Exhibit 10.4(A)

YAHOO! INC.

DIRECTORS’ STOCK PLAN

(as amended and restated on October 16, 2014)

 

1. Purposes of the Plan. The purposes of this Directors’ Stock Plan are to
attract and retain the best available personnel for service as Directors of the
Company, to provide additional incentive to the Outside Directors of the Company
to serve as Directors, and to encourage their continued service on the Board.

Awards granted on or after the Effective Date shall be made under this version
of the Plan and not under the Plan as previously in effect. For the terms and
conditions of the Plan applicable to Awards granted under the Plan before the
Effective Date (except as expressly provided herein), refer to the version of
the Plan in effect as of the date such Award was granted. Notwithstanding the
foregoing, the April 2012 amendments to the Plan apply as to all Awards then
outstanding, and all Awards granted thereafter, under the Plan.

 

2. Definitions. As used herein, the following definitions shall apply:

“Annual Meeting” means the annual meeting of the Company’s stockholders for the
applicable year. If more than one such meeting occurs for a particular year, the
Annual Meeting for that year means only the first such meeting for that year. In
the event that an Annual Meeting for a particular year is adjourned, the date of
the Annual Meeting for that year for purposes of the Plan shall be the date that
corresponds to the portion of Annual Meeting at which Directors were elected.

“Applicable Laws” means any legal requirements of all state and federal laws,
including without limitation securities laws and the Code, relating to the
administration of stock incentive plans such as the Plan.

“Award” means an award of Options or Restricted Stock Units (each as defined
below).

“Board” means the Board of Directors of the Company.

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Common Stock” means the common stock of the Company.

“Company” means Yahoo! Inc., a Delaware corporation.

“Continuous Service as a Director” means the absence of any interruption or
termination of service as a Director.

“Director” means a member of the Board.

 

Directors’ Stock Plan    1

--------------------------------------------------------------------------------

“Director Fees” means the amount of all compensation payable to a Director for
services as a member of the Board (including service on any Board committee)
that, but for any election made by such Director to receive such compensation in
the form of an Award under Section 11 of the Plan, would have been payable in
cash to such Director.

“Effective Date” means January 1, 2015.

“Employee” means any person, including officers and directors, employed by the
Company or any Parent or Subsidiary of the Company. The payment of compensation
by the Company for service as a Director does not, alone, constitute
“employment” of the Director by the Company.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“Fair Market Value” means, as of any date, the fair market value of Common Stock
determined as follows:

 

  (i) If the Common Stock is listed on any established stock exchange or a
national market system including without limitation the Nasdaq Global Market and
Nasdaq Global Select Market, its Fair Market Value shall be the closing sales
price for such stock as quoted on such exchange or system on the date of
determination (if for a given day no sales were reported, the closing sales
price for a share of Common Stock for the next preceding day on which sales of
Common Stock were reported shall be used), as such price is reported in The Wall
Street Journal or such other source as the Board deems reliable;

 

  (ii) If the Common Stock is listed on the Nasdaq Stock Market (but not on the
Nasdaq Global Market or Nasdaq Global Select Market thereof) or regularly quoted
by a recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the bid and asked prices for the Common
Stock on the date of determination, as reported in The Wall Street Journal or
such other source as the Board deems reliable; or

 

  (iii) In the absence of an established market for the Common Stock, the Fair
Market Value thereof shall be determined in good faith by the Board.

“Option” means a stock option granted pursuant to the Plan. All Options shall be
nonstatutory stock options (i.e., options that are not intended to qualify as
incentive stock options under Section 422 of the Code).

“Outside Director” means a Director who is not an Employee.

“Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.

“Participant” means an Outside Director who receives an Award.

“Plan” means this Directors’ Stock Plan (formerly known as the “1996 Directors’
Stock Plan”).

 

Directors’ Stock Plan    2

--------------------------------------------------------------------------------

“Restricted Stock Unit” means the right to receive one Share, subject to the
terms and conditions hereof.

