Exhibit 10.11
 
MODIGENE INC.
 
STOCK INCENTIVE PLAN
 
Effective December 14, 2005
 
Article I
Purpose and Adoption of the Plan
 
1.01 Purpose. The Modigene Inc. Stock Incentive Plan (the “Incentive Plan”) was
adopted by the Company to assist the Company and its Affiliates in attracting
and retaining valued employees, directors, consultants and advisors; to act as
an incentive in motivating selected employees, directors, consultants and
advisors to achieve long-term corporate objectives; and to allow those
employees, directors, consultants and advisors to share the benefits of future
growth in the value of the Company that they help to create by providing them
with the opportunity to acquire shares of Common Stock.
 
1.02 Adoption and Term. The Incentive Plan has been approved by the Board, to be
effective as of December 14, 2005 (the “Effective Date”). No Awards may be
granted under the Incentive Plan after the tenth anniversary of the Effective
Date, or until terminated by action of the Board, whichever occurs sooner. The
Incentive Plan shall remain in effect as long as any Awards are outstanding
hereunder.
 
Article II
Definitions
 
For the purposes of the Incentive Plan, capitalized terms shall have the
following meanings:
 
2.01 Affiliate. “Affiliate” means any corporation or other entity which would be
a subsidiary corporation with respect to the Company as defined in Section
424(f) of the Code.
 
2.02 Award. “Award” means any award of an Option, Stock Appreciation Rights,
Restricted Stock, Stock Unit or other stock-based grant under the Incentive
Plan. Any Award under the Incentive Plan may be granted singularly, in
combination with another Award (or Awards), or in tandem whereby the exercise or
vesting of one Award held by a Participant cancels another Award held by the
Participant.
 
2.03 Award Agreement. “Award Agreement” means a written agreement (in whatever
medium prescribed by the Committee) between the Company and a Participant or a
written notice from the Company to a Participant specifically setting forth the
terms and conditions of an Award granted under the Incentive Plan. Such document
is referred to as an agreement regardless of whether any Participant signature
is required.
 
2.04 Beneficiary. “Beneficiary” means an individual, trust, or estate who or
which, by a written designation of the Participant filed with the Company or by
operation of law, succeeds to the rights and obligations of the Participant
under the Incentive Plan and an Award Agreement upon the Participant’s death.
 

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2.05 Board. “Board” means the Board of Directors of the Company.
 
2.06 Change in Control. “Change in Control” means any one of the following
events:
 
(a) consummation of the acquisition by any person (as such term is defined in
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended from
time to time (the “1934 Act”)) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the 1934 Act) of fifty percent (50%) or more of the
combined voting power of the then outstanding voting securities of the Company;
 
(b) the individuals who, as of the date hereof, are members of the Board cease
for any reason to constitute a majority of the Board, unless the election, or
nomination for election by the stockholders, of any new director was approved by
a vote of a majority of the Board; or
 
(c) the consummation of: (1) a merger or consolidation to which the Company is a
party if the stockholders immediately before such merger or consolidation do
not, as a result of such merger or consolidation, own, directly or indirectly,
more than fifty percent (50%) of the combined voting power of the then
outstanding voting securities of the entity resulting from such merger or
consolidation in substantially the same proportion as their ownership of the
combined voting power of the Company’s voting securities outstanding immediately
before such merger or consolidation or (2) a complete liquidation or dissolution
of the Company.
 
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because fifty percent (50%) or more of the combined voting power of the
Company’s then outstanding securities is acquired by: (1) a trustee or other
fiduciary holding securities under one or more employee benefit plans maintained
for employees of the entity; or (2) any corporation which, immediately after
such acquisition is owned directly or indirectly by the stockholders of the
Company in substantially the same proportion as their ownership of stock
immediately prior to such acquisition.
 
2.07 Code. “Code” means the Internal Revenue Code of 1986, as amended from time
to time. References to a section of the Code include that section and any
comparable section or sections of any future legislation that amends,
supplements, or supersedes that section.
 
2.08 Common Stock. “Common Stock” means the common stock, par value $0.001 per
share, of the Company.
 
2.09 Committee. “Committee” means the Committee acting under Section 3.01.
 
2.10 Company. “Company” means Modigene Inc., a Delaware corporation, and any
successor company.
 
2.11 Date of Grant. “Date of Grant” means the date designated by the Board as
the date as of which it grants an Award, which shall not be earlier than the
date on which the Board approves the granting of the Award.
 
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2.12 Disability. “Disability” means that a Participant: (i) is unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months; or
(ii) is, by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, receiving income
replacement benefits for a period of not less than three (3) months under an
accident and health plan covering the Company’s employees.
 
2.13 Effective Date. “Effective Date” is defined in Section 1.02 of the
Incentive Plan.
 
2.14 Exchange Act. “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time.
 
2.15 Exercise Price. “Exercise Price” means the price established with respect
to an Option or Stock Appreciation Right pursuant to Section 6.01(b).
 
2.16 Fair Market Value. “Fair Market Value” means, as of any applicable date:
(i) if the Common Stock is listed on a national securities exchange or is
authorized for quotation on the Nasdaq National Market System (“NMS”), the
closing sales price of the Common Stock on the exchange or NMS, as the case may
be, on that date, or, if no sale of the Common Stock occurred on that date, on
the next preceding date on which there was a reported sale; or (ii) if none of
the above apply, the closing bid price as reported by the Nasdaq SmallCap Market
on that date, or if no price was reported for that date, on the next preceding
date for which a price was reported; or (iii) if none of the above apply, the
last reported bid price published in the “pink sheets” or displayed on the
National Association of Securities Dealers, Inc. (“NASD”), Electronic Bulletin
Board, as the case may be; or (iv) if none of the above apply, the fair market
value of the Common Stock as determined by the Board on an annual basis.
 
