Exhibit 10.2
 
 

 
AMKOR TECHNOLOGY, INC.

 
2007 EQUITY INCENTIVE PLAN
 
1.  Purposes of the Plan.  The purposes of this Plan are:
 

  •  to attract and retain the best available personnel for positions of
substantial responsibility,     •  to provide incentives to individuals who
perform services to the Company, and     •  to promote the success of the
Company’s business.

 
The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock
Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights,
Performance Units, Performance Shares and other stock or cash awards as the
Administrator may determine.
 
2.  Definitions.  As used herein, the following definitions will apply:
 
(a) “Administrator” means the Board or any of its Committees as will be
administering the Plan, in accordance with Section 4 of the Plan.
 
(b) “Annual Revenue” means the Company’s or a business unit’s net sales for the
Fiscal Year, determined in accordance with generally accepted accounting
principles.
 
(c) “Applicable Laws” means the requirements relating to the administration of
equity-based awards under U.S. state corporate laws, U.S. federal and state
securities laws, the Code, any stock exchange or quotation system on which the
Common Stock is listed or quoted and the applicable laws of any foreign country
or jurisdiction where Awards are, or will be, granted under the Plan.
 
(d) “Award” means, individually or collectively, a grant under the Plan of
Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights,
Performance Units, Performance Shares and other stock or cash awards as the
Administrator may determine.
 
(e) “Award Agreement” means the written or electronic agreement setting forth
the terms and provisions applicable to each Award granted under the Plan. The
Award Agreement is subject to the terms and conditions of the Plan.
 
(f) “Award Transfer Program” means any program instituted by the Committee which
would permit Participants the opportunity to transfer any outstanding Awards to
a financial institution or other person or entity approved by the Committee.
 
(g) “Board” means the Board of Directors of the Company.
 
(h) “Cash Position” means the Company’s or a business unit’s level of cash and
cash equivalents.
 
(i) “Change in Control” means the occurrence of any of the following events:
 
(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of securities of the Company representing
fifty percent (50%) or more of the total voting power represented by the
Company’s then outstanding voting securities;
 
(ii) The consummation of the sale or disposition by the Company of all or
substantially all of the Company’s assets;
 
(iii) A change in the composition of the Board occurring within a twelve
(12)-month period, as a result of which fewer than a majority of the directors
are Incumbent Directors. “Incumbent Directors” means directors who either
(A) are Directors as of the effective date of the Plan, or (B) are elected, or
nominated for election, to the Board with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination
(but will not include an individual whose election or

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nomination is in connection with an actual or threatened proxy contest relating
to the election of directors to the Company); or
 
(iv) The consummation of a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity or its parent outstanding immediately after
such merger or consolidation.
 
(j) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to
a section of the Code herein will be a reference to any successor or amended
section of the Code.
 
(k) “Committee” means a committee of Directors or of other individuals
satisfying Applicable Laws appointed by the Board in accordance with Section 4
hereof.
 
(l) “Common Stock” means the common stock of the Company.
 
(m) “Company” means Amkor Technology, Inc., a Delaware corporation, or any
successor thereto.
 
(n) “Company Free Cash Flow” means as to any Fiscal Quarter or Fiscal Year, the
Company’s or a business unit’s Net Cash Provided by Operations less payments for
property, plant, and equipment determined in accordance with generally accepted
accounting principles.
 
(o) “Consultant” means any person, including an advisor, engaged by the Company
or a Parent or Subsidiary to render services to such entity.
 
(p) “Determination Date” means the latest possible date that will not jeopardize
the qualification of an Award granted under the Plan as “performance-based
compensation” under Section 162(m) of the Code.
 
(q) “Director” means a member of the Board.
 
(r) “Disability” means total and permanent disability as defined in
Section 22(e)(3) of the Code, provided that in the case of Awards other than
Incentive Stock Options, the Administrator in its discretion may determine
whether a permanent and total disability exists in accordance with uniform and
non-discriminatory standards adopted by the Administrator from time to time.
 
(s) “Earnings Per Share” means as to any Fiscal Quarter or Fiscal Year, the
Company’s or a business unit’s Net Income, divided by a weighted average number
of common shares outstanding and dilutive common equivalent shares deemed
outstanding, determined in accordance with generally accepted accounting
principles.
 
(t) “EBITDA” means as to any Fiscal Quarter or Fiscal Year, the Company’s or a
business unit’s earnings before interest, depreciation and amortization
determined in accordance with generally accepted accounting principles.
 
(u) “Employee” means any person, including Officers and Directors, employed by
the Company or any Parent or Subsidiary of the Company. Neither service as a
Director nor payment of a director’s fee by the Company will be sufficient to
constitute “employment” by the Company.
 
(v) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
(w) “Exchange Program” means a program under which (i) outstanding Awards are
surrendered or cancelled in exchange for Awards of the same type (which may have
higher exercise prices and different terms), Awards of a different type, and/or
cash, and/or (ii) the exercise price of an outstanding Award is increased. The
Administrator will determine the terms and conditions of any Exchange Program in
its sole discretion.

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(x) “Fair Market Value” means, as of any date, the value of the Common Stock
determined as follows:
 
(i) If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq Global Market,
the Nasdaq Global Select Market or the Nasdaq Capital Market, its Fair Market
Value shall be the closing sales price for such stock (or, if no closing sales
price was reported on that date, as applicable, on the last trading date such
closing sales price was reported) as quoted on such exchange or system on the
day of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable;
 
(ii) If the Common Stock is regularly quoted by a recognized securities dealer
but selling prices are not reported, its Fair Market Value shall be the mean
between the high bid and low asked prices for the Common Stock on the day of
determination (or, if no bids and asks were reported on that date, as
applicable, on the last trading date such bids and asks were reported); or
 
(iii) In the absence of an established market for the Common Stock, the Fair
Market Value thereof shall be determined in good faith by the Administrator.
 
(y) “Fiscal Quarter” means a fiscal quarter of the Company.
 
(z) “Fiscal Year” means the fiscal year of the Company.
 
(aa) “Gross Fixed Assets” means as to any Fiscal Quarter or Fiscal Year, the
value of the Company’s assets intended for ongoing use in business operations,
determined in accordance with generally accepted accounting principles.
 
(bb) “Gross Margin” means as to any Fiscal Quarter or Fiscal Year, the Company’s
or a business unit’s revenue less the cost of goods sold, determined in
accordance with generally accepted accounting principles.
 
