{"id":38290,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/1997-stock-plan-netflix-com-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"1997-stock-plan-netflix-com-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/1997-stock-plan-netflix-com-inc.html","title":{"rendered":"1997 Stock Plan &#8211; NetFLix.com Inc."},"content":{"rendered":"<pre>                               NETFLIX.COM, INC.\n                      AMENDED AND RESTATED 1997 STOCK PLAN\n\n                    As amended and restated on March 15, 2000\n                                        \n     1.   Purposes of the Plan.  The purposes of this 1997 Stock Plan are:\n          --------------------                                            \n\n          .    to attract and retain the best available personnel for positions\n               of substantial responsibility,\n\n          .    to provide additional incentive to Employees, Directors and\n               Consultants, and\n\n          .    to promote the success of the Company's business.\n\n          Options granted under the Plan may be Incentive Stock Options or\nNonstatutory Stock Options, as determined by the Administrator at the time of\ngrant.  Stock Purchase Rights may also be granted under the Plan.\n\n     2.   Definitions.  As used herein, the following definitions shall apply:\n          -----------                                                         \n\n          (a) 'Administrator' means the Board or any of its Committees as shall\n               -------------                                                   \nbe administering the Plan, in accordance with Section 4 of the Plan.\n\n          (b) 'Applicable Laws' means the requirements relating to the\n               ---------------                                        \nadministration of stock option plans under U. S. state corporate laws, U.S.\nfederal and state securities laws, the Code, any stock exchange or quotation\nsystem on which the Common Stock is listed or quoted and the applicable laws of\nany foreign country or jurisdiction where Options or Stock Purchase Rights are,\nor will be, granted under the Plan.\n\n          (c) 'Board' means the Board of Directors of the Company.\n               -----                                              \n\n          (d) 'Code' means the Internal Revenue Code of 1986, as amended.\n               ----                                                      \n\n          (e) 'Committee' means a committee of Directors appointed by the Board\n               ---------                                                       \nin accordance with Section 4 of the Plan.\n\n          (f) 'Common Stock' means the common stock of the Company.\n               ------------                                        \n\n          (g) 'Company' means NetFlix.com, Inc., a Delaware corporation.\n               -------                                                  \n\n          (h) 'Consultant' means any person, including an advisor, engaged by\n               ----------                                                    \nthe Company or a Parent or Subsidiary to render services to such entity.\n\n          (i) 'Director' means a member of the Board.\n               --------                              \n\n \n          (j) 'Disability' means total and permanent disability as defined in\n               ----------                                                    \nSection 22(e)(3) of the Code.\n\n          (k) 'Employee' means any person, including Officers and Directors,\n               --------                                                     \nemployed by the Company or any Parent or Subsidiary of the Company.  A Service\nProvider shall not cease to be an Employee in the case of (i) any leave of\nabsence approved by the Company or (ii) transfers between locations of the\nCompany or between the Company, its Parent, any Subsidiary, or any successor.\nFor purposes of Incentive Stock Options, no such leave may exceed ninety days,\nunless reemployment upon expiration of such leave is guaranteed by statute or\ncontract.  If reemployment upon expiration of a leave of absence approved by the\nCompany is not so guaranteed, on the 181st day of such leave any Incentive Stock\nOption held by the Optionee shall cease to be treated as an Incentive Stock\nOption and shall be treated for tax purposes as a Nonstatutory Stock Option.\nNeither service as a Director nor payment of a director's fee by the Company\nshall be sufficient to constitute 'employment' by the Company.\n\n          (l) 'Exchange Act' means the Securities Exchange Act of 1934, as\n               ------------                                               \namended.\n\n          (m) 'Fair Market Value' means, as of any date, the value of Common\n               -----------------                                            \nStock determined as follows:\n\n              (i)   If the Common Stock is listed on any established stock\nexchange or a national market system, including without limitation the Nasdaq\nNational Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its\nFair Market Value shall be the closing sales price for such stock (or the\nclosing bid, if no sales were reported) as quoted on such exchange or system for\nthe last market trading day prior to the time of determination, as reported in\nThe Wall Street Journal or such other source as the Administrator deems\nreliable;\n\n              (ii)  If the Common Stock is regularly quoted by a recognized\nsecurities dealer but selling prices are not reported, the Fair Market Value of\na Share of Common Stock shall be the mean between the high bid and low asked\nprices for the Common Stock on the last market trading day prior to the day of\ndetermination, as reported in The Wall Street Journal or such other source as\nthe Administrator deems reliable; or\n\n              (iii) In the absence of an established market for the Common\nStock, the Fair Market Value shall be determined in good faith by the\nAdministrator.