2.17 Incentive Plan. “Incentive Plan” means the Modigene Inc. Stock Incentive
Plan described in this document and as it may be amended from time to time.
 
2.18 Incentive Stock Option. “Incentive Stock Option” means a stock option
within the meaning of Section 422 of the Code.
 
2.19 Merger. “Merger” means any merger, reorganization, consolidation, share
exchange, transfer of assets, or other transaction having a similar effect
involving the Company.
 
2.20 Non-Qualified Stock Option. “Non-Qualified Stock Option” means a stock
option which is not an Incentive Stock Option.
 
2.21 Non-Vested Share. “Non-Vested Share” means shares of the Company Common
Stock issued to a Participant in respect of the non-vested portion of an Option
in the event of the early exercise of such Participant’s Options pursuant to
such Participant’s Award Agreement, as permitted in Section 6.06 below.
 
2.22 Option. “Option” means all Non-Qualified Stock Options and Incentive Stock
Options granted at any time under the Incentive Plan.
 
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2.23 Participant. “Participant” means a person designated to receive an Award
under the Incentive Plan in accordance with Section 5.01 below.
 
2.24 Purchase Price. “Purchase Price” means the amount that a Participant is or
may be required to pay with respect to an Award of Restricted Stock under
Article VII or with respect to an Award of stock purchase rights under Section
6.04.
 
2.25 Restricted Stock. “Restricted Stock” means an Award consisting of shares of
Common Stock subject to the restrictions granted under Article VII below.
 
2.26 Stock Appreciation Rights. “Stock Appreciation Rights” means Awards granted
in accordance with Article VI.
 
2.27 Stock Unit. “Stock Unit” means a unit of value, equal at any relevant time
to the Fair Market Value of a share of Common Stock, established by the Board as
a means of measuring the value of a Participant’s Stock Unit Account.
 
2.28 Stock Unit Account. “Stock Unit Account” means the bookkeeping account
maintained by the Committee on behalf of each Participant who is credited with
Stock Units and dividend equivalents thereon pursuant to Section 8.02.
 
2.29 Termination of Service. “Termination of Service” means the termination of a
person’s status as a director or an employee, and termination of a business
relationship with a consultant, advisor or any other Participant who is neither
an employee nor a member of the Board. Subject to the terms of Code Section 409A
and the regulations promulgated thereunder, a leave of absence shall not be
considered a Termination of Service for purposes of the Incentive Plan.
 
2.30 409A Award. “409A Award” means Awards that are described in Section 9.05.
 
Article III
Administration
 
3.01 Committee. The Incentive Plan shall be administered by the Committee. The
Committee shall be selected by the Board. At any time the Common Stock is
publicly traded, the Committee shall be comprised of two (2) or more members of
the Board, each of whom are both (a) “non-employee director” (within the meaning
of Rule 16b-3 promulgated under the Exchange Act) and (b) an “outside director”
(within the meaning of Code Section 162(m)). Subject to applicable stock
exchange rules, if the Committee does not exist, or for any other reason
determined by the Board, the Board may take any action under the Incentive Plan
that would otherwise be the responsibility of the Committee.
 
3.02 Powers of the Committee. The Committee’s administration of the Incentive
Plan shall be subject to the following:
 
(a) Subject to the provisions of the Incentive Plan, the Committee will have the
authority and discretion to select from among the employees, directors and
service providers of the Company or its Affiliates those persons who shall
receive Awards, to determine the time or times of receipt, to determine the
types of Awards and the number of shares covered by the Awards, to establish the
terms, conditions, performance criteria, restrictions, and other provisions of
such Awards, and (subject to the restrictions imposed by Section 9.14) to cancel
or suspend Awards.
 
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(b) The Committee will have the authority and discretion to interpret the
Incentive Plan, to establish, amend and rescind any rules and regulations
relating to the Incentive Plan, and to make all other determinations that may be
necessary or advisable for the administration of the Incentive Plan.
 
(c) Any interpretation of the Incentive Plan by the Committee and any decision
made by it under the Incentive Plan are final and binding on all persons.
 
(d) The Committee shall make decisions by a majority vote of its members.
 
(e) In controlling and managing the operation and administration of the
Incentive Plan, the Committee shall take action in a manner that conforms to the
articles and bylaws of the Company and applicable state corporate law.
 
3.03 Delegation by Committee. Except to the extent prohibited by applicable law,
the applicable rules of a stock exchange or the Incentive Plan, or as may be
necessary to comply with the exemptive provisions of Rule 16b-3 under the
Exchange Act, the Committee may allocate all or any portion of its
responsibilities and powers to any one or more of its members and may delegate
all or any part of its responsibilities and powers to any person or persons
selected by it, including: (a) delegating to a committee of one or more members
of the Board who are not “outside directors” within the meaning of Code Section
162(m), the authority to grant Awards under the Incentive Plan to eligible
persons who are either: (i) not then “covered employees,” within the meaning of
Code Section 162(m) and are not expected to be “covered employees” at the time
of recognition of income resulting from such Award; or (ii) not persons with
respect to whom the Company wishes to comply with Code Section 162(m); and/or
(b) delegating to a committee of one or more members of the Board who are not
“non-employee directors,” within the meaning of Rule 16b-3, the authority to
grant Awards under the Incentive Plan to eligible persons who are not then
subject to Section 16 of the Exchange Act.  Any such allocation or delegation
may be revoked by the Committee at any time.  To the extent permitted by
applicable law and resolution of the Board, the Committee may delegate all or
any part of its responsibilities to any officer of the Company.
 