(cc) “Gross Profit Dollars” means as to any Fiscal Quarter or Fiscal Year, the
Company’s or a business unit’s revenue less cost of goods sold, determined in
accordance with generally accepted accounting principles.
 
(dd) “Incentive Stock Option” means an Option that by its terms qualifies and is
otherwise intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code and the regulations promulgated thereunder.
 
(ee) “Inside Director” means a Director who is an Employee.
 
(ff) “Net Cash Provided by Operations” means as to any Fiscal Quarter or Fiscal
Year, the Company’s or a business unit’s Net Income plus adjustments to
reconcile Net Income to Net Cash Provided by Operations, determined in
accordance with generally accepted accounting principles.
 
(gg) “Net Income” means as to any Fiscal Quarter or Fiscal Year, the income
after taxes of the Company or a business unit for the Fiscal Quarter or Fiscal
Year determined in accordance with generally accepted accounting principles.
 
(hh) “Nonstatutory Stock Option” means an Option that by its terms does not
qualify or is not intended to qualify as an Incentive Stock Option.
 
(ii) “Officer” means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
 
(jj) “Operating Cash Flow” means the Company’s or a business unit’s sum of Net
Income plus depreciation and amortization less capital expenditures plus changes
in working capital comprised of accounts receivable, inventories, other current
assets, trade accounts payable, accrued expenses, product warranty, advance
payments from customers and long-term accrued expenses, determined in accordance
with generally acceptable accounting principles.
 
(kk) “Operating Expenses” means the sum of the Company’s or a business unit’s
research and development expenses and selling and general and administrative
expenses during a Fiscal Quarter or Fiscal Year.

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(ll) “Operating Income” means the Company’s or a business unit’s income from
operations determined in accordance with generally accepted accounting
principles.
 
(mm) “Option” means a stock option granted pursuant to the Plan.
 
(nn) “Outside Director” means a Director who is not an Employee.
 
(oo) “Parent” means a “parent corporation,” whether now or hereafter existing,
as defined in Section 424(e) of the Code.
 
(pp) “Participant” means the holder of an outstanding Award.
 
(qq) “Performance Goals” will have the meaning set forth in Section 12 of the
Plan.
 
(rr) “Performance Period” means any Fiscal Year of the Company or such other
period as determined by the Administrator in its sole discretion.
 
(ss) “Performance Share” means an Award denominated in Shares which may be
earned in whole or in part upon attainment of Performance Goals or other vesting
criteria as the Administrator may determine pursuant to Section 10.
 
(tt) “Performance Unit” means an Award which may be earned in whole or in part
upon attainment of Performance Goals or other vesting criteria as the
Administrator may determine and which may be settled for cash, Shares or other
securities or a combination of the foregoing pursuant to Section 10.
 
(uu) “Period of Restriction” means the period during which the transfer of
Shares of Restricted Stock are subject to restrictions and therefore, the Shares
are subject to a substantial risk of forfeiture. Such restrictions may be based
on the passage of time, the achievement of target levels of performance, or the
occurrence of other events as determined by the Administrator.
 
(vv) “Plan” means this 2007 Equity Incentive Plan.
 
(ww) “Profit Before Tax” means as to any Fiscal Quarter or Fiscal Year, the
Company’s or a business unit’s net sales less all expenses (except for taxes,
equity, and minority interest), determined in accordance with generally accepted
accounting principles.
 
(xx) “Restricted Stock” means Shares issued pursuant to a Restricted Stock award
under Section 7 of the Plan, or issued pursuant to the early exercise of an
Option.
 
(yy) “Restricted Stock Unit” means a bookkeeping entry representing an amount
equal to the Fair Market Value of one Share, granted pursuant to Section 8. Each
Restricted Stock Unit represents an unfunded and unsecured obligation of the
Company.
 
(zz) “Retirement” means a Participant’s ceasing to be a Service Provider on or
after the date when the sum in years of (i) the Participant’s age (rounded down
to the nearest whole month), plus (ii) the number of years (rounded down to the
nearest whole month) that the Participant has provided services to the Company
equals or is greater than seventy-five (75).
 
(aaa) “Return on Assets” means the percentage equal to the Company’s or a
business unit’s Operating Income before incentive compensation, divided by
average net Company or business unit, as applicable, assets, determined in
accordance with generally accepted accounting principles.
 
(bbb) “Return on Equity” means the percentage equal to the Company’s or a
business unit’s Net Income divided by average stockholder’s equity, determined
in accordance with generally accepted accounting principles.
 
(ccc) “Return on Gross Fixed Assets” means as to any Fiscal Quarter or Fiscal
Year, the Company’s or a business unit’s annualized EBITDA divided by the total
Gross Fixed Assets determined in accordance with generally accepted accounting
principles.

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(ddd) “Return on Sales” means the percentage equal to the Company’s or a
business unit’s Operating Income before incentive compensation, divided by the
Company’s or the business unit’s, as applicable, revenue, determined in
accordance with generally accepted accounting principles.
 
(eee) “Revenue Growth” means the Company’s or a business unit’s net sales for
the Fiscal Quarter or Fiscal Year, determined in accordance with generally
accepted accounting principles, compared to the net sales of the immediately
preceding quarter.
 
(fff) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the
Plan.
 
(ggg) “Section 16(b)” means Section 16(b) of the Exchange Act.
 
(hhh) “Service Provider” means an Employee, Director, or Consultant.
 
(iii) “Share” means a share of the Common Stock, as adjusted in accordance with
Section 15 of the Plan.
 
(jjj) “Stock Appreciation Right” means an Award, granted alone or in connection
with an Option, that pursuant to Section 9 is designated as a Stock Appreciation
Right.
 
(kkk) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter
existing, as defined in Section 424(f) of the Code.
 
(lll) “Total Stockholder Return” means the total return (change in share price
plus reinvestment of any dividends) of a share of the Company’s common stock.
 
3.  Stock Subject to the Plan.  
 
(a) Subject to the provisions of Section 15 of the Plan, the maximum aggregate
number of Shares that may be awarded and sold under the Plan is seventeen
million (17,000,000) Shares. The Shares may be authorized, but unissued, or
reacquired Common Stock.
 
(b) Full Value Awards.  Any Shares subject to Restricted Stock, Restricted Stock
Units, Performance Units, and Performance Shares will be counted against the
numerical limits of this Section 3 as one and a half (1.5) Shares for every one
(1) Share subject thereto. Further, if Shares acquired pursuant to any
Restricted Stock, Restricted Stock Units, Performance Units, and Performance
Shares are forfeited or repurchased by the Company and would otherwise return to
the Plan pursuant to Section 3(c), one and a half (1.5) times the number of
Shares so forfeited or repurchased will return to the Plan and will again become
available for issuance.
 
