REALNETWORKS, INC.
2005 Stock Incentive Plan,
as amended and restated effective September 19, 2016
1.     PURPOSE OF THE PLAN
1.1 Purpose. The purpose of the RealNetworks, Inc. 2005 Stock Incentive Plan
(the “Plan”), as amended and restated effective as of September 19, 2016 (the
“Restatement Date”), is to assist RealNetworks, Inc., a Washington corporation
(the “Company”), and its subsidiaries in attracting and retaining selected
individuals to serve as employees, directors, consultants and/or advisors of the
Company who are expected to contribute to the Company’s success and to achieve
long-term objectives which will inure to the benefit of all shareholders of the
Company through the additional incentives inherent in the Awards hereunder.
2.     DEFINITIONS
2.1 “Award” shall mean any Option, Stock Appreciation Right, Restricted Stock
Award, Restricted Stock Unit Award, Performance Award, Other Share-Based Award
or any other right, interest or option relating to Shares or other property
(including cash) granted pursuant to the provisions of the Plan.
2.2 “Award Agreement” shall mean any agreement, contract or other instrument or
document, including through an electronic medium, evidencing any Award granted
by the Committee hereunder.
2.3 “Board” shall mean the board of directors of the Company.
2.4 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.
2.5 “Committee” shall mean the Compensation Committee of the Board or a
subcommittee thereof formed by the Compensation Committee to act as the
Committee hereunder. The Committee shall consist of no fewer than two Directors,
each of whom is (a) a “Non-Employee Director” within the meaning of Rule 16b-3
of the Exchange Act, (b) an “outside director” within the meaning of
Section 162(m) of the Code, and (c) an “independent director” for purpose of the
rules and regulations of the NASDAQ Stock Market.
2.6 “Covered Employee” shall mean a “covered employee” within the meaning of
Section 162(m) of the Code.
2.7 “Director” shall mean a non-employee member of the Board.
2.8 “Determination Date” shall mean the latest possible date that will not
jeopardize the qualification of an Award granted under the Plan as
“performance-based compensation” under Section 162(m) of the Code.
2.9 “Employee” shall mean any employee of the Company or any Subsidiary and any
prospective employee conditioned upon, and effective not earlier than, such
person’s becoming an employee of the Company or any Subsidiary. Solely for
purposes of the Plan, an Employee shall also mean any consultant or advisor who
provides services to the Company or any Subsidiary, so long as such person
(a) renders bona fide services that are not in connection with the offer and
sale of the Company’s securities in a capital-raising transaction and (b) does
not directly or indirectly promote or maintain a market for the Company’s
securities.
2.10 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
2.11 “Fair Market Value” shall mean, with respect to any property other than
Shares, the market value of such property determined by such methods or
procedures as shall be established from time to time by the Committee. The Fair
Market Value of Shares as of any date shall be the per Share closing price of
the Shares as reported on the NASDAQ Stock Market on that date (or if there was
no reported price on such date, on the last preceding date on which the price
was reported); if the Company is not then listed on the NASDAQ Stock Market but
is listed on the New York Stock Exchange, the Fair Market Value of the Shares
shall be the per Share closing price of the Shares as reported on the New York
Stock Exchange on that date (or if there was no reported price on such date, on
the last preceding date on which the price was reported); or, if the Company is
not then listed on the NASDAQ Stock Market or the New York Stock Exchange, the
Fair Market Value of Shares shall be determined by the Committee in its sole
discretion using appropriate criteria.
2.12 “Freestanding Stock Appreciation Right” shall have the meaning set forth in
Section 6.1.
2.13 “Incentive Stock Option” shall mean an Option that by its terms qualifies
and is intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code and the regulations promulgated thereunder.
2.14 “Limitations” shall have the meaning set forth in Section 11.6.
2.15 “Nonstatutory Stock Option” shall mean an Option that by its terms does not
qualify or is not intended to qualify as an Incentive Stock Option.

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2.16 “Option” shall mean any right granted to a Participant under the Plan
allowing such Participant to purchase Shares at such price or prices and during
such period or periods as the Committee shall determine.
2.17 “Other Share-Based Award” shall have the meaning set forth in Section 9.1.
2.18 “Participant” shall mean an Employee or Director who is selected by the
Committee to receive an Award under the Plan.
2.19 “Payee” shall have the meaning set forth in Section 14.2.
2.20 “Performance-Based Award” shall mean an Award that is subject to the terms
and conditions set forth in Section 11. All Performance-Based Awards are
intended to constitute qualified performance-based compensation under
Section 162(m) of the Code.
2.21 “Performance Award” shall mean any Award of Performance Shares or
Performance Units granted pursuant to Section 10.
2.22 “Performance Goals” shall mean the goal or goals (or combined goals)
determined by the Committee (in its discretion) to be applicable to a
Participant with respect to an Award. As determined by the Committee, the
Performance Goals applicable to an Award may provide for a targeted level or
levels of achievement using one or more of the following measures: net revenue;
revenue growth; earnings per share; net income; division, group or corporate
financial goals; total shareholder return; attainment of strategic and
operational initiatives; appreciation in and/or maintenance of the price of the
Shares or any other publicly-traded securities of the Company; market share;
gross profits; earnings before taxes, earnings before interest and taxes;
earnings before interest, taxes, depreciation and amortization; comparisons with
various stock market indices; reductions in costs; cash flow, cash flow per
share; return on invested capital; cash flow return on investment; and
improvement in or attainment of expense levels on working capital levels of the
Company or any Subsidiary, division, business segment or business unit of the
Company for or within which the Participant is primarily employed. Prior to the
Determination Date, the Committee shall determine whether any element(s) or
item(s) shall be included in or excluded from the calculation of any Performance
Goal with respect to any Participants and whether a Performance Goal shall be
measured in accordance with generally accepted accounting principles (“GAAP”) or
a basis other than GAAP.
 
2.23 “Performance Period” shall mean that period established by the Committee at
the time any Performance Award or other performance-based Award is granted or at
any time thereafter during which any performance goals specified by the
Committee with respect to such Award are to be measured.
2.24 “Performance Share” shall mean any grant pursuant to Section 10 of a unit
valued by reference to a designated number of Shares, which value may be paid to
the Participant by delivery of such property as the Committee shall determine,
including cash, Shares, other property, or any combination thereof, upon
achievement of such performance goals during the Performance Period as the
Committee shall establish at the time of such grant or thereafter.
2.25 “Performance Unit” shall mean any grant pursuant to Section 10 of a unit
valued by reference to a designated amount of property (including cash) other
than Shares, which value may be paid to the Participant by delivery of such
property as the Committee shall determine, including cash, Shares, other
property, or any combination thereof, upon achievement of such performance goals
during the Performance Period as the Committee shall establish at the time of
such grant or thereafter.
2.26 “Permitted Assignee” shall have the meaning set forth in Section 13.4.
2.27 “Prior Plans” shall mean, collectively, the Company’s 1996 Stock Option
Plan, 2000 Stock Option Plan, 2002 Director Stock Option Plan, and the Director
Compensation Stock Plan.
2.28 “Restricted Stock” shall mean any Share issued with the restriction that
the holder may not sell, transfer, pledge or assign such Share and with such
other restrictions as the Committee, in its sole discretion, may impose
(including any restriction on the right to vote such Share and the right to
receive any dividends), which restrictions may lapse separately or in
combination at such time or times, in installments or otherwise, as the
Committee may deem appropriate.
2.29 “Restricted Stock Unit” shall mean a bookkeeping entry representing an
amount equal to the Fair Market Value of one Share, granted pursuant to
Section 8. Each Restricted Stock Unit represents an unfunded and unsecured
obligation of the Company.
2.30 “Section 409A” shall mean Section 409A of the Code, the Treasury
Regulations and Internal Revenue Service guidance thereunder, as each may be
amended from time to time.
2.31 “Shares” shall mean the shares of common stock of the Company, par value
$0.001 per share.

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2.32 “Stock Appreciation Right” shall mean the right granted to a Participant
pursuant to Section 6.
2.33 “Subsidiary” shall mean any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of the
granting of the Award, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain.
2.34 “Substitute Awards” shall mean Awards granted or Shares issued by the
Company in assumption of, or in substitution or exchange for, awards previously
granted, or the right or obligation to make future awards, by a company acquired
by the Company or any Subsidiary or with which the Company or any Subsidiary
combines.
2.35 “Tandem Stock Appreciation Right” shall have the meaning set forth in
Section 6.1.
2.36 “Vesting Period” shall mean the period of time specified by the Committee
during which vesting restrictions for an Award are applicable.
 