3.04 Information to be Furnished to Committee. As may be permitted by applicable
law, the Company and its subsidiaries shall furnish the Committee with such data
and information as it determines may be required for it to discharge its
duties.  The records of the Company and its subsidiaries as to an employee’s or
Participant’s employment, termination of employment, leave of absence,
reemployment and compensation shall be conclusive on all persons unless
determined by the Committee to be manifestly incorrect.  Subject to applicable
law, Participants and other persons entitled to benefits under the Incentive
Plan must furnish the Committee such evidence, data or information as the
Committee considers desirable to carry out the terms of the Incentive Plan.
 
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Article IV
Stock
 
4.01 Number of Shares. The maximum number of shares authorized to be issued
under the Incentive Plan shall be 1,600,000 shares of the Company’s Common
Stock. The number of shares available for issuance under the Incentive Plan
shall be subject to adjustment in accordance with Section 9.06 below. The shares
to be offered under the Incentive Plan shall be authorized and unissued shares
of Common Stock, or issued shares of Common Stock that have been reacquired by
the Company in private or public transactions.
 
4.02 Reuse of Shares. Shares of Common Stock covered by any unexercised portions
of terminated Options (including canceled or forfeited Options) granted under
Article VI or any Award settled in cash without the issuance of Shares may be
subject to new Awards under the Incentive Plan. Shares of Common Stock used to
meet tax withholding requirements may be subject to new Awards under the
Incentive Plan.
 
4.03 Delivery of Shares. Delivery of shares of Common Stock or other amounts
under the Incentive Plan shall be subject to the following:
 
(a) Compliance with Applicable Laws.  Notwithstanding any other provision of the
Incentive Plan, the Company shall have no obligation to deliver any shares of
Common Stock or make any other distribution of benefits under the Incentive Plan
unless such delivery or distribution complies with all applicable laws
(including, the requirements of the Securities Act of 1933, as amended from time
to time), and the applicable requirements of any securities exchange or similar
entity.
 
(b) Certificates.  To the extent that the Incentive Plan provides for the
issuance of shares of Common Stock, the issuance may be affected on a
non-certificated basis, to the extent not prohibited by applicable law or the
applicable rules of any securities exchange or similar entity.
 
Article V
Participation
 
5.01 Eligible Participants. Participants in the Incentive Plan shall be
employees, directors, consultants and advisors of the Company or an Affiliate
that the Committee, in its sole discretion, may designate from time to time. The
Committee’s designation of a Participant in any year shall not require the
Committee to designate the person to receive Awards in any other year. The
Committee shall consider those factors it deems pertinent in selecting
Participants and in determining the types and amounts of their respective
Awards. 
 
Article VI
Stock Options & Stock Appreciation Rights
 
6.01 Option Awards.
 
(a) Grant of Options. The Committee may grant, to Participants who the Committee
may select, Options entitling the Participants to purchase shares of Common
Stock from the Company in the amount, at the price, on the terms, and subject to
the conditions, not inconsistent with the terms of the Incentive Plan, that may
be established by the Committee. The terms of any Option granted under the
Incentive Plan shall be set forth in an Award Agreement.
 
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(b) Exercise Price of Options. Subject to Section 6.01(d) below with respect to
Incentive Stock Options, the Exercise Price of each Option for purchase of
shares of Common Stock under any Option granted under the Incentive Plan shall
be determined by the Committee and shall be set forth in the Award Agreement. To
the extent required by applicable law, the Exercise Price will not be less than
One Hundred percent (100%) of the Fair Market Value of a share of Common Stock
on the Date of Grant.
 
(c) Designation of Options. Except as otherwise expressly provided in the
Incentive Plan, the Committee may designate an Option as an Incentive Stock
Option or a Non-Qualified Stock Option at the time the grant is made; provided,
however, that an Option may be designated as an Incentive Stock Option only if
the applicable Participant is an employee of the Company or an Affiliate on the
Date of Grant.
 
(d) Special Incentive Stock Option Rules. No Participant may be granted
Incentive Stock Options under the Incentive Plan (or any other plans of the
Company) that would result in Incentive Stock Options to purchase shares of
Common Stock with an aggregate Fair Market Value (measured on the Date of Grant)
of more than $100,000 first becoming exercisable by the Participant in any one
calendar year. Notwithstanding any other provision of the Incentive Plan to the
contrary, the Exercise Price of each Incentive Stock Option shall be equal to or
greater than the Fair Market Value of the Common Stock as of the Date of Grant
of the Incentive Stock Option; provided, however, that no Incentive Stock Option
shall be granted to any person who, at the time the Option is granted, owns
stock (including stock owned by application of the constructive ownership rules
in Section 424(d) of the Code) possessing more than 10% of the total combined
voting power of all classes of stock of the Company, unless at the time the
Incentive Stock Option is granted the Exercise Price is at least 110% of the
Fair Market Value of the Common Stock as of the Date of Grant and the Incentive
Stock Option by its terms is not exercisable for more than five years from the
Date of Grant. To the extent an Option does not qualify as an Incentive Stock
Option, such Option shall be treated for all purposes as a Non-Qualified Stock
Option.
 