(c) Lapsed Awards.  If an Award expires or becomes unexercisable without having
been exercised in full, is surrendered pursuant to an Exchange Program, or, with
respect to Restricted Stock, Restricted Stock Units, Performance Units or
Performance Shares, is forfeited to or repurchased by the Company due to failure
to vest, the unpurchased Shares (or for Awards other than Options or Stock
Appreciation Rights, the forfeited or repurchased Shares) which were subject
thereto will become available for future grant or sale under the Plan (unless
the Plan has terminated). With respect to Stock Appreciation Rights, only Shares
actually issued pursuant to a Stock Appreciation Right will cease to be
available under the Plan; all remaining Shares under Stock Appreciation Rights
will remain available for future grant or sale under the Plan (unless the Plan
has terminated). Shares that have actually been issued under the Plan under any
Award will not be returned to the Plan and will not become available for future
distribution under the Plan; provided, however, that if Shares issued pursuant
to Awards of Restricted Stock, Restricted Stock Units, Performance Shares or
Performance Units are repurchased by the Company or are forfeited to the
Company, such Shares will become available for future grant under the Plan.
Shares used to pay the exercise price of an Award or to satisfy the tax
withholding obligations related to an Award will not become available for future
grant or sale under the Plan. To the extent an Award under the Plan is paid out
in cash rather than Shares, such cash payment will not result in reducing the
number of Shares available for issuance under the Plan. Notwithstanding the
foregoing and, subject to adjustment as provided in Section 15, the maximum
number of Shares that may be issued upon the exercise of Incentive Stock Options
will equal the aggregate Share number stated in Section 3(a), plus, to the
extent allowable under Section 422 of the Code and the Treasury Regulations
promulgated thereunder, any Shares that become available for issuance under the
Plan pursuant to this Section 3(c).

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(d) Share Reserve.  The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as will be sufficient to
satisfy the requirements of the Plan.
 
4.  Administration of the Plan.  
 
(a) Procedure.
 
(i) Multiple Administrative Bodies.  Different Committees with respect to
different groups of Service Providers may administer the Plan.
 
(ii) Section 162(m).  To the extent that the Administrator determines it to be
desirable to qualify Awards granted hereunder as “performance-based
compensation” within the meaning of Section 162(m) of the Code, the Plan will be
administered by a Committee of two (2) or more “outside directors” within the
meaning of Section 162(m) of the Code.
 
(iii) Rule 16b-3.  To the extent desirable to qualify transactions hereunder as
exempt under Rule 16b-3, the transactions contemplated hereunder will be
structured to satisfy the requirements for exemption under Rule 16b-3.
 
(iv) Other Administration.  Other than as provided above, the Plan will be
administered by (A) the Board or (B) a Committee, which Committee will be
constituted to satisfy Applicable Laws.
 
(b) Powers of the Administrator.  Subject to the provisions of the Plan, and in
the case of a Committee, subject to the specific duties delegated by the Board
to such Committee, the Administrator will have the authority, in its discretion:
 
(i) to determine the Fair Market Value;
 
(ii) to select the Service Providers to whom Awards may be granted hereunder;
 
(iii) to determine the number of Shares to be covered by each Award granted
hereunder;
 
(iv) to approve forms of Award Agreements for use under the Plan;
 
(v) to determine the terms and conditions, not inconsistent with the terms of
the Plan, of any Award granted hereunder. Such terms and conditions include, but
are not limited to, the exercise price, the time or times when Awards may be
exercised (which may be based on performance criteria), any vesting acceleration
or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Award or the Shares relating thereto, based in each case on such
factors as the Administrator will determine;
 
(vi) to determine the terms and conditions of any, and to institute any Exchange
Program;
 
(vii) to determine the terms and conditions of any, and to institute any Award
Transfer Program in accordance with Section 14(b).
 
(viii) to construe and interpret the terms of the Plan and Awards granted
pursuant to the Plan;
 
(ix) to prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans established for the
purpose of satisfying applicable foreign laws;
 
(x) to modify or amend each Award (subject to Section 20(c) of the Plan),
including but not limited to the discretionary authority to extend the
post-termination exercisability period of Awards and to extend the maximum term
of an Option (subject to Section 6(b) regarding Incentive Stock Options).
Notwithstanding the previous sentence, without stockholder approval, the
Administrator may not (1) modify or amend an Option or Stock Appreciation Right
to reduce the exercise price of such Option or Stock Appreciation Right after it
has been granted (except for adjustments made pursuant to Section 15),
(2) cancel any outstanding Option or Stock Appreciation Right and immediately
replace it with a new Option or Stock Appreciation Right with a lower exercise
price, (3) cancel any outstanding Option or Stock Appreciation Right and
immediately replace it with a new Restricted Stock, Restricted Stock Unit,
Performance Unit, or Performance Share, or (4) cancel any outstanding Option in
exchange for cash;

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(xi) to allow Participants to satisfy withholding tax obligations in such manner
as prescribed in Section 16;
 
(xii) to authorize any person to execute on behalf of the Company any instrument
required to effect the grant of an Award previously granted by the
Administrator;
 
(xiii) to allow a Participant to defer the receipt of the payment of cash or the
delivery of Shares that would otherwise be due to such Participant under an
Award pursuant to such procedures as the Administrator may determine; and
 
(xiv) to make all other determinations deemed necessary or advisable for
administering the Plan.
 
(c) Effect of Administrator’s Decision.  The Administrator’s decisions,
determinations and interpretations will be final and binding on all Participants
and any other holders of Awards.
 
5.  Eligibility.  Nonstatutory Stock Options, Restricted Stock, Restricted Stock
Units, Stock Appreciation Rights, Performance Units and Performance Shares, and
such other cash or stock awards as the Administrator determines may be granted
to Service Providers. Incentive Stock Options may be granted only to Employees.
 
6.  Stock Options.  
 
(a) Limitations.
 
(i) Each Option will be designated in the Award Agreement as either an Incentive
Stock Option or a Nonstatutory Stock Option. However, notwithstanding such
designation, to the extent that the aggregate Fair Market Value of the Shares
with respect to which Incentive Stock Options are exercisable for the first time
by the Participant during any calendar year (under all plans of the Company and
any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such
Options will be treated as Nonstatutory Stock Options. For purposes of this
Section 16(a), Incentive Stock Options will be taken into account in the order
in which they were granted. The Fair Market Value of the Shares will be
determined as of the time the Option with respect to such Shares is granted.
 
