Exhibit 10.1

FULGENT GENETICS, INC.
2016 OMNIBUS INCENTIVE PLAN

(as amended and restated effective May 18, 2018)

1. Purposes of the Plan. The purposes of this Plan are to attract and retain the
best available personnel, to provide additional incentives to Employees,
Directors and Consultants and to promote the success of the Company’s business.

2. Definitions. The following definitions shall apply as used herein and in the
individual Award Agreements except as defined otherwise in an individual Award
Agreement. In the event a term is separately defined in an individual Award
Agreement, such definition shall supersede the definition contained in this
Section 2.

(a) “Administrator” means the Board or any of the Committees appointed to
administer the Plan.

(b) “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 promulgated under the Exchange Act.

(c) “Applicable Laws” means the legal requirements relating to the Plan and the
Awards under applicable provisions of federal securities laws, state corporate
and securities laws, the Code, the rules of any applicable stock exchange or
national market system, and the rules of any non-U.S. jurisdiction applicable to
Awards granted to residents therein.

(d) “Assumed” means that pursuant to a Corporate Transaction either (i) the
Award is expressly affirmed by the Company or (ii) the contractual obligations
represented by the Award are expressly assumed (and not simply by operation of
law) by the successor entity or its Parent in connection with the Corporate
Transaction with appropriate adjustments to the number and type of securities of
the successor entity or its Parent subject to the Award and the exercise or
purchase price thereof which at least preserves the compensation element of the
Award existing at the time of the Corporate Transaction as determined in
accordance with the instruments evidencing the agreement to assume the Award and
Applicable Laws.

(e) “Award” means the grant of an Option, SAR, Dividend Equivalent Right,
Restricted Stock, Restricted Stock Unit or Other Award.

(f) “Award Agreement” means the written agreement or other instrument evidencing
the grant of an Award, including any amendments thereto. An Award Agreement may
be in the form of an agreement to be executed by both the Grantee and the
Company (or an authorized representative of the Company) or certificates,
notices or similar instruments.

(g) “Board” means the Board of Directors of the Company.

(h) “Change in Control” means the occurrence of any of the following:

(i) an acquisition by any “person” or “group” (as such terms are used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) of direct or indirect
beneficial ownership (as defined in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act (“Beneficial Ownership”) of 50% or more of
either the then outstanding shares of Company common stock (the “Outstanding
Company Common Stock”) or the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding

 

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Company Voting Securities”); provided that the following acquisitions shall be
excluded: (i) any acquisition directly or indirectly by one of the Permitted
Holders, (ii) any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the Company, (iii)
any acquisition by the Company, or (iv) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or a Subsidiary;

(ii) a majority of the members of the Board are replaced during any twelve (12)
month period by directors whose appointment or election is not endorsed by a
majority of the Board before the date of appointment or election; or

(iii) consummation of Corporate Transaction; excluding, however, a Corporate
Transaction pursuant to which:

(A) all or substantially all of the individuals and entities who have Beneficial
Ownership, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Corporate Transaction will
have Beneficial Ownership, directly or indirectly, of more than 50% of,
respectively, the outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting from
such Corporate Transaction (including, without limitation, the Company or a
corporation that as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or more
subsidiaries) (the “Resulting Corporation”) in substantially the same
proportions as their ownership, immediately prior to such Corporate Transaction,
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be;

(B) no “person” or “group” (as such terms are used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act) (other than (1) the Company, (2) an employee
benefit plan (or related trust) sponsored or maintained by the Company,
Resulting Corporation, or a Subsidiary, or (3) any entity controlled, directly
or indirectly, by the Company or a Resulting Corporation) will have Beneficial
Ownership, directly or indirectly, of 50% or more of, respectively, the
outstanding shares of common stock of the Resulting Corporation or the combined
voting power of the outstanding voting securities of the Resulting Corporation
entitled to vote generally in the election of directors, except to the extent
that such ownership existed prior to the Corporate Transaction; and

(C) individuals who were members of the Board before the Corporation Transaction
(or whose appointment or election is endorsed by a majority of such members of
the Board) will continue to constitute at least a majority of the members of the
board of directors of the Resulting Corporation; or

(iv) the approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company.

(i) “Code” means the Internal Revenue Code of 1986, as amended.

(j) “Committee” means any committee composed of members of the Board appointed
by the Board to administer the Plan.

(k) “Common Stock” means the common stock of the Company, par value $0.0001 per
share.

 

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(l) “Company” means Fulgent Genetics, Inc., a Delaware corporation, or any
successor entity.

(m) “Consultant” means any person (other than an Employee or a Director, solely
with respect to rendering services in such person’s capacity as a Director) who
is engaged by the Company or any Related Entity to render consulting or advisory
services to the Company or such Related Entity.