“Share” means a share of the Common Stock, as adjusted in accordance with
Section 13 of the Plan.

“Stock Exchange” means any stock exchange or consolidated stock price reporting
system on which prices for the Common Stock are quoted at any given time.

“Subsidiary” means a “subsidiary corporation,” whether now or hereafter
existing, as defined in Section 424(f) of the Code.

“Total Disability” means a total and permanent disability within the meaning of
Section 22(e)(3) of the Code.

“Vesting Date” with respect to a particular Award granted pursuant to
Section 4(b)(ii) means the last day of each of the four three-month periods
following the date on which the Award is granted; provided, however, that the
fourth such “Vesting Date” as to the Award shall be the first to occur of the
first anniversary of the date of grant of the Award or the day before the Annual
Meeting for the calendar year following the year in which the Award is granted.

 

3. Stock Subject to the Plan.

 

  (a) Share Limits. Subject to the provisions of Section 13 of the Plan, the
maximum aggregate number of Shares which may be issued under the Plan (including
Shares issued before the Effective Date) is 8,800,000 Shares (the “Pool”) of
Common Stock. The Shares may be authorized, but unissued, or reacquired Common
Stock. Shares issued in payment of any Restricted Stock Units granted under the
Plan shall be counted against the Pool as 1.75 shares for every one Share
actually issued in payment of such Restricted Stock Units. (For example, if 100
Shares were issued in payment of Restricted Stock Units granted under the Plan,
175 Shares shall be charged against the Pool in connection with that payment.)

 

  (b)

Reissue of Shares. To the extent that an Award is settled in cash or a form
other than Shares, the Shares that would have been delivered had there been no
such cash or other settlement shall not be counted against the Shares available
for issuance under the Plan. In the event that shares of Common Stock are
delivered in respect of a Dividend Equivalent right granted under the Plan, only
the actual number of shares delivered with respect to the Award shall be counted
against the share limits of the Plan. (For purposes of clarity, if 1,000
Dividend Equivalent rights are granted and outstanding when the Company pays a
dividend, and 50 shares are delivered in payment of those rights with respect to
that dividend, 50 shares shall be counted against the Pool.) In connection with
the exercise of an Option, the number of underlying Shares as to which the
exercise relates shall be counted against the applicable Share limits under
Section 3(a), as opposed to only counting the Shares actually issued. (For
purposes of clarity, if an Option relates to 100,000

 

Directors’ Stock Plan    3

--------------------------------------------------------------------------------

  Shares and is exercised in full at a time when the net number of Shares due to
the Participant (after any netting of Shares to cover the exercise price and/or
tax withholding) is 15,000 Shares, 100,000 Shares shall be counted against the
Pool with respect to such exercise.) Shares that are exchanged by a Participant
or withheld by the Company as full or partial payment in connection with any
Award under the Plan, as well as any Shares exchanged by a Participant or
withheld by the Company or one of its Subsidiaries to satisfy the tax
withholding obligations related to any Award, shall not be available for
subsequent Awards under the Plan. Shares that are subject to or underlie Awards
which expire or for any reason are cancelled or terminated, are forfeited, fail
to vest, or for any other reason are not paid or delivered under the Plan shall
again be available for subsequent Awards under the Plan.

 

4. Administration of and Grants of Awards Under the Plan.

 

  (a) Administrator. Except as otherwise required herein, the Plan shall be
administered by the Board.

 

  (b) Procedure for Grants. Except as provided in Section 11, all grants of
Awards hereunder shall be automatic and nondiscretionary and shall be made
strictly in accordance with the following provisions:

 

  (i) Subject to the Board’s amendment authority pursuant to Section 15(a), no
person shall have any discretion to select which Outside Directors shall be
granted Awards or to determine the number of Shares to be covered by Awards
granted to Outside Directors.