3.     SHARES SUBJECT TO THE PLAN
3.1 Number of Shares. Subject to adjustment as provided in Section 13.2, the
maximum number of Shares authorized and available for grant under the Plan shall
be equal to 14,541,477 Shares.
3.2 Lapsed Awards. If, after December 17, 2009, any Shares subject to an Award
or to an award under the Prior Plans are forfeited or expire, or any Award or
award under the Prior Plans is settled for cash, the Shares subject to such
Award or to such award under the Prior Plans shall, to the extent of such
forfeiture, expiration or cash settlement, again be available for Awards under
the Plan. Notwithstanding anything to the contrary contained herein, the
following Shares shall not be added to the Shares authorized for grant under
Section 3.1: (a) Shares tendered by the Participant or withheld by the Company
in payment of the purchase price of an Option or an option granted under the
Prior Plans, or to satisfy any tax withholding obligation with respect to an
Option or Stock Appreciation Right or options or stock appreciation rights
granted under the Prior Plans, and (b) Shares subject to a Stock Appreciation
Right or stock appreciation right granted under the Prior Plans that are not
issued in connection with its stock settlement on exercise thereof, and
(c) Shares reacquired by the Company on the open market or otherwise using cash
proceeds from the exercise of Options or options granted under the Prior Plans.
3.3 Substitute Awards. Substitute Awards may be issued under the Plan and such
Substitute Awards shall not reduce the Shares authorized for grant under the
Plan or the numerical limitations applicable to a Participant under
Section 11.6, nor shall Shares subject to a Substitute Award again be available
for Awards under the Plan to the extent of any forfeiture, expiration or cash
settlement as provided in Section 3.2 above. Additionally, in the event that a
company acquired by the Company or any Subsidiary or with which the Company or
any Subsidiary combines has shares available under a pre-existing plan approved
by shareholders and not adopted in contemplation of such acquisition or
combination, the shares available for grant pursuant to the terms of such
pre-existing plan (as adjusted, to the extent appropriate, using the exchange
ratio or other adjustment or valuation ratio or formula used in such acquisition
or combination to determine the consideration payable to the holders of common
stock of the entities party to such acquisition or combination) may be used for
Awards under the Plan and shall not reduce the Shares authorized for grant under
the Plan; provided that Awards using such available shares shall not be made
after the date awards or grants could have been made under the terms of the
pre-existing plan, absent the acquisition or combination, and shall only be made
to individuals who were not Employees or Directors prior to such acquisition or
combination.
3.4 Character of Shares. Any Shares issued hereunder may consist, in whole or in
part, of authorized and unissued shares or shares purchased in the open market
or otherwise.
4.     ELIGIBILITY AND ADMINISTRATION
4.1 Eligibility. Any Employee or Director shall be eligible to be selected as a
Participant.
4.2 Administration. The Plan shall be administered by the Committee. The
Committee shall have full power and authority, subject to the provisions of the
Plan and subject to such orders or resolutions not inconsistent with the
provisions of the Plan as may from time to time be adopted by the Board, to:
4.2.1 determine the Fair Market Value;
4.2.2 select the Employees and Directors to whom Awards may from time to time be
granted hereunder;
4.2.3 determine the type or types of Awards, not inconsistent with the
provisions of the Plan, to be granted to each Participant hereunder;
 
4.2.4 determine the number of Shares to be covered by each Award granted
hereunder;

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4.2.5 approve forms of Award Agreements for use under the Plan;
4.2.6 determine the terms and conditions, not inconsistent with the provisions
of the Plan, of any Award granted hereunder. Such terms and conditions include,
but are not limited to, the exercise price, the time or times when Awards may be
exercised (which may be based on performance criteria), any vesting acceleration
or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Award or the Shares relating thereto, based in each case on such
factors as the Committee will determine;
4.2.7 determine whether, to what extent and under what circumstances Awards may
be settled in cash, Shares or other property, subject to the terms of the Plan;
4.2.8 determine whether, to what extent, and under what circumstances cash,
Shares, other property and other amounts payable with respect to an Award made
under the Plan shall be deferred, in compliance with applicable laws (including
but not limited to Section 409A), either automatically or at the election of the
Participant;
4.2.9 determine whether, to what extent and under what circumstances any Award
shall be reduced, canceled, suspended or subject to recoupment in addition to
any otherwise applicable vesting or performance conditions of an Award, as may
be specified in an Award Agreement at the time of the Award, or later if (a) the
Company later adopts a policy requiring such reduction, cancellation, forfeiture
or recoupment, or (b) pursuant to an amendment of an outstanding Award;
4.2.10 interpret and administer the Plan and any instrument or agreement entered
into under or in connection with the Plan, including any Award Agreement;
4.2.11 correct any defect, supply any omission or reconcile any inconsistency in
the Plan or any Award in the manner and to the extent that the Committee shall
deem desirable to carry it into effect;
4.2.12 modify or amend each Award (subject to Section 13.1);
4.2.13 allow Participants to satisfy tax withholding obligations in such manner
as prescribed in Section 14.2 of the Plan;
4.2.14 establish such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan and any sub-plans
established for the purpose of satisfying applicable non-U.S. laws and/or for
qualifying for favorable tax treatment under applicable non-U.S. laws;
4.2.15 authorize any person to execute on behalf of the Company any instrument
required to effect the grant of an Award previously granted by the Committee
pursuant to such procedures as the Committee may determine;
4.2.16 impose such restrictions, conditions or limitations as it determines
appropriate as to the timing and manner of any resales by a Participant or other
subsequent transfers by the Participant of any Shares issued as a result of or
under an Award, including without limitation, (a) restrictions under an insider
trading policy, and (b) restrictions as to the use of a specified brokerage firm
for such resales or other transfers; and
4.2.17 make any other determination and take any other action that the Committee
deems necessary or desirable for administration of the Plan.
 
4.3 Decisions of the Committee shall be final, conclusive and binding on all
persons or entities, including the Company, any Participant, and any Subsidiary
and shall be given the maximum deference permitted by law. Notwithstanding the
foregoing or anything else to the contrary in the Plan, any action or
determination by the Committee specifically affecting or relating to an Award to
a Director shall require the prior approval of the Board.
4.4 Different Committees with respect to different Participants may administer
the Plan. To the extent not inconsistent with applicable law, including
Section 162(m) of the Code, or the rules and regulations of the NASDAQ Stock
Market, the Committee may delegate to (a) a committee of one or more directors
of the Company any of the authority of the Committee under the Plan, including
the right to grant, cancel or suspend Awards, and (b) to the extent permitted by
law, to one or more executive officers or a committee of executive officers the
right to grant Awards to Employees who are not Directors or executive officers
of the Company and the authority to take action on behalf of the Committee
pursuant to the Plan to cancel or suspend Awards to Employees who are not
Directors or executive officers of the Company. Such delegations may be revoked
at any time.

