Exhibit 10.1

 

APPLIED MATERIALS, INC.

EMPLOYEE STOCK INCENTIVE PLAN

 

(March 6, 2012 Amendment and Restatement)

 

SECTION 1

BACKGROUND AND PURPOSE

 

1.1 Background and Effective Date. The Plan permits the grant of Nonqualified
Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted
Stock Awards, Performance Units, Performance Shares, and Restricted Stock Units.
The Plan is effective as of March 6, 2012 (the “Effective Date”), subject to
approval by an affirmative vote of the holders of a majority of the Shares that
are present in person or by proxy and entitled to vote at the 2012 Annual
Meeting of Stockholders of the Company.

 

1.2 Purpose of the Plan. The Plan is intended to attract, motivate, and retain
(a) employees of the Company and its Affiliates, (b) consultants who provide
significant services to the Company and its Affiliates, and (c) directors of the
Company who are employees of neither the Company nor any Affiliate. The Plan
also is designed to: (1) encourage stock ownership by Participants, thereby
aligning their interests with those of the Company’s stockholders, and
(2) permit the payment of compensation that qualifies as “performance-based
compensation” under Section 162(m) of the Code.

 

SECTION 2

DEFINITIONS

 

The following words and phrases shall have the following meanings unless a
different meaning is plainly required by the context:

 

2.1 “1933 Act” means the Securities Act of 1933, as amended. Reference to a
specific section of the 1933 Act or regulation thereunder shall include such
section or regulation, any valid regulation promulgated under such section, and
any comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.

 

2.2 “1934 Act” means the Securities Exchange Act of 1934, as amended. Reference
to a specific section of the 1934 Act or regulation thereunder shall include
such section or regulation, any valid regulation promulgated under such section,
and any comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.

 

2.3 “Affiliate” means any corporation or any other entity (including, but not
limited to, partnerships and joint ventures) controlling, controlled by, or
under common control with the Company.

 

2.4 “Annual Meeting” means the Company’s annual meeting of stockholders.

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2.5 “Applicable Laws” means the requirements relating to the administration of
equity-based awards under U.S. federal and state corporate laws, U.S. federal
and state securities laws, the Code, any stock exchange or quotation system on
which the Company’s 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.

 

2.6 “Award” means, individually or collectively, a grant under the Plan of
Incentive Stock Options, Nonqualified Stock Options, SARs, Restricted Stock
Awards, Restricted Stock Units, Performance Units or Performance Shares.

 

2.7 “Award Agreement” means the written agreement (which may be in electronic
form) setting forth the terms and conditions applicable to each Award granted
under the Plan.

 

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

 

2.9 “Cash Flow” means as to any Performance Period, cash generated from business
activities.

 

2.10 “Cause” means the occurrence of any of the following: (a) an act of
personal dishonesty taken by the Participant in connection with his or her
responsibilities as an employee and intended to result in his or her substantial
personal enrichment; (b) the Participant being convicted of, or pleading no
contest or guilty to, (x) a misdemeanor that the Company reasonably believes has
had or will have a material detrimental effect on the Company; or (y) any
felony; (c) a willful act by the Participant that constitutes gross misconduct;
(d) the Participant’s willful and continued failure to perform the reasonable
duties and responsibilities of his or her position after there has been
delivered to the Participant a written demand for performance from the Company
that describes the basis for the Company’s belief that the Participant has not
substantially performed his or her duties and/or responsibilities and the
Participant has not corrected such failure within 30 days of such written
demand; or (e) a material violation by the Participant of any written, material
Company employment policy or standard of conduct.

 

2.11 “Change of Control” means the occurrence of any of the following events:

 

(a) A change in the ownership of the Company that occurs on the date that any
one person, or more than one person acting as a group (“Person”), acquires
ownership of the stock of the Company that, together with the stock held by such
Person, constitutes more than fifty percent (50%) of the total voting power of
the stock of the Company. For purposes of this subsection (a), the acquisition
of additional stock by any one Person, who is considered to own more than fifty
percent (50%) of the total voting power of the stock of the Company will not be
considered an additional Change of Control; or

 

(b) A change in the effective control of the Company that occurs on the date
that a majority of members of the Board is replaced during any twelve (12) month
period by directors whose appointment or election is not endorsed by a majority
of the members of the Board prior to the date of the appointment or election; or
for purposes of this subsection (b), once any Person is considered to be in
effective control of the Company, the acquisition of additional control of the
Company by the same Person will not be considered an additional Change of
Control; or

 

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(c) A change in the ownership of a “substantial portion of the Company’s
assets”, as defined herein. For this purpose, a “substantial portion of the
Company’s assets” shall mean assets of the Company having a total gross fair
market value equal to or more than fifty percent (50%) of the total gross fair
market value of all of the assets of the Company immediately prior to such
change in ownership. For purposes of this subsection (c), a change in ownership
of a substantial portion of the Company’s assets occurs on the date that any
Person acquires (or has acquired during the twelve (12) month period ending on
the date of the most recent acquisition by such person or persons) assets from
the Company that constitute a “substantial portion of the Company’s assets.” For
purposes of this subsection (c), the following will not constitute a change in
the ownership of a substantial portion of the Company’s assets: (A) a transfer
to an entity that is controlled by the Company’s stockholders immediately after
the transfer, or (B) a transfer of assets by the Company to: (1) a stockholder
of the Company (immediately before the asset transfer) in exchange for or with
respect to the Company’s stock, (2) an entity, fifty percent (50%) or more of
the total value or voting power of which is owned, directly or indirectly, by
the Company, (3) a Person, that owns, directly or indirectly, fifty percent
(50%) or more of the total value or voting power of all the outstanding stock of
the Company, or (4) an entity, at least fifty percent (50%) of the total value
or voting power of which is owned, directly or indirectly, by a Person described
in this subsection (c). For purposes of this subsection (c), gross fair market
value means the value of the assets of the Company, or the value of the assets
being disposed of, determined without regard to any liabilities associated with
such assets.

 

For purposes of this Section 2.11, persons will be considered to be acting as a
group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction
with the Company.

 

Notwithstanding the foregoing, a transaction will not be deemed a Change of
Control unless the transaction qualifies as a change of control event within the
meaning of Section 409A.

 

Further and for the avoidance of doubt, a transaction will not constitute a
Change of Control if its primary purpose is to: (1) change the state of the
Company’s incorporation, or (2) create a holding company that will be owned in
substantially the same proportions by the persons who held the Company’s
securities immediately before such transaction.

 

2.12 “Code” means the Internal Revenue Code of 1986, as amended . Reference to a
specific section of the Code or regulation thereunder shall include such section
or regulation, any valid regulation promulgated under such section, and any
comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.

 

2.13 “Committee” means the committee appointed by the Board (pursuant to
Section 3 . 1) to administer the Plan.

 

2.14 “Company” means Applied Materials, Inc. , a Delaware corporation, or any
successor thereto.

 

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2.15 “Consultant” means any consultant, independent contractor, or other person
who provides significant services to the Company or its Affiliates, but who is
not an Employee or a Director.

 

2.16 “Customer Satisfaction” means as to any Performance Period, the objective
and measurable goals approved by the Committee that relate to fulfillment of
customer expectations and/or attainment of customer ratings.

 

2.17 “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.

 

2.18 “Director” means any individual who is a member of the Board of Directors
of the Company.

 

2.19 “Disability” means a permanent and total disability within the meaning of
Section 22(e)(3) of the Code. In the case of Awards other than Incentive Stock
Options, the Committee, in its discretion, may determine that a different
definition of Disability shall apply in accordance with standards adopted by the
Committee from time to time.

 

2.20 “Earnings Per Share” means as to any Performance Period, the Company’s
Profit, divided by a weighted average number of common shares outstanding and
dilutive common equivalent shares deemed outstanding for the Performance Period.

 

2.21 “Employee” means any employee of the Company or of an Affiliate, whether
such employee is so employed at the time the Plan is adopted or becomes so
employed subsequent to the adoption of the Plan. Neither service as a Director
nor payment of a director’s fee by the Company will constitute “employment” by
the Company.

 

2.22 “Exchange Program” means a program under which outstanding Awards are
amended to provide for a lower Exercise Price or surrendered or cancelled in
exchange for (a) Awards with a lower Exercise Price, (b) a different type of
Award, (c) cash, or (d) a combination of (a), (b) and/or (c). Notwithstanding
the preceding, the term Exchange Program does not include any (i) action
described in Sections 4.3 or 4.5, nor (ii) transfer or other disposition
permitted under Sections 13.7 and 13.8. The implementation of any Exchange
Program is subject to stockholder approval as required under Section 3.2.

 

2.23 “Exercise Price” means the price at which a Share may be purchased by a
Participant pursuant to the exercise of an Option or SAR.