(ii) The following limitations will apply to grants of Options:
 
(1) No Participant will be granted, in any Fiscal Year, Options to purchase more
than 2,000,000 Shares.
 
(2) In connection with his or her initial service as an Employee, an Employee
may be granted Options to purchase up to an additional 2,000,000 Shares, which
will not count against the limit set forth in Section 6(a)(ii)(1) above.
 
(3) The foregoing limitations will be adjusted proportionately in connection
with any change in the Company’s capitalization as described in Section 15.
 
(4) If an Option is cancelled in the same Fiscal Year in which it was granted
(other than in connection with a transaction described in Section 15), the
cancelled Option, as applicable, will be counted against the limits set forth in
subsections (1) and (2) above.
 
(b) Term of Option.  The Administrator will determine the term of each Option in
its sole discretion; provided, however, that the term will be no more than ten
(10) years from the date of grant thereof. Moreover, in the case of an Incentive
Stock Option granted to a Participant who, at the time the Incentive Stock
Option is granted, owns stock representing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or any Parent
or Subsidiary, the term of the Incentive Stock Option will be five (5) years
from the date of grant or such shorter term as may be provided in the Award
Agreement.
 
(c) Option Exercise Price and Consideration.
 
(i) Exercise Price.  The per share exercise price for the Shares to be issued
pursuant to exercise of an Option will be determined by the Administrator, but
will be no less than one hundred percent (100%) of the Fair Market Value per
Share on the date of grant. In addition, in the case of an Incentive Stock
Option granted to an Employee who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten

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percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price will be no less than one
hundred ten percent (110%) of the Fair Market Value per Share on the date of
grant. Notwithstanding the foregoing provisions of this Section 6(c), Options
may be granted with a per Share exercise price of less than one hundred percent
(100%) of the Fair Market Value per Share on the date of grant pursuant to a
transaction described in, and in a manner consistent with, Section 424(a) of the
Code.
 
(ii) Waiting Period and Exercise Dates.  At the time an Option is granted, the
Administrator will fix the period within which the Option may be exercised and
will determine any conditions that must be satisfied before the Option may be
exercised.
 
(iii) Form of Consideration.  The Administrator will determine the acceptable
form of consideration for exercising an Option, including the method of payment
to the extent permitted by Applicable Laws.
 
(d)  Exercise of Option.
 
(i) Procedure for Exercise; Rights as a Stockholder.  Any Option granted
hereunder will be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Award Agreement. An Option may not be exercised for a fraction of a
Share.
 
An Option will be deemed exercised when the Company receives: (i) notice of
exercise (in such form as the Administrator specifies from time to time) from
the person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised (together with any applicable
withholding taxes). Full payment may consist of any consideration and method of
payment authorized by the Administrator and permitted by the Award Agreement and
the Plan. Shares issued upon exercise of an Option will be issued in the name of
the Participant or, if requested by the Participant, in the name of the
Participant and his or her spouse. Until the Shares are issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a stockholder will exist with respect to the Shares subject to
an Option, notwithstanding the exercise of the Option. The Company will issue
(or cause to be issued) such Shares promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Shares are issued, except as provided in Section 15 of
the Plan.
 
Exercising an Option in any manner will decrease the number of Shares thereafter
available, both for purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised.
 
(ii) Termination of Relationship as a Service Provider.  If a Participant ceases
to be a Service Provider, other than upon the Participant’s termination as the
result of the Participant’s death or Disability, the Participant may exercise
his or her Option within such period of time as is specified in the Award
Agreement to the extent that the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Award Agreement). In the absence of a specified time in the Award
Agreement, the Option will remain exercisable for three (3) months following the
Participant’s termination. Unless otherwise provided by the Administrator, if on
the date of termination the Participant is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option will revert to
the Plan. If after termination the Participant does not exercise his or her
Option within the time specified by the Administrator, the Option will
terminate, and the Shares covered by such Option will revert to the Plan.
 
(iii) Disability of Participant.  If a Participant ceases to be a Service
Provider as a result of the Participant’s Disability, the Participant may
exercise his or her Option within such period of time as is specified in the
Award Agreement to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Award Agreement). In the absence of a specified time in the Award
Agreement, the Option will remain exercisable for twelve (12) months following
the Participant’s termination. Unless otherwise provided by the Administrator,
if on the date of termination the Participant is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option will
revert to the Plan. If after termination the Participant does not exercise his
or her Option within the time specified herein, the Option will terminate, and
the Shares covered by such Option will revert to the Plan.

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(iv) Death of Participant.  If a Participant dies while a Service Provider, the
Option may be exercised following the Participant’s death within such period of
time as is specified in the Award Agreement to the extent that the Option is
vested on the date of death (but in no event may the option be exercised later
than the expiration of the term of such Option as set forth in the Award
Agreement), by the Participant’s designated beneficiary, provided such
beneficiary has been designated prior to Participant’s death in a form
acceptable to the Administrator. If no such beneficiary has been designated by
the Participant, then such Option may be exercised by the personal
representative of the Participant’s estate or by the person(s) to whom the
Option is transferred pursuant to the Participant’s will or in accordance with
the laws of descent and distribution. In the absence of a specified time in the
Award Agreement, the Option will remain exercisable for twelve (12) months
following Participant’s death. Unless otherwise provided by the Administrator,
if at the time of death Participant is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option will
immediately revert to the Plan. If the Option is not so exercised within the
time specified herein, the Option will terminate, and the Shares covered by such
Option will revert to the Plan.
 
(v) Retirement of Optionee.  If a Participant ceases to be a Service Provider as
a result of the Participant’s Retirement, the Option will remain exercisable for
twelve (12) months following Participant’s Retirement.
 
(vi) Other Termination.  A Participant’s Award Agreement may also provide that
if the exercise of an Option following the termination of Participant’s status
as a Service Provider (other than upon the Participant’s death or Disability)
would result in liability under Section 16(b), then the Option will terminate on
the earlier of (A) the expiration of the term of the Option set forth in the
Award Agreement, or (B) the 10th day after the last date on which such exercise
would result in such liability under Section 16(b). Finally, a Participant’s
Award Agreement may also provide that if the exercise of the Option following
the termination of the Participant’s status as a Service Provider (other than
upon the Participant’s death or Disability) would be prohibited at any time
solely because the issuance of Shares would violate the registration
requirements under the Securities Act, then the Option will terminate on the
earlier of (A) the expiration of the term of the Option, or (B) the expiration
of a period of three (3) months after the termination of the Participant’s
status as a Service Provider during which the exercise of the Option would not
be in violation of such registration requirements.
 
