Exhibit 10.1

CARGURUS, INC.

OMNIBUS INCENTIVE COMPENSATION PLAN

Effective as of the Effective Date (as defined below), the CarGurus, Inc.
Omnibus Incentive Compensation Plan (the “Plan”) is hereby established as a
successor to the CarGurus, Inc. Amended and Restated 2015 Equity Incentive Plan
(the “Prior Plan”). No additional grants shall be made under the Prior Plan on
and after the Effective Date. Outstanding grants under the Prior Plan shall
continue in effect according to their terms, and the shares with respect to
outstanding grants under the Prior Plan shall be issued or transferred under the
Prior Plan.

The purpose of the Plan is to provide employees of CarGurus, Inc. (the
“Company”) and its subsidiaries, certain consultants and advisors who perform
services for the Company or its subsidiaries, and non-employee members of the
Board of Directors of the Company with the opportunity to receive grants of
incentive stock options, nonqualified stock options, stock appreciation rights,
stock awards, stock units, other stock-based awards and cash awards.

The Company believes that the Plan will encourage the participants to contribute
materially to the growth of the Company, thereby benefitting the Company’s
stockholders, and will align the economic interests of the participants with
those of the stockholders.

Section 1.    Definitions

The following terms shall have the meanings set forth below for purposes of the
Plan:

(a)    “Board” shall mean the Board of Directors of the Company.

(b)    “Cash Award” shall mean a cash incentive payment awarded under the Plan
as described under Section 11.

(c)    “Cause” shall have the meaning given to that term in any written
employment agreement, offer letter or severance agreement between the Employer
and the Participant, or if no such agreement exists or if such term is not
defined therein, and unless otherwise defined in the Grant Instrument, Cause
shall mean a finding by the Committee that the Participant (i) has breached his
or her employment or service contract with the Employer, (ii) has engaged in
disloyalty to the Employer, including, without limitation, fraud, embezzlement,
theft, commission of a felony or proven dishonesty, (iii) has disclosed trade
secrets or confidential information of the Employer to persons not entitled to
receive such information, (iv) has breached any written non-competition,
non-solicitation, invention assignment or confidentiality agreement between the
Participant and the Employer or (v) has engaged in such other behavior
detrimental to the interests of the Employer as the Committee determines.

(d)    “CEO” shall mean the Chief Executive Officer of the Company.

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(e)    Unless otherwise set forth in a Grant Instrument, a “Change of Control”
shall be deemed to have occurred if:

(i)    Any “person” (as such term is used in sections 13(d) and 14(d) of the
Exchange Act) becomes a “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
more than 50% of the voting power of the then outstanding securities of the
Company; provided that a Change of Control shall not be deemed to occur as a
result of a transaction in which the Company becomes a subsidiary of another
corporation and in which the stockholders of the Company, immediately prior to
the transaction, will beneficially own, immediately after the transaction,
shares entitling such stockholders to more than 50% of all votes to which all
stockholders of the parent corporation would be entitled in the election of
directors.

(ii)    The consummation of (A) a merger or consolidation of the Company with
another corporation where, immediately after the merger or consolidation, the
stockholders of the Company, immediately prior to the merger or consolidation,
will not beneficially own, in substantially the same proportion as ownership
immediately prior to the merger or consolidation, shares entitling such
stockholders to more than 50% of all votes to which all stockholders of the
surviving corporation would be entitled in the election of directors, or where
the members of the Board, immediately prior to the merger or consolidation, will
not, immediately after the merger or consolidation, constitute a majority of the
board of directors of the surviving corporation or (B) a sale or other
disposition of all or substantially all of the assets of the Company.

(iii)    A change in the composition of the Board over a period of 12
consecutive months or less such that a majority of the Board members ceases, by
reason of one or more contested elections, or threatened election contests, for
Board membership, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (B) have been elected
or nominated for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were still in office
at the time the Board approved such election or nomination.

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

Notwithstanding the foregoing, if a Grant constitutes deferred compensation
subject to section 409A of the Code and the Grant provides for payment upon a
Change of Control, then no Change of Control shall be deemed to have occurred
upon an event described in items (i) – (iv) above unless the event would also
constitute a change in ownership or effective control of, or a change in the
ownership of a substantial portion of the assets of, the Company under section
409A of the Code.

(f)    “Code” shall mean the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.

(g)    “Committee” shall mean the Compensation Committee of the Board or another
committee appointed by the Board to administer the Plan.

 

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(h)    “Company” shall mean CarGurus, Inc. and shall include its successors.

(i)    “Company Stock” shall mean Class A common stock of the Company.

(j)    “Disability” or “Disabled” shall mean, unless otherwise set forth in the
Grant Instrument, a Participant’s becoming disabled within the meaning of the
Employer’s long-term disability plan applicable to the Participant.

(k)    “Dividend Equivalent” shall mean an amount determined by multiplying the
number of shares of Company Stock subject to a Stock Unit or Other Stock-Based
Award by the per-share cash dividend paid by the Company on its outstanding
Company Stock, or the per-share Fair Market Value of any dividend paid on its
outstanding Company Stock in consideration other than cash. If interest is
credited on accumulated divided equivalents, the term “Dividend Equivalent”
shall include the accrued interest.

(l)    “Effective Date” shall mean the business day immediately preceding the
date at which the registration statement for the initial public offering of the
Company Stock is declared effective by the Securities and Exchange Commission
and the Company Stock is priced for the initial public offering of such Company
Stock, subject to approval of the Plan by the stockholders of the Company.

(m)    “Employee” shall mean an employee of the Employer (including an officer
or director who is also an employee), but excluding any person who is classified
by the Employer as a “contractor” or “consultant,” no matter how characterized
by the Internal Revenue Service, other governmental agency or a court. Any
change of characterization of an individual by the Internal Revenue Service or
any court or government agency shall have no effect upon the classification of
an individual as an Employee for purposes of this Plan, unless the Committee
determines otherwise.