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5.     OPTIONS
5.1 Grant of Options. Options may be granted hereunder to Participants either
alone or in addition to other Awards granted under the Plan. Any Option shall be
subject to the terms and conditions of this Section 5 and to such additional
terms and conditions, not inconsistent with the provisions of the Plan, as the
Committee shall deem desirable.
5.2 Award Agreements. All Options granted pursuant to this Section 5 shall be
evidenced by an Award Agreement in such form and containing such terms and
conditions as the Committee shall determine which are not inconsistent with the
provisions of the Plan. The terms of Options need not be the same with respect
to each Participant. Granting of an Option pursuant to the Plan shall impose no
obligation on the recipient to exercise such Option. Any individual who is
granted an Option pursuant to this Section 5 may hold more than one Option
granted pursuant to the Plan at the same time.
5.3 Option Price. Other than in connection with Substitute Awards, the option
price per each Share purchasable under any Option granted pursuant to this
Section 5 shall not be less than 100% of the Fair Market Value of such Share on
the date of grant of such Option. Other than pursuant to Section 13.2, the
Committee shall not without the approval of the Company’s shareholders (a) lower
the option price per Share of an Option after it is granted, (b) cancel an
Option in exchange for cash or another Award other than in connection with
Substitute Awards or a Change of Control, and (c) take any other action with
respect to an Option that would be treated as a repricing under the rules and
regulations of the NASDAQ Stock Market.
5.4 Option Term. The term of each Option shall be fixed by the Committee in its
sole discretion; provided that no Option shall be exercisable after the
expiration of seven (7) years from the date the Option is granted, except in the
event of death or disability.
5.5 Exercise of Options.
5.5.1 Exercise. Any Option granted hereunder will be exercisable according to
the terms of the Plan and at such times or under such conditions as determined
by the Committee and set forth in the Award Agreement. An Option will be deemed
exercised by the Participant or by a Permitted Assignee thereof (or by the
Participant’s executors, administrators, guardian or legal representative, as
may be provided in an Award Agreement) as to all or part of the Shares covered
thereby, when the Company or its designated agent receives a notice of exercise
(in such form as the Committee may specify from time to time) specifying the
number of Shares to be purchased, accompanied by payment of the full purchase
price for the Shares being purchased. The Committee will determine the
acceptable form of consideration for exercising the Option, including the method
of payment. In the case of an Incentive Stock Option, the Committee will
determine the acceptable form of consideration at the time of grant. Unless
otherwise provided in an Award Agreement, full payment of the purchase price
shall be made at the time of exercise and shall be made (a) in cash or cash
equivalents (including certified check or bank check or wire transfer of
immediately available funds), (b) by tendering previously acquired Shares
(either actually or by attestation), valued at their then Fair Market Value and
provided that accepting such Shares will not result in any adverse accounting
consequences to the Company, as the Committee determines in its sole discretion,
(c) with the consent of the Committee, by delivery of other consideration
(including, where permitted by law and the Committee, other Awards) having a
Fair Market Value on the exercise date equal to the total purchase price,
(d) with the consent of the Committee, by withholding Shares otherwise issuable
in connection with the exercise of the Option, (e) with the consent of the
Committee, consideration received by the Company under a cashless exercise
program (whether through a broker, net exercise program or otherwise)
implemented by the Company in connection with the Plan, (f) with the consent of
the Committee, by net exercise, (g) through any other method to the extent
permitted by applicable law and specified in an Award Agreement, or (h) any
combination of any of the foregoing. The notice of exercise, accompanied by such
payment, shall be delivered to the Company at its principal business office or
such other office as the Committee may from time to time direct, and shall be in
such form, containing such further provisions consistent with the provisions of
the Plan, as the Committee may from time to time prescribe. In no event may any
Option granted hereunder be exercised for a fraction of a Share. No adjustment
shall be made for cash dividends or other rights for which the record date is
prior to the date of such issuance. Exercising an Option in any manner will
decrease the number of Shares thereafter available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
5.5.2 Automatic Exercise. Notwithstanding the foregoing, an Award Agreement may
provide that if on the last day of the term of an Option the Fair Market Value
of one Share exceeds the option price per Share, the Participant has not
exercised the Option or a Tandem Stock Appreciation Right (if applicable) and
the Option has not expired, the Option shall be deemed to have been exercised by
the Participant on such day with payment made by withholding Shares otherwise
issuable in connection with the exercise of the Option. In such event, the
Company shall deliver to the Participant the number of Shares for which the
Option was deemed exercised, less the number of Shares required to be withheld
for the payment of the total purchase price and required withholding taxes;
provided, however, any fractional Share shall be settled in cash, rounded down
to the nearest $.01.
5.6 Form of Settlement. In its sole discretion, the Committee may provide, at
the time of grant, that the Shares to be issued upon an Option’s exercise shall
be in the form of Restricted Stock or other similar securities, or may reserve
the right so to provide after the time of grant.

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5.7 Incentive Stock Options. The Committee may grant Incentive Stock Options to
any employee of the Company or any Subsidiary, subject to the requirements of
Section 422 of the Code. Each Option will be designated in the Award Agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Participant during any calendar year
(under all plans of the Company and any Subsidiary or parent of the Company)
exceeds one hundred thousand dollars ($100,000), such Options will be treated as
Nonstatutory Stock Options. For purposes of this Section 5.7, Incentive Stock
Options will be taken into account in the order in which they were granted. The
Fair Market Value of the Shares will be determined as of the time the Option
with respect to such Shares is granted. Further, notwithstanding anything in
Section 3.1 to the contrary and solely for the purposes of determining whether
Shares are available for the grant of Incentive Stock Options under the Plan,
the maximum aggregate number of Shares with respect to which Incentive Stock
Options may be granted under the Plan shall be 5,000,000 Shares. In addition,
and notwithstanding anything in this Section 5 to the contrary, if an Incentive
Stock Option is granted to a Participant who at the time such grant owns (within
the meaning of Section 422 of the Code) stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or of its
parent corporation or of any Subsidiary (a) the option price per Share under the
Incentive Stock Option shall be not less than 110% of the Fair Market Value of a
Share on the date of grant of the Incentive Stock Option and (b) such Incentive
Stock Option shall expire and no longer be exercisable no later than 5 years
from the date of grant.
5.8 Termination of Relationship as Employee or Director. If a Participant ceases
to provide services as an Employee or Director, other than upon the
Participant’s service termination as the result of the Participant’s death or
Disability, the Participant may exercise his or her Option within such period of
time as is specified in the Award Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Award Agreement). In the absence of
a specified time in the Award Agreement, the Option will remain exercisable for
three (3) months following the Participant’s termination. Unless otherwise
provided by the Committee, if on the date of termination the Participant is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option will revert to the Plan. If after termination the
Participant does not exercise his or her Option within the time specified by the
Committee, subject to Section 5.5.2, the Option will terminate, and the Shares
covered by such Option will revert to the Plan.
5.9 Disability of Employee or Director. If a Participant ceases to be an
Employee or Director as a result of the Participant’s Disability, the
Participant may exercise his or her Option within such period of time as is
specified in the Award Agreement to the extent the Option is vested on the date
of termination (but in no event later than the expiration of the term of such
Option as set forth in the Award Agreement). In the absence of a specified time
in the Award Agreement, the Option will remain exercisable for twelve
(12) months following the Participant’s termination. Unless otherwise provided
by the Committee, if on the date of termination the Participant is not vested as
to his or her entire Option, the Shares covered by the unvested portion of the
Option will revert to the Plan. If after termination the Participant does not
exercise his or her Option within the time specified herein, subject to
Section 5.5.2, the Option will terminate, and the Shares covered by such Option
will revert to the Plan.
5.10 Death of Participant. If a Participant dies while a Service Provider, the
Option may be exercised following the Participant’s death within the period of
time as is specified in the applicable Award Agreement to the extent that the
Option is vested on the date of death (but in no event may the Option be
exercised later than the expiration of the term of the Option as set forth in
the applicable Award Agreement), by the Participant’s designated beneficiary,
provided the beneficiary has been designated prior to Participant’s death in a
form acceptable to the Committee. If no such beneficiary has been designated by
the Participant, then the Option may be exercised by the personal representative
of the Participant’s estate or by the person(s) to whom the Option is
transferred pursuant to the Participant’s will or in accordance with the laws of
descent and distribution. In the absence of a specified time in the Award
Agreement, the Option will remain exercisable for twelve (12) months following
Participant’s death. Unless otherwise provided by the Committee, if at the time
of death, the Participant is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option immediately will revert to
the Plan. If the Option is not so exercised within the time specified herein,
subject to Section 5.5.2, the Option will terminate, and the Shares covered by
the Option will revert to the Plan.
6.     STOCK APPRECIATION RIGHTS
6.1 Grant and Exercise. The Committee may provide Stock Appreciation Rights to
an Employee or Director (a) in conjunction with all or part of any Option
granted under the Plan or at any subsequent time during the term of such Option
(“Tandem Stock Appreciation Right”), (b) in conjunction with all or part of any
Award (other than an Option) granted under the Plan or at any subsequent time
during the term of such Award, or (c) without regard to any Option or other
Award (a “Freestanding Stock Appreciation Right”), in each case upon such terms
and conditions as the Committee may establish in its sole discretion.
 