\n\n          (n) 'Incentive Stock Option' means an Option intended to qualify as an\n               ----------------------                                           \nincentive stock option within the meaning of Section 422 of the Code and the\nregulations promulgated thereunder.\n\n          (o) 'Inside Director' means a Director who is an Employee.\n               ---------------                                      \n\n          (p) 'IPO Effective Date' means the date upon which the Securities and\n               ------------------                                              \nExchange Commission declares the initial public offering of the Company's common\nstock as effective.\n\n          (q) 'Nonstatutory Stock Option' means an Option not intended to\n               -------------------------                                 \nqualify as an Incentive Stock Option.\n\n                                      -2-\n\n \n          (r)  'Notice of Grant' means a written or electronic notice evidencing\n                ---------------                                                 \ncertain terms and conditions of an individual Option or Stock Purchase Right\ngrant.  The Notice of Grant is part of the Option Agreement.\n\n          (s)  'Officer' means a person who is an officer of the Company within\n                -------                                                        \nthe meaning of Section 16 of the Exchange Act and the rules and regulations\npromulgated thereunder.\n\n          (t)  'Option' means a stock option granted pursuant to the Plan.\n                ------                                                    \n\n          (u)  'Option Agreement' means an agreement between the Company and an\n                ----------------                                               \nOptionee evidencing the terms and conditions of an individual Option grant.  The\nOption Agreement is subject to the terms and conditions of the Plan.\n\n          (v)  'Option Exchange Program' means a program whereby outstanding\n                -----------------------                                     \nOptions are surrendered in exchange for Options with a lower exercise price.\n\n          (w)  'Optioned Stock' means the Common Stock subject to an Option or\n                --------------                                                \nStock Purchase Right.\n\n          (x)  'Optionee' means the holder of an outstanding Option or Stock\n                --------                                                    \nPurchase Right granted under the Plan.\n\n          (y)  'Outside Director' means a Director who is not an Employee.\n                ----------------                                          \n\n          (z)  'Parent' means a 'parent corporation,' whether now or hereafter\n                ------                                                        \nexisting, as defined in Section 424(e) of the Code.\n\n          (aa) 'Plan' means this 1997 Stock Plan.\n                ----                             \n\n          (bb) 'Restricted Stock' means shares of Common Stock acquired pursuant\n                ----------------                                                \nto a grant of Stock Purchase Rights under Section 11 of the Plan.\n\n          (cc) 'Restricted Stock Purchase Agreement' means a written agreement\n                -----------------------------------                           \nbetween the Company and the Optionee evidencing the terms and restrictions\napplying to stock purchased under a Stock Purchase Right.  The Restricted Stock\nPurchase Agreement is subject to the terms and conditions of the Plan and the\nNotice of Grant.\n\n          (dd) 'Rule 16b-3' means Rule 16b-3 of the Exchange Act or any\n                ----------                                             \nsuccessor to Rule 16b-3, as in effect when discretion is being exercised with\nrespect to the Plan.\n\n          (ee) 'Section 16(b)' means Section 16(b) of the Exchange Act.\n                -------------                                           \n\n          (ff) 'Service Provider' means an Employee, Director or Consultant.\n                ----------------                                            \n\n          (gg) 'Share' means a share of the Common Stock, as adjusted in\n                -----                                                   \naccordance with Section 13 of the Plan.\n\n                                      -3-\n\n \n          (hh) 'Stock Purchase Right' means the right to purchase Common Stock\n                --------------------                                          \npursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.\n\n          (ii) 'Subsidiary' means a 'subsidiary corporation', whether now or\n                ----------                                                  \nhereafter existing, as defined in Section 424(f) of the Code.\n\n     3.   Stock Subject to the Plan.  Subject to the provisions of Section 13 of\n          -------------------------                                             \nthe Plan, the maximum aggregate number of Shares that may be optioned and sold\nunder the Plan is 6,952,250 Shares, plus an annual increase to be added on\nthe first day of the Company's fiscal year beginning in 2001, equal to the\nlesser of (i) 1,550,000 shares, (ii) 5% of the outstanding shares on such\ndate or (iii) a lesser amount determined by the Board.  The Shares may be\nauthorized, but unissued, or reacquired Common Stock.