7.  Restricted Stock.
 
(a) Grant of Restricted Stock.  Subject to the terms and provisions of the Plan,
the Administrator, at any time and from time to time, may grant Shares of
Restricted Stock to Service Providers in such amounts as the Administrator, in
its sole discretion, will determine.
 
(b) Restricted Stock Agreement.  Each Award of Restricted Stock will be
evidenced by an Award Agreement that will specify the Period of Restriction, the
number of Shares granted, and such other terms and conditions as the
Administrator, in its sole discretion, will determine. Notwithstanding the
foregoing sentence, Restricted Stock will vest over a minimum period of three
(3) years from the date of grant, unless such Restricted Stock was granted based
upon performance criteria in which case it will vest over a minimum of one
(1) year from the date of grant. Notwithstanding the foregoing sentence, during
any Fiscal Year no Participant will receive more than an aggregate of
1,000,000 Shares of Restricted Stock. Notwithstanding the foregoing limitation,
in connection with his or her initial service as an Employee, an Employee may be
granted an aggregate of up to an additional 1,000,000 Shares of Restricted
Stock. Unless the Administrator determines otherwise, the Company as escrow
agent will hold Shares of Restricted Stock until the restrictions on such Shares
have lapsed.
 
(c) Transferability.  Except as provided in this Section 7, Shares of Restricted
Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated until the end of the applicable Period of Restriction.
 
(d) Other Restrictions.  The Administrator, in its sole discretion, may impose
such other restrictions on Shares of Restricted Stock as it may deem advisable
or appropriate.
 
(e) Removal of Restrictions.  Except as otherwise provided in this Section 7,
Shares of Restricted Stock covered by each Restricted Stock grant made under the
Plan will be released from escrow as soon as practicable

9

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after the last day of the Period of Restriction or at such other time as the
Administrator may determine. The Administrator, in its discretion, may
accelerate the time at which any restrictions will lapse or be removed.
 
(f) Voting Rights.  During the Period of Restriction, Service Providers holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares, unless the Administrator determines otherwise.
 
(g) Dividends and Other Distributions.  During the Period of Restriction,
Service Providers holding Shares of Restricted Stock will be entitled to receive
all dividends and other distributions paid with respect to such Shares unless
otherwise provided in the Award Agreement. If any such dividends or
distributions are paid in Shares, the Shares will be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.
 
(h) Return of Restricted Stock to Company.  On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed will
revert to the Company and again will become available for grant under the Plan.
 
(i) Section 162(m) Performance Restrictions.  For purposes of qualifying grants
of Restricted Stock as “performance-based compensation” under Section 162(m) of
the Code, the Administrator, in its discretion, may set restrictions based upon
the achievement of Performance Goals. The Performance Goals will be set by the
Administrator on or before the Determination Date. In granting Restricted Stock
which is intended to qualify under Section 162(m) of the Code, the Administrator
will follow any procedures determined by it from time to time to be necessary or
appropriate to ensure qualification of the Award under Section 162(m) of the
Code (e.g., in determining the Performance Goals).
 
8.  Restricted Stock Units.  
 
(a) Grant.  Restricted Stock Units may be granted at any time and from time to
time as determined by the Administrator. Each Restricted Stock Unit grant will
be evidenced by an Award Agreement that will specify such other terms and
conditions as the Administrator, in its sole discretion, will determine,
including all terms, conditions, and restrictions related to the grant, the
number of Restricted Stock Units and the form of payout, which subject to
Section 8(d), may be left to the discretion of the Administrator.
Notwithstanding anything to the contrary in this Section 8(a), during any Fiscal
Year of the Company, no Participant will receive more than an aggregate of
1,000,000 Restricted Stock Units. Notwithstanding the limitation in the previous
sentence, in connection with his or her initial service as an Employee, an
Employee may be granted an aggregate of up to an additional 1,000,000 Restricted
Stock Units.
 
(b) Vesting Criteria and Other Terms.  The Administrator will set vesting
criteria in its discretion, which, depending on the extent to which the criteria
are met, will determine the number of Restricted Stock Units that will be paid
out to the Participant. Notwithstanding the foregoing sentence, Restricted Stock
Units will vest over a minimum period of three (3) years from the date of grant,
unless such Restricted Stock Units were granted based upon performance criteria
in which case they will vest over a minimum of one (1) year from the date of
grant. The Administrator may set vesting criteria based upon the achievement of
Company-wide, business unit, or individual goals (including, but not limited to,
continued employment), or any other basis determined by the Administrator in its
discretion.
 
(c) Earning Restricted Stock Units.  Upon meeting the applicable vesting
criteria, the Participant will be entitled to receive a payout as specified in
the Award Agreement.
 
(d) Form and Timing of Payment.  Payment of earned Restricted Stock Units will
be made as soon as practicable after the date(s) set forth in the Award
Agreement. The Administrator, in its sole discretion, may pay earned Restricted
Stock Units in cash, Shares, or a combination thereof.
 
(e) Cancellation.  On the date set forth in the Award Agreement, all unearned
Restricted Stock Units will be forfeited to the Company.
 
(f) Section 162(m) Performance Restrictions.  For purposes of qualifying grants
of Restricted Stock Units as “performance-based compensation” under
Section 162(m) of the Code, the Administrator, in its discretion, may set

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restrictions based upon the achievement of Performance Goals. In granting
Restricted Stock Units which are intended to qualify under Section 162(m) of the
Code, the Administrator will follow any procedures determined by it from time to
time to be necessary or appropriate to ensure qualification of the Award under
Section 162(m) of the Code (e.g., in determining the Performance Goals). The
Performance Goals will be set by the Administrator on or before the
Determination Date.
 
9.  Stock Appreciation Rights.  
 
(a) Grant of Stock Appreciation Rights.  Subject to the terms and conditions of
the Plan, a Stock Appreciation Right may be granted to Service Providers at any
time and from time to time as will be determined by the Administrator, in its
sole discretion.
 