(n)    “Employed by, or providing service to, the Employer” shall mean
employment or service as an Employee, Key Advisor or member of the Board (so
that, for purposes of exercising Options and SARs and satisfying conditions with
respect to Stock Awards, Stock Units, Other Stock-Based Awards and Cash Awards,
a Participant shall not be considered to have terminated employment or service
until the Participant ceases to be an Employee, Key Advisor and member of the
Board), unless the Committee determines otherwise. If a Participant’s
relationship is with a subsidiary of the Company and that entity ceases to be a
subsidiary of the Company, the Participant will be deemed to cease employment or
service when the entity ceases to be a subsidiary of the Company, unless the
Participant transfers employment or service to an Employer.

(o)    “Employer” shall mean the Company and its direct or indirect
subsidiaries.

(p)    “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.

 

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(q)    “Exercise Price” shall mean the per share price at which shares of
Company Stock may be purchased under an Option, as designated by the Committee.

(r)    “Fair Market Value” shall mean:

(i)    If the Company Stock is publicly traded, the Fair Market Value per share
shall be determined as follows: (A) if the principal trading market for the
Company Stock is a national securities exchange, the closing sales price during
regular trading hours on the relevant date or, if there were no trades on that
date, the latest preceding date upon which a sale was reported, or (B) if the
Company Stock is not principally traded on any such exchange, the last reported
sale price of a share of Company Stock during regular trading hours on the
relevant date, as reported by the OTC Bulletin Board.

(ii)    If the Company Stock is not publicly traded or, if publicly traded, is
not subject to reported transactions as set forth above, the Fair Market Value
per share shall be determined by the Committee through any reasonable valuation
method authorized under the Code.

(iii)    If a Grant is made effective on the date that the registration
statement for the initial public offering of the Company Stock is declared
effective by the Securities and Exchange Commission and the Company Stock is
priced for the initial public offering of such Company Stock, then the Fair
Market Value per share shall be equal to the per share price of Company Stock
offered to the public in such initial public offering.

(s)    “GAAP” shall mean United States Generally Accepted Accounting Principles.

(t)    “Grant” shall mean an Option, SAR, Stock Award, Stock Unit, Other
Stock-Based Award or Cash Award granted under the Plan.

(u)    “Grant Instrument” shall mean the written agreement that sets forth the
terms and conditions of a Grant, including all amendments thereto.

(v)    “Incentive Stock Option” shall mean an Option that is intended to meet
the requirements of an incentive stock option under section 422 of the Code.

(w)    “Key Advisor” shall mean a consultant or advisor of the Employer.

(x)    “Non-Employee Director” shall mean a member of the Board who is not an
Employee.

(y)    “Nonqualified Stock Option” shall mean an Option that is not intended to
be taxed as an incentive stock option under section 422 of the Code.

(z)    “Option” shall mean an option to purchase shares of Company Stock, as
described in Section 6.

 

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(aa)    “Other Stock-Based Award” shall mean any Grant based on, measured by or
payable in Company Stock (other than an Option, Stock Unit, Stock Award, or
SAR), as described in Section 10.

(bb)    “Participant” shall mean an Employee, Key Advisor or Non-Employee
Director designated by the Committee to participate in the Plan.

(cc)    “Plan” shall mean this CarGurus, Inc. Omnibus Incentive Compensation
Plan, as in effect from time to time.

(dd)    “Prior Plan” shall mean CarGurus, Inc. Amended and Restated 2015 Equity
Incentive Plan.

(ee)    “Reliance Period” shall have the meaning given to that term in
Section 18(b).

(ff)    “Restriction Period” shall have the meaning given that term in
Section 7(a).

(gg)    “SAR” shall mean a stock appreciation right, as described in Section 9.

(hh)    “Stock Award” shall mean an award of Company Stock, as described in
Section 7.

(ii)    “Stock Unit” shall mean an award of a phantom unit representing a share
of Company Stock, as described in Section 8.

(jj)    “Substitute Awards” shall have the meaning given that term in
Section 4(b).

Section 2.    Administration

(a)    Committee. The Plan shall be administered and interpreted by the
Committee. The Committee may delegate authority to one or more subcommittees, as
it deems appropriate. The Committee, when making Grants to officers and
directors of the Company, or the subcommittee to which it delegates authority to
make Grants to officers and directors of the Company shall consist of entirely
of directors who are “non-employee directors” as defined under Rule 16b-3
promulgated under the Exchange Act. In addition, the Committee or subcommittee
to which it delegates authority shall consist of directors who are “independent
directors,” as determined in accordance with the independence standards
established by the stock exchange on which the Company Stock is at the time
primarily traded, to the extent required thereunder. Subject to compliance with
applicable law and the applicable stock exchange rules, the Board, in its
discretion, may perform any action of the Committee hereunder. To the extent
that the Board, the Committee, a subcommittee or the CEO, as described below,
administers the Plan, references in the Plan to the “Committee” shall be deemed
to refer to the Board, the Committee, such subcommittee or the CEO.

 

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(b)    Delegation to CEO. Subject to compliance with applicable law and
applicable stock exchange requirements, the Committee may delegate all or part
of its authority and power to the CEO, as it deems appropriate, with respect to
Grants to Employees or Key Advisors who are not executive officers or directors
under section 16 of the Exchange Act.

(c)    Committee Authority. The Committee shall have the sole authority to
(i) determine the individuals to whom Grants shall be made under the Plan,
(ii) determine the type, size, terms and conditions of the Grants to be made to
each such individual, (iii) determine the time when the Grants will be made and
the duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, (v) amend
the terms of any previously issued Grant, subject to the provisions of
Section 18 below, and (vi) deal with any other matters arising under the Plan.

