Exhibit 10.4
ATMEL CORPORATION
2005 STOCK PLAN
(AS AMENDED AND RESTATED AUGUST 14, 2008)
     1. Background. The Plan permits the grant of Nonstatutory Stock Options,
Incentive Stock Options, Stock Purchase Rights, Stock Appreciation Rights, and
Restricted Stock Units.
     2. Purposes of the Plan. The purposes of this 2005 Stock Plan are:

  –   to attract and retain the best available personnel for positions of
substantial responsibility,     –   to provide additional incentive to
Employees, Directors and Consultants, and     –   to promote the success of the
Company’s business.

     3. Definitions. As used herein, the following definitions shall apply:
          (a) “Administrator” means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 5 of the Plan.
          (b) “Affiliate” means any corporation or any other entity (including,
but not limited to, partnerships and joint ventures) controlling, controlled by,
or under common control with the Company.
          (c) “Applicable Laws” means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Awards are, or will be, granted under
the Plan.
          (d) “Annual Revenue” means the Company’s or a business unit’s net
sales for the Fiscal Year, determined in accordance with generally accepted
accounting principles; provided, however, that prior to the Fiscal Year, the
Committee shall determine whether any significant item(s) shall be excluded or
included from the calculation of Annual Revenue with respect to one or more
Participants.
          (e) “Award” means, individually or collectively, a grant under the
Plan of Options, Stock Purchase Rights, Stock Appreciation Rights, and
Restricted Stock Units.
          (f) “Award Agreement” means the written agreement setting forth the
terms and provisions applicable to each Award granted under the Plan. The Award
Agreement is subject to the terms and conditions of the Plan.

 

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          (g) “Board” means the Board of Directors of the Company.
          (h) “Cash Flow from Operations” means as to any Fiscal Year, the
Company’s cash generated from operating activities, or a business unit’s cash
generated from operating activities, determined in accordance with generally
acceptable accounting principles.
          (i) “Code” means the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code or regulation thereunder shall
include such section or regulation, any valid regulation promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation.
          (j) “Committee” means a committee of Directors appointed by the Board
in accordance with Section 5 of the Plan.
          (k) “Common Stock” means the common stock of the Company.
          (l) “Company” means Atmel Corporation, a Delaware corporation.
          (m) “Consultant” means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.
          (n) “Director” means a member of the Board, either as an Employee or
an Outside Director.
          (o) “Disability” means total and permanent disability as defined in
Section 22(e)(3) of the Code.
          (p) “Earnings Per Share” means as to any Fiscal Year, the Company’s
Net Income or a business unit’s Pro Forma Net Income, divided by a weighted
average number of common shares outstanding and dilutive common equivalent
shares deemed outstanding.
          (q) “Employee” means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee 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, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
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 three months following the 91st day of such
leave any Incentive Stock Option held by the Optionee shall cease to be treated
as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option. Neither service as a Director nor payment of a
director’s fee by the Company shall be sufficient to constitute “employment” by
the Company.
          (r) “Exercise Price” means the price at which a Share may be purchased
by a Participant pursuant to the exercise of an Option.
          (s) “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

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          (t) “Fair Market Value” means, as of any date, the value of Common
Stock determined as follows:
               (i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
Global Select Market, Nasdaq Global Market, or Nasdaq Capital Market, its Fair
Market Value shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such exchange or system on the day
of determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable, or, if the day of determination is not a
trading day, the average of the closing sales prices (or the closing bids, if no
sales were reported) on the immediately following and preceding trading dates,
in either case as reported by The Wall Street Journal or such other source as
the Administrator deems reliable;
               (ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the day of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; or
               (iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
          (u) “Fiscal Year” means the fiscal year of the Company.
          (v) “Grant Date” means, with respect to an Award, the date that the
Award was granted.
          (w) “Incentive Stock Option” means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
          (x) “Net Income” means as to any Fiscal Year, the income after taxes
of the Company for the Fiscal Year determined in accordance with generally
accepted accounting principles, provided that prior to the Fiscal Year, the
Committee shall determine whether any significant item(s) shall be included or
excluded from the calculation of Net Income with respect to one or more
Participants.
          (y) “Nonstatutory Stock Option” means an Option not intended to
qualify as an Incentive Stock Option.
          (z) “Notice of Grant” means a written or electronic notice evidencing
certain terms and conditions of an individual Award grant. The Notice of Grant
is part of the Award Agreement.
          (aa) “Officer” means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

