Exhibit 10.07
ONI SYSTEMS CORP.
XXXXX STOCK OPTION PLAN AND AGREEMENT
This Xxxxx Stock Option Plan and Agreement (this "Agreement") is made
and entered into as of the date of grant set forth below (the "Date of Grant")
by and between ONI Systems Corp., a Delaware corporation (the "Company"), and
the participant named below (the "Participant"). Capitalized terms not defined
herein shall have the meaning ascribed to them in Exhibit A attached hereto.
---------
Participant: Xxxxx X. Xxxxx
------------------------------------------------
Social Security Number:
------------------------------------------------
Address:
------------------------------------------------
Total Option Shares: 1,000,000
------------------------------------------------
Exercise Price Per Share: $ 4.00
------------------------------------------------
Date of Grant: May 3, 2000
------------------------------------------------
Vesting Start Date: May 1, 2000
------------------------------------------------
Expiration Date: May 2, 2010
------------------------------------------------
(unless earlier terminated under this Agreement)
Type of Stock Option Nonqualified Stock Option
1. Grant of Option. The Company hereby grants to Participant an
---------------
option (this "Option") to purchase the total number of shares of Common Stock of
the Company set forth above as Total Option Shares (the "Shares") at the
Exercise Price Per Share set forth above (the "Exercise Price"), subject to all
of the terms and conditions of this Agreement. In the event that the number of
outstanding shares of the Company's Common Stock is changed by a stock dividend,
recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company
without consideration, then (a) the number of Shares reserved for issuance under
this Agreement, and (b) the Exercise Price of and number of Shares subject to
the Option will be proportionately adjusted, subject to any required action by
the Board or the shareholders of the Company and compliance with applicable
securities laws; provided, however, that fractions of a Share will not be issued
but will either be paid in cash at Fair Market Value of such fraction of a Share
or will be rounded down to the nearest whole Share, as determined by the
Committee.
2. Exercise Period.
---------------
2.1 Exercise Period of Option. This Option is immediately
-------------------------
exercisable. Provided Participant continues to provide services to the Company
or any Subsidiary or Parent of the Company, the Option will become vested as to
portions of the Shares as follows: (i) this Option shall not vest with respect
to any of the Shares until the first anniversary of the Vesting Start Date (the
"First Vesting Date"); (ii) on the First Vesting Date the Option will become
vested as to twenty-five percent (25%) of the Shares; and (iii) thereafter at
the end of each full succeeding month the Option will become vested as to 1/48th
(2.0833%) of the Shares until the Shares are vested with respect to one hundred
percent (100%) of the Shares. If application of the vesting percentage causes a
fractional share, such share shall be rounded down to the nearest whole share
for each month except for the last month in such vesting period, at the end of
which last month this Option shall become vested for the full remainder of the
Shares.
2.2 Vesting of Options. Shares that are vested pursuant to the
------------------
schedule set forth in Section 2.1, including as provided in Section 2.4, are
"Vested Shares." Shares that are not Vested Shares are "Unvested Shares."
2.3 Expiration. The Option shall expire on the Expiration Date
----------
set forth above or earlier as provided in Section 3 below.
