-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Wy4lLrvWMpTIDp5z/WyL9xLE7nj58S189MLMOV/vNWZTrJ20/JClBbuTkD6ErAo9 K8tKjgYa3mCNnCE7RGcgvQ== 0000891020-06-000016.txt : 20060123 0000891020-06-000016.hdr.sgml : 20060123 20060123171828 ACCESSION NUMBER: 0000891020-06-000016 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060117 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060123 DATE AS OF CHANGE: 20060123 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEKTRONIX INC CENTRAL INDEX KEY: 0000096879 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 930343990 STATE OF INCORPORATION: OR FISCAL YEAR END: 0528 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04837 FILM NUMBER: 06544269 BUSINESS ADDRESS: STREET 1: 14200 SW KARL BRAUN DRIVE CITY: BEAVERTON STATE: OR ZIP: 97077 BUSINESS PHONE: 503-627-7111 MAIL ADDRESS: STREET 1: P O BOX 500 CITY: BEAVERTON STATE: OR ZIP: 97077-0001 8-K 1 v16405e8vk.htm FORM 8-K e8vk
 

 
 
         
 
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
January 17, 2006
TEKTRONIX, INC.
(Exact name of registrant as specified in its charter)
         
OREGON   001-04837   93-0343990
(State or other jurisdiction
of incorporation) 		  (Commission File Number)   (IRS Employer
Identification No.)
 
     
14200 SW Karl Braun Drive    
Beaverton, Oregon   97077
(Address of principal executive offices)   (Zip Code)
 
Registrant’s telephone number, including area code: (503) 627-7111
No Change
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

 

Item 1.01. Entry into a Material Definitive Agreement.
On January 17, 2006, the Organization and Compensation Committee of the Board of Directors made restricted stock and non-statutory stock option awards to executive officers of the Company as follows:
                 
    Number of Restricted        
Name   Shares Awarded     Number of Options Awarded  
Richard H. Wills
     20,000       90,000  
Colin L. Slade
     7,000       32,000  
Richard D. McBee
     7,000       30,000  
Craig L. Overhage
     7,000       30,000  
James F. Dalton
     5,000       24,000  
Susan Kirby
     5,000       20,000  
John T. Major
     5,000       20,000  
The shares were awarded pursuant to the Company’s 2005 Stock Incentive Plan. Except for Mr. Wills, the restricted stock vests 100% on January 18, 2009, and in all cases, vesting is conditioned upon continued employment. The restricted stock for Mr. Wills vests 2,500 shares on January 18, 2008 and 2009, and the balance on January 18, 2010. The form of Restricted Stock Agreement relating to the awards is filed under Item 9.01 of this Form 8-K. Stock options vest over four years, also conditioned upon continued employment. The Form of Non-Statutory Stock Option agreement is filed under Item 9.01 of this Form 8-K.
Item 9.01. Financial Statements and Exhibits.
     (d) Exhibits.
  10.1   Form of Restricted Stock Agreement for Executive Officer.
 
  10.2   Form of Non-Statutory Stock Option Agreement for Executive Officer.

 

 

SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: January 23, 2006
         
  TEKTRONIX, INC.
 		  
  By:   /s/ JAMES F. DALTON    
    James F. Dalton    
    Senior Vice President,
General Counsel
and Secretary 		  

 

 

         
EXHIBIT INDEX
         
Exhibit No.   Description
  10.1    
Form of Restricted Stock Agreement for Executive Officer.
       
 
  10.2    
Form of Non-Statutory Stock Option Agreement for Executive Officer.

 