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          (bb) “Operating Profit” means the Company’s or a business unit’s
profit from operations but excluding any unusual items, determined in accordance
with generally accepted accounting principles.
          (cc) “Option” means an Incentive Stock Option or a Nonstatutory Stock
Option granted pursuant to the Plan.
          (dd) “Optionee” means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.
          (ee) “Option Exchange Program” means a program whereby outstanding
Options are surrendered or cancelled in exchange for the right to receive
options of the same type, of a different type and/or cash pursuant to such terms
as the Administrator may determine.
          (ff) “Optioned Stock” means the Common Stock subject to an Award.
          (gg) “Outside Director” means a Director who is not an Employee.
          (hh) “Parent” means a “parent corporation,” whether now or hereafter
existing, as defined in Section 424(e) of the Code.
          (ii) “Participant” means the holder of an outstanding Award, which
shall include an Optionee.
          (jj) “Performance Goals” means the goal(s) (or combined goal(s))
determined by the Committee (in its discretion) to be applicable to a
Participant with respect to an Award. As determined by the Committee, the
Performance Goals applicable to an Award may provide for a targeted level or
levels of achievement using one or more of the following measures: (a) Annual
Revenue, (b) Operating Profit, (c) Cash Flow from Operations, (d) Net Income,
(e) Pro Forma Net Income, (f) Earnings Per Share, and (g) Return on Sales. The
Performance Goals may differ from Participant to Participant and from Award to
Award. Any criteria used may be (i) measured in absolute terms, (ii) measured in
relative terms (including, but not limited to compared to another company or
companies), (iii) measured against the performance of the Company as a whole or
a segment of the Company and/or (iv) measured on a pre-tax or post-tax basis (if
applicable).
          (kk) “Plan” means this 2005 Stock Plan, as amended.
          (ll) “Pro Forma Net Income” means as to any business unit for any
Fiscal Year, the Controllable Profits of such business unit, minus allocations
of designated corporate expenses.
          (mm) “Reload Option” means an Option that automatically is granted if
a Participant pays the exercise price of an Option by tendering Shares.
          (nn) “Restricted Stock” means shares of Common Stock acquired pursuant
to a grant of Stock Purchase Rights under Section 12 of the Plan.
          (oo) “Restricted Stock Purchase Agreement” means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock

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Purchase Right. The Restricted Stock Purchase Agreement is subject to the terms
and conditions of the Plan and the Notice of Grant.
          (pp) “Restricted Stock Unit” means an Award granted to a Participant
pursuant to Section 14.
          (qq) “Retirement” means, in the case of an Employee or Director: (a) a
Termination of Service occurring on or after age sixty-five (65), or (b) a
Termination of Service occurring on or after age sixty (60) with at least ten
(10) Years of Service. With respect to a Consultant, no Termination of Service
shall be deemed to be on account of “Retirement.”
          (rr) “Return on Sales” means as to any Fiscal Year, the percentage
equal to the Company’s Net Income or the business unit’s Pro Forma Net Income,
divided by the Company’s or the business unit’s Annual Revenue, as applicable.
          (ss) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
          (tt) “Section 16(b)” means Section 16(b) of the Exchange Act.
          (uu) “Section 409A” means Section 409A of the Code and any proposed,
temporary or final Treasury Regulations and Internal Revenue Service guidance
thereunder, as each may be amended from time to time.
          (vv) “Service Provider” means an Employee, Director or Consultant.
          (ww) “Share” means a share of the Common Stock, as adjusted in
accordance with Section 16 of the Plan.
          (xx) “Stock Appreciation Right” or “SAR” means an Award, granted alone
or in connection with a related Option (either affiliated or tandem) that
pursuant to Section 13 is designated as an SAR.
          (yy) “Stock Purchase Right” means the right to purchase Common Stock
pursuant to Section 12 of the Plan, as evidenced by a Notice of Grant.
          (zz) “Subsidiary” means a “subsidiary corporation”, whether now or
hereafter existing, as defined in Section 424(f) of the Code.
          (aaa) “Termination of Service” means (a) in the case of an Employee, a
cessation of the employee-employer relationship between the Employee and the
Company or an Affiliate for any reason, including, but not by way of limitation,
a termination by resignation, discharge, death, Disability, Retirement, or the
disaffiliation of an Affiliate, but excluding any such termination where there
is a simultaneous re-employment or engagement as a consultant by the Company or
an Affiliate; (b) in the case of a Consultant, a cessation of the service
relationship between the Consultant and the Company or an Affiliate for any
reason, including, but not by way of limitation, a termination by resignation,
discharge, death, Disability, or the disaffiliation of an Affiliate, but
excluding any such termination where there is a simultaneous employment as an
Employee or re-