\n\n          If an Option or Stock Purchase Right expires or becomes unexercisable\nwithout having been exercised in full, or is surrendered pursuant to an Option\nExchange Program, the unpurchased Shares which were subject thereto shall become\navailable for future grant or sale under the Plan (unless the Plan has\nterminated); provided, however, that Shares that have actually been issued under\n             --------                                                           \nthe Plan, whether upon exercise of an Option or Right, shall not be returned to\nthe Plan and shall not become available for future distribution under the Plan,\nexcept that if Shares of Restricted Stock are repurchased by the Company at\ntheir original purchase price, such Shares shall become available for future\ngrant under the Plan.\n\n     4.   Administration of the Plan.\n          -------------------------- \n\n          (a)  Procedure.\n               --------- \n\n               (i)    Multiple Administrative Bodies. Different Committees with \n                      ------------------------------         \nrespect to different groups of Service Providers may administer the Plan.\n\n               (ii)   Section 162(m).  To the extent that the Administrator \n                      --------------           \ndetermines it to be desirable to qualify Options granted hereunder as\n'performance-based compensation' within the meaning of Section 162(m) of the\nCode, the Plan shall be administered by a Committee of two or more 'outside\ndirectors' within the meaning of Section 162(m) of the Code.\n\n               (iii)  Rule 16b-3. To the extent desirable to qualify \n                      ----------                \ntransactions hereunder as exempt under Rule 16b-3, the transactions contemplated\nhereunder shall be structured to satisfy the requirements for exemption under\nRule 16b-3.\n\n               (iv)   Other Administration.  Other than as provided above, the\n                      --------------------         \nPlans hall be administered by (A) the Board or (B) a Committee, which committee\nshall be constituted to satisfy Applicable Laws.\n\n          (b)  Powers of the Administrator.  Subject to the provisions of the\n               ---------------------------                                   \nPlan, and in the case of a Committee, subject to the specific duties delegated\nby the Board to such Committee, the Administrator shall have the authority, in\nits discretion:\n\n               (i) to determine the Fair Market Value;\n\n                                      -4-\n\n \n               (ii)   to select the Service Providers to whom Options and Stock\nPurchase Rights may be granted hereunder;\n\n               (iii)  to determine the number of shares of Common Stock to be\ncovered by each Option and Stock Purchase Right granted hereunder;\n\n               (iv)   to approve forms of agreement for use under the Plan;\n\n               (v)    to determine the terms and conditions, not inconsistent\nwith the terms of the Plan, of any Option or Stock Purchase Right granted\nhereunder. Such terms and conditions include, but are not limited to, the\nexercise price, the time or times when Options or Stock Purchase Rights may be\nexercised (only the Board may determine whether vesting may be based on\nperformance criteria), any vesting acceleration or waiver of forfeiture\nrestrictions (the Board may not delegate this power), and any restriction or\nlimitation regarding any Option or Stock Purchase Right or the shares of Common\nStock relating thereto, based in each case on such factors as the Administrator,\nin its sole discretion, shall determine;\n\n               (vi)   to reduce the exercise price of any Option or Stock\nPurchase Right to the then current Fair Market Value if the Fair Market Value of\nthe Common Stock covered by such Option or Stock Purchase Right shall have\ndeclined since the date the Option or Stock Purchase Right was granted (the\nBoard may not delegate this power);\n\n               (vii)  to institute an Option Exchange Program (the Board may not\ndelegate this power);\n\n               (viii) to construe and interpret the terms of the Plan and\nawards granted pursuant to the Plan;\n\n               (ix)   to prescribe, amend and rescind rules and regulations\nrelating to the Plan, including rules and regulations relating to sub-plans\nestablished for the purpose of qualifying for preferred tax treatment under\nforeign tax laws;\n\n               (x)    to modify or amend each Option or Stock Purchase Right\n(subject to Section 15(c) of the Plan), including the discretionary authority to\nextend the post-termination exercisability period of Options longer than is\notherwise provided for in the Plan (the Board may not delegate this power);\n\n               (xi)   to allow Optionees to satisfy withholding tax obligations\nby electing to have the Company withhold from the Shares to be issued upon\nexercise of an Option or Stock Purchase Right that number of Shares having a\nFair Market Value equal to the amount required to be withheld. The Fair Market\nValue of the Shares to be withheld shall be determined on the date that the\namount of tax to be withheld is to be determined. All elections by an Optionee\nto have Shares withheld for this purpose shall be made in such form and under\nsuch conditions as the Administrator may deem necessary or advisable;\n\n                                      -5-\n\n \n               (xii)  to authorize any person to execute on behalf of the\nCompany any instrument required to effect the grant of an Option or Stock\nPurchase Right previously granted by the Administrator;\n\n               (xiii) to make all other determinations deemed necessary or\nadvisable for administering the Plan.\n\n          (c)  Effect of Administrator's Decision.  The Administrator's \n               ----------------------------------                      \ndecisions, determinations and interpretations shall be final and binding on all\nOptionees and any other holders of Options or Stock Purchase Rights.\n\n     5.   Eligibility.  