(n) “Continuing Directors” means members of the Board who either (i) have been
Board members continuously for a period of at least twelve (12) months or (ii)
have been Board members for less than twelve (12) months and were elected or
nominated for election as Board members by at least a majority of the Board
members described in clause (i) who were still in office at the time such
election or nomination was approved by the Board.

(o) “Continuous Service” means that the provision of services to the Company or
a Related Entity in any capacity of Employee, Director or Consultant is not
interrupted or terminated. In jurisdictions requiring notice in advance of an
effective termination as an Employee, Director or Consultant, Continuous Service
shall be deemed terminated upon the actual cessation of providing services to
the Company or a Related Entity notwithstanding any required notice period that
must be fulfilled before a termination as an Employee, Director or Consultant
can be effective under Applicable Laws. A Grantee’s Continuous Service shall be
deemed to have terminated either upon an actual termination of Continuous
Service or upon the entity for which the Grantee provides services ceasing to be
a Related Entity. Continuous Service shall not be considered interrupted in the
case of (i) any approved leave of absence, (ii) transfers among the Company, any
Related Entity, or any successor, in any capacity of Employee, Director or
Consultant, or (iii) any change in status as long as the individual remains in
the service of the Company or a Related Entity in any capacity of Employee,
Director or Consultant (except as otherwise provided in the Award Agreement).
Notwithstanding the foregoing, except as otherwise determined by the
Administrator, in the event of any spin-off of a Related Entity, service as an
Employee, Director or Consultant for such Related Entity following such spin-off
shall be deemed to be Continuous Service for purposes of the Plan and any Award
under the Plan. An approved leave of absence shall include sick leave, military
leave, or any other authorized personal leave. For purposes of each Incentive
Stock Option granted under the Plan, if such leave exceeds three (3) months, and
reemployment upon expiration of such leave is not guaranteed by statute or
contract, then the Incentive Stock Option shall be treated as a Non-Qualified
Stock Option on the day three (3) months and one (1) day following the
expiration of such three (3) month period.

(p) “Corporate Transaction” means a reorganization, merger, share exchange,
consolidation or sale or other disposition of all or substantially all of the
assets of the Company.

(q) “Director” means a member of the Board or the board of directors or board of
managers of any Related Entity.

(r) “Disability” means such term (or word of like import) as defined under the
long-term disability policy of the Company or the Related Entity to which the
Grantee provides services regardless of whether the Grantee is covered by such
policy. If the Company or the Related Entity to which the Grantee provides
service does not have a long-term disability plan in place, “Disability” means
that a Grantee is unable to carry out the responsibilities and functions of the
position held by the Grantee by reason of any medically determinable physical or
mental impairment for a period of not less than ninety (90) consecutive days. A
Grantee will not be considered to have incurred a Disability unless he or she
furnishes proof of such impairment sufficient to satisfy the Administrator in
its discretion.

 

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(s) “Dividend Equivalent Right” means a right entitling the Grantee to
compensation measured by dividends paid with respect to Common Stock.

(t) “Employee” means any person, including an Officer or Director, who is in the
employ of the Company or any Related Entity, subject to the control and
direction of the Company or any Related Entity as to both the work to be
performed and the manner and method of performance. The payment of a director’s
fee by the Company or a Related Entity shall not be sufficient to constitute
“employment” by the Company.

(u) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(v) “Fair Market Value” means, as of any date, the value of Common Stock
determined as follows:

(i) If the Common Stock is listed on one or more established stock exchanges or
national market systems, including without limitation The Nasdaq Global Select
Market, The Nasdaq Global Market or The Nasdaq Capital Market of The Nasdaq
Stock Market, its Fair Market Value shall be the closing sales price for such
stock (or the closing bid, if no sales were reported) as quoted on the principal
exchange or system on which the Common Stock is listed (as determined by the
Administrator) on the date of determination (or, if no closing sales price or
closing bid was reported on that date, as applicable, on the last trading date
such closing sales price or closing bid was reported), as reported in The Wall
Street Journal or such other source as the Administrator deems reliable;

(ii) If the Common Stock is regularly quoted on an automated quotation system
(including the OTC Bulletin Board) or by a recognized securities dealer, its
Fair Market Value shall be the closing sales price for such stock as quoted on
such system or by such securities dealer on the date of determination, but if
selling prices are not reported, the Fair Market Value of a share of Common
Stock shall be the mean between the high bid and low asked prices for the Common
Stock on the date of determination (or, if no such prices were reported on that
date, on the last date such prices were reported), as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; or

(iii) In the absence of an established market for the Common Stock of the type
described in (i) and (ii), above, the Fair Market Value thereof shall be
determined by the Administrator in good faith.

(w) “Grantee” means an Employee, Director or Consultant who receives an Award
under the Plan.

(x) “Incentive Stock Option” means an Option intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code.

