Exhibit 10.1

TECHTARGET, INC.

2017 STOCK OPTION AND INCENTIVE PLAN

 

1.PURPOSE OF THE PLAN.

 

The purpose of this 2017 Stock Option and Incentive Plan (the “Plan”) of
TechTarget, Inc., a Delaware corporation (the “Company”), is to advance the
interests of the Company’s stockholders by enhancing the Company’s ability to
attract, retain and motivate persons who are expected to make important
contributions to the Company and by providing such persons with equity ownership
opportunities and performance-based incentives that are intended to better align
the interests of such persons with those of the Company’s stockholders.  Except
where the context otherwise requires, the term “Company” shall include any of
the Company’s present or future parent or subsidiary corporations as defined in
Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any
regulations thereunder (the “Code”) and any other business venture (including,
without limitation, joint venture or limited liability company) in which the
Company has a controlling interest, as determined by the Board of Directors of
the Company (the “Board”).

 

2.ELIGIBILITY.

 

All of the Company’s employees, officers and directors, as well as consultants
and advisors to the Company (as the terms consultants and advisors are defined
and interpreted for purposes of Form S-8 under the Securities Act of 1933, as
amended (the “Securities Act”), or any successor form) are eligible to be
granted Awards (as defined below) under the Plan. Each person who is granted an
Award under the Plan is deemed a “Participant.” The Plan provides for the
following types of awards, each of which is referred to as an “Award”: Options
(as defined in Section 5), SARs (as defined in Section 7), Restricted Stock (as
defined in Section 8), RSUs (as defined in Section 8) and Other Stock-Based
Awards (as defined in Section 9) and Cash-Based Awards (as defined in Section
9). Except as otherwise provided by the Plan, each Award may be made alone or in
addition or in relation to any other Award. The terms of each Award need not be
identical, and the Board need not treat Participants uniformly.  

 

3.ADMINISTRATION AND DELEGATION.

 

(a)Administration by Board of Directors. The Plan will be administered by the
Board. The Board shall have authority to grant Awards and to adopt, amend and
repeal such administrative rules, guidelines and practices relating to the Plan
as it shall deem advisable. The Board may construe and interpret the terms of
the Plan and any Award agreements entered into under the Plan. The Board may
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or any Award. All actions and decisions by the Board with respect to the
Plan and any Awards shall be made in the Board’s discretion and shall be final
and binding on all persons having or claiming any interest in the Plan or in any
Award.

 

(b)Appointment of Committees. To the extent permitted by applicable law, the
Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a “Committee”).  All references in the
Plan to the “Board” shall mean the Board or a Committee of the Board or the
officers referred to in Section 3(d) to the extent that the Board’s powers or
authority under the Plan have been delegated to such Committee or officers.
During such time as the common stock, $0.001 par value per share, of the Company
(the “Common Stock”) is registered under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), the Board shall appoint one such Committee of not
less than two members, each member of which shall be an independent director
under applicable stock exchange rules, an “outside director” within the meaning
of Section 162(m) of the Code and a “non-employee director” as defined in Rule
16b-3 under the Exchange Act.

 

(c)Awards to Non-Employee Directors. Awards to non-employee directors will be
granted and administered by a Committee, all of the members of which are
independent directors as defined by Section 5605(a)(2) of the NASDAQ Marketplace
Rules.

 

 

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(d)Delegation to Officers. Subject to any requirements of applicable law
(including as applicable Sections 152 and 157(c) of the General Corporation Law
of the State of Delaware), the Board may delegate to one or more officers of the
Company the power to grant Awards (subject to any limitations under the Plan) to
employees or officers of the Company and to exercise such other powers under the
Plan as the Board may determine, provided that the Board shall fix the terms of
Awards to be granted by such officers, the maximum number of shares subject to
Awards that the officers may grant, and the time period in which such Awards may
be granted; and provided further, that no officer shall be authorized to grant
Awards to any “executive officer” of the Company (as defined by Rule 3b-7 under
the Exchange Act or to any “officer” of the Company (as defined by Rule 16a-1(f)
under the Exchange Act).  

 

(e)Foreign Award Recipients. Notwithstanding any provision of the Plan to the
contrary, in order to comply with the laws and practices in which the Company
and its subsidiaries operate or have employees or other individuals eligible for
Awards, the Committee, in its sole discretion, shall have the power and
authority to: (i) determine which subsidiaries shall be covered by the Plan;
(ii) determine which individuals outside the United States are eligible to
participate in the Plan; (iii) modify the terms and conditions of any Award
granted to individuals outside the United States to comply with applicable
foreign laws, policies, customs, or practices; (iv) establish subplans and
modify exercise procedures and other terms and procedures, to the extent the
Committee determines such actions to be necessary or advisable (and such
subplans and/or modifications shall be attached to this Plan as appendices);
provided, however, that no such subplans and/or modifications shall increase the
share limitations contained in Section 4(a) hereof; and (v) take any action,
before or after an Award is made, that the Committee determines to be necessary
or advisable to obtain approval or comply with any local governmental regulatory
exemptions or approvals. Notwithstanding the foregoing, the Committee may not
take any actions hereunder, and no Awards shall be granted, that would violate
the Exchange Act or any other applicable United States securities law, the Code,
or any other applicable United States governing statute or law.

 

4.STOCK AVAILABLE FOR AWARDS.

 

(a)Number of Shares; Share Counting.

 

(1)Authorized Number of Shares. Subject to adjustment under Section 11, Awards
may be made under the Plan for up to 3,000,000 shares of common stock, $0.001
par value per share, of the Company (the “Common Stock”), any or all of which
Awards may be in the form of Incentive Stock Options (as defined in Section
5(b)). Shares of Common Stock issued under the Plan may consist in whole or in
part of authorized but unissued shares or treasury shares.

 

(2)Fungible Share Pool. Subject to adjustment under Section 11, any Award that
is not a Full-Value Award (as defined below) shall be counted against the share
limits specified in Sections 4(a)(1) and as one share for each share of Common
Stock subject to such Award and any Award that is a Full-Value Award shall be
counted against the share limits specified in Sections 4(a)(1) and as one and a
half shares for each one share of Common Stock subject to such Full-Value Award.
“Full-Value Award” means any award of Restricted Stock, RSUs or Other
Stock-Based Award with a per share price or per unit purchase price lower than
100% of the fair market value per share of Common Stock (valued in the manner
determined or approved by the Board) on the date of grant. To the extent a share
that was subject to an Award that counted as one share is returned to the Plan
pursuant to Section 4(a)(3), each applicable share reserve will be credited with
one share. To the extent that a share that was subject to an Award that counts
as one and a half shares is returned to the Plan pursuant to Section 4(a)(3),
each applicable share reserve will be credited with the same number of shares as
would count against the share limits upon grant shares.