Nonstatutory Stock Options and Stock Purchase Rights may\n          -----------                                                           \nbe granted to Service Providers.  Incentive Stock Options may be granted only to\nEmployees.\n\n     6.   Limitations.\n          ----------- \n\n          (a) Each Option shall be designated in the Option Agreement as either\nan Incentive Stock Option or a Nonstatutory Stock Option.  However,\nnotwithstanding such designation, to the extent that the aggregate Fair Market\nValue of the Shares with respect to which Incentive Stock Options are\nexercisable for the first time by the Optionee during any calendar year (under\nall plans of the Company and any Parent or Subsidiary) exceeds $100,000, such\nOptions shall be treated as Nonstatutory Stock Options.  For purposes of this\nSection 6(a), Incentive Stock Options shall be taken into account in the order\nin which they were granted.  The Fair Market Value of the Shares shall be\ndetermined as of the time the Option with respect to such Shares is granted.\n\n          (b) Neither the Plan nor any Option or Stock Purchase Right shall\nconfer upon an Optionee any right with respect to continuing the Optionee's\nrelationship as a Service Provider with the Company, nor shall they interfere in\nany way with the Optionee's right or the Company's right to terminate such\nrelationship at any time, with or without cause.\n\n          (c) The following limitations shall apply to grants of Options:\n\n              (i)   No Service Provider shall be granted, in any fiscal year of\nthe Company, Options to purchase more than 1,500,000 Shares.\n\n              (ii)  In connection with his or her initial service, a Service\nProvider may be granted Options to purchase up to an additional 500,000\nShares, which shall not count against the limit set forth in subsection (i)\nabove.\n\n              (iii) The foregoing limitations shall be adjusted proportionately\nin connection with any change in the Company's capitalization as described in\nSection 13.\n\n                    (iv)  If an Option is cancelled in the same fiscal year of\nthe Company in which it was granted (other than in connection with a transaction\ndescribed in Section 13), the cancelled Option will be counted against the\nlimits set forth in subsections (i) and (ii) above. For this purpose, if the\nexercise price of an Option is reduced, the transaction will be treated as a\ncancellation of the Option and the grant of a new Option.\n\n                                      -6-\n\n \n     7.   Term of Plan.  Subject to Section 19 of the Plan, the amendment and\n          ------------                                                       \nrestatement of the Plan shall become effective upon the IPO Effective Date.  It\nshall continue in effect for a term of ten (10) years from the date of obtaining\nstockholder approval of the Plan in 2000, unless terminated earlier under\nSection 15 of the Plan.\n\n     8.   Term of Option.  The term of each Option shall be stated in the Option\n          --------------                                                        \nAgreement.  In the case of an Incentive Stock Option, the term shall be ten (10)\nyears from the date of grant or such shorter term as may be provided in the\nOption Agreement.  Moreover, in the case of an Incentive Stock Option granted to\nan Optionee who, at the time the Incentive Stock Option is granted, owns stock\nrepresenting more than ten percent (10%) of the total combined voting power of\nall classes of stock of the Company or any Parent or Subsidiary, the term of the\nIncentive Stock Option shall be five (5) years from the date of grant or such\nshorter term as may be provided in the Option Agreement.\n\n     9.   Option Exercise Price and Consideration.\n          --------------------------------------- \n\n          (a) Exercise Price.  The per share exercise price for the Shares to be\n              --------------                                                    \nissued pursuant to exercise of an Option shall be determined by the\nAdministrator, subject to the following:\n\n              (i)   In the case of an Incentive Stock Option\n\n                    (A) granted to an Employee who, at the time the Incentive\nStock Option is granted, owns stock representing more than ten percent (10%) of\nthe voting power of all classes of stock of the Company or any Parent or\nSubsidiary, the per Share exercise price shall be no less than 110% of the Fair\nMarket Value per Share on the date of grant.\n\n                    (B) granted to any Employee other than an Employee described\nin paragraph (A) immediately above, the per Share exercise price shall be no\nless than 100% of the Fair Market Value per Share on the date of grant.\n\n              (ii)  In the case of a Nonstatutory Stock Option, the per Share\nexercise price shall be determined by the Administrator.  In the case of a\nNonstatutory Stock Option intended to qualify as 'performance-based\ncompensation' within the meaning of Section 162(m) of the Code, the per Share\nexercise price shall be no less than 100% of the Fair Market Value per Share on\nthe date of grant.\n\n              (iii) Notwithstanding the foregoing, Options may be granted with a\nper Share exercise price of less than 100% of the Fair Market Value per Share on\nthe date of grant pursuant to a merger or other corporate transaction.\n\n          (b) Waiting Period and Exercise Dates.  At the time an Option is\n              ---------------------------------                           \ngranted, the Administrator shall fix the period within which the Option may be\nexercised and shall determine any conditions that must be satisfied before the\nOption may be exercised.\n\n          (c) Form of Consideration.  