g8wave Holdings, Inc.
2007 EQUITY INCENTIVE PLAN
 
Effective as of August 13, 2007
 
Section 1. Purpose and Duration
 
1.1 Purposes. The purposes of the Plan are to attract, retain and motivate
employees, directors and consultants and advisors of the Company, its Parent (if
any), and any present or future Subsidiaries and to enable them to participate
in the growth of the Company by providing for or increasing the proprietary
interests of such persons in the Company.
 
1.2 Effective Date. The Plan is effective as of the date of its adoption by the
Board, subject to approval by the Company’s stockholders within twelve months of
such date.
 
1.3 Expiration Date. The Plan shall expire one day less than ten years from the
Plan’s effective date. In no event shall any Awards be made under the Plan after
such expiration date, but Awards previously granted may extend beyond such date.
 
Section 2. Definitions
 
As used in the Plan, the following capitalized words shall have the meanings
indicated:
 
“Award” means, individually or collectively, a grant under the Plan of Options,
SARs, Performance Shares, Restricted Stock or Stock Units.
 
“Award Agreement” means the written agreement or other instrument or document
(including through use of an electronic medium) setting forth the terms and
provisions applicable to an Award granted under the Plan.
 
“Board” means the Board of Directors of the Company.
 
“Change of Control” means (i) any transaction or series of related transactions
in which the stockholders of the Company immediately prior to such transactions
hold less than a majority of the Company’s issued and outstanding voting power
immediately after such transactions, or (ii) a sale of all or substantially all
of the assets of the Company. With respect to any Award that provides for the
deferral of compensation that is subject to Section 409A of the Code, the term
“Change of Control” shall be interpreted and applied in the manner consistent
with a change in the ownership or effective control of the Company, or in the
ownership of a substantial portion of the Company’s assets, within the meaning
of Section 409A(a)(2)(A)(v) of the Code.
 
“Code” means the Internal Revenue Code of 1986, as amended.
 
“Committee” means the committee of the Board appointed by the Board to
administer the Plan in accordance with Section 3.1.
 
“Company” means g8wave Holdings, Inc., a Delaware corporation, or any successor
thereto.
 

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“Director” means any individual who is a member of the Board.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Fair Market Value” means, with respect to a Share, (i) if the Shares are not
publicly traded on the day in question, the fair market value thereof as
determined in accordance with a valuation methodology approved by the Board in
good faith but in no event less than, in the case of newly issued stock, the par
value per Share; and (ii) if the Shares are publicly traded on the day in
question, the closing price per share as reported on the principal exchange for
the Shares or the last sale price quoted on the principal market on which the
Shares are then quoted, in either case, on the day in question (or if that day
is not a business day, on the immediately preceding business day).
 
“Grant Date” means the date an Award is made by the Board.
 
“Incentive Stock Option” or “ISO” means an option to purchase Shares awarded
to a Participant under Section 6 of the Plan that is intended to meet the
requirements of Section 422 of the Code.
 
“Non-Employee Director” means a “non-employee director” as that term is defined
in Rule 16b-3 promulgated under the Exchange Act.
 
“Nonqualified Stock Option” or “NQO” means an option to purchase Shares awarded
to a Participant under Section 6 of the Plan that is not intended to be an ISO.
 
“Option” means an ISO or an NQO.
 
“Parent” means a “parent corporation” as that term is defined in Section 424 of
the Code.
 
“Participant” means an individual who has been selected by the Board to receive
an Award under the Plan.
 
“Performance Cycle” means the period of time selected by the Board during which
performance is measured for the purpose of determining the extent to which an
Award has been earned, provided, however, that a Performance Cycle shall not be
less than one year or greater than five years. More than one Performance Cycle
may be in progress at any one time and the duration of Performance Cycles may
differ.
 