 

(3)Share Counting. For purposes of counting the number of shares available for
the grant of Awards under the Plan under this Section 4(a) and under the
sublimits contained in Section 4(b)(2):

 

 

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(A)all shares of Common Stock covered by SARs shall be counted against the
number of shares available for the grant of Awards under the Plan and against
the sublimits referenced in the first clause of this Section 4(a)(3);  provided,
however, that (i) SARs that may be settled only in cash shall not be so counted
and (ii) if the Company grants a SAR in tandem with an Option for the same
number of shares of Common Stock and provides that only one such Award may be
exercised (a “Tandem SAR”), only the shares covered by the Option, and not the
shares covered by the Tandem SAR, shall be so counted, and the expiration of one
in connection with the other’s exercise will not restore shares to the Plan;

 

(B)if any Award (i) expires or is terminated, surrendered or cancelled without
having been fully exercised or is forfeited in whole or in part (including as
the result of shares of Common Stock subject to such Award being repurchased by
the Company at the original issuance price pursuant to a contractual repurchase
right) or (ii) results in any Common Stock not being issued (including as a
result of an SAR that was settleable either in cash or in stock actually being
settled in cash), the unused Common Stock covered by such Award shall again be
available for the grant of Awards; provided, however, that (1) in the case of
Incentive Stock Options, the foregoing shall be subject to any limitations under
the Code, (2) in the case of the exercise of an SAR, the number of shares
counted against the shares available under the Plan and against the sublimits
referenced in the first clause of this Section 4(a)(3) shall be the full number
of shares subject to the SAR multiplied by the percentage of the SAR actually
exercised, regardless of the number of shares actually used to settle such SAR
upon exercise and (3) the shares covered by a Tandem SAR shall not again become
available for grant upon the expiration or termination of such Tandem SAR;

 

(C)shares of Common Stock delivered (either by actual delivery, attestation, or
net exercise) to the Company by a Participant to (i) purchase shares of Common
Stock upon the exercise of an Award or (ii) satisfy tax withholding obligations
with respect to Awards (including shares retained from the Award creating the
tax obligation) shall be added back to the number of shares available for the
future grant of Awards; provided that no more than the number of shares used to
satisfy the statutory minimum tax withholding obligation shall be added back to
the Plan pursuant to this section 4(a)(3)(C)(ii); and

 

(D)shares of Common Stock repurchased by the Company on the open market using
the proceeds from the exercise of an Award shall not increase the number of
shares available for future grant of Awards.

 

(b)Sublimits. Subject to adjustment as provided under Section 10, the following
sublimits on the number of shares subject to Awards shall apply:

 

(1)Section 162(m) Per-Participant Limit. The maximum number of shares of Common
Stock with respect to which Awards may be granted to any Participant under the
Plan shall be 350,000 per calendar year. For purposes of the foregoing limit,
the combination of an Option in tandem with an SAR shall be treated as a single
Award. The per-Participant limit described in this Section 4(b)(1) shall be
construed and applied consistently with Section 162(m) of the Code or any
successor provision thereto, and the regulations thereunder (“Section 162(m)”).
The fungible share counting rules in Section 4(a)(2) shall not apply for
purposes of this Section 4(b)(1) and instead, each share subject to any type of
Award shall be counted as one share for purposes of this Section 4(b)(1).

 

(2)Limit on Awards to Non-Employee Directors. The maximum number of shares of
Common Stock subject to Awards that may be granted to any individual
non-employee director under the Plan (excluding Awards made in lieu of all or a
portion of annual Board and Committee cash retainers) shall be 15,000 per
calendar year. The Compensation Committee may make exceptions to this limit for
individual non-employee directors in extraordinary circumstances, as

 

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the Committee may determine in its discretion, provided that the non-employee
director receiving such additional compensation may not participate in the
decision to award such compensation.

 

(c)Substitute Awards. In connection with a merger or consolidation of an entity
with the Company or the acquisition by the Company of property or stock of an
entity, the Board may grant Awards in substitution for any options or other
stock or stock-based awards granted by such entity or an affiliate thereof.
Substitute Awards may be granted on such terms as the Board deems appropriate in
the circumstances, notwithstanding any limitations on Awards contained in the
Plan.  Substitute Awards shall not count against the overall share limit set
forth in Section 4(a)(1) or any sublimits contained in the Plan, except as may
be required by reason of Section 422 and related provisions of the Code.

 

5.STOCK OPTIONS.

 

(a)General. The Board may grant options to purchase Common Stock (each, an
“Option”) and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as the Board considers
necessary or advisable.  

 

(b)Incentive Stock Options.  An Option that the Board intends to be an
“incentive stock option” as defined in Section 422 of the Code (an “Incentive
Stock Option”) shall only be granted to employees of TechTarget, Inc., any of
TechTarget, Inc.’s present or future parent or subsidiary corporations as
defined in Sections 424(e) or (f) of the Code, and any other entities the
employees of which are eligible to receive Incentive Stock Options under the
Code, and shall be subject to and shall be construed consistently with the
requirements of Section 422 of the Code. An Option that is not intended to be an
Incentive Stock Option shall be designated a “Nonstatutory Stock Option.” The
Company shall have no liability to a Participant, or any other person, if an
Option (or any part thereof) that is intended to be an Incentive Stock Option is
not an Incentive Stock Option or if the Company converts an Incentive Stock
Option to a Nonstatutory Stock Option.

 

(c)Exercise Price. The Board shall establish the exercise price of each Option
or the formula by which such exercise price will be determined. The exercise
price shall be specified in the applicable Option agreement. The exercise price
shall be not less than 100% of the Grant Date Fair Market Value (as defined
below) of the Common Stock on the date the Option is granted; provided that if
the Board approves the grant of an Option with an exercise price to be
determined on a future date, the exercise price shall be not less than 100% of
the Grant Date Fair Market Value on such future date. “Grant Date Fair Market
Value” of a share of Common Stock for purposes of the Plan will be determined as
follows:

 

(1)if the Common Stock trades on a national securities exchange, the closing
sale price (for the primary trading session) on the date of grant; or

 

(2)if the Common Stock does not trade on any such exchange, the average of the
closing bid and asked prices on the date of grant as reported by an
over-the-counter marketplace designated by the Board; or

 

(3)if the Common Stock is not publicly traded, the Board will determine the
Grant Date Fair Market Value for purposes of the Plan using any measure of value
it determines to be appropriate (including, as it considers appropriate, relying
on appraisals) in a manner consistent with the valuation principles under Code
Section 409A, except as the Board may expressly determine otherwise.

 

For any date that is not a trading day, the Grant Date Fair Market Value of a
share of Common Stock for such date will be determined by using the closing sale
price or average of the bid and asked prices, as appropriate, for the
immediately preceding trading day and with the timing in the formulas above
adjusted accordingly.  The Board can substitute a particular time of day or
other measure of “closing sale price” or “bid and asked prices” if appropriate
because of exchange or market procedures or can, in its sole

 

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discretion, use weighted averages either on a daily basis or such longer period
as complies with Code Section 409A.

 

The Board has sole discretion to determine the Grant Date Fair Market Value for
purposes of the Plan, and all Awards are conditioned on the participants’
agreement that the Administrator’s determination is conclusive and binding even
though others might make a different determination.