(y) “Non-Qualified Stock Option” means an Option not intended to, or that does
not, qualify as an Incentive Stock Option.

(z) “Officer” means a person who is an officer of the Company or a Related
Entity within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

(aa) “Option” means an option to purchase Shares pursuant to an Award Agreement
granted under the Plan.

 

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(bb) “Other Award” means an award entitling the Grantee to Shares or cash that
may or may not be subject to restrictions upon issuance or cash compensation, as
established by the Administrator.

(cc) “Parent” means a “parent corporation”, whether now or hereafter existing,
as defined in Section 424(e) of the Code.

(dd) “Permitted Holders” means, as of the date of determination, (i) any and all
of Ming Hsieh, his spouse, his siblings and their spouses, and descendants of
any of them (whether natural or adopted) (collectively, the “Hsieh Group”) and
(ii) any trust established and maintained primarily for the benefit of any
member of the Hsieh Group and any entity controlled by any member of the Hsieh
Group.

(ee) “Plan” means this 2016 Omnibus Incentive Plan.

(ff) “Registration Date” means the first to occur of (i) the closing of the
first sale to the general public pursuant to a registration statement filed with
and declared effective by the Securities and Exchange Commission under the
Securities Act of 1933, as amended, of (A) the Common Stock or (B) the same
class of securities of a successor corporation (or its Parent) issued pursuant
to a Corporate Transaction in exchange for or in substitution of the Common
Stock; and (ii) in the event of a Corporate Transaction, the date of the
consummation of the Corporate Transaction if the same class of securities of the
successor corporation (or its Parent) issuable in such Corporate Transaction
shall have been sold to the general public pursuant to a registration statement
filed with and declared effective by the Securities and Exchange Commission
under the Securities Act of 1933, as amended, on or prior to the date of
consummation of such Corporate Transaction.

(gg) “Related Entity” means any (i) Parent or Subsidiary of the Company, (ii)
any other entity controlling, controlled by or under common control with the
Company and (iii) Fulgent Therapeutics LLC.

(hh) “Replaced” means that pursuant to a Corporate Transaction the Award is
replaced with a comparable stock award or a cash incentive award or program of
the Company, the successor entity (if applicable) or Parent of either of them
which preserves the compensation element of such Award existing at the time of
the Corporate Transaction and provides for subsequent payout in accordance with
the same (or, for the Grantee, a more favorable) vesting schedule applicable to
such Award. The determination of Award comparability shall be made by the
Administrator and its determination shall be final, binding and conclusive.

(ii) “Restricted Stock” means Shares issued under the Plan to the Grantee for
such consideration, if any, and subject to such restrictions on transfer,
forfeiture provisions, and other terms and conditions as established by the
Administrator.

(jj) “Restricted Stock Units” means an Award which may be earned in whole or in
part upon the passage of time or the attainment of performance criteria
established by the Administrator and which may be settled for cash, Shares or
other securities or a combination of cash, Shares or other securities as
specified by the Administrator in the Award Agreement.

(kk) “SAR” means a stock appreciation right entitling the Grantee to Shares or
cash compensation or a combination thereof, as established by the Administrator,
measured by appreciation in the value of Common Stock.

(ll) “Share” means a share of the Common Stock.

 

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(mm) “Subsidiary” means any corporation in which the Company owns, directly or
indirectly, at least fifty percent (50%) of the total combined voting power of
all classes of stock, or any other entity (including, but not limited to,
partnerships and joint ventures) in which the Company owns, directly or
indirectly, at least fifty percent (50%) of the combined equity thereof.
Notwithstanding the foregoing, for purposes of determining whether any
individual may be a Grantee for purposes of any grant of Incentive Stock
Options, “Subsidiary” shall have the meaning ascribed to such term in Section
424(f) of the Code.

(nn) “Substitute Awards” means Awards that the Company will grant under the Plan
in substitution of awards that were granted by Fulgent Therapeutics LLC.

3. Stock and Cash Subject to the Plan.

(a) Subject to the provisions of Section 10, below, the maximum aggregate number
of Shares which may be issued pursuant to Awards initially shall be a number of
Shares equal to the sum of (i) 656,901 Shares, which will be available for
issuance solely pursuant to the Substitute Awards, and (ii) 3,447,368 Shares.
Subject to the provisions of Section 10, below, no more than 3,447,368 Shares
may be issued pursuant to Incentive Stock Options granted under the Plan. The
Shares to be issued pursuant to Awards may be authorized, but unissued, or
reacquired Common Stock.