(d)    Committee Determinations. The Committee shall have full power and express
discretionary authority to administer and interpret the Plan, to make factual
determinations and to adopt or amend such rules, regulations, agreements and
instruments for implementing the Plan and for the conduct of its business as it
deems necessary or advisable, in its sole discretion. The Committee’s
interpretations of the Plan and all determinations made by the Committee
pursuant to the powers vested in it hereunder shall be conclusive and binding on
all persons having any interest in the Plan or in any awards granted hereunder.
All powers of the Committee shall be executed in its sole discretion, in the
best interest of the Company, not as a fiduciary, and in keeping with the
objectives of the Plan and need not be uniform as to similarly situated
individuals.

(e)    Indemnification. No member of the Committee or the Board, and no employee
of the Company shall be liable for any act or failure to act with respect to the
Plan, except in circumstances involving his or her bad faith or willful
misconduct, or for any act or failure to act hereunder by any other member of
the Committee or employee or by any agent to whom duties in connection with the
administration of this Plan have been delegated. The Company shall indemnify
members of the Committee and the Board and any agent of the Committee or the
Board who is an employee of the Company or a subsidiary against any and all
liabilities or expenses to which they may be subjected by reason of any act or
failure to act with respect to their duties on behalf of the Plan, to the
fullest extent permissible under applicable law and in accordance with any
applicable agreements with the Company.

Section 3.    Grants

Grants under the Plan may consist of Options as described in Section 6, Stock
Awards as described in Section 7, Stock Units as described in Section 8, SARs as
described in Section 9, Other Stock-Based Awards as described in Section 10 and
Cash Awards as described in Section 11. All Grants shall be subject to the terms
and conditions set forth herein and to such other terms and conditions
consistent with this Plan as the Committee deems appropriate and as are
specified in writing by the Committee to the individual in the Grant Instrument.
All Grants shall be made conditional upon the Participant’s acknowledgement, in
writing or by acceptance of the Grant, that all decisions and determinations of
the Committee shall be final and binding on the

 

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Participant, his or her beneficiaries and any other person having or claiming an
interest under such Grant. Grants under a particular Section of the Plan need
not be uniform as among the Participants.

Section 4.    Shares Subject to the Plan

(a)    Shares Authorized. Subject to adjustment as described below in
Section 4(d), the aggregate number of shares of Company Stock that may be issued
or transferred under the Plan shall be equal to the sum of the following: (i)
7,800,000 shares of Company Stock, plus (ii) the number of shares of Company
Stock (up to 4,500,000 shares) equal to the sum of (x) the number of shares of
Company Stock and Class B Common Stock of the Company subject to outstanding
grants under the Prior Plan as of the Effective Date that terminate, expire or
are cancelled, forfeited, exchanged or surrendered on or after the Effective
Date without having been exercised, vested or paid prior to the Effective Date,
including shares tendered or withheld to satisfy tax withholding obligations
with respect to outstanding grants under the Prior Plan, plus (y) the number of
shares of Company Stock reserved for issuance under the Prior Plan that remain
available for grant under the Prior Plan as of the Effective Date. The aggregate
number of shares of Company Stock that may be issued or transferred under the
Plan pursuant to Incentive Stock Options shall not exceed 12,300,000 shares of
Company Stock. In addition, as of the first trading day of January during the
term of the Plan (excluding any extensions), beginning with calendar year 2019,
an additional positive number of shares of Company Stock shall be added to the
number of shares of Company Stock authorized to be issued or transferred under
the Plan and the number of shares authorized to be issued or transferred
pursuant to Incentive Stock Options, equal to 4% of the total number of shares
of Company Stock outstanding on the last trading day in December of the
immediately preceding calendar year or 6,000,000 shares, whichever is less, or
such lesser amount as determined by the Board.

(b)    Source of Shares; Share Counting. Shares issued or transferred under the
Plan may be authorized but unissued shares of Company Stock or reacquired shares
of Company Stock, including shares purchased by the Company on the open market
for purposes of the Plan. If and to the extent Options or SARs granted under the
Plan (including options granted under the Prior Plan) terminate, expire or are
canceled, forfeited, exchanged or surrendered without having been exercised, or
if any Stock Awards, Stock Units or Other Stock-Based Awards (including stock
units granted under the Prior Plan) are forfeited, terminated or otherwise not
paid in full, the shares subject to such Grants shall again be available for
purposes of the Plan. If shares of Company Stock otherwise issuable under the
Plan are surrendered in payment of the Exercise Price of an Option, then the
number of shares of Company Stock available for issuance under the Plan shall be
reduced only by the net number of shares actually issued by the Company upon
such exercise and not by the gross number of shares as to which such Option is
exercised. Upon the exercise of any SAR under the Plan, the number of shares of
Company Stock available for issuance under the Plan shall be reduced by only by
the net number of shares actually issued by the Company upon such exercise. If
shares of Company Stock otherwise issuable under the Plan are withheld by the
Company in satisfaction of the withholding taxes incurred in connection with the
issuance, vesting or exercise of any Grant or the issuance of Company Stock
thereunder, then the number of shares of Company Stock available for issuance
under the Plan shall be reduced

 

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by the net number of shares issued, vested or exercised under such Grant,
calculated in each instance after payment of such share withholding. To the
extent any Grants are paid in cash, and not in shares of Company Stock, any
shares previously subject to such Grants shall again be available for issuance
or transfer under the Plan.

(c)    Substitute Awards. Shares issued or transferred under Grants made
pursuant to an assumption, substitution or exchange for previously granted
awards of a company acquired by the Company in a transaction (“Substitute
Awards”) shall not reduce the number of shares of Company Stock available under
the Plan and available shares under a stockholder approved plan of an acquired
company (as appropriately adjusted to reflect the transaction) may be used for
Grants under the Plan and shall not reduce the Plan’s share reserve (subject to
applicable stock exchange listing and Code requirements).