EX-10.1 2 v16405exv10w1.txt EXHIBIT 10.1 Exhibit 10.1 [EXECUTIVE OFFICERS] RESTRICTED STOCK AGREEMENT 2005 Stock Incentive Plan This Agreement is made and entered into as of the ___rd day of ______ 2006 by and between Tektronix, Inc., an Oregon corporation (the "Company") and _________(the "Employee"). RECITALS A. In order to attract and retain as employees people of initiative and ability, the Board of Directors of the Company (the "Board") has adopted the 2005 Stock Incentive Plan (the "Incentive Plan"). B. Under the Incentive Plan, the Organization and Compensation Committee of the Board (the "Committee") may make restricted stock grants of the Company's common stock (the "Common Shares") subject to terms, conditions, and restrictions determined by the Committee. C. The Committee considers it in the Company's best interest to award Employee a restricted stock grant to enhance the Company's ability to retain Employee's services and to provide an additional incentive for Employee to exert the Employee's best efforts on behalf of the Company. D. Employee accepts the restricted stock award on the terms and conditions contained in this Agreement and in the Incentive Plan. AGREEMENT 1. Award of Restricted Stock. Pursuant to Section 7 of the Incentive Plan, the Committee hereby awards to Employee ________ shares of the Company's fully paid and nonassessable Common Shares as a restricted stock grant (the "Restricted Stock"). All of the Restricted Stock is subject to the length of service restrictions set forth in Section 2. 2. Length of Service Restrictions. All of the Restricted Stock shall initially be subject to forfeiture to the Company. All of the Restricted Stock shall be automatically forfeited to the Company if Employee's employment by the Company terminates for any reason whatsoever, including termination with or without cause, or retirement, prior to ______________. Subject to satisfaction of this length of service condition, on such date, all of the shares of Restricted Stock shall be released from the forfeiture restriction. For purposes of this Agreement, a person is considered to be employed by the Company if the person is employed by any entity that is either the Company or a parent or subsidiary of the Company. Notwithstanding the foregoing, the possibility of forfeiture of the Restricted Stock established above shall lapse in its entirety in the event Employee's employment terminates because of the death of Employee or physical disability preventing Employee from performing regular duties. 3. Certain Transactions. Notwithstanding any provision in this Agreement, in the event of a merger, consolidation, plan of exchange, acquisition of property or stock, split-up, split-off, spin-off, reorganization or liquidation to which the Company is a party or any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company (each, a "Transaction"), the Company shall, by action of the Board of Directors, in its sole discretion and to the extent possible under the structure of the Transaction, select one of the following alternatives for treating the Restricted Stock: (i) The Restricted Stock shall remain in effect in accordance with its terms. (ii) The Restricted Stock, to the extent then still subject to the length of service forfeiture restrictions, shall be forfeited to the Company at the closing of the Transaction. 1 (iii) The Restricted Stock shall be converted into restricted stock of one or more of the corporations that are the surviving or acquiring corporations in the Transaction. The amount and type of converted restricted stock shall be determined by the Company, taking into account the relative values of the companies involved in the Transaction and the exchange rate, if any, used in determining shares of the surviving corporation(s) to be held by holders of shares of the Company following the Transaction. Unless otherwise determined by the Company, by action of the Board of Directors, the converted restricted stock shall continue to be subject to the forfeiture provisions applicable to the Restricted Stock at the time of the Transaction. 4. Share Certificates and Dividends; No Transfers. Certificates for Restricted Stock shall be issued as soon as practicable after the effective date of this Agreement and shall be issued in the name of the Employee. In order to facilitate the cancellation of Restricted Stock upon forfeiture, Employee shall execute a stock power upon request, endorsed in blank, covering all Restricted Stock and deliver it to the Company. Certificates and corresponding stock powers shall be held by the Company or its designee until the possibility of forfeiture has lapsed. Upon the lapse of forfeiture restrictions with respect to all or a portion of the Restricted Stock, certificates representing such shares shall be delivered to the registered owner as soon as practicable. If forfeiture occurs, the certificates covering the forfeited shares shall be promptly cancelled by the Company. While the certificates are held by the Company or its designee, Employee will be entitled to receive cash dividends declared on the Restricted Stock, if any, and will be able to exercise voting and other shareholder rights. Certificates for any stock dividends shall also be held in accordance with this Section. If forfeiture occurs, Employee shall have no right to receive retained stock dividends with respect to Restricted Stock that is forfeited. No interest in any Restricted Stock may be transferred voluntarily or by operation of law until the possibility of forfeiture lapses. The registered owner to whom a certificate is delivered pursuant to this Section shall be Employee, unless Employee is not living, in which case the owner shall be the person or persons establishing rights of ownership by will or under the laws of descent and distribution. At the Company's discretion, all certificates may be issued in book-entry format in lieu of issuing physical certificates. 