 

  (ii) On the date of each Annual Meeting of the Company’s Stockholders which
occurs on or after the Effective Date and immediately following which an Outside
Director is serving on the Board, such Outside Director shall be automatically
granted an Award of a number of Restricted Stock Units determined by dividing
(A) $240,000 by (B) the Fair Market Value of the Common Stock on the date of
grant, such number to be rounded down to the nearest whole number of Restricted
Stock Units.

 

  (iii) In addition, each Outside Director who first becomes an Outside Director
at any time on or after the Effective Date and other than in connection with an
Annual Meeting shall be automatically granted, on the date he or she first
becomes an Outside Director, an Award of a number of Restricted Stock Units
determined by multiplying (A) the quotient obtained by dividing $240,000 by the
Fair Market Value of the Common Stock on the date of grant, by (B) a fraction,
the numerator of which shall be the number of days remaining in the 365-day
period following the most recent Annual Meeting, and the denominator of which
shall be 365 (but in no event shall such fraction be greater than one (1)), such
number to be rounded down to the nearest whole number of Restricted Stock Units;
provided, however, that an Outside Director shall not be eligible to receive an
Award pursuant to this Section 4(b)(iii) if he or she was an Employee at any
time during the six (6) month period ending with the date on which he or she
first became an Outside Director.

 

Directors’ Stock Plan    4

--------------------------------------------------------------------------------

  (iv) Notwithstanding the provisions of subsections (ii) and (iii), in the
event that the automatic grant of one or more Awards on any given date pursuant
to either such subsection would cause the number of Shares subject to
outstanding Awards plus the number of Shares previously delivered in respect of
Awards granted under the Plan to exceed the Pool, then the number of Shares to
be subject to any Award granted on such date shall be determined by multiplying
(A) the total number of Shares remaining available under the Plan before giving
effect to any Award grants on such date, by (B) a fraction, the numerator of
which shall be the number of Shares that would otherwise be subject to such
Award pursuant to subsection (ii) or (iii) hereof, as applicable, and the
denominator of which shall be the number of Shares that would otherwise be
subject to all Awards automatically granted on such date pursuant to such
subsection. Any further automatic grants shall then be deferred until such time,
if any, as additional Shares become available for grant under the Plan through
action of the stockholders to increase the number of Shares which may be issued
under the Plan or through cancellation or expiration of Awards previously
granted hereunder.

 

  (v) Any Restricted Stock Unit Award granted under subsection (ii) shall become
non-forfeitable in installments as to one-fourth of the Restricted Stock Units
subject to the Award on each Vesting Date applicable to the Award. Any
Restricted Stock Unit Award granted under subsection (iii) shall become
non-forfeitable in a number of installments equal to the number of Vesting Dates
(determined with reference to the Awards granted under subsection (ii) at the
last Annual Meeting to occur) from the date of grant of such Award through and
including the next Annual Meeting, with a portion of the Award (determined by
dividing the total number of Restricted Stock Units subject to the Award by the
number of such installments) to become non-forfeitable on each such Vesting
Date. All Restricted Stock Unit Awards granted hereunder shall be paid in
accordance with Section 10 of the Plan.

 

  (vi) The Board may at any time prospectively change the timing, grant levels,
vesting and other provisions of the automatic grants provided in this
Section 4(b) without stockholder approval. For avoidance of doubt, the Board may
provide on a prospective basis for such automatic grants to consist of Options
only, Restricted Stock Unit Awards only, or a combination of Options and
Restricted Stock Unit Awards on such terms and conditions, subject to the share
limits of Section 3 and the other express limits of the Plan, as may be
established by the Board.

 

Directors’ Stock Plan    5

--------------------------------------------------------------------------------

  (c) Powers of the Board. Subject to the provisions and restrictions of the
Plan, the Board shall have the authority, in its discretion: (i) to determine,
upon review of relevant information and in accordance with the provisions
hereof, the Fair Market Value of the Common Stock; (ii) to determine the
exercise price per share of Options to be granted, which exercise price shall be
determined in accordance with Section 8(a) of the Plan; (iii) to interpret the
Plan; (iv) to prescribe, amend and rescind rules and regulations relating to the
Plan; (v) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Award previously granted
hereunder; and (vi) to make all other determinations deemed necessary or
advisable for the administration of the Plan. The Board has discretion to
accelerate the vesting of any or all Awards granted under the Plan in such
circumstances as it, in its discretion, deems appropriate.