(d)    Adjustments. If there is any change in the number or kind of shares of
Company Stock outstanding by reason of (i) a stock dividend, spinoff,
recapitalization, stock split, or combination or exchange of shares, (ii) a
merger, reorganization or consolidation, (iii) a reclassification or change in
par value, or (iv) any other extraordinary or unusual event affecting the
outstanding Company Stock as a class without the Company’s receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spinoff or the Company’s payment of an
extraordinary dividend or distribution, the maximum number and kind of shares of
Company Stock available for issuance under the Plan, the kind and number of
shares covered by outstanding Grants, the kind and number of shares issued and
to be issued under the Plan, and the price per share or the applicable market
value of such Grants shall be equitably adjusted by the Committee to reflect any
increase or decrease in the number of, or change in the kind or value of, the
issued shares of Company Stock to preclude, to the extent practicable, the
enlargement or dilution of rights and benefits under the Plan and such
outstanding Grants; provided, however, that any fractional shares resulting from
such adjustment shall be eliminated. In addition, in the event of a Change of
Control, the provisions of Section 13 of the Plan shall apply. Any adjustments
to outstanding Grants shall be consistent with section 409A or 424 of the Code,
to the extent applicable. The adjustments of Grants under this Section 4(d)
shall include adjustment of shares, Exercise Price of Stock Options, base amount
of SARs, performance goals or other terms and conditions, as the Committee deems
appropriate. The Committee shall have the sole discretion and authority to
determine what appropriate adjustments shall be made and any adjustments
determined by the Committee shall be final, binding and conclusive.

Section 5.    Eligibility for Participation

(a)    Eligible Persons. All Employees and Non-Employee Directors shall be
eligible to participate in the Plan. Key Advisors shall be eligible to
participate in the Plan if the Key Advisors render bona fide services to the
Employer, the services are not in connection with the offer and sale of
securities in a capital-raising transaction and the Key Advisors do not directly
or indirectly promote or maintain a market for the Company’s securities.

 

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(b)    Selection of Participants. The Committee shall select the Employees,
Non-Employee Directors and Key Advisors to receive Grants and shall determine
the number of shares of Company Stock subject to a particular Grant in such
manner as the Committee determines.

Section 6.    Options

The Committee may grant Options to an Employee, Non-Employee Director or Key
Advisor upon such terms as the Committee deems appropriate. The following
provisions are applicable to Options:

(a)    Number of Shares. The Committee shall determine the number of shares of
Company Stock that will be subject to each Grant of Options to Employees,
Non-Employee Directors and Key Advisors.

(b)    Type of Option and Exercise Price.

(i)    The Committee may grant Incentive Stock Options or Nonqualified Stock
Options or any combination of the two, all in accordance with the terms and
conditions set forth herein. Incentive Stock Options may be granted only to
employees of the Company or its parent or subsidiary corporations, as defined in
section 424 of the Code. Nonqualified Stock Options may be granted to Employees,
Non-Employee Directors and Key Advisors.

(ii)    The Exercise Price of Company Stock subject to an Option shall be
determined by the Committee and shall be equal to or greater than the Fair
Market Value of a share of Company Stock on the date the Option is granted.
However, an Incentive Stock Option may not be granted to an Employee who, at the
time of grant, owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company, or any parent or subsidiary
corporation of the Company, as defined in section 424 of the Code, unless the
Exercise Price per share is not less than 110% of the Fair Market Value of a
share of Company Stock on the date of grant.

(c)    Option Term. The Committee shall determine the term of each Option. The
term of any Option shall not exceed ten years from the date of grant. However,
an Incentive Stock Option that is granted to an Employee who, at the time of
grant, owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company, or any parent or subsidiary corporation of
the Company, as defined in section 424 of the Code, may not have a term that
exceeds five years from the date of grant. Notwithstanding the foregoing, in the
event that on the last business day of the term of an Option (other than an
Incentive Stock Option), the exercise of the Option is prohibited by applicable
law, including a prohibition on purchases or sales of Company Stock under the
Company’s insider trading policy, the term of the Option shall be extended for a
period of 30 days following the end of the legal prohibition, unless the
Committee determines otherwise.

 

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(d)    Exercisability of Options. Options shall become exercisable in accordance
with such terms and conditions, consistent with the Plan, as may be determined
by the Committee and specified in the Grant Instrument. The Committee may
accelerate the exercisability of any or all outstanding Options at any time for
any reason.

(e)    Grants to Non-Exempt Employees. Notwithstanding the foregoing, Options
granted to persons who are non-exempt employees under the Fair Labor Standards
Act of 1938, as amended, may not be exercisable for at least six months after
the date of grant (except that such Options may become exercisable, as
determined by the Committee, upon the Participant’s death, Disability or
retirement, or upon a Change of Control or other circumstances permitted by
applicable regulations).

(f)    Termination of Employment or Service. Except as provided in the Grant
Instrument, an Option may only be exercised while the Participant is employed
by, or providing services to, the Employer. The Committee shall determine in the
Grant Instrument under what circumstances and during what time periods a
Participant may exercise an Option after termination of employment or service.

(g)    Exercise of Options. A Participant may exercise an Option that has become
exercisable, in whole or in part, by delivering a notice of exercise to the
Company or its delegate. The Participant shall pay the Exercise Price for an
Option as specified by the Committee (i) in cash, (ii) unless the Committee
determines otherwise, by delivering shares of Company Stock owned by the
Participant and having a Fair Market Value on the date of exercise at least
equal to the Exercise Price or by attestation (in accordance with procedures
prescribed by the Company) to ownership of shares of Company Stock having a Fair
Market Value on the date of exercise at least equal to the Exercise Price,
(iii) by payment through a broker in accordance with procedures permitted by
Regulation T of the Federal Reserve Board, or (iv) by such other method as the
Committee may approve. In addition, to the extent an Option is at the time
exercisable for vested shares of Company Stock, all or any part of that vested
portion may be surrendered to the Company for an appreciation distribution
payable in shares of Company Stock with a Fair Market Value at the time of the
Option surrender equal to the dollar amount by which the then Fair Market Value
of the shares of Company Stock subject to the surrendered portion exceeds the
aggregate Exercise Price payable for those shares (“net exercise”). Shares of
Company Stock used to exercise an Option shall have been held by the Participant
for the requisite period of time necessary to avoid adverse accounting
consequences to the Company with respect to the Option. Payment for the shares
to be issued or transferred pursuant to the Option, and any required withholding
taxes, must be received by the Company by the time specified by the Committee
depending on the type of payment being made, but in all cases prior to the
issuance or transfer of such shares.