5. Taxes. Employee acknowledges that any income recognized as a result of receiving the Restricted Stock will be treated as ordinary compensation income subject to federal, state and local income, employment and other tax withholding. Employee understands that if he or she makes an election under Section 83(b) of the Internal Revenue Code of 1986, as amended (a "Section 83(b) Election"), with respect to some or all of the Restricted Stock, Employee will recognize ordinary compensation income at the time such Restricted Stock is received, in an amount equal to the fair market value of the Restricted Stock on that date. If Employee does not make a Section 83(b) Election with respect to some or all of the Restricted Stock, Employee will recognize ordinary compensation income at the time any portion of such Restricted Stock vests in accordance with Section 2 of this Agreement, in an amount equal to the fair market value of those Restricted Stock on the vesting date. Within 10 days after notification by Company, and prior to or concurrently with the delivery of the certificates representing the Restricted Stock, Employee shall pay to Company the amount necessary to satisfy any applicable federal, state and local tax withholding requirements arising in connection with Employee's receipt of the Restricted Stock, including any amounts required to be withheld at the time any portion of the Restricted Stock vests in accordance with Section 2 of this Agreement. Employee shall pay such amounts in cash or, at the election of the Employee, by surrendering to Company for cancellation Restricted Stock or other shares of Company Common Stock held for at least six months valued at the closing market price for the Company Common Stock on the last trading day preceding the date of Employee's election to surrender such shares. If additional withholding becomes required beyond any amount paid before delivery of the certificates representing the Restricted Stock, Employee shall pay such amount to Company upon demand. If Employee fails to pay any amount demanded, Company shall have the right to withhold such amount from other amounts payable by Company to the Employee, including salary, subject to applicable law. EMPLOYEE UNDERSTANDS THAT TO BE VALID, A SECTION 83(b) ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE WITHIN 30 DAYS OF THE DATE THE OWNERSHIP OF THE RESTRICTED STOCK IS TRANSFERRED TO EMPLOYEE, A COPY OF THE ELECTION MUST BE PROVIDED TO COMPANY, AND A COPY OF THE ELECTION MUST BE ATTACHED TO THE EMPLOYEE'S FEDERAL (AND POSSIBLY STATE) INCOME TAX RETURN FOR THE YEAR OF THE ELECTION. EMPLOYEE ACKNOWLEDGES THAT IF HE OR SHE CHOOSES TO FILE A SECTION 83(b) ELECTION, IT IS EMPLOYEE'S SOLE RESPONSIBILITY, AND NOT COMPANY'S, TO MAKE A VALID AND TIMELY ELECTION. EMPLOYEE IS ENCOURAGED TO CONSULT HIS OR HER TAX ADVISOR REGARDING THE ADVISABILITY OF, AND PROCEDURE FOR, MAKING A SECTION 83(b) ELECTION WITH RESPECT TO SOME OR ALL OF THE RESTRICTED STOCK. 2 6. No Solicitation. Employee agrees that for 18 months after Employee's employment with the Company terminates for any reason, with or without cause, whether by the Company or Employee, Employee shall not recruit, attempt to hire, solicit, or assist others in recruiting or hiring, any person who is an employee of the Company, or any of its subsidiaries, in each case as of the date of employment termination, or induce or attempt to induce any such employee to terminate his or her employment with the Company or any of its subsidiaries. In addition to other remedies that may be available to the Company, Employee shall repay to the Company all benefits received under this Agreement if Employee violates this Section 6. 7. Additional Common Shares of the Company. If, during the period when any of the Restricted Stock is subject to the possibility of forfeiture, the outstanding Common Shares are hereafter increased as a result of a stock dividend or stock split, the restrictions and other provisions of this Agreement shall apply to any such additional shares which are issued in respect of any Restricted Stock to the same extent as such restrictions and other provisions apply to such Restricted Stock. 