The Administrator shall determine the\n              ---------------------                                        \nacceptable form of consideration for exercising an Option, including the method\nof payment.  In the case of an \n\n                                      -7-\n\n \nIncentive Stock Option, the Administrator shall determine the acceptable form of\nconsideration at the time of grant. Such consideration may consist entirely of:\n\n                 (i)    cash;\n\n                 (ii)   check;\n\n                 (iii)  promissory note;\n\n                 (iv)   other Shares which (A) in the case of Shares acquired\nupon exercise of an option, have been owned by the Optionee for more than six\nmonths on the date of surrender, and (B) have a Fair Market Value on the date of\nsurrender equal to the aggregate exercise price of the Shares as to which said\nOption shall be exercised;\n\n                 (v)    consideration received by the Company under a cashless\nexercise program implemented by the Company in connection with the Plan;\n\n                 (vi)   a reduction in the amount of any Company liability to\nthe Optionee, including any liability attributable to the Optionee's\nparticipation in any Company-sponsored deferred compensation program or\narrangement;\n\n                 (vii)  any combination of the foregoing methods of payment; or\n\n                 (viii) such other consideration and method of payment for the\nissuance of Shares to the extent permitted by Applicable Laws.\n\n     10.  Exercise of Option.\n          ------------------ \n\n          (a)  Procedure for Exercise; Rights as a Shareholder.  Any Option\n               -----------------------------------------------             \ngranted hereunder shall be exercisable according to the terms of the Plan and at\nsuch times and under such conditions as determined by the Administrator and set\nforth in the Option Agreement.  Unless the Administrator provides otherwise,\nvesting of Options granted hereunder shall be tolled during any unpaid leave of\nabsence.  An Option may not be exercised for a fraction of a Share.\n\n               An Option shall be deemed exercised when the Company receives:\n(i) written or electronic notice of exercise (in accordance with the Option\nAgreement) from the person entitled to exercise the Option, and (ii) full\npayment for the Shares with respect to which the Option is exercised. Full\npayment may consist of any consideration and method of payment authorized by the\nAdministrator and permitted by the Option Agreement and the Plan. Shares issued\nupon exercise of an Option shall be issued in the name of the Optionee or, if\nrequested by the Optionee, in the name of the Optionee and his or her spouse.\nUntil the Shares are issued (as evidenced by the appropriate entry on the books\nof the Company or of a duly authorized transfer agent of the Company), no right\nto vote or receive dividends or any other rights as a shareholder shall exist\nwith respect to the Optioned Stock, notwithstanding the exercise of the Option.\nThe Company shall issue (or cause to be issued) such Shares promptly after the\nOption is exercised. No adjustment will be made for a dividend or other right\nfor which the record date is prior to the date the Shares are issued, except as\nprovided in Section 13 of the Plan.\n\n                                      -8-\n\n \n          Exercising an Option in any manner shall decrease the number of Shares\nthereafter available, both for purposes of the Plan and for sale under the\nOption, by the number of Shares as to which the Option is exercised.\n\n          (b) Termination of Relationship as a Service Provider.  If an Optionee\n              -------------------------------------------------                 \nceases to be a Service Provider, other than upon the Optionee's death or\nDisability, the Optionee may exercise his or her Option within such period of\ntime as is specified in the Option Agreement to the extent that the Option is\nvested on the date of termination (but in no event later than the expiration of\nthe term of such Option as set forth in the Option Agreement).  In the absence\nof a specified time in the Option Agreement, the Option shall remain exercisable\nfor three (3) months following the Optionee's termination.  If, on the date of\ntermination, the Optionee is not vested as to his or her entire Option, the\nShares covered by the unvested portion of the Option shall revert to the Plan.\nIf, after termination, the Optionee does not exercise his or her Option within\nthe time specified by the Administrator, the Option shall terminate, and the\nShares covered by such Option shall revert to the Plan.\n\n          (c) Disability of Optionee.  If an Optionee ceases to be a Service\n              ----------------------                                        \nProvider as a result of the Optionee's Disability, the Optionee may exercise his\nor her Option within such period of time as is specified in the Option Agreement\nto the extent the Option is vested on the date of termination (but in no event\nlater than the expiration of the term of such Option as set forth in the Option\nAgreement).  In the absence of a specified time in the Option Agreement, the\nOption shall remain exercisable for twelve (12) months following the Optionee's\ntermination.  If, on the date of termination, the Optionee is not vested as to\nhis or her entire Option, the Shares covered by the unvested portion of the\nOption shall revert to the Plan.  If, after termination, the Optionee does not\nexercise his or her Option within the time specified herein, the Option shall\nterminate, and the Shares covered by such Option shall revert to the Plan.\n\n          (d) Death of Optionee.  