 

  (d) Effect of Board’s Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Participants and
any other holders of any Awards granted under the Plan.

 

  (e) Suspension or Termination of Award. If the Board reasonably believes that
a Participant has committed an act of misconduct, the Board may suspend the
Participant’s right to exercise any Option or otherwise receive any Shares or
other payment in respect of any Award granted to such Participant pending a
determination by the Board. If the Board (excluding the Participant accused of
such misconduct) determines a Participant has committed an act of embezzlement,
fraud, dishonesty, nonpayment of an obligation owed to the Company, breach of
fiduciary duty or deliberate disregard of the Company rules resulting in loss,
damage or injury to the Company, or if a Participant makes an unauthorized
disclosure of any Company trade secret or confidential information, engages in
any conduct constituting unfair competition, induces any Company customer to
breach a contract with the Company or induces any principal for whom the Company
acts as agent to terminate such agency relationship, neither the Participant nor
his or her estate shall be entitled to exercise or receive payment of any Award
whatsoever. In making such determination, the Board shall act fairly and shall
give the Participant an opportunity to appear and present evidence on the
Participant’s behalf at a hearing before the Board or a committee of the Board.

 

5. Eligibility. Awards may be granted only to Outside Directors. Except as
provided in Section 11, all Awards shall be automatically granted in accordance
with the terms set forth in Section 4(b) hereof. An Outside Director who has
been granted an Award may, if he or she is otherwise eligible, be granted an
additional Award or Awards in accordance with such provisions. The Plan shall
not confer upon any Outside Director any right with respect to continuation of
service as a Director or nomination to serve as a Director, nor shall it
interfere in any way with any rights which the Director or the Company may have
to terminate his or her directorship at any time.

 

6. Term of Plan. The Plan shall continue in effect until September 1, 2019
unless sooner terminated under Section 15 of the Plan.

 

Directors’ Stock Plan    6

--------------------------------------------------------------------------------

7. Term of Options. The term of each Option shall be seven (7) years from the
date of grant thereof.

 

8. Option Exercise Price and Consideration.

 

  (a) Exercise Price. The per Share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be 100% of the Fair Market Value per
Share on the date of grant of the Option.

 

  (b) Form of Consideration. The consideration to be paid for the Shares to be
issued upon exercise of an Option shall consist entirely of cash, check, other
Shares of Common Stock having a Fair Market Value on the date of surrender equal
to the aggregate exercise price of the Shares as to which said Option shall be
exercised (which, if acquired from the Company, shall have been held for at
least six months), delivery of a properly executed notice of exercise together
with irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds required to pay the exercise price, or any
combination of such methods of payment and/or any other consideration or method
of payment as shall be permitted under applicable corporate law.

 

9. Exercise of Option.

 

  (a) Procedure for Exercise; Rights as a Stockholder. Except as provided in
Section 11(a), any Option granted hereunder shall be exercisable at such times
as are set forth in Section 4(b) hereof. An Option may not be exercised for a
fraction of a Share. An Option shall be deemed to be exercised when written
notice of such exercise has been given to the Company (or such other
administrative exercise procedures as the Board may implement from time to time
have been completed) by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may consist of any consideration and
method of payment allowable under Section 8(b) hereof. Until such Shares are
actually issued to and held of record by the Participant, the Participant shall
have no right to vote or receive dividends or any other rights as a stockholder
with respect to such Shares, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such Shares as soon as practicable
after exercise of the Option. No adjustment will be made for a dividend or other
right for which the record date is prior to the date such Shares are issued,
except as provided in Section 13. Exercise of an Option in any manner shall
result in a decrease in the number of Shares which thereafter may be available,
both for purposes of the Plan and for sale under the Option, by the number of
Shares as to which the Option is exercised.

