at the end of one year from the date of the grant and the balance vesting ratably, on a monthly basis thereafter.
At December 31, 2014, a total of 256,176 options were outstanding and exercisable, and no shares were
available for future grant under the 2000 Plan. The 2000 Plan expired on January 5, 2010, so we may no longer
grant new options under the 2000 Plan.
Change of Control Under 1989 Plan and 2000 Plan
With respect to both the 1989 Plan and 2000 Plan, in the event of:
•
a sale, lease or other disposition of all or substantially all of our assets;
•
a merger or consolidation in which we are not the surviving corporation; or
•
reverse merger in which we are the surviving corporation but the shares of common stock outstanding
immediately preceding the merger are converted by virtue of the merger into other property, whether in
the form of securities, cash or otherwise,
then any surviving corporation or acquiring corporation will assume any stock awards outstanding under the
2000 Plan and the 1989 Plan or will substitute similar stock awards (including an award to acquire the same
consideration paid to the shareholders in the transaction for those outstanding under the 2000 Plan and the 1989
Plan). In the event any surviving corporation or acquiring corporation refuses to assume such stock awards or to
substitute similar stock awards for those outstanding under the 2000 Plan and the 1989 Plan, then with respect to
stock awards held by participants whose continuous service has not terminated, such stock awards automatically
vest in full and the stock awards will terminate if not exercised (if applicable) at or prior to such event.
2011 Equity Incentive Plan
InMarch 2011, our Board of Directors adopted, and the stockholders subsequently approved, a stock option
plan that provides for the issuance of stock options, stock appreciation rights, restricted stock awards, restricted
stock unit awards, and performance cash awards. The plan provides for the purchase of up to 5,500,000 shares of
our common stock for issuance to our employees, directors, and consultants. The plan expires in June 2021. The
2011 Plan does not allow us to reduce the exercise price of any outstanding stock options or stock appreciation
rights or cancel any outstanding stock options or stock appreciation rights that have an exercise price or strike
price greater than the current fair market value of the common stock in exchange for cash or other stock awards
unless our stockholders approve such action. Currently we anticipate awarding only options and restricted stock
unit awards to our employees, directors and consultants. Under the 2011 Plan, stock options cannot vest in a
period of less than two years and restricted stock unit awards cannot vest in a period of less than three years. We
have granted restricted stock unit awards to our employees under the 2011 Plan which vest annually over a four
year period. At December 31, 2014, a total of 1,706,486 options were outstanding, of which none were
exercisable, 605,493 restricted stock unit awards were outstanding, and 3,029,009 shares were available for future
grant under the 2011 Plan.
Under the 2011 Plan, we may issue a stock award with additional acceleration of vesting and exercisability
upon or after a change in control. In the absence of such provisions, no such acceleration will occur. The stock
options and restricted stock unit awards we issue to our chief executive officer and chief operating officer will
accelerate upon a change of control, as defined in the 2011 Plan.
Corporate Transactions and Change in Control under 2011 Plan
In the event of certain significant corporate transactions, our Board of Directors has the discretion to take
one or more of the following actions with respect to outstanding stock awards under the 2011 Plan:
•
arrange for assumption, continuation, or substitution of a stock award by a surviving or acquiring entity
(or its parent company);
•
arrange for the assignment of any reacquisition or repurchase rights applicable to any shares of our
common stock issued pursuant to a stock award to the surviving or acquiring corporation (or its parent
company);
•
accelerate the vesting and exercisability of a stock award followed by the termination of the stock
award;
F-28