“Performance Factors” means one or more or any combination of the factors
selected by the Board from among the following measures to determine whether
performance goals established by the Board and applicable to Awards have been
satisfied: net sales; revenue; revenue or product revenue growth; operating
income or loss (before or after taxes); earnings or losses (including earnings
or losses before taxes, earnings or losses before interest and taxes, earnings
or losses before interest, taxes and depreciation or earnings or losses before
interest, taxes, depreciation and amortization); after-tax earnings or loss
(before or after allocation of corporate overhead); net earnings or loss; net
earnings or loss per share; return on assets or net assets; return on equity;
return on capital (including return on total capital or return on invested
capital); total stockholder return; economic value-added models (or equivalent
metrics); attainment of strategic and operational initiatives; appreciation in
and/or maintenance of the price of the Shares or any other publicly traded
securities of the Company; comparisons of the price of the Shares or any other
publicly traded securities of the Company with various stock market indices;
market share for one or more products; margins, including operating margin,
gross margin or cash margin; reductions in costs; cash flow or cash flow per
share (before or after dividends), including cash flow return on investment;
improvement in or attainment of expense levels or working capital levels; debt
reduction; stockholder’s equity; implementation or completion of projects and
processes; partner satisfaction; budget management; internal controls, including
those related to the Sarbanes-Oxley Act of 2002; financing; investor relations,
analysts and communication; and recruiting and maintaining personnel; and
individual business objectives.
 
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“Performance Share” means a Share awarded to a Participant under Section 8 of
the Plan that entitles the Participant to acquire Shares upon the attainment of
specified performance goals based upon Performance Factors.
 
“Plan” means the g8wave Holdings, Inc. 2007 Equity Incentive Plan set forth in
this document and as hereafter amended from time to time in accordance with
Section 13.
 
“Restricted Period” means the period of time selected by the Board during which
Shares of Restricted Stock are subject to forfeiture and/or restrictions on
transferability.
 
“Restricted Stock” means Shares awarded to a Participant under Section 9 of the
Plan pursuant to an Award that entitles the Participant to acquire Shares for a
purchase price (which may be zero), subject to such conditions, including a
Company right during a specified period or periods to repurchase the Shares at
their original purchase price (or to require forfeiture of the Shares if the
purchase price was zero) upon the Participant’s termination of employment.
 
“SAR” or “Stock Appreciation Right” means an Award that is designated as an SAR
pursuant to Section 7 of the Plan, granted alone or in connection with a related
Award, entitling a Participant to receive an amount in cash or Shares or a
combination thereof having a value equal to (or if the Board shall so determine
at time of grant, less than) the excess of the Fair Market Value of a Share on
the date of exercise over the Fair Market Value of a Share on the Grant Date (or
over the Option exercise price, if the Stock Appreciation Right was granted in
tandem with an Option) multiplied by the number of Shares with respect to which
the Stock Appreciation Right is exercised.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Shares” means shares of the Company’s common stock, par value $.001 per share.
 
“Stock Unit” means an Award of a Share or a unit valued in whole or in part by
reference to, or otherwise based on, the value of a Share, granted to a
Participant under Section 10 of the Plan.
 
“Subsidiary” means a “subsidiary corporation” as that term is defined in
Section 424 of the Code.
 
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Section 3. Administration of the Plan
 
3.1 The Board. The Plan shall be administered by the Board. The Board may, in
its discretion, delegate some or all of its powers with respect to the Plan to
the Committee, in which event all references in the Plan to the Board (except
references in Section 13.1) shall be deemed to refer to the Committee. The
Committee, if one is appointed, shall consist solely of two or more Non-Employee
Directors who are also “outside directors” within the meaning of Section 162(m)
of the Code.
 
3.2 Authority of the Board. The Board shall have the authority to adopt, alter
and repeal such administrative rules, guidelines and practices governing the
operation of the Plan as it shall consider advisable from time to time, to
interpret the provisions of the Plan, any Award and any Award Agreement and to
decide all disputes arising in connection therewith. The Board’s decisions and
interpretations shall be final and binding.
 
3.3 Delegation of Power. Following the authorization of a pool of cash or Shares
to be available for Awards, the Board may delegate to one or more committees or
subcommittees consisting of one or more officers of the Company any or all of
its power and duties under the Plan pursuant to such conditions or limitations
as the Board may establish; provided, however, that the Board shall not delegate
to such officers its authority to (i) amend or modify the Plan, (ii) act on
matters affecting any Participant who is subject to the reporting requirements
of Section 16(a) of the Exchange Act or the liability provisions of
Section 16(b) of the Exchange Act, or otherwise take any action or fail to act
in a manner that would cause any Award or other transaction under the Plan to
cease to be exempt from Section 16(b) of the Exchange Act, or (iii) determine
the extent to which Awards will conform to the requirements of Code
Section 162(m). The Board may authorize any one or more of its members or any
officer of the Company to execute and deliver documents on behalf of the Board.
 