 

  (b) Accelerated Vesting on Death or Disability. If the Outside Director ceases
to serve as a Director due to the Director’s death or Total Disability, his or
her Options, to the extent then outstanding and unvested, shall be fully vested
and exercisable as of the date of such cessation of service.

 

Directors’ Stock Plan    7

--------------------------------------------------------------------------------

  (b) Termination of Status as a Director. If an Outside Director ceases to
serve as a Director for any reason, he or she may, but only within one (1) year
after the date he or she ceases to be a Director of the Company, exercise his or
her Option to the extent that he or she was entitled to exercise it at the date
of such termination (after giving effect to any acceleration of vesting that may
apply in the circumstances). Notwithstanding the foregoing, in no event may the
Option be exercised after its term set forth in Section 7 has expired. To the
extent that an Outside Director was not entitled to exercise an Option at the
date of such termination, or does not exercise such Option (which he or she was
entitled to exercise) within the time specified herein, the Option shall
terminate.

 

10. Restricted Stock Units.

 

  (a) Lapse of Restrictions; Termination of Service. Subject to this
Section 10(a) and except as otherwise provided in Section 11(b), any Award of
Restricted Stock Units granted hereunder shall become non-forfeitable at such
times as are set forth in Section 4(b) hereof. In the event of the termination
of a Participant’s Continuous Service as a Director for any reason, any
Restricted Stock Units held by such Participant as to which the restrictions in
accordance with Section 4(b) hereof have not lapsed prior to the termination of
the Participant’s Continuous Service as a Director shall be automatically
forfeited by the Participant as of the date of such termination; provided,
however, that if such termination is due to the Participant’s death or Total
Disability, his or her Restricted Stock Units, to the extent then outstanding
and unvested, shall be fully vested as of the date of such termination. Neither
the Participant nor any of the Participant’s successors, heirs, assigns or
personal representatives shall have any rights or interests in any Restricted
Stock Units that are so forfeited.

 

  (b) No Rights as a Stockholder. Restricted Stock Units are bookkeeping entries
only. A Participant who is awarded Restricted Stock Units shall possess no
incidents of ownership with respect to such Restricted Stock Units, except as
expressly provided in Section 10(c) with respect to dividend equivalent rights.

 

  (c) Dividend Equivalent Rights. As of any date that the Company pays an
ordinary cash dividend on its Common Stock, each Participant shall automatically
be granted under the Plan a number of additional Restricted Stock Units equal to
(i) the per share cash dividend paid by the Company on its Common Stock on such
date, multiplied by (ii) the number of outstanding and unpaid Restricted Stock
Units (whether or not non-forfeitable) held by such Participant under the Plan
as of the related dividend payment record date, divided by (iii) the Fair Market
Value of a share of Common Stock on the date of payment of such dividend. Any
Restricted Stock Units granted pursuant to the foregoing provisions of this
Section 10(c) shall be subject to the same vesting, payment (including, without
limitation, any election by the Participant to defer payment pursuant to
Section 10(e)) and other terms, conditions and restrictions as the original
Restricted Stock Units to which they relate.

 

Directors’ Stock Plan    8

--------------------------------------------------------------------------------

  (d) Timing and Manner of Payment of Restricted Stock Units. Subject to
Sections 10(e) and 13(b) hereof, with respect to any Restricted Stock Units
granted to a Participant that become non-forfeitable pursuant to the terms
hereof, such Restricted Stock Units shall be paid on or as soon as practicable
after (and in all events within two and one-half months after) the earlier of
(i) the date such Participant’s Continuous Service as a Director terminates, or
(ii) the last Vesting Date applicable to the Award of such Restricted Stock
Units (the earlier of such dates, the “Payment Date”), such payment to be made
by the Company delivering to the Participant a number of Shares equal to the
number of the Restricted Stock Units being paid on the Payment Date. The Company
shall issue the Shares either (i) in certificate form or (ii) in book entry
form, registered in the name of the Participant. Delivery of any certificates
will be made to the Participant’s last address reflected on the books of the
Company unless the Company is otherwise instructed in writing. Neither the
Participant nor any of the Participant’s successors, heirs, assigns or personal
representatives shall have any further rights or interests in any Restricted
Stock Units that are so paid.