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engagement of the Consultant by the Company or an Affiliate; and (c) in the case
of a Director, a cessation of the Director’s service on the Board for any
reason, including, but not by way of limitation, a termination by resignation,
death, Disability, Retirement or non-reelection to the Board, but excluding any
such termination where there is a simultaneous employment as an Employee or
engagement as a Consultant by the Company or an Affiliate.
     4. Stock Subject to the Plan.
          (a) Subject to the provisions of Section 16 of the Plan, the maximum
aggregate number of Shares that may be optioned and sold under the Plan is
114,000,000 Shares.1 The Shares may be authorized, but unissued, or reacquired
Common Stock.
          If an Award expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated); provided,
however, that Shares that have actually been issued under the Plan, whether upon
exercise of an Option or Right, shall not be returned to the Plan and shall not
become available for future distribution under the Plan, except that if Shares
of Restricted Stock are repurchased by the Company at their original purchase
price, such Shares shall become available for future grant under the Plan.
          (b) Full Value Awards. Any Shares subject to Restricted Stock,
Restricted Stock Units, and Stock Purchase Rights granted on or after May 14,
2008 will be counted against the numerical limits of this Section 4 as one and
78/100 (1.78) Shares for every one (1) Share subject thereto. Further, if Shares
acquired pursuant to any Restricted Stock, Restricted Stock Units, and Stock
Purchase Rights granted on or after May 14, 2008 are forfeited or repurchased by
the Company and would otherwise return to the Plan pursuant to this Section 4,
one and 78/100 (1.78) times the number of Shares so forfeited or repurchased
will return to the Plan and will again become available for issuance.
     5. Administration of the Plan.
          (a) Procedure.
               (i) Multiple Administrative Bodies. The Plan may be administered
by different Committees with respect to different groups of Service Providers.
               (ii) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Awards granted hereunder as
“performance-based compensation” within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more “outside
directors” within the meaning of Section 162(m) of the Code. For purposes of
qualifying grants of Awards as “performance-based compensation” under Section
162(m) of the Code, the Committee, in its discretion, may set restrictions based
upon the achievement of Performance Goals. The Performance Goals shall be set by
the Committee on or before the latest
 

1   Includes 58,000,000 Shares approved by the Company’s stockholders on May 14,
2008.

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date permissible to enable the Awards to qualify as “performance-based
compensation” under Section 162(m) of the Code. In granting Awards that are
intended to qualify under Section 162(m) of the Code, the Committee shall follow
any procedures determined by it from time to time to be necessary or appropriate
to ensure qualification of the Awards under Section 162(m) of the Code (e.g., in
determining the Performance Goals).
               (iii) Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule 16b-3.
               (iv) Other Administration. Other than as provided above, the Plan
shall be administered by (A) the Board or (B) a Committee, which committee shall
be constituted to satisfy Applicable Laws.
          (b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
               (i) to determine the Fair Market Value;
               (ii) to select the Service Providers to whom Awards may be
granted hereunder;
               (iii) to determine the number of shares of Common Stock to be
covered by each Award granted hereunder;
               (iv) to approve forms of agreement for use under the Plan;
               (v) to determine the terms and conditions, not inconsistent with
the terms 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 Administrator, in its sole discretion, shall
determine;
               (vi) to construe and interpret the terms of the Plan and Awards
granted pursuant to the Plan;
               (vii) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of satisfying applicable foreign laws;
               (viii) to modify or amend each Award (subject to Section 18(c) of
the Plan), including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the
Plan;
               (ix) to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon exercise
of an Award that number of