(b) Number of Shares.  The Administrator will have complete discretion to
determine the number of Stock Appreciation Rights granted to any Participant,
provided that during any Fiscal Year, no Participant will be granted Stock
Appreciation Rights covering more than 1,000,000 Shares. Notwithstanding the
limitation in the previous sentence, in connection with his or her initial
service as an Employee, an Employee may be granted Stock Appreciation Rights
covering up to an additional 1,000,000 Shares.
 
(c) Exercise Price and Other Terms.  The Administrator, subject to the
provisions of the Plan, will have complete discretion to determine the terms and
conditions of Stock Appreciation Rights granted under the Plan; provided,
however, that the exercise price will be not less than one hundred percent
(100%) of the Fair Market Value of a Share on the date of grant.
 
(d) Stock Appreciation Right Agreement.  Each Stock Appreciation Right grant
will be evidenced by an Award Agreement that will specify the exercise price,
the term of the Stock Appreciation Right, the conditions of exercise, and such
other terms and conditions as the Administrator, in its sole discretion, will
determine.
 
(e) Expiration of Stock Appreciation Rights.  A Stock Appreciation Right granted
under the Plan will expire upon the date determined by the Administrator, in its
sole discretion, and set forth in the Award Agreement; provided, however, that
the term will be no more than ten (10) years from the date of grant thereof.
Notwithstanding the foregoing, the rules of Section 6(d) also will apply to
Stock Appreciation Rights.
 
(f) Payment of Stock Appreciation Right Amount.  Upon exercise of a Stock
Appreciation Right, a Participant will be entitled to receive payment from the
Company in an amount determined by multiplying:
 
(i) The difference between the Fair Market Value of a Share on the date of
exercise over the exercise price; times
 
(ii) The number of Shares with respect to which the Stock Appreciation Right is
exercised.
 
At the discretion of the Administrator, the payment upon Stock Appreciation
Right exercise may be in cash, in Shares of equivalent value, or in some
combination thereof.
 
10.  Performance Units and Performance Shares.  
 
(a) Grant of Performance Units/Shares.  Performance Units and Performance Shares
may be granted to Service Providers at any time and from time to time, as will
be determined by the Administrator, in its sole discretion. The Administrator
will have complete discretion in determining the number of Performance Units and
Performance Shares granted to each Participant, provided that during any Fiscal
Year, (i) no Participant will receive Performance Units having an initial value
greater than $5,000,000, and (ii) no Participant will receive more than
1,000,000 Performance Shares. Notwithstanding the foregoing limitation, in
connection with his or her initial service, a Service Provider may be granted up
to an additional 1,000,000 Performance Shares.
 
(b) Value of Performance Units/Shares.  Each Performance Unit will have an
initial value that is established by the Administrator on or before the date of
grant. Each Performance Share will have an initial value equal to the Fair
Market Value of a Share on the date of grant.
 
(c) Performance Objectives and Other Terms.  The Administrator will set
performance objectives or other vesting provisions (including, without
limitation, continued status as a Service Provider) in its discretion which,
depending on the extent to which they are met, will determine the number or
value of Performance Units/Shares that

11

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will be paid out to the Service Providers. Notwithstanding the foregoing
sentence, Performance Units/Shares will vest over a minimum period of three
(3) years from the date of grant, unless such Performance Units/Shares were
granted based upon performance criteria in which case they will vest over a
minimum of one (1) year from the date of grant. Each Award of Performance
Units/Shares will be evidenced by an Award Agreement that will specify the
Performance Period, and such other terms and conditions as the Administrator, in
its sole discretion, will determine. The Administrator may set performance
objectives based upon the achievement of Company-wide, divisional, or individual
goals, applicable federal or state securities laws, or any other basis
determined by the Administrator in its discretion.
 
(d) Earning of Performance Units/Shares.  After the applicable Performance
Period has ended, the holder of Performance Units/Shares will be entitled to
receive a payout of the number of Performance Units/Shares earned by the
Participant over the Performance Period, to be determined as a function of the
extent to which the corresponding performance objectives or other vesting
provisions have been achieved. After the grant of a Performance Unit/Share, the
Administrator, in its sole discretion, may reduce or waive any performance
objectives or other vesting provisions for such Performance Unit/Share.
 
(e) Form and Timing of Payment of Performance Units/Shares.  Payment of earned
Performance Units/Shares will be made as soon as practicable after the
expiration of the applicable Performance Period. The Administrator, in its sole
discretion, may pay earned Performance Units/Shares in the form of cash, in
Shares (which have an aggregate Fair Market Value equal to the value of the
earned Performance Units/Shares at the close of the applicable Performance
Period) or in a combination thereof.
 
(f) Cancellation of Performance Units/Shares.  On the date set forth in the
Award Agreement, all unearned or unvested Performance Units/Shares will be
forfeited to the Company, and again will be available for grant under the Plan.
 
(g) Section 162(m) Performance Restrictions.  For purposes of qualifying grants
of Performance Units/Shares as “performance-based compensation” under
Section 162(m) of the Code, the Administrator, in its discretion, may set
restrictions based upon the achievement of Performance Goals. The Performance
Goals will be set by the Administrator on or before the Determination Date. In
granting Performance Units/Shares which are intended to qualify under
Section 162(m) of the Code, the Administrator will follow any procedures
determined by it from time to time to be necessary or appropriate to ensure
qualification of the Award under Section 162(m) of the Code (e.g., in
determining the Performance Goals).
 
11.  Formula Option Grants to Outside Directors.  
 
(a) General.  All grants of Options to Outside Directors pursuant to this
Section 11 will be automatic and nondiscretionary, except as otherwise provided
herein, and will be made in accordance with the following provisions:
 
(b) Type of Option.  All Options granted pursuant to this Section will be
Nonstatutory Stock Options and, except as otherwise provided herein, will be
subject to the other terms and conditions of the Plan.
 
(c) No Discretion.  No person will have any discretion to select which Outside
Directors will be granted Options under this Section or to determine the number
of Shares to be covered by such Options (except as provided in Sections 11(g)
and 15).
 
(d) Initial Option.  Each person who first becomes an Outside Director following
the effective date of the Plan will be automatically granted an Option to
purchase twenty thousand (20,000) Shares (the “Initial Option”) on or about the
date on which such person first becomes an Outside Director, whether through
election by the stockholders of the Company or appointment by the Board to fill
a vacancy; provided, however, that an Inside Director who ceases to be an Inside
Director, but who remains a Director, will not receive a First Option.
 
(e) Annual Option.  Each Outside Director will be automatically granted an
Option to purchase ten thousand (10,000) Shares (an “Annual Option”) on each
date of the annual meeting of the stockholders of the Company beginning in 2008,
if as of such date, he or she will have served on the Board for at least the
preceding six (6) months.