If an Optionee dies while a Service Provider,\n              -----------------                                                \nthe Option may be exercised within such period of time as is specified in the\nOption Agreement (but in no event later than the expiration of the term of such\nOption as set forth in the Notice of Grant), by the Optionee's estate or by a\nperson who acquires the right to exercise the Option by bequest or inheritance,\nbut only to the extent that the Option is vested on the date of death.  In the\nabsence of a specified time in the Option Agreement, the Option shall remain\nexercisable for twelve (12) months following the Optionee's termination.  If, at\nthe time of death, the Optionee is not vested as to his or her entire Option,\nthe Shares covered by the unvested portion of the Option shall immediately\nrevert to the Plan.  The Option may be exercised by the executor or\nadministrator of the Optionee's estate or, if none, by the person(s) entitled to\nexercise the Option under the Optionee's will or the laws of descent or\ndistribution.  If the Option is not so exercised within the time specified\nherein, the Option shall terminate, and the Shares covered by such Option shall\nrevert to the Plan.\n\n          (e) Buyout Provisions.  The Administrator may at any time offer to buy\n              -----------------                                                 \nout for a payment in cash or Shares an Option previously granted based on such\nterms and conditions as the Administrator shall establish and communicate to the\nOptionee at the time that such offer is made.\n\n                                      -9-\n\n \n     11.  Stock Purchase Rights.\n          --------------------- \n\n          (a)  Rights to Purchase.  Stock Purchase Rights may be issued either\n               ------------------                                             \nalone, in addition to, or in tandem with other awards granted under the Plan\nand\/or cash awards made outside of the Plan.  After the Administrator determines\nthat it will offer Stock Purchase Rights under the Plan, it shall advise the\nofferee in writing or electronically, by means of a Notice of Grant, of the\nterms, conditions and restrictions related to the offer, including the number of\nShares that the offeree shall be entitled to purchase, the price to be paid, and\nthe time within which the offeree must accept such offer.  The offer shall be\naccepted by execution of a Restricted Stock Purchase Agreement in the form\ndetermined by the Administrator.\n\n          (b)  Repurchase Option. Unless the Administrator determines otherwise,\n               -----------------  \nthe Restricted Stock Purchase Agreement shall grant the Company a repurchase\noption exercisable upon the voluntary or involuntary termination of the\npurchaser's service with the Company for any reason (including death or\nDisability).  The purchase price for Shares repurchased pursuant to the\nRestricted Stock Purchase Agreement shall be the original price paid by the\npurchaser and may be paid by cancellation of any indebtedness of the purchaser\nto the Company.  The repurchase option shall lapse at a rate determined by the\nAdministrator.\n\n          (c)  Other Provisions.  The Restricted Stock Purchase Agreement shall\n               ----------------                                                \ncontain such other terms, provisions and conditions not inconsistent with the\nPlan as may be determined by the Administrator in its sole discretion.\n\n          (d)  Rights as a Shareholder.  Once the Stock Purchase Right is\n               -----------------------                                   \nexercised, the purchaser shall have the rights equivalent to those of a\nshareholder, and shall be a shareholder when his or her purchase is entered upon\nthe records of the duly authorized transfer agent of the Company.  No adjustment\nwill be made for a dividend or other right for which the record date is prior to\nthe date the Stock Purchase Right is exercised, except as provided in Section 13\nof the Plan.\n\n     12.  Non-Transferability of Options and Stock Purchase Rights.  Unless\n          --------------------------------------------------------         \ndetermined otherwise by the Administrator, an Option or Stock Purchase Right may\nnot be sold, pledged, assigned, hypothecated, transferred, or disposed of in any\nmanner other than by will or by the laws of descent or distribution and may be\nexercised, during the lifetime of the Optionee, only by the Optionee.  If the\nAdministrator makes an Option or Stock Purchase Right transferable, such Option\nor Stock Purchase Right shall contain such additional terms and conditions as\nthe Administrator deems appropriate.\n\n     13.  Adjustments Upon Changes in Capitalization, Dissolution, Merger or\n          ------------------------------------------------------------------\nAsset Sale.\n---------- \n\n          (a) Changes in Capitalization.  Subject to any required action by the\n              -------------------------                                        \nshareholders of the Company, the number of shares of Common Stock covered by\neach outstanding Option and Stock Purchase Right, and the number of shares of\nCommon Stock which have been authorized for issuance under the Plan but as to\nwhich no Options or Stock Purchase Rights have yet been granted or which have\nbeen returned to the Plan upon cancellation or expiration of an Option or Stock\nPurchase Right, as well as the price per share of Common Stock covered by each\nsuch outstanding Option or Stock Purchase Right, shall be proportionately\nadjusted for any increase or decrease in the \n\n                                      -10-\n\n \nnumber of issued shares of Common Stock resulting from a stock split, reverse\nstock split, stock dividend, combination or reclassification of the Common\nStock, or any other increase or decrease in the number of issued shares of\nCommon Stock effected without receipt of consideration by the Company; provided,\nhowever, that conversion of any convertible securities of the Company shall not\nbe deemed to have been 'effected without receipt of consideration.' Such\nadjustment shall be made by the Board, whose determination in that respect shall\nbe final, binding and conclusive. Except as expressly provided herein, no\nissuance by the Company of shares of stock of any class, or securities\nconvertible into shares of stock of any class, shall affect, and no adjustment\nby reason thereof shall be made with respect to, the number or price of shares\nof Common Stock subject to an Option or Stock Purchase Right.