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Shares having a Fair Market Value equal to the minimum amount required to be
withheld. The Fair Market Value of the Shares to be withheld shall be determined
on the date that the amount of tax to be withheld is to be determined. All
elections by an Optionee to have Shares withheld for this purpose shall be made
in such form and under such conditions as the Administrator may deem necessary
or advisable;
               (x) to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Award previously granted by
the Administrator;
               (xi) to commence a Section 409A Exchange Offer in connection with
each Option that had a per share exercise price that was less than the fair
market value of a share of the Company’s common stock, as determined for
purposes of Section 409A, on the Option’s grant date and that was unvested, in
whole or in part, as of December 31, 2004 (notwithstanding Section 18(b) of the
Plan), as described by Section 23 of the Plan;
               (xii) to make all other determinations deemed necessary or
advisable for administering the Plan.
          (c) Additional Power of Administrator Requiring Stockholder Approval.
The Administrator shall have authority to take the following actions, but only
if not otherwise prohibited by the provisions of the Plan and only if approval
by the Company’s stockholders is obtained:
               (i) reduce the exercise price of any Award to the then current
Fair Market Value if the Fair Market Value of the Common Stock covered by such
Award shall have declined since the date the Award was granted; provided,
however, that the Administrator shall have the power to make adjustments in the
exercise price of any Award pursuant to Section 16 without the necessity of
obtaining stockholder approval;
               (ii) institute an Option Exchange Program to allow for the
cancellation of an outstanding Option followed by its immediate replacement with
a new Option with a lower exercise price, or with a different type of Award,
cash or a combination thereof; provided, however, that the Administrator shall
have the power to make adjustments in the exercise price of any Award pursuant
to Section 16 without the necessity of obtaining stockholder approval; and
               (iii) institute any other program that would constitute a
revaluation or repricing of Options; provided, however, that the Administrator
shall have the power to make adjustments in the exercise price of any Award
pursuant to Section 16 without the necessity of obtaining stockholder approval.
          (d) Effect of Administrator’s Decision. The Administrator’s decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options or Stock Purchase Rights.
     6. Eligibility. Nonstatutory Stock Options, Stock Purchase Rights, Stock
Appreciation Rights and Restricted Stock Units may be granted to Service
Providers. Incentive Stock Options may be granted only to Employees.
     7. Limitations.

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          (a) Each Option shall 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 Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 7(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
          (b) Neither the Plan nor any Award shall confer upon an Optionee any
right with respect to continuing the Optionee’s relationship as a Service
Provider with the Company, nor shall they interfere in any way with the
Optionee’s right or the Company’s right to terminate such relationship at any
time, with or without cause.
          (c) The following limitations shall apply to grants of Options, Stock
Purchase Rights, Stock Appreciation Rights and Restricted Stock Units:
               (i) No Service Provider shall be granted, in any fiscal year of
the Company, Options, Stock Purchase Rights, Stock Appreciation Rights or
Restricted Stock Units to purchase more than 5,000,000 Shares.
               (ii) In connection with his or her initial service, a Service
Provider may be granted Options, Stock Purchase Rights, Stock Appreciation
Rights or Restricted Stock Units to purchase up to an additional 5,000,000
Shares which shall not count against the limit set forth in subsection (i)
above.
               (iii) The foregoing limitations shall be adjusted proportionately
in connection with any change in the Company’s capitalization as described in
Section 16.
               (iv) If an Option, Stock Purchase Rights, Stock Appreciation
Rights or Restricted Stock Unit is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 16), the cancelled Option, Stock Purchase Rights, Stock
Appreciation Rights or Restricted Stock Units will be counted against the limits
set forth in subsections (i) and (ii) above. For this purpose, if the exercise
price of an Option, Stock Purchase Rights, Stock Appreciation Rights or
Restricted Stock Unit is reduced, the transaction will be treated as a
cancellation of the Option, Stock Purchase Rights, Stock Appreciation Rights or
Restricted Stock Units and the grant of a new Option, Stock Purchase Rights,
Stock Appreciation Rights or Restricted Stock Units.
     8. Term of Plan. Subject to Section 22 of the Plan, the Plan shall become
effective upon adoption by the Board and obtaining stockholder approval. The
Plan amends and restates the previous 1996 Stock Plan. It shall continue in
effect for a term of ten (10) years unless terminated earlier under Section 18
of the Plan.
     9. Term of Option. The term of each Option shall be stated in the Award
Agreement; however, the term of an Option granted on or after April 9, 2008
shall be no longer than ten (10) years from the Grant Date or such shorter term
as may be provided in the Award Agreement. Moreover, in the case of an Incentive
Stock Option granted to an Optionee who, at the time the