 

  (e) Deferral of Payment of Restricted Stock Units. Notwithstanding any
provision of Section 10(d) or 11(b) to the contrary, a Participant granted an
Award of Restricted Stock Units under the Plan may irrevocably elect, not later
than the December 31 that precedes the calendar year in which such Award is
granted (or, in the case of an Outside Director who is newly elected or
appointed to the Board during the calendar year in which such Award is granted,
not later than the commencement of such Outside Director’s service as a Board
member) and on a form and in a manner prescribed by the Company, that such
Restricted Stock Units shall be paid on (i) the date such Participant’s
Continuous Service as a Director terminates, (ii) any date elected by the
Participant that is not earlier than January 1 of the second year following the
year in which the Award is granted, or (iii) the first to occur of the dates
referred to in the foregoing clauses (i) and (ii). In the event of any such
election, the payment date timely elected by the Participant shall be the
“Payment Date” with respect to the Restricted Stock Units covered by the
election.

 

11. Awards in Lieu of Cash Payment of Fees. Prior to the December 31 that
precedes the calendar year during which any Director Fees are earned by an
Outside Director (or such earlier date as may be prescribed by the Company), or,
in the case of Director Fees earned by an Outside Director during the calendar
year in which such Outside Director is newly elected or appointed to the Board,
prior to the date of such Outside Director’s first day of service as a Board
member, the Outside Director may elect, on a form and in a manner prescribed by
the Company, to exchange the right to receive payment of such Director Fees in
cash for the grant of an Award under the Plan pursuant to either Section 11(a)
or 11(b) below. Notwithstanding any other provision herein, unless and until
otherwise provided by the Board, Director Fees earned by an Outside Director
during calendar year 2015 and thereafter may be exchanged for an Award of
Restricted Stock Units pursuant to Section 11(b) but may not be exchanged for an
Option pursuant to Section 11(a).

 

Directors’ Stock Plan    9

--------------------------------------------------------------------------------

  (a) Stock Option. The Outside Director may elect to be granted an Option with
respect to the number of Shares determined by dividing (i) three (3) times the
amount of the Director Fees being exchanged for the Option, by (ii) the Fair
Market Value of a Share as of the date of such exchange, and rounding down to
the nearest whole share. The Option shall be granted on the last day of the
calendar quarter for which the applicable Director Fees would have otherwise
been paid (or such other date as the Board may determine appropriate) and shall
be exercisable immediately upon the date of grant. Except as expressly provided
herein, any Option granted pursuant to this Section 11(a) shall be subject to
all of the provisions of the Plan applicable to Options granted under the Plan.

 

  (b) Restricted Stock Unit Award. The Outside Director may elect to be granted
an Award of Restricted Stock Units. The number of Restricted Stock Units to be
covered by such Award shall be determined by dividing (i) the amount of the
Director Fees being exchanged for the Award, by (ii) the Fair Market Value of a
Share as of the date of grant of such Restricted Stock Units, and rounding down
to the nearest whole unit. Unless otherwise provided by the Board, the
Restricted Stock Units shall be granted on the last day of the calendar quarter
for which the applicable Director Fees would have otherwise been paid (or, if
the Outside Director ceases to serve as a Director during such quarter, on the
date of such cessation of service). Such Restricted Stock Units shall be fully
non-forfeitable as of the date of grant. Subject to Sections 10(e) and 13(b)
hereof, such Restricted Stock Units shall be paid on or as soon as practicable
after (and in all events within two and one-half months after) the earlier of
(i) the date such Participant’s Continuous Service as a Director terminates, or
(ii) the first anniversary of the date such Restricted Stock Units are granted
(the earlier of such dates, the “Payment Date”), such payment to be made by the
Company delivering to the Participant a number of Shares equal to the number of
the Restricted Stock Units being paid on the Payment Date. Except as expressly
provided herein, any Restricted Stock Units granted pursuant to this
Section 11(b) shall be subject to all of the provisions of the Plan applicable
to Awards of Restricted Stock Units granted under the Plan.