(b) Any Shares covered by an Award (or portion of an Award), other than a
Substitute Award, which is forfeited, canceled or expires (whether voluntarily
or involuntarily) shall be deemed not to have been issued for purposes of
determining the maximum aggregate number of Shares which may be issued under the
Plan. Shares that actually have been issued under the Plan pursuant to an Award
shall not be returned to the Plan and shall not become available for future
issuance under the Plan, except that if unvested Shares (pursuant to a
Restricted Stock Award) are forfeited, such Shares shall become available for
future grant under the Plan. To the extent not prohibited by the listing
requirements of The Nasdaq Global Select Market, The Nasdaq Global Market or The
Nasdaq Capital Market of The Nasdaq Stock Market (or other established stock
exchange or national market system on which the Common Stock is traded) or
Applicable Law, any Shares covered by an Award (other than a Substitute Award)
which are surrendered (i) in payment of the Award exercise or purchase price
(including pursuant to the “net exercise” of an option pursuant to
Section 7(b)(v)) or (ii) in satisfaction of tax withholding obligations incident
to an Award shall be deemed not to have been issued for purposes of determining
the maximum number of Shares which may be issued pursuant to all Awards under
the Plan, unless otherwise determined by the Administrator. SARs payable in
Shares shall reduce the maximum aggregate number of Shares which may be issued
under the Plan only by the net number of actual Shares issued to the Grantee
upon exercise of the SAR. Shares underlying the Substitute Awards will not be
available for issuance pursuant to other Awards in any circumstance.

4. Administration of the Plan.

(a) Plan Administrator.

(i) Administration with Respect to Directors and Officers. With respect to
grants of Awards to Directors or Officers, the Plan shall be administered by (A)
the Board or (B) a Committee designated by the Board. Once appointed, such
Committee shall continue to serve in its designated capacity until otherwise
directed by the Board.

(ii) Administration With Respect to Consultants and Other Employees. With
respect to grants of Awards to Employees or Consultants who are neither
Directors nor Officers, the Plan shall be

 

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administered by (A) the Board or (B) a Committee designated by the Board. Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. The Board or Committee may also authorize
one or more Officers to administer the Plan with respect to Awards to Employees
or Consultants who are neither Directors nor Officers (and to grant such Awards)
and may limit such authority as the Board or Committee, as applicable,
determines from time to time.

(b) Powers of the Administrator. Subject to Applicable Laws and the provisions
of the Plan (including any other powers given to the Administrator hereunder),
and except as otherwise provided by the Board or any Committee, the
Administrator shall have the authority, in its discretion to do all things that
it determines to be necessary or appropriate in connection with the
administration of the Plan, including, without limitation:

(i) to select the Employees, Directors and Consultants to whom Awards may be
granted from time to time hereunder;

(ii) to determine whether, when and to what extent Awards are granted hereunder;

(iii) to determine the number of Shares or the amount of cash or other
consideration to be covered by each Award granted hereunder;

(iv) to approve forms of Award Agreements for use under the Plan;

(v) to determine the terms and conditions of any Award granted hereunder;

(vi) to amend the terms of any outstanding Award granted under the Plan,
provided that any amendment that would adversely affect the Grantee’s rights
under an outstanding Award shall not be made without the Grantee’s written
consent, provided, however, that an amendment or modification that may cause an
Incentive Stock Option to become a Non-Qualified Stock Option shall not be
treated as adversely affecting the rights of the Grantee;

(vii) to reduce, in each case, without stockholder approval, the exercise price
of any Option awarded under the Plan and the base appreciation amount of any SAR
awarded under the Plan and canceling an Option or SAR at a time when its
exercise price or base appreciation amount (as applicable) exceeds the Fair
Market Value of the underlying Shares, in exchange for another Option, SAR,
Restricted Stock, or other Award or for cash;

(viii) to prescribe, amend and rescind rules and regulations relating to the
Plan and to define terms not otherwise defined herein;

(ix) to construe and interpret the terms of the Plan, any rules and regulations
under the Plan and Awards, including without limitation, any notice of award or
Award Agreement, granted pursuant to the Plan;

(x) to approve corrections in the documentation or administration of any Award;

(xi) to grant Awards to Employees, Directors and Consultants employed outside
the United States or to otherwise adopt or administer such procedures or
subplans that the Administrator deems appropriate or necessary on such terms and
conditions different from those specified in the Plan as may, in the judgment of
the Administrator, be necessary or desirable to further the purpose of the Plan;
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(xii) to take such other action, not inconsistent with the terms of the Plan, as
the Administrator deems appropriate.

The express grant in the Plan of any specific power to the Administrator shall
not be construed as limiting any power or authority of the Administrator;
provided that the Administrator may not exercise any right or power reserved to
the Board. Any decision made, or action taken, by the Administrator or in
connection with the administration of this Plan shall be final, conclusive and
binding on all persons having an interest in the Plan.