 

2.24 “Fair Market Value” means the closing per share selling price for Shares on
the relevant date, or if there were no sales on such date, the average of the
closing sale prices on the immediately following and preceding trading dates, in
either case as reported by the NASDAQ Global Select Market/National Market or
such other source selected in the discretion of the Committee (or its
delegate). Notwithstanding the preceding, for federal, state, and local income
tax reporting purposes, fair market value shall be determined by the Committee
(or its delegate) in accordance with uniform and nondiscriminatory standards
adopted by it from time to time.

 

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2.25 “Fiscal Quarter” means a fiscal quarter within a Fiscal Year of the
Company.

 

2.26 “Fiscal Year” means the fiscal year of the Company.

 

2.27 “Good Reason” means without the Participant’s written consent: (a) a
material reduction in the Participant’s level of base salary, unless such
reduction is no greater (in terms of percentage) than base salary reductions
imposed on all or substantially all of the Company’s employees; or (b) a
material relocation of the Participant’s principal place of employment by at
least 50 miles. In order for a termination to be for “Good Reason,” the
Participant must (x) provide notice to the Company of the Good Reason condition
within 90 days of the initial existence of the condition, (y) give the Company
at least 30 days to remedy such condition, and (z) actually terminate the
Participant’s employment within six months following the initial existence of
the condition.

 

2.28 “Grant Date” means, with respect to an Award, the date on which the
Committee makes the determination granting such Award, or such later date as is
determined by the Committee at the time it approves the grant. With respect to
an Award granted under the automatic grant provisions of Section 12, “Grant
Date” means the applicable date of grant specified in Section 12. The Grant Date
of an Award shall not be earlier than the date the Award is approved by the
Committee.

 

2.29 “Incentive Stock Option” means an Option to purchase Shares that by its
terms qualifies as and is intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code.

 

2.30 “Margin” means as to any Performance Period, Revenue less appropriate costs
and expenses for the type of margin determined by the Committee (for example,
but not by way of limitation, gross margin, operating margin or contribution
margin).

 

2.31 “Market Share” means as to any Performance Period, the percentage of a
market segment with respect to one or more products or services.

 

2.32 “Nonemployee Director” means a Director who is not an employee of the
Company or any Affiliate.

 

2.33 “Nonqualified Stock Option” means an option to purchase Shares that by its
terms does not qualify or is not intended to qualify as an Incentive Stock
Option.

 

2.34 “Operating Profit” means as to any Performance Period, the difference
between revenue and related costs of products sold and operating expenses,
excluding income derived from other sources and before other income deductions.

 

2.35 “Option” means an Incentive Stock Option or a Nonqualified Stock Option.

 

2.36 “Participant” means the holder of an outstanding Award.

 

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2.37 “Performance Goals” means the goal(s) (or combined goal(s)) determined by
the Committee (in its discretion) to be applicable to a Participant with respect
to an Award. As determined by the Committee, the Performance Goals applicable to
an Award shall provide for a targeted level or levels of achievement using one
or more of the following measures: (a) Cash Flow, (b) Customer Satisfaction,
(c) Earnings Per Share, (d) Margin, (e) Market Share, (f) Operating Profit,
(g) Product Development and Quality, (h) Profit, (i) Return on Capital,
(j) Return on Equity, (k) Revenue and (l) Total Shareholder Return. Any
Performance Goal used may be measured (1) in absolute terms, (2) in combination
with another Performance Goal or Goals (for example, but not by way of
limitation, as a ratio or matrix), (3) in relative terms (including, but not
limited to, as compared to results for other periods of time, and/or against
another company, companies or an index or indices), (4) on a per-share or
per-capita basis, (5) against the performance of the Company as a whole or a
specific business unit(s), business segment(s) or product(s) of the Company,
and/or (6) on a pre-tax or after-tax basis. Prior to the Determination Date, the
Committee, in its discretion, will determine whether any significant element(s)
or item(s) will be included in or excluded from the calculation of any
Performance Goal with respect to any Participants (for example, but not by way
of limitation, the effect of mergers and acquisitions). As determined in the
discretion of the Committee prior to the Determination Date, achievement of
Performance Goals for a particular Award may be calculated in accordance with
the Company’s financial statements, prepared in accordance with generally
accepted accounting principles, or as adjusted for certain costs, expenses,
gains and losses to provide non-GAAP measures of operating results.

 

2.38 “Performance Period” means any Fiscal Year (or period of four
(4) consecutive Fiscal Quarters) or such other period longer than a Fiscal Year,
as determined by the Committee in its sole discretion.

 

2.39 “Performance Share” means an Award granted to a Participant pursuant to
Section 9.

 

2.40 “Performance Unit” means an Award granted to a Participant pursuant to
Section 8.

 

2.41 “Plan” means the Applied Materials, Inc. Employee Stock Incentive Plan, as
set forth in this instrument and as hereafter amended from time to time. The
Plan formerly was named the Applied Materials, Inc. 1995 Equity Incentive Plan.

 

2.42 “Product Development and Quality” means as to any Performance Period, the
objective and measurable goals approved by the Committee for the design,
creation or manufacture of products, which goals may include (but not by way of
limitation) conformance to design or use specifications or requirements not to
exceed specified defect levels.

 

2.43 “Profit” means as to any Performance Period, income.

 

2.44 “Restricted Stock” means restricted Shares granted pursuant to a Restricted
Stock Award.

 

2.45 “Restricted Stock Award” means an Award granted to a Participant pursuant
to Section 7.

 

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2.46 “Restricted Stock Unit” means an Award granted to a Participant pursuant to
Section 10.

 

2.47 “Retirement” means, in the case of an Employee, the first to occur of:
(a) a Termination of Service occurring on or after age sixty-five (65), or (b) a
Termination of Service occurring on or after age sixty (60) with at least ten
(10) full Years of Service. With respect to a Consultant, no Termination of
Service shall be deemed to be on account of “Retirement.”

 

2.48 “Return on Capital” means as to any Performance Period, Profit divided by
invested capital.

 

2.49 “Return on Equity” means as to any Performance Period, the percentage equal
to Profit divided by stockholder’s equity.

 

2.50 “Revenue” means as to any Performance Period, net sales.

 

2.51 “Rule 16b-3” means Rule 16b-3 promulgated under the 1934 Act, and any
future regulation amending, supplementing or superseding such regulation.

 

2.52 “Section 16(b)” means Section 16(b) of the 1934 Act.

 

2.53 “Section 16 Person” means an individual who, with respect to Shares, is
subject to Section 16 of the 1934 Act and the rules and regulations promulgated
thereunder.

 

2.54 “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as
amended and the regulations and guidance thereunder, as they may be amended or
modified from time to time.

 

2.55 “Shares” means the shares of common stock of the Company.

 

2.56 “Stock Appreciation Right” or “SAR” means an Award, granted alone or in
connection with a related Option, that pursuant to Section 6 is designated as an
SAR.

 

2.57 “Subsidiary” means any corporation in an unbroken chain of corporations
beginning with the Company as the corporation at the top of the chain, but only
if each of the corporations below the Company (other than the last corporation
in the unbroken chain) then owns stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain, or if Section 424(f) of the Code is modified after
the Effective Date, a “subsidiary corporation” as defined in Section 424(f) of
the Code.

 

2.58 “Tax Obligations” means tax and social insurance liability obligations and
requirements in connection with the Awards, including, without limitation,
(a) all federal, state, and local taxes (including the Participant’s Federal
Insurance Contributions Act (FICA) obligation) that are required to be withheld
by the Company or the employing Affiliate, (b) the Participant’s and, to the
extent required by the Company (or Affiliate), the Company’s (or Affiliate’s)
fringe benefit tax liability, if any, associated with the grant,
vesting, or exercise of an Award or sale of Shares, and (c) any other Company
(or Affiliate) taxes the responsibility for which the Participant has, or has
agreed to bear, with respect to such Award (or exercise thereof or issuance of
Shares thereunder).

 

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2.59 “Termination of Service” means (a) in the case of an Employee, a cessation
of the employee-employer relationship between the Employee and the Company or an
Affiliate for any reason, including, but not by way of limitation, a termination
by resignation, discharge, death, Disability, Retirement, or the disaffiliation
of an Affiliate, but excluding any such termination where there is a
simultaneous reemployment by the Company or an Affiliate; (b) in the case of a
Consultant, a cessation of the service relationship between the Consultant and
the Company or an Affiliate for any reason, including, but not by way of
limitation, a termination by resignation, discharge, death, Disability, or the
disaffiliation of an Affiliate, but excluding any such termination where there
is a simultaneous re-engagement of the consultant by the Company or an
Affiliate; and (c) in the case of a Nonemployee Director, a cessation of the
Director’s service on the Board for any reason, including, but not by way of
limitation, a termination by resignation, death, Disability or non-reelection to
the Board. The Committee, in its discretion, may specify in an Award Agreement
whether or not a Termination of Service will be deemed to occur when a
Participant changes capacities (for example, when an Employee ceases to be such
but immediately thereafter becomes a Consultant).