Section 4. Eligibility of Participants
 
The persons eligible to receive Awards under the Plan shall be all executive
officers of the Company, its Parent (if any), and any Subsidiaries and other
employees, consultants and advisors who, in the opinion of the Board, are in a
position to make a significant contribution to the success of the Company, its
Parent (if any), and any Subsidiaries. Directors, including directors who are
not employees, of the Company, its Parent (if any), and any Subsidiaries shall
be eligible to receive Awards under the Plan.
 
Section 5. Stock Available for Awards
 
5.1 Number of Shares. Awards may be made under the Plan for up to 4,725,000
Shares. Shares issued under the Plan may consist in whole or in part of
authorized but unissued Shares or treasury Shares.
 
5.2 Lapsed, Forfeited, or Expired Awards; Net Exercise. If any Award in respect
of Shares expires or is terminated before exercise or is forfeited for any
reason, the Shares subject to such Award, to the extent of such expiration,
termination or forfeiture, shall again be available for future award under the
Plan. If the exercise price of any Option or SAR and/or the tax withholding
obligations relating to any Award are satisfied by the Participant delivering
Shares (either actually or through attestation) or the Company withholding
Shares relating to such Award or if any Shares subject to an Award shall
otherwise not be delivered in settlement of such Award (including upon the
exercise of a SAR), only the net number of Shares received by the Participant
shall be deemed to have been delivered for purposes of the number of Shares
available to be issued under the Plan in accordance with Section 5.1, and the
Shares not delivered under such Award shall again be available for future award
under the Plan.
 
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5.3 Maximum Number of Shares to a Single Participant in any Calendar Year. In no
event shall any Participant receive in any calendar year Awards under the Plan
and any other grants for more than 4,725,000 Shares.
 
Section 6. Stock Options
 
6.1 Grant of Options. Subject to the terms and provisions of the Plan, the Board
may award Options and determine the number of Shares to be covered by each
Option, the exercise price therefor, the term of the Option, and any other
conditions and limitations applicable to the exercise of the Option. The Board
may grant ISOs, NQOs or a combination thereof.
 
6.2 Exercise Period and Exercise Price. The Board may provide for Options to
become exercisable at one time or from time to time, periodically or otherwise
(including, without limitation, upon the attainment during a Performance Cycle
of performance goals based on Performance Factors), in such number of Shares or
percentage of Shares subject to the Option as the Board determines. No Option
shall be exercisable more than 10 years after the date the Grant Date, subject
to Section 6.4.4. Subject to the provisions of this Section 6, the exercise
price for each Option shall be determined by the Board in its sole discretion;
provided, however, that the exercise price for an Option shall not be less than
100% of the Fair Market Value on the Grant Date of the Shares subject to the
Option.
 
6.3 Restrictions on Option Transferability and Exercisability. Options shall be
exercisable only during the Participant’s lifetime. No Option shall be
transferable by the Participant other than by will or the laws of descent and
distribution; provided, however, that the Board may provide that an Option is
transferable by the Participant and exercisable by persons other than the
Participant upon such terms and conditions as the Board shall determine;
provided, further, that with respect to NQOs, no provision with respect to
transferability or exercisability shall provide, or cause the Option, Award or
Award Agreement to provide, for the deferral of compensation subject to Section
409A of the Code.
 
6.4 Certain Additional Provisions for Incentive Stock Options.
 
6.4.1 Exercise Price. If on the Grant Date of an ISO the Participant (together
with persons whose stock ownership is attributed to the Participant pursuant to
Section 424(d) of the Code) owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company, its Parent (if
any) or any Subsidiaries, the exercise price shall be not less than 110% of the
Fair Market Value on the Grant Date of the Shares subject to the Option.
 
6.4.2 Exercisability. Subject to Section 12.3 and Section 12.4, the aggregate
Fair Market Value (determined on the Grant Date(s)) of the Shares with respect
to which ISOs are exercisable for the first time by any Participant during any
calendar year (under all plans of the Company, its Parent (if any) and any
Subsidiaries) shall not exceed $100,000.
 
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6.4.3 Eligibility. ISOs may be granted only to persons who are employees of the
Company, its Parent (if any) or any Subsidiaries on the Grant Date.
 