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Incentive Stock Option is granted, owns stock representing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or any Parent or Subsidiary, the term of the Incentive Stock Option shall be
five (5) years from the Grant Date or such shorter term as may be provided in
the Award Agreement.
     10. Option Exercise Price and Consideration.
          (a) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
               (i) In the case of an Incentive Stock Option
                    (A) granted to an Employee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the Grant Date.
                    (B) granted to any Employee other than an Employee described
in paragraph (A) immediately above, the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on the Grant Date.
               (ii) In the case of a Nonstatutory Stock Option granted on or
after April 9, 2008, except as may be required by law to ensure favorable tax
treatment in a non-U.S. jurisdiction, the per Share exercise price shall be no
less than 100% of the Fair Market Value per share on the Grant Date . In the
case of a Nonstatutory Stock Option intended to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the Grant Date.
               (iii) Notwithstanding the foregoing, Options may be granted with
a per Share exercise price of less than 100% of the Fair Market Value per Share
on the Grant Date pursuant to a merger or other corporate transaction.
          (b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.
          (c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:
               (i) cash;
               (ii) check;
               (iii) other Shares, which in the case of Shares acquired directly
or indirectly from the Company, (A) have been vested and owned by the Optionee
for more than six

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months on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;
               (iv) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;
               (v) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee’s participation
in any Company-sponsored deferred compensation program or arrangement;
               (vi) any combination of the foregoing methods of payment; or
               (vii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
     11. Exercise of Option.
          (a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Award Agreement. Except for options granted prior to October 11,
1996, or unless the Administrator provides otherwise, vesting of Options granted
hereunder shall be suspended during any unpaid leave of absence. An Option may
not be exercised for a fraction of a Share.
               An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Award
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Award Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 16 of the Plan.
               Exercising an Option in any manner shall 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.
          (b) Termination of Relationship as a Service Provider. If an Optionee
ceases to be a Service Provider, other than upon the Optionee’s death or
Disability, the Optionee 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 shall remain exercisable for
three (3) months following the Optionee’s

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termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified by the Administrator, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.
          (c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee’s Disability, the Optionee 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 shall remain exercisable for twelve (12) months following the Optionee’s
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
          (d) Death of Optionee. If an Optionee dies while a Service Provider,
the Option may be exercised following the Optionee’s death within such period of
time as is specified in the Award Agreement to the extent the Option is vested
on the date of death (but in no event later than the expiration of the term of
such Option as set forth in the Award Agreement), by the Optionee’s designated
beneficiary, provided such beneficiary has been designated prior to Optionee’s
death in a form acceptable to the Administrator. If no such beneficiary has been
designated by the Optionee, then such Option may be exercised by the personal
representative of the Optionee’s estate or by the person(s) to whom the Option
is transferred pursuant to the Optionee’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 shall remain exercisable for twelve (12) months following
the Optionee’s death. If, at the time of death, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall immediately revert to the Plan. If the Option is not so exercised
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.
12. Stock Purchase Rights.
          (a) Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically, by means of a Notice of Grant, of the
terms, conditions and restrictions related to the offer, including the number of
Shares that the offeree shall be entitled to purchase, the price to be paid, and
the time within which the offeree must accept such offer. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the form
determined by the Administrator.
          (b) Number of Shares. The Administrator shall have complete discretion
to determine the number of Stock Purchase Rights granted to any Participant,
provided that during any Fiscal Year, no Participant shall be granted Stock
Purchase Rights covering more than 5,000,000 Shares, unless in connection with
his or her initial service as described in Section 7(c)(ii).