(h)    Limits on Incentive Stock Options. Each Incentive Stock Option shall
provide that, if the aggregate Fair Market Value of the Company Stock on the
date of the grant with respect to which Incentive Stock Options are exercisable
for the first time by a Participant during any calendar year, under the Plan or
any other stock option plan of the Company or a parent or subsidiary, exceeds
$100,000, then the Option, as to the excess, shall be treated as a Nonqualified
Stock Option.

 

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Section 7.    Stock Awards

The Committee may issue or transfer shares of Company Stock to an Employee,
Non-Employee Director or Key Advisor under a Stock Award, upon such terms as the
Committee deems appropriate. The following provisions are applicable to Stock
Awards:

(a)    General Requirements. Shares of Company Stock issued or transferred
pursuant to Stock Awards may be issued or transferred for consideration or for
no consideration, and subject to restrictions or no restrictions, as determined
by the Committee. The Committee may, but shall not be required to, establish
conditions under which restrictions on Stock Awards shall lapse over a period of
time or according to such other criteria as the Committee deems appropriate,
including, without limitation, restrictions based upon the achievement of
specific performance goals. The period of time during which the Stock Awards
will remain subject to restrictions will be designated in the Grant Instrument
as the “Restriction Period.”

(b)    Number of Shares. The Committee shall determine the number of shares of
Company Stock to be issued or transferred pursuant to a Stock Award and the
restrictions applicable to such shares.

(c)    Requirement of Employment or Service. If the Participant ceases to be
employed by, or provide service to, the Employer during a period designated in
the Grant Instrument as the Restriction Period, or if other specified conditions
are not met, the Stock Award shall terminate as to all shares covered by the
Grant as to which the restrictions have not lapsed, and those shares of Company
Stock must be immediately returned to the Company. The Committee may, however,
provide for complete or partial exceptions to this requirement as it deems
appropriate.

(d)    Restrictions on Transfer and Legend on Stock Certificate. During the
Restriction Period, a Participant may not sell, assign, transfer, pledge or
otherwise dispose of the shares of a Stock Award except under Section 16 below.
Unless otherwise determined by the Committee, the Company will retain possession
of certificates for shares of Stock Awards until all restrictions on such shares
have lapsed. Each certificate for a Stock Award, unless held by the Company,
shall contain a legend giving appropriate notice of the restrictions in the
Grant. The Participant shall be entitled to have the legend removed from the
stock certificate covering the shares subject to restrictions when all
restrictions on such shares have lapsed. The Committee may determine that the
Company will not issue certificates for Stock Awards until all restrictions on
such shares have lapsed.

(e)    Right to Vote and to Receive Dividends. Unless the Committee determines
otherwise, during the Restriction Period, the Participant shall have the right
to vote shares of Stock Awards and to receive any dividends or other
distributions paid on such shares, subject to any restrictions deemed
appropriate by the Committee, including, without limitation, the achievement of
specific performance goals. Dividends with respect to Stock Awards that vest
based on performance shall vest if and to the extent that the underlying Stock
Award vests, as determined by the Committee.

 

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(f)    Lapse of Restrictions. All restrictions imposed on Stock Awards shall
lapse upon the expiration of the applicable Restriction Period and the
satisfaction of all conditions, if any, imposed by the Committee. The Committee
may determine, as to any or all Stock Awards, that the restrictions shall lapse
without regard to any Restriction Period.

Section 8.    Stock Units

The Committee may grant Stock Units, each of which shall represent one
hypothetical share of Company Stock, to an Employee, Non-Employee Director or
Key Advisor upon such terms and conditions as the Committee deems appropriate.
The following provisions are applicable to Stock Units:

(a)    Crediting of Units. Each Stock Unit shall represent the right of the
Participant to receive a share of Company Stock or an amount of cash based on
the value of a share of Company Stock, if and when specified conditions are met.
All Stock Units shall be credited to bookkeeping accounts established on the
Company’s records for purposes of the Plan.

(b)    Terms of Stock Units. The Committee may grant Stock Units that vest and
are payable if specified performance goals or other conditions are met, or under
other circumstances. Stock Units may be paid at the end of a specified
performance period or other period, or payment may be deferred to a date
authorized by the Committee. The Committee may accelerate vesting or payment, as
to any or all Stock Units at any time for any reason, provided such acceleration
complies with section 409A of the Code. The Committee shall determine the number
of Stock Units to be granted and the requirements applicable to such Stock
Units.

(c)    Requirement of Employment or Service. If the Participant ceases to be
employed by, or provide service to, the Employer prior to the vesting of Stock
Units, or if other conditions established by the Committee are not met, the
Participant’s Stock Units shall be forfeited. The Committee may, however,
provide for complete or partial exceptions to this requirement as it deems
appropriate.

(d)    Payment With Respect to Stock Units. Payments with respect to Stock Units
shall be made in cash, Company Stock or any combination of the foregoing, as the
Committee shall determine.

Section 9.    Stock Appreciation Rights

The Committee may grant SARs to an Employee, Non-Employee Director or Key
Advisor separately or in tandem with any Option. The following provisions are
applicable to SARs:

(a)    General Requirements. The Committee may grant SARs to an Employee,
Non-Employee Director or Key Advisor separately or in tandem with any Option
(for all or a

 

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portion of the applicable Option). Tandem SARs may be granted either at the time
the Option is granted or at any time thereafter while the Option remains
outstanding; provided, however, that, in the case of an Incentive Stock Option,
SARs may be granted only at the time of the grant of the Incentive Stock Option.
The Committee shall establish the base amount of the SAR at the time the SAR is
granted. The base amount of each SAR shall be equal to or greater than the Fair
Market Value of a share of Company Stock as of the date of grant of the SAR. The
term of any SAR shall not exceed ten years from the date of grant.
Notwithstanding the foregoing, in the event that on the last business day of the
term of a SAR, the exercise of the SAR is prohibited by applicable law,
including a prohibition on purchases or sales of Company Stock under the
Company’s insider trading policy, the term shall be extended for a period of 30
days following the end of the legal prohibition, unless the Committee determines
otherwise.

