EXHIBIT 10.1

 

CARTESIAN, INC.

 

1998 EQUITY INCENTIVE PLAN

(amended and restated June 18, 2014)

 

The Management Network Group, Inc. (n/k/a Cartesian, Inc.), originally
established the The Management Network Group, Inc. 1998 Equity Incentive Plan,
effective April 30, 1998 and The Management Network Group, Inc. 1998 Consultant
Equity Incentive Plan, effective April 30, 1998. The Management Network Group,
Inc. amended and restated these two plan into one plan effective as of September
7, 1999. Effective June 8, 2009 (the "Effective Date"), The Management Network
Group, Inc. amended and restated the Plan. Effective May 27, 2010 (the
"Amendment Date"), The Management Network Group, Inc. hereby further amends the
Plan.

 

1.          Purposes of the Plan. The purposes of this 1998 Equity Incentive
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.

 

Options granted under the Plan may be Incentive Stock Options or Nonstatutory
Stock Options, as determined by the Administrator at the time of grant. Stock
Purchase Rights may also be granted under the Plan.

 

2.          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 4 of the Plan.

 

(b)           "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 Options or Stock Purchase Rights are,
or will be, granted under the Plan.

 

(c)           "Award" means an Option, Restricted Stock or Restricted Stock
Units.

 

(d)           "Board" means the Board of Directors of the Company.

 

 

 

 

(e)           "Cause" means (i) any willful material violation by the Holder of
any law or regulation applicable to the business of the Company or a Parent or
Subsidiary of the Company, the Holder’s conviction for, or guilty plea to, a
felony or a crime involving moral turpitude, any willful perpetration by the
Holder of a common law fraud, (ii) the Holder’s commission of an act of personal
dishonesty which involves personal profit in connection with the Company or any
other entity having a business relationship with the Company, (iii) any material
breach by the Holder of any provision of any agreement or understanding between
the Company, or any Parent or Subsidiary of the Company, and the Holder
regarding the terms of the Holder’s service as a Service Provider, including
without limitation, the willful and continued failure or refusal of the Holder
to perform the material duties required of such Holder as a Service Provider,
other than as a result of having a Disability, or a breach of any applicable
invention assignment and confidentiality agreement or similar agreement between
the Company and the Holder, (iv) Holder’s disregard of the policies of the
Company or any Parent or Subsidiary of the Company so as to cause loss, damage
or injury to the property, reputation or employees of the Company or a Parent or
Subsidiary of the Company, or (v) any other misconduct by the Holder which is
materially injurious to the financial condition or business reputation of, or is
otherwise materially injurious to, the Company or a Parent of Subsidiary of the
Company.

 

(f)            "Code" means the Internal Revenue Code of 1986, as amended.

 

(g)           "Committee" means a committee of Directors appointed by the Board
in accordance with Section 4 of the Plan.

 

(h)           "Common Stock" means the common stock of the Company.

 

(i)            "Company" means Cartesian, Inc. (f/k/a The Management Network
Group, Inc.), a Delaware corporation.

 

(j)            "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.

 

(k)           "Director" means a member of the Board.

 

(l)            "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.

 

(m)          "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, on the 181st 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.

 

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(n)           "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

 

(o)           "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 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 for
the market trading day of the time of determination, as reported in 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 for the market trading 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.

 

(p)           "Holder" means a Service Provider who is in possession of an
Award.

 

(q)           "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.

 

(r)            "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

 

(s)           "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 related Award Agreement.

 

(t)            "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.

 

(u)           "Option" means a stock option granted pursuant to the Plan.

 

(v)           "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

 

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(w)          "Option Exchange Program" means a program whereby outstanding
Options are surrendered in exchange for Options with a lower exercise price.

 

(x)           "Optioned Stock" means the Common Stock subject to an Option or
Stock Purchase Right.

 

(y)           "Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.

 

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

 

(aa)         "Plan" means this 1998 Equity Incentive Plan, as amended and
restated.