(e) Rights as a Stockholder. A Participant or a transferee of an Option pursuant
to Section 9.03 below shall have no rights as a stockholder with respect to the
shares of Common Stock covered by an Option until that Participant or transferee
becomes the holder of record of the shares, and no adjustment shall be made to
the shares of Common Stock for dividends in cash or other property or
distributions of other rights on the Common Stock for which the record date is
prior to the date on which that Participant or transferee became the holder of
record of any of the shares covered by the Option; provided, however, that
Participants are entitled to share adjustments to reflect capital changes under
Section 9.06.
 
6.02 Stock Appreciation Rights.
 
(a) Stock Appreciation Right Awards. The Committee is authorized to grant to any
Participant one or more Stock Appreciation Rights. Such Stock Appreciation
Rights may be granted either independent of or in tandem with or by reference to
Options granted prior to or simultaneously with the grant of such rights to the
same Participant. Stock Appreciation Rights may be granted in tandem with or by
reference to a related Option, in which event the Participant may elect to
exercise either the Option or the Stock Appreciation Right, but not both, as to
the same share subject to the Option and the Stock Appreciation Right, or the
Stock Appreciation Right may be granted independently of a related Option. Upon
exercise of a Stock Appreciation Right with respect to a share of Common Stock,
the Participant shall be entitled to receive an amount equal to the excess, if
any, of (i) the Fair Market Value of a share of Common Stock on the date of
exercise over (ii) the Exercise Price of such Stock Appreciation Right
established in the Award Agreement, which amount shall be payable as provided in
Section 6.02(c).
 
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(b) Exercise Price. The Exercise Price established under any Stock Appreciation
Right granted under the Incentive Plan shall be determined by the Committee, but
in the case of Stock Appreciation Rights granted in tandem with Options shall
not be less than the Exercise Price of such Options.
 
(c) Payment of Incremental Value. Any payment which may become due from the
Company by reason of a Participant’s exercise of a Stock Appreciation Right may
be paid to the Participant as determined by the Committee (i) all in cash, (ii)
all in Common Stock, or (iii) in any combination of cash and Common Stock. In
the event that all or a portion of the payment is made in Common Stock, the
number of shares of Common Stock delivered in satisfaction of such payment shall
be determined by dividing the amount of such payment or portion thereof by the
Fair Market Value on the Exercise Date. 
 
6.03 Terms of Stock Options & Stock Appreciation Rights.
 
(a) Conditions on Exercise. An Award Agreement with respect to Options and/or
Stock Appreciation Rights may contain conditions or restrictions as determined
by the Committee at the time of grant.
 
(b) Duration of Options. Unless otherwise provided in an Award Agreement,
Options and/or Stock Appreciation Rights shall terminate after the first to
occur of the following events:
 
(i) termination of the Award as provided in Section 6.03(e), following the
applicable Participant’s Termination of Service; and
 
(ii) ten years from the Date of Grant (five years in certain cases, as described
in Section 6.01(d)).
 
(c) Acceleration of Exercise Time. The Committee, in its sole discretion, shall
have the right (but shall not in any case be obligated), exercisable at any time
after the Date of Grant, to permit the exercise of any Option and/or Stock
Appreciation Right prior to the time the Award would otherwise vest under the
terms of the related Award Agreement.
 
(d) Extension of Exercise Time. In addition to the extensions permitted under
Section 6.03(e) below in the event of Termination of Service, the Committee, in
its sole discretion, shall have the right (but shall not in any case be
obligated), exercisable on or at any time after the Date of Grant, to permit the
exercise of any Option and/or Stock Appreciation Right after its expiration date
described in Section 6.03(e), subject, however, to the limitations described in
Section 6.03(b)(ii) above.
 
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(e) Exercise of Options Upon Termination of Service. Unless otherwise provided
in an Award Agreement, the following rules shall govern the treatment of Options
and/or Stock Appreciation Rights upon Termination of Service:
 
(i) Termination of Options and/or Stock Appreciation Rights Upon Termination of
Service.
 

 
(A)
Termination Other Than Due to Death or Disability. In the event of a
Participant’s Termination of Service for any reason other than death or
Disability, the right of the Participant to exercise any vested Options and/or
Stock Appreciation Rights shall, unless the exercise period is extended by the
Committee in accordance with Section 6.03(d) above, terminate upon the earlier
of: (I) ninety (90) days after the date of the Termination of Service; and (II)
the date of expiration of the Options and/or Stock Appreciation Rights
determined pursuant to Section 6.03(b)(ii) above.

 

 
(B)
Death or Disability. In the event of a Participant’s Termination of Service by
reason of death or Disability, the right of the Participant to exercise any
vested Options and/or Stock Appreciation Rights shall, unless the exercise
period is extended by the Committee in accordance with Section 6.03(d) above,
terminate upon the earlier of: (I) one year after the date of the Termination of
Service; and (II) the date of expiration of the Options and/or Stock
Appreciation Rights determined pursuant to Section 6.03(b)(ii) above.

 
(ii) Termination of Unvested Options Upon Termination of Service. Subject to
Section 6.06 below, to the extent the right to exercise Options and/or Stock
Appreciation Rights, or any portion thereof, has not vested as of the date of
Termination of Service, the right shall expire on the date of Termination of
Service regardless of the reason for the Termination of Service.
 