(b)    Tandem SARs. In the case of tandem SARs, the number of SARs granted to a
Participant that shall be exercisable during a specified period shall not exceed
the number of shares of Company Stock that the Participant may purchase upon the
exercise of the related Option during such period. Upon the exercise of an
Option, the SARs relating to the Company Stock covered by such Option shall
terminate. Upon the exercise of SARs, the related Option shall terminate to the
extent of an equal number of shares of Company Stock.

(c)    Exercisability. An SAR shall be exercisable during the period specified
by the Committee in the Grant Instrument and shall be subject to such vesting
and other restrictions as may be specified in the Grant Instrument. The
Committee may accelerate the exercisability of any or all outstanding SARs at
any time for any reason. SARs may only be exercised while the Participant is
employed by, or providing service to, the Employer or during the applicable
period after termination of employment or service as specified by the Committee.
A tandem SAR shall be exercisable only during the period when the Option to
which it is related is also exercisable.

(d)    Grants to Non-Exempt Employees. Notwithstanding the foregoing, SARs
granted to persons who are non-exempt employees under the Fair Labor Standards
Act of 1938, as amended, may not be exercisable for at least six months after
the date of grant (except that such SARs may become exercisable, as determined
by the Committee, upon the Participant’s death, Disability or retirement, or
upon a Change of Control or other circumstances permitted by applicable
regulations).

(e)    Value of SARs. When a Participant exercises SARs, the Participant shall
receive in settlement of such SARs an amount equal to the value of the stock
appreciation for the number of SARs exercised. The stock appreciation for an SAR
is the amount by which the Fair Market Value of the underlying Company Stock on
the date of exercise of the SAR exceeds the base amount of the SAR as described
in subsection (a).

(f)    Form of Payment. The appreciation in an SAR shall be paid in shares of
Company Stock, cash or any combination of the foregoing, as the Committee shall
determine. For purposes of calculating the number of shares of Company Stock to
be received, shares of Company Stock shall be valued at their Fair Market Value
on the date of exercise of the SAR.

 

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Section 10.    Other Stock-Based Awards

The Committee may grant Other Stock-Based Awards, which are awards (other than
those described in Sections 6, 7, 8 and 9 of the Plan) that are based on or
measured by Company Stock, to any Employee, Non-Employee Director or Key
Advisor, on such terms and conditions as the Committee shall determine. Other
Stock-Based Awards may be awarded subject to the achievement of performance
goals or other conditions and may be payable in cash, Company Stock or any
combination of the foregoing, as the Committee shall determine.

Section 11.    Cash Awards

The Committee may grant Cash Awards to Employees who are executive officers and
other key employees of the Company. The Committee shall determine the terms and
conditions applicable to Cash Awards, including the criteria for the vesting and
payment of Cash Awards. Cash Awards shall be based on such measures as the
Committee deems appropriate and need not relate to the value of shares of
Company Stock.

Section 12.    Dividend Equivalents

The Committee may grant Dividend Equivalents in connection with Stock Units or
Other Stock-Based Awards. Dividend Equivalents may be paid currently or accrued
as contingent cash obligations and may be payable in cash or shares of Company
Stock, and upon such terms and conditions as the Committee shall determine.
Dividend Equivalents with respect to Stock Units or Other Stock-Based Awards
that vest based on performance shall vest and be paid only if and to the extent
the underlying Stock Units or Other Stock-Based Awards vest and are paid, as
determined by the Committee.

Section 13.    Consequences of a Change of Control

(a)    Assumption of Outstanding Grants. Upon a Change of Control where the
Company is not the surviving corporation (or survives only as a subsidiary of
another corporation), unless the Committee determines otherwise, all outstanding
Grants that are not exercised or paid at the time of the Change of Control shall
be assumed by, or replaced with grants that have comparable terms by, the
surviving corporation (or a parent or subsidiary of the surviving corporation).
After a Change of Control, references to the “Company” as they relate to
employment matters shall include the successor employer in the transaction,
subject to applicable law.

(b)    Vesting Upon Certain Terminations of Employment. Unless the Grant
Instrument provides otherwise, if a Participant’s employment is terminated by
the Employer without Cause upon or within 12 months following a Change of
Control, the Participant’s outstanding Grants shall become fully vested as of
the date of such termination; provided that if the vesting of any such Grants is
based, in whole or in part, on performance, the applicable Grant Instrument
shall specify how the portion of the Grant that becomes vested pursuant to this
Section 13(b) shall be calculated.

 

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(c)    Other Alternatives. In the event of a Change of Control, if any
outstanding Grants are not assumed by, or replaced with grants that have
comparable terms by, the surviving corporation (or a parent or subsidiary of the
surviving corporation), the Committee may take any of the following actions with
respect to any or all outstanding Grants, without the consent of any
Participant: (i) the Committee may determine that outstanding Stock Options and
SARs shall automatically accelerate and become fully exercisable and the
restrictions and conditions on outstanding Stock Awards, Stock Units, Cash
Awards and Dividend Equivalents shall immediately lapse; (ii) the Committee may
determine that Participants shall receive a payment in settlement of outstanding
Stock Units, Cash Awards or Dividend Equivalents, in such amount and form as may
be determined by the Committee; (ii) the Committee may require that Participants
surrender their outstanding Stock Options and SARs in exchange for a payment by
the Company, in cash or Company Stock as determined by the Committee, in an
amount equal to the amount, if any, by which the then Fair Market Value of the
shares of Company Stock subject to the Participant’s unexercised Stock Options
and SARs exceeds the Stock Option Exercise Price or SAR base amount, and
(iv) after giving Participants an opportunity to exercise all of their
outstanding Stock Options and SARs, the Committee may terminate any or all
unexercised Stock Options and SARs at such time as the Committee deems
appropriate. Such surrender, termination or payment shall take place as of the
date of the Change of Control or such other date as the Committee may specify.
Without limiting the foregoing, if the per share Fair Market Value of the
Company Stock does not exceed the per share Stock Option Exercise Price or SAR
base amount, as applicable, the Company shall not be required to make any
payment to the Participant upon surrender of the Stock Option or SAR.