(c) Indemnification. In addition to such other rights of indemnification as they
may have as members of the Board or as Officers or Employees, members of the
Board and any Officers or Employees to whom authority to act for the Board, the
Administrator or the Company is delegated shall be defended and indemnified by
the Company to the extent permitted by law on an after-tax basis against all
reasonable expenses, including attorneys’ fees, actually and necessarily
incurred in connection with the defense of any claim, investigation, action,
suit or proceeding, or in connection with any appeal therein, to which they or
any of them may be a party by reason of any action taken or failure to act under
or in connection with the Plan, or any Award granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by the Company) or paid by them in satisfaction of a judgment in any such claim,
investigation, action, suit or proceeding, except in relation to matters as to
which it shall be adjudged in such claim, investigation, action, suit or
proceeding that such person is liable for gross negligence, bad faith or
intentional misconduct; provided, however, that within thirty (30) days after
the institution of such claim, investigation, action, suit or proceeding, such
person shall offer to the Company, in writing, the opportunity at the Company’s
expense to defend the same.

5. Eligibility. Awards other than Incentive Stock Options may be granted to
Employees, Directors and Consultants. Incentive Stock Options may be granted
only to Employees of the Company or a Parent or a Subsidiary of the Company. An
Employee, Director or Consultant who has been granted an Award may, if otherwise
eligible, be granted additional Awards. Awards may be granted to such Employees,
Directors or Consultants who are residing in non-U.S. jurisdictions as the
Administrator may determine from time to time.

6. Terms and Conditions of Awards.

(a) Types of Awards. The Administrator is authorized under the Plan to award any
type of arrangement to an Employee, Director or Consultant that is not
inconsistent with the provisions of the Plan and that by its terms involves or
might involve the issuance of (i) Shares, (ii) cash or (iii) an Option, a SAR,
or similar right with a fixed or variable price related to the Fair Market Value
of the Shares and with an exercise or conversion privilege related to the
passage of time, the occurrence of one or more events, or the satisfaction of
performance criteria or other conditions. Such awards include, without
limitation, Options, SARs, sales or bonuses of Restricted Stock, Restricted
Stock Units, Other Awards or Dividend Equivalent Rights, and an Award may
consist of one such security or benefit, or two (2) or more of them in any
combination or alternative.

(b) Designation of Award. Each Award shall be designated in the Award Agreement.
In the case of an Option, the Option shall be designated as either an Incentive
Stock Option or a Non-Qualified Stock Option. However, notwithstanding such
designation, an Option will qualify as an Incentive Stock Option under the Code
only to the extent the $100,000 limitation of Section 422(d) of the Code is not
exceeded. The $100,000 limitation of Section 422(d) of the Code is calculated
based on the aggregate Fair Market Value of the Shares subject to Options
designated as Incentive Stock Options which become

 

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exercisable for the first time by a Grantee during any calendar year (under all
plans of the Company or any Parent or Subsidiary of the Company). For purposes
of this calculation, Incentive Stock Options shall be taken into account in the
order in which they were granted, and the Fair Market Value of the Shares shall
be determined as of the grant date of the relevant Option. In the event that the
Code or the regulations promulgated thereunder are amended after the date the
Plan becomes effective to provide for a different limit on the Fair Market Value
of Shares permitted to be subject to Incentive Stock Options, then such
different limit will be automatically incorporated herein and will apply to any
Options granted after the effective date of such amendment.

(c) Conditions of Award. Subject to the terms of the Plan, the Administrator
shall determine the provisions, terms, and conditions of each Award including,
but not limited to, the Award vesting schedule, forfeiture provisions, form of
payment (cash, Shares, or other consideration) upon settlement of the Award,
payment contingencies, and satisfaction of any performance criteria.

(d) Acquisitions and Other Transactions. The Administrator may issue Awards
under the Plan in settlement, assumption or substitution for, outstanding awards
or obligations to grant future awards in connection with the Company or a
Related Entity acquiring another entity, an interest in another entity or an
additional interest in a Related Entity whether by merger, stock purchase, asset
purchase or other form of transaction.

(e) Deferral of Award Payment. The Administrator may establish one or more
programs under the Plan to permit selected Grantees the opportunity to elect to
defer receipt of consideration to be received under an Award in compliance with
Applicable Laws, other than an Award of Options, SARs or Restricted Stock. The
Administrator may establish the election procedures, the timing of such
elections, the mechanisms for payments of, and accrual of interest or other
earnings, if any, on amounts, Shares or other consideration so deferred, and
such other terms, conditions, rules and procedures that the Administrator deems
advisable for the administration of any such deferral program.

(f) Separate Programs. The Administrator may establish one or more separate
programs under the Plan for the purpose of issuing particular forms of Awards to
one or more classes of Grantees on such terms and conditions as determined by
the Administrator from time to time.