6.2 Terms and Conditions. Stock Appreciation Rights shall be evidenced by an
Award Agreement and be subject to such terms and conditions, not inconsistent
with the provisions of the Plan, as shall be determined from time to time by the
Committee, including the following:

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6.2.1 Amount of Payment. Upon the exercise of a Stock Appreciation Right, the
holder shall have the right to receive for each exercised Share under the Award,
the excess of (i) the Fair Market Value of one Share on the date of exercise (or
such other amount less than such Fair Market Value as the Committee shall so
determine at any time during a specified period before the date of exercise)
over (ii) the per Share grant price of the Stock Appreciation Right as specified
by the Committee in its sole discretion, which per Share grant price, except in
the case of Substitute Awards or in connection with an adjustment provided in
Section 13.2, shall not be less than the Fair Market Value of one Share on such
date of grant or, if applicable, the exercise price of the related Option with
respect to a Tandem Stock Appreciation Right granted subsequent to the related
Option (subject to the requirements of Section 409A).
6.2.2 Form of Payment. The Committee shall determine in its sole discretion
whether payment shall be made in cash, in whole Shares or other property, or any
combination thereof.
6.2.3 Tandem Stock Appreciation Rights.
6.2.3.1 Any Tandem Stock Appreciation Right may be granted at the same time as
the related Option is granted or at any time thereafter before exercise or
expiration of such Option.
6.2.3.2 Any Tandem Stock Appreciation Right related to an Option may be
exercised only when the related Option would be exercisable and the Fair Market
Value of a Share subject to the related Option exceeds the option price at which
a Share can be acquired pursuant to the Option. In addition, if a Tandem Stock
Appreciation Right exists with respect to less than the full number of Shares
covered by a related Option, then an exercise or termination of such Option
shall not reduce the number of Shares to which the Tandem Stock Appreciation
Right applies until the number of Shares then exercisable under such Option
equals the number of Shares to which the Tandem Stock Appreciation Right
applies.
6.2.3.3 Any Option related to a Tandem Stock Appreciation Right shall no longer
be exercisable to the extent the Tandem Stock Appreciation Right has been
exercised.
6.2.3.4 The exercise price of a Tandem Stock Appreciation Right may be less than
the Fair Market Value on the date of grant if the Tandem Stock Appreciation
Right is added to an Option following the date of the grant of the Option
(subject to the requirements of Section 409A).
6.3 Freestanding Stock Appreciation Rights. Subject to Section 13.2, a
Freestanding Stock Appreciation Right generally shall have the same terms and
conditions as Options, including (a) a per Share exercise price not less than
Fair Market Value of one Share on the date of grant or, if applicable, on the
date of grant of an Option with respect to a Freestanding Stock Appreciation
Right granted in exchange for an Option (subject to the requirements of
Section 409A) except in the case of Substitute Awards or in connection with an
adjustment provided in Section 13.2, (b) a term not greater than seven
(7) years, and (c) the exercisability provisions set forth in Sections 5.8
through 5.10.
6.4 Automatic Exercise. An Award Agreement may provide that if on the last day
of the term of a Stock Appreciation Right the Fair Market Value of one Share
exceeds the exercise price per Share of the Stock Appreciation Right, the
Participant has not exercised the Stock Appreciation Right or the tandem Option
(if applicable), and neither the Stock Appreciation Right nor the Option has
expired, the Stock Appreciation Right shall be deemed to have been exercised by
the Participant on such day. In such event, the Company shall make payment to
the Participant in accordance with this Section 6, reduced by the number of
Shares (or cash) required for withholding taxes; any fractional Share shall be
settled in cash, rounded down to the nearest $.01.
 
6.5 No Repricing of Stock Appreciation Rights. Without the approval of the
Company’s shareholders, other than pursuant to Section 13.2, the Committee shall
not (a) reduce the grant price of any Stock Appreciation Right after the date of
grant (b) cancel any Stock Appreciation Right in exchange for cash or another
Award (other than in connection with a Change of Control, as defined in
Section 2.4, or a Substitute Award), or (c) take any other action with respect
to a Stock Appreciation Right that would be treated as a repricing under the
rules and regulations of the NASDAQ Stock Market.
6.6 Other Terms and Conditions. The provisions of Stock Appreciation Rights need
not be the same with respect to each Participant. The Committee may impose such
terms and conditions on Stock Appreciation Rights, including such conditions or
restrictions on the terms of exercise and the exercise price of any Stock
Appreciation Right, as the Committee shall determine in its sole discretion.
7.     RESTRICTED STOCK
7.1 Grants. Awards of Restricted Stock may be issued hereunder to Participants
either alone or in addition to other Awards granted under the Plan, and such
Restricted Stock Awards shall also be available as a form of payment of
Performance Awards and other earned cash-based incentive compensation. A
Restricted Stock Award shall be subject to vesting restrictions during the
Vesting Period as specified by the Committee. The Committee has absolute
discretion to determine whether any consideration (other than services) is to be
received by the Company or any Subsidiary as a condition precedent to the
issuance of Restricted Stock.

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7.2 Award Agreements. The terms of any Restricted Stock Award granted under the
Plan shall be set forth in an Award Agreement which shall contain provisions
determined by the Committee and not inconsistent with the Plan. The terms of
Restricted Stock Awards need not be the same with respect to each Participant.
7.3 Rights of Holders of Restricted Stock. Unless otherwise provided in the
Award Agreement, beginning on the date of grant of the Restricted Stock Award
and subject to execution of the Award Agreement, a Participant holding Shares of
Restricted Stock granted under the Plan may exercise full voting rights with
respect to those Shares and will be entitled to receive all dividends and other
distributions paid with respect to such Shares. Except as otherwise provided in
an Award Agreement, any Shares or any other property (other than cash)
distributed as a dividend or otherwise with respect to any Restricted Stock
Award as to which the restrictions have not yet lapsed shall be subject to the
same restrictions as such Restricted Stock Award. Notwithstanding the provisions
of this Section 7.3, cash dividends with respect to any Restricted Stock Award
and any other property (other than cash) distributed as a dividend or otherwise
with respect to any Restricted Stock Award that vests based on achievement of
performance goals shall be subject to restrictions and risk of forfeiture to the
same extent as the Restricted Stock with respect to which such cash, Shares or
other property has been distributed.
7.4 Issuance of Shares. Any Restricted Stock granted under the Plan may be
evidenced in such manner as the Committee may deem appropriate, including
book-entry registration or issuance of a stock certificate or certificates,
which certificate or certificates shall be held by the Company as escrow agent
until the restrictions on the Shares of Restricted Stock have lapsed. Such
certificate or certificates shall be registered in the name of the Participant
and shall bear an appropriate legend referring to the restrictions applicable to
such Restricted Stock. Except as otherwise provided in this Section 7, Shares of
Restricted Stock covered by each Restricted Stock Award granted under the Plan
will be released from escrow as soon as practicable after the last day on which
the Award remained subject to restrictions, or at such other time as the
Committee may determine. The Committee may, in its sole discretion, subject to
the limitations imposed under Section 162(m) of the Code and the regulations
thereunder in the case of a Restricted Stock Award intended to comply with the
performance-based exception under Code Section 162(m), waive the forfeiture
period and any other conditions set forth in any Award Agreement subject to such
terms and conditions as the Committee shall deem appropriate.
7.5 Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed will
revert to the Company and, subject to Section 3, again will become available for
grant under the Plan.
 
8.     RESTRICTED STOCK UNITS
8.1 Grants. Subject to the terms and provisions of the Plan, the Committee, at
any time and from time to time, may grant Restricted Stock Units to Participants
in such amounts as the Committee, in its sole discretion, will determine. After
the Committee determines that it will grant Restricted Stock Units under the
Plan, it will advise the Participant in an Award Agreement of the terms,
conditions, and restrictions related to the grant (as determined by the
Committee and not inconsistent with the Plan), including the number of
Restricted Stock Units and whether such Awards shall have Dividend Equivalents
pursuant to Section 13.6.
8.2 Vesting Criteria and Other Terms. The Committee will set vesting criteria in
its discretion, which, depending on the extent to which the criteria are met,
will determine the number of Restricted Stock Units that will be paid out to the
Participant. The Committee may set vesting criteria based upon continued
employment or service, the achievement of specific performance objectives
(Company-wide, departmental, divisional, business unit, or individual goals
(including, but not limited to, continued employment or service), applicable
federal or state securities laws or any other basis determined by the Committee
in its discretion.
8.3 Earning Restricted Stock Units. Upon meeting the applicable vesting
criteria, the Participant will be entitled to receive a payout as determined by
the Committee. Notwithstanding the foregoing, at any time after the grant of
Restricted Stock Units, the Committee, in its sole discretion, subject to the
limitations imposed under Section 162(m) of the Code and the regulations
thereunder in the case of a Restricted Stock Award intended to comply with the
performance-based exception under Code Section 162(m), may reduce or waive any
vesting criteria that must be met to receive a payout.
8.4 Form and Timing of Payment. Payment of earned Restricted Stock Units will be
made as soon as practicable after the date(s) determined by the Committee and
set forth in the Award Agreement; provided, however, that the timing of payment
shall in all cases comply with Section 409A to the extent applicable to the
Award. The Committee, in its sole discretion, may settle earned Restricted Stock
Units in cash, Shares, other property, or a combination thereof.
8.5 Cancellation. On the date set forth in the Award Agreement, all unearned
Restricted Stock Units will be forfeited to the Company and, subject to
Section 3, again will become available for grant under the Plan.