 

(bb)        "Performance Award" means any Award that will be issued or granted,
or become vested or payable, as the case may be, upon the achievement of certain
performance goals (as described in Section 15) to a Holder pursuant to Section
15.

 

(cc)         "Prior Plan" means the 2000 Supplemental Stock Plan.

 

(dd)        "Restricted Stock" means shares of Common Stock either granted or
acquired pursuant to a grant of Stock Purchase Rights under Section 11 of the
Plan.

 

(ee)         "Restricted Stock Purchase Agreement" means a written agreement
between the Company and the Holder evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted Stock
Purchase Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.

 

(ff)          "Restricted Stock Unit" means an Award granted under Section 11
evidencing the Holder's right to receive a Share (or cash payment equal to the
Fair Market Value of a Share) at some future date.

 

(gg)        "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.

 

(hh)        "Section 16(b) " means Section 16(b) of the Exchange Act.

 

(ii)           "Service Provider" means an Employee, Director or Consultant.

 

(jj)           "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.

 

(kk)         "Stock Purchase Right" means the right to purchase Common Stock
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.

 

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(ll)           "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.

 

3.          Stock Subject to the Plan. Subject to the provisions of Section 13
of the Plan, the maximum aggregate number of Shares which may be granted,
optioned and sold under the Plan is 2,305,659 (which includes the Prior Plan
Shares as provided below). The Shares may be authorized, but unissued, or
reacquired Common Stock.

 

From and after the Amendment Date, 291,321 Shares previously available for
issuance under the Prior Plan shall be available for issuance pursuant to the
Plan (the "Prior Plan Shares"). From and after the Amendment Date, all
outstanding awards granted under the Prior Plan shall remain subject to the
terms of the Prior Plan. All Awards granted under this Plan on or after the
Amendment Date will be subject to the terms of this Plan.

 

Any Shares that are subject to an Award under this Plan that are not used
because the terms and conditions for the Award are not met, including any Shares
subject to an Award that expires, is forfeited, or becomes unexercisable without
having been exercised in full, or is surrendered pursuant to an Option Exchange
Program, 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 grant of Restricted Stock or 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.

 

4.          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 Options 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.

 

(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.

 

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(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
Options or Stock Purchase Rights 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 Restricted Stock,
Restricted Stock Unit, Option or Stock Purchase Right or the shares of Common
Stock relating thereto, based in each case on such factors as the Administrator,
in its sole discretion, shall determine;

 

(vi)        to reduce the exercise price of any Option or Stock Purchase Right
to the then current Fair Market Value if the Fair Market Value of the Common
Stock covered by such Option or Stock Purchase Right shall have declined since
the date the Option or Stock Purchase Right was granted;

 

(vii)       to institute an Option Exchange Program;

 

(viii)      to construe and interpret the terms of the Plan and awards granted
pursuant to the Plan;

 

(ix)         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 qualifying for preferred tax treatment under foreign tax laws;

 

(x)          to modify or amend each Award (subject to Section 16(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;

 

(xi)         to allow Holders to satisfy withholding tax obligations by electing
to have the Company withhold from the Shares to be issued upon the exercise of
an Option or Stock Purchase Right or upon the vesting of Restricted Stock or
Restricted Stock Units that number of Shares having a Fair Market Value equal to
the 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 a Holder 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;

 

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(xii)        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;

 

(xiii)       to make all other determinations deemed necessary or advisable for
administering the Plan.

 

(c)          Effect of Administrator's Decision. The Administrator's decisions,
determinations and interpretations shall be final and binding on all Holders.

 

5.          Eligibility. Nonstatutory Stock Options, Stock Purchase Rights,
Restricted Stock and Restricted Stock Units may be granted to Service Providers.
Incentive Stock Options may be granted only to Employees.

 

6.          Limitations.

 

(a)          Each Option shall be designated in the Option 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 6(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 Holder any
right with respect to continuing the Holder's relationship as a Service Provider
with the Company, nor shall they interfere in any way with the Holder'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:

 

(i)          The maximum number of Shares that may be issued pursuant to the
exercise of Incentive Stock Options is 1,400,000.