(g) Term of Award. The term of each Award shall be the term stated in the Award
Agreement, provided, however, that the term of an Incentive Stock Option shall
be no more than ten (10) years from the date of grant thereof. However, in the
case of an Incentive Stock Option granted to a Grantee who, at the time the
Option is granted, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary
of the Company, the term of the Incentive Stock Option shall be five (5) years
from the date of grant thereof or such shorter term as may be provided in the
Award Agreement. Notwithstanding the foregoing, the specified term of any Award
shall not include any period for which the Grantee has elected to defer the
receipt of the Shares or cash issuable pursuant to the Award.

(h) Transferability of Awards. Incentive Stock Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Grantee, only by the Grantee. Other Awards shall be transferable
(i) by will and by the laws of descent and distribution and (ii) during the
lifetime of the Grantee, to the extent and in the manner authorized by the
Administrator, but only to the extent such transfers are made in accordance with
Applicable Laws to family members, to family trusts, to family controlled
entities, to charitable organizations, and pursuant to domestic relations orders
or agreements, in all cases without payment for such transfers to the Grantee.
Notwithstanding the foregoing, the

 

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Grantee may designate one or more beneficiaries of the Grantee’s Award in the
event of the Grantee’s death on a beneficiary designation form provided by the
Administrator.

(i) Time of Granting Awards. The date of grant of an Award shall for all
purposes be the date on which the Administrator makes the determination to grant
such Award, or such other later date as is determined by the Administrator.

7. Award Exercise or Purchase Price, Consideration and Taxes.

(a) Exercise or Purchase Price. The exercise or purchase price, if any, for an
Award shall be as follows:

(i) In the case of an Incentive Stock Option:

(A) granted to an Employee who, at the time of the grant of such Incentive Stock
Option owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary of the
Company, the per Share exercise price shall be not less than one hundred ten
percent (110%) of the Fair Market Value per Share on the date of grant; or

(B) granted to any Employee other than an Employee described in the preceding
paragraph, the per Share exercise price shall be not less than one hundred
percent (100%) of the Fair Market Value per Share on the date of grant.

(ii) In the case of a Non-Qualified Stock Option, the per Share exercise price
shall be not less than one hundred percent (100%) of the Fair Market Value per
Share on the date of grant.

(iii) In the case of SARs, the base appreciation amount shall not be less than
one hundred percent (100%) of the Fair Market Value per Share on the date of
grant.

(iv) In the case of other Awards, such price as is determined by the
Administrator.

(v) Notwithstanding the foregoing provisions of this Section 7(a), in the case
of an Award issued pursuant to Section 6(d), above, the exercise or purchase
price for the Award shall be determined in accordance with the provisions of the
relevant instrument evidencing the agreement to issue such Award.

(b) Consideration. Subject to Applicable Laws, the consideration to be paid for
the Shares to be issued upon exercise or purchase of an Award including the
method of payment, shall be determined by the Administrator. In addition to any
other types of consideration the Administrator may determine, the Administrator
is authorized to accept as consideration for Shares issued under the Plan the
following, provided that the portion of the consideration equal to the par value
of the Shares must be paid in cash or other legal consideration permitted by the
Delaware General Corporation Law:

(i) cash;

(ii) check;

(iii) surrender of Shares or delivery of a properly executed form of attestation
of ownership of Shares as the Administrator may require which have a Fair Market
Value on the date of surrender or attestation equal to the aggregate exercise
price of the Shares as to which said Award shall be exercised;

 

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(iv) with respect to Options, if the exercise occurs on or after the
Registration Date, payment through a broker-assisted cashless exercise program
made available by the Company;

(v) with respect to Options, payment through a “net exercise” procedure
established by the Company such that, without the payment of any funds, the
Grantee may exercise the Option and receive the net number of Shares; or

(vi) any combination of the foregoing methods of payment.

The Administrator may at any time or from time to time, by adoption of or by
amendment to the standard forms of Award Agreement described in Section
4(b)(iv), or by other means, grant Awards which do not permit all of the
foregoing forms of consideration to be used in payment for the Shares or which
otherwise restrict one or more forms of consideration.

(c) Taxes. The Company and any Related Entity shall have the power and the right
to deduct or withhold, or require a Grantee to remit to the Company or a Related
Entity, an amount sufficient to satisfy any federal, state, local, domestic or
foreign taxes required to be withheld with respect to any taxable event arising
with respect to an Award. The Administrator may require or may permit Grantees
to elect that the withholding requirement be satisfied, in whole or in part, by
having the Company withhold, or by tendering to the Company, Shares having a
Fair Market Value equal to the amount required to be withheld (provided the
amount withheld does not exceed the maximum statutory tax rate for an employee
in the applicable jurisdictions or such lesser amount as is necessary to avoid
adverse accounting treatment).

8. Exercise of Award.

(a) Procedure for Exercise; Rights as a Stockholder.