 

2.60 “Total Shareholder Return” means as to any Performance Period, the total
return (change in share price, including treatment of dividends as determined by
the Committee) of a Share.

 

2.61 “Years of Service” means, in the case of an Employee, the number of full
months from the Employee’s latest hire date with the Company or an Affiliate to
the date in question, divided by twelve (12). The Employee’s latest hire date
shall be determined after giving effect to the non-401(k) Plan principles of
North American Human Resources Policy No. 2-06, Re-Employment of Former
Employees/Bridging of Service, as such Policy may be amended or superseded from
time to time. With respect to a Nonemployee Director, “Years of Service” means
the number of years of continuous service on the Board of Directors.

 

SECTION 3

ADMINISTRATION

 

3.1 The Committee. The Plan shall be administered by the Committee. The
Committee shall consist of not less than two (2) Directors who shall be
appointed from time to time by, and shall serve at the pleasure of, the Board of
Directors. The Committee shall be comprised solely of Directors who are
(a) “outside directors” under Section 162(m), and (b) “non-employee directors”
under Rule 16b-3. Until and unless determined otherwise by the Board, the
Committee shall be the Human Resources & Compensation Committee of the Board.

 

3.2 Authority of the Committee. It shall be the duty of the Committee to
administer the Plan in accordance with the Plan’s provisions. The Committee
shall have all powers and discretion necessary or appropriate to administer the
Plan and to control its operation, including, but not limited to, the power to
(a) determine which Employees, Consultants and Directors shall be granted
Awards, (b) prescribe the terms and conditions of the Awards, (c) interpret the
Plan and the Awards, (d) adopt such procedures and subplans as are necessary or
appropriate for the purpose of satisfying applicable foreign laws or for
qualifying for favorable tax treatment under applicable foreign laws, (e) adopt

 

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rules for the administration, interpretation and application of the Plan as are
consistent therewith, and (f) interpret, amend or revoke any such rules.
Notwithstanding the preceding, the Committee shall not implement an Exchange
Program without the approval of the holders of a majority of the Shares that are
present in person or by proxy and entitled to vote at any Annual or Special
Meeting of Stockholders of the Company.

 

3.3 Minimum Vesting Periods. Notwithstanding any contrary provision of the Plan
(but subject to the following sentence), the vesting period for an Award shall
expire in full no earlier than (a) the third (3rd) annual anniversary of the
grant date if the vesting period expires solely as the result of continued
employment or service, and (b) the first (1st) annual anniversary of the grant
date if expiration of the vesting period is conditioned on achievement of
performance objectives and does not expire solely as the result of continued
employment or service. The preceding minimum vesting periods shall not apply
with respect to Awards to Nonemployee Directors under Section 12, or to an Award
if determined by the Committee (in its discretion): (a) due to death,
Disability, Retirement, or major capital change, (b) with respect to Options and
SARs, or (d) with respect to Awards other than Options and SARs covering, in the
aggregate, no more than five percent (5%) of the shares reserved for issuance
under the Plan,

 

3.4 Delegation by the Committee. The Committee, in its sole discretion and on
such terms and conditions as it may provide, may delegate all or any part of its
authority and powers under the Plan to one or more Directors or officers of the
Company, except that the Committee may not delegate all or any part of its
authority under the Plan with respect to Awards granted to any individual who is
subject to Section 16(b). Notwithstanding the foregoing, with respect to Awards
that are intended to qualify as performance-based compensation under
Section 162(m) of the Code, the Committee may not delegate its authority and
powers with respect to such Awards if such delegation would cause the Awards to
fail to so qualify. To the extent of any delegation by the Committee, references
to the Committee in this Plan and any Award Agreement shall be deemed also to
include reference to the applicable delegate(s).

 

3.5 Decisions Binding. All interpretations, determinations and decisions made by
the Committee, the Board, and any delegate of the Committee pursuant to the
provisions of the Plan shall be final, conclusive, and binding on all persons,
and shall be given the maximum deference permitted by law.

 

SECTION 4

SHARES SUBJECT TO THE PLAN

 

4.1 Number of Shares. Subject to adjustment as provided in Section 4.3, the
total number of Shares available issuance under the Plan shall not exceed the
sum of (a) 125,000,000, plus (b) the 367,200,000 that were reserved for issuance
prior to the Effective Date. Shares granted under the Plan may be either
authorized but unissued Shares or treasury Shares. As of January 15, 2012,
73,473,915 Shares remained available for grant under the Plan.

 

4.2 Lapsed Awards. If an Award expires without having been exercised in full,
or, with respect to Restricted Stock, Restricted Stock Units, Performance Shares
or Performance Units, is forfeited to or repurchased by the Company, the
unpurchased Shares (or for Awards other than

 

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Options and 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). Upon exercise of a Stock Appreciation
Right settled in Shares, the gross number of Shares covered by the portion of
the Award so exercised will cease to be available under the Plan. Shares that
have 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 unvested Shares 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 or purchase price of an Award
and/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 reduce the number of Shares available for issuance under the Plan.
Notwithstanding anything in the Plan or any Award Agreement to the contrary,
Shares covered by Awards that are surrendered or cancelled under any Exchange
Program will not again be available for grant under the Plan. Notwithstanding
the foregoing provisions of this Section 4.2, subject to adjustment provided in
Section 4.3, 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 4.1, plus, to the extent allowable under Section 422 of the Code, any
Shares that become available for issuance under the Plan under this Section 4.2.

 

4.3 Adjustments in Awards and Authorized Shares. In the event that any dividend
(other than regular, ongoing dividends) 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 such that an adjustment is determined by the
Committee (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, then the Committee shall, in such manner as it
may deem equitable, adjust the number and class of Shares which may be delivered
under the Plan, the number and class of Shares which may be added annually to
the Shares reserved under the Plan, the number, class, and price of Shares
subject to outstanding Awards, and the numerical limits of Sections 5.1, 6.1,
7.1, 8.1, 9.1, and 10.1. Notwithstanding the preceding, the number of Shares
subject to any Award always shall be a whole number.

 

4.4 Full Value Awards. Grants of Restricted Stock, Restricted Stock Units,
Performance Shares and Performance Units under the Plan shall count against the
numerical limits in Section 4.1 of the Plan as two Shares for every one Share
subject thereto. If Shares acquired pursuant to Restricted Stock, Restricted
Stock Units, Performance Shares and Performance Units granted on or after the
Effective Date are forfeited to the Company and otherwise would return to the
Plan pursuant to Section 4.2 of the Plan, two times the number of Shares so
forfeited shall become available for issuance. For purposes of clarification, if
Shares acquired pursuant to any Awards granted prior to the Effective Date are
forfeited to the Company and otherwise would return to the Plan pursuant to
Section 4.2 of the Plan, one times the number of Shares so forfeited shall
become available for issuance.

 

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4.5 Change of Control. In the event of a Change of Control, each outstanding
Award will be treated as the Committee (in its discretion) determines,
including, without limitation, that each Award be assumed or an equivalent
option or right be substituted by the successor corporation or a parent or
Subsidiary of the successor corporation. The Committee will not be required to
treat all Awards similarly in the transaction.

 

4.5.1 Non-Assumption of Awards. If, in connection with a Change of Control, the
successor corporation (or a parent or Subsidiary of the successor corporation)
does not assume or substitute outstanding Awards that were granted on or after
the Effective Date, then, with respect to such Awards and no later than
immediately prior to the Change of Control: (a) each Participant will vest fully
in, and have the right to exercise, all of such Awards that are Options and
Stock Appreciation Rights, including Shares as to which such Awards would not
otherwise be vested or exercisable, (b) all other such Awards that are not
Options or SARs will fully vest and any applicable restrictions will lapse, and
(c) 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 SAR granted on or after the Effective Date is not assumed or
substituted in the event of a Change of Control, the Option or Stock
Appreciation Right will terminate upon the Change of Control provided that
either (1) before the Change of Control, the Committee notifies the Participant
in writing or electronically that the Option or SAR will be exercisable for a
period of time determined by the Committee in its sole discretion, or
(2) immediately after the Change of Control, the Participant receives a cash
payment equal to the Fair Market Value (calculated at the time of the Change of
Control) of the Shares covered by the Option or SAR, minus the Exercise Price of
the Shares covered by the Option or SAR. All Awards that become fully vested
pursuant to this Section 4.5.1 will terminate and expire upon the occurrence of
the Change of Control.