6.04 Exercise Procedures. Each Option and Stock Appreciation Right granted under
the Incentive Plan shall be exercised under such procedures and by such methods
as the Committee may establish or approve from time to time. The Exercise Price
of shares purchased upon exercise of an Option granted under the Incentive Plan
shall be paid in full in cash by the Participant pursuant to the Award
Agreement; provided, however, that the Committee may (but shall not be required
to) permit payment to be made by delivery to the Company of either (a) shares of
Common Stock held by the Participant for at least six (6) months or (b) any
combination of cash and Common Stock held by the Participant for at least six
(6) months or (c) any other consideration that the Committee deems appropriate
and in compliance with applicable law. In the event that any Common Stock shall
be transferred to the Company to satisfy all or any part of the Exercise Price,
the part of the Exercise Price deemed to have been satisfied by such transfer of
Common Stock shall be equal to the product derived by multiplying the Fair
Market Value as of the date of exercise times the number of shares of Common
Stock transferred to the Company. The Participant may not transfer to the
Company in satisfaction of the Exercise Price any fractional share of Common
Stock.
 
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6.05 Change in Control. Unless otherwise stated in the Award Agreement, in the
event of a Change in Control, all Options and/or Stock Appreciation Rights
outstanding as of the effective date of the Change in Control that have not
previously vested or terminated under the terms of the applicable Award
Agreement shall be immediately and fully vested and exercisable; provided
however, for purposes of this Section 6.05, unless otherwise determined by the
Committee, no Change in Control of the Company shall be deemed to have occurred
for purposes of determining a Participant's rights under the Incentive Plan if
(i) the Participant is a member of a group that first announces a proposal
which, if successful, would result in a Change in Control, which proposal
(including any modifications thereof) is ultimately successful, or (ii) the
Participant acquires a two percent or more equity interest in the entity that
ultimately acquires the Company pursuant to the transaction described in clause
(i) of this Section 6.05.
 
6.06 Early Exercise. An Award Agreement may provide the Participant the right to
exercise the Option in whole or in part prior to the date the Option is fully
vested. The provision may be included in the Award Agreement at the time of
grant of the Option or may be added to the Award Agreement by amendment at a
later date. In the event of an early exercise of an Option, any shares of Common
Stock received shall be subject to a repurchase right in favor of the Company
with terms established by the Committee. The Committee shall determine the time
and/or the event that causes the repurchase right to terminate and fully vest
the Common Stock in the Participant.
 
Article VII
Restricted Stock
 
7.01 Restricted Stock Awards. The Committee may grant to any Participant an
Award of a number of shares of Common Stock subject to the terms, conditions,
and restrictions as determined by the Committee. Such restrictions may be based
on performance standards, periods of service, retention by the Participant of
ownership of specified shares of Common Stock, or other criteria, as determined
by the Committee. The terms of any Restricted Stock Award granted under the
Incentive Plan shall be set forth in an Award Agreement that shall contain
provisions determined by the Committee and not inconsistent with the Incentive
Plan.
 
(a) Issuance of Restricted Stock. As soon as practicable after the Date of Grant
of a Restricted Stock Award by the Committee, the Company shall cause to be
transferred on its books the number of shares of Restricted Stock awarded to the
Participant, and the shares shall be issued in the name of the Participant. In
the discretion of the Committee, the Restricted Stock may be subject to
forfeiture to the Company as of the Date of Grant if an Award Agreement for the
Restricted Stock covered by the Award is not signed by the Participant and
timely returned to the Company. Until the lapse or release of all forfeiture
restrictions applicable to an Award of Restricted Stock, the share certificates
representing the Restricted Stock may be held, in the Company’s discretion, in
custody by the Company, its designee, or, if the certificates bear a restrictive
legend, by the Participant. 
 
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(b) Shareholder Rights. Beginning on the Date of Grant of a Restricted Stock
Award, subject to execution of the related Award Agreement and the provisions
contained therein, the Participant shall become a shareholder of the Company
with respect to the shares of Restricted Stock subject to the Award Agreement
and shall have all of the rights of a holder of Common Stock, including, but not
limited to, the right to vote and to receive dividends; provided, however, that
any Common Stock or other securities distributed as a dividend or otherwise
related to any Restricted Stock on which the Award Agreement restrictions have
not yet lapsed, shall be subject to the same restrictions as such Restricted
Stock and held or restricted as provided in Section 7.01(a).
 
(c) Restriction on Transferability. No Restricted Stock may be assigned or
transferred (other than by will or the laws of descent and distribution or to an
inter vivos trust under which the Participant is treated as the owner under
Sections 671 through 677 of the Code), pledged, or sold prior to the lapse of
the restrictions applicable to them.
 
(d) Delivery of Stock Upon Vesting. Upon expiration or termination of the
forfeiture period without a forfeiture and the satisfaction of or release from
any other conditions prescribed by the Committee in the Award Agreement, or at
any earlier time provided under the provisions of Section 7.03 below, the such
restrictions applicable to the Restricted Stock shall lapse. After the lapse of
such restrictions, the Company shall, subject to the requirements of
Section 9.04, promptly deliver to the Participant or, in case of the
Participant’s death, to the Participant’s Beneficiary, one or more share
certificates for the appropriate number of shares of Common Stock, free of all
forfeiture restrictions (but not free of any transfer restrictions applicable to
Common Stock generally or under the terms of an Award Agreement).
 