\n\n          (b)  Dissolution or Liquidation.  In the event of the proposed\n               --------------------------                               \ndissolution or liquidation of the Company, the Administrator shall notify each\nOptionee as soon as practicable prior to the effective date of such proposed\ntransaction.  The Administrator in its discretion may provide for an Optionee to\nhave the right to exercise his or her Option until ten (10) days prior to such\ntransaction as to all of the Optioned Stock covered thereby, including Shares as\nto which the Option would not otherwise be exercisable.  In addition, the\nAdministrator may provide that any Company repurchase option applicable to any\nShares purchased upon exercise of an Option or Stock Purchase Right shall lapse\nas to all such Shares, provided the proposed dissolution or liquidation takes\nplace at the time and in the manner contemplated.  To the extent it has not been\npreviously exercised, an Option or Stock Purchase Right will terminate\nimmediately prior to the consummation of such proposed action.\n\n          (c)  Merger or Asset Sale. In the event of a merger of the Company \n               --------------------         \nwith or into another corporation, or the sale of substantially all of the assets\nof the Company (a 'Merger'), each outstanding Option and Stock Purchase Right\nshall be assumed or an equivalent option or right substituted by the successor\ncorporation or a Parent or Subsidiary of the successor corporation (the\n'Successor Corporation').\n\n          Following such assumption or substitution in connection with a Merger,\nif the Optionee's status as an Employee or employee of the Successor\nCorporation, as applicable, is terminated by the Successor Corporation as a\nresult of an Involuntary Termination (as defined below) other than for Cause (as\ndefined below) within twelve months following a Merger, the Optionee shall vest\nin and have the right to exercise that portion of Optionee's Option or Stock\nPurchase Right, if any, that would have vested within one year after the date of\nOptionee's termination.  Thereafter, the Option or Stock Purchase Right shall\nremain exercisable in accordance with Sections 10(b) through (d) above.\n\n          For purposes of this section, any of the following events shall\nconstitute an 'Involuntary Termination':  (i) a significant reduction of the\nEmployee's duties, authority or responsibilities, relative to the Employee's\nduties, authority or responsibilities as in effect immediately prior to the\nMerger, or the assignment to Employee of such reduced duties, authority or\nresponsibilities; (ii) a substantial reduction of the facilities and perquisites\n(including office space and location) available to the Employee immediately\nprior to the Merger; (iii) a reduction in the base salary of the Employee as in\neffect immediately prior to the Merger; (iv) a material reduction in the kind or\nlevel of employee benefits, including bonuses, to which the Employee was\n\n                                      -11-\n\n \nentitled immediately prior to the Merger with the result that the Employee's\noverall benefits package is significantly reduced; (v) the relocation of the\nEmployee to a facility or a location more than fifty (50) miles from the\nEmployee's then present location, without the Employee's express written\nconsent; (vi) any purported termination of the Employee by the Successor\nCorporation which is not effected for Disability or for Cause, or any purported\ntermination for which the grounds relied upon are not valid; (vii) or any act or\nset of facts or circumstances which would, under California case law or statute\nconstitute a constructive termination of the Employee.\n\n         For purposes of this section, 'Cause' shall mean (i) any act of\npersonal dishonesty taken by the Employee in connection with his\nresponsibilities as an employee and intended to result in substantial personal\nenrichment of the Employee, (ii) the conviction of a felony, (iii) a willful act\nby the Employee which constitutes gross misconduct and which is injurious to the\nSuccessor Corporation, and (iv) following delivery to the Employee of a written\ndemand for performance from the Successor Corporation which describes the basis\nfor the Successor Corporation's belief that the Employee has not substantially\nperformed his duties, continued violations by the Employee of the Employee's\nobligations to the Successor which are demonstrably willful and deliberate on\nthe Employee's part.\n\n         In the event that the Successor Corporation refuses to assume or\nsubstitute for the Option or Stock Purchase Right, the Optionee shall fully vest\nin and have the right to exercise the Option or Stock Purchase Right as to all\nof the Optioned Stock, including Shares as to which Optionee would not otherwise\nbe vested or exercisable.  If an Option or Stock Purchase Right becomes fully\nvested and exercisable in lieu of assumption or substitution in connection with\na Merger, the Administrator shall notify the Optionee in writing that the Option\nor Stock Purchase Right shall be fully vested and exercisable for a period of\nfifteen (15) days from the date of such notice, and the Option or Stock Purchase\nRight shall terminate upon the expiration of such period.  