 

12. Nontransferability of Awards. Awards granted under the Plan may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution or pursuant to a
qualified domestic relations order (as defined by the Code or the rules
thereunder). The designation of a beneficiary by a Participant does not
constitute a transfer. An Option may be exercised during the lifetime of a
Participant only by the Participant or a transferee permitted by this
Section 12.

 

13. Adjustments upon Changes in Capitalization; Corporate Transactions.

 

  (a)

Adjustments. Subject to any required action by the stockholders of the Company,
the number of shares of Common Stock covered by each outstanding Award, and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but as to which no Awards have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Award, as well as the
price per share of Common Stock covered by each outstanding Option, shall,

 

Directors’ Stock Plan    10

--------------------------------------------------------------------------------

  in each case to the extent necessary to preserve (but not increase) the level
of incentives intended by the Plan and the then-outstanding Awards, be equitably
and proportionately adjusted for any dividend of stock or other property, or
extraordinary cash dividend, by the Company, any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination, recapitalization or reclassification
of the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been “effected without receipt of consideration.”
Such adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to any Award.

 

  (b) Corporate Transactions. In the event of (i) a dissolution or liquidation
of the Company, (ii) a sale of all or substantially all of the Company’s assets,
(iii) a merger or consolidation in which the Company is not the surviving
corporation, or (iv) any other capital reorganization in which more than fifty
percent (50%) of the shares of the Company entitled to vote are exchanged (a
“Corporate Transaction”), at the time of adoption of the plan for such Corporate
Transaction, the Company shall:

 

  •   in the case of outstanding Options, provide for either a reasonable time
thereafter within which to exercise the Option, including Shares as to which the
Option would not be otherwise exercisable, prior to the effectiveness of such
Corporate Transaction, at the end of which time the Option shall terminate, or
the right to exercise the Option, including Shares as to which the Option would
not be otherwise exercisable (or receive a substitute option with comparable
terms), as to an equivalent number of shares of stock of the corporation
succeeding the Company or acquiring its business by reason of such Corporate
Transaction; and

 

  •   in the case of outstanding Restricted Stock Units, provide that,
immediately prior to the effectiveness of such Corporate Transaction, all such
Restricted Stock Units (A) to the extent that such Restricted Stock Units are
not then non-forfeitable, shall become non-forfeitable, and (B) shall be paid in
an equivalent number of Shares; provided, however, that payment shall be made in
respect of a Corporate Transaction pursuant to the foregoing clause (B) only if
such Corporate Transaction constitutes a “change in the ownership or effective
control” of the Company or a “change in the ownership of a substantial portion
of the assets” of the Company within the meaning of Section 409A(a)(2)(A)(v) of
the Code; and provided further, that in the event the foregoing proviso is not
satisfied, payment shall be made at the time otherwise provided herein.

 

Directors’ Stock Plan    11

--------------------------------------------------------------------------------

14. Time of Granting Awards. The date of grant of an Award shall, for all
purposes, be the date determined in accordance with Section 4(b) or Section 11
hereof, as applicable. Notice of the determination shall be given to each
Outside Director to whom an Award is so granted within a reasonable time after
the date of such grant.