7.02 Terms of Restricted Shares.
 
(a) Forfeiture of Restricted Shares. Subject to Sections 7.02(b) and 7.03 below,
Restricted Stock shall be forfeited and returned to the Company and all rights
of the Participant with respect to the Restricted Stock shall terminate in the
event of a Termination of Service occurring prior to the expiration of the
forfeiture period for the Restricted Stock and the Participant satisfies any and
all other conditions set forth in the Award Agreement.
 
(b) Waiver of Forfeiture Period. Notwithstanding anything contained in this
Article VII to the contrary, the Committee may, in its sole discretion, waive
the forfeiture period and any other conditions set forth in any Award Agreement
under appropriate circumstances (including the death or Disability of the
Participant or a material change in circumstances arising after the date of an
Award) and subject to any terms and conditions (including forfeiture of a
proportionate number of shares of Restricted Stock) that the Committee may deem
appropriate.
 
7.03 Change in Control. Unless otherwise stated in the Award Agreement, in the
event of a Change in Control, all restrictions applicable to a Restricted Stock
Award shall terminate fully (other than the transfer or other restrictions
generally applicable to Common Stock) and the Participant shall immediately have
the right to the delivery of share certificates for the Restricted Stock in
accordance with Section 7.01(d) above. Notwithstanding the foregoing, unless
otherwise determined by the Committee, no Change in Control of the Company shall
be deemed to have occurred for purposes of determining a Participant's rights
under the Incentive Plan if (i) the Participant is a member of a group that
first announces a proposal which, if successful, would result in a Change of
Control, which proposal (including any modifications thereof) is ultimately
successful, or (ii) the Participant acquires a two percent or more equity
interest in the entity that ultimately acquires the Company pursuant to the
transaction described in clause (i) of this Section 7.03.
 
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Article VIII
Other Stock-Based Awards
 
8.01 Grant of Other Stock-Based Awards. Other stock-based Awards, consisting of
stock purchase rights, Awards of Common Stock, or Awards valued in whole or in
part by reference to, or otherwise based on, Common Stock, may be granted either
alone or in addition to or in conjunction with other Awards under the Incentive
Plan. Subject to the provisions of the Incentive Plan, the Committee shall have
sole and complete authority to determine the persons to whom and the time or
times at which such Awards shall be made, the number of shares of Common Stock
to be granted pursuant to such Awards, and all other terms and conditions of the
Awards. Any such Award shall be confirmed by an Award Agreement executed by the
Company and the Participant, which Award Agreement shall contain such provisions
as the Committee determines to be necessary or appropriate to carry out the
intent of the Incentive Plan with respect to such Award.
 
8.02 Terms of Other Stock-Based Awards. Unless otherwise provided in the Award
Agreement, Awards made pursuant to this Article VIII shall be subject to the
following:
 
(a) Any Common Stock subject to Awards made under this Article VIII may not be
sold, assigned, transferred, pledged or otherwise encumbered prior to the date
on which the shares are issued, or, if later, the date on which any applicable
restriction, performance or deferral period lapses.
 
(b) The recipient of an Award under this Article VIII shall be entitled to
receive interest or dividends or dividend equivalents with respect to the Common
Stock or other securities covered by the Award.
 
(c) If the vesting of an outstanding Award is conditioned upon the achievement
of performance measures, then the Award shall be subject to the following:
 
(i) If, at the time of the Change in Control, the established performance
measures are less than fifty percent (50%) attained (as determined in the sole
discretion of the Committee, based upon a pro rata determination through the
date of the Change in Control), then such Award shall become vested and
exercisable on a fractional basis with the numerator being equal to the
percentage of attainment and the denominator being fifty percent (50%).
 
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(ii) If at the time of the Change in Control, the established performance
measures are at least fifty percent (50%) attained (as determined in the sole
discretion of the Committee, based upon a pro rata determination through the
date of the Change in Control), then such Award shall become fully vested and
exercisable.
 
Article IX
Terms Applicable to All Awards Granted under the Incentive Plan
 
9.01 Plan Provisions Control Award Terms. The terms of the Incentive Plan shall
govern all Awards granted under the Incentive Plan, and the Committee may not
grant any Award under the Incentive Plan that contains terms that are contrary
to any of the provisions of the Incentive Plan. In the event any provision of
any Award granted under the Incentive Plan conflicts with any term in the
Incentive Plan as in effect on the Date of Grant of the Award, the terms of the
Incentive Plan shall control. Except as provided in Sections 9.05 and 9.06
below, the terms of any Award granted under the Incentive Plan may not be
changed after the Date of Grant of the Award in a manner that would materially
decrease the value of the Award without the express written approval of the
Participant.
 
9.02 Award Agreement. No person shall have any rights under any Award granted
under the Incentive Plan unless and until the Company and the Participant to
whom the Award was granted have executed and delivered an Award Agreement or the
Participant has received and acknowledged notice of the Award authorized by the
Committee expressly granting the Award to the Participant and containing
provisions setting forth the terms of the Award.
 
9.03 Limitation on Transfer. Except as may be provided in the applicable Award
Agreement, a Participant’s rights and interest under the Incentive Plan may not
be assigned or transferred other than by will or the laws of descent and
distribution and, during the lifetime of a Participant, only the Participant
personally (or the Participant’s personal representative) may exercise rights
under the Incentive Plan. The Participant’s Beneficiary may exercise the
Participant’s rights to the extent they are exercisable under the Incentive Plan
following the death of the Participant. 
 
