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This excerpt taken from the OCLS DEF 14A filed Jul 29, 2009. SECTION 4. ELIGIBILITY.
(a) General Rule. Only common-law
employees of the Company, a Parent or a Subsidiary shall be
eligible for the grant of ISOs. Only Employees, Consultants and
Outside Directors shall be eligible for the grant of Restricted
Shares, Stock Units, Nonstatutory Options or SARs.
(b) Automatic Grants to Outside Directors.
(i) Each Outside Director who first joins the Board of
Directors on or after the Effective Date, and who was not
previously an Employee, shall receive a Nonstatutory Option,
subject to approval of the Plan by the Company’s
stockholders, to purchase 50,000 Shares (subject to
adjustment under Section 11) on the date of his or her
election to the Board of Directors. One-third of the Shares
subject to each Option granted under this Section 4(b)(i)
shall vest and become exercisable on the first anniversary of
the date of grant. The balance of the Shares subject to such
Option (i.e. the remaining two-thirds) shall vest and become
exercisable monthly, in equal monthly installments, over a
three-year period beginning on the day which is one month after
the first anniversary of the date of grant. Notwithstanding the
foregoing, each such Option shall become vested if a Change in
Control occurs with respect to the Company during the
Optionee’s Service.
(ii) On the first business day of the month following the
conclusion of each regular annual meeting of the Company’s
stockholders, commencing with the annual meeting of stockholders
occurring in calendar year 2007, each Outside Director who was
not elected to the Board for the first time at the annual
meeting of
Oculus Innovative
Sciences, Inc.
2006 Stock Incentive Plan
Table of Contents
stockholders for that year and who will continue serving as a
member of the Board of Directors thereafter shall receive an
Option to purchase 15,000 Shares (subject to adjustment
under Section 11), provided that such Outside Director has
served on the Board of Directors for at least six months. Each
Option granted under this Section 4(b)(ii) shall vest and
become exercisable in twelve equal installments on the one-month
anniversary of the date of grant; provided, however, that each
such Option shall become exercisable in full immediately prior
to the next regular annual meeting of the Company’s
stockholders following such date of grant in the event such
meeting occurs prior to such first anniversary date.
Notwithstanding the foregoing, each Option granted under this
Section 4(b)(ii) shall become vested if a Change in Control
occurs with respect to the Company during the Optionee’s
Service.
(iii) The Exercise Price of all Nonstatutory Options
granted to an Outside Director under this Section 4(b)
shall be equal to 100% of the Fair Market Value of a Share on
the date of grant, payable in one of the forms described in
Section 8(a), (b) or (d).
(iv) All Nonstatutory Options granted to an Outside
Director under this Section 4(b) shall terminate on the
earlier of (A) the day before the tenth anniversary of the
date of grant of such Options or (B) the date twelve months
after the termination of such Outside Director’s Service
for any reason; provided, however, that any such Options that
are not vested upon the termination of the Outside
Director’s Service as a member of the Board of Directors
for any reason shall terminate immediately and may not be
exercised.
(c) Ten-Percent Stockholders. An
Employee who owns more than 10% of the total combined voting
power of all classes of outstanding stock of the Company, a
Parent or Subsidiary shall not be eligible for the grant of an
ISO unless such grant satisfies the requirements of
Section 422(c)(5) of the Code.
(d) Attribution Rules. For purposes of
Section 4(b) above, in determining stock ownership, an
Employee shall be deemed to own the stock owned, directly or
indirectly, by or for such Employee’s brothers, sisters,
spouse, ancestors and lineal descendants. Stock owned, directly
or indirectly, by or for a corporation, partnership, estate or
trust shall be deemed to be owned proportionately by or for its
stockholders, partners or beneficiaries.
(e) Outstanding Stock. For purposes of
Section 4(b) above, “outstanding stock” shall
include all stock actually issued and outstanding immediately
after the grant. “Outstanding stock” shall not include
shares authorized for issuance under outstanding options held by
the Employee or by any other person.
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