 

4.5.2 Assumption. For the purposes of this Section 4.5, an Award will be
considered assumed if, following the Change of Control, the Award confers the
right to purchase or receive, for each Share subject to the Award immediately
prior to the Change of Control, the consideration (whether stock, cash, or other
securities or property) received in the Change of Control by holders of Shares
held on the effective date of the transaction (and if holders were offered a
choice of consideration, the type of consideration chosen by the greatest number
of holders of outstanding Shares); provided, however, that if such consideration
received in the Change of Control is not solely common stock of the successor
corporation or its parent, the Committee may, with the consent of the successor
corporation, provide for the consideration to be received upon the exercise of
an Option or SAR or upon the payout of any other Award, 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 Shares in the Change of Control. Notwithstanding anything in this
Section 4.5 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 of Control
corporate structure will not be deemed to invalidate an otherwise valid Award
assumption.

 

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SECTION 5

STOCK OPTIONS

 

5.1 Grant of Options. Subject to the terms and provisions of the Plan, Options
may be granted to Employees, Directors and Consultants at any time and from time
to time as determined by the Committee in its sole discretion. The Committee, in
its sole discretion, shall determine the number of Shares subject to each
Option, provided that during any Fiscal Year, no Participant shall be granted
Options (and/or SARs) covering more than a total of 4,500,000 Shares.
Notwithstanding the foregoing, during the Fiscal Year in which a Participant
first becomes an Employee, he or she may be granted Options (and/or SARs) to
purchase up to a total of an additional 4,500,000 Shares. The Committee may
grant Incentive Stock Options, Nonqualified Stock Options, or a combination
thereof.

 

5.2 Award Agreement. Each Option shall be evidenced by an Award Agreement that
shall specify the Exercise Price, the expiration date of the Option, the number
of Shares covered by the Option, any conditions to exercise the Option, and such
other terms and conditions as the Committee, in its discretion, shall determine.
The Award Agreement shall also specify whether the Option is intended to be an
Incentive Stock Option or a Nonqualified Stock Option.

 

5.3 Exercise Price. Subject to the provisions of this Section 5.3, the Exercise
Price for each Option shall be determined by the Committee in its sole
discretion.

 

5.3.1 Nonqualified Stock Options. The Exercise Price of each Nonqualified Stock
option shall be determined by the Committee in its discretion but shall be not
less than one hundred percent (100%) of the Fair Market Value of a Share on the
Grant Date.

 

5.3.2 Incentive Stock Options. In the case of an Incentive Stock Option, the
Exercise Price shall be not less than one hundred percent (100%) of the Fair
Market Value of a Share on the Grant Date; provided, however, that if on the
Grant Date, the Employee (together with persons whose stock ownership is
attributed to the Employee pursuant to Section 424(d) of the Code) owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or any of its Subsidiaries, the Exercise Price shall be not
less than one hundred and ten percent (110%) of the Fair Market Value of a Share
on the Grant Date.

 

5.3.3 Substitute Options. Notwithstanding the other provisions of this
Section 5.3, in the event that the Company or a Subsidiary consummates a
transaction described in Section 424(a) of the Code (e.g., the acquisition of
property or stock from an unrelated corporation), persons who become Employees,
Nonemployee Directors or Consultants on account of such transaction may be
granted Options in substitution for options granted by their former employer. If
such substitute Options are granted, the Committee, in its sole discretion and
consistent with Section 424(a) of the Code, may determine that such substitute
Options shall have an Exercise Price less than one hundred percent (100%) of the
Fair Market Value of the Shares on the Grant Date.

 

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5.4 Expiration of Options.

 

5.4.1 Expiration Dates. Each Option shall terminate no later than the first to
occur of the following events:

 

(a) The date for termination of the Option set forth in the Award Agreement; or

 

(b) The expiration of seven (7) years from the Grant Date.

 

5.4.2 Death of Participant. Notwithstanding Section 5.4.1, if a Participant dies
prior to the expiration of his or her Options, the Committee, in its discretion,
may provide that his or her Options shall be exercisable for up to three
(3) years after the date of death. With respect to extensions that were not
included in the original terms of the Option but were provided by the Committee
after the Grant Date, if at the time of any such extension, the Exercise Price
of the Option is less than the Fair Market Value of a Share, the extension
shall, unless otherwise determined by the Committee, be limited to the earlier
of (a) the maximum term of the Option as set by its original terms, or (b) ten
(10) years from the Grant Date.

 

5.4.3 Committee Discretion. Subject to the seven (7) and ten (10)-year limits of
Sections 5.4.1 and 5.4.2, the Committee, in its sole discretion, (a) shall
provide in each Award Agreement when each Option expires and becomes
unexercisable, and (b) may, after an Option is granted, extend the maximum term
of the Option (subject to Section 5.8.4 regarding Incentive Stock Options). With
respect to the Committee’s authority in Section 5.4.3(b), if, at the time of any
such extension, the Exercise Price of the Option is less than the Fair Market
Value of a Share, the extension shall, unless otherwise determined by the
Committee, be limited to the earlier of (1) the maximum term of the Option as
set by its originals terms, or (2) ten (10) years from the Grant Date. Unless
otherwise determined by the Committee, any extension of the term of an Option
pursuant to this Section 5.4.3 shall comply with Section 409A to the extent
applicable.

 

5.5 Exercisability of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall determine in its sole discretion. An Option may not be
exercised for a fraction of a Share. After an Option is granted, the Committee,
in its sole discretion, may accelerate the exercisability of the Option.

 

5.6 Payment. In order to exercise an Option, the Participant shall give notice
in the form specified by the Company and follow such procedures as the Company
(or its designee) may specify from time to time. Exercise of an Option also
requires that the Participant make arrangements satisfactory to the Company for
full payment of the Exercise Price for the Shares. All exercise notices shall be
given in the form and manner specified by the Company from time to time.

 

The Exercise Price shall be payable to the Company in full in cash or its
equivalent. The Committee, in its sole discretion, also may permit exercise
(a) by tendering previously acquired Shares having an aggregate Fair Market
Value at the time of exercise equal to the total Exercise Price, or (b) by any
other means which the Committee, in its sole discretion, determines to both
provide legal consideration for the Shares, and to be consistent with the
purposes of the Plan. As soon as practicable after receipt of a notification of
exercise satisfactory to the Company and full payment for the Shares purchased,
the Company shall deliver to the Participant (or the Participant’s

 

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designated broker), Share certificates (which may be in book entry form)
representing such Shares. 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 4.3 of the Plan.

 

5.7 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option as it
may deem advisable, including, but not limited to, restrictions related to
applicable federal securities laws, the requirements of any national securities
exchange or system upon which Shares are then listed or traded, or any blue sky
or state securities laws.

 

5.8 Certain Additional Provisions for Incentive Stock Options.

 

5.8.1 Exercisability. The aggregate Fair Market Value (determined on the Grant
Date(s)) of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by any Employee during any calendar year (under
all plans of the Company and its Subsidiaries) shall not exceed $100,000.

 

5.8.2 Termination of Service. No Incentive Stock Option may be exercised more
than three (3) months after the Participant’s Termination of Service for any
reason other than Disability or death, unless (a) the Participant dies during
such three-month period, and/or (b) the Award Agreement or the Committee permits
later exercise (in which case the Option instead may be deemed to be a
Nonqualified Stock Option). No Incentive Stock Option may be exercised more than
one (1) year after the Participant’s Termination of Service on account of
Disability, unless (a) the Participant dies during such one-year period, and/or
(b) the Award Agreement or the Committee permit later exercise (in which case
the option instead may be deemed to be a Nonqualified Stock Option).

 

5.8.3 Employees Only. Incentive Stock Options may be granted only to persons who
are employees of the Company or a Subsidiary on the Grant Date.

 

5.8.4 Expiration. No Incentive Stock Option may be exercised after the
expiration of ten (10) years from the Grant Date; provided, however, that if the
Option is granted to an Employee who, together with persons whose stock
ownership is attributed to the Employee pursuant to Section 424(d) of the Code,
owns stock possessing more than 10% of the total combined voting power of all
classes of the stock of the Company or any of its Subsidiaries, the Option may
not be exercised after the expiration of five (5) years from the Grant Date.

 

5.8.5 Leave of Absence. For purposes of Incentive Stock Options, no leave of
absence may exceed three (3) months, 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 six
(6) months following the first (1st) 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 Nonqualified Stock Option.

 

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SECTION 6

STOCK APPRECIATION RIGHTS

 

6.1 Grant of SARs. Subject to the terms and conditions of the Plan, a SAR may be
granted to Employees, Directors and Consultants at any time and from time to
time as shall be determined by the Committee, in its sole discretion.

 

6.1.1 Number of Shares. The Committee shall have complete discretion to
determine the number of SARs granted to any Participant, provided that during
any Fiscal Year, no Participant shall be granted SARs (and/or Options) covering
more than a total of 4,500,000 Shares. Notwithstanding the foregoing, during the
Fiscal Year in which a Participant first becomes an Employee, he or she may be
granted SARs (and/or Options) covering up to a total of an additional 4,500,000
Shares.