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9.     OTHER SHARE-BASED AWARDS
9.1 Grants. Other Awards of Shares and other Awards valued in whole or in part
by reference to, or are otherwise based on, Shares or other property
(collectively “Other Share-Based Awards”), including deferred stock units, may
be granted hereunder to Participants. Other Share-Based Awards shall also be
available as a form of payment of other Awards granted under the Plan and other
earned cash-based compensation (including Directors’ fees). Prior to granting
any Other Share-Based Awards to be settled upon a Change of Control, the
Committee shall consider the implications of Section 409A on, and take any
action or adopt any provision with respect to, such Other Share-Based Award that
it deems necessary or appropriate in its sole discretion.
9.2 Award Agreements. The terms of Other Share-Based Awards granted under the
Plan shall be set forth in an Award Agreement, or in a sub-plan forming part of
the Plan, which shall contain provisions determined by the Committee and not
inconsistent with the Plan. The terms of such Awards need not be the same with
respect to each Participant. Notwithstanding the provisions of this Section 9,
any property (other than cash) distributed as a dividend or otherwise with
respect to the number of Shares covered by an Other Share-Based Award that vests
based on achievement of performance goals shall be subject to restrictions and
risk of forfeiture to the same extent as the Shares covered by such Award with
respect to which such cash, Shares or other property has been distributed. Other
Share-Based Awards may be subject to vesting restrictions during the Vesting
Period as specified by the Committee.
 
9.3 Payment. Except as provided in Section 11 or as may be provided in an Award
Agreement, Other Share-Based Awards may be paid in cash, Shares, other property,
or any combination thereof, in the sole discretion of the Committee at the time
of payment. Other Share-Based Awards may be paid in a lump sum or in
installments or, in accordance with procedures established by the Committee, on
a deferred basis subject to the requirements of Section 409A.
9.4 Deferral of Director Fees and Other Compensation. Directors shall, if
determined by the Board, receive Other Share-Based Awards in the form of
deferred stock units in lieu of all or a portion of their annual retainer. In
addition, to the extent permitted by the Committee, (a) Directors may elect to
receive Other Share-Based Awards in the form of deferred stock units in lieu of
all or a portion of their annual and committee retainers and annual meeting
fees, and (b) Employees may elect to receive Other Share-Based Awards in the
form of deferred stock units in lieu of all or a portion of their compensation
for services to the Company. The Committee shall, in its absolute discretion,
establish such rules and procedures as it deems appropriate for such elections
and for the payment of the deferred stock units, including (but not limited to)
with respect to the requirements of Section 409A.
9.5 Cancellation of Performance Awards. On the date set forth in the Award
Agreement, all unearned or unvested Performance Awards will be forfeited to the
Company, and, subject to Section 3, again will be available for grant under the
Plan.
10.   PERFORMANCE AWARDS
10.1 Grants. Performance Awards in the form of Performance Shares or Performance
Units, as determined by the Committee in its sole discretion, may be granted
hereunder to Participants, for no consideration or for such minimum
consideration as may be required by applicable law, either alone or in addition
to other Awards granted under the Plan. The performance goals to be achieved for
each Performance Period shall be conclusively determined by the Committee and
may be based upon the criteria set forth in Section 11.2.
10.2 Value of Performance Units/Shares. Each Performance Unit will have an
initial value that is established by the Committee on or before the date of
grant. Each Performance Share will have an initial value equal to the Fair
Market Value of a Share on the date of grant.
10.3 Award Agreements. The terms of any Performance Award granted under the Plan
shall be set forth in an Award Agreement which shall contain provisions
determined by the Committee and not inconsistent with the Plan, including
whether such Awards shall have Dividend Equivalents (subject to the requirements
of Section 13.6). The terms of Performance Awards need not be the same with
respect to each Participant.
10.4 Terms and Conditions. The performance criteria to be achieved during any
Performance Period and the length of the Performance Period shall be determined
by the Committee upon the grant of each Performance Award. The Committee may set
vesting criteria based upon continued employment or service, the achievement of
specific performance objectives (Company-wide, departmental, divisional,
business unit, or individual goals (including, but not limited to, continued
employment or service), applicable federal or state securities laws or any other
basis determined by the Committee in its discretion. After the applicable
Performance Period has ended, the holder of Performance Units/Shares will be
entitled to receive a payout of the number of Performance Units/Shares earned by
the Participant over the Performance Period, to be determined as a function of
the extent to which the corresponding performance objectives or other vesting
provisions have been achieved. The amount of the Award to be distributed shall
be conclusively determined by the Committee.

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10.5 Payment. Except as provided in Section 11 or as may be provided in an Award
Agreement, Performance Awards will be distributed only after the end of the
relevant Performance Period. Performance Awards may be paid in cash, Shares,
other property, or any combination thereof, in the sole discretion of the
Committee at the time of payment. Performance Awards may be paid in a lump sum
or in installments following the close of the Performance Period or, in
accordance with procedures established by the Committee, on a deferred basis
subject to the requirements of Section 409A.
11.   CODE SECTION 162(m) PROVISIONS
11.1 Covered Employees. The purpose of this Section 11 is to provide the
Committee the ability to qualify Awards (other than Options and Stock
Appreciation Rights) that are granted pursuant to the Plan as qualified
performance-based compensation under Section 162(m) of the Code. If the
Committee, in its discretion, decides to grant a Performance-Based Award to a
Covered Employee, the provisions of this Section 11 will control over any
contrary provision in the Plan; provided, however, that the Committee may in its
discretion grant other Awards to such Covered Employees that are based on
performance goals or other specific criteria or goals but that do not satisfy
the requirements of this Section 11. The designation of a Covered Employee as
being subject to Section 162(m) of the Code will not in any manner entitle the
Covered Employee to receive an Award under the Plan. Moreover, designation of a
Covered Employee subject to Section 162(m) of the Code for a particular
Performance Period will not require designation of such Covered Employee in any
subsequent Performance Period and designation of one Covered Employee will not
require designation of any other Covered Employee in such period or in any other
period. Unless otherwise provided in the applicable Award Agreement, a Covered
Employee must be employed by the Company or its Subsidiary on the day a
Performance-Based Award for a Performance Period is paid to the Covered
Employee.
11.2 Performance Criteria. If the Committee determines that a Restricted Stock
Award, Performance Award, Restricted Stock Unit Award or Other Share-Based Award
is subject to this Section 11, the lapsing of restrictions thereon and the
distribution of cash, Shares or other property pursuant thereto, as applicable,
shall be subject to the achievement of one or more objective Performance Goals
established by the Committee, which shall be based on the attainment of
specified levels of one or any combination of the Performance Goals. Such
Performance Goals may be based solely by reference to the Company’s performance
or the performance of a Subsidiary, division, business segment or business unit
of the Company, or based upon the relative performance of other companies or
upon comparisons of any of the indicators of performance relative to other
companies. The Committee may also exclude the impact of an event or occurrence
which the Committee determines should appropriately be excluded, including
(a) restructurings, discontinued operations, extraordinary items, and other
unusual or non-recurring charges, (b) an event either not directly related to
the operations of the Company or not within the reasonable control of the
Company’s management, or (c) the cumulative effects of tax or accounting changes
in accordance with generally accepted accounting principles. Such Performance
Goals shall be set by the Committee within the time period prescribed by, and
shall otherwise comply with the requirements of, Section 162(m) of the Code, and
the regulations thereunder.
11.3 Procedures. To the extent necessary to comply with the performance-based
compensation requirements of Section 162(m) of the Code, with respect to any
Award granted subject to Performance Goals, the Committee will, in writing and
no later than the Determination Date, (a) designate one or more Participants who
are Covered Employees, (b) select the Performance Goals applicable to the
Performance Period, (c) establish the Performance Goals, and amounts or methods
of computation of such Awards, as applicable, which may be earned for such
Performance Period, and (d) specify the relationship between Performance Goals
and the amounts or methods of computation of such Awards, as applicable, to be
earned by each Covered Employee for such Performance Period. Following the
completion of each Performance Period, the Committee will certify in writing
whether the applicable Performance Goals have been achieved for such Performance
Period.
11.4 Adjustments. Notwithstanding any provision of the Plan (other than
Section 12), with respect to any Award that is subject to this Section 11, the
Committee may adjust downwards, but not upwards, the amount payable pursuant to
such Award, and the Committee may not waive the achievement of the applicable
Performance Goals, unless otherwise permitted by Section 162(m) of the Code.
 