 

(d)Duration of Options. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Board may specify in the applicable
Option agreement; provided, however, that no Option will be granted with a term
in excess of ten (10) years.

 

(e)Exercise of Options. Options may be exercised by delivery to the Company of a
notice of exercise in a form (which may be electronic) approved by the Company,
together with payment in full (in the manner specified in Section 5(f)) of the
exercise price for the number of shares for which the Option is exercised.
Shares of Common Stock subject to the Option will be delivered by the Company as
soon as practicable following exercise.

 

(f)Payment Upon Exercise. Common Stock purchased upon the exercise of an Option
granted under the Plan shall be paid for as follows:

 

(1)in cash or by check, payable to the order of the Company;

 

(2)except as may otherwise be provided in the applicable Option agreement or
approved by the Board, by (i) delivery of an irrevocable and unconditional
undertaking by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price and any required tax withholding or
(ii) delivery by the Participant to the Company of a copy of irrevocable and
unconditional instructions to a creditworthy broker to deliver promptly to the
Company cash or a check sufficient to pay the exercise price and any required
tax withholding;

 

(3)to the extent provided for in the applicable Option agreement or approved by
the Board, by delivery (either by actual delivery or attestation) of shares of
Common Stock owned by the Participant valued at their fair market value (valued
in the manner determined by (or in a manner approved by) the Board), provided
(i) such method of payment is then permitted under applicable law, (ii) such
Common Stock, if acquired directly from the Company, was owned by the
Participant for such minimum period of time, if any, as may be established by
the Board and (iii) such Common Stock is not subject to any repurchase,
forfeiture, unfulfilled vesting or other similar requirements;

 

(4)to the extent provided for in the applicable Nonstatutory Stock Option
agreement or approved by the Board, by delivery of a notice of “net exercise” to
the Company, as a result of which the Participant would receive (i) the number
of shares underlying the portion of the Option being exercised, less (ii) such
number of shares as is equal to (A) the aggregate exercise price for the portion
of the Option being exercised divided by (B) the fair market value of the Common
Stock (valued in the manner determined by (or in a manner approved by) the
Board) on the date of exercise;

 

(5)to the extent permitted by applicable law and provided for in the applicable
Option agreement or approved by the Board, by payment of such other lawful
consideration as the Board may determine; provided, however, that in no event
may a promissory note of the Participant be used to pay the Option exercise
price; or

 

(6)by any combination of the above permitted forms of payment.

 

(g)Limitation on Repricing. Unless such action is approved by the Company’s
stockholders, the Company may not (except as provided for under Section
10):  (1) amend any outstanding Option granted under the Plan to provide an
exercise price per share that is lower than the then-current exercise price per
share of such outstanding Option, (2) cancel any outstanding option (whether or
not granted

 

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under the Plan) and grant in substitution therefor new Awards under the Plan
(other than Awards granted pursuant to Section 4(c)) covering the same or a
different number of shares of Common Stock and having an exercise price per
share lower than the then-current exercise price per share of the cancelled
option, (3) cancel in exchange for a cash payment any outstanding Option with an
exercise price per share above the then-current fair market value of the Common
Stock (valued in the manner determined by (or in a manner approved by) the
Board), or (4) take any other action under the Plan that constitutes a
“repricing” within the meaning of the rules of the NASDAQ Stock Market
(“NASDAQ”).

 

(h)No Reload Options. No Option granted under the Plan shall contain any
provision entitling the Participant to the automatic grant of additional Options
in connection with any exercise of the original Option.

 

(i)No Dividend Equivalents. No Option shall provide for the payment or accrual
of dividend equivalents.

 

6.DIRECTOR OPTIONS.

 

(a)Initial Grant.  Upon the commencement of service on the Board by any
individual who is not then an employee of the Company or any subsidiary of the
Company, such person shall automatically be granted a Nonstatutory Stock Option
to purchase 2,500 shares of Common Stock (subject to adjustment under Sections
6(d), 6(e) or 10).

 

(b)Annual Grant. On the date of each annual meeting of stockholders of the
Company, each member of the Board of Directors of the Company who is both
serving as a director of the Company immediately prior to and immediately
following such annual meeting and who is not then an employee of the Company or
any of its subsidiaries, shall automatically be granted a Nonstatutory Stock
Option to purchase 5,000 shares of Common Stock (subject to adjustment under
Section 6(d), 6(e) or 10); provided, however, that a director shall not be
eligible to receive an option grant under this Section 6(b) until such director
has served on the Board for at least six (6) months.

 

(c)Terms of Director Options.  Options granted under this Section 6 shall (i)
have an exercise price equal to the Grant Date Fair Market Value of the Common
Stock,  (ii) vest in full on the first anniversary of the date of grant provided
that the individual is serving on the Board on such date (or in the case of an
option granted under Section 6(b), if earlier, on the date that is one business
day prior to date of the Company’s next annual meeting), provided that no
additional vesting shall take place after the Participant ceases to serve as a
director and provided further that the Board may provide for accelerated vesting
in the case of death, disability, change in control, (iii) expire on the earlier
of ten (10) years from the date of grant or six (6) months following cessation
of service on the Board and (iv) contain such other terms and conditions as the
Board shall determine.

 

(d)Board Discretion. The Committee referenced in Section 3(c) retains the
specific authority to increase or decrease from time to time the number of
shares subject to Options granted under this Section 6, subject to the
limitation on the aggregate number of shares issuable to non-employee directors
contained in Section 4(b)(2).  

 

(e)Non-exclusive Grants. The Board retains the specific authority to grant
Options, SARs, Restricted Stock, RSUs and Other Stock-Based Awards and
Cash-Based Awards in addition to or in lieu of some or all of the Options
provided for in this Section 6, subject to the limitation on the aggregate
number of shares with respect to which Awards may be granted to non-employee
directors set forth in Section 4(b)(2).

 

7.STOCK APPRECIATION RIGHTS.

 

(a)General.  The Board may grant Awards consisting of stock appreciation rights
(“SARs”) entitling the holder, upon exercise, to receive an amount of Common
determined by reference to appreciation, from and after the date of grant, in
the fair market value of a share of Common Stock

 

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(valued in the manner determined by (or in a manner approved by) the Board) over
the measurement price established pursuant to Section 7(b). The date as of which
such appreciation is determined shall be the exercise date.  

 

(b)Measurement Price. The Board shall establish the measurement price of each
SAR and specify it in the applicable SAR agreement. The measurement price shall
not be less than 100% of the Grant Date Fair Market Value of the Common Stock on
the date the SAR is granted; provided that if the Board approves the grant of an
SAR effective as of a future date, the measurement price shall be not less than
100% of the Grant Date Fair Market Value on such future date.

 

(c) Duration of SARs. Each SAR shall be exercisable at such times and subject to
such terms and conditions as the Board may specify in the applicable SAR
agreement; provided, however, that no SAR will be granted with a term in excess
of ten (10) years.

 

(d)Exercise of SARs. SARs may be exercised by delivery to the Company of a
notice of exercise in a form (which may be electronic) approved by the Company,
together with any other documents required by the Board.