 

6.1.2 Exercise Price and Other Terms. The Committee, subject to the provisions
of the Plan, shall have complete discretion to determine the terms and
conditions of SARs granted under the Plan. The Exercise Price of each SAR shall
be determined by the Committee in its discretion but shall not be less than one
hundred percent (100%) of the Fair Market Value of a Share on the Grant Date.
Notwithstanding the foregoing, SARs 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 Grant Date pursuant to the rules of Section 5.3.3, which also shall apply
to SARs.

 

6.2 SAR Agreement. Each SAR grant shall be evidenced by an Award Agreement that
shall specify the Exercise Price, the term of the SAR, the conditions of
exercise, and such other terms and conditions as the Committee, in its sole
discretion, shall determine.

 

6.3 Expiration of SARs. An SAR granted under the Plan shall expire upon the date
determined by the Committee, in its sole discretion, and set forth in the Award
Agreement. Notwithstanding the foregoing, the rules of Section 5.4 also shall
apply to SARs.

 

6.4 Payment of SAR Amount. Upon exercise of an SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:

 

(a) The difference between the Fair Market Value of a Share on the date of
exercise over the Exercise Price; times

 

(b) The number of Shares with respect to which the SAR is exercised. At the
discretion of the Committee, the payment upon SAR exercise may be in cash, in
Shares of equivalent value, or in some combination thereof.

 

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 under the SAR, except as
provided in Section 4.3 of the Plan.

 

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SECTION 7

RESTRICTED STOCK AWARDS

 

7.1 Grant of Restricted Stock Awards. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Employees, Directors and Consultants as the Committee, in
its sole discretion, shall determine. The Committee, in its sole discretion,
shall determine the number of Shares to be granted to each Participant, provided
that during any Fiscal Year, no Participant shall receive more than a total of
1,500,000 Shares of Restricted Stock (and/or Performance Shares or Restricted
Stock Units). Notwithstanding the foregoing, during the Fiscal Year in which a
Participant first becomes an Employee, he or she may be granted up to a total of
an additional 1,500,000 Shares of Restricted Stock (and/or Performance Shares or
Restricted Stock Units).

 

7.2 Restricted Stock Award Agreement. Each Restricted Stock Award shall be
evidenced by an Award Agreement that shall specify any vesting conditions, the
number of Shares granted, and such other terms and conditions as the Committee,
in its sole discretion, shall determine. Unless the Committee (or its
designee(s)) determine otherwise, Shares of Restricted Stock shall be held by
the Company as escrow agent until the restrictions on such Shares have lapsed.

 

7.3 Transferability. Except as provided in this Section 7 or Section 13.8,
Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated until the end of the applicable vesting
period.

 

7.4 Other Restrictions. The Committee, in its sole discretion, may impose such
other restrictions on Shares of Restricted Stock as it may deem advisable or
appropriate, in accordance with this Section 7.4.

 

7.4.1 General Restrictions. The Committee may set restrictions based upon the
Participant’s continued employment or service with the Company and its
Affiliates, the achievement of specific performance objectives (Company-wide,
departmental, or individual), applicable federal or state securities laws, or
any other basis determined by the Committee in its discretion (for example, but
not by way of limitation, continuous service as an Employee, Director or
Consultant).

 

7.4.2 Section 162(m) Performance Restrictions. For purposes of qualifying
Restricted Stock Awards as “performance-based compensation” under Section 162(m)
of the Code, the Committee, in its discretion, may set restrictions based upon
the achievement of Performance Goals. The Performance Goals shall be set by the
Committee on or before the Determination Date. In granting Restricted Stock
Awards which are intended to qualify under Section 162(m) of the Code, the
Committee shall follow any procedures determined by it from time to time to be
necessary or appropriate to ensure qualification of the Restricted Stock Award
under Section 162(m) of the Code (e.g., in determining the Performance Goals).

 

7.4.3 Legend on Certificates. The Committee, in its discretion, may require that
a legend be placed on the certificates representing Restricted Stock to give
appropriate notice of the applicable restrictions.

 

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7.5 Removal of Restrictions. Except as otherwise provided in this Section 7,
Shares of Restricted Stock covered by each Restricted Stock Award shall be
released from escrow as soon as practicable after the last day of the vesting
period. The Committee, in its discretion, may accelerate the time at which any
restrictions shall lapse or be removed. After the restrictions have lapsed, the
Participant shall be entitled to have any legend(s) under Section 7.4.3 removed
from his or her Share certificate(s), and the Shares shall be freely
transferable by the Participant. The Committee (in its discretion) may establish
procedures regarding the release of Shares from escrow and the removal of
legends, as necessary or appropriate to minimize administrative burdens on the
Company

 

7.6 Voting Rights. During the vesting period, Participants holding Shares of
Restricted Stock granted hereunder may exercise full voting rights with respect
to those Shares, unless the Committee determines otherwise.

 

7.7 Dividends and Other Distributions. During the vesting period, Participants
holding Shares of Restricted Stock shall be entitled to receive all dividends
and other distributions paid with respect to such Shares unless otherwise
provided in the Award Agreement. Any such dividends or distribution shall be
subject to the same restrictions on transferability and forfeitability as the
Shares of Restricted Stock with respect to which they were paid, unless
otherwise provided in the Award Agreement.

 

7.8 Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed shall be
forfeited to the Company and, except as otherwise determined by the Committee
and subject to Section 4.2, again shall become available for grant under the
Plan.

 

SECTION 8

PERFORMANCE UNITS

 

8.1 Grant of Performance Units. Performance Units may be granted to Employees,
Directors and Consultants at any time and from time to time, as shall be
determined by the Committee, in its sole discretion. The Committee shall have
complete discretion in determining the number of Performance Units granted to
each Participant provided that during any Fiscal Year, no Participant shall
receive Performance Units having an initial value greater than $15,000,000.

 

8.2 Value of Performance Units. Each Performance Unit shall have an initial
value that is established by the Committee on or before the Grant Date.

 

8.3 Performance Objectives and Other Terms. The Committee, in its discretion,
shall set performance objectives or other vesting criteria which, depending on
the extent to which they are met, will determine the number or value of
Performance Units that will be paid out to the Participants. Each Award of
Performance Units shall be evidenced by an Award Agreement that shall specify
any applicable Performance Period, and such other terms and conditions as the
Committee, in its sole discretion, shall determine.

 

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8.3.1 General Performance Objectives or Vesting Criteria. The Committee may set
performance objectives or vesting criteria based upon the achievement of
Company-wide, departmental, or individual goals, applicable federal or state
securities laws, or any other basis determined by the Committee in its
discretion (for example, but not by way of limitation, continuous service as an
Employee, Director or Consultant).

 

8.3.2 Section 162(m) Performance Objectives. For purposes of qualifying grants
of Performance Units as “performance-based compensation” under Section 162(m) of
the Code, the Committee, in its discretion, may determine that the performance
objectives applicable to Performance Units shall be based on the achievement of
Performance Goals. The Performance Goals shall be set by the Committee on or
before the Determination Date. In granting Performance Units that are intended
to qualify under Section 162(m) of the Code, the Committee shall follow any
procedures determined by it from time to time to be necessary or appropriate to
ensure qualification of the Performance Units under Section 162(m) of the Code
(e.g., in determining the Performance Goals).

 

8.4 Earning of Performance Units. After the applicable Performance Period has
ended, the holder of Performance Units shall be entitled to receive a payout of
the number of Performance Units earned by the Participant over the Performance
Period, to be determined as a function of the extent to which the corresponding
performance objectives have been achieved. After the grant of a Performance
Unit, the Committee, in its sole discretion, may reduce or waive any performance
objectives for such Performance Unit and may accelerate the time at which any
restrictions will lapse or be removed.

 

8.5 Form and Timing of Payment of Performance Units. Payment of earned
Performance Units shall be made as soon as practicable after the expiration of
the applicable Performance Period (subject to any deferral permitted under
Section 13.1), or as otherwise provided in the applicable Award Agreement or as
required by Applicable Laws. The Committee, in its sole discretion, may pay
earned Performance Units in the form of cash, in Shares (which have an aggregate
Fair Market Value equal to the value of the earned Performance Units at the
close of the applicable Performance Period) or in a combination thereof.

 

8.6 Cancellation of Performance Units. On the date set forth in the Award
Agreement, all unearned or unvested Performance Units shall be forfeited to the
Company, and, except as otherwise determined by the Committee and subject to
Section 4.2, again shall be available for grant under the Plan.

 

SECTION 9

PERFORMANCE SHARES

 

9.1 Grant of Performance Shares. Performance Shares may be granted to Employees,
Directors and Consultants at any time and from time to time, as shall be
determined by the Committee, in its sole discretion. The Committee shall have
complete discretion in determining the number of Performance Shares granted to
each Participant, provided that during any Fiscal Year, no Participant shall be
granted more than a total of 1,500,000 Performance Shares (and/or Shares of
Restricted Stock or Restricted Stock Units). Notwithstanding the foregoing,
during the Fiscal Year in which a Participant first becomes an Employee, he or
she may be granted up to a total of an additional 1,500,000 Performance Shares
(and/or Shares of Restricted Stock or Restricted Stock Units).