Section 14.    Deferrals

The Committee may permit or require a Participant to defer receipt of the
payment of cash or the delivery of shares that would otherwise be due to such
Participant in connection with any Grant. If any such deferral election is
permitted or required, the Committee shall establish rules and procedures for
such deferrals and may provide for interest or other earnings to be paid on such
deferrals. The rules and procedures for any such deferrals shall be consistent
with applicable requirements of section 409A of the Code.

Section 15.    Withholding of Taxes

(a)    Required Withholding. All Grants under the Plan shall be subject to
applicable United States federal (including FICA), state and local, foreign
country or other tax withholding requirements. The Employer may require that the
Participant or other person receiving Grants or exercising Grants pay to the
Employer an amount sufficient to satisfy such tax withholding requirements with
respect to such Grants, or the Employer may deduct from other wages and
compensation paid by the Employer the amount of any withholding taxes due with
respect to such Grants.

(b)    Share Withholding. The Committee may permit or require the Employer’s tax
withholding obligation with respect to Grants paid in Company Stock to be
satisfied by having shares withheld up to an amount that does not exceed the
Participant’s applicable

 

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withholding tax rate for United States federal (including FICA), state and local
tax liabilities. The Committee may, in its discretion, and subject to such rules
as the Committee may adopt, allow Participants to elect to have such share
withholding applied to all or a portion of the tax withholding obligation
arising in connection with any particular Grant. Unless the Committee determines
otherwise, share withholding for taxes shall not exceed the participant’s
minimum applicable tax withholding amount.

Section 16.    Transferability of Grants

(a)    Nontransferability of Grants. Except as described in subsection
(b) below, only the Participant may exercise rights under a Grant during the
Participant’s lifetime. A Participant may not transfer those rights except
(i) by will or by the laws of descent and distribution or (ii) with respect to
Grants other than Incentive Stock Options, pursuant to a domestic relations
order. When a Participant dies, the personal representative or other person
entitled to succeed to the rights of the Participant may exercise such rights.
Any such successor must furnish proof satisfactory to the Company of his or her
right to receive the Grant under the Participant’s will or under the applicable
laws of descent and distribution.

(b)    Transfer of Nonqualified Stock Options. Notwithstanding the foregoing,
the Committee may provide, in a Grant Instrument, that a Participant may
transfer Nonqualified Stock Options to family members, or one or more trusts or
other entities for the benefit of or owned by family members, consistent with
the applicable securities laws, according to such terms as the Committee may
determine; provided that the Participant receives no consideration for the
transfer of an Option and the transferred Option shall continue to be subject to
the same terms and conditions as were applicable to the Option immediately
before the transfer.

Section 17.    Requirements for Issuance or Transfer of Shares

No Company Stock shall be issued or transferred in connection with any Grant
hereunder unless and until all legal requirements applicable to the issuance or
transfer of such Company Stock have been complied with to the satisfaction of
the Committee. The Committee shall have the right to condition any Grant on the
Participant’s undertaking in writing to comply with such restrictions on his or
her subsequent disposition of the shares of Company Stock as the Committee shall
deem necessary or advisable, and certificates representing such shares may be
legended to reflect any such restrictions. Certificates representing shares of
Company Stock issued or transferred under the Plan may be subject to such
stop-transfer orders and other restrictions as the Committee deems appropriate
to comply with applicable laws, regulations and interpretations, including any
requirement that a legend be placed thereon.

Section 18.    Amendment and Termination of the Plan

(a)    Amendment. The Board may amend or terminate the Plan at any time;
provided, however, that the Board shall not amend the Plan without stockholder
approval if such approval is required in order to comply with the Code or other
applicable law, or to comply with applicable stock exchange requirements.

 

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(b)    Stockholder Approval Requirements.

(i)    The Plan is intended to comply with the transition relief set forth at
Treas. Reg. §1.162-27(f)(1) for companies that become publicly held in
connection with an initial public offering, which applies until the first to
occur of (A) the expiration of the Plan, (B) a material modification of the Plan
within the meaning of section 162(m) of the Code and the regulations thereunder,
(C) the issuance of all Company Stock authorized under the Plan, or (D) the
first meeting of stockholders at which directors are to be elected that occurs
after the close of the third calendar year following the calendar year in which
the initial public offering occurs (the period commencing on the initial public
offering and ending on the first to occur of the foregoing events shall be
hereinafter referred to as the “Reliance Period”).

(ii)    Following the Reliance Period, if Grants are to be made as “qualified
performance-based compensation” under section 162(m) of the Code, the Plan must
be approved by the stockholders in accordance with section 162(m) of the Code,
and the Plan must be reapproved by the stockholders no later than the first
stockholders meeting that occurs in the fifth year following the year in which
the stockholders previously approved the Plan, if required by section 162(m) of
the Code or the regulations thereunder.

(c)    Termination of Plan. The Plan shall terminate on the day immediately
preceding the tenth anniversary of its Effective Date, unless the Plan is
terminated earlier by the Board or is extended by the Board with the approval of
the stockholders.

(d)    Termination and Amendment of Outstanding Grants. A termination or
amendment of the Plan that occurs after a Grant is made shall not materially
impair the rights of a Participant unless the Participant consents or unless the
Committee acts under Section 19(f) below. The termination of the Plan shall not
impair the power and authority of the Committee with respect to an outstanding
Grant. Whether or not the Plan has terminated, an outstanding Grant may be
terminated or amended under Section 19(f) below or may be amended by agreement
of the Company and the Participant consistent with the Plan.