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          (c) Repurchase Option. Unless the Administrator determines otherwise,
the Restricted Stock Purchase Agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser’s service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.
          (d) Other Provisions. The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.
          (e) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 16
of the Plan.
     13. Stock Appreciation Rights.
          (a) Grant of SARs. Subject to the terms and conditions of the Plan, a
SAR may be granted to Employees and Consultants at any time and from time to
time as shall be determined by the Administrator, in its sole discretion. The
Administrator may grant affiliated SARs, freestanding SARs, tandem SARs, or any
combination thereof.
               (i) Number of Shares. The Administrator shall have complete
discretion to determine the number of SARs granted to any Participant, provided
that during any Fiscal Year, no Participant shall be granted SARs covering more
than 5,000,000 Shares, unless in connection with his or her initial service as
described in Section 7(c)(ii).
               (ii) Exercise Price and Other Terms. The Administrator, subject
to the provisions of the Plan, shall have complete discretion to determine the
terms and conditions of SARs granted under the Plan. However, except as may be
required by law to ensure favorable tax treatment in a non-U.S. jurisdiction,
the exercise price of a freestanding SAR shall be not less than one hundred
percent (100%) of the Fair Market Value of a Share on the Grant Date. The
exercise price of tandem or affiliated SARs shall equal the Exercise Price of
the related Option.
          (b) Exercise of Tandem SARs. Tandem SARs may be exercised for all or
part of the Shares subject to the related Option upon the surrender of the right
to exercise the equivalent portion of the related Option. A tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable. With respect to a tandem SAR granted in connection with an
Incentive Stock Option: (a) the tandem SAR shall expire no later than the
expiration of the underlying Incentive Stock Option; (b) the value of the payout
with respect to the tandem SAR shall be for no more than one hundred percent
(100%) of the difference between the Exercise Price of the underlying Incentive
Stock Option and the Fair Market Value of the Shares subject to the underlying
Incentive Stock Option at the time the tandem SAR is exercised; and (c) the
tandem SAR shall be

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exercisable only when the Fair Market Value of the Shares subject to the
Incentive Stock Option exceeds the Exercise Price of the Incentive Stock Option.
          (c) Exercise of Affiliated SARs. An affiliated SAR shall be deemed to
be exercised upon the exercise of the related Option. The deemed exercise of an
affiliated SAR shall not necessitate a reduction in the number of Shares subject
to the related Option.
          (d) Exercise of Freestanding SARs. Freestanding SARs shall be
exercisable on such terms and conditions as the Administrator, in its sole
discretion, shall determine.
          (e) SAR Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the exercise price, the term of the SAR, the
conditions of exercise, and such other terms and conditions as the
Administrator, in its sole discretion, shall determine.
          (f) Expiration of SARs. An SAR granted under the Plan shall expire
upon the date determined by the Administrator, in its sole discretion, and set
forth in the Award Agreement; however, an SAR granted on or after April 9, 2008
shall expire no later than ten (10) years from the Grant Date. Notwithstanding
the foregoing, the rules of Section 11 also shall apply to SARs.
          (g) Payment of SAR Amount. Upon exercise of an SAR, a Participant
shall be entitled to receive payment from the Company in an amount determined by
multiplying:
               (i) The difference between the Fair Market Value of a Share on
the date of exercise over the exercise price; times
               (ii) The number of Shares with respect to which the SAR is
exercised.
                    At the discretion of the Administrator, the payment upon SAR
exercise may be in cash, in Shares of equivalent value, or in some combination
thereof. For purposes of Section 4 of the Plan, the reduction in Shares
available for future issuance upon the grant of the SAR will be determined at
the Grant Date based on the full number of Shares subject to the SAR. Upon
settlement of the SAR, there will be no further reduction in Shares available
for future issuance under Section 4 of the Plan. Upon the forfeiture of all or a
portion of the SAR, the forfeited Shares shall be returned to the Shares
available for future issuance under Section 4 of the Plan. For avoidance of
doubt, upon settlement of an SAR, Shares will not be returned to the Shares
available for future issuance under Section 4 of the Plan, notwithstanding the
fact that if Shares are issued in settlement of an SAR they will be issued only
based on the difference between the Fair Market Value of a Share on the date of
exercise over the exercise price.
     14. Restricted Stock Units.
          (a) Grant of Restricted Stock Units. Restricted Stock Units may be
granted to Service Providers at any time and from time to time, as will be
determined by the Administrator, in its sole discretion.
          (b) Number of Shares. The Administrator will have complete discretion
in determining the number of Restricted Stock Units granted to each Participant,
provided that during