 

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9.2 Value of Performance Shares. Each Performance Share shall have an initial
value equal to the Fair Market Value of a Share on the Grant Date.

 

9.3 Performance Share Agreement. Each Award of Performance Shares shall be
evidenced by an Award Agreement that shall specify any vesting conditions, the
number of Performance Shares granted, and such other terms and conditions as the
Committee, in its sole discretion, shall determine.

 

9.4 Performance Objectives and Other Terms. The Committee, in its discretion,
shall set performance objectives or other vesting criteria which, depending on
the extent to which they are met, will determine the number or value of
Performance Shares that will be paid out to the Participants. Each Award of
Performance Shares shall be evidenced by an Award Agreement that shall specify
the Performance Period, and such other terms and conditions as the Committee, in
its sole discretion, shall determine.

 

9.4.1 General Performance Objectives or Vesting Criteria. The Committee may set
performance objectives or vesting criteria based upon the achievement of
Company-wide, departmental, or individual goals, applicable federal or state
securities laws, or any other basis determined by the Committee in its
discretion (for example, but not by way of limitation, continuous service as an
Employee, Director or Consultant).

 

9.4.2 Section 162(m) Performance Objectives. For purposes of qualifying grants
of Performance Shares as “performance-based compensation” under Section 162(m)
of the Code, the Committee, in its discretion, may determine that any
performance objectives applicable to Performance Shares shall be based on the
achievement of Performance Goals. In that case, the Performance Goals shall be
set by the Committee on or before the Determination Date. In granting
Performance Shares that are intended to qualify under Section 162(m) of the
Code, the Committee shall follow any procedures determined by it from time to
time to be necessary or appropriate to ensure qualification of the Performance
Shares under Section 162(m) of the Code (e.g., in determining the Performance
Goals).

 

9.5 Earning of Performance Shares. After the applicable Performance Period has
ended, the holder of Performance Shares shall be entitled to receive a payout of
the number of Performance Shares earned by the Participant over the Performance
Period, to be determined as a function of the extent to which the corresponding
performance objectives have been achieved. After the grant of a Performance
Share, the Committee, in its sole discretion, may reduce or waive any
performance objectives for such Performance Share and may accelerate the time at
which any restrictions will lapse or be removed.

 

9.6 Form and Timing of Payment of Performance Shares. Payment of vested
Performance Shares shall be made as soon as practicable after the expiration of
the applicable Performance Period (subject to any deferral permitted under
Section 13.1), or as otherwise provided in the applicable Award Agreement or as
required by Applicable Laws. The Committee, in its sole discretion, may pay
earned Performance Shares in the form of cash, in Shares or in a combination
thereof.

 

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9.7 Cancellation of Performance Shares. On the date set forth in the Award
Agreement, all unvested Performance Shares shall be forfeited to the Company,
and except as otherwise determined by the Committee and subject to Section 4.2,
again shall be available for grant under the Plan.

 

SECTION 10

RESTRICTED STOCK UNITS

 

10.1 Grant of Restricted Stock Units. Restricted Stock Units may be granted to
Employees, Directors and Consultants at any time and from time to time, as shall
be determined by the Committee, in its sole discretion. The Committee shall have
complete discretion in determining the number of Restricted Stock Units granted
to each Participant, provided that during any Fiscal Year, no Participant shall
be granted more than a total of 1,500,000 Restricted Stock Units (and/or Shares
of Restricted Stock or Performance Shares). Notwithstanding the foregoing,
during the Fiscal Year in which a Participant first becomes an Employee, he or
she may be granted up to a total of an additional 1,500,000 Restricted Stock
Units (and/or Shares of Restricted Stock or Performance Shares).

 

10.2 Value of Restricted Stock Units. Each Restricted Stock Unit shall have an
initial value equal to the Fair Market Value of a Share on the Grant Date.

 

10.3 Restricted Stock Unit Agreement. Each Award of Restricted Stock Units shall
be evidenced by an Award Agreement that shall specify any vesting conditions,
the number of Restricted Stock Units granted, and such other terms and
conditions as the Committee, in its sole discretion, shall determine.

 

10.4 Vesting and Other Terms. The Committee, in its discretion, shall set
performance objectives or other vesting criteria which, depending on the extent
to which they are met, will determine the number or value of Restricted Stock
Units that will be paid out to the Participants. Each Award of Restricted Stock
Units shall be evidenced by an Award Agreement that shall specify the
Performance Period, and such other terms and conditions as the Committee, in its
sole discretion, shall determine.

 

10.4.1 General Performance Objectives or Vesting Criteria. The Committee may set
performance objectives or vesting criteria based upon the achievement of
Company-wide, departmental, or individual goals, applicable federal or state
securities laws, or any other basis determined by the Committee in its
discretion (for example, but not by way of limitation, continuous service as an
Employee, Director or Consultant).

 

10.4.2 Section 162(m) Performance Objectives. For purposes of qualifying grants
of Restricted Stock Units as “performance-based compensation” under
Section 162(m) of the Code, the Committee, in its discretion, may determine that
any performance objectives applicable to Restricted Stock Units shall be based
on the achievement of Performance Goals. In that case, the Performance

 

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Goals shall be set by the Committee on or before the Determination Date. In
granting Restricted Stock Units that are intended to qualify under
Section 162(m) of the Code, the Committee shall follow any procedures determined
by it from time to time to be necessary or appropriate to ensure qualification
of the Restricted Stock Units under Section 162(m) of the Code (e.g., in
determining the Performance Goals).

 

10.5 Earning of Restricted Stock Units. After the applicable vesting period has
ended, the holder of Restricted Stock Units shall be entitled to receive a
payout of the number of Restricted Stock Units earned by the Participant over
the vesting period. After the grant of a Restricted Stock Unit, the Committee,
in its sole discretion, may reduce or waive any vesting condition that must be
met to receive a payout for such Restricted Stock Unit and may accelerate the
time at which any restrictions will lapse or be removed.

 

10.6 Form and Timing of Payment of Restricted Stock Units. Payment of vested
Restricted Stock Units shall be made as soon as practicable after the date(s)
set forth in the Award Agreement (subject to any deferral permitted under
Section 13.1) or as otherwise provided in the applicable Award Agreement or as
required by Applicable Laws. The Committee, in its sole discretion, may pay
Restricted Stock Units in the form of cash, in Shares or in a combination
thereof.

 

10.7 Cancellation of Restricted Stock Units. On the date set forth in the Award
Agreement, all unearned Restricted Stock Units shall be forfeited to the
Company, and except as otherwise determined by the Committee and subject to
Section 4.2, again shall be available for grant under the Plan.

 

SECTION 11

PERFORMANCE-BASED COMPENSATION UNDER CODE SECTION 162(m)

 

11.1 General. If the Committee, in its discretion, decides to grant an Award
intended to qualify as “performance-based compensation” under Section 162(m) of
the Code, the provisions of this Section 11 will control over any contrary
provision in the Plan. The Committee, in its discretion, also may grant Awards
that are not intended to qualify as “performance-based compensation” under
Section 162(m) of the Code.

 

11.2 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, in the discretion of the Committee, be made
subject to the achievement of one or more Performance Goals.

 

11.3 Procedures. To the extent necessary to comply with the “performance-based
compensation” provisions of Section 162(m) of the Code, with respect to any
Award granted subject to Performance Goals and intended to qualify as
“performance-based compensation” under such section, on or before the
Determination Date (i.e., within the first twenty-five percent (25%) of the
Performance Period, but in no event more than ninety (90) days following the
commencement of any Performance Period or such other time as may be required or
permitted by Section 162(m) of the Code), the Committee will, in writing,
(i) designate one or more
Participants to whom an Award will be made, (ii) determine the Performance Period,
(iii) establish the Performance Goals and amounts that may be earned for the
Performance Period, and (iv) determine any other terms and conditions applicable
to the Award(s).

 

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11.4 Additional Limitations. Notwithstanding any other provision of the Plan,
any Award that is granted to a Participant and is intended to constitute
qualified “performance-based compensation” under Section 162(m) of the Code will
be subject to any additional limitations set forth in the Code (including any
amendment to Section 162(m)) or any regulations and ruling issued thereunder
that are requirements for qualification as “performance-based compensation”
under Section 162(m) of the Code, and the Plan will be deemed amended to the
extent necessary to conform to such requirements.