 

(e)Limitation on Repricing. Unless such action is approved by the Company’s
stockholders, the Company may not (except as provided for under Section
10):  (1) amend any outstanding SAR granted under the Plan to provide a
measurement price per share that is lower than the then-current measurement
price per share of such outstanding SAR, (2) cancel any outstanding SAR (whether
or not granted under the Plan) and grant in substitution therefor new Awards
under the Plan (other than Awards granted pursuant to Section 4(c)) covering the
same or a different number of shares of Common Stock and having a measurement
price per share lower than the then-current measurement price per share of the
cancelled SAR, (3) cancel in exchange for a cash payment any outstanding SAR
with a measurement price per share above the then-current fair market value of
the Common Stock (valued in the manner determined by (or in a manner approved
by) the Board), or (4) take any other action under the Plan that constitutes a
“repricing” within the meaning of the rules of the NASDAQ.

 

(f)No Reload SARs. No SAR granted under the Plan shall contain any provision
entitling the Participant to the automatic grant of additional SARs in
connection with any exercise of the original SAR.

 

(g)No Dividend Equivalents. No SAR shall provide for the payment or accrual of
dividend equivalents.  

 

8.RESTRICTED STOCK; RSUs.

 

(a)General.  The Board may grant Awards entitling recipients to acquire shares
of Common Stock (“Restricted Stock”), subject to the right of the Company to
repurchase all or part of such shares at their issue price or other stated or
formula price (or to require forfeiture of such shares if issued at no cost)
from the recipient in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award. The Board
may also grant Awards entitling the recipient to receive shares of Common Stock
or cash to be delivered at the time such Award vests (“RSUs”).

 

(b)Terms and Conditions for Restricted Stock and RSUs. The Board shall determine
the terms and conditions of Restricted Stock and RSUs, including the conditions
for vesting and repurchase (or forfeiture) and the issue price, if any.  

 

(c)Additional Provisions Relating to Restricted Stock.  

 

(1)Dividends. Any dividends (whether paid in cash, stock or property) declared
and paid by the Company with respect to shares of Restricted Stock (“Unvested
Dividends”) shall be paid to the Participant only if and when such shares become
free from the restrictions on transferability and forfeitability that apply to
such shares. Each payment of Unvested Dividends will

 

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be made no later than the end of the calendar year in which the dividends are
paid to stockholders of that class of stock or, if later, the 15th day of the
third month following the lapsing of the restrictions on transferability and the
forfeitability provisions applicable to the underlying shares of Restricted
Stock.  No interest will be paid on Unvested Dividends.

 

(2)Stock Certificates. The Company may require that any stock certificates
issued in respect of shares of Restricted Stock, as well as dividends or
distributions paid on such Restricted Stock, shall be deposited in escrow by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee).  At the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or if the Participant has died, to his or
her Designated Beneficiary. “Designated Beneficiary” means (i) the beneficiary
designated, in a manner determined by the Board, by a Participant to receive
amounts due or exercise rights of the Participant in the event of the
Participant’s death or (ii) in the absence of an effective designation by a
Participant, the Participant’s estate.

 

(d)Additional Provisions Relating to RSUs.

 

(1)Settlement. Upon the vesting of and/or lapsing of any other restrictions
(i.e., settlement) with respect to each RSU, the Participant shall be entitled
to receive from the Company the number of shares of Common Stock specified in
the Award agreement or (if so provided in the applicable Award agreement or
otherwise determined by the Board) an amount of cash equal to the fair market
value (valued in the manner determined by (or in a manner approved by) the
Board) of such number of shares or a combination thereof.  The Board may provide
that settlement of RSUs shall be deferred, on a mandatory basis or at the
election of the Participant, in a manner that complies with Section 409A of the
Code or any successor provision thereto, and the regulations thereunder
(“Section 409A”).

 

(2)Voting Rights. A Participant shall have no voting rights with respect to any
RSUs.

 

(3)Dividend Equivalents. The Award agreement for RSUs may provide Participants
with the right to receive an amount equal to any dividends or other
distributions declared and paid on an equal number of outstanding shares of
Common Stock (“Dividend Equivalents”). Dividend Equivalents may be paid
currently or credited to an account for the Participant, may be settled in cash
and/or shares of Common Stock and shall be subject to the same restrictions on
transfer and forfeitability as the RSUs with respect to which paid, in each case
to the extent provided in the Award agreement. No interest will be paid on
Dividend Equivalents.

 

9.OTHER STOCK-BASED AND CASH-BASED AWARDS.

 

(a)General. The Board may grant other Awards of shares of Common Stock, and
other Awards that are valued in whole or in part by reference to, or are
otherwise based on, shares of Common Stock or other property (“Other Stock-Based
Awards”). Such Other Stock-Based Awards shall also be available as a form of
payment in the settlement of other Awards granted under the Plan or as payment
in lieu of compensation to which a Participant is otherwise entitled. Other
Stock-Based Awards may be paid in shares of Common Stock or cash, as the Board
shall determine. The Company may also grant Awards denominated in cash rather
than shares of Common Stock (“Cash-Based Awards”).  

 

(b)Terms and Conditions. Subject to the provisions of the Plan, the Board shall
determine the terms and conditions of each Other Stock-Based Award or Cash-Based
Award, including any purchase price applicable thereto.  

 

(c)Dividend Equivalents. The Award agreement for an Other Stock-Based Award may
provide Participants with the right to receive Dividend Equivalents. Dividend
Equivalents may be paid currently or credited to an account for the Participant,
may be settled in cash and/or shares of Common

 

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Stock and shall be subject to the same restrictions on transfer and
forfeitability as the Other Stock-Based Award with respect to which paid, in
each case to the extent provided in the Award agreement. No interest will be
paid on Dividend Equivalents.

 

10.PERFORMANCE AWARDS.

 

(a)Grants. Restricted Stock, RSUs and Other Stock-Based Awards and Cash-Based
Awards under the Plan may be made subject to the achievement of performance
goals pursuant to this Section 9 (“Performance Awards”). Performance Awards can
also provide for cash payments of up to $600,000 per calendar year per
individual.

 

(b)Committee. Grants of Performance Awards to any Covered Employee (as defined
below) intended to qualify as “performance-based compensation” under Section
162(m) (“Performance-Based Compensation”) shall be made only by a Committee (or
a subcommittee of a Committee) comprised solely of two or more directors
eligible to serve on a committee making Awards qualifying as “performance-based
compensation” under Section 162(m).  In the case of such Awards granted to
Covered Employees, references to the Board or to a Committee shall be treated as
referring to such Committee (or subcommittee). “Covered Employee” shall mean any
person who is, or whom the Committee, in its discretion, determines may be, a
“covered employee” under Section 162(m)(3) of the Code.