 

(ii)         No Service Provider shall be granted, in any fiscal year of the
Company, Options to purchase more than 200,000 Shares.

 

(iii)        In connection with his or her initial service, a Service Provider
may be granted Options to purchase up to an additional 100,000 Shares which
shall not count against the limit set forth in subsection (i) above.

 

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(iv)        The foregoing limitations shall be adjusted proportionately in
connection with any change in the Company's capitalization as described in
Section 13.

 

(v)         If an Option 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 13), the cancelled Option will be counted against the limits set forth
in subsections (ii) and (iii) above. For this purpose, if the exercise price of
an Option is reduced, the transaction will be treated as a cancellation of the
Option and the grant of a new Option.

 

(d)          The maximum number of Shares with respect to which an Award or
Awards may be granted to any Holder in any one taxable year of the Company shall
not exceed 400,000 Shares (increased proportionately, in the event of any stock
split or stock dividend with respect to the Shares).

 

7.          Term of Plan. Subject to Section 19 of the Plan, the Plan shall
become effective upon its adoption by the Board. It shall continue in effect
until the 10th Anniversary of the Effective Date unless terminated earlier under
Section 16 of the Plan.

 

8.          Term of Option. The term of each Option shall be stated in the
Option Agreement. In the case of an Incentive Stock Option, the term shall be
ten (10) years from the date of grant or such shorter term as may be provided in
the Option Agreement. Moreover, in the case of an Incentive Stock Option granted
to an Optionee who, at the time the 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 date of
grant or such shorter term as may be provided in the Option Agreement.

 

9.          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 date of grant.

 

(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 date of grant.

 

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(ii)         In the case of a Nonstatutory Stock Option, the per Share exercise
price shall be determined by the Administrator. 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 date of grant.

 

(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
date of grant 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)        promissory note;

 

(iv)        other Shares which (A) in the case of Shares acquired upon exercise
of an option, have been owned by the Optionee for more than six 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;

 

(v)         consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan;

 

(vi)        for any Nonstatutory Stock Option, by a "net exercise" arrangement
pursuant to which the Company will not require a payment of the Option exercise
price but will reduce the number of Shares upon the exercise by the largest
number of whole shares that has a Fair Market Value on the date of exercise that
does not exceed the aggregate Option exercise price.

 

(vii)       any combination of the foregoing methods of payment; or

 

(viii)      such other consideration and method of payment for the issuance of
Shares to the extent permitted by Applicable Laws.

 

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10.         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 Option Agreement. Unless the Administrator provides otherwise, vesting of
Options granted hereunder shall be tolled 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 Option 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 Option 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 13 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 for any reason other than the Optionee’s death,
Disability or termination of service for Cause (but not in the event of an
Optionee’s change of status from Employee to Consultant (in which case an
Employee’s Incentive Stock Option shall automatically convert to a Nonstatutory
Stock Option on the ninety-first (91st) day following such change of status) or
from Consultant to Employee), such Optionee may, but only within such period of
time as is determined by the Administrator, of at least thirty (30) days, with
such determination in the case of an Incentive Stock Option not exceeding three
(3) months after the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise his or her Option to the extent that Optionee was entitled
to exercise it at the date of such 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, but only
within twelve (12) months from the date of such termination (or within such
longer time period, not exceeding five (5) years, after the termination date as
may be determined by the Administrator, with any exercise beyond twelve (12)
months after the termination date, deemed to be a Nonstatutory Stock Option)
(and in no event later than the expiration date of the term of such Option as
set forth in the Option Agreement), exercise his or her Option the extent the
Option is vested on the date of 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.

 

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(d)          Death of Optionee. If an Optionee dies while a Service Provider (or
the Optionee dies within three (3) months after a termination other than for
Cause), the Option may be exercised at any time within twelve (12) months
following the date of death (or within such longer time period, not exceeding
five (5) years after the termination date as may be determined by the
Administrator) (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement), by the Optionee's estate or by a
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of 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. The Option may be exercised by the executor or administrator
of the Optionee's estate or, if none, by the person(s) entitled to exercise the
Option under the Optionee's will or the laws of descent or distribution. 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.