9.04 Taxes. The Company shall be entitled, if the Committee deems it necessary
or desirable, to withhold (or secure payment from the Participant in lieu of
withholding) the amount of any withholding or other tax required by law to be
withheld or paid by the Company regarding any amount payable and/or shares
issuable under the Participant’s Award or regarding any income recognized upon a
disqualifying disposition (i.e., a disposition prior to the expiration of the
required holding periods) of shares received pursuant to the exercise of an
Incentive Stock Option, and the Company may defer payment of cash or issuance of
shares upon exercise or vesting of an Award unless indemnified to its
satisfaction against any liability for any taxes. The amount of the withholding
or tax payment shall be determined by the Committee and shall be payable by the
Participant in cash at the time the Committee determines; provided, however,
that with the approval of the Committee, the Participant may elect to meet his
or her withholding requirement, in whole or in part, by having withheld from the
Award at the appropriate time that number of shares of Common Stock, rounded
down to the next whole share, the Fair Market Value of which is equal to the
amount of minimum required withholding taxes due.
 
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9.05 Code Section 409A. Any Options, Stock Appreciation Rights, Restricted Stock
Awards, or other stock-based Award, which constitutes “deferred compensation”
under Code Section 409A (“409A Award”), and any rules and regulations
promulgated thereunder, shall be subject to the following:
 
(a) All 409A Award documents and agreements, or rules and regulations created by
the Committee pertaining to 409A Awards, shall provide for the required
procedures under Code Section 409A, including the timing of deferral elections
and the timing and method of payment distributions.
 
(b) With respect to all 409A Awards, the Committee and its delegates shall
operate the Incentive Plan at all times in conformity with the known rules,
regulations and guidance promulgated under Code Section 409A, and the Committee
shall reserve the right (including the right to delegate such right) to
unilaterally amend any 409A Award granted under the Incentive Plan, without the
consent of the Participant, to maintain compliance with Code Section 409A. A
Participant’s acceptance of any Award under the Incentive Plan constitutes
acknowledgement and consent to such rights of the Committee.
 
9.06 Adjustments to Reflect Capital Changes.
 
(a) Recapitalization. The number and kind of shares subject to outstanding
Awards, the Exercise Price for the shares, the number and kind of shares
available for Awards to be granted under the Incentive Plan shall be
automatically adjusted to reflect any stock dividend, stock split, combination
or exchange of shares, Merger, consolidation, or other change in capitalization
with a similar substantive effect upon the Incentive Plan or the Awards granted
under the Incentive Plan. The Committee shall have the power and sole discretion
to determine the amount of the adjustment to be made in each case and shall have
the right to prevent such automatic adjustment upon a determination that such
adjustment would inappropriately increase or decrease the intended Award to the
Participant.
 
(b) Merger. In the event that the Company is a party to a Merger, outstanding
Awards shall be subject to the agreement of merger or reorganization. Such
agreement may provide, without limitation, for the continuation of outstanding
Awards by the Company (if the Company is a surviving corporation), for their
assumption by the surviving corporation or its parent or subsidiary, for the
substitution by the surviving corporation or its parent or subsidiary of its own
awards for such Awards, for accelerated vesting and accelerated expiration, or
for settlement in cash or cash equivalents.
 
(c) Awards to Replace Awards of Acquired Companies. After any Merger in which
the Company or an Affiliate is a surviving corporation, the Board may grant
substituted Awards under the provisions of the Incentive Plan, generally
consistent with Section 424 of the Code, in replacement of awards granted under
a plan of another party to the Merger whose shares of stock to be issued under
the old awards may no longer be issued following the Merger. The terms and
conditions of such replacement Awards shall be as determined by the Committee in
its sole discretion.
 
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9.07 Initial Public Offering. As a condition of participation in the Incentive
Plan, each Participant shall be obligated to cooperate with the Company and the
underwriters in connection with any public offering of the Company’s securities
and any transactions relating to a public offering, and shall execute and
deliver any agreements and documents, including, without limitation, a lock-up
agreement, that may be requested by the Company or the underwriters. The
Participants’ obligations under this Section shall apply to any shares of Common
Stock issued under the Incentive Plan as well as to any and all other securities
of the Company or its successor for which Common Stock may be exchanged or into
which Common Stock may be converted.
 
9.08 No Implied Rights.
 
(a) No Rights to Specific Assets.  Neither a Participant nor any other person
shall by reason of participation in the Incentive Plan acquire any right in or
title to any assets, funds or property of the Company or any subsidiary
whatsoever, including any specific funds, assets, or other property which the
Company or any subsidiary, in its sole discretion, may set aside in anticipation
of a liability under the Incentive Plan.  A Participant shall have only a
contractual right to the Common Stock or amounts, if any, payable or
distributable under the Incentive Plan, unsecured by any assets of the Company,
and nothing contained in the Incentive Plan shall constitute a guarantee that
the assets of the Company or any subsidiary shall be sufficient to pay any
benefits to any person.
 
(b) No Contractual Right to Employment or Future Awards.  The Incentive Plan
does not constitute a contract of employment, and selection as a Participant
will not give any participating employee the right to be retained in the employ
of the Company or an Affiliate or any right or claim to any benefit under the
Incentive Plan, unless such right or claim has specifically accrued under the
terms of the Incentive Plan.  Except as otherwise provided in the Incentive
Plan, no Award under the Incentive Plan shall confer upon the holder thereof any
rights as a stockholder of the Company prior to the date on which the individual
fulfills all conditions for receipt of such rights.
 