 

11.5 Determination of Amounts Earned. Following the completion of each
Performance Period, the Committee will certify in writing whether the applicable
Performance Goals have been achieved for such Performance Period. A Participant
will be eligible to receive payment pursuant to an Award intended to qualify as
“performance-based compensation” under Section 162(m) of the Code for a
Performance Period only if the Performance Goals for such period are achieved.
In determining the amounts earned by a Participant pursuant to an Award intended
to qualified as “performance-based compensation” under Section 162(m) of the
Code, the Committee will have the right to (a) reduce or eliminate (but not to
increase) the amount payable at a given level of performance to take into
account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the Performance Period,
(b) determine what actual Award, if any, will be paid in the event of a
termination of employment as the result of a Participant’s death or disability
or upon a Change of Control or in the event of a termination of employment
following a Change of Control prior to the end of the Performance Period, and
(c) determine what actual Award, if any, will be paid in the event of a
termination of employment other than as the result of a Participant’s death or
Disability prior to a Change of Control and prior to the end of the Performance
Period to the extent an actual Award would have otherwise been achieved had the
Participant remained employed through the end of the Performance Period.

 

SECTION 12

NONEMPLOYEE DIRECTOR AWARDS

 

12.1 General. As determined in the discretion of the Committee, Nonemployee
Directors will be eligible to be granted all types of Awards under this Plan,
including discretionary Awards not covered under this Section 12. All grants of
Restricted Stock Units to Nonemployee Directors pursuant to this Section 12 will
be automatic and nondiscretionary, except as otherwise provided herein, and will
be made in accordance with the following provisions:

 

12.2 Awards.

 

12.2.1 Initial Awards. Each Nonemployee Director who first becomes a Nonemployee
Director on or after the Effective Date, automatically shall receive, as of the
date that the individual first is appointed or elected as a Nonemployee
Director, an Award of Restricted Stock Units (the “Initial Award”). The number
of Restricted Stock Units subject to the Initial Award will be equal to (a) the
value obtained by multiplying (x) $200,000 times (y) a fraction, the numerator
of which is the actual number of days between the date of the Nonemployee
Director’s appointment or

 

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election and the scheduled date of the next following Annual Meeting, and the
denominator of which is 365, which such resulting value divided by (b) the Fair
Market Value of a Share on the Grant Date, rounded down to the nearest whole
Share. The Nonemployee Director shall not receive an Initial Award if he or she
is first appointed or elected as a Non employee Director on the date of an
Annual Meeting and instead shall receive an Ongoing Award pursuant to
Section 12.2.2 on that date.

 

12.2.2 Ongoing Awards.On the date of each Annual Meeting beginning in 2012, but
after any stockholder votes taken on such date, each Nonemployee Director who is
appointed or elected as a Nonemployee Director on the date of the Annual Meeting
automatically shall receive, as of such date, an Award of the number of
Restricted Stock Units equal to $200,000 divided by the Fair Market Value of a
Share on the Grant Date, rounded down to the nearest whole Performance Share
(the “Ongoing Award”). Notwithstanding the foregoing, each Nonemployee Director
who is required to tender a resignation following such Annual Meeting in
accordance with the Company’s majority voting policy for election of directors
shall not receive an Ongoing Award, unless the Board determines not to accept
his or her resignation in accordance with the Company’s policy, in which case
such Nonemployee Director automatically shall receive the Ongoing Award on the
date the Board makes a determination not to accept such resignation.

 

12.3 Terms of Initial Award and Ongoing Awards.

 

12.3.1 Award Agreement. Each Award of Restricted Stock Units granted pursuant to
this Section 12 shall be evidenced by a written Award Agreement (which may be in
electronic form) between the Participant and the Company.

 

12.3.2 Value of Restricted Stock Units. Each Restricted Stock Unit shall have an
initial value equal to the Fair Market Value of a Share on the Grant Date.

 

12.3.3 Vesting and Other Terms. Subject to the other provisions of Section 12.3,
each Initial Award and Ongoing Award shall be earned and paid out as to one
hundred percent (100%) of the Shares subject to the Initial Award or Ongoing
Award, as applicable, on the next following March 1 (or, if earlier, on the date
immediately before the date of the Annual Meeting of Stockholders that next
follows the Grant Date). Notwithstanding the preceding, once a Participant
ceases to be a Director, his or her Restricted Stock Units which are not then
earned shall never be earned or paid out and shall be immediately forfeited,
except to the extent provided in Section 12.3.4 and Section 12.3.5.

 

12.3.4 Disability of Participant. If a Participant has a Termination of Service
due to Disability prior to the vesting of Restricted Stock Units, then one
hundred percent (100%) of the Restricted Stock Units shall immediately become
vested and payable, subject to the terms and conditions of any deferral pursuant
to Section 12.3.8.

 

12.3.5 Death of Participant. If a Participant dies while serving as a Director
prior to the vesting of his or her Restricted Stock Units, then one hundred
percent (100%) of the Restricted Stock Units shall immediately become vested and
payable, subject to the terms and conditions of any deferral pursuant to
Section 12.3.8.

 

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12.3.6 Earning of Restricted Stock Units. After the applicable vesting period
has ended, the holder of Restricted Stock Units shall be entitled to receive a
payout of the number of Restricted Stock Units earned by the Participant over
the vesting period, to be determined as a function of the extent to which the
corresponding vesting provisions have been achieved.

 

12.3.7 Form and Timing of Payment of Restricted Stock Units. Payment of earned
Restricted Stock Units shall be made as soon as practicable after the expiration
of the applicable vesting period. The Committee, in its sole discretion, may pay
earned Restricted Stock Units in the form of cash, in Shares (which have an
aggregate Fair Market Value equal to the value of the earned Restricted Stock
Units at the close of the applicable vesting period) or in a combination
thereof. Notwithstanding the foregoing, the Committee may, in its sole
discretion, provide a Nonemployee Director with the opportunity to defer the
receipt of earned Restricted Stock Units that would otherwise be delivered to
such Nonemployee Director under this Section 12. Any such deferral shall be
subject to such rules, conditions and procedures as shall be determined by the
Committee in its sole discretion, which rules, conditions and procedures shall
comply with the requirements of Section 409A, unless otherwise specifically
determined by the Committee.

 

12.3.8 Cancellation of Restricted Stock Units. On the date set forth in the
Award Agreement, all unearned or unvested Restricted Stock Units shall be
forfeited to the Company, and except as otherwise determined by the Committee
and subject to Section 4.2, again shall be available for grant under the Plan.

 

12.3.9 Other Terms. All provisions of the Plan not inconsistent with this
Section 12 shall apply to Restricted Stock Units granted to Nonemployee
Directors, including but not limited to the provisions of Section 10.

 

12.4 Amendments. The Committee, in its sole discretion, at any time may change
the number of Restricted Stock Units to be granted (after the date of the
amendment) as the Initial Award and Ongoing Awards.

 

12.5 Elections by Nonemployee Directors. Pursuant to such procedures as the
Committee (in its discretion) may adopt from time to time, each Nonemployee
Director may elect to forego receipt of all or a portion of the annual retainer,
committee fees and meeting fees otherwise due to the Nonemployee Director in
exchange for Shares or Awards granted under the Plan. The number of Shares (or
covered by Awards) received by any Nonemployee Director shall equal the amount
of foregone compensation divided by the Fair Market Value of a Share (or of the
Award) on the date that the compensation otherwise would have been paid to the
Nonemployee Director, rounded down to the nearest whole number of Shares. The
procedures adopted by the Committee for elections under this Section 12.5 shall
be designed to ensure that any such election by a Nonemployee Director will not
disqualify him or her as a “non-employee director” under Rule 16b-3. Unless
otherwise expressly determined by the Committee, the elections permitted under
this Section 12.5 shall comply with Section 409A.

 

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SECTION 13

ADDITIONAL PROVISIONS

 

13.1 Deferrals. The Committee, in its sole discretion, may permit a Participant
to defer receipt of the payment of cash or the delivery of Shares that would
otherwise be due to such Participant under an Award. Any such deferral elections
shall be subject to such rules and procedures as shall be determined by the
Committee in its sole discretion and, unless otherwise expressly determined by
the Committee, shall comply with the requirements of Section 409A.

 

13.2 Compliance with Section 409A. Awards will be designed and operated in such
a manner that they are either exempt from the application of, or comply with,
the requirements of Section 409A such that the grant, payment, settlement or
deferral will not be subject to the additional tax or interest applicable under
Section 409A, except as otherwise determined in the sole discretion of the
Committee. The Plan and each Award Agreement under the Plan is intended to meet
the requirements of Section 409A and will be construed and interpreted in
accordance with such intent, including with respect to any ambiguities or
ambiguous terms, except as otherwise determined in the sole discretion of the
Committee. To the extent that an Award or payment, or the settlement or deferral
thereof, is subject to Section 409A the Award will be granted, paid, settled or
deferred in a manner that will meet the requirements of Section 409A, such that
the grant, payment, settlement or deferral will not be subject to the additional
tax or interest applicable under Section 409A. Each payment or benefit under
this Plan and under each Award Agreement is intended to constitute a separate
payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

 

13.3 No Effect on Employment or Service. Nothing in the Plan or any Award shall
interfere with or limit in any way the right of the Company to terminate any
Participant’s employment or service at any time, with or without cause. For
purposes of the Plan, transfer of employment of a Participant between the
Company and any one of its Affiliates (or between Affiliates) shall not be
deemed a Termination of Service. Employment with the Company and its Affiliates
is on an at-will basis only.

