This excerpt taken from the QSFT DEF 14A filed Apr 10, 2008.
Terms of Options
Options may be granted under the 2008 Plan pursuant to stock option agreements adopted by our Board. The following is a description of the permissible terms of options under the 2008 Plan. Individual stock option agreements may be more restrictive as to any or all of the permissible terms described below.
Exercise Price. The exercise price of incentive stock options may not be less than 100% of the fair market value of the stock subject to the option on the date of grant and, in some cases (see Eligibility above), may not be less than 110% of such fair market value. The exercise price of nonstatutory stock options may not be less than 100% of the fair market value of the stock on the date of grant. The fair market value per share on any particular date under the 2008 Plan is the closing price per share on such date reported on the Nasdaq Global Select Market. As of March 31, 2008, the fair market value determined on such basis was $13.07 per share.
Consideration. The exercise price of options granted under the 2008 Plan may, at the discretion of our Board, be paid in (a) cash or check, (b) pursuant to a broker-assisted cashless exercise, (c) by delivery of other shares of Common Stock, (d) pursuant to a net exercise arrangement, or (e) in any other form of legal consideration acceptable to our Board. The Prior Plans do not provide express authority for the use of a net exercise arrangement, but provide express authority for the use of past services rendered to us as appropriate consideration.
Vesting. Options granted under the 2008 Plan may become exercisable in cumulative increments, or vest, as determined by our Board. Vesting typically will occur during the participants continued service with us or an affiliate, whether such service is performed in the capacity of an employee, director, or consultant (collectively, service) and regardless of any change in the capacity of the service performed or upon achievement of certain quantitative of qualitative goals determined by our Board. Shares covered by different options granted under the 2008 Plan may be subject to different vesting terms.
Minimum Vesting Requirements. Options granted to our Chief Executive Officer or Chairman of the Board are subject to a minimum vesting period. Such options may vest with respect to no more than 20% of the underlying shares within one year following the date of grant, and no more than 10% of the underlying shares over each six-month period thereafter. Our Compensation Committee has the authority to reduce such minimum vesting periods. In addition, the minimum vesting period does not apply to options granted to our Chairman at such time that he is considered independent within the meaning of the listing standards of the New York Stock Exchange.
Term. The maximum term of options granted under the 2008 Plan is 10 years, except that in certain cases (see Eligibility above) the maximum term is five years.
Termination of Service. Options under the 2008 Plan generally terminate 30 days after termination of a participants service unless (a) termination is due to the participants disability, in which case the option may be exercised (to the extent the option was exercisable at the time of the termination of service) at any time within 12 months of termination; (b) the participant dies within a specified period after termination of service, in which case the option may be exercised (to the extent the option was exercisable at the time of the participants death) within 12 months of the participants death by the person or persons to whom the rights to such option have passed; or (c) the option by its terms specifically provides otherwise. The option term may be extended in the event that exercise of the option following termination of service is prohibited by applicable securities laws. In no event, however, may an option be exercised beyond the expiration of its term.
Restrictions on Transfer. Unless our Board determines otherwise, a participant in the 2008 Plan may not transfer an option other than by will, by the laws of descent and distribution, or pursuant to a domestic relations order. During the lifetime of the participant, only the participant may exercise an incentive stock option. A participant may also designate a beneficiary who may exercise an option following the participants death.