2.4 Change of Control. In the event of a Change in Control of
-----------------
the Company (as defined below), which is immediately preceded by or followed by,
within twelve (12) months, an actual or "Involuntary Termination" (as defined
below) without Cause, the Shares issuable upon exercise of this Option will
become vested with respect to an additional fifty percent (50%) of the then
Unvested Shares. For the purposes of this Section 2.4, a "Change in Control of
the Company" means the occurrence of any of the following events: (i) a merger
or consolidation in which the Company is not the surviving corporation (other
than a merger or consolidation with a wholly-owned subsidiary, a re-
incorporation of the Company in a different jurisdiction, or other transaction
in which there is no substantial change in the shareholders of the Company or
their relative stock holdings) (ii) a merger in which the Company is the
surviving corporation but after which the shareholders of the Company
immediately prior to such merger cease to own shares or other equity interests
in the Company representing at least fifty percent (50%) of the voting power of
all securities of the Company; or (iii) the sale of all, or substantially all,
of the assets of the Company. For purposes of this Section 2.4, an "Involuntary
Termination" will be deemed to have occurred if both (a) any of the following
actions is taken by the Company and such action is not reversed in full by the
Company within fourteen days: (i) Participant's aggregate compensation and
benefits are materially reduced, (ii) Participant's duties and responsibilities
are significantly decreased in a way that is adverse to Participant, (iii)
Participant is required to perform Participant's employment obligations (other
than travel on business) at a location more than sixty (60) miles away from the
Company's current offices, and/or (iv) the terms of the offer letter between
Participant and the Company are not assumed in full by any acquiror or other
successor to the Company, and (b) Participant, after the expiration of such
fourteen-day period, resigns in writing stating that Participant's resignation
is as a result of, and specifying in reasonable detail the nature of, such
uncured action listed above (a "Resignation"). Notwithstanding the foregoing,
Participant shall have six (6) months from the expiration of such fourteen-day
period to submit a Resignation. Other changes in the Company's management or
reporting structure, or changes in Participant's position's title, shall not
constitute an "Involuntary Termination."
3. Termination.
-----------
3.1 Termination for Any Reason Except Death, Disability or
------------------------------------------------------
Cause. If Participant is Terminated for any reason, except death, Disability or
for Cause, the Option, to the extent (and only to the extent) that it would have
been exercisable by Participant on the Termination Date, may be exercised by
Participant no later than three (3) months after the Termination Date, but in
any event no later than the Expiration Date.
3.2 Termination Because of Death or Disability. If Participant
------------------------------------------
is Terminated because of death or Disability of Participant (or Participant dies
within three (3) months of Termination when Termination is for any reason other
than Participant's Disability or for Cause), the Option, to the extent that it
is exercisable by Participant on the Termination Date, may be exercised by
Participant (or Participant's legal representative) no later than twelve (12)
months after the Termination Date, but in any event no later than the Expiration
Date. Any exercise beyond (i) three (3) months after the Termination Date when
the Termination is for any reason other than the Participant's death or
disability, within the meaning of Section 22(e)(3) of the Code; or (ii) twelve
(12) months after the Termination Date when the termination is for Participant's
disability, within the meaning of Section 22(e)(3) of the Code, is deemed to be
an NQSO.
3.3 Termination for Cause. If Participant is Terminated for
---------------------
Cause, then the Option will expire on Participant's Termination Date, or at such
later time and on such conditions as are determined by the Committee.
3.4 No Obligation to Employ. Nothing in this Agreement shall
-----------------------
confer on Participant any right to continue in the employ of, or other
relationship with, the Company or any Parent or Subsidiary of the Company, or
limit in any way the right of the Company or any Parent or Subsidiary of the
Company to terminate Participant's employment or other relationship at any time,
with or without Cause.
4. Manner of Exercise.
------------------
4.1 Stock Option Exercise Agreement. To exercise this Option,
-------------------------------
Participant (or in the case of exercise after Participant's death or incapacity,
Participant's executor, administrator, heir or legatee, as the case may be) must
deliver to the Company an executed stock option exercise agreement in the form
attached hereto as Exhibit B, or in such other form as may be approved by the
---------
Committee from time to time (the "Exercise Agreement"), which shall set forth,
inter alia, (i) Participant's election to exercise the Option, (ii) the number
----- ----
of Shares being purchased, (iii) any restrictions imposed on the Shares and (iv)
any representations, warranties and agreements regarding Participant's
investment intent and access to information as may be required by the Company to
comply with applicable securities laws. If someone other than Participant
exercises the Option, then such person must submit documentation reasonably
acceptable to the Company verifying that such person has the legal right to
exercise the Option.
4.2 Limitations on Exercise. The Option may not be exercised
-----------------------
unless such exercise is in compliance with all applicable federal and state
securities laws, as they are in effect on the date of exercise. The Option may
not be exercised as to fewer than one hundred (100) Shares unless it is
exercised as to all Shares as to which the Option is then exercisable.