11.5 Restrictions. The Committee shall have the power to impose such other
restrictions on Awards subject to this Section 11 as it may deem necessary or
appropriate to ensure that such Awards satisfy all requirements for
“performance-based compensation” within the meaning of Section 162(m) of the
Code. Notwithstanding any other provision of the Plan, any Award which is
granted to a Covered Employee and is intended to constitute qualified
performance-based compensation under Section 162(m) of the Code will be subject
to any additional limitations set forth in the Code (including any amendment to
Section 162(m)) or any regulations and ruling issued thereunder that are
requirements for qualification as qualified performance-based compensation as
described in Section 162(m) of the Code, and the Plan will be deemed amended to
the extent necessary to conform to such requirements.

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11.6 Limitations on Grants to Individual Participant.
11.6.1 Section 162(m) Limitations. Subject, in each case, to adjustment as
provided in Section 13.2, the Company may grant (a) Options or Stock
Appreciation Rights during any 12-month period to a Participant for up to a
maximum of 2,000,000 Shares and (b) up to a maximum of an additional 900,000
Shares with respect to Restricted Stock Awards, Performance Awards, Restricted
Stock Unit Awards and/or Other Share-Based Awards during any 12-month period
that are intended to comply with the performance-based exception under Code
Section 162(m) and are denominated in Shares (collectively, the “Share-Based
Limitations”). In addition to the foregoing Share-Based Limitations, a
Participant may receive up to an additional $3,000,000 during any 12-month
period with respect to Performance Awards that are intended to comply with the
performance-based exception under Code Section 162(m) and are denominated in
cash (the “Cash-Based Limitation,” and collectively with the Share-Based
Limitations, the “Limitations”). If an Award is cancelled, the cancelled Award
shall continue to be counted toward the applicable Limitations.
11.6.2 Director Limitations. Notwithstanding the foregoing in Section 11.6.1 and
subject in each case to adjustments as provided in Section 13.2, the Company,
during any 12-month period, may grant to a Director (a) Options or Stock
Appreciation Rights for up to a maximum of 650,000 Shares and (b) up to a
maximum of an additional 300,000 Shares with respect to Restricted Stock Awards,
Performance Awards, Restricted Stock Unit Awards and/or Other Share-Based Awards
that are denominated in Shares. In addition, a Director may receive up to an
additional $1,000,000 during any 12-month period with respect to Performance
Awards that are denominated in cash.
12.   CHANGE OF CONTROL PROVISIONS
12.1 Impact on Certain Awards. Award Agreements may provide that in the event of
a Change of Control of the Company (as that term may be defined therein),
(a) Options and Stock Appreciation Rights outstanding as of the date of the
Change of Control immediately vest and become fully exercisable, (b) that
Options and Stock Appreciation Rights outstanding as of the date of the Change
of Control may be cancelled and terminated without payment therefor if the Fair
Market Value of one Share as of the date of the Change of Control is less than
the per Share Option exercise price or Stock Appreciation Right grant price,
(c) restrictions and deferral limitations on Restricted Stock lapse and the
Restricted Stock becomes free of all restrictions and limitations and becomes
fully vested, (d) all Performance Awards shall be considered to be earned and
payable (either in full or pro rata based on the portion of Performance Period
completed as of the date of the Change of Control), and any limitations or other
restrictions shall lapse and such Performance Awards shall be immediately
settled or distributed, and (e) the restrictions and deferral limitations and
other conditions applicable to any Other Share-Based Awards, Restricted Stock
Unit Awards, or any other Awards shall lapse, and such Other Share-Based Awards,
Restricted Stock Unit Awards, or such other Awards shall become free of all
restrictions, limitations or conditions and become fully vested.
12.2 Assumption or Substitution of Certain Awards.
12.2.1 Unless otherwise provided in an Award Agreement, in the event of a Change
of Control of the Company of which the successor company assumes or substitutes
for an Option, Stock Appreciation Right, Restricted Stock Award, Restricted
Stock Unit Award, or Other Share-Based Award (or in which the Company is the
ultimate parent corporation and continues the Award), then each outstanding
Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit
Award, or Other Share-Based Award shall not be accelerated as described in
Sections 12.1(a), (c) and (e). For the purposes of this Section 12.2, an Option,
Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award,
or Other Share-Based Award shall be considered assumed or substituted for if
following the Change of Control the Award confers the right to purchase or
receive, for each Share subject to the Option, Stock Appreciation Right,
Restricted Stock Award, Restricted Stock Unit Award, or Other Share-Based Award
immediately prior to the Change of Control, the consideration (whether stock,
cash or other securities or property) received in the transaction constituting a
Change of Control by holders of Shares for each Share held on the effective date
of such transaction (and if holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the
transaction constituting a Change of Control is not solely common stock of the
successor company, the Committee may, with the consent of the successor company,
provide that the consideration to be received upon the exercise or vesting of an
Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit
Award, or Other Share-Based Award, for each Share subject thereto, will be
solely common stock of the successor company substantially equal in fair market
value to the per Share consideration received by holders of Shares in the
transaction constituting a Change of Control. The determination of such
substantial equality of value of consideration shall be made by the Committee in
its sole discretion and its determination shall be conclusive and binding.
Notwithstanding the foregoing, on such terms and conditions as may be set forth
in an Award Agreement, in the event of a termination of a Participant’s
employment in such successor company within a specified time period following
such Change of Control, each Award held by such Participant at the time of the
Change of Control shall be accelerated.
12.2.2 The Committee, in its discretion, may determine that, upon the occurrence
of a Change of Control of the Company, each Option and Stock Appreciation Right
outstanding shall terminate within a specified number of days after notice to
the Participant, and/or that each Participant shall receive, with respect to
each Share subject to such Option or Stock Appreciation Right, an amount equal
to the excess of the Fair Market Value of such Share immediately prior to the
occurrence of such Change of Control