 

(c)Performance Measures. For any Award that is intended to qualify as
Performance-Based Compensation, the Committee shall specify that the degree of
granting, vesting and/or payout shall be subject to the achievement of one or
more objective performance measures established by the Committee, which shall be
based on the relative or absolute attainment of specified levels of one or any
combination of the following, which may be determined pursuant to generally
accepted accounting principles (“GAAP”) or on a non-GAAP basis, as determined by
the Committee: earnings before interest, taxes, depreciation and amortization
(“EBITDA”), EBITDA as adjusted for non-cash expenses (such as stock-based
compensation expenses), net income (loss) (either before or after interest,
taxes, depreciation and/or amortization), changes in the market price of the
Stock, economic value-added, funds from operations or similar measure, sales or
revenue, acquisitions or strategic transactions, operating income (loss), cash
flow (including, but not limited to, operating cash flow and free cash flow),
return on capital, assets, equity, or investment, stockholder returns, return on
sales, gross or net profit levels, productivity, expense, margins, operating
efficiency, customer satisfaction, working capital, earnings (loss) per share of
Stock, sales or market shares and number of customers, any of which may be
measured either in absolute terms or as compared to any incremental increase or
as compared to results of a peer group. Such goals may reflect absolute entity
or business unit performance or a relative comparison to the performance of a
peer group of entities or other external measure of the selected performance
criteria and may be absolute in their terms or measured against or in
relationship to other companies comparably, similarly or otherwise situated. The
Committee may specify that such performance measures shall be adjusted to
exclude any one or more of (i) non-recurring or unusual gains or losses, (ii)
gains or losses on the dispositions of discontinued operations, (iii) the
cumulative effects of changes in accounting principles, (iv) the writedown of
any asset, (v) fluctuation in foreign currency exchange rates, and (vi) charges
for restructuring and rationalization programs. Such performance measures:  (x)
may vary by Participant and may be different for different Awards; (y) may be
particular to a Participant or the department, branch, line of business,
subsidiary or other unit in which the Participant works and may cover such
period as may be specified by the Committee; and (z) shall be set by the
Committee within the time period prescribed by, and shall otherwise comply with
the requirements of, Section 162(m). Awards that are not intended to qualify as
Performance-Based Compensation may be based on these or such other performance
measures as the Board may determine.

 

(d)Adjustments. Notwithstanding any provision of the Plan, with respect to any
Performance Award that is intended to qualify as Performance-Based Compensation,
the Committee may adjust downwards, but not upwards, the cash or number of
shares payable pursuant to such Award, and the Committee may not waive the
achievement of the applicable performance measures except in the case of the
death or disability of the Participant or a change in control of the Company.

 

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(e)Other. The Committee shall have the power to impose such other restrictions
on Performance Awards as it may deem necessary or appropriate to ensure that
such Awards satisfy all requirements for Performance-Based Compensation.

 

11.ADJUSTMENTS FOR CHANGES IN COMMON STOCK AND CERTAIN OTHER EVENTS.

 

(a)Changes in Capitalization. In the event of any stock split, reverse stock
split, stock dividend, recapitalization, combination of shares, reclassification
of shares, spin-off or other similar change in capitalization or event, or any
dividend or distribution to holders of Common Stock other than an ordinary cash
dividend, (i) the number and class of securities available under the Plan, (ii)
the share counting rules and sublimits set forth in Sections 4(a) and 4(b),
(iii) the number and class of securities and exercise price per share of each
outstanding Option, each Option issuable under Section 6, and each Option
issuable under Section 6, (iv) the share and per-share provisions and the
measurement price of each outstanding SAR, (v) the number of shares subject to
and the repurchase price per share subject to each outstanding award of
Restricted Stock and (vi) the share and per-share-related provisions and the
purchase price, if any, of each outstanding RSU and each Other Stock-Based
Award, shall be equitably adjusted by the Company (or substituted Awards may be
made, if applicable) in the manner determined by the Board. Without limiting the
generality of the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to an outstanding Option are adjusted as of the date of
the distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.  

 

(b)Reorganization Events.

 

(1)Definition.  A “Reorganization Event” shall mean:  (a) any merger or
consolidation of the Company with or into another entity as a result of which
all of the Common Stock of the Company is converted into or exchanged for the
right to receive cash, securities or other property or is cancelled, (b) any
transfer or disposition of all of the Common Stock of the Company for cash,
securities or other property pursuant to a share exchange or other transaction
or (c) any liquidation or dissolution of the Company.

 

(2)Consequences of a Reorganization Event on Awards Other than Restricted
Stock.  

 

(A)In connection with a Reorganization Event, the Board may take any one or more
of the following actions as to all or any (or any portion of) outstanding Awards
other than Restricted Stock on such terms as the Board determines (except to the
extent specifically provided otherwise in an applicable Award agreement or
another agreement between the Company and the Participant): (i) provide that
such Awards shall be assumed, or substantially equivalent Awards shall be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), (ii) upon written notice to a Participant, provide that all of the
Participant’s unvested Awards will be forfeited immediately prior to the
consummation of such Reorganization Event and/or that all of the Participant’s
unexercised Awards will terminate immediately prior to the consummation of such
Reorganization Event unless exercised by the Participant (to the extent then
exercisable) within a specified period following the date of such notice,
(iii) provide that outstanding Awards shall become exercisable, realizable or
deliverable, or restrictions applicable to an Award shall lapse, in whole or in
part prior to or upon such Reorganization Event, (iv) in the event of a
Reorganization Event under the terms of which holders of Common Stock will
receive upon consummation thereof a cash payment for each share surrendered in
the Reorganization Event (the “Acquisition Price”), make or provide for a cash
payment to Participants with respect to each Award held by a Participant equal
to (A) the number of shares of Common Stock subject to the vested portion of the
Award (after giving effect to any acceleration of vesting that occurs upon or
immediately prior to such

 

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Reorganization Event) multiplied by (B) the excess, if any, of (I) the
Acquisition Price over (II) the exercise, measurement or purchase price of such
Award and any applicable tax withholdings, in exchange for the termination of
such Award, (v) provide that, in connection with a liquidation or dissolution of
the Company, Awards shall convert into the right to receive liquidation proceeds
(if applicable, net of the exercise, measurement or purchase price thereof and
any applicable tax withholdings) and (vi) any combination of the foregoing.  In
taking any of the actions permitted under this Section 10(b)(2)(A), the Board
shall not be obligated by the Plan to treat all Awards, all Awards held by a
Participant, or all Awards of the same type, identically.  

 

(B)Notwithstanding the terms of Section 10(b)(2)(A)(i), in the case of
outstanding RSUs that are subject to Section 409A: (i) if the applicable RSU
agreement provides that the RSUs shall be settled upon a “change in control
event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i), and
the Reorganization Event constitutes such a “change in control event”, then no
assumption or substitution shall be permitted pursuant to Section 10(b)(2)(A)(i)
and the RSUs shall instead be settled in accordance with the terms of the
applicable RSU agreement; and (ii) the Board may only undertake the actions set
forth in clauses (iii), (iv) or (v) of Section 10(b)(2)(A) if the Reorganization
Event constitutes a “change in control event” as defined under Treasury
Regulation Section 1.409A-3(i)(5)(i) and such action is permitted or required by
Section 409A; if the Reorganization Event is not a “change in control event” as
so defined or such action is not permitted or required by Section 409A, and the
acquiring or succeeding corporation does not assume or substitute the RSUs
pursuant to clause (i) of Section 10(b)(2)(A), then the unvested RSUs shall
terminate immediately prior to the consummation of the Reorganization Event
without any payment in exchange therefor.