 

13.4 Participation. No Employee, Director or Consultant shall have the right to
be selected to receive an Award under this Plan, or, having been so selected, to
be selected to receive a future Award.

 

13.5 Indemnification. Each person who is or shall have been a member of the
Committee, or of the Board, shall be indemnified and held harmless by the
Company against and from (a) any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan or any Award Agreement, and (b) from any and all
amounts paid by him or her in settlement thereof, with the Company’s approval,
or paid by him or her in satisfaction of any judgment in any such claim, action,
suit, or proceeding against him or her, provided he or she shall give the
Company an opportunity, at its own expense, to handle and defend the same before
he or she undertakes to handle and defend it on his or her own behalf. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company’s
Certificate of Incorporation or Bylaws, by contract, as a matter of law, or
otherwise, or under any power that the Company may have to indemnify them or
hold them harmless.

 

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13.6 Successors. All obligations of the Company under the Plan, with respect to
Awards granted hereunder, shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business or assets of the Company.

 

13.7 Beneficiary Designations. If permitted by the Committee, a Participant
under the Plan may name a beneficiary or beneficiaries to whom any vested but
unpaid Award shall be paid in the event of the Participant’s death. Each such
designation shall revoke all prior designations by the Participant and shall be
effective only if given in a form and manner acceptable to the Committee. In the
absence of any such designation, any vested benefits remaining unpaid at the
Participant’s death shall be paid to the Participant’s estate and, subject to
the terms of the Plan and of the applicable Award Agreement, any unexercised
vested Award may be exercised by the administrator or executor of the
Participant’s estate.

 

13.8 Limited Transferability of Awards. No Award granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will, by the laws of descent and distribution, or to the limited
extent provided in Section 13.7. All rights with respect to an Award granted to
a Participant shall be available during his or her lifetime only to the
Participant. Notwithstanding the foregoing, a Participant may, if the Committee
(in its discretion) so permits, transfer an Award to an individual or entity
other than the Company for estate planning or charitable purposes. Any such
transfer shall be made as a gift (i.e., without consideration) and in accordance
with such procedures as the Committee may specify from time to time.

 

13.9 No Rights as Stockholder. Except to the limited extent provided in
Sections 7.6 and 7.7, no Participant (nor any beneficiary) shall have any of the
rights or privileges of a stockholder of the Company with respect to any Shares
issuable pursuant to an Award (or exercise thereof), unless and until
certificates representing such Shares (which may be in book entry form) shall
have been issued, recorded on the records of the Company or its transfer agents
or registrars, and delivered to the Participant (or beneficiary).

 

13.10 Vesting of Awards following Change of Control. If, within 12 months after
a Change of Control, a Participant’s employment is terminated by the Company
without Cause, or the Participant voluntary terminates his or her employment
with Good Reason, the vesting of each outstanding Award held by such Participant
that was both granted prior to the Change of Control and on or after the
Effective Date shall be accelerated as described in Section 4.5.1. If a
Participant who is a Nonemployee Director ceases to be such as of the date of a
Change of Control (and does not become a member of the board of directors of the
successor corporation, or a parent of the successor corporation), the vesting of
each outstanding Award then held by the Participant that was granted on or after
the Effective Date shall be accelerated as described in Section 4.5.1, as if the
Award was not assumed or substituted for in the Change of Control. The
accelerated vesting provided by this Section 13.10 shall not apply to an Award
if: (a) the applicable Award Agreement specifically provides that the provisions
of this Section 13.10 shall not apply to the Award, or (b) the Participant’s
employment or service on the Board is terminated due to the Participant’s death
or Disability.

 

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SECTION 14

AMENDMENT, TERMINATION, AND DURATION

 

14.1 Amendment, Suspension, or Termination. The Board, in its sole discretion,
may amend, suspend or terminate the Plan, or any part thereof, at any time and
for any reason. The Company will obtain stockholder approval of any Plan
amendment to the extent necessary and desirable to comply with applicable laws.
In addition, an amendment will be subject to stockholder approval if the
Committee or the Board, in their sole discretion, deems such amendment to be a
material amendment, except with respect to such an amendment that will impact
Awards covering, in the aggregate, no more than five percent (5%) of the shares
reserved for issuance under the Plan. The following amendments shall be deemed
material amendments for purposes of the preceding sentence: (a) material
increases to the benefits accrued to Participants under the Plan; (b) increases
to the number of securities that may be issued under the Plan; (c) material
modifications to the requirements for participation in the Plan, and (d) the
addition of a new provision allowing the Committee to lapse or waive
restrictions at its discretion. The amendment, suspension, or termination of the
Plan shall not, without the consent of the Participant, alter or impair any
rights or obligations under any Award theretofore granted to such Participant.
No Award may be granted during any period of suspension or after termination of
the Plan. Termination of the Plan will not affect the Committee’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.

 

14.2 Duration of the Plan. The Plan shall be effective as of the Effective Date,
and subject to Section 14.1 (regarding the Board’s right to amend or terminate
the Plan), shall remain in effect thereafter. However, without further
stockholder approval, no Incentive Stock Option may be granted under the Plan
after January 19, 2022.

 

SECTION 15

TAX WITHHOLDING

 

15.1 Withholding Requirements. Prior to the delivery of any Shares or cash
pursuant to an Award (or exercise thereof), or at such earlier time as the Tax
Obligations are due, the Company shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient
to satisfy all Tax Obligations.

 

15.2 Withholding Arrangements. The Committee, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may designate
the method or methods by which a Participant may satisfy such Tax Obligations.
As determined by the Committee in its discretion from time to time, these
methods may include one or more of the following: (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 minimum
amount required to be withheld or remitted, provided the delivery of such Shares
will not result in any adverse accounting consequences as the Committee
determines in its sole discretion, (d) selling a sufficient number of Shares
otherwise deliverable to the Participant through such means as the Committee may
determine in its sole discretion (whether through a broker or otherwise) equal
to the Tax Obligations required to be withheld, (e) retaining from salary or
other amounts payable to the Participant cash having a

 

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sufficient value to satisfy the Tax Obligations, or (f) any other means which
the Committee, in its sole discretion, determines to both comply with Applicable
Laws, and to be consistent with the purposes of the Plan. The amount of Tax
Obligations will be deemed to include any amount that the Committee 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 or the Company, as applicable, with respect
to the Award on the date that the amount of tax or social insurance liability to
be withheld or remitted is to be determined. The Fair Market Value of the Shares
to be withheld or delivered shall be determined as of the date that the Tax
Obligations are required to be withheld.

 

SECTION 16

LEGAL CONSTRUCTION

 

16.1 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.

 

16.2 Severability. In the event any provision of the Plan shall be held illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.

 

16.3 Requirements of Law. Shares shall not be issued pursuant to the exercise or
vesting of an Award unless the exercise or vesting of such Award and the
issuance and delivery of such Shares shall comply with Applicable Laws and shall
be further subject to the approval of counsel for the Company with respect to
such compliance.

 

16.4 Securities Law Compliance. With respect to Section 16 Persons, transactions
under this Plan are intended to qualify for the exemption provided by
Rule 16b-3. To the extent any provision of the Plan, Award Agreement or action
by the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable or appropriate by the Committee.

 

16.5 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.

 

16.6 Inability to Obtain Authority. The Company will not be required to issue
any Shares, cash or other property under the Plan unless all the following
conditions are satisfied: (a) the admission of the Shares or other property to
listing on all stock exchanges on which such class of stock or property then is
listed; (b) the completion of any registration or other qualification or rule
compliance of the Shares under any U.S. state or federal law or under the
rulings or regulations of the Securities and Exchange Commission, the stock
exchange on which Shares of the same class are then listed, or any other
governmental regulatory body, as counsel to the Company, in its absolute
discretion, deems necessary or advisable; (c) the obtaining of any approval or
other clearance from

 

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any U.S. federal, state or other governmental agency, which counsel to the
Company, in its absolute discretion, determines to be necessary or advisable;
and (d) the lapse of such reasonable period of time following the Grant Date,
vesting and/or exercise as the Company may establish from time to time for
reasons of administrative convenience. If the Committee determines, in its
absolute discretion, that one or more of the preceding conditions will not be
satisfied, the Company automatically will be relieved of any liability with
respect to the failure to issue the Shares, cash or other property as to which
such requisite authority will not have been obtained.

 

16.7 Governing Law. The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the State of California (with the
exception of its conflict of laws provisions).

 

16.8 Captions. Captions are provided herein for convenience only, and shall not
serve as a basis for interpretation or construction of the Plan.

 

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