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over the exercise price per Share of such Option and/or Stock Appreciation
Right; such amount to be payable in cash, in one or more kinds of stock or
property (including the stock or property, if any, payable in the transaction)
or in a combination thereof, as the Committee, in its discretion, shall
determine; provided, however, that if the Fair Market Value of one Share as of
the date of the Change of Control is less than the per Share Option exercise
price or Stock Appreciation Right grant price, the Committee may, in its
discretion, cancel and terminate each such outstanding Option and/or Stock
Appreciation Right without payment.
13.   GENERALLY APPLICABLE PROVISIONS
13.1 Amendment and Termination of the Plan. The Board may, from time to time,
alter, amend, suspend or terminate the Plan as it shall deem advisable, subject
to any requirement for shareholder approval imposed by applicable law, including
the rules and regulations of the NASDAQ Stock Market provided that the Board may
not amend the Plan in any manner that would result in noncompliance with Rule
16b-3 of the Exchange Act; and further provided that the Board may not, without
the approval of the Company’s shareholders, amend the Plan to (a) increase the
number of Shares that may be the subject of Awards under the Plan (except for
adjustments pursuant to Section 13.2), (b) expand the types of awards available
under the Plan, (c) materially expand the class of persons eligible to
participate in the Plan, (d) amend Sections 5.3, 6.3, or 6.5 to eliminate the
requirements relating to minimum exercise price and shareholder approval,
(e) increase the maximum permissible term of any Option specified by Section 5.4
or the maximum permissible term of a Freestanding Stock Appreciation Right
specified in Section 6.3, or (f) increase the numerical limitations in
Section 11.6. The Board may not, without the approval of the Company’s
shareholders, except as set forth in Section 13.2, (i) lower, after it is
granted, the option price per Share of an Option or the grant price per Share of
a Stock Appreciation Right, (ii) cancel an Option or Stock Appreciation Right in
exchange for cash or another Award (other than in connection with Substitute
Awards or a Change of Control, as defined in Section 2.4), or (iii) take any
other action with respect to an Option or Stock Appreciation Right that would be
treated as a repricing under the rules and regulations of the NASDAQ Stock
Market. In addition, no amendments to, or termination of, the Plan shall in any
way impair the rights of a Participant under any Award previously granted
without such Participant’s consent. Termination of the Plan will not affect the
Committee’s ability to exercise the powers granted to it hereunder with respect
to Awards granted under the Plan prior to the date of such termination.
13.2 Adjustments. In the event of any merger, reorganization, consolidation,
recapitalization, dividend or distribution (whether in cash, shares, other
securities or other property, other than a regular cash dividend), stock split,
reverse stock split, spin-off, split-up, combination, repurchase or exchange of
Shares or other securities of the Company, or similar transaction or other
change in corporate structure affecting the Shares or the value thereof, such
adjustments and other substitutions shall be made to the Plan and to Awards as
the Committee deems equitable or appropriate taking into consideration the
accounting and tax consequences, including such adjustments in the aggregate
number, class and kind of securities that may be delivered under the Plan, the
numerical limitations in Section 11.6, the maximum number of shares that may be
issued pursuant to Incentive Stock Options, and in the number, class, kind and
option or exercise price of securities subject to outstanding Awards granted
under the Plan (including, if the Committee deems appropriate, the substitution
of similar options to purchase the shares of, or other awards denominated in the
shares of, another company) as the Committee may determine to be appropriate in
its sole discretion; provided, however, that the number of Shares subject to any
Award shall always be a whole number.
13.3 Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Committee will notify each Participant as soon
as practicable prior to the effective date of such proposed transaction. To the
extent it has not been previously exercised (with respect to an Option or Stock
Appreciation Right) or vested (with respect to an Award other than an Option or
Stock Appreciation Right), an Award will terminate immediately prior to the
consummation of such proposed action.
13.4 Transferability of Awards. Except as provided below, no Award and no Shares
subject to Awards described in Section 9 that have not been issued or as to
which any applicable restriction, performance or deferral period has not lapsed,
may be sold, assigned, transferred, pledged or otherwise encumbered, other than
by will or the laws of descent and distribution, and such Award may be exercised
during the life of the Participant only by the Participant or the Participant’s
guardian or legal representative. To the extent and under such terms and
conditions as determined by the Committee, a Participant may assign or transfer
an Award (each transferee thereof, a “Permitted Assignee”) to (a) the
Participant’s spouse, children or grandchildren (including any adopted and step
children or grandchildren), parents, grandparents or siblings, (b) to a trust
for the benefit of one or more of the Participant or the persons referred to in
clause (a), (c) to a partnership, limited liability company or corporation in
which the Participant or the persons referred to in clause (a) are the only
partners, members or shareholders or (d) for charitable donations; provided that
such Permitted Assignee shall be bound by and subject to all of the terms and
conditions of the Plan and the Award Agreement relating to the transferred Award
and shall execute an agreement satisfactory to the Company evidencing such
obligations; and provided further that such Participant shall remain bound by
the terms and conditions of the Plan.
13.5 Leaves of Absence/Transfer Between Locations. Unless the Committee provides
otherwise or as otherwise required by applicable law, vesting of Awards granted
hereunder will be suspended during any unpaid leave of absence, such that
vesting shall cease on the first day of any unpaid leave of absence and shall
only recommence upon return to active service. A Participant will not cease to
be an employee of the Company or its Subsidiary in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company or its Subsidiary. For purposes of Incentive
Stock Options, no such leave may exceed

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three (3) months, unless reemployment upon expiration of such leave is
guaranteed by statute or contract. If reemployment upon expiration of a leave of
absence approved by the Company is not so guaranteed, then six (6) months
following the first (1st) day of such leave any Incentive Stock Option held by
the Participant will cease to be treated as an Incentive Stock Option and will
be treated for tax purposes as a Nonstatutory Stock Option.
 
13.6 Deferral; Dividend Equivalents. The Committee shall be authorized to
establish procedures pursuant to which the payment of any Award may be deferred,
subject to the requirements of Section 409A. Subject to the provisions of the
Plan and any Award Agreement, the recipient of an Award other than an Option or
Stock Appreciation Right may, if so determined by the Committee, be entitled to
receive, currently or on a deferred basis, amounts equivalent to cash, stock or
other property dividends on Shares (“Dividend Equivalents”) with respect to the
number of Shares covered by the Award, as determined by the Committee, in its
sole discretion. The Committee may provide that the Dividend Equivalents (if
any) shall be deemed to have been reinvested in additional Shares or otherwise
reinvested and may provide that the Dividend Equivalents are subject to the same
vesting or performance conditions as the underlying Award. Notwithstanding the
foregoing, Dividend Equivalents distributed in connection with an Award that
vests based on the achievement of performance goals shall be subject to
restrictions and risk of forfeiture to the same extent as the Award with respect
to which such cash, stock or other property has been distributed.

13.7 One-Time Option Exchange. Notwithstanding any other provision of the stock
plan to the contrary, upon approval of the company’s shareholders of this
Section in connection with the Company’s 2016 Annual Meeting of Shareholders,
the Committee may provide for, and the company may implement, a one-time-only
option exchange offer, pursuant to which certain outstanding Options could, at
the election of the person holding such Option, be tendered to the company for
cancellation in exchange for the issuance of an Option, with a lower per share
exercise price, that covers the same number of shares as the number of shares
that were subject to the corresponding cancelled Option, provided that such
one-time-only option exchange offer is commenced within 12 months following the
date of such shareholder approval.
14.   MISCELLANEOUS
14.1 Award Agreements. Each Award Agreement shall either be (a) in writing in a
form approved by the Committee and executed by the Company by an officer duly
authorized to act on its behalf, or (b) an electronic notice in a form approved
by the Committee and recorded by the Company (or its designee) in an electronic
recordkeeping system used for the purpose of tracking one or more types of
Awards as the Committee may provide; in each case and if required by the
Committee, the Award Agreement shall be executed or otherwise electronically
accepted by the recipient of the Award in such form and manner as the Committee
may require. The Committee may authorize any officer of the Company to execute
any or all Award Agreements on behalf of the Company. The Award Agreement shall
set forth the material terms and conditions of the Award as established by the
Committee consistent with the provisions of the Plan.
14.2 Tax Withholding. The Company shall have the right to make all payments or
distributions pursuant to the Plan to a Participant (or a Permitted Assignee
thereof) (any such person, a “Payee”) net of any applicable federal, state and
local taxes required to be paid or withheld as a result of (a) the grant of any
Award, (b) the exercise of an Option or Stock Appreciation Right, (c) the
delivery of Shares or cash, (d) the lapse of any restrictions in connection with
any Award or (e) any other event occurring pursuant to the Plan. The Company or
any Subsidiary shall have the right to withhold from wages or other amounts
otherwise payable to such Payee such withholding taxes as may be required by
law, or to otherwise require the Payee to pay such withholding taxes. If the
Payee shall fail to make such tax payments as are required, the Company or its
Subsidiaries shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to such Payee or to take
such other action as may be necessary to satisfy such withholding obligations.
The Committee shall be authorized to establish procedures for election by
Participants to satisfy such obligation for the payment of such taxes by
tendering previously acquired Shares (either actually or by attestation, having
a Fair Market Value equal to the minimum statutory amount required to be
withheld), or by directing the Company to retain Shares (having a Fair Market
Value equal to the minimum statutory amount required to be held) otherwise
deliverable in connection with the Award. The Fair Market Value of the Shares to
be withheld or delivered will be determined as of the date that the taxes are
required to be withheld.
14.3 Right of Discharge Reserved; Claims to Awards. Nothing in the Plan nor the
grant of an Award hereunder shall confer upon any Employee or Director the right
to continue in the employment or service of the Company or any Subsidiary or
affect any right that the Company or any Subsidiary may have to terminate the
employment or service of (or to demote or to exclude from future Awards under
the Plan) any such Employee or Director at any time for any reason. Except as
specifically provided by the Committee, the Company shall not be liable for the
loss of existing or potential profit from an Award granted in the event of
termination of an employment or other relationship. No Employee or Director
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Employees or Directors under the Plan.
14.4 Prospective Recipient. The prospective recipient of any Award under the
Plan shall not, with respect to such Award, be deemed to have become a
Participant, or to have any rights with respect to such Award, until and unless
such recipient shall have executed an agreement or other instrument evidencing
the Award and delivered a copy thereof to the Company, and otherwise complied
with the then applicable terms and conditions.