 

(e)          Termination for Cause. If the Optionee is terminated for Cause,
then Optionee’s Option shall expire on such Optionee’s termination date or such
later time and on such conditions as are determined by the Administrator.

 

(f)          Buyout Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares an Option previously granted based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.

 

11.         Restricted Stock, Restricted Stock Units and Stock Purchase Rights.

 

(a)          Restricted Stock Awards. Coincident with or following designation
for participation in the Plan and subject to the terms and provisions of the
Plan, the Administrator, at any time and from time to time, may grant Restricted
Stock to any Service Provider in such amounts as the Administrator shall
determine.

 

(b)          Restricted Stock Unit Awards. Coincident with or following
designation for participation in the Plan and subject to the terms and
provisions of the Plan, the Administrator may grant a Service Provider
Restricted Stock Units, in connection with or separate from a grant of
Restricted Stock. Upon the vesting of Restricted Stock Units, the Holder shall
be entitled to receive the full value of the Restricted Stock Units payable in
either Shares or cash.

 

(c)          Rights to Purchase and Option to Repurchase.

 

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(i)          Stock Purchase Rights may be granted 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, and which may contain such other terms, provisions and conditions
not inconsistent with the Plan as may be determined by the Administrator in its
sole discretion.

 

(ii)         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)          Restrictions. A Holder's right to retain Shares of Restricted Stock
or be paid with respect to Restricted Stock Units shall be subject to such
restrictions, including but not limited to, him or her continuing to perform as
a Service Provider for a restriction period specified by the Committee, or the
attainment of specified performance goals and objectives, as may be established
by the Committee with respect to such Award. All grants of Restricted Stock and
Restricted Stock Units shall be subject to a minimum one-year vesting period.
The Committee may in its sole discretion require different periods of service or
different performance goals and objectives with respect to (i) different
Holders, (ii) different Restricted Stock or Restricted Stock Unit Awards, or
(iii) separate, designated portions of the Shares constituting a Restricted
Stock Award. Any grant of Restricted Stock or Restricted Stock Units shall
contain terms such that the Award is either exempt from Code section 409A or
complies with such section.

 

(e)          Privileges of a Stockholder, Transferability. Unless otherwise
provided in the Award Agreement, a Participant shall have all voting, dividend,
liquidation and other rights with respect to Shares of Restricted Stock,
provided however that any dividends paid on Shares of Restricted Stock prior to
such Shares becoming vested shall be held in escrow by the Company and subject
to the same restrictions on transferability and forfeitability as the underlying
Shares of Restricted Stock. Any voting, dividend, liquidation or other rights
shall accrue to the benefit of a Holder only with respect to Shares of
Restricted Stock held by, or for the benefit of, the Holder on the record date
of any such dividend or voting date. A Participant's right to sell, encumber or
otherwise transfer such Restricted Stock shall, in addition to the restrictions
otherwise provided for in the Award Agreement, be subject to the limitations of
Section 12 hereof. The Committee may determine that a Holder of Restricted Stock
Units is entitled to receive dividend equivalent payments on such units. If the
Committee determines that Restricted Stock Units shall receive dividend
equivalent payments, such feature will be specified in the applicable Award
Agreement. Restricted Stock Units shall not have any voting rights.

 

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(f)          Enforcement of Restrictions. The Committee may in its sole
discretion require one or more of the following methods of enforcing the
restrictions referred to in Sections 11(d) and 11(e):

 

(i)          placing a legend on the stock certificates, or the Restricted Stock
Unit Award Agreement, as applicable, referring to restrictions;

 

(ii)         requiring the Holder to keep the stock certificates, duly endorsed,
in the custody of the Company while the restrictions remain in effect;

 

(iii)        requiring that the stock certificates, duly endorsed, be held in
the custody of a third party nominee selected by the Company who will hold such
Shares of Restricted Stock on behalf of the Holder while the restrictions remain
in effect; or

 

(iv)        inserting a provision into the Restricted Stock Award Agreement
prohibiting assignment of such Award Agreement until the terms and conditions or
restrictions contained therein have been satisfied or released, as applicable.