4.3 Payment. The Exercise Agreement shall be accompanied by
-------
full payment of the Exercise Price for the shares being purchased in cash (by
check), or where permitted by law:
(a) by surrender of shares of the Company's Common Stock that (i) either
(A) have been owned by Participant for more than six (6) months and
have been paid for within the meaning of SEC Rule 144 (and, if such
shares were purchased from the Company by use of a promissory note,
such note has been fully paid with respect to such shares); or (B)
were obtained by Participant in the open public market; and (ii) are
clear of all liens, claims, encumbrances or security interests;
(b) by tender of a full recourse promissory note having such terms as may
be approved by the Committee and bearing interest at a rate sufficient
to avoid imputation of income under Sections 483 and 1274 of the Code;
provided, however, that Participants who are not employees or
directors of the Company shall not be entitled to purchase Shares with
a promissory note unless the note is adequately secured by collateral
other than the Shares;
(c) provided that a public market for the Company's stock exists: (i)
through a "same day sale" commitment from Participant and a broker-
dealer that is a member of the National Association of Securities
Dealers (an "NASD Dealer") whereby Participant irrevocably elects to
exercise the Option and to sell a portion of the Shares so purchased
sufficient to pay for the total Exercise Price and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to forward the
total Exercise Price directly to the Company, or (ii) through a
"margin" commitment from Participant and an NASD Dealer whereby
Participant irrevocably elects to exercise the Option and to pledge
the Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the total
Exercise Price, and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the total Exercise Price directly to
the Company;
(d) any other form of consideration approved by the Committee; or
(e) by any combination of the foregoing.
4.4 Tax Withholding. Prior to the issuance of the Shares upon
---------------
exercise of the Option, Participant must pay or provide for any applicable
federal, state and local withholding obligations of the Company. If the
Committee permits, Participant may provide for payment of withholding taxes upon
exercise of the Option by requesting that the Company retain the minimum number
of Shares with a Fair Market Value equal to the minimum amount of taxes required
to be withheld; but in no event will the Company withhold Shares if such
withholding would result in adverse accounting consequences to the Company. In
such case, the Company shall
issue the net number of Shares to the Participant by deducting the Shares
retained from the Shares issuable upon exercise.
4.5 Issuance of Shares. Provided that the Exercise Agreement
------------------
and payment are in form and substance satisfactory to counsel for the Company,
the Company shall issue the Shares registered in the name of Participant,
Participant's authorized assignee, or Participant's legal representative, and
shall deliver certificates representing the Shares with the appropriate legends
affixed thereto.
5. Compliance with Laws and Regulations. This Agreement is intended
------------------------------------
to comply with applicable securities laws. The exercise of the Option and the
issuance and transfer of Shares shall be subject to compliance by the Company
and Participant with all applicable requirements of federal and state securities
laws and with all applicable requirements of any stock exchange on which the
Company's Common Stock may be listed at the time of such issuance or transfer.
Participant understands that the Company is under no obligation to register or
qualify the Shares with the SEC, any state securities commission or any stock
exchange to effect such compliance.
6. Nontransferability of Option. The Option may not be transferred
----------------------------
in any manner other than by will or by the laws of descent and distribution and
may be exercised during the lifetime of Participant only by Participant or in
the event of Participant's incapacity, by Participant's legal representative.
The terms of the Option shall be binding upon the executors, administrators,
successors and assigns of Participant.
7. Company's Repurchase Option for Unvested Shares. The Company, or
-----------------------------------------------
its assignee, shall have the option to repurchase Participant's Unvested Shares
(as defined in Section 2.2 of this Agreement) on the terms and conditions set
forth in the Exercise Agreement (the "Repurchase Option") if Participant is
Terminated for any reason, or no reason, including without limitation
Participant's death, Disability, voluntary resignation or termination by the
Company with or without Cause. Notwithstanding the foregoing, the Company shall
retain the Repurchase Option for Unvested Shares only as to that number of
Unvested Shares (whether or not exercised) that exceeds the number of shares
which remain unexercised.