 

(C)For purposes of Section 10(b)(2)(A)(i), an Award (other than Restricted
Stock) shall be considered assumed if, following consummation of the
Reorganization Event, such Award confers the right to purchase or receive
pursuant to the terms of such Award, for each share of Common Stock subject to
the Award immediately prior to the consummation of the Reorganization Event, the
consideration (whether cash, securities or other property) received as a result
of the Reorganization Event by holders of Common Stock for each share of Common
Stock held immediately prior to the consummation of the Reorganization Event
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares of
Common Stock); provided, however, that if the consideration received as a result
of the Reorganization Event is not solely common stock of the acquiring or
succeeding corporation (or an affiliate thereof), the Company may, with the
consent of the acquiring or succeeding corporation, provide for the
consideration to be received upon the exercise or settlement of the Award to
consist solely of such number of shares of common stock of the acquiring or
succeeding corporation (or an affiliate thereof) that the Board determined to be
equivalent in value (as of the date of such determination or another date
specified by the Board) to the per share consideration received by holders of
outstanding shares of Common Stock as a result of the Reorganization Event.

 

(3)Consequences of a Reorganization Event on Restricted Stock. Upon the
occurrence of a Reorganization Event other than a liquidation or dissolution of
the Company, the repurchase and other rights of the Company with respect to
outstanding Restricted Stock shall inure to the benefit of the Company’s
successor and shall, unless the Board determines otherwise, apply to the cash,
securities or other property which the Common Stock was converted into or
exchanged for pursuant to such Reorganization Event in the same manner and to
the same extent as they applied to such Restricted Stock; provided, however,
that the Board may either provide for termination or deemed satisfaction of such
repurchase or other rights under the instrument evidencing any Restricted Stock
or any other agreement between a Participant and the Company, either initially
or by amendment, or provide for forfeiture of such Restricted Stock if issued at
no cost. Upon the occurrence of a Reorganization Event involving the liquidation
or dissolution of the Company, except to the extent specifically provided to the
contrary in the instrument evidencing any Restricted Stock or any other
agreement between a Participant and the Company, all restrictions and conditions
on all Restricted Stock then outstanding shall automatically be deemed
terminated or satisfied.

 

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(c)Change in Control Events.

 

(1)Definitions.  

 

(A)A “Change in Control Event” shall mean:  (i) the acquisition by an
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act) (a “Person”) of beneficial ownership of any capital stock
of the Company if, after such acquisition, such Person beneficially owns (within
the meaning of Rule 13d-3 under the Exchange Act) 30% or more of either (x) the
then-outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (y) the combined voting power of the then-outstanding
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that
for purposes of this subsection (A), the following acquisitions shall not
constitute a Change in Control Event: (1) any acquisition directly from the
Company (excluding an acquisition pursuant to the exercise, conversion or
exchange of any security exercisable for, convertible into or exchangeable for
common stock or voting securities of the Company, unless the Person exercising,
converting or exchanging such security acquired such security directly from the
Company or an underwriter or agent of the Company) or (2) any acquisition by any
corporation pursuant to a Business Combination (as defined below) which complies
with clauses (x) and (y) of subsection (iii) of this definition; or (ii) a
change in the composition of the Board that results in the Continuing Directors
(as defined below) no longer constituting a majority of the Board (or, if
applicable, the Board of Directors of a successor corporation to the Company),
where the term “Continuing Director” means at any date a member of the Board (x)
who was a member of the Board on the date of the initial adoption of the Plan by
the Board or (y) who was nominated or elected subsequent to such date by at
least a majority of the directors who were Continuing Directors at the time of
such nomination or election or whose election to the Board was recommended or
endorsed by at least a majority of the directors who were Continuing Directors
at the time of such nomination or election; provided, however, that there shall
be excluded from this clause (y) any individual whose initial assumption of
office occurred as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents, by or on behalf of a person other than the
Board; or (iii) the consummation of a merger, consolidation, reorganization,
recapitalization or share exchange involving the Company or a sale or other
disposition of all or substantially all of the assets of the Company (a
“Business Combination”), unless, immediately following such Business
Combination, each of the following two conditions is satisfied: (x) all or
substantially all of the individuals and entities who were the beneficial owners
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then-outstanding shares of common
stock and the combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall include,
without limitation, a corporation which as a result of such transaction owns the
Company or substantially all of the Company’s assets either directly or through
one or more subsidiaries) (such resulting or acquiring corporation is referred
to herein as the “Acquiring Corporation”) in substantially the same proportions
as their ownership of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, respectively, immediately prior to such Business
Combination and (y) no Person (excluding any employee benefit plan (or related
trust) maintained or sponsored by the Company or by the Acquiring Corporation)
beneficially owns, directly or indirectly, 30% or more of the then-outstanding
shares of common stock of the Acquiring Corporation, or of the combined voting
power of the then-outstanding securities of such corporation entitled to vote
generally in the election of directors (except to the extent that such ownership
existed prior to the Business Combination); or (iv) the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially all of the
Company’s assets.

 

(B)“Good Reason” shall mean (i) if the Participant is a party to an employment
or other agreement that defines “good reason”, then good reason as defined in
such agreement and (ii) otherwise, (a) a material diminution in base
compensation, (b) a material diminution in

 

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duties, authority or responsibilities, (c) a material relocation or (d) a
material breach of the Award agreement or other employment or service agreement
between the Company and the Participant. Notwithstanding the occurrence of any
such event or circumstance, such occurrence shall not be deemed to constitute
Good Reason unless (x) the Participant gives the Company notice of termination
no more than ninety (90) days after the initial existence of such event or
circumstance, (y) such event or circumstance has not been fully corrected and
the Participant has not been reasonably compensated for any losses or damages
resulting therefrom within thirty (30) days of the Company’s receipt of such
notice and (z) the Participant’s termination of employment occurs within six (6)
months following the Company’s receipt of such notice.

 

(C)“Cause” shall mean (i) if the Participant is a party to an employment or
other agreement that defines “cause”, then cause as defined in such agreement
and (ii) otherwise, any act (a) whether or not involving the Company or any
affiliate of the Company, of fraud or gross misconduct, (b) the commission by
the Participant of (x) a felony or (y) any misdemeanor involving moral
turpitude, deceit, dishonesty or fraud, or (c) gross negligence or willful
misconduct of the Participant with respect to the Company or any affiliate of
the Company. The Participant shall be considered to have been discharged for
“Cause” if the Company determines, within thirty (30) days after the
Participant’s resignation, that discharge for Cause was warranted.