 

(g)          Termination of Service, Death, Disability, etc. Except as otherwise
provided in an Award Agreement, in the event of the death or Disability of a
Participant, all service period and other restrictions applicable to Restricted
Stock Awards then held by him or her shall lapse, and such Awards shall become
fully nonforfeitable. Subject to Section 13 and except as otherwise provided in
an Award Agreement, in the event a Participant ceases to be a Service Provider
for any other reason, any Restricted Stock Awards as to which the service period
or other vesting conditions have not been satisfied shall be forfeited.

 

(h)          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 13
of the Plan.

 

12.         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 Holder,
only by the Holder. If the Administrator makes an Award transferable, such Award
shall contain such additional terms and conditions as the Administrator deems
appropriate.

 

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13.         Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.

 

(a)          Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Award, and the number of shares of Common Stock which have been
authorized for issuance under the Plan but as to which no shares of Common Stock
have yet been issued or which have been returned to the Plan upon cancellation
or expiration of an Award, as well as the price per share of Common Stock
covered by each such outstanding Award, shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock 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 of Common Stock subject to an Award.

 

(b)          Dissolution, Liquidation, Merger or Asset Sale. Subject to the
third sentence of this Section 13(b), in the event of the proposed dissolution
or liquidation of the Company or 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. Notwithstanding the foregoing, in the event that a Holder ceases to
be a Service Provider for any reason other than Cause or voluntary resignation
within six (6) months of the consummation of a transaction described in this
Section 13(b) pursuant to which outstanding Options and Stock Purchase Rights
are assumed or substituted as provided above, the vesting and exercisability of
each outstanding Award shall be automatically accelerated as to 50% of the
unvested Shares of Optional Stock subject to the Award on the date of such
Holder’s termination. Notwithstanding the foregoing, (i) in the event that the
successor corporation refuses to assume or substitute for the Award, and (ii) in
the case of an Award granted to a Service Provider who is a Consultant at the
time such Award is granted, the Holder shall fully vest in and have the right to
exercise the Award as to all of the Optioned Stock, including Shares as to which
it would not otherwise be vested or exercisable. If an Award becomes fully
vested and exercisable in accordance with the foregoing sentence, the
Administrator shall notify the Holder in writing or electronically that the
Option or Stock Purchase Right shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Award shall
terminate upon the expiration of such period. For the purposes of this Section,
the Award shall be considered assumed if, following the dissolution,
liquidation, merger or sale of assets, the option or right confers the right to
purchase or receive, for each Share of Optioned Stock subject to the Award
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) received in the dissolution,
liquidation, 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 dissolution, liquidation, 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 the Award, for each Share
of Optioned Stock subject to the Award, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the dissolution,
liquidation, merger or sale of assets.

 

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(c)          Other Treatment of Options and Stock Purchase Rights. Subject to
any greater rights granted to Optionees under the foregoing provisions of this
Section 13, in the event of the occurrence of any transaction described in
Section 13 hereof, any outstanding Options and Stock Purchase Rights will be
treated as provided in the applicable agreement or plan of merger,
consolidation, dissolution, liquidation or sale of assets.

 

14.         Date of Grant. The date of grant 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 Holder within a reasonable
time after the date of such grant.