8. Restrictive Legend. Certificates for shares issued under this Agreement may bear the following legend: "The shares represented by this certificate are subject to a Restricted Stock Agreement between the registered owner and Tektronix, Inc. materially restricting the transferability of the shares. A copy of the agreement is on file with the Secretary of Tektronix, Inc." 9. Not a Contract of Employment. This Agreement shall not be construed as a contract of employment between the Company and Employee and nothing contained in this Agreement or in the Incentive Plan shall confer upon Employee any right to be continued in the employment of the Company or any subsidiary or to interfere in any way with the right of the Company or any subsidiary by whom Employee is employed to terminate the Employee's employment at any time for any reason, with or without cause, or to decrease Employee's compensation or benefits. 10. Electronic Delivery. Employee consents to the electronic delivery of any prospectus and any other documents relating to this award in lieu of mailing or other form of delivery. TEKTRONIX, INC. ________________________ By: _________________________ (Signature) (Signature) Title: ______________________ 3 EX-10.2 3 v16405exv10w2.txt EXHIBIT 10.2 Exhibit 10.2 TEKTRONIX, INC. 2005 STOCK INCENTIVE PLAN [EXECUTIVE OFFICERS] NON-STATUTORY STOCK OPTION AGREEMENT Pursuant to the Tektronix, Inc. 2005 Stock Incentive Plan, as amended (the "Plan"), Tektronix, Inc. (the "Company") has approved granting to you (the "Optionee") an option to purchase Common Shares of the Company in the amount, and upon the terms, hereinafter indicated. This document, together with the STOCK OPTION AWARD SUMMARY delivered to Optionee describing an OPTION GRANT DATE OF JANUARY 17, 2006, sets forth the complete NON-STATUTORY STOCK OPTION AGREEMENT (the "Agreement") between you and Tektronix with respect to the Number of Shares identified in the Stock Option Award Summary. Optionee and Company agree as follows: 1. As of the Option Grant Date set forth in the Stock Option Award Summary delivered to you simultaneously with this Non-Statutory Stock Option Agreement, the Company hereby grants to the Optionee on the terms and conditions herein the right and option (the "Option") to purchase the Company's authorized but unissued or reacquired Common Shares, without par value, in an amount equal to the Number of Shares and at the Exercise Price per share identified in the Stock Option Award Summary. This Option is a Non-Statutory Stock Option and is not intended to be an Incentive Stock Option, as defined in Section 422 of the Internal Revenue Code, as amended (the "Code"). 2. The terms and conditions set forth in Exhibit A are hereby incorporated into and made a part of this Agreement. 3. The obligations of the Company under this Agreement are subject to the approval of such authorities or agencies, if any, as may have jurisdiction in the matter. The Company will use its best efforts to take such steps as may be required by state or federal law or applicable regulations, including rules and regulations of the Securities and Exchange Commission and any stock exchange on which the Company's shares may then be listed, in connection with issuance or sale of any shares purchased upon exercise of the Option. 4. Nothing in the Plan or this Agreement shall confer upon the Optionee any right to be continued in the employment of the Company or any subsidiary of the Company, or to interfere in any way with the right of the Company or any subsidiary by whom the Optionee is employed to terminate the Optionee's employment at any time, for any reason, with or without cause. Nothing in the Plan or this Agreement shall confer upon the Optionee any right to receive severance benefits based upon the options granted herein. 5. This Agreement shall be binding upon and shall inure to the benefit of any successor or successors of the Company but except as provided herein the Option may not be assigned or otherwise disposed of by the Optionee. 6. If Optionee has not previously indicated acceptance of the terms of this Agreement, any exercise or attempted exercise of the options awarded pursuant to this Agreement shall constitute acceptance of its terms. 7. Optionee consents to the electronic delivery of any prospectus and any other documents relating to the Option in lieu of mailing or other form of delivery. Page 1 2005 STOCK INCENTIVE PLAN EXHIBIT A to Non-Statutory Stock Option Agreement 1. Option Expiration Date. Subject to reductions in the Option period as hereinafter provided in the event of termination of employment or death of the Optionee, the Option shall continue in effect for a period of ten years from the Option Grant Date. 2. Vesting (when you can exercise your options). Except as provided in paragraph 5 of this Exhibit A, the Option may be exercised from time to time in the following amounts:
Percentage of Shares Subject to Option ---------------------- Prior to 12 months after Option Grant Date 0% 12 months after Option Grant Date 25% 24 months after Option Grant Date 50% 36 months after Option Grant Date 75% 48 months after Option Grant Date 100%