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any Fiscal Year, no Participant shall be granted Restricted Stock Units covering
more than 5,000,000 Shares, unless in connection with his or her initial service
as described in Section 7(c)(ii).
          (c) Value of Restricted Stock Units. Each Restricted Stock Unit will
have an initial value that is established by the Administrator on or before the
Grant Date.
          (d) Performance Goals and Other Terms. The Administrator will set
Performance Goals or other vesting provisions (including, without limitation,
continued status as a Service Provider) in its discretion which, depending on
the extent to which they are met, will determine the number or value of
Restricted Stock Units that will be paid out to the Service Providers. The time
period during which the Performance Goals or other vesting provisions must be
met will be called the “Performance Period.” Each award of Restricted Stock
Units will be evidenced by an Award Agreement that will specify the Performance
Period, and such other terms and conditions as the Administrator, in its sole
discretion, will determine. The Administrator may set Performance Goals based
upon the achievement of Company-wide, divisional, or individual goals,
applicable federal or state securities laws, or any other basis determined by
the Administrator in its discretion.
          (e) Duration of Performance Periods. The Administrator will set the
length of time for a Performance Period, subject to the following limits:
                    (i) The Performance Period related to Restricted Stock Units
with Performance Goals shall not be less than one (1) year; and
                    (ii) The Performance Period related to Restricted Stock
Units with time-based vesting provisions shall not be less than three (3) years;
     provided, however, that up to five percent (5%) of the shares currently
authorized for grant under the Plan may be subject to Restricted Stock Units
without such limits on the length of the Performance Period.
          (f) Earning of Restricted Stock Units. After the applicable
Performance Period has ended, the holder of Restricted Stock Units will be
entitled to receive a payout of the number of Restricted Stock Units earned by
the Participant over the Performance Period, to be determined as a function of
the extent to which the corresponding Performance Goals or other vesting
provisions have been achieved. After the grant of a Restricted Stock Units, the
Administrator shall not reduce or waive any Performance Goals or other vesting
provisions for such Restricted Stock Unit; provided, however, that the
Administrator, in its sole discretion, may reduce or waive any Performance Goals
or other vesting provisions for such Restricted Stock Unit in the event of a
Participant’s death, Disability, or Retirement, or in the event of the sale of
substantially all of the assets of the Company, or a merger of the Company with
or into another entity pursuant to which the stockholders of the Company before
such transaction do not retain, directly or indirectly, at least a majority of
the beneficial interest in the voting stock of the Company after such
transaction.
          (g) Form and Timing of Payment of Restricted Stock Units. Payment of
earned Restricted Stock Units will be made as soon as practicable after the
expiration of the applicable Performance Period. The Administrator, in its sole
discretion, may pay earned Restricted Stock Units in the form of cash, in Shares
(which have an aggregate Fair Market Value equal to the value

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of the earned Restricted Stock Units at the close of the applicable Performance
Period) or in a combination thereof.
          (h) Cancellation of Restricted Stock Units. On the date set forth in
the Award Agreement, all unearned or unvested Restricted Stock Units will be
forfeited to the Company, and again will be available for grant under the Plan.
     15. Non-Transferability of Awards. Unless determined otherwise by the
Administrator, an Award may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Award
transferable, such Award shall contain such additional terms and conditions as
the Administrator deems appropriate.
     16. Adjustments Upon Changes in Capitalization, Dissolution or Liquidation,
Merger or Asset Sale.
          (a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number and class of Shares that may be
delivered under the Plan and/or the number, class, and price of Shares covered
by each outstanding Award, and the numerical Share limits in Sections 4, 7, 13
and 14 of the Plan, shall be proportionately adjusted for any increase or
decrease in the number of issued Shares resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Shares, or
any other increase or decrease in the number of issued Shares effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
“effected without receipt of consideration.” Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of Shares subject to an Award.
          (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Participant as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for a Participant
to have the right to exercise his or her Award until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Award would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Award shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Award will terminate immediately prior to the consummation of such proposed
action. Notwithstanding anything in this Section 16(b) to the contrary, for
Awards granted on or after August 14, 2008, that may be considered “deferred
compensation” within the meaning of Section 409A, the payment of any Awards that
accelerate in accordance with this Section 16(b) nevertheless will be made at
the same time or times as if such Awards had vested in accordance with the
vesting provisions applicable to such Awards unless otherwise determined by the
Administrator.