 

(2)Effect on Options. Notwithstanding the provisions of Section 11(b), effective
immediately prior to a Change in Control Event, except to the extent
specifically provided to the contrary in the instrument evidencing any Option or
any other agreement between a Participant and the Company, the vesting schedule
of such Option shall be accelerated in part so that one-half of the number of
shares that would otherwise have first become vested on any date after the date
of the Change in Control Event shall immediately become exercisable.  The
remaining one-half of such number of shares shall continue to become vested in
accordance with the original vesting schedule set forth in such Option, with
one-half of the number of shares that would otherwise have become vested on each
subsequent vesting date in accordance with the original schedule becoming vested
on each such subsequent vesting date; provided, however, that each such Option
shall be immediately exercisable in full if, on or prior to the first
anniversary of the date of the consummation of the Change in Control Event, the
Participant’s employment with the Company or the Acquiring Corporation is
terminated for Good Reason by the Participant or is terminated without Cause by
the Company or the Acquiring Corporation.

 

(3)Effect on Restricted Stock Awards. Notwithstanding the provisions of Section
10(b), effective immediately prior to a Change in Control Event, except to the
extent specifically provided to the contrary in the instrument evidencing any
Restricted Stock Award or any other agreement between a Participant and the
Company, the vesting schedule of all Restricted Stock Awards shall be
accelerated in part so that one-half of the number of shares that would
otherwise have first become free from conditions or restrictions on any date
after the date of the Change in Control Event shall immediately become free from
conditions or restrictions.  Subject to the following sentence, the remaining
one-half of such number of shares shall continue to become free from conditions
or restrictions in accordance with the original schedule set forth in such
Restricted Stock Award, with one-half of the number of shares that would
otherwise have become free from conditions or restrictions on each subsequent
vesting date in accordance with the original schedule becoming free from
conditions or restrictions on each subsequent vesting date. In addition, each
such Restricted Stock Award shall immediately become free from all conditions or
restrictions if, on or prior to the first anniversary of the date of the
consummation of the Change in Control Event, the Participant’s employment with
the Company or the Acquiring Corporation is terminated for Good Reason by the
Participant or is terminated without Cause by the Company or the Acquiring
Corporation.

 

(4)Effect on SARs and Other Stock-Based Awards. The Board may specify in an
Award at the time of the grant the effect of a Change in Control Event on any
SAR and Other Stock-Based Award.

 

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(5)Section 409A.  The definition of Change in Control Event for purposes of the
Plan is intended to conform to the description of “Change in Control Events” in
Treasury Regulation section 1.409A-3(i)(5), or in subsequent IRS guidance
describing what constitutes a change in control event for purposes of Section
409A of the Code when the Award is subject to Section 409A. Accordingly, no
Change in Control Event will be deemed to provide for acceleration of payment
with respect to a transaction or event described in this Section 11(c) unless
the transaction or event would constitute a “Change in Control Event” as
described in Treasury Regulation section 1.409A-3(i)(5), or in subsequent IRS
guidance under Section 409A of the Code.

 

12.GENERAL PROVISIONS APPLICABLE TO AWARDS.

 

(a)Transferability of Awards. Awards shall not be sold, assigned, transferred,
pledged or otherwise encumbered by a Participant, either voluntarily or by
operation of law, except by will or the laws of descent and distribution or,
other than in the case of an Incentive Stock Option, pursuant to a qualified
domestic relations order, and, during the life of the Participant, shall be
exercisable only by the Participant; provided, however, that, except with
respect to Awards subject to Section 409A, the Board may permit or provide in an
Award for the gratuitous transfer of the Award by the Participant to or for the
benefit of any immediate family member, family trust or other entity established
for the benefit of the Participant and/or an immediate family member thereof if
the Company would be eligible to use a Form S-8 under the Securities Act for the
registration of the sale of the Common Stock subject to such Award to such
proposed transferee; provided further, that the Company shall not be required to
recognize any such permitted transfer until such time as such permitted
transferee shall, as a condition to such transfer, deliver to the Company a
written instrument in form and substance satisfactory to the Company confirming
that such transferee shall be bound by all of the terms and conditions of the
Award.  References to a Participant, to the extent relevant in the context,
shall include references to authorized transferees.  For the avoidance of doubt,
nothing contained in this Section 12(a) shall be deemed to restrict a transfer
to the Company.

 

(b)Documentation. Each Award shall be evidenced in such form (written,
electronic or otherwise) as the Board shall determine (such written instrument
may be in the form of an agreement signed by the Company and the Participant or
a written confirming memorandum to the Participant from the Company). Each Award
may contain terms and conditions in addition to those set forth in the Plan.

 

(c)Termination of Status. The Board shall determine the effect on an Award of
the disability, death, termination or other cessation of employment, authorized
leave of absence or other change in the employment or other status of a
Participant and the extent to which, and the period during which, the
Participant, or the Participant’s legal representative, conservator, guardian or
Designated Beneficiary, may exercise rights, or receive any benefits, under an
Award.

 

(d)Withholding. The Participant must satisfy all applicable federal, state, and
local or other income and employment tax withholding obligations before the
Company will deliver stock certificates or otherwise recognize ownership of
Common Stock under an Award. The Company may elect to satisfy the withholding
obligations through additional withholding on salary or wages. If the Company
elects not to or cannot withhold from other compensation, the Participant must
pay the Company the full amount, if any, required for withholding or have a
broker tender to the Company cash equal to the withholding obligations. Payment
of withholding obligations is due before the Company will issue any shares on
exercise, vesting or release from forfeiture of an Award or at the same time as
payment of the exercise or purchase price, unless the Company determines
otherwise. If provided for in an Award or approved by the Committee, a
Participant may satisfy the tax obligations in whole or in part by delivery
(either by actual delivery or attestation) of shares of Common Stock, including
shares retained from the Award creating the tax obligation, valued at their fair
market value (valued in the manner determined by (or in a manner approved by)
the Company); provided, however, except as otherwise provided by the Committee,
that the total tax withholding where stock is being used to satisfy such tax
obligations cannot exceed the Company’s minimum statutory withholding
obligations (based on minimum statutory withholding rates for federal and state
tax purposes, including payroll taxes, that are applicable to such supplemental
taxable

 

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income), except that, to the extent that the Company is able to retain shares of
Common Stock having a fair market value (determined by, or in a manner approved
by, the Company)  that exceeds the statutory minimum applicable withholding tax
without financial accounting implications or the Company is withholding in a
jurisdiction that does not have a statutory minimum withholding tax, the Company
may retain such number of shares of Common Stock (up to the number of shares
having a fair market value equal to the maximum individual statutory rate of tax
(determined by, or in a manner approved by, the Company)) as the Company shall
determine in its sole discretion to satisfy the tax liability associated with
any Award.  Shares used to satisfy tax withholding requirements cannot be
subject to any repurchase, forfeiture, unfulfilled vesting or other similar
requirements.

 

(e)Amendment of Award. Except as otherwise provided in Section 5(g), 7(e), 10,
12(g) and 12(h), the Board may amend, modify or terminate any outstanding Award,
including but not limited to, substituting therefor another Award of the same or
a different type, changing the date of exercise or realization, and converting
an Incentive Stock Option to a Nonstatutory Stock Option. The Participant’s
consent to such action shall be required unless (i) the Board determines that
the action, taking into account any related action, does not materially and
adversely affect the Participant’s rights under the Plan or (ii) the change is
permitted under Section 11.