For the purposes of\nthis paragraph, the Option or Stock Purchase Right shall be considered assumed\nif, following the Merger, the option or right confers the right to purchase or\nreceive, for each Share of Optioned Stock subject to the Option or Stock\nPurchase Right immediately prior to the Merger, the consideration (whether\nstock, cash, or other securities or property) received in the Merger by holders\nof Common Stock for each Share held on the effective date of the transaction\n(and if holders were offered a choice of consideration, the type of\nconsideration chosen by the holders of a majority of the outstanding Shares);\nprovided, however, that if such consideration received in the Merger is not\nsolely common stock of the Successor Corporation or its Parent, the\nAdministrator may, with the consent of the Successor Corporation, provide for\nthe consideration to be received upon the exercise of the Option or Stock\nPurchase Right, for each Share of Optioned Stock subject to the Option or Stock\nPurchase Right, to be solely common stock of the Successor Corporation or its\nParent equal in fair market value to the per share consideration received by\nholders of Common Stock in the Merger.\n\n     14. Date of Grant.  The date of grant of an Option or Stock Purchase Right\n         -------------                                                         \nshall be, for all purposes, the date on which the Administrator makes the\ndetermination granting such Option or Stock Purchase Right, or such other later\ndate as is determined by the Administrator.  Notice of the determination shall\nbe provided to each Optionee within a reasonable time after the date of such\ngrant.\n\n                                      -12-\n\n \n     15.  Amendment and Termination of the Plan.\n          ------------------------------------- \n\n          (a)  Amendment and Termination.  The Board may at any time amend,\n               -------------------------                                   \nalter, suspend or terminate the Plan.\n\n          (b)  Shareholder Approval.  The Company shall obtain shareholder\n               --------------------                                       \napproval of any Plan amendment to the extent necessary and desirable to comply\nwith Applicable Laws.\n\n          (c)  Effect of Amendment or Termination.  No amendment, alteration,\n               ----------------------------------                            \nsuspension or termination of the Plan shall impair the rights of any Optionee,\nunless mutually agreed otherwise between the Optionee and the Administrator,\nwhich agreement must be in writing and signed by the Optionee and the Company.\nTermination of the Plan shall not affect the Administrator's ability to exercise\nthe powers granted to it hereunder with respect to Options granted under the\nPlan prior to the date of such termination.\n\n     16.  Conditions Upon Issuance of Shares.\n          ---------------------------------- \n\n          (a)  Legal Compliance.  Shares shall not be issued pursuant to the\n               ----------------                                             \nexercise of an Option or Stock Purchase Right unless the exercise of such Option\nor Stock Purchase Right and the issuance and delivery of such Shares shall\ncomply with Applicable Laws and shall be further subject to the approval of\ncounsel for the Company with respect to such compliance.\n\n          (b)  Investment Representations.  As a condition to the exercise of an\n               --------------------------                                       \nOption or Stock Purchase Right, the Company may require the person exercising\nsuch Option or Stock Purchase Right to represent and warrant at the time of any\nsuch exercise that the Shares are being purchased only for investment and\nwithout any present intention to sell or distribute such Shares if, in the\nopinion of counsel for the Company, such a representation is required.\n\n     17.  Inability to Obtain Authority.  The inability of the Company to obtain\n          -----------------------------                                         \nauthority from any regulatory body having jurisdiction, which authority is\ndeemed by the Company's counsel to be necessary to the lawful issuance and sale\nof any Shares hereunder, shall relieve the Company of any liability in respect\nof the failure to issue or sell such Shares as to which such requisite authority\nshall not have been obtained.\n\n     18.  Reservation of Shares.  The Company, during the term of this Plan,\n          ---------------------                                             \nwill at all times reserve and keep available such number of Shares as shall be\nsufficient to satisfy the requirements of the Plan.\n\n     19.  Shareholder Approval.  The Plan shall be subject to approval by the\n          --------------------                                               \nshareholders of the Company within twelve (12) months after the date the Plan is\nadopted.  Such shareholder approval shall be obtained in the manner and to the\ndegree required under Applicable Laws.\n\n                                      -13-\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8324],"corporate_contracts_industries":[9469],"corporate_contracts_types":[9539,9545],"class_list":["post-38290","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-netflix-inc","corporate_contracts_industries-media__rental","corporate_contracts_types-compensation","corporate_contracts_types-compensation__esp"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38290","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=38290"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38290"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38290"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38290"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}