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          (c) Merger or Asset Sale. For Awards granted prior to August 14, 2008,
in the event of a merger of the Company with or into another corporation, or the
sale of substantially all of the assets of the Company, each outstanding Award
shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. For Awards
granted on or after August 14, 2008, in the event of (i) a merger of the Company
with or into another corporation, other than a merger which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its Parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity or its Parent outstanding immediately after
such merger or (ii) the sale of substantially all of the assets of the Company,
each outstanding Award shall be assumed or an equivalent option or right
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute for the Award (whether granted prior to, on or after
August 14, 2008), the Participant will fully vest in and have the right to
exercise all of his or her outstanding Options and Stock Appreciation Rights,
including Shares as to which such Awards would not otherwise be vested or
exercisable, all restrictions on Restricted Stock will lapse, and, with respect
to Restricted Stock Units, all Performance Goals or other vesting criteria will
be deemed achieved at target levels and all other terms and conditions met. In
addition, if an Option or Stock Appreciation Right becomes fully vested and
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Administrator will notify the Participant in writing or
electronically that the Option or Stock Appreciation Right will be fully vested
and exercisable for a period of 15 days from the date of such notice, and the
Option or Stock Appreciation Right will terminate upon the expiration of such
period.
                    For the purposes of this paragraph, the Award shall be
considered assumed if, following the merger or sale of assets, the Award confers
the right to purchase or receive, for each Share subject to the Award
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) or, in the case of a Stock
Appreciation Right upon the exercise of which the Administrator determines to
pay cash or a Restricted Stock Unit which the Administrator can determine to pay
in cash, the fair market value of the consideration received in the merger or
sale of assets by holders of Common Stock for each Share held on the effective
date of the 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 merger or
sale of assets is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of an Option or
Stock Appreciation Right or upon the payout of a Restricted Stock Unit, for each
Share subject to such Award (or in the case of Restricted Stock Units, the
number of implied shares determined by dividing the value of the Restricted
Stock Units by the per Share consideration received by holders of Common Stock
in the merger or sale of assets), to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per Share
consideration received by holders of Common Stock in the merger or sale of
assets.
                    Notwithstanding anything in this Section 16(c) to the
contrary, an Award that vests, is earned or paid-out upon the satisfaction of
one or more Performance Goals will not be considered assumed if the Company or
its successor modifies any of such Performance Goals

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without the Participant’s consent; provided, however, a modification to such
Performance Goals only to reflect the successor corporation’s corporate
structure post-merger or post-sale of assets will not be deemed to invalidate an
otherwise valid Award assumption.
     17. Date of Grant. The Grant Date of an Award shall be, for all purposes,
the date on which the Administrator makes the determination granting such Award,
or such other later date as is determined by the Administrator. Notice of the
determination shall be provided to each Optionee within a reasonable time after
the date of such grant.
     18. Amendment and Termination of the Plan.
          (a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.
          (b) Shareholder Approval. The Company shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws, and to adopt material Plan amendments, including:
               (i) A material increase in benefits accrued to Participants under
the Plan;
               (ii) An increase in the number of shares that may be optioned or
sold under the Plan;
               (iii) A material modification (expansion or reduction) of the
class of participants in the Plan; or
               (iv) A provision permitting the Administrator to lapse or waive
restrictions on Awards at its discretion.
          (c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator’s ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.
     19. Conditions Upon Issuance of Shares.
          (a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Award unless the exercise of such Award and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
          (b) 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.

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     20. Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
     21. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
     22. Shareholder Approval. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.
     23. Section 409A Exchange Offer. The Administrator, may in its sole
discretion, offer to each Optionee who holds an Option with an original Grant
Date Exercise Price that was less than the original Grant Date fair market
value, as determined for purposes of Section 409A, (each a “Discount Option”)
one or more of the following choices with respect to the portion of such
Discount Option that was unvested on December 31, 2004 (such portion is referred
to as the “Eligible Discount Option”):
          (a) If Optionee exercised any Eligible Discount Option (or portion
thereof) in 2006, then Optionee may elect to amend the eligible portion of each
Eligible Discount Option such that the Exercise Price of the Option will be
increased to the fair market value, as determined for purposes of Section 409A,
of a share of the Company’s Common Stock on the Option’s grant date.
          (b) If Optionee was granted an Eligible Discount Option, but did not
exercise any Eligible Discount Option in 2006, then Optionee may be given one or
more of the following choices:
               (i) Optionee may elect to amend each Eligible Discount Option to
change the option expiration date identified in the original grant agreement to
a date that is expected to constitute a fixed calendar year election for
purposes of Section 409A (the Administrator will have the discretion to choose
to allow Optionees to pick different calendar years for different portions of
each Eligible Discount Option); and/or
               (ii) Optionee may elect to amend the eligible portion of each
Eligible Discount Option such that the Exercise Price of the Option will be
increased to the fair market value, as determined for purposes of Section 409A,
of a share of the Company’s Common Stock on the Option’s grant date.

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