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14.5 Date of Grant. The date of grant of an Award will be, for all purposes, the
date on which the Committee makes the determination granting such Award, or such
other later date as is determined by the Committee. Notice of the determination
will be provided to each Participant within a reasonable time after the date of
such grant.
14.6 Substitute Awards. Notwithstanding any other provision of the Plan, the
terms of Substitute Awards may vary from the terms set forth in the Plan to the
extent the Committee deems appropriate to conform, in whole or in part, to the
provisions of the awards in substitution for which they are granted.
14.7 Cancellation of Award. Notwithstanding anything to the contrary contained
herein, an Award Agreement may provide that the Award shall be canceled if the
Participant, without the consent of the Company, while employed by the Company
or any Subsidiary or after termination of such employment or service, engages in
activity that violates any agreement between the Company or any Subsidiary and
Participant or upon the occurrence of other specified events, as determined by
the Committee in its sole discretion. Such events may include, but shall not be
limited to, fraud, breach of a fiduciary duty, restatement of financial
statements as a result of fraud or willful errors or omissions, termination of
employment for cause, violation of material Company and/or Subsidiary policies,
breach of non-competition, confidentiality, or other restrictive covenants that
may apply to the Participant, or other conduct by the Participant that is
detrimental to the business or reputation of the Company and/or its
Subsidiaries. The Committee may provide in an Award Agreement that if within the
time period specified in the agreement the Participant establishes a
relationship with a competitor or engages in an activity referred to in the
preceding sentence, the Participant will forfeit any gain realized on the
vesting or exercise of the Award and must repay such gain to the Company. The
Committee also may require the application of this Section 14.7 with respect to
any Award previously granted to a Participant even without any specified terms
being included in any applicable Award Agreement to the extent required under
applicable laws.
14.8 Stop Transfer Orders. All certificates for Shares delivered under the Plan
pursuant to any Award shall be subject to such stop-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Shares are then listed, and any applicable federal or
state securities law, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such restrictions.
14.9 Investment Representations. As a condition to the exercise of an Award, the
Company may require the person exercising such Award to represent and warrant at
the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required.
14.10 Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction or to complete or comply
with the requirements of any registration or other qualification of the Shares
under any state, federal or foreign law or under the rules and regulations of
the Securities and Exchange Commission, the stock exchange on which Shares of
the same class are then listed, or any other governmental or regulatory body,
which authority, registration, qualification or rule compliance is deemed by the
Company’s counsel to be necessary or advisable for the issuance and sale of any
Shares hereunder, will relieve the Company of any liability in respect of the
failure to issue or sell such Shares as to which such requisite authority,
registration, qualification or rule compliance will not have been obtained.
14.11 Nature of Payments. All Awards made pursuant to the Plan are in
consideration of services performed or to be performed for the Company or any
Subsidiary, division or business unit of the Company. Any income or gain
realized pursuant to Awards under the Plan and any Stock Appreciation Rights
constitute a special incentive payment to the Participant and shall not be taken
into account, to the extent permissible under applicable law, as compensation
for purposes of any of the employee benefit plans of the Company or any
Subsidiary except as may be determined by the Committee or by the Board or board
of directors of the applicable Subsidiary.
14.12 Other Plans. Nothing contained in the Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to shareholder
approval if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases.
14.13 Severability. The provisions of the Plan shall be deemed severable. If any
provision of the Plan shall be held unlawful or otherwise invalid or
unenforceable in whole or in part by a court of competent jurisdiction, such
provision shall (a) be deemed limited to the extent that such court of competent
jurisdiction deems it lawful, valid and/or enforceable and as so limited shall
remain in full force and effect, and (b) not affect any other provision of the
Plan or part thereof, each of which shall remain in full force and effect. If
the making of any payment or the provision of any other benefit required under
the Plan shall be held unlawful or otherwise invalid or unenforceable by a court
of competent jurisdiction, such unlawfulness, invalidity or unenforceability
shall not prevent any other payment or benefit from being made or provided under
the Plan, and if the making of any payment in full or the provision of any other
benefit required under the Plan in full would be unlawful or otherwise invalid
or unenforceable, then such unlawfulness, invalidity or unenforceability shall
not prevent such payment or benefit from being made or provided in part, to the
extent that it would not be unlawful, invalid or unenforceable, and the maximum
payment or benefit that would not be unlawful, invalid or unenforceable shall be
made or provided under the Plan.

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14.14 Construction. As used in the Plan, the words “include” and “including,”
and variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words “without limitation.”
14.15 Unfunded Status of the Plan. The Plan is intended to constitute an
“unfunded” plan for incentive compensation. With respect to any payments not yet
made to a Participant by the Company, nothing contained herein shall give any
such Participant any rights that are greater than those of a general creditor of
the Company. In its sole discretion, the Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver the Shares or payments in lieu of or with respect to Awards hereunder;
provided, however, that the existence of such trusts or other arrangements is
consistent with the unfunded status of the Plan.
14.16 Governing Law. The Plan and all determinations made and actions taken
thereunder, to the extent not otherwise governed by the Code or the laws of the
United States, shall be governed by the laws of the State of Washington, without
reference to principles of conflict of laws, and construed accordingly.
14.17 Effective Date; Termination. This amendment and restatement of the Plan
shall be effective on the Restatement Date. Awards may be granted under the Plan
at any time and from time to time on or prior to the tenth anniversary of the
earlier of the adoption of the amendment and restatement of the Plan or the
approval of the Plan by the Company’s shareholders, on which date the Plan will
expire except as to Awards then outstanding under the Plan. Such outstanding
Awards shall remain in effect until they have been exercised or terminated, or
have expired.
14.18 Foreign Employees. Awards may be granted to Participants who are foreign
nationals or employed outside the United States, or both, on such terms and
conditions different from those applicable to Awards to Employees employed in
the United States as may, in the judgment of the Committee, be necessary or
desirable in order to recognize differences in local law or tax policy. The
Committee also may impose conditions on the exercise or vesting of Awards in
order to minimize the Company’s obligation with respect to tax equalization for
Employees on assignments outside their home country.
 
14.19 Compliance with Section 409A. This Plan is intended to comply and shall be
administered in a manner that is intended to comply with or be exempt from
Section 409A and shall be construed and interpreted, including without
limitation with respect to ambiguities and/or ambiguous terms, in accordance
with such intent, except as otherwise specifically determined in the sole
discretion of the Committee. To the extent that an Award or the payment,
settlement or deferral thereof is subject to Section 409A, the Award shall be
granted, paid, settled or deferred in a manner that will comply with
Section 409A, except as otherwise determined by the Committee. Each payment or
benefit under this Plan and under each Award Agreement is intended to constitute
a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury
Regulations. Any provision of this Plan that would cause the grant of an Award
or the payment, settlement or deferral thereof to fail to satisfy Section 409A
shall be amended to comply with Section 409A on a timely basis, which may be
made on a retroactive basis, in accordance with regulations and other guidance
issued under Section 409A.
14.20 Captions. The captions in the Plan are for convenience of reference only,
and are not intended to narrow, limit or affect the substance or interpretation
of the provisions contained herein.
14.21 Conditions to Issuance of Shares. The granting of Awards and the issuance
of Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be necessary or appropriate. Shares (or if
applicable, cash or other property) shall not be issued pursuant to an Award
unless, as determined by the Company, the issuance and delivery of the Shares
(or if applicable, cash or other property) complies with all such laws, rules,
regulations and approvals and will be further subject to the approval of counsel
for the Company with respect to such compliance.

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