3. Limitations on Right to Exercise. Except as provided in paragraph 5 of this Exhibit A, the Option may not be exercised unless at the time of such exercise the Optionee is employed by the Company and has been so employed continuously since the Option Grant Date. For purposes of this Exhibit A, a person is considered to be employed by the Company if the person is employed by any entity (the "Employer") that is either the Company or a parent or subsidiary of the Company. 4. Nonassignability. The Option may not be assigned or transferred by the Optionee except by will or by the laws of descent and distribution of the state or country of the Optionee's domicile at the time of death, and during the lifetime of the Optionee the Option may be exercised only by the Optionee. 5. Termination of Employment. (a) General Rule. If the Optionee's employment by the Company terminates for any reason other than because of physical disability as provided in paragraph 5(c), or death as provided in paragraph 5 (d), or when the Optionee is eligible for retirement as provided in paragraph 5(b), the Option may be exercised at any time before the expiration date of the Option or the expiration of three months after the date of termination, whichever is the shorter period, but only if and to the extent the Optionee was entitled to exercise the Option at the date of termination. (b) Termination When Eligible for Retirement. In the event of the termination of the Optionee's employment when the Optionee is eligible for retirement (other than because of death as provided in paragraph 5(d) or because of physical disability as provided in paragraph 5(c)), the Option may be exercised at any time prior to the expiration date of the Option or the expiration of one year after the date of such termination, whichever is the shortest period, but only if and to the extent the Optionee was entitled to exercise the Option on the date of termination. For purposes of this Stock Option Agreement, the Optionee is eligible for retirement if the Optionee is a U.S. citizen, is at least 55 years of age Page 2 and has been continuously employed by Tektronix for at least four years. If the Optionee is not a U.S. citizen, then the Optionee is eligible for retirement pursuant to the retirement plan or local law applicable to that Optionee, or in the absence of such plan or local law, then the determination shall be the same as for a U.S. employee. The Company may, in its sole discretion, cancel the Option at any time prior to the exercise thereof unless the following conditions are met: (i) The Optionee shall not render services for any organization or engage directly or indirectly in any business which, in the judgment of the Chief Executive Officer of the Company, is or becomes competitive with the Company, or which is or becomes otherwise prejudicial to or in conflict with the interests of the Company. The Optionee shall be free, however, to purchase as an investment or otherwise, stock or other securities of such organization or business so long as they are listed upon a recognized securities exchange or traded over-the-counter, and such investment does not represent a substantial investment to the Optionee or a greater than 10 percent equity interest in the organization or business. (ii) The Optionee shall not, without prior written authorization from the Company, disclose to anyone outside the Company, or use in other than the Company's business, any confidential information or material, as defined in the Company's employee confidentiality agreement, relating to the business of the Company, acquired by the Optionee either during or after employment with the Company. (iii) The Optionee, pursuant to the Company's employee confidentiality agreement, shall disclose promptly and assign to the Company all right, title, and interest in any invention or idea, patentable or not, made or conceived by the Optionee during employment by the Company, relating in any manner to the actual or anticipated business, research or development work of the Company and shall do anything reasonably necessary as requested by the Company to enable the Company to secure a patent where appropriate in the United States and in foreign countries. (c) Termination Because of Disability. If the Optionee's employment by the Company terminates because of physical disability preventing the Optionee from performing regular duties, all or any part of the Option may be exercised by the Optionee (without regard to the vesting schedule specified in paragraph 2 of this Exhibit A) at any time before the expiration date of the Option or before the date one year after the date of termination, whichever is the shorter period. (d) Termination Because of Death. If the Optionee dies while employed by the Company, all or any part of the Option may be exercised (without regard to the vesting schedule specified in paragraph 2 of this Exhibit A) at any time before the expiration date of the Option or before the date one year after the date of death, whichever is the shorter period, but only by the person or persons to whom the Optionee's rights under the Option shall pass by the Optionee's will or by the laws of descent and distribution of the state or country of domicile at the time of death. (e) Failure to Exercise Option. To the extent that the Option is not exercised within the applicable period above provided, all further rights to purchase shares pursuant to the Option shall cease and terminate. (f) Leave of Absence. Absence on leave approved by the Employer or on account of illness or disability shall not be deemed a termination or interruption of employment or service. Vesting of the Option shall continue during a medical, family or military leave of Page 3 absence, whether paid or unpaid, and vesting of the Option shall be suspended during any other unpaid leave of absence. 