Section 19.    Miscellaneous

(a)    Grants in Connection with Corporate Transactions and Otherwise. Nothing
contained in the Plan shall be construed to (i) limit the right of the Committee
to make Grants under the Plan in connection with the acquisition, by purchase,
lease, merger, consolidation or otherwise, of the business or assets of any
corporation, firm or association, including Grants to employees thereof who
become Employees, or (ii) limit the right of the Company to grant stock options
or make other awards outside of the Plan. The Committee may make a Grant to an
employee of another corporation who becomes an Employee by reason of a corporate
merger, consolidation, acquisition of stock or property, reorganization or
liquidation involving the Company, in substitution for a stock option or stock
awards grant made by such corporation. Notwithstanding anything in the Plan to
the contrary, the Committee may establish such terms and conditions of the new
Grants as it deems appropriate, including setting the Exercise Price of Options
or the base price of SARs at a price necessary to retain for the Participant the
same economic value as the prior options or rights.

 

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(b)    Governing Document. The Plan shall be the controlling document. No other
statements, representations, explanatory materials or examples, oral or written,
may amend the Plan in any manner. The Plan shall be binding upon and enforceable
against the Company and its successors and assigns.

(c)    Funding of the Plan. The Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Grants under the Plan.

(d)    Rights of Participants. Nothing in the Plan shall entitle any Employee,
Non-Employee Director, Key Advisor or other person to any claim or right to
receive a Grant under the Plan. Neither the Plan nor any action taken hereunder
shall be construed as giving any individual any rights to be retained by or in
the employ of the Employer or any other employment rights.

(e)    No Fractional Shares. No fractional shares of Company Stock shall be
issued or delivered pursuant to the Plan or any Grant. Except as otherwise
provided under the Plan, the Committee shall determine whether cash, other
awards or other property shall be issued or paid in lieu of such fractional
shares or whether such fractional shares or any rights thereto shall be
forfeited or otherwise eliminated.

(f)    Compliance with Law.

(i)    The Plan, the exercise of Options and SARs and the obligations of the
Company to issue or transfer shares of Company Stock under Grants shall be
subject to all applicable laws and regulations, and to approvals by any
governmental or regulatory agency as may be required. With respect to persons
subject to section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act. In addition,
it is the intent of the Company that Incentive Stock Options comply with the
applicable provisions of section 422 of the Code, and that, to the extent
applicable, Grants comply with the requirements of section 409A of the Code. To
the extent that any legal requirement of section 16 of the Exchange Act or
section 422 or 409A of the Code as set forth in the Plan ceases to be required
under section 16 of the Exchange Act or section 422 or 409A of the Code, that
Plan provision shall cease to apply. The Committee may revoke any Grant if it is
contrary to law or modify a Grant to bring it into compliance with any valid and
mandatory government regulation. The Committee may also adopt rules regarding
the withholding of taxes on payments to Participants. The Committee may, in its
sole discretion, agree to limit its authority under this Section.

(ii)    The Plan is intended to comply with the requirements of section 409A of
the Code, to the extent applicable. Each Grant shall be construed and
administered such that the Grant either (A) qualifies for an exemption from the
requirements of section 409A of the

 

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Code or (B) satisfies the requirements of section 409A of the Code. If a Grant
is subject to section 409A of the Code, (I) distributions shall only be made in
a manner and upon an event permitted under section 409A of the Code,
(II) payments to be made upon a termination of employment or service shall only
be made upon a “separation from service” under section 409A of the Code,
(III) unless the Grant specifies otherwise, each installment payment shall be
treated as a separate payment for purposes of section 409A of the Code, and
(IV) in no event shall a Participant, directly or indirectly, designate the
calendar year in which a distribution is made except in accordance with section
409A of the Code.

(iii)    Any Grant that is subject to section 409A of the Code and that is to be
distributed to a Key Employee (as defined below) upon separation from service
shall be administered so that any distribution with respect to such Grant shall
be postponed for six months following the date of the Participant’s separation
from service, if required by section 409A of the Code. If a distribution is
delayed pursuant to section 409A of the Code, the distribution shall be paid
within 15 days after the end of the six-month period. If the Participant dies
during such six-month period, any postponed amounts shall be paid within 90 days
of the Participant’s death. The determination of Key Employees, including the
number and identity of persons considered Key Employees and the identification
date, shall be made by the Committee or its delegate each year in accordance
with section 416(i) of the Code and the “specified employee” requirements of
section 409A of the Code.

(iv)    Notwithstanding anything in the Plan or any Grant agreement to the
contrary, each Participant shall be solely responsible for the tax consequences
of Grants under the Plan, and in no event shall the Company or any subsidiary or
affiliate of the Company have any responsibility or liability if a Grant does
not meet any applicable requirements of section 409A of the Code. Although the
Company intends to administer the Plan to prevent taxation under section 409A of
the Code, the Company does not represent or warrant that the Plan or any Grant
complies with any provision of federal, state, local or other tax law.

(g)    Establishment of Subplans. The Board may from time to time establish one
or more sub-plans under the Plan for purposes of satisfying applicable blue sky,
securities or tax laws of various jurisdictions. The Board shall establish such
sub-plans by adopting supplements to the Plan setting forth (i) such limitations
on the Committee’s discretion under the Plan as the Board deems necessary or
desirable and (ii) such additional terms and conditions not otherwise
inconsistent with the Plan as the Board shall deem necessary or desirable. All
supplements adopted by the Board shall be deemed to be part of the Plan, but
each supplement shall apply only to Participants within the affected
jurisdiction and the Employer shall not be required to provide copies of any
supplement to Participants in any jurisdiction that is not affected.

(h)    Clawback Rights. Subject to the requirements of applicable law, the
Committee may provide in any Grant Instrument that, if a Participant breaