EXHIBIT 10.1

2006 EQUITY INCENTIVE PLAN
(Restated* September 27, 2013)
1.
Purpose of this Plan

The purpose of this 2006 Equity Incentive Plan is to enhance the long-term
stockholder value of Leidos Holdings, Inc. and its affiliated companies by
offering opportunities to eligible individuals to participate in the growth in
value of the equity of Leidos Holdings, Inc.
2.
Definitions and Rules of Interpretation

2.1    Definitions.
This Plan uses the following defined terms:
(a)    “Administrator” means the Board or the Committee, or any officer or
Employee of the Company to whom the Board or the Committee delegates authority
to administer this Plan.
(b)    “Affiliate” means a “parent” or “subsidiary” (as each is defined in
Section 424 of the Code) of the Company and any other entity that the Board or
Committee designates as an “Affiliate” for purposes of this Plan.
(c)    “Applicable Law” means any and all laws of whatever jurisdiction, within
or without the United States, and the rules of any stock exchange or quotation
system on which Shares are listed or quoted, applicable to the taking or
refraining from taking of any action under this Plan, including the
administration of this Plan and the issuance or transfer of Awards or Award
Shares.
(d)    “Award” means a Stock Award, SAR, Cash Award, or Option granted in
accordance with the terms of this Plan.
(e)    “Award Agreement” means the document, which may be in paper or electronic
form, evidencing the grant of an Award and its terms and conditions.
(f)    “Award Shares” means Shares covered by an outstanding Award or purchased
under an Award.
(g)    “Awardee” means: (i) a person to whom an Award has been granted,
including a holder of a Substitute Award or (ii) a person to whom an Award has
been transferred in accordance with all applicable requirements of Sections 6.5,
7(h), 8.1(c), 8.2(d) and 17.
(h)    “Board” means the Board of Directors of the Company.
(i)    “Cash Award” means the right to receive cash as described in Section 8.3.

*  Reflects a change in the Company’s name and adjustments to share amounts to
reflect a one-for-four reverse stock split, both effected on September 27, 2013.

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(j)    “Cause” means employment related dishonesty, fraud, misconduct or
disclosure or misuse of confidential information, or other employment related
conduct that is likely to cause significant injury to the Company, an Affiliate,
or any of their respective employees, officers or directors (including, without
limitation, commission of a felony or similar offense), in each case as
determined by the Administrator. “Cause” shall not require that a civil judgment
or criminal conviction has been entered against or guilty plea shall have been
made by the Awardee regarding any of the matters referred to in the previous
sentence. Accordingly, the Administrator shall be entitled to determine “Cause”
based on the Administrator’s good faith belief. If the Awardee is criminally
charged with a felony or similar offense that shall be a sufficient, but not a
necessary, basis for such belief.
(k)    “Code” means the Internal Revenue Code of 1986, as amended.
(l)    “Committee” means a committee or subcommittee of the Board of Directors
of the Company composed of one or more Company Directors appointed in accordance
with the Company’s charter documents and Section 4. As referenced in Section
4.1(a), from time to time throughout this Plan, the term “Committee” is used to
refer to both the Board and the Committee.
(m)    “Company” means Leidos Holdings, Inc., a Delaware corporation, or any
successor corporation thereto.
(n)    “Company Director” means a member of the Board.
(o)    “Consultant” means an individual who, or an employee of any entity that,
provides bona fide services to the Company or an Affiliate not in connection
with the offer or sale of securities in a capital-raising transaction, but who
is not an Employee.
(p)    “Director” means a member of the Board of Directors of the Company or an
Affiliate.
(q)    “Divestiture” means any transaction or event that the Board or the
Committee specifies as a Divestiture under Section 10.5.
(r)    “Dividend Equivalent Right” means the right of an Awardee, granted at the
discretion of the Committee, to receive a credit for the account of such Awardee
in an amount equal to the cash dividends paid on one Share for each Share
represented by a Stock Award held by such Awardee.
(s)    “Effective Date” means June 15, 2012.
(t)    “Employee” means a regular employee of the Company or an Affiliate,
including an officer or Director, who is treated as an employee in the personnel
records of the Company or an Affiliate, but not individuals who are classified
by the Company or an Affiliate as: (i) leased from or otherwise employed by a
third party, (ii) independent contractors, or (iii) intermittent or temporary
workers. The Company’s or an Affiliate’s classification of an individual as an
“Employee” (or as not an “Employee”) for purposes of this Plan shall not be
altered retroactively even if that classification is changed retroactively for
another purpose as a result of an audit, litigation or otherwise. An Awardee
shall not cease to be an Employee

      
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due to transfers between locations of the Company, or between the Company and an
Affiliate, or to any successor to the Company or an Affiliate that assumes the
Awardee’s Options under Section 10. Neither service as a Director nor receipt of
a director’s fee shall be sufficient to make a Director an “Employee.”
(u)    “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(v)    “Executive” means, if the Company has any class of any equity security
registered under Section 12 of the Exchange Act, an individual who is subject to
Section 16 of the Exchange Act or who is a “covered employee” under Section
162(m) of the Code, in either case because of the individual’s relationship with
the Company or an Affiliate. If the Company does not have any class of any
equity security registered under Section 12 of the Exchange Act, “Executive”
means any (i) Director, (ii) officer elected or appointed by the Board, or (iii)
beneficial owner of more than 10% of any class of the Company’s equity
securities.
(w)    “Expiration Date” means, with respect to an Award, the date stated in the
Award Agreement as the expiration date of the Award or, if no such date is
stated in the Award Agreement, then the last day of the exercise period for the
Award, disregarding the effect of an Awardee’s Termination or any other event
that would shorten that period.
(x)    “Fair Market Value” means the value of a share of the stock of Company as
determined under Section 18.2.
(y)    “Fundamental Transaction” means any transaction or event described in
Section 10.3.
(z)    “Good Reason” means (i) a material diminution in responsibility or
compensation, or (ii) requiring Awardee to work in a location (other than normal
business travel) which is more than 50 miles from Awardee’s place of employment
before the change so long as not closer to Awardee’s primary residence.
(aa)    “Grant Date” means the date the Administrator approves the grant of an
Award. However, if the Administrator specifies that an Award’s Grant Date is a
future date or the date on which a condition is satisfied, the Grant Date for
such Award is that future date or the date that the condition is satisfied.
(bb)    “Incentive Stock Option” means an Option intended to qualify as an
incentive stock option under Section 422 of the Code and designated as an
Incentive Stock Option in the Award Agreement for that Option.
(cc)    “Involuntary Termination” means termination by the Company or an
Affiliate, as applicable, without Cause or termination by the Awardee for Good
Reason.
(dd)    “Nonstatutory Option” means any Option other than an Incentive Stock
Option.
(ee)    “Objectively Determinable Performance Condition” shall mean a
performance condition (i) that is established (A) at the time an Award is
granted or (B) no later than the

      
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earlier of (1) 90 days after the beginning of the period of service to which it
relates, or (2) before the elapse of 25% of the period of service to which it
relates, (ii) that is uncertain of achievement at the time it is established,
and (iii) the achievement of which is determinable by a third party with
knowledge of the relevant facts. Measures that may be used in Objectively
Determinable Performance Conditions may be expressed in absolute terms, in terms
of growth or improvement, or relative to the performance of one or more
comparable companies or an index covering multiple companies and that relate to
any of the following, as it may apply to an individual, one or more Affiliates,
business unit(s), divisions or the whole of the Company: revenue; earnings per
share; return on assets; return on equity; net order dollars; net profit;
operating cash flow; operating income; contract bookings; contract awards;
profits before tax; earnings before interest, depreciation and taxes (EBITDA);
return on invested capital; days working capital; total shareholder return;
share price growth; free cash flow; return on sales; operating margin;
book-to-bill; headcount; employee retention; new hires; backlog; objective
customer satisfaction indicators; and efficiency measures, each with respect to
the Company and/or an Affiliate or individual business unit.
(ff)    “Officer” means an officer of the Company as defined in Rule 16a-1
adopted under the Exchange Act.
(gg)    “Option” means a right to purchase Shares of the Company granted under
this Plan.
(hh)    “Option Price” means the price payable under an Option for Shares, not
including any amount payable in respect of withholding or other taxes.
(ii)    “Option Shares” means Shares covered by an outstanding Option or
purchased under an Option.
(jj)    “Plan” means this 2006 Equity Incentive Plan, as amended.
(kk)    “Prior Plans” means the Science Application International Corporation
1999 Stock Incentive Plan, 1998 Stock Option Plan and 1984 Bonus Compensation
Plan.
(ll)    “Purchase Price” means the price payable under a Stock Award for Shares,
not including any amount payable in respect of withholding or other taxes.
(mm)    “Qualified Domestic Relations Order” means a “qualified domestic
relations order” as defined in, and otherwise meeting the requirements of,
Section 414(p) of the Code, except that reference to a “plan” in that definition
shall be to this Plan.
(nn)    “Rule 16b-3” means Rule 16b-3 adopted under Section 16(b) of the
Exchange Act.
(oo)    “SAR” or “Stock Appreciation Right” means a right to receive cash and/or
Shares based on a change in the Fair Market Value of a specific number of Shares
pursuant to an Award Agreement, as described in Section 8.1.
(pp)    “Securities Act” means the Securities Act of 1933, as amended.

      
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(qq)    “Share” means a share of Common Stock of the Company or other securities
substituted for Common Stock under Section 10.
(rr)    “Stock Award” means an offer by the Company to sell or issue shares
subject to certain restrictions pursuant to the Award Agreement as described in
Section 8.2 or, as determined by the Board or Committee, a notional account
representing the right to be paid an amount based on Shares. Types of Awards
which may be granted as Stock Awards include such awards as are commonly known
as restricted stock, deferred stock, restricted stock units, performance shares,
phantom stock or similar types of awards as determined by the Administrator.
(ss)    “Substitute Award” means a Substitute Option, Substitute SAR or
Substitute Stock Award granted in accordance with the terms of this Plan.
(tt)    “Substitute Option” means an Option granted in substitution for, or upon
the conversion of, an option granted by another entity to purchase equity
securities in the granting entity.
(uu)    “Substitute SAR” means a SAR granted in substitution for, or upon the
conversion of, a stock appreciation right granted by another entity with respect
to equity securities in the granting entity.
(vv)    “Substitute Stock Award” means a Stock Award granted in substitution
for, or upon the conversion of, a stock award granted by another entity to
purchase equity securities in the granting entity.
(ww)    “Ten Percent Stockholder” is any person who, directly or by attribution
under Section 424(d) of the Code, owns stock possessing more than ten percent of
the total combined voting power of all classes of stock of the Company or of any
Affiliate on the Grant Date.
(xx)    “Termination” means that the Awardee has ceased to be, with or without
any cause or reason, an Employee, Director or Consultant. However, unless so
determined by the Administrator, or otherwise provided in this Plan,
“Termination” shall not include a change in status from an Employee, Consultant
or Director to another such status. An event that causes an Affiliate to cease
being an Affiliate shall be treated as the “Termination” of that Affiliate’s
Employees, Directors, and Consultants.
2.2    Rules of Interpretation. Any reference to a “Section,” without more, is
to a Section of this Plan. Captions and titles are used for convenience in this
Plan and shall not, by themselves, determine the meaning of this Plan. Except
when otherwise indicated by the context, the singular includes the plural and
vice versa. Any reference to a statute is also a reference to the applicable
rules and regulations adopted under that statute. Any reference to a statute,
rule or regulation, or to a section of a statute, rule or regulation, is a
reference to that statute, rule, regulation, or section as amended from time to
time, both before and after the Effective Date and including any successor
provisions.

      
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3.
Shares Subject to This Plan; Term of This Plan

3.1    Number of Award Shares. The Shares issuable under this Plan shall be
authorized but unissued or reacquired Shares, including Shares repurchased by
the Company on the open market. The number of Shares available for issuance
after the Effective Date over the remaining term of this Plan shall be
12,500,000 (including Shares underlying awards that are outstanding as of the
Effective Date, and subject to adjustment pursuant to Section 10.2). Except as
required by Applicable Law, Shares subject to an outstanding Award shall not
reduce the number of Shares available for issuance under this Plan until the
earlier of the date such Shares are vested pursuant to the terms of the
applicable Award or the actual date of delivery of the Shares to the Awardee.
Those Shares (i) that are issued under the Plan that are forfeited or
repurchased by the Company at the original purchase price or less or that are
issuable upon exercise of awards granted under the Plan that expire or become
unexercisable for any reason after their Grant Date without having been
exercised in full, (ii) that are withheld from an Option or Stock Award pursuant
to a Company-approved “net exercise” provision or (iii) that are not delivered
to or are Award Shares surrendered by a holder in consideration for applicable
tax withholding will continue to be available for issuance under this Plan.
Shares issued in settlement of any Dividend Equivalent Rights shall be applied
against the number of Shares available for Awards. Shares subject to Substitute
Awards and available under a stockholder-approved equity plan of an acquired
company shall not be applied against the number of Shares available for Awards.
3.2    Source of Shares. Award Shares may be: (a) Shares that have never been
issued, (b) Shares that have been issued but are no longer outstanding, or (c)
Shares that are outstanding and are acquired to discharge the Company’s
obligation to deliver Award Shares.
3.3    Term of this Plan.
(a)    This Plan shall become effective on the Effective Date (with any
amendments to the Plan being effective on and after the date thereof), and
Awards may be granted under this Plan on and after, the Effective Date. Upon
effectiveness of this Plan, no additional awards will be made under the Prior
Plans.
(b)    Subject to the provisions of Section 14, Awards may be granted under this
Plan until June 15, 2022.
4.
Administration

4.1    General.
(a)    The Board shall have ultimate responsibility for administering this Plan.
To the extent permitted by Applicable Law, the Board may delegate certain of its
responsibilities to a Committee. In addition, to the extent permitted by
Applicable Law, the Board or the Committee may further delegate its
responsibilities to any Employee of the Company or any Affiliate. Where this
Plan specifies that an action must be taken or a determination made by the
Committee, only the Board or the Committee may take that action or make that
determination; provided that Section 5.2 includes reference to actions that only
the Committee may perform. Where this Plan references the “Administrator,” the
action may be taken or determination made by the Board, the Committee, or other
administrator to whom the Board or Committee has delegated specified powers,
including those powers set forth in Section 4.2. However, only the Board or a
Committee consisting solely of

      
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independent directors as defined in the Company’s Corporate Governance
Guidelines may approve grants of Awards to Executives, and an Administrator
other than the Board or the Committee may grant Awards only within the
guidelines established by the Board or Committee. Moreover, all actions and
determinations by any Administrator are subject to the provisions of this Plan.
(b)    So long as the Company has registered and outstanding a class of equity
securities under Section 12 of the Exchange Act and to the extent necessary or
helpful to comply with Applicable Law with respect to officers subject to
Section 16 of the Exchange Act and/or others, a Committee shall consist of two
or more Company Directors who are “Non-Employee Directors” as defined in Rule
16b-3 and who are “outside directors” as defined in Section 162(m) of the Code.
4.2    Authority of the Board or the Committee. Subject to the other provisions
of this Plan, the Board or the Committee shall have the authority to:
(c)    grant Awards, including Substitute Awards;
(d)    determine the Fair Market Value of Shares;
(e)    determine the Option Price and the Purchase Price of Awards;
(f)    select the Awardees;
(g)    determine the times Awards are granted;
(h)    determine the number of Shares subject to each Award;
(i)    determine the type of Shares subject to each Award;
(j)    determine the methods of payment that may be used to purchase Award
Shares;
(k)    determine the methods of payment that may be used to satisfy withholding
tax obligations;
(l)    determine the other terms of each Award, including but not limited to the
time or times at which Awards may be exercised, whether and under what
conditions an Award is assignable, whether an Option is a Nonstatutory Option or
an Incentive Stock Option and automatic cancellation of the Award if certain
objective requirements determined by the Administration are not met;
(m)    modify or amend any Award;
(n)    authorize any person to sign any Award Agreement or other document
related to this Plan on behalf of the Company;
(o)    determine the form of any Award Agreement or other document related to
this Plan, and whether that document, including signatures, may be in electronic
form;

      
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(p)    interpret this Plan and any Award Agreement or document related to this
Plan;
(q)    correct any defect, remedy any omission, or reconcile any inconsistency
in this Plan, any Award Agreement or any other document related to this Plan;
(r)    adopt, amend, and revoke rules and regulations under this Plan, including
rules and regulations relating to sub-plans and Plan addenda;
(s)    adopt, amend, and revoke special rules and procedures which may be
inconsistent with the terms of this Plan, set forth (if the Administrator so
chooses) in sub-plans regarding (for example) the operation and administration
of this Plan and the terms of Awards, if and to the extent necessary or useful
to accommodate non-U.S. Applicable Laws and practices as they apply to Awards
and Award Shares held by, or granted or issued to, persons working or resident
outside of the United States or employed by Affiliates incorporated outside the
United States;
(t)    determine whether a transaction or event should be treated as a
Divestiture;
(u)    determine the effect of a Fundamental Transaction and, if the Board
determines that a transaction or event should be treated as a a Divestiture,
then the effect of that Divestiture;
(v)    appoint such additional administrators as are necessary to perform
various administrative acts and determine the duties of such administrators; and
(w)    make all other determinations the Administrator deems necessary or
advisable for the administration of this Plan.
4.3    Scope of Discretion. Subject to the provisions of this Section 4.3, on
all matters for which this Plan confers the authority, right or power on the
Board, the Committee, or other Administrator to make decisions, that body may
make those decisions in its sole and absolute discretion. Those decisions will
be final, binding and conclusive. In making its decisions, the Board, Committee
or other Administrator need not treat all persons eligible to receive Awards,
all Awardees, all Awards or all Award Shares the same way. Notwithstanding
anything herein to the contrary, and except as provided in Section 14.3, the
discretion of the Board, Committee or other Administrator is subject to the
specific provisions and specific limitations of this Plan, as well as all rights
conferred on specific Awardees by Award Agreements and other agreements.
5.
Persons Eligible to Receive Awards

5.1    Eligible Individuals. Awards (including Substitute Awards) may be granted
to, and only to, Employees, Directors and Consultants, including to prospective
Employees, Directors and Consultants conditioned on the beginning of their
service for the Company or an Affiliate. However, Incentive Stock Options may
only be granted to Employees, as provided in Section 7(g).
5.2    Section 162(m) Limitation.
(a)    Options and SARs. Subject to the provisions of this Section 5.2, for so
long as the Company is a “publicly held corporation” within the meaning of
Section 162(m) of

      
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the Code: (i) no Employee may be granted within any fiscal year of the Company
under this Plan Options to purchase, and SARs to receive compensation calculated
with reference to, more than an aggregate of 750,000 Shares, subject to
adjustment pursuant to Section 10 and considered without regard to any number of
Stock Awards or the dollar amount of any Cash Awards that may have been granted
or awarded to such Employee during the applicable fiscal year, and (ii) with
respect to any Option or SAR that is granted with the intent of having it
qualify as “qualified performance-based compensation” under Code Section 162(m),
Options and SARs may be granted to an Executive only by the Committee (and,
notwithstanding anything to the contrary in Section 4.1(a), not by the Board).
If an Option or SAR is cancelled without being exercised, that cancelled Option
or SAR shall continue to be counted against the limit on Awards that may be
granted to any individual under this Section 5.2(a).
(b)    Cash Awards and Other Stock Awards. Subject to the provisions of this
Section 5.2, so long as the Company is a “publicly held corporation” within the
meaning of Code Section 162(m), with respect to any Stock Award or Cash Award
that is granted with the intent of having it qualify as “qualified
performance-based compensation” under Code Section 162(m): (i) no Employee may
be granted one or more Stock Awards within any single fiscal year of the Company
to purchase more than 500,000 Shares, subject to adjustment pursuant to Section
10 and considered without regard to any number of Option or SAR Shares or the
dollar amount of any Cash Awards that may have been granted or awarded to such
Employee during the applicable fiscal year, and (ii) no Employee may be granted
one or more Cash Awards within a single fiscal year of the Company having an
aggregate amount of more than $5,000,000, considered without regard to any
number of Options, SARs or Stock Awards that may have been granted or awarded to
such Employee during the applicable fiscal year. With respect to any Stock Award
or Cash Award that is granted with the intent of having it qualify as “qualified
performance-based compensation” under Code Section 162(m), such Awards may be
granted to an Executive only by the Committee (and, notwithstanding anything to
the contrary in Section 4.1(a), not by the Board).
(c)    Any Cash Award or Stock Award intended as “qualified performance-based
compensation” within the meaning of Section 162(m) of the Code must be awarded,
vest or become exercisable contingent on the achievement of one or more
Objectively Determinable Performance Conditions. The Committee shall have the
discretion to determine the time and manner of compliance with Section 162(m) of
the Code.
(d)     Nothing in this Section 5.2 shall prevent the Committee from making any
type of Award authorized for grant under this Plan outside of this Plan. In
addition, nothing in this Section 5.2 shall prevent the Committee from granting
Awards under this Plan that are not intended to qualify as “qualified
performance-based compensation” under Code Section 162(m).
(e)     Notwithstanding satisfaction, achievement or completion of any
Objectively Determinable Performance Conditions, that may be specified at the
time of grant of an Award to a “covered employee” within the meaning of
Section 162(m) of the Code, the number of Awards, Shares, or other benefits
granted, issued, retainable and/or vested under an Award on account of
satisfaction of such Objectively Determinable Performance Condition(s) may

      
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be reduced by the Committee on the basis of such further considerations as the
Committee in its sole discretion shall determine.
6.
Terms and Conditions of Options

Options will be evidenced by an Award Agreement. In addition, the following
rules apply to all Options:
6.1    Price. No Option (other than Substitute Options) may have an Option Price
less than the Fair Market Value of the underlying Share on the Grant Date.
6.2    Term. No Option shall be exercisable after its Expiration Date. No Option
may have an Expiration Date that is more than ten years after its Grant Date.
Additional provisions regarding the term of Incentive Stock Options are provided
in Sections 7(a) and 7(e).
6.3    Vesting. Options shall be exercisable: (a) on the Grant Date, or (b) in
accordance with a schedule related to the Grant Date, the date the Awardee’s
directorship, employment or consultancy begins, or a different date specified in
the Award Agreement. Additional provisions regarding the vesting of Incentive
Stock Options are provided in Section 7(c). No Option granted to an individual
who is subject to the overtime pay provisions of the Fair Labor Standards Act
may be exercised before the expiration of six months after the Grant Date.
6.4    Form and Method of Payment. In accordance with Section 4.2, the
Administrator shall have the authority to determine the acceptable form and
method of payment for exercising an Option. Acceptable forms of payment that the
Administrator may permit with respect to the exercise of Options include:
(a)     cash, check or wire transfer, denominated in U.S. dollars except as
specified by the Administrator for non-U.S. Employees or non-U.S. sub-plans;
(b)     other shares of stock of the Company, or the designation of other shares
of stock of the Company, which have a Fair Market Value on the date of surrender
greater than or equal to the Option Price of the Shares as to which the Option
is being exercised;
(c)     provided that a public market exists for the Common Stock, consideration
received by the Company under a procedure under which a licensed broker-dealer
advances funds on behalf of an Awardee or sells shares of Common Stock issued
upon conversion of the Option Shares on behalf of an Awardee (a “Cashless
Exercise Procedure”), provided that if the Company extends or arranges for the
extension of credit to an Awardee under any Cashless Exercise Procedure, no
Officer or Director may participate in that Cashless Exercise Procedure;
(d)     cancellation of any debt owed by the Company or any Affiliate to the
Awardee by the Company (including, without limitation, waiver of compensation
due or accrued for services previously rendered to the Company);
(e)     payment pursuant to any “cashless net exercise” procedures approved by
the Committee; provided that the difference between the full number of Shares
covered by the exercised portion of the Award and the number of Shares actually
delivered shall be restored to the amount of Shares reserved for issuance under
Section 3.1; and

      
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(f)     any combination of the methods of payment permitted by any paragraph of
this Section 6.4.
The Committee may also permit any other form or method of payment for Option
Shares permitted by Applicable Law. In making its determination as to the type
of consideration to accept, the Administrator shall consider if acceptance of
such consideration may be reasonably expected to benefit the Company and the
Administrator may, in its sole discretion, refuse to accept a particular form of
consideration at the time of any Option exercise.
6.5    Nonassignability of Options. Except as otherwise determined by the
Administrator and subject to Section 17, no Option shall be assignable or
otherwise transferable by the Awardee. Incentive Stock Options may only be
assigned in compliance with Section 7(h).
6.6    Substitute Options. The Committee may cause the Company to grant
Substitute Options in connection with the acquisition by the Company or an
Affiliate of equity securities of any entity (including by merger, tender offer,
or other similar transaction) or of all or a portion of the assets of any
entity. Any such substitution shall be effective on the effective date of the
acquisition. Substitute Options may be Nonstatutory Options or Incentive Stock
Options. Unless and to the extent specified otherwise by the Committee,
Substitute Options shall have the same terms and conditions as the options they
replace, except that (subject to the provisions of Section 10) Substitute
Options shall be Options to purchase Shares rather than equity securities of the
granting entity, shall have an Option Price determined by the Committee and
shall be on terms that, as determined by the Committee in its sole and absolute
discretion, properly reflect the substitution.
6.7    No Repricing. The Committee may not reprice, reduce the exercise price of
or make similar adjustments with the effect of lowering the exercise price of
Options previously granted under the Plan, including through a cancellation and
grant of any new Award or payment of cash, without the approval of the Company’s
stockholders other than in connection with a change in the Company’s
capitalization pursuant to Section 10 of the Plan.
7.
Incentive Stock Options

The following rules apply only to Incentive Stock Options and only to the extent
these rules are more restrictive than the rules that would otherwise apply under
this Plan. With the consent of the Awardee, or where this Plan provides that an
action may be taken notwithstanding any other provision of this Plan, the
Administrator may deviate from the requirements of this Section, notwithstanding
that any Incentive Stock Option modified by the Administrator will thereafter be
treated as a Nonstatutory Option.
(a)    The Expiration Date of an Incentive Stock Option shall not be later than
ten years from its Grant Date, with the result that no Incentive Stock Option
may be exercised after the expiration of ten years from its Grant Date.
(b)    No Incentive Stock Option may be granted after June 15, 2022.
(c)    Options intended to be incentive stock options under Section 422 of the
Code that are granted to any single Awardee under all incentive stock option
plans of the Company and its Affiliates, including incentive stock options
granted under this Plan, may not vest at a rate of more than $100,000 in Fair
Market Value of stock (measured on the grant dates of the options) during any
calendar year. For this purpose, an option vests with respect to

      
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a given share of stock the first time its holder may purchase that share,
notwithstanding any right of the Company to repurchase that share. Unless the
administrator of that option plan specifies otherwise in the related agreement
governing the option, this vesting limitation shall be applied by, to the extent
necessary to satisfy this $100,000 rule, treating certain stock options that
were intended to be incentive stock options under Section 422 of the Code as
Nonstatutory Options. The stock options or portions of stock options to be
reclassified as Nonstatutory Options are those with the highest option prices,
whether granted under this Plan or any other equity compensation plan of the
Company or any Affiliate that permits that treatment. This Section 7(c) shall
not cause an Incentive Stock Option to vest before its original vesting date or
cause an Incentive Stock Option that has already vested to cease to be vested.
(d)    In order for an Incentive Stock Option to be exercised for any form of
payment other than those described in Section 6.4(a), that right must be stated
at the time of grant in the Award Agreement relating to that Incentive Stock
Option.
(e)    Any Incentive Stock Option granted to a Ten Percent Stockholder, must
have an Expiration Date that is not later than five years from its Grant Date,
with the result that no such Option may be exercised after the expiration of
five years from the Grant Date.
(f)    The Option Price of an Incentive Stock Option shall never be less than
the Fair Market Value of the Shares at the Grant Date. The Option Price for the
Shares covered by an Incentive Stock Option granted to a Ten Percent Stockholder
shall never be less than 110% of the Fair Market Value of the Shares at the
Grant Date.
(g)    Incentive Stock Options may be granted only to Employees. If an Awardee
changes status from an Employee to a Consultant, that Awardee’s Incentive Stock
Options become Nonstatutory Options if not exercised within the time period
described in Section 7(i) (determined by treating that change in status as a
Termination solely for purposes of this Section 7(g)).
(h)    No rights under an Incentive Stock Option may be transferred by the
Awardee, other than by will or the laws of descent and distribution. During the
life of the Awardee, an Incentive Stock Option may be exercised only by the
Awardee. The Company’s compliance with a Qualified Domestic Relations Order, or
the exercise of an Incentive Stock Option by a guardian or conservator appointed
to act for the Awardee, shall not violate this Section 7(h).
(i)    An Incentive Stock Option shall be treated as a Nonstatutory Option if it
remains exercisable after, and is not exercised within, the three-month period
beginning with the Awardee’s Termination for any reason other than the Awardee’s
death or disability (as defined in Section 22(e) of the Code). In the case of
Termination due to death, an Incentive Stock Option shall continue to be treated
as an Incentive Stock Option if it remains exercisable after, and is not
exercised within, the three month period after the Awardee’s Termination
provided it is exercised before the Expiration Date. In the case of Termination
due to disability, an Incentive Stock Option shall be treated as a Nonstatutory
Option if it remains exercisable after, and is not exercised within, one year
after the Awardee’s Termination.

      
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(j)    An Incentive Stock Option may only be modified by the Committee.
8.
Stock Appreciation Rights, Stock Awards and Cash Awards

8.1    Stock Appreciation Rights. The following rules apply to SARs:
(a)    General. SARs may be granted either alone, in addition to, or in tandem
with other Awards granted under this Plan. The Administrator may grant SARs to
eligible participants subject to terms and conditions not inconsistent with this
Plan and determined by the Administrator. The specific terms and conditions
applicable to the Awardee shall be provided for in the Award Agreement. SARs
shall be exercisable, in whole or in part, at such times as the Administrator
shall specify in the Award Agreement. The grant or vesting of a SAR may be made
contingent on the achievement of Objectively Determinable Performance
Conditions. The Expiration Date of an SAR shall not be later than ten years from
its Grant Date, with the result that no SAR may be exercised after the
expiration of ten years from its Grant Date
(b)    Exercise of SARs. Upon the exercise of an SAR, in whole or in part, an
Awardee shall be entitled to a payment in an amount equal to the excess of the
Fair Market Value of a fixed number of Shares covered by the exercised portion
of the SAR on the date of exercise, over the Fair Market Value of the Shares
covered by the exercised portion of the SAR on the Grant Date. The amount due to
the Awardee upon the exercise of a SAR shall be paid in cash, Shares or a
combination thereof as, and over the period or periods, specified in the Award
Agreement. An Award Agreement may place limits on the amount that may be paid
over any specified period or periods upon the exercise of a SAR, on an aggregate
basis or as to any Awardee. Subject to Section 9.2, a SAR shall be considered
exercised when the Company receives written notice of exercise in accordance
with the terms of the Award Agreement from the person entitled to exercise the
SAR. If a SAR has been granted in tandem with an Option, upon the exercise of
the SAR, the number of Shares that may be purchased pursuant to the Option shall
be reduced by the number of Shares with respect to which the SAR is exercised.
(c)    Nonassignability of SARs. Except as determined by the Administrator and
subject to Section 17, no SAR shall be assignable or otherwise transferable by
the Awardee.
(d)    Substitute SARs. The Committee may cause the Company to grant Substitute
SARs in connection with the acquisition by the Company or an Affiliate of equity
securities of any entity (including by merger, tender offer, or other similar
transaction) or of all or a portion of the assets of any entity. Any such
substitution shall be effective on the effective date of the acquisition. Unless
and to the extent specified otherwise by the Committee, Substitute SARs shall
have the same terms and conditions as the SARs they replace, except that
(subject to the provisions of Section 10) Substitute SARs shall be exercisable
for Shares rather than equity securities of the granting entity and shall be on
terms that, as determined by the Committee in its sole and absolute discretion,
properly reflects the substitution.
(e)    No Repricing. The Committee may not reprice, reduce the exercise price of
or make similar adjustments with the effect of lowering the exercise price of
SARs previously

      
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granted under the Plan, including through the cancellation and grant of any new
Award or payment of cash, without the approval of the Company’s stockholders
other than in connection with a change in the Company’s capitalization pursuant
to Section 10 of the Plan.
8.2    Stock Awards. The following rules apply to all Stock Awards:
(a)    General. The specific terms and conditions of a Stock Award applicable to
the Awardee may be provided for in the Award Agreement. The Award Agreement
shall state the number of Shares that the Awardee shall be entitled to receive
or purchase, the terms and conditions on which the Shares shall vest (Stock
Awards may be made in fully vested Shares when appropriate in the discretion of
the Administrator), the price to be paid, whether Shares are to be delivered at
the time of grant or at some deferred date specified in the Award Agreement,
whether the Award is payable solely in Shares, cash or either and, if
applicable, the manner in which the Award Agreement is to be accepted or
acknowledged by the Awardee. The Administrator may require that all Shares
subject to a right of repurchase or risk of forfeiture be held in escrow until
such repurchase right or risk of forfeiture lapses. The grant or vesting of a
Stock Award may be made contingent on the achievement of Objectively
Determinable Performance Conditions.
(b)    Right of Repurchase. If so provided in the Award Agreement, Award Shares
acquired pursuant to a Stock Award may be subject to repurchase by the Company
or an Affiliate if not vested in accordance with the Award Agreement.
(c)    Form of Payment. The Administrator shall determine the acceptable form
and method of payment for exercising a Stock Award, which may include any or all
of the forms of payment set forth in Section 6.4.
(d)    Dividend Equivalent Rights. The Committee, in its discretion, may provide
in the Award Agreement evidencing any Stock Award that the Awardee shall be
entitled to Dividend Equivalent Rights, which may be settled in the form of
cash, Shares or a combination of both. Dividend Equivalent Rights will not be
permitted on appreciation awards (e.g., SARs and Options), and will not be paid
out on unearned performance awards.
(e)    Nonassignability of Stock Awards. Except as otherwise determined by the
Administrator and subject to Section 17, no Stock Award subject by its terms to
any conditions or restrictions on the issuance or ownership rights of Shares
pursuant to such Award, including without limitation any vesting or similar
conditions or any deferral elections, shall be assignable or otherwise
transferable by the Awardee.
(f)    Substitute Stock Award. The Committee may cause the Company to grant
Substitute Stock Awards in connection with the acquisition by the Company or an
Affiliate of equity securities of any entity (including by merger, tender offer,
or other similar transaction) or of all or a portion of the assets of any
entity. Unless and to the extent specified otherwise by the Committee,
Substitute Stock Awards shall have the same terms and conditions as the stock
awards they replace, except that (subject to the provisions of Section 10)
Substitute Stock Awards shall be Stock Awards to purchase Shares rather than
equity securities of the granting entity and shall have a Purchase Price and
other terms

      
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that, as determined by the Committee in its sole and absolute discretion,
properly reflects the substitution. Any such Substitute Stock Award shall be
effective on the effective date of the acquisition.
(g)    Forfeiture and Repurchase Rights.
(i)    General. In the event of the Awardee’s termination, any unvested Shares
and Stock Awards shall be forfeited, or if the Awardee paid a purchase price to
acquire the Stock Award, the Company shall have the right, during the seven
months after the Awardee’s Termination, to repurchase any or all of the Award
Shares that were outstanding and unvested as of the date of that Termination.
The repurchase price shall be determined by the Administrator in accordance with
this Section 8.2(g) which shall be either (i) the Purchase Price for the Award
Shares (minus the amount of any cash dividends paid or payable with respect to
the Award Shares for which the record date precedes the repurchase) or (ii) the
lower of (A) the Purchase Price for the Shares or (B) the Fair Market Value of
those Award Shares as of the date of the Termination. The repurchase price shall
be paid in cash. The Company may assign this right of repurchase.
(ii)    Procedure. The Company or its assignee may choose to give the Awardee a
written notice of exercise of its repurchase rights under this Section 8.2(g).
However, the Company’s failure to give such a notice shall not affect its rights
to repurchase Award Shares. The Company must, however, tender the repurchase
price during the period specified in this Section 8.2(f) for exercising its
repurchase rights in order to exercise such rights.
8.3    Cash Awards. Cash Awards may be granted either alone, in addition to, or
in tandem with other Awards granted under this Plan. After the Administrator
determines that it will offer a Cash Award, it shall advise the Awardee, by
means of an Award Agreement or otherwise, of the terms, conditions and
restrictions related to the Cash Award. The grant or vesting of a Cash Award may
be made contingent on the achievement of Objectively Determinable Performance
Conditions.
9.
Exercise of Awards

9.1    In General. An Award shall be exercisable in accordance with this Plan
and the Award Agreement under which it is granted.
9.2    Time of Exercise. Options and Stock Awards shall be considered exercised
when the Company or its designee receives: (a) written (including electronically
pursuant to Section 18.4 below) notice of exercise from the person entitled to
exercise the Option or Stock Award, (b) full payment, or provision for payment,
in a form and method approved by the Administrator, for the Shares for which the
Option or Stock Award is being exercised, and (c) with respect to any Award the
exercise of which triggers any withholding obligation, payment, or provision for
payment, in a form and method approved by the Administrator, of all applicable
withholding and similar taxes and/or (if applicable) transaction costs due upon
exercise. An Award may not be exercised for a fraction of a Share. SARs shall be
considered exercised when the Company receives written notice of the exercise
from the person entitled to exercise the SAR.

      
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9.3    Issuance of Award Shares. Subject to Sections 12.1 and 13, the Company
shall issue Award Shares in the name of the Awardee (or to such other person as
to whom the Award Shares may be appropriately and legally issued under
procedures and rules, if any, established from time to time by the
Administrator). The Company shall endeavor to issue Award Shares promptly after
an Award is exercised or after the Grant Date or settlement date of a Stock
Award, as applicable. Until Award Shares are actually issued, as evidenced by
the appropriate entry on the stock register of the Company or its transfer
agent, the Awardee will not have the rights of a stockholder with respect to
those Award Shares, even though the Awardee has completed all the steps
necessary to exercise the Award. No adjustment shall be made for any dividend,
distribution, or other right for which the record date precedes the date the
Award Shares are issued, except as provided in Section 10 or in the Award
Agreement.
9.4    Termination.
(a)    In General. Except as provided in an Award Agreement or in writing by the
Administrator, including in an Award Agreement, and as otherwise provided in
Sections 9.4(b), (c), (d) and (e) after an Awardee’s Termination for other than
Cause, the Awardee’s Awards shall be exercisable to the extent (but only to the
extent) they are vested on the date of that Termination and only during the
ninety (90) days after the Termination, but in no event after the Expiration
Date. Unless otherwise provided in the Award Agreement, in the event of
termination for Cause the Award may not be exercised after the date of
Termination. To the extent the Awardee does not exercise an Award within the
time specified for exercise, the Award shall automatically terminate.
(b)    Leaves of Absence. If an Awardee is an employee of the Company or an
Affiliate and is on a leave of absence pursuant to the terms of the Company’s
Administrative Policy No. SH-1 “Working Hours and Absences” or similar policy
maintained by an Affiliate, as such policies may be revised or replaced from
time to time, the Awardee shall not, during the period of such absence be
deemed, by virtue of such absence alone, to have terminated the Awardee’s
employment. The Awardee shall continue to vest in the Award during any approved
medical or military leave of absence. Medical leave shall include family or
medical leaves, workers’ compensation leave, or pregnancy disability leave. For
all other leaves of absence, the Award will fully vest only during active
employment and shall not vest during a leave of absence, unless required under
local law. However, if an Awardee returns to active employment with the Company
or an Affiliate following such a leave, the Award will be construed to vest as
if there had been no break in active employment. During any leave of absence, an
Awardee shall have the right to exercise the vested portion of the Award.
(c)    Death or Disability. Unless otherwise provided in the Award Agreement or
determined by the Administrator, if an Awardee’s Termination is due to death or
disability (as determined by the Administrator with respect to all Awards other
than Incentive Stock Options and as defined by Section 22(e) of the Code with
respect to Incentive Stock Options), the unvested portion of all Awards of that
Awardee shall be accelerated and become fully exercisable upon the Termination,
and all Awards of the Awardee shall be exercisable until the Expiration Date. In
the case of Termination due to death, an Award may be exercised as provided in
Section 17. In the case of Termination due to disability, if a guardian or
conservator has been appointed to act for the Awardee and been granted this
authority as part of that appointment, that guardian or conservator may exercise
the Award on behalf of the Awardee. Unless otherwise provided in the Award
Agreement, death or disability occurring after an Awardee’s Termination shall
not cause the Termination to be treated as having occurred due to death or
disability. To the extent an Award is not so exercised within the time specified
for its exercise, the Award shall automatically terminate.

      
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(d)    Divestiture. If an Awardee’s Termination is due to a Divestiture, the
Committee may take any one or more of the actions described in Section 10.3 with
respect to the Awardee’s Awards.
(e)    Administrator Discretion. Notwithstanding the provisions of Section 9.4
(a)-(d), the Administrator shall have complete discretion, exercisable either at
the time an Award is granted or at any time while the Award remains outstanding,
to:
(i)    Extend the period of time for which the Award is to remain exercisable,
following the Awardee’s Termination, from the limited exercise period otherwise
in effect for that Award to such greater period of time as the Administrator
shall deem appropriate, but in no event beyond the Expiration Date; and/or
(ii)    Permit the Award to be exercised, during the applicable post-Termination
exercise period, not only with respect to the number of vested Shares for which
such Award may be exercisable at the time of the Awardee’s Termination but also
with respect to one or more additional installments in which the Awardee would
have vested had the Awardee not been subject to Termination.
(f)    Consulting or Employment Relationship. Nothing in this Plan or in any
Award Agreement, and no Award or the fact that Award Shares remain subject to
repurchase rights or risk of forfeiture, shall: (A) interfere with or limit the
right of the Company or any Affiliate to terminate the employment or consultancy
of any Awardee at any time, whether with or without cause or reason, and with or
without the payment of severance or any other compensation or payment, (B)
confer upon any employee any right to continue in the employ of, or affiliation
with, the Company or a Subsidiary nor constitute any promise or commitment by
the Company or a Subsidiary regarding future positions, future work assignments,
future compensation or any other term or condition of employment or affiliation
or (C) interfere with the application of any provision in any of the Company’s
or any Affiliate’s charter documents or Applicable Law relating to the election,
appointment, term of office, or removal of a Director.
10.
Certain Transactions and Events

10.1    In General. Except as provided in this Section 10, no change in the
capital structure of the Company, merger, sale or other disposition of assets or
of a subsidiary, change in control, issuance by the Company of shares of any
class of securities or securities convertible into shares of any class of
securities, exchange or conversion of securities, or other transaction or event
shall require or be the occasion for any adjustments of the type described in
this Section 10.
10.2    Changes in Capital Structure. In the event of any stock split, reverse
stock split, recapitalization, combination or reclassification of stock, stock
dividend, spin-off, extraordinary cash dividend or similar change to the capital
structure of the Company (not including a Fundamental Transaction), the
Committee shall make such adjustments as it concludes are appropriate in order
to preserve the proportionate value of Awards before and after the change in
capital structure of the Company to: (a) the number and type of Awards and Award
Shares that may be granted under this Plan, including (without limitation) to
the number of Shares available for issuance over the term of this Plan as set
forth in Section 3.1 above, (b) the number and type of Options, SARs and Stock
Awards that may be granted to any individual under this Plan, (c) the terms of
any SAR, (d) the Purchase Price and repurchase price of any Stock Award

      
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or other Award Shares, (e) the Option Price and number and class of securities
issuable under each outstanding Option, and (f) the repurchase price of any
securities substituted for Award Shares that are subject to repurchase rights.
The specific adjustments shall be determined by the Committee. Unless the
Committee specifies otherwise, any securities issuable as a result of any such
adjustment shall be rounded down to the next lower whole security. The Committee
need not adopt the same rules for each Award or each Awardee.
10.3    Fundamental Transactions. In the event of (a) a merger or consolidation
in which the Company is not the surviving corporation (other than a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption shall be binding on all
participants), (b) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such merger
(other than any stockholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (c) the sale of all or
substantially all of the assets of the Company, or (d) the acquisition, sale, or
transfer of more than 50% of the outstanding shares of the Company by tender
offer or similar transaction (each, a “Fundamental Transaction”), any or all
outstanding Options, SARs and Stock Awards may be assumed, converted or replaced
by the successor corporation (if any), which assumption, conversion or
replacement shall be binding on all participants under this Plan. In the
alternative, the successor corporation may substitute equivalent Options, SARs
and Stock Awards or provide substantially similar consideration to participants
as was provided to stockholders (after taking into account the existing
provisions of the Awards). The successor corporation may also issue, in place of
outstanding Shares held by the participants, substantially similar shares or
other property subject to repurchase restrictions no less favorable to the
participant. In the event such successor corporation (if any) does not assume or
substitute Options, SARs and Stock Awards, as provided above, pursuant to a
transaction described in this Subsection 10.3, the vesting with respect to such
Awards shall fully and immediately accelerate or the repurchase rights of the
Company shall fully and immediately terminate, as the case may be, so that the
Awards may be exercised or the repurchase rights shall terminate before, or
otherwise in connection with the closing or completion of the Fundamental
Transaction or event and the Award shall then terminate. Notwithstanding
anything in this Plan to the contrary, the Committee may, in its sole
discretion, provide that the vesting of any or all Award Shares subject to
vesting or right of repurchase shall accelerate or lapse, as the case may be,
upon a transaction described in this Section 10.3. If the Committee exercises
such discretion with respect to Options, such Options shall become exercisable
in full prior to the consummation of such event at such time and on such
conditions as the Committee determines, and if such Options are not exercised
prior to the consummation of the Fundamental Transaction, the Committee may
specify that they terminate at such time as determined by the Committee. Subject
to any greater rights granted to participants under the foregoing provisions of
this Section 10.3, in the event of the occurrence of any Fundamental
Transaction, any outstanding Awards shall be treated as provided in the
applicable agreement or plan of merger, consolidation or sale of assets.
10.4     Additional Rules and Benefits related to Fundamental Transactions. The
Committee need not adopt the same rules for each Award or each Awardee.
Notwithstanding anything in this Plan to the contrary, in the event of an
Involuntary Termination of services for any reason other than death, disability
or Cause, within 18 months following the consummation of a Fundamental
Transaction, any Options, SARs and Stock Awards assumed or substituted in a
Fundamental Transaction, which are subject to vesting conditions and/or the
right of repurchase in favor of the Company or a successor entity, shall fully
accelerate for vesting so that such Award Shares are immediately exercisable
upon Termination or, if subject to the right of repurchase in favor of the
Company, such repurchase rights shall lapse as of the date of Termination.

      
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Any such Awards having an exercisability feature shall be exercisable for a
period of six months following Termination.
10.5    Divestiture. If the Company or an Affiliate sells or otherwise transfers
equity securities of an Affiliate to a person or entity other than the Company
or an Affiliate, or leases, exchanges or transfers all or any portion of its
assets to such a person or entity, then the Committee may specify that such
transaction or event constitutes a “Divestiture”. In connection with a
Divestiture, notwithstanding any other provision of this Plan, the Committee
may, but need not, take one or more of the actions described in Section 10.3 or
10.4 with respect to Awards or Award Shares held by, for example, Employees,
Directors or Consultants for whom that transaction or event results in a
Termination. The Committee need not adopt the same rules for each Award or
Awardee.
10.6    Dissolution. If the Company adopts a plan of dissolution, the Committee
may cause Awards to be fully vested and exercisable (but not after their
Expiration Date) before the dissolution is completed but contingent on its
completion and may cause the Company’s repurchase rights on Award Shares to
lapse upon completion of the dissolution. The Committee need not adopt the same
rules for each Award or each Awardee. Notwithstanding anything herein to the
contrary, in the event of a dissolution of the Company, to the extent not
exercised before the earlier of the completion of the dissolution or their
Expiration Date, Awards shall terminate immediately prior to the dissolution.
10.7    Cut-Back to Preserve Benefits. If the Administrator determines that the
net after-tax amount to be realized by any Awardee, taking into account any
accelerated vesting, termination of repurchase rights, or cash payments to that
Awardee in connection with any transaction or event set forth in this Section 10
would be greater if one or more of those steps were not taken or payments were
not made with respect to that Awardee’s Awards or Award Shares, then, at the
election of the Awardee, to such extent, one or more of those steps shall not be
taken and payments shall not be made.
11.
Grants to Non-Employee Directors

11.1    Certain Transactions and Events.
(a)    In the event of a Fundamental Transaction while the Awardee remains a
non-Employee Director, the Shares at the time subject to each outstanding Award
held by such Awardee pursuant to this Plan, but not otherwise vested, shall
automatically vest in full and become exercisable for all Shares as fully vested
Shares and all repurchase rights shall automatically terminate in full
immediately prior to the effective date of the Fundamental Transaction.
Immediately following the consummation of the Fundamental Transaction, each
Award shall terminate and cease to be outstanding, except to the extent assumed
by the successor corporation (or Affiliate thereof).
(b)    Each Award which is assumed in connection with a Fundamental Transaction
shall be appropriately adjusted, immediately after such Fundamental Transaction,
to apply to the number and class of securities which would have been issuable to
the Awardee in consummation of such Fundamental Transaction had the Award been
exercised immediately prior to such Fundamental Transaction. Appropriate
adjustments shall also be made to the Option Price or Purchase Price payable per
share under each outstanding Award, provided the aggregate Option Price or
Purchase Price payable for such securities shall remain the same. To the extent
the actual holders of the Company’s outstanding Shares receive cash
consideration for their Shares in

      
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consummation of the Fundamental Transaction, the successor corporation may, in
connection with the assumption of the outstanding Awards granted to non-Employee
Directors under this Plan, substitute one or more shares of its own common stock
with a fair market value equivalent to the cash consideration paid per Share in
such Fundamental Transaction.
12.
Withholding and Tax Reporting

12.1    Tax Withholding Alternatives.
(g)    General. Whenever Awards are granted or exercised, or Award Shares are
issued or become free of restrictions, as applicable, the Company may require
the Awardee to remit to the Company an amount sufficient to satisfy any
applicable tax withholding requirement, whether the related tax is imposed on
the Awardee or the Company. The Company shall have no obligation to deliver
Award Shares or release Award Shares from an escrow or permit a transfer of
Award Shares until the Awardee has satisfied those tax withholding obligations.
Whenever payment in satisfaction of Awards is made in cash, the payment will be
reduced by an amount sufficient to satisfy all tax withholding requirements.
(h)    Method of Payment. The Awardee shall pay any required withholding using
such forms of consideration as are described in Section 6.4 and determined
appropriate by the Administrator. The Administrator, in its sole discretion, may
also permit Award Shares to be withheld or surrendered to pay required
withholding or for required withholding to be paid through payroll deductions.
If the Administrator permits Award Shares to be withheld or surrendered, the
Fair Market Value of the Award Shares withheld or surrendered, as determined as
of the date of withholding, shall not exceed the amount determined by the
applicable minimum statutory withholding rates to the extent the Administrator
determines such limit is necessary or advisable in light of generally accepted
accounting principles.
12.2    Reporting of Dispositions. Any holder of Option Shares acquired under an
Incentive Stock Option shall promptly notify the Administrator, following such
procedures as the Administrator may require, of the sale or other disposition of
any of those Option Shares if the disposition occurs during: (a) the longer of
two years after the Grant Date of the Incentive Stock Option and one year after
the date the Incentive Stock Option was exercised, or (b) such other period as
the Administrator has established.
13.
Compliance With Law

The grant of Awards and the issuance and subsequent transfer of Award Shares
shall be subject to compliance with all Applicable Law, including all applicable
securities laws. Awards may not be exercised, and Award Shares may not be
transferred, in violation of Applicable Law. Thus, for example, Awards may not
be exercised unless: (a) a registration statement under the Securities Act is
then in effect with respect to the related Award Shares, or (b) in the opinion
of legal counsel to the Company, those Award Shares may be issued in accordance
with an applicable exemption from the registration requirements of the
Securities Act and any other applicable securities laws. The failure or
inability of the Company to obtain from any regulatory body the authority
considered by the Company’s legal counsel to be necessary or useful for the
lawful issuance of any Award Shares or their subsequent transfer shall relieve
the Company of any liability for failing to issue those Award Shares or
permitting their transfer. As a condition to the exercise of any Award or the
transfer of any Award Shares, the Company may require the Awardee to satisfy any
requirements or

      
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qualifications that may be necessary or appropriate to comply with or evidence
compliance with any Applicable Law.
14.
Amendment or Termination of this Plan or Outstanding Awards

14.1    Amendment and Termination. The Board or the Committee may at any time
amend, suspend, or terminate this Plan.
14.2    Stockholder Approval. The Company shall obtain the approval of the
Company’s stockholders for any amendment to this Plan if stockholder approval is
necessary or desirable to comply with any Applicable Law or with the
requirements applicable to the grant of Awards intended to be Incentive Stock
Options. The Board may also, but need not, require that the Company’s
stockholders approve any other amendments to this Plan.
14.3    Effect. No amendment, suspension, or termination of this Plan, and no
modification of any Award even in the absence of an amendment, suspension, or
termination of this Plan, shall impair any existing contractual rights of any
Awardee unless the affected Awardee consents to the amendment, suspension,
termination, or modification. Notwithstanding anything herein to the contrary,
no such consent shall be required if the Committee determines that the
amendment, suspension, termination, or modification (including an amendment of
the designation of the class of securities to be issued under Awards): (a) is
required or advisable in order for the Company, this Plan or the Award to
satisfy Applicable Law, to meet the requirements of any accounting standard or
to avoid any adverse accounting treatment, or (b) in connection with any
transaction or event described in Section 10, is in the best interests of the
Company or its stockholders. The Committee may, but need not, take the tax or
accounting consequences to affected Awardees into consideration in acting under
the preceding sentence. Those decisions shall be final, binding and conclusive.
Termination of this Plan shall not affect the Administrator’s ability to
exercise the powers granted to it under this Plan with respect to Awards granted
before the termination of this Plan or with respect to Award Shares issued under
such Awards even if those Award Shares are issued after the termination of this
Plan.
14.4    Recoupment/Clawback. Notwithstanding anything in this Plan to the
contrary, Awards granted under this Plan shall be subject to cancellation,
forfeiture and recovery in accordance with the Company’s Recoupment Policy, as
the same may be amended from time to time, or any other compensation recoupment
policy that may be adopted by the Committee, including any policies and
procedures that the Committee determines to be necessary or appropriate to
implement Section 10D of the Exchange Act and any rules promulgated thereunder
or any other Applicable Law. Without limiting the foregoing, the Committee may
provide for such recoupment in Award Agreements or with respect to any Award
granted hereunder (including on a retroactive basis without the Awardee’s
consent).
15.
Reserved Rights

15.1    Nonexclusivity of this Plan. This Plan shall not limit the power of the
Company or any Affiliate to adopt other incentive arrangements including, for
example, the grant or issuance of stock options, stock, other equity-based
rights or cash bonuses or awards under other plans.
15.2    Unfunded Plan. This Plan shall be unfunded. Although bookkeeping
accounts may be established with respect to Awardees, any such accounts will be
used merely as a convenience. The Company shall not be required to segregate any
assets on account of this Plan, the grant of Awards, or the issuance of Award
Shares. The Company and the Administrator shall not be deemed to be a trustee of
stock or cash to

      
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be awarded under this Plan. Any obligations of the Company to any Awardee shall
be based solely upon contracts entered into under this Plan, such as Award
Agreements. No such obligations shall be deemed to be secured by any pledge or
other encumbrance on any assets of the Company. Neither the Company nor the
Administrator shall be required to give any security or bond for the performance
of any such obligations.
15.3     Compensation. The value of Options, SARs and Stock Awards granted
pursuant to the Plan will not be included as compensation, earnings, salary or
other similar terms used when calculating an Awardee's benefits under any other
employee benefit plan sponsored by the Company or any Affiliate except as such
other plan otherwise expressly provides.
16.
Escrow of Stock Certificates

To enforce any restrictions on Award Shares, the Administrator may require the
holder to deposit any certificates (or indicia of ownership) representing Award
Shares, with stock powers or other transfer instruments approved by the
Administrator endorsed in blank, with the Company or an agent of the Company to
hold in escrow until the restrictions have lapsed or terminated. The
Administrator may also cause a legend or legends referencing the restrictions to
be placed on any such certificates.
17.
Treatment of Awards upon Death of Awardee; Limited Transferability

17.1    Treatment of Awards upon Death of Awardee. The Company may from time to
time establish procedures under which the Company may make certain
determinations required with respect to Awards in the event of an Awardee’s
death. The Company’s determinations and decisions in this regard shall be final
and binding on all parties.
17.2    Limited Transferability. Options, SARs and Stock Awards shall generally
be nontransferable; provided however that the Administrator may in its
discretion (and as reflected in the applicable Award Agreement or an amendment
thereto) make an Option, SAR or Stock Award transferable to an Awardee’s family
or entities affiliated with the Awardee’s family if and to the extent permitted
under the rules and instructions applicable to Form S-8 (or any successor form
or other securities laws under which the issuance and sale of Awards and Award
Shares hereunder are registered or exempted). If the Administrator makes an
Option, SAR or Stock Award transferable, either at the time of grant or
thereafter, such Award shall contain such additional terms and conditions as the
Administrator deems appropriate, and any transferee shall be deemed to be bound
by such terms upon acceptance of such transfer.
18.
Miscellaneous

18.1    Governing Law. This Plan, the Award Agreements and all other agreements
entered into under this Plan, and all actions taken under this Plan or in
connection with Awards or Award Shares, shall be governed by the laws of the
State of Delaware without giving effect to principles of conflicts of law.
18.2    Determination of Value. The “Fair Market Value” of a Share shall be
determined as follows:
(a)    Listed Stock. If Shares are traded on any established stock exchange or
quoted on a national market system, Fair Market Value shall be the closing sales
price as quoted on that stock exchange or system for the day before the date the
value is to be determined (the “Value Date”) as reported in The Wall Street
Journal or a similar publication. If no sales are reported as having occurred on
the day before the Value Date, Fair Market Value shall be that closing sales
price for the last preceding trading day on which sales of Shares

      
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are reported as having occurred. If no sales are reported as having occurred
during the five trading days before the Value Date, Fair Market Value shall be
the closing bid for the Shares on the day before the Value Date. If the Shares
of the Company are listed on multiple exchanges or systems, Fair Market Value
shall be based on sales or bid prices on the primary exchange or system on which
Shares of the Company are traded or quoted.
(b)    Stock Quoted by Securities Dealer. If Shares are regularly quoted by a
recognized securities dealer but selling prices are not reported on any
established stock exchange or quoted on a national market system, Fair Market
Value shall be the mean between the high bid and low asked prices on the day
before the Value Date. If no prices are quoted for the day before the Value
Date, Fair Market Value shall be the mean between the high bid and low asked
prices on the last preceding trading day on which any bid and asked prices were
quoted.
(c)    No Established Market. If Shares are not traded on any established stock
exchange or quoted on a national market system and are not quoted by a
recognized securities dealer, the Administrator (following guidelines
established by the Board or Committee) will determine Fair Market Value of the
Shares in good faith.
18.3    Reservation of Shares. During the term of this Plan, the Company shall
at all times keep available such number of Shares as are still issuable under
this Plan.
18.4    Electronic Communications. Any Award Agreement, notice of exercise of an
Award, or other document required or permitted by this Plan may be delivered in
writing or, to the extent determined by the Administrator, electronically.
Signatures or acknowledgements may also be electronic if permitted by the
Administrator.
18.5    Notices. Unless the Administrator specifies otherwise, any notice to the
Company under any Award Agreement or with respect to any Awards or Award Shares
shall be in writing (or, if so authorized by Section 18.4, communicated
electronically), shall be addressed to the Secretary of the Company, and shall
only be effective when received by the Secretary of the Company.

      
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