6. Exercise of Option. The Option may be exercised only upon receipt by the Company of written notice from the Optionee of the Optionee's binding commitment to purchase shares, specifying the number of shares the Optionee desires to purchase under the Option and the date on which the Optionee agrees to complete the transaction and, if required in order to comply with the Securities Act of 1933, containing a representation that it is the Optionee's intention to acquire the shares for investment and not with a view to distribution. On or before the date specified for completion of the purchase of the shares, the Optionee must pay the Company the full purchase price of those shares in cash or by check or, with the consent of the Company, in Common Shares of the Company valued at fair market value. Any Common Shares provided in payment of the purchase price must have been previously acquired and held by the Optionee for at least six months. The fair market value of Common Shares provided in payment of the purchase price shall be the closing price of the Common Shares last reported before the time payment in Common Shares is made or, if earlier, committed to be made, if the Company's Common Shares is publicly traded, or another value of the Common Shares as specified by the Board of Directors. No shares shall be issued until full payment for the shares has been made, including all amounts owed for tax withholding. Upon notification of the amount due (if any), the Optionee shall pay to the Company in cash amounts necessary to satisfy applicable federal, state and local withholding tax requirements. Notwithstanding the foregoing, residents of the People's Republic of China shall, concurrent with exercise, elect to sell the exercised shares at the current fair market value of the shares pursuant to the Company's same-day sale procedures. 7. Changes in Capital Structure. (a) If the outstanding Common Shares are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any stock split, combination of shares, dividend payable in shares, recapitalization or reclassification, appropriate adjustment shall be made by the Board of Directors in the number and kind of shares as to which the Option, or portion thereof then unexercised, shall be exercisable, so that the Optionee's proportionate interest before and after the occurrence of the event is maintained. Any such adjustments made by the Board of Directors shall be conclusive. (b) In the event of a merger, consolidation, plan of exchange, acquisition of property, or stock, split-up, split-off, spin-off, reorganization or liquidation to which the Company is a party or any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company (each, a "Transaction"), the Company shall, by action of the Board of Directors, in its sole discretion and to the extent possible under the structure of the Transaction, select one of the following alternatives for treating the Option: (i) The Option shall remain in effect in accordance with its terms. (ii) The Option shall be converted into an option to purchase stock in one or more of the corporations, including the Company, that are the surviving or acquiring corporations in the Transaction. The amount, type of securities subject thereto and exercise price of the converted option shall be determined by the Company, taking into account the relative values of the companies involved in the Transaction and the exchange rate, if any, used in determining shares of the surviving corporation(s) to be held by holders of shares of the Company following the Transaction. Unless otherwise determined by the Company, at the sole discretion of the Board of Directors, the converted option shall be vested only to the extent that the vesting requirements relating to the Option have been satisfied. Page 4 (iii) The Company shall provide a period of 30 days or less before the completion of the Transaction during which the Option may be exercised to the extent then exercisable, and upon the expiration of that period, any unexercised portion of the Option shall immediately terminate. The Board of Directors may, in its sole discretion, accelerate the exercisability of options so that they are exercisable in full during that period. (c) In the event of the dissolution of the Company, the Option shall be treated in accordance with paragraph 7(b)(iii) above. 8. No Solicitation. Employee agrees that for 18 months after Optionee's employment with the Company terminates for any reason, with or without cause, whether by the Company or Optionee, Optionee shall not recruit, attempt to hire, solicit, or assist others in recruiting or hiring, any person who is an employee of the Company, or any of its subsidiaries, in each case as of the date of employment termination, or induce or attempt to induce any such employee to terminate his or her employment with the Company or any of its subsidiaries. In addition to other remedies that may be available to the Company, Optionee shall repay to the Company all benefits received under this Agreement if Optionee violates this paragraph 9. Page 5 -----END PRIVACY-ENHANCED MESSAGE-----