8. Company's Right of First Refusal. Unvested Shares may not be
--------------------------------
sold or otherwise transferred by Participant without the Company's prior written
consent. Before any Vested Shares held by Participant or any transferee of such
Vested Shares may be sold or otherwise transferred (including without limitation
a transfer by gift or operation of law), the Company and/or its assignee(s)
shall have an assignable right of first refusal to purchase the Vested Shares to
be sold or transferred on the terms and conditions set forth in the Exercise
Agreement (the "Right of First Refusal"). The Company's Right of First Refusal
will terminate when the Company's securities become publicly traded.
9. Tax Consequences. Set forth below is a brief summary as of the
----------------
Effective Date of this Agreement of some of the federal and California tax
consequences of exercise of the Option and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE
OPTION OR DISPOSING OF THE SHARES.
9.1 Exercise of Nonqualified Stock Option. There may be a
-------------------------------------
regular federal and California income tax liability upon the exercise of the
Option. Participant will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the excess, if any, of the Fair
Market Value of the Shares on the date of exercise over the Exercise Price. If
Participant is a current or former employee of the Company, the Company may be
required to withhold from Participant's compensation or collect from Participant
and pay to the applicable taxing authorities an amount equal to a percentage of
this compensation income at the time of exercise.
9.2 Disposition of Shares. The following tax consequences may
---------------------
apply upon disposition of the Shares.
(a) Nonqualified Stock Options. If the Shares are held for
--------------------------
more than twelve (12) months after the date of the transfer of the Shares
pursuant to the exercise of an NQSO, any gain realized on disposition of the
Shares will be treated as long term capital gain.
(b) Withholding. The Company may be required to withhold
-----------
from the Participant's compensation or collect from the Participant and pay to
the applicable taxing authorities an amount equal to a percentage of this
compensation income.
9.3. Section 83(b) Election for Unvested Shares. With respect to
------------------------------------------
Unvested Shares, which are subject to the Repurchase Option, unless an election
is filed by the Participant with the Internal Revenue Service (and, if
necessary, the proper state taxing authorities), within 30 days of the purchase
--------------
of the Unvested Shares, electing pursuant to Section 83(b) of the Code (and
similar state tax provisions, if applicable) to be taxed currently on any
difference between the Exercise Price of the Unvested Shares and their Fair
Market Value on the date of purchase, there may be a recognition of taxable
income (including, where applicable, alternative minimum taxable income) to the
Participant, measured by the excess, if any, of the Fair Market Value of the
Unvested Shares at the time they cease to be Unvested Shares, over the Exercise
Price of the Unvested Shares.
10. Privileges of Stock Ownership. Participant shall not have any of
-----------------------------
the rights of a shareholder with respect to any Shares until the Shares are
issued to Participant.
11. Corporate Transactions.
11.1 Assumption or Replacement of Option by Successor or
---------------------------------------------------
Acquiring Corporation. In the event of (a) a dissolution or liquidation of the
---------------------
Company, (b) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the shareholders of
the Company or their relative stock holdings and the Option granted under this
Agreement is assumed, converted or replaced by the successor or acquiring
corporation, which assumption, conversion or replacement will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the shareholders of the Company immediately prior to such merger
(other than any shareholder which merges with the Company in such merger, or
which owns or controls another corporation which merges, with the Company in
such merger) cease to own their shares or other equity interests in the Company,
or (d) the sale of all or substantially all of the assets of the Company, this
Agreement may be assumed, converted or replaced by the successor or acquiring
corporation (if any), which assumption, conversion or replacement will be
binding on the Participant. In the alternative, the successor or acquiring
corporation may substitute an equivalent Option or provide substantially similar
consideration to Participant as was provided to shareholders (after taking into
account the existing provisions of the Option). The successor or acquiring
corporation may also issue, in place of outstanding Shares of the Company held
by the Participant, substantially similar shares or other property subject to
repurchase restrictions and other provisions no less favorable to the
Participant than those which applied to such outstanding Shares immediately
prior to such transaction described in this Section 11.1. In the event such
successor or acquiring corporation (if any) does not assume or substitute this
Agreement, as provided above, pursuant to a transaction described in this
Section 11.1, then notwithstanding any other provision in this Agreement to the
contrary, the vesting of the Option will accelerate and this Option will become
exercisable in full prior to the consummation of such event at such times and on
such conditions as the Committee determines, and if this Option is not exercised
prior to the consummation of the corporate transaction, it shall terminate in
accordance with the provisions of this Agreement.