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(f) Terms.  The terms of each Option granted pursuant to this Section 11 will be
as follows:
 
(i) The term of the Option will be ten (10) years.
 
(ii) The exercise price per Share will be one hundred percent (100%) of the Fair
Market Value per Share on the date of grant of the Option.
 
(iii) Subject to Section 15, the Option will vest and become exercisable as to
one-third (1/3rd) of the Shares subject to the Option on each anniversary of its
date of grant, provided that the Participant continues to serve as a Director
through each such date.
 
(g) Adjustments.  The Administrator in its discretion may change and otherwise
revise the terms of Options granted under this Section 11, including, without
limitation, the number of Shares and exercise prices thereof, for Options
granted on or after the date the Administrator determines to make any such
change or revision.
 
(h) Other Awards.  Nothing in this Section 11 will limit the ability of the
Administrator to grant all types of Awards under the Plan to Outside Directors
in addition to the Options that are granted to them under this Section 11.
 
12.  Performance Goals.  The granting and/or vesting of Awards of Restricted
Stock, Restricted Stock Units, Performance Shares and Performance Units and
other incentives under the Plan may be made subject to the attainment of
performance goals relating to one or more business criteria within the meaning
of Section 162(m) of the Code and may provide for a targeted level or levels of
achievement (“Performance Goals”) including: (i) Annual Revenue, (ii) Cash
Position, (iii) Company Free Cash Flow, (iv) Earnings Per Share, (v) EBITDA,
(vi) Gross Margin, (vii) Gross Profit Dollars, (viii) Net Cash Provided by
Operations, (ix) Net Income, (x) Operating Cash Flow, (xi) Operating Expenses,
(xii) Operating Income, (xiii) Profit Before Tax, (xiv) Return on Assets,
(xv) Return on Equity, (xvi) Return on Gross Fixed Assets, (xvii) Return on
Sales, (xviii) Revenue Growth, and (xix) Total Stockholder Return. Any
Performance Goals may be used to measure the performance of the Company as a
whole or a business unit of the Company and may be measured relative to a peer
group or index. The Performance Goals may differ from Participant to Participant
and from Award to Award. Any criteria used may be (i) measured in absolute
terms, (ii) compared to another company or companies, (iii) measured against the
performance of the Company as a whole or a segment of the Company and/or
(iv) measured on a pre-tax or post-tax basis (if applicable). Prior to the
Determination Date, the Administrator will determine whether any significant
element(s) will be included in or excluded from the calculation of any
Performance Goal with respect to any Participant. Any Performance Goals may be
used to measure the performance of the Company as a whole or a business unit of
the Company and may be measured relative to a peer group or index. The
Performance Goals may differ from Participant to Participant and from Award to
Award. Prior to the Determination Date, the Administrator will determine whether
any significant element(s) will be included in or excluded from the calculation
of any Performance Goal with respect to any Participant. In all other respects,
Performance Goals will be calculated in accordance with the Company’s financial
statements, generally accepted accounting principles, or under a methodology
established by the Administrator prior to the issuance of an Award, which is
consistently applied and identified in the financial statements, including
footnotes, or the management discussion and analysis section of the Company’s
annual report.
 
13.  Leaves of Absence/Transfer Between Locations.  Unless the Administrator
provides otherwise or except as required by Applicable Laws, vesting of Awards
granted hereunder will be suspended during any unpaid leave of absence. A
Service Provider will not cease to be an Employee in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, or any Subsidiary. For purposes of
Incentive Stock Options, no such leave may exceed ninety (90) days, unless
reemployment upon expiration of such leave is guaranteed by statute or contract.
If reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, then three (3) months following the ninety-first (91st) day
of such leave any Incentive Stock Option held by the Participant will cease to
be treated as an Incentive Stock Option and will be treated for tax purposes as
a Nonstatutory Stock Option.
 
14.  Transferability of Awards.  
 
(a) Unless determined otherwise by the Administrator, an Award may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution

13

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and may be exercised, during the lifetime of the Participant, only by the
Participant. If the Administrator makes an Award transferable, such Award will
contain such additional terms and conditions as the Administrator deems
appropriate.
 
(b) Award Transfer Program.  Notwithstanding any contrary provision of the Plan,
the Administrator shall have all discretion and authority to determine and
implement the terms and conditions of any Award Transfer Program instituted
pursuant to this Section 14(b) and shall have the authority to amend the terms
of any Award participating, or otherwise eligible to participate in, the Award
Transfer Program, including (but not limited to) the authority to (i) amend
(including to extend) the expiration date, post-termination exercise period
and/or forfeiture conditions of any such Award, (ii) amend or remove any
provisions of the Award relating to the Award holder’s continued service to the
Company, (iii) amend the permissible payment methods with respect to the
exercise or purchase of any such Award, (iv) amend the adjustments to be
implemented in the event of changes in the capitalization and other similar
events with respect to such Award, and (v) make such other changes to the terms
of such Award as the Administrator deems necessary or appropriate in its sole
discretion.
 
15.  Adjustments; Dissolution or Liquidation; Merger or Change in Control.  
 
(a) Adjustments.  Subject to any required action by the stockholders of the
Company, the number of shares of Common Stock which have been authorized for
issuance under the Plan, including Shares as to which no Award have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Award, the number of Shares issuable pursuant to Options to be granted
under Section 11 of the Plan, the number of Shares covered by each outstanding
Award and/or the price per Share covered by each such outstanding Award, shall
be proportionately adjusted for any dividend or other distribution (whether in
the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, or other change in the corporate
structure of the Company affecting the Shares occurs such that an adjustment is
determined by the Administrator (in its sole discretion) to be appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan. Such adjustment shall be made by
the Administrator, whose determination in that respect shall be final, binding
and conclusive. Notwithstanding the preceding, the number of Shares subject to
any Award always shall be a whole number. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of Shares
subject to an Award.
 
(b) Dissolution or Liquidation.  In the event of the proposed dissolution or
liquidation of the Company, the Administrator will notify each Participant as
soon as practicable prior to the effective date of such proposed transaction. To
the extent it has not been previously exercised, an Award will terminate
immediately prior to the consummation of such proposed action.
 
(c) Change in Control.  In the event of a merger or Change in Control, each
outstanding Award will be treated as the Administrator determines, including,
without limitation, that each Award be assumed or an equivalent option or right
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. The Administrator will not be required to treat all
Awards similarly in the transaction.
 