(i) Any Award granted hereunder shall be exercisable at such times and under
such conditions as determined by the Administrator under the terms of the Plan
and specified in the Award Agreement.

(ii) An Award shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the Award
by the person entitled to exercise the Award and full payment for the Shares
with respect to which the Award is exercised has been made, including, to the
extent selected, use of the broker-dealer sale and remittance procedure to pay
the purchase price as provided in Section 7(b)(iv).

(b) Exercise of Award Following Termination of Continuous Service.

(i) An Award may not be exercised after the termination date of such Award set
forth in the Award Agreement and may be exercised following the termination of a
Grantee’s Continuous Service only to the extent provided in the Award Agreement.

(ii) Where the Award Agreement permits a Grantee to exercise an Award following
the termination of the Grantee’s Continuous Service for a specified period, the
Award shall terminate to the extent not exercised on the last day of the
specified period or the last day of the original term of the Award, whichever
occurs first.

(iii) Any Award designated as an Incentive Stock Option to the extent not
exercised within the time permitted by law for the exercise of Incentive Stock
Options following the termination

 

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of a Grantee’s Continuous Service shall convert automatically to a Non-Qualified
Stock Option and thereafter shall be exercisable as such to the extent
exercisable by its terms for the period specified in the Award Agreement.

9. Conditions Upon Issuance of Shares. If at any time the Administrator
determines that the delivery of Shares pursuant to the exercise, vesting or any
other provision of an Award is or may be unlawful under Applicable Laws, the
vesting or right to exercise an Award or to otherwise receive Shares pursuant to
the terms of an Award shall be suspended until the Administrator determines that
such delivery is lawful and shall be further subject to the approval of counsel
for the Company with respect to such compliance. The Company shall have no
obligation to effect any registration or qualification of the Shares under
federal or state laws.

10. Adjustments Upon Changes in Capitalization. Subject to any required action
by the stockholders of the Company and Section 11 hereof, the number and kind of
Shares covered by each outstanding Award, the number and kind of Shares
available for issuance under the Plan, the exercise or purchase price of each
such outstanding Award and any other terms that the Administrator determines
require adjustment shall be proportionately adjusted for (i) any increase or
decrease in the number of issued Shares resulting from a stock split, reverse
stock split, stock dividend, recapitalization, combination or reclassification
of the Shares, or similar transaction affecting the Shares, (ii) any other
increase or decrease in the number of issued Shares effected without receipt of
consideration by the Company, or (iii) any other transaction with respect to
Common Stock including a corporate merger, consolidation, acquisition of
property or stock, separation (including a spin-off or other distribution of
stock or property), reorganization, liquidation (whether partial or complete) or
any similar transaction; provided, however that conversion of any convertible
securities of the Company shall not be deemed to have been “effected without
receipt of consideration.” In the event of any distribution of cash or other
assets to stockholders other than a normal cash dividend, the Administrator
shall also make such adjustments as provided in this Section 10 or substitute,
exchange or grant Awards to effect such adjustments (collectively
“adjustments”). Any such adjustments to outstanding Awards will be effected in a
manner that precludes the enlargement of rights and benefits under such Awards.
In connection with the foregoing adjustments, the Administrator may, in its
discretion, prohibit the exercise of Awards or other issuance of Shares, cash or
other consideration pursuant to Awards during certain periods of time. Except as
the Administrator determines, no issuance by the Company of shares of any class,
or securities convertible into shares of any class, shall affect, and no
adjustment by reason hereof shall be made with respect to, the number or price
of Shares subject to an Award.

11. Change in Control. Except as provided otherwise in an individual Award
Agreement, in the event of a Change in Control and irrespective of whether the
Award is Assumed or Replaced, (A) outstanding Options and SARs shall immediately
vest and become exercisable; and (B) the restrictions and other conditions
applicable to outstanding Restricted Stock, Restricted Stock Units, and other
Share-based Awards, including vesting requirements, shall immediately lapse, and
any performance goals relevant to such awards shall be deemed to have been
achieved at the target performance level; such Awards shall be free of all
restrictions and fully vested; and, with respect to Restricted Stock Units,
shall be payable immediately in accordance with their terms or, if later, as of
the earliest permissible date under Code Section 409A. The Committee may provide
that Awards that remain outstanding after vesting pursuant to the preceding
sentence will be Assumed or Replaced in connection with the Change in
Control. With respect to Options and SARs, the Committee may also provide for
the cashing out of outstanding and vested Options and SARs based on the based
upon the per-share consideration being paid for Common Stock in connection with
such Change in Control, less the applicable exercise price or base amount;
provided, however, that holders of Options and SARs shall

 

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be entitled to consideration in respect of cancellation of such Awards only if
the per-share consideration less the applicable exercise price or base amount is
greater than $0, and to the extent that the per-share consideration is less than
or equal to the applicable exercise price or base amount, such Awards shall be
cancelled for no consideration. Awards need not be treated
uniformly. Notwithstanding the foregoing, with respect to any Award that
constitutes deferred compensation under Code Section 409A, to the extent
required to comply with Code Section 409A, a transaction that does not
constitute a change in control event under Treasury Regulation Section
1.409A-3(i)(5)(i) shall not be considered a Change in Control. For the avoidance
of doubt, in no event shall an initial public offering (or reorganizations or
other transactions undertaken in connection with an initial public offering)
constitute a Change in Control.