 

15.         Performance Awards.

 

(a)           Any Award granted under the Plan may be subject to the terms and
conditions set forth in this Section 15. If an Award is subject to this Section
15, then 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 one or any combination of
the following:

 

(i)          Earnings (either in the aggregate or on a per-Share basis)
including earnings per share, earnings before interest, earnings before interest
and taxes, earnings before interest, taxes and depreciation or earnings before
interest, taxes, depreciation and amortization and in the case of any of the
foregoing, such goal may be adjusted to further exclude items in order to
measure achievement of specific performance goals, including any one or more of
the following: stock-based compensation expense; income or losses from
discontinued operations; gain on cancellation of debt; debt extinguishment and
related costs; restructuring, separation and/or integration charges and costs;
reorganization and/or recapitalization charges and costs; impairment charges;
gain or loss related to investments or the sale of assets; extraordinary gains
or losses; the cumulative effect of accounting changes; acquisitions or
divestitures; foreign exchange impacts; any unusual, nonrecurring gain or loss;
sales and use tax settlement; and gain on non-monetary transactions;

 

(ii)         Operating Profit (either in the aggregate or on a per Share basis);

 

(iii)        Operating income (either in the aggregate or on a per Share basis);

 

(iv)        Net income or loss (either in the aggregate or on a per-Share
basis);

 

(v)         Net earnings on either a LIFO or FIFO basis (either in the aggregate
or on a per Share basis);

 

-15-

 

  

(vi)        Cash flow provided by operations, either in the aggregate or on a
per-Share basis;

 

(vii)       Free cash flow (either in the aggregate on a per-Share basis);

 

(viii)      Reductions in expense levels, determined either on a
Corporation-wide basis or in respect of any one or more business units;

 

(ix)         Operating and maintenance cost management and employee
productivity;

 

(x)          Stockholder returns (including return on assets, investments,
equity, or gross sales);

 

(xi)         Return measures (including return on assets, equity, or sales);

 

(xii)        Where applicable, growth or rate of growth of any of the above
listed business criteria;

 

(xiii)       Share price (including attainment of a specified per-Share price
during the Incentive Period; growth measures and total stockholder return or
attainment by the Shares of a specified price for a specified period of time);

 

(xiv)      Accomplishment of mergers, acquisitions, dispositions, public
offerings or similar extraordinary business transactions;

 

(xv)       Strategic business criteria, consisting of one or more objectives
based on meeting specified revenue, market share, market penetration, geographic
business expansion goals, objectively identified project milestones, production
volume levels, cost targets, and goals relating to acquisitions or divestitures;
and/or

 

(xvi)      Achievement of business or operational goals such as market share
and/or business development;

 

provided that applicable incentive goals may be applied on a pre- or post-tax
basis; and provided further that the Committee may, when the applicable
incentive goals are established, provide that the formula for such goals may
include or exclude items to measure specific objectives, including any one or
more of the following: stock-based compensation expense; income or losses from
discontinued operations; gain on cancellation of debt; debt extinguishment and
related costs; restructuring, separation and/or integration charges and costs;
reorganization and/or recapitalization charges and costs; impairment charges;
gain or loss related to investments or the sale of assets; extraordinary gains
or losses; the cumulative effect of accounting changes; acquisitions or
divestitures; foreign exchange impacts; any unusual, nonrecurring gain or loss;
sales and use tax settlement; and gain on non-monetary transactions. As
established by the Committee, the incentive goals may include, without
limitation, GAAP and non-GAAP financial measures. 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. Notwithstanding anything in the Plan to the contrary,
the Administrator may elect to grant performance-based awards that are not
subject to the conditions of this Section 15 and that are not intended to
qualify as performance-based compensation under Section 162(m).

 

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(b)          Notwithstanding any provision of the Plan other than Section 13,
with respect to any Performance Award, the Committee may not adjust upwards the
amount payable pursuant to such Award, nor may it waive the achievement of the
applicable performance goals except in the case of the death or disability of
the Participant.

 

(c)          The Committee shall have the power to impose such other
restrictions on Performance Awards subject to this Section 15 as it may deem
necessary or appropriate to insure that such Performance Awards satisfy all
requirements for "performance-based compensation" within the meaning of section
162(m)(4)(B) of the Code or any successor thereto.

 

16.         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.

 

(c)          Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Holder,
unless mutually agreed otherwise between the Holder and the Administrator, which
agreement must be in writing and signed by the Holder 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.

 

17.         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.

 

18.         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.

 

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19.         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.

 

20.         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.

 

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