6.4.4 Expiration. No ISO may be exercised after the expiration of one day less
than 10 years from the Grant Date; provided, however, that if the Option is
granted to a Participant who, together with persons whose stock ownership is
attributed to the Participant pursuant to Section 424(d) of the Code, owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, its Parent (if any) or any Subsidiaries, the ISO may not
be exercised after the expiration of one day less than 5 years from the
Grant Date.
 
6.4.5 Compliance with Section 422 of the Code. The terms and conditions of ISOs
shall be subject to and comply with Section 422 of the Code or any successor
provision.
 
6.4.6 Notice to Company of Disqualifying Disposition. The Company may require
each Participant who receives an ISO to notify the Company in writing
immediately after the Participant makes a Disqualifying Disposition of any
Shares received pursuant to the exercise of an ISO. The term “Disqualifying
Disposition” means any disposition (including any sale) of Shares before the
later of (i) two years after the Participant was granted the ISO under which the
Participant acquired such Shares, or (ii) one year after the Participant
acquired the Shares by exercising the ISO.
 
6.4.7 Substitute Options. Notwithstanding the provisions of Section 6.4.1,
in the event that the Company, its Parent (if any) or any Subsidiary consummates
a transaction described in Section 424(a) of the Code (relating to the
acquisition of property or stock from an unrelated corporation), individuals who
become employees, consultants or advisors of the Company, its Parent (if any) or
any Subsidiary on account of such transaction may be granted Options in
substitution for options granted by their former employer. The Board, in its
sole discretion and, in the case of ISOs, consistent with Section 424(a) of the
Code, shall determine the exercise price of such substitute Options.
 
6.5 NQO Presumption. Options granted pursuant to the Plan shall be presumed to
be NQOs unless expressly designated ISOs in the Award Agreements.
 
6.6 Special Provisions Applicable to Options. The Company may postpone the
issuance and delivery of Shares upon any exercise of an Option until the
admission of such shares to listing on the principal exchange or market for the
Shares and the completion of such registration or other qualification of the
Shares under any state or federal law, rule or regulation as the Board, in its
sole discretion, shall determine to be necessary or advisable. The Participant
shall make such representations and furnish such information as, in the opinion
of counsel for the Company, may be appropriate to permit the Company to issue
the Shares in compliance with the provisions of the Securities Act or any
comparable act. The Company may cause an appropriate legend to be set forth on
each certificate representing the Shares or any other security issued or
issuable upon exercise of such Option unless counsel for the Company is of the
opinion as to any such certificate that a legend is unnecessary.
 
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Section 7. Grant of Stock Appreciation Rights
 
Subject to the terms and provisions of the Plan, the Board may award SARs in
tandem with another Award (at or after the Grant Date of the other Award), or
alone and unrelated to another Award, and may determine the terms and conditions
applicable thereto, including the form of payment.
 
Section 8. Performance Shares
 
8.1 Grant of Performance Shares. The Board may award Performance Shares to
Participants and determine the performance goals based upon Performance Factors
applicable to each such Award, the number of Shares for each Performance Cycle,
the duration of each Performance Cycle and all other limitations and conditions
applicable to the awarded Performance Shares.
 
8.2 Adjustment of Performance Goals. Except as provided in an Award, during any
Performance Cycle, the Board may adjust the performance goals based upon
Performance Factors for the Performance Cycle as it deems equitable in
recognition of unusual or non-recurring events affecting the Company or its
Shares, changes in applicable tax laws or accounting principles, or such other
factors as the Board shall determine, subject to the applicable requirements of
Section 162(m) of the Code in the case of any Award intended to qualify as
qualified performance-based compensation under Section 162(m)(4)(C) of the Code.
 
8.3 Written Certification. As soon as practical after the end of a Performance
Cycle, the Board shall certify in writing the extent to which the performance
goals applicable to each Participant for the Performance Cycle were achieved or
exceeded and the number of Performance Shares which have been earned on the
basis of performance in relation to the established performance goals.
 
Section 9. Restricted Stock
 
9.1 Grant of Restricted Stock. The Board may award Shares of Restricted Stock
and determine the purchase price, if any, therefor, the duration of the
Restricted Period, the conditions under which the Shares may be forfeited to or
repurchased by the Company and any other terms and conditions of the Awards. The
Board may modify or waive any restrictions, terms and conditions with respect to
any Restricted Stock. Shares of Restricted Stock may be issued for whatever
consideration is determined by the Board, subject to applicable law.
 
9.2 Transferability. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered, except as permitted by the Board,
during the Restricted Period.
 