In the event that the successor corporation does not assume or substitute for
the Award, the Participant will fully vest in and have the right to exercise all
of his or her outstanding Options and Stock Appreciation Rights, including
Shares as to which such Awards would not otherwise be vested or exercisable, all
restrictions on Restricted Stock and Restricted Stock Units will lapse, and,
with respect to Awards with performance-based vesting, all Performance Goals or
other vesting criteria will be deemed achieved at one hundred percent (100%) of
target levels and all other terms and conditions met. In addition, if an Option
or Stock Appreciation Right is not assumed or substituted for in the event of a
Change in Control, the Administrator will notify the Participant in writing or
electronically that the Option or Stock Appreciation Right will be full vested
and exercisable for a period of time determined by the Administrator in its sole
discretion, and the Option or Stock Appreciation Right will terminate upon the
expiration of such period.

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For the purposes of this Section 15(c), an Award will be considered assumed if,
following the Change in Control, the Award confers the right to purchase or
receive, for each Share subject to the Award immediately prior to the Change in
Control, the consideration (whether stock, cash, or other securities or
property) received in the Change in Control by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the Change in Control is not solely common stock of
the successor corporation or its Parent, the Administrator may, with the consent
of the successor corporation, provide for the consideration to be received upon
the exercise of an Option or Stock Appreciation Right or upon the payout of a
Restricted Stock Unit, Performance Unit or Performance Share, for each Share
subject to such Award, to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the Change in Control.
 
Notwithstanding anything in this Section 15(c) to the contrary, an Award that
vests, is earned or paid-out upon the satisfaction of one or more Performance
Goals will not be considered assumed if the Company or its successor modifies
any of such Performance Goals without the Participant’s consent; provided,
however, a modification to such Performance Goals only to reflect the successor
corporation’s post-Change in Control corporate structure will not be deemed to
invalidate an otherwise valid Award assumption.
 
(d) Outside Director Awards.  With respect to Awards granted to an Outside
Director that are assumed or substituted for, if on the date of or following
such assumption or substitution the Participant’s status as a Director or a
director of the successor corporation, as applicable, is terminated other than
upon a voluntary resignation by the Participant (unless such resignation is at
the request of the acquirer), then the Participant will fully vest in and have
the right to exercise Options and/or Stock Appreciation Rights as to all of the
Shares underlying such Award, including those Shares which would not otherwise
be vested or exercisable, all restrictions on Restricted Stock and Restricted
Stock Units will lapse, and, with respect to Performance Units and Performance
Shares, all Performance Goals or other vesting criteria will be deemed achieved
at one hundred percent (100%) of target levels and all other terms and
conditions met.
 
16.  Tax Withholding.
 
(a) Withholding Requirements.  Prior to the delivery of any Shares or cash
pursuant to an Award (or exercise thereof), the Company will have the power and
the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state, local, foreign or other
taxes (including the Participant’s FICA obligation) required to be withheld with
respect to such Award (or exercise thereof).
 
(b) Withholding Arrangements.  The Administrator, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit a
Participant to satisfy such tax withholding obligation, in whole or in part by
(without limitation) (a) paying cash, (b) electing to have the Company withhold
otherwise deliverable cash or Shares having a Fair Market Value equal to the
amount required to be withheld, (c) delivering to the Company already-owned
Shares having a Fair Market Value equal to the amount required to be withheld,
or (d) selling a sufficient number of Shares otherwise deliverable to the
Participant through such means as the Administrator may determine in its sole
discretion (whether through a broker or otherwise) equal to the amount required
to be withheld. The amount of the withholding requirement will be deemed to
include any amount which the Administrator agrees may be withheld at the time
the election is made, not to exceed the amount determined by using the maximum
federal, state or local marginal income tax rates applicable to the Participant
with respect to the Award on the date that the amount of tax to be withheld is
to be determined. The Fair Market Value of the Shares to be withheld or
delivered will be determined as of the date that the taxes are required to be
withheld.
 
17.  No Effect on Employment or Service.  Neither the Plan nor any Award will
confer upon a Participant any right with respect to continuing the Participant’s
relationship as a Service Provider with the Company, nor will they interfere in
any way with the Participant’s right or the Company’s right to terminate such
relationship at any time, with or without cause, to the extent permitted by
Applicable Laws.
 
18.  Date of Grant.  The date of grant of an Award will be, for all purposes,
the date on which the Administrator makes the determination granting such Award,
or such other later date as is determined by the

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Administrator. Notice of the determination will be provided to each Participant
within a reasonable time after the date of such grant.
 
19.  Term of Plan.  Subject to stockholder approval in accordance with
Section 23 of the Plan, the Plan will become effective January 1, 2008. Unless
sooner terminated under Section 20 of the Plan, it will continue in effect for a
term of ten (10) years from the later of (a) the effective date of the Plan, or
(b) the earlier of the most recent Board or stockholder approval of an increase
in the number of Shares reserved for issuance under the Plan.
 
20.  Amendment and Termination of the Plan.  
 
(a) Amendment and Termination.  The Board may at any time amend, alter, suspend
or terminate the Plan.
 
(b) Stockholder Approval.  The Company will obtain stockholder approval of any
Plan amendment to the extent necessary and desirable to comply with Applicable
Laws.
 
(c) Effect of Amendment or Termination.  No amendment, alteration, suspension,
or termination of the Plan will impair the rights of any Participant, unless
mutually agreed otherwise between the Participant and the Administrator, which
agreement must be in writing (which may include e-mail) and signed by the
Participant and the Company. Termination of the Plan will not affect the
Administrator’s ability to exercise the powers granted to it hereunder with
respect to Awards granted under the Plan prior to the date of such termination.
 
21.  Conditions Upon Issuance of Shares.  
 
(a) Legal Compliance.  Shares will not be issued pursuant to the exercise of an
Award unless the exercise of such Award and the issuance and delivery of such
Shares will comply with Applicable Laws and will be further subject to the
approval of counsel for the Company with respect to such compliance.
 
(b) Investment Representations.  As a condition to the exercise of an Award, the
Company may require the person exercising such Award to represent and warrant at
the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required.
 
22.  Inability to Obtain Authority.  The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, will relieve the Company of any liability in respect of
the failure to issue or sell such Shares as to which such requisite authority
will not have been obtained.
 
23.  Stockholder Approval.  The Plan will be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is
adopted. Such stockholder approval will be obtained in the manner and to the
degree required under Applicable Laws.

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