 

15. Amendment and Termination of the Plan.

 

  (a) Amendment and Termination. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided,
that no such amendment, alteration, suspension, discontinuation or termination
shall be made without stockholder approval if such approval is necessary to
comply with any tax, securities or regulatory law or requirement or any
applicable Stock Exchange requirement with which the Board intends the Plan to
comply or if such amendment constitutes a “material amendment.” For purposes of
the Plan, a “material amendment” shall mean an amendment that (i) materially
increases the benefits accruing to Participants under the Plan, (ii) materially
increases the number of securities that may be issued under the Plan,
(iii) materially modifies the requirements for participation in the Plan, or
(iv) is otherwise deemed a material amendment by the Board pursuant to any
Applicable Law or applicable accounting or Stock Exchange rules; provided,
however, that the Board may, in its sole discretion but subject to the share
limits of Section 3 and the other express limits of the Plan, at any time
prospectively make any of the changes contemplated by Section 4(b)(vi) above
without the approval of the Company’s stockholders, and any such change shall
not be considered a “material amendment” for purposes of this Section 15(a).

 

  (b) Amendments to Awards. Without limiting any other express authority of the
Board under (but subject to) the express limits of the Plan, the Board may waive
conditions of or limitations on Awards that the Board in the prior exercise of
its discretion has imposed, without the consent of the Award recipient, and
(subject to the requirements of Section 15(c)) may make other changes to the
terms and conditions of Awards. Notwithstanding the foregoing and except for an
adjustment pursuant to Section 13(a) or a repricing approved by stockholders, in
no case may the Board (1) amend an outstanding Option to reduce the exercise
price or grant price of the Award, (2) provide for the cancellation, exchange,
or surrender of an outstanding Option in exchange for cash or other awards for
the purpose of repricing the Award, or (3) provide for the cancellation,
exchange, or surrender an outstanding Option in exchange for an Option with an
exercise or grant price that is less than the exercise or grant price of the
original Award.

 

  (c) Limitations on Amendments to Plan and Awards. No amendment, suspension or
termination of the Plan or change of or affecting any outstanding Award shall,
without written consent of the Award recipient, affect in any manner materially
adverse to such recipient any rights or benefits of such recipient or
obligations of the Company under any Award granted under the Plan prior to the
effective date of such change. Changes, settlements and other actions
contemplated by Section 13 shall not be deemed to constitute changes or
amendments for purposes of this Section 15(c).

 

Directors’ Stock Plan    12

--------------------------------------------------------------------------------

16. Conditions upon Issuance of Shares. Shares shall not be issued pursuant to
the exercise or payment of any Award granted under the Plan unless the exercise
or payment of such Award and the issuance and delivery of such Shares pursuant
thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules
and regulations promulgated thereunder, state securities laws, and the
requirements of any Stock Exchange, and shall be further subject to the approval
of counsel for the Company with respect to such compliance. As a condition to
the exercise or payment of any Award, the Company may require the person
exercising or receiving payment of such Award to represent and warrant at the
time of any such exercise or payment that the Shares are being acquired only for
investment and without any present intention to sell or distribute such Shares,
if, in the opinion of counsel for the Company, such a representation is required
by any of the aforementioned relevant provisions of law.

 

17. Reservation of Shares. The Company, during the term of the Plan, will at all
times reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan. Inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

 

18. Award Agreement. Awards shall be evidenced by written award agreements in
such form as the Board shall approve.

 

19. Unfunded Status of Plan. The Plan is intended to constitute an “unfunded”
plan for incentive compensation. With respect to any payments not yet made to a
participant by the Company, nothing contained herein shall give any such
participant any rights that are greater than those of a general creditor of the
Company.

 

20. Governing Law. The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of Delaware, without
giving effect to the conflict of laws principles thereof.

 

21. Construction. The Plan and any agreement evidencing any Award granted
hereunder shall be construed and interpreted to comply with Section 409A of the
Code. The Company reserves the right to amend the Plan and any such agreement to
the extent it reasonably determines is necessary in order to preserve the
intended tax consequences of Awards granted hereunder in light of Section 409A
of the Code and any regulations or other guidance promulgated thereunder.

 

22. Recoupment. Each Award, and any Shares issued or other payment in respect of
an Award, is subject to the recoupment or “clawback” policies adopted by the
Board and applicable to the Award as such policies are in effect from time to
time.

 

Directors’ Stock Plan    13