9.3 Evidence of Award. Shares of Restricted Stock shall be evidenced in such
manner as the Board may determine. Any certificates issued in respect of Shares
of Restricted Stock shall be registered in the name of the Participant and,
unless otherwise determined by the Board, deposited by the Participant, together
with a stock power endorsed in blank, with the Company. At the expiration of the
Restricted Period, the Company shall deliver the certificates and stock power to
the Participant.
 
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9.4 Stockholder Rights. A Participant shall have all the rights of a stockholder
with respect to Restricted Stock awarded, including voting and dividend rights,
subject to non-transferability restrictions and Company repurchase or forfeiture
rights and subject to any other conditions provided in the Award Agreement.
 
Section 10. Stock Units
 
10.1 Grant of Stock Units. Subject to the terms and provisions of the Plan, the
Board may award Stock Units subject to such terms, restrictions, conditions,
performance criteria, vesting requirements and payment rules as the Board shall
determine.
 
10.2 Consideration. Shares awarded in connection with a Stock Unit may be issued
for whatever consideration is determined by the Board, subject to applicable
law.
 
Section 11. Grant of Other Awards
 
The Board shall have the authority to specify the terms and provisions of other
forms of equity-based or equity-related Awards not described above which the
Board determines to be consistent with the purposes of the Plan and the
interests of the Company, which Awards may provide for cash payments based in
whole or in part on the value or future value of Shares, for the acquisition or
future acquisition of Shares, or any combination thereof. Other Awards may also
include cash payments (including the cash payment of dividend equivalents) under
the Plan which may be based on one or more criteria determined by the Board that
are unrelated to the value of the Shares and that may be granted in tandem with,
or independent of, other Awards under the Plan.
 
Section 12. General Provisions Applicable to Awards
 
12.1 Legal and Regulatory Matters. The delivery of Shares shall be subject to
compliance with (i) applicable federal and state laws and regulations and (ii)
if the outstanding Shares are listed at the time on any stock exchange or quoted
on any market, the listing requirements of such exchange or market. The Company
shall have no obligation to register or qualify the Shares for resale. If an
exemption from registration or qualification is available, it may be conditioned
on various requirements including, but not limited to, the time and manner of
sale, the holding period for the Shares, and requirements relating to the
Company that are outside of the Participant’s control, which the Company is
under no obligation, and may not be able, to satisfy. If the sale of the Shares
has not been registered under the Securities Act, the Company may require, as
a condition to delivery of the Shares, such representations or agreements as
counsel for the Company may consider appropriate to avoid violation of such Act
and may require that the certificates evidencing the Shares bear an appropriate
legend restricting transfer.
 
12.2 Written Award Agreement. The terms and provisions of an Award shall be set
forth in an Award Agreement in such form and content approved by the Board from
time to time and delivered or made available to the Participant as soon as
practicable following the Grant Date. The effectiveness of an Award shall not be
subject to the Award Agreement being signed by the Company or the Participant
unless specifically so provided in the Award Agreement. Where the Award is an
Option Award, the Award Agreement shall specify whether the Option is intended
to be an ISO or a NQO.
 
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12.3 Determination of Restrictions on the Award. The vesting, exercisability,
payment and other restrictions applicable to an Award (which may include,
without limitation, restrictions on transferability or provision for mandatory
resale to the Company) shall be determined by the Board and set forth in the
applicable Award Agreement. Notwithstanding the foregoing, the Board may
accelerate (i) the vesting or payment of any Award (including an ISO), (ii) the
lapse of restrictions on any Award (including an Award of Restricted Stock) and
(iii) the date on which all or any portion of any Option or SAR first becomes
exercisable.
 
12.4 Change of Control. Notwithstanding any other provision of the Plan, in the
event of a Change of Control, the Board, in its discretion, may take one or more
of the following actions: (i) provide for the acceleration of any time period
relating to the exercise or realization of the Award, (ii) provide for the
purchase of the Award upon the Participant’s request for an amount of cash or
other property that could have been received upon the exercise or realization of
the Award immediately prior to the consummation of the Change of Control had the
Award been currently exercisable or payable, (iii) adjust the terms of the Award
in a manner determined by the Board, (iv) cause the Award to be assumed, or new
rights substituted therefor, by another entity, or (v) make such other provision
as the Board may consider equitable and in the best interests of the Company.
 