 

(f)Conditions on Delivery of Stock. The Company will not be obligated to deliver
any shares of Common Stock pursuant to the Plan or to remove restrictions from
shares previously issued or delivered under the Plan until (i) all conditions of
the Award have been met or removed to the satisfaction of the Company, (ii) in
the opinion of the Company’s counsel, all other legal matters in connection with
the issuance and delivery of such shares have been satisfied, including any
applicable securities laws and regulations and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.

 

(g)Limitations on Vesting. Subject to Section 12(h), no Award shall vest earlier
than the first anniversary of its date of grant, unless such Award is granted in
lieu of salary, bonus or other compensation otherwise earned by or payable to
the Participant. The foregoing sentence shall not apply to Awards granted, in
the aggregate, for up to 5% of the maximum number of authorized shares set forth
in Section 4(a).  

 

(h)Acceleration. The Board may at any time provide that any Award shall become
immediately exercisable in whole or in part, free from some or all restrictions
or conditions or otherwise realizable in whole or in part, as the case may be.

13.MISCELLANEOUS.

 

(a)No Right To Employment or Other Status. No person shall have any claim or
right to be granted an Award by virtue of the adoption of the Plan, and the
grant of an Award shall not be construed as giving a Participant the right to
continued employment or any other relationship with the Company. The Company
expressly reserves the right at any time to dismiss or otherwise terminate its
relationship with a Participant free from any liability or claim under the Plan,
except as expressly provided in the applicable Award.

 

(b)No Rights As Stockholder; Clawback. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be issued with
respect to an Award until becoming the record holder of such shares.  In
accepting an Award under the Plan, the Participant agrees to be bound by any
clawback policy that the Company has in effect or may adopt in the future.

 

(c)Effective Date and Term of Plan. The Plan shall become effective on the date
the Plan is approved by the Company’s stockholders (the “Effective Date”). No
Awards shall be granted under the

 

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Plan after the expiration of ten (10) years from the Effective Date, but Awards
previously granted may extend beyond that date.

 

(d)Amendment of Plan. The Board may amend, suspend or terminate the Plan or any
portion thereof at any time provided that (i) to the extent required by Section
162(m), no Award granted to a Participant that is intended to comply with
Section 162(m) after the date of such amendment shall become exercisable,
realizable or vested, as applicable to such Award, unless and until the
Company’s stockholders approve such amendment in the manner required by Section
162(m); (ii) no amendment that would require stockholder approval under the
rules of the national securities exchange on which the Company then maintains
its primary listing  may be made effective unless and until the Company’s
stockholders approve such amendment; and (iii) if the national securities
exchange on which the Company then maintains its primary listing  does not have
rules regarding when stockholder approval of amendments to equity compensation
plans is required (or if the Company’s Common Stock is not then listed on any
national securities exchange), then no amendment to the Plan (A) materially
increasing the number of shares authorized under the Plan (other than pursuant
to Section 4(c) or 11), (B) expanding the types of Awards that may be granted
under the Plan, or (C) materially expanding the class of participants eligible
to participate in the Plan shall be effective unless and until the Company’s
stockholders approve such amendment. In addition, if at any time the approval of
the Company’s stockholders is required as to any other modification or amendment
under Section 422 of the Code or any successor provision with respect to
Incentive Stock Options, the Board may not effect such modification or amendment
without such approval. Unless otherwise specified in the amendment, any
amendment to the Plan adopted in accordance with this Section 13(d) shall apply
to, and be binding on the holders of, all Awards outstanding under the Plan at
the time the amendment is adopted, provided the Board determines that such
amendment, taking into account any related action, does not materially and
adversely affect the rights of Participants under the Plan. No Award shall be
made that is conditioned upon stockholder approval of any amendment to the Plan
unless the Award provides that (i) it will terminate or be forfeited if
stockholder approval of such amendment is not obtained within no more than
twelve (12) months from the date of grant and (2) it may not be exercised or
settled (or otherwise result in the issuance of Common Stock) prior to such
stockholder approval.

 

(e)Authorization of Sub-Plans (including for Grants to non-U.S. Employees). The
Board may from time to time establish one or more sub-plans under the Plan for
purposes of satisfying applicable securities, tax or other laws of various
jurisdictions. The Board shall establish such sub-plans by adopting supplements
to the Plan containing (i) such limitations on the Board’s discretion under the
Plan as the Board deems necessary or desirable or (ii) such additional terms and
conditions not otherwise inconsistent with the Plan as the Board shall deem
necessary or desirable. All supplements adopted by the Board shall be deemed to
be part of the Plan, but each supplement shall apply only to Participants within
the affected jurisdiction and the Company shall not be required to provide
copies of any supplement to Participants in any jurisdiction which is not the
subject of such supplement.  

 

(f)Compliance with Section 409A of the Code. If and to the extent (i) any
portion of any payment, compensation or other benefit provided to a Participant
pursuant to the Plan in connection with his or her employment termination
constitutes “nonqualified deferred compensation” within the meaning of Section
409A and (ii) the Participant is a specified employee as defined in Section
409A(a)(2)(B)(i) of the Code, in each case as determined by the Company in
accordance with its procedures, by which determinations the Participant (through
accepting the Award) agrees that he or she is bound, such portion of the
payment, compensation or other benefit shall not be paid before the day that is
six months plus one day after the date of “separation from service” (as
determined under Section 409A) (the “New Payment Date”), except as Section 409A
may then permit. The aggregate of any payments that otherwise would have been
paid to the Participant during the period between the date of separation from
service and the New Payment Date shall be paid to the Participant in a lump sum
on such New Payment Date, and any remaining payments will be paid on their
original schedule.

 

The Company makes no representations or warranty and shall have no liability to
the Participant or any other person if any provisions of or payments,
compensation or other benefits

 

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under the Plan are determined to constitute nonqualified deferred compensation
subject to Section 409A but do not to satisfy the conditions of that section.

 

(g)Limitations on Liability. Notwithstanding any other provisions of the Plan,
no individual acting as a director, officer, employee or agent of the Company
will be liable to any Participant, former Participant, spouse, beneficiary, or
any other person for any claim, loss, liability, or expense incurred in
connection with the Plan, nor will such individual be personally liable with
respect to the Plan because of any contract or other instrument he or she
executes in his or her capacity as a director, officer, employee or agent of the
Company.  The Company will indemnify and hold harmless each director, officer,
employee or agent of the Company to whom any duty or power relating to the
administration or interpretation of the Plan has been or will be delegated,
against any cost or expense (including attorneys’ fees) or liability (including
any sum paid in settlement of a claim with the Board’s approval) arising out of
any act or omission to act concerning the Plan unless arising out of such
person’s own fraud or bad faith.

 

(h)Governing Law. The provisions of the Plan and all Awards made hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware, excluding choice-of-law principles of the law of such state that would
require the application of the laws of a jurisdiction other than the State of
Delaware.