12. Effective Date and Term of Plan. The Plan shall become effective upon the
earlier to occur of its adoption by the Board or its approval by the
stockholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated. Subject to Section 17, below, and Applicable
Laws, Awards may be granted under the Plan upon its becoming effective.

13. Amendment, Suspension or Termination of the Plan.

(a) The Board may at any time amend, suspend or terminate the Plan; provided,
however, that no such amendment shall be made without the approval of the
Company’s stockholders to the extent such approval is required by Applicable
Laws.

(b) No Award may be granted during any suspension of the Plan or after
termination of the Plan.

(c) No suspension or termination of the Plan (including termination of the Plan
under Section 11, above) shall adversely affect any rights under Awards already
granted to a Grantee.

14. Limitation of Liability. The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority shall not have
been obtained.

15. No Effect on Terms of Employment/Consulting Relationship. The Plan shall not
confer upon any Grantee any right with respect to the Grantee’s Continuous
Service, nor shall it interfere in any way with his or her right or the right of
the Company or any Related Entity to terminate the Grantee’s Continuous Service
at any time, with or without cause, and with or without notice.

16. No Effect on Retirement and Other Benefit Plans. Except as specifically
provided in a retirement or other benefit plan of the Company or a Related
Entity, Awards shall not be deemed compensation for purposes of computing
benefits or contributions under any retirement plan of the Company or a Related
Entity, and shall not affect any benefits under any other benefit plan of any
kind or any benefit plan subsequently instituted under which the availability or
amount of benefits is related to level of compensation. The Plan is not a
“Pension Plan” or “Welfare Plan” under the Employee Retirement Income Security
Act of 1974, as amended.

17. Stockholder Approval. The grant of Incentive Stock Options under the Plan
shall be subject to approval by the stockholders of the Company within twelve
(12) months before or after the date the Plan is adopted excluding Incentive
Stock Options issued in substitution for outstanding Incentive Stock Options
pursuant to Section 424(a) of the Code. Such stockholder approval shall be
obtained in the

 

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degree and manner required under Applicable Laws. The Administrator may grant
Incentive Stock Options under the Plan prior to approval by the stockholders,
but until such approval is obtained, no such Incentive Stock Option shall be
exercisable.

18. Unfunded Obligation. Grantees shall have the status of general unsecured
creditors of the Company. Any amounts payable to Grantees pursuant to the Plan
shall be unfunded and unsecured obligations for all purposes, including, without
limitation, Title I of the Employee Retirement Income Security Act of 1974, as
amended. Neither the Company nor any Related Entity shall be required to
segregate any monies from its general funds, or to create any trusts, or
establish any special accounts with respect to such obligations. The Company
shall retain at all times beneficial ownership of any investments, including
trust investments, which the Company may make to fulfill its payment obligations
hereunder. Any investments or the creation or maintenance of any trust or any
Grantee account shall not create or constitute a trust or fiduciary relationship
between the Administrator, the Company or any Related Entity and a Grantee, or
otherwise create any vested or beneficial interest in any Grantee or the
Grantee’s creditors in any assets of the Company or a Related Entity. The
Grantees shall have no claim against the Company or any Related Entity for any
changes in the value of any assets that may be invested or reinvested by the
Company with respect to the Plan.

19. Construction. Captions and titles contained herein are for convenience only
and shall not affect the meaning or interpretation of any provision of the Plan.
Except when otherwise indicated by the context, the singular shall include the
plural and the plural shall include the singular. Use of the term “or” is not
intended to be exclusive, unless the context clearly requires otherwise.

20. Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board,
the submission of the Plan to the stockholders of the Company for approval, nor
any provision of the Plan will be construed as creating any limitations on the
power of the Board to adopt such additional compensation arrangements as it may
deem desirable, including, without limitation, the granting of Awards otherwise
than under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.

21. Governing Law. This Plan and any agreements or other documents hereunder
shall be interpreted and construed in accordance with the laws of Delaware to
the extent not preempted by federal law. Any reference in this Plan or in the
agreement or other document evidencing any Awards to a provision of law or to a
rule or regulation shall be deemed to include any successor law, rule or
regulation of similar effect or applicability.