12.5 Termination of Employment. For purposes of the Plan, the following events
shall not be deemed a termination of employment of a Participant: (i) a transfer
to the employment of the Company from its Parent (if any) or from a Subsidiary,
or from the Company to its Parent (if any) or to a Subsidiary, or from one
Subsidiary to another, or from the Company’s Parent (if any) to a Subsidiary, or
from a Subsidiary to the Company’s Parent (if any); or (ii) an approved leave of
absence for military service or sickness, or for any other purpose approved by
the Board, if the Participant’s right to employment is guaranteed either by a
statute or by contract or under the policy pursuant to which the leave of
absence was granted or if the Board otherwise so provides in writing. For
purposes of the Plan, employees of a Subsidiary or Parent (if any) shall be
deemed to have terminated their employment on the date on which such Subsidiary
or Parent ceases to be a Subsidiary or Parent of the Company, as the case may
be.
 
12.6 Date of and Effect of Termination of Employment. The date of a
Participant’s termination of employment for any reason shall be determined in
the sole discretion of the Board. The Board shall have full authority to
determine and specify in the applicable Award Agreement the effect, if any, that
a Participant’s termination of employment for any reason will have on the
vesting, exercisability, payment or lapse of restrictions applicable to an
outstanding Award.
 
12.7 Grant of Awards. Each Award may be made alone, in addition to or in
relation to any other Award. The terms of each Award need not be identical, and
the Board need not treat Participants uniformly.
 
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12.8 Settlement of Awards. No Shares shall be delivered pursuant to any exercise
of an Award until payment in full of the price therefor, if any, is received by
the Company. Such payment may be made in whole or in part in cash or by
certified or bank check or, to the extent permitted by the Board at or after the
Grant Date, by delivery of a note or Shares, including Restricted Stock, valued
at their Fair Market Value on the date of delivery, or such other lawful
consideration as the Board shall determine. The Board may permit a Participant
to elect to pay the exercise price upon the exercise of an Option by authorizing
a third party to sell Shares (or a sufficient portion of the Shares) acquired
upon exercise of the Option and remit to the Company a sufficient portion of the
sale proceeds to pay the entire exercise price and any tax withholding resulting
from such exercise.
 
12.9 Withholding Requirements and Arrangements. The Participant shall pay to the
Company or make provision satisfactory to the Board for payment of any taxes
required by law to be withheld in respect of Awards under the Plan no later than
the date of the event creating the tax liability. In the Board’s discretion,
such tax obligations may be paid in whole or in part in Shares, including Shares
retained from the Award creating the tax obligation, valued at their Fair Market
Value on the date of delivery. The Company may, to the extent permitted by law,
deduct any such tax obligations from any payment of any kind otherwise due to
the Participant.
 
12.10 No Effect on Employment. The Plan shall not give rise to any right on the
part of any Participant to continue in the employ of the Company, its Parent
(if any) or any Subsidiary. The loss of existing or potential profit in Awards
granted under the Plan shall not constitute an element of damages in the event
of termination of the employment or relationship of a Participant even if the
termination is in violation of an obligation of the Company to the Participant
by contract or otherwise.
 
12.11 No Rights as Stockholder. Subject to the provisions of the Plan and the
applicable Award Agreement, no Participant shall have any rights as a
stockholder with respect to any Shares to be distributed under the Plan until he
or she becomes the holder thereof.
 
12.12 Adjustments. Upon the happening of any of the following described events,
a Participant’s rights with respect to Awards granted hereunder shall be
adjusted as hereinafter provided, unless otherwise specifically provided in the
Award Agreement.
 
12.12.1 Stock Splits and Dividends; Mergers. (i) Subject to any required action
by the Board, the number of Shares covered by the Plan as provided in Section
5.1 hereof, the number of Shares covered by each outstanding Award, and the
price if any at which a Participant may purchase Restricted Stock, or exercise
Options, Stock Appreciation Rights or Stock Units shall be proportionately
adjusted for any increase or decrease in the number of issued Shares resulting
from a recapitalization, reclassification, subdivision or consolidation of
Shares or the payment of a stock dividend (but only if paid in Shares), a stock
split or any other increase or decrease in the number of issued Shares effected
without receipt of consideration by the Company. Subject to any required action
by the Board and/or stockholders, if the Company merges with another corporation
and the Company is the surviving corporation in such merger and under the terms
of such merger the Shares outstanding immediately prior to the merger remain
outstanding and unchanged, each outstanding Award shall continue to apply to the
Shares subject thereto and shall also pertain and apply to any additional
securities and other property to which a holder of the number of Shares subject
to the Award would have been entitled as a result of the merger.
 