11.2 Other Treatment of Option. Subject to any greater rights
-------------------------
granted to Participant under the foregoing provisions of this Section 11, in the
event of the occurrence of any transaction described in Section 11.1 hereof, any
outstanding Option will be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation or sale of assets.
12. Interpretation. Any dispute regarding the interpretation of this
--------------
Agreement shall be submitted by Participant or the Company to the Committee for
review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and Participant.
13. Entire Agreement. This Agreement and the Offer Letter, dated
----------------
April 14, 2000, between the Company and Xxxxx X. Xxxxx, constitute the entire
agreement of the parties and supersede all prior undertakings and agreements
with respect to the subject matter hereof.
14. Notices. Any notice required to be given or delivered to the
-------
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Participant shall be in writing and
addressed to Participant at the address indicated above or to such other address
as such party may designate in writing from time to time to the Company. All
notices shall be deemed to have been given or delivered upon: (i) personal
delivery; (ii) three (3) days after deposit in the United States mail by
certified or registered mail (return receipt requested); (iii) one (1) business
day after deposit with any return receipt express courier (prepaid); or (iv) one
(1) business day after transmission by facsimile, rapifax or telecopier.
15. Successors and Assigns. The Company may assign any of its rights
----------------------
under this Agreement, including its rights to purchase Shares under the
Repurchase Option and the Right of First Refusal. This Agreement shall be
binding upon and inure to the benefit of the successors and assigns of the
Company. Subject to the restrictions on transfer set forth herein, this
Agreement shall be binding upon Participant and Participant's heirs, executors,
administrators, legal representatives, successors and assigns.
16. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of California as such laws are applied
to agreements between California residents entered into and to be performed
entirely within California. If any provision of this Agreement is determined by
a court of law to be illegal or unenforceable, then such provision will be
enforced to the maximum extent possible and the other provisions will remain
fully effective and enforceable.
17. Acceptance. Participant hereby acknowledges receipt of a copy of
----------
this Agreement. Participant has read and understands the terms and provisions
thereof, and accepts the Option subject to all the terms and conditions of this
Agreement. Participant acknowledges that there may be adverse tax consequences
upon exercise of the Option or disposition of the Shares and that Participant
should consult a tax adviser prior to such exercise or disposition.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in triplicate by its duly authorized representative and Participant has
executed this Agreement in triplicate, effective as of the Date of Grant.
ONI SYSTEMS CORP. PARTICIPANT
By:/s/ Xxxx X. Xxxxxx /s/ Xxxxx X. Xxxxx
----------------------------- -----------------------------------------
(Signature)
Xxxx X. Xxxxxx Xxxxx X. Xxxxx
-------------------------------- -----------------------------------------
(Please print name) (Please print name)
President and Chief Executive Officer
------------------------------------------
(Please print title)
EXHIBIT A
---------
DEFINITIONS
DEFINITIONS. As used in this Agreement, the following terms will have the
-----------
following meanings:
"Board" means the Board of Directors of the Company.