9.09 Awards Not Includable for Benefit Purposes. Payments received by a
Participant pursuant to the provisions of the Incentive Plan shall not be
included in the determination of benefits under any pension, group insurance, or
other benefit plan applicable to the Participant that is maintained by the
Company, except as may be provided under the terms of those plans or determined
by the Committee.
 
9.10 Governing Law. The Incentive Plan, and all Awards granted hereunder, and
all actions taken in connection herewith, except as superseded by applicable
federal law, shall be interpreted, construed, and enforced and its construction
and performance shall be governed by the internal laws of the State of Delaware.
 
9.11 No Strict Construction. No rule of strict construction shall be implied
against the Company, the Board, the Committee, or any other person in the
interpretation of any of the terms of the Incentive Plan, any Award granted
under the Incentive Plan, or any rule or procedure established by the Committee
that relates to the Incentive Plan.
 
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9.12 Captions. The captions and Section headings used in the Incentive Plan are
for convenience only, do not constitute a part of the Incentive Plan, and shall
not be deemed to limit, characterize, or affect in any way any provision of the
Incentive Plan, and all provisions of the Incentive Plan shall be construed as
if no captions or headings had been used in the Incentive Plan.
 
9.13 Severability. Each part of the Incentive Plan is intended to be several. If
any term, covenant, condition, or provision of the Incentive Plan is determined
by a court of competent jurisdiction to be illegal, invalid, or unenforceable
for any reason whatsoever, that determination shall not affect the legality,
validity, or enforceability of the remaining parts of the Incentive Plan, and
all remaining parts shall be legal, valid, and enforceable and have full force
and effect as if the illegal, invalid, and/or unenforceable part had not been
included.
 
9.14 Amendment and Termination.
 
(a) Amendment. The Committee shall have complete power and authority to amend
the Incentive Plan at any time and for any reason. No termination or amendment
of the Incentive Plan may, without the consent of the Participant (or, if the
Participant is not then living, the affected Beneficiary) to whom any Award has
previously been granted under the Incentive Plan, materially adversely affect
the rights of the Participant or Beneficiary under that Award; provided,
however, that no amendment may (i) materially increase the aggregate number of
securities which may be issued under the Incentive Plan, other than pursuant to
Section 9.06(a), or (ii) materially modify the requirements for participation in
the Incentive Plan, unless the amendment is approved by a majority of the
Company’s stockholders.
 
(b) Termination. The Committee shall have the right and the power to terminate
the Incentive Plan at any time and for any reason. No Award shall be granted
under the Incentive Plan after the termination of the Incentive Plan, but the
termination of the Incentive Plan shall not affect any Award outstanding at the
time of the termination of the Incentive Plan.
 
9.15 Further Assurances. As a condition to receipt of any Award under the
Incentive Plan, a Participant shall agree, upon demand of the Company, to do all
acts and execute, deliver and perform all additional documents, instruments and
agreements (including, without limitation, any applicable stockholder’s
agreement or a joinder to such agreement) which may be reasonably required by
the Company, to implement the provisions and purposes of the Incentive Plan.
 
9.16 Form and Time of Elections.  Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other person
entitled to benefits under the Incentive Plan, and any permitted modification,
or revocation thereof, shall be filed with the Company at such times, in such
form, and subject to such restrictions and limitations, not inconsistent with
the terms of the Incentive Plan, as the Committee shall require.
 
9.17 Evidence.  Evidence required of anyone under the Incentive Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.
 
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9.18 Successors.  All obligations of the Company under the Incentive Plan shall
be binding upon and inure to the benefit of 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, stock, and/or assets of the Company.
 
9.19 Indemnification. The Company shall indemnify members of the Committee and
any agent of the Committee who is an employee of the Company against any and all
liabilities or expenses to which they may be subjected by reason of any act or
failure to act with respect to their duties on behalf of the Incentive Plan,
except in circumstances involving such person’s bad faith, gross negligence or
willful misconduct.
 
9.20 No Fractional Shares. Unless otherwise permitted by the Committee, no
fractional shares of Common Stock shall be issued or delivered pursuant to the
Incentive Plan or any Award. The Committee shall determine whether cash or other
property shall be issued or paid in lieu of fractional shares or whether such
fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.
 
9.21 Notice. Unless otherwise provided in an Award Agreement, all written
notices and all other written communications to the Company provided for in the
Incentive Plan or any Award Agreement shall be delivered personally or sent by
registered or certified mail, return receipt requested, postage
prepaid (provided that international mail shall be sent via overnight or two-day
delivery), or sent by facsimile or prepaid overnight courier to the Company at
the address set forth below. Such notices, demands, claims and other
communications shall be deemed given:
 
(a) in the case of delivery by overnight service with guaranteed next day
delivery, the next day or the day designated for delivery;
 
(b) in the case of certified or registered U.S. mail, five (5) days after
deposit in the U.S. mail; or
 
(c) in the case of facsimile, the date upon which the transmitting party
received confirmation of receipt by facsimile, telephone or otherwise;
 
provided, however, that in no event shall any such communications be deemed to
be given later than the date they are actually received; provided they are
actually received. In the event a communication is not received, it shall only
be deemed received upon the showing of an original of the applicable receipt,
registration or confirmation from the applicable delivery service provider.
Communications that are to be delivered by the U.S. mail or by overnight service
to the Company shall be directed to the attention of the Company’s senior human
resource officer and Corporate Secretary.
 
9.22 Use of Term. Unless otherwise provided herein, the term “person” when
referred to in the Incentive Plan or any Award Agreement may refer to an
individual or an entity.
 
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