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12.12.2 Restricted Stock. If any person owning Restricted Stock or another Award
receives new or additional or different shares or securities (or the rights
thereto) (“New Securities”) in connection with a corporate transaction described
in Section 12.12.1 or a stock dividend described in Section 12.12.1 as a result
of owning such Restricted Stock or such other Award, the New Securities shall be
subject to all of the conditions and restrictions applicable to the Restricted
Stock on such other Award with respect to which such New Securities were issued.
 
12.12.3 Board Determination. Notwithstanding any provision to the contrary, no
adjustments shall be made pursuant to Section 12.12.1 with respect to ISOs,
unless (i) the Board, after consulting with counsel for the Company, determines
that such adjustments would not constitute a “modification, extension or
renewal” of such ISOs as such terms are defined in Section 424 of the Code, (ii)
would not cause any adverse tax consequences for the holders of such ISOs or
(iii) the holders of such ISOs consent to the adjustment. No adjustments to ISOs
shall be made for dividends paid in cash or in property other than securities of
the Company.
 
12.12.4 Fractional Shares. No fractional Shares shall be issued under the Plan.
Any fractional Shares which, but for this Section 12.12, would have been issued
shall be deemed to have been issued and immediately sold to the Company for
their Fair Market Value, and the Participant shall receive from the Company cash
in lieu of such fractional Shares.
 
12.12.5 Recapitalization. The Board may adjust the number of Shares subject to
outstanding Awards and the exercise price and the terms of outstanding Awards to
take into consideration material changes in accounting practices or principles,
extraordinary dividends, acquisitions or dispositions of stock or property, or
any other event if it is determined by the Board that such adjustment is
appropriate to avoid distortion in the operation of the Plan.
 
Section 13. Amendment and Termination
 
13.1 Amendment, Suspension, Termination of the Plan. The Board may modify,
amend, suspend or terminate the Plan in whole or in part at any time; provided,
however, that no modification, amendment, suspension or termination of the Plan
shall be made without stockholder approval if such approval is necessary to
comply with any applicable tax or regulatory requirement; provided, further,
that such modification, amendment, suspension or termination shall not, without
a Participant’s consent, affect adversely the rights of such Participant with
respect to any Award then outstanding.
 
13.2 Amendment, Suspension, Termination of an Award. The Board may modify, amend
or terminate any outstanding Award, including, without limitation, substituting
therefor another Award of the same or a different type, changing the date of
exercise or realization and converting an ISO to a NQO; provided, however, that
the Participant’s consent to such action shall be required unless the Board
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.
 
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Section 14. Legal Construction
 
14.1 Captions. The captions provided herein are included solely for convenience
of reference and shall not affect the meaning of any of the provisions of the
Plan or serve as a basis for interpretation or construction of the Plan.
 
14.2 Severability. In the event any provision of the Plan is held invalid or
illegal for any reason, the illegality or invalidity shall not affect the
remaining provisions of the Plan, and the Plan shall be construed and enforced
as if the illegal or invalid provision had not been included.
 
14.3 Governing Law. The Plan and all rights under the Plan shall be construed
in accordance with the laws of the State of Delaware.
 
14.4 Interpretation. The Company intends that the Plan meet the requirements of
Rule 16b-3 (“Rule 16b-3”) promulgated under the Exchange Act and that
transactions of the type specified in subparagraphs (c) to (f) inclusive of Rule
16b(3) by officers and directors of the Company pursuant to the Plan will be
exempt from the operation of Section 16(b) of the Exchange Act. The Plan also is
intended to satisfy the performance-based compensation exception to the
limitation on the Company’s tax deductions imposed by Section 162(m) of the Code
with respect to those Options for which qualification for such exception is
intended. Further, to the extent that any Award constitutes an arrangement
providing for the deferral of compensation subject to Section 409A of the Code,
the Plan and/or such Award is intended to comply with the requirements of
Section 409A, except as otherwise expressly provided under the terms of such
Award. In all cases, the terms, provisions, conditions and limitations of the
Plan shall be construed and interpreted consistent with the Company’s intent as
stated in this Section 14.4
 
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