"Cause" means Termination because of (i) any willful material
violation by the Participant of any law or regulation applicable to the business
of the Company or a Parent or Subsidiary of the Company, the Participant's
conviction for, or guilty plea to, a felony or a crime involving moral
turpitude, any willful perpetration by the Participant of a common law fraud,
(ii) the Participant's commission of an act of personal dishonesty which
involves personal profit in connection with the Company or any other entity
having a business relationship with the Company, (iii) any material breach by
the Participant of any provision of any agreement or understanding between the
Company or any Parent or Subsidiary of the Company and the Participant regarding
the terms of the Participant's service as an employee, director or consultant to
the Company or a Parent or Subsidiary of the Company, including without
limitation, the willful and continued failure or refusal of the Participant to
perform the material duties required of such Participant as an employee,
director or consultant of the Company or a Parent or Subsidiary of the Company,
other than as a result of having a Disability, or a breach of any applicable
invention assignment and confidentiality agreement or similar agreement between
the Company and the Participant, (iv) Participant's disregard of the policies of
the Company or any Parent or Subsidiary of the Company so as to cause loss,
damage or injury to the property, reputation or employees of the Company or a
Parent or Subsidiary of the Company, or (v) any other misconduct by the
Participant which is materially injurious to the financial condition or business
reputation of, or is otherwise materially injurious to, the Company or a Parent
or Subsidiary of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the committee appointed by the Board to
administer this Plan, or if no committee is appointed, the Board.
"Company" means ONI Systems Corp., or any successor corporation.
"Disability" means a disability, whether temporary or permanent,
partial or total, as determined by the Committee.
"Exercise Price" means the price at which a holder of an Option
may purchase the Shares issuable upon exercise of the Option.
"Fair Market Value" means, as of any date, the value of a share of
the Company's Common Stock determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq National
Market, its closing price on the Nasdaq National Market on
the last trading day prior to the date of determination as
reported in The Wall Street Journal;
-----------------------
(b) if such Common Stock is publicly traded and is then listed on
a national securities exchange, its closing price on the last
trading day prior to the date of determination on the
principal national securities exchange on which the Common
Stock is listed or admitted to trading as reported in The
Wall Street Journal;
-------------------
(c) if such Common Stock is publicly traded but is not quoted on
the Nasdaq National Market nor listed or admitted to trading
on a national securities exchange, the average of the closing
bid and asked prices on the last trading day prior to the
date of determination as reported by The Wall Street Journal
-----------------------
(or, if not so reported, as otherwise reported by any
newspaper or other source as the Board may determine); or
(d) if none of the foregoing is applicable, by the Committee in
good faith.
"Parent" means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if each of such corporations other
than the Company owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
"Participant" means a person named as "Participant" as page 1 of this
Agreement.
"Purchase Price" means the price at which a Participant may purchase
Restricted Stock.
"Restricted Stock" means Shares purchased pursuant to a Restricted
Stock Award.
"Restricted Stock Award" means an award of Shares pursuant to Section
6 hereof.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Ac t of 1933, as amended.
"Shares" means shares of the Company's Common Stock reserved for
issuance under this Plan, as adjusted pursuant to Section 1 hereof, and any
successor security.
"Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
"Termination" or "Terminated" means, for purposes of this Agreement
with respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, officer, director or consultant to the Company
or a Parent or Subsidiary of the Company. A Participant will not be deemed to
have ceased to provide services in the case of (i) sick leave, (ii) military
leave, or (iii) any other leave of absence approved by the Committee, provided
that such leave is for a period of not more than ninety (90) days unless
reinstatement upon the expiration of such leave is guaranteed by contract or
statute, or unless provided otherwise pursuant to formal policy adopted from
time to time by the Company and issued and promulgated in writing. In the case
of any Participant on (i) sick leave, (ii) military leave or (iii) an approved
leave of absence, the Committee may make such provisions respecting suspension
of vesting of the Option while on leave from the Company or a Parent or
Subsidiary of the Company as it may deem appropriate, except that in no event
may an Option be exercised after the expiration of the term set forth in the
Stock Option Agreement. The Committee will have sole discretion to determine
whether a Participant has ceased to provide services and the effective date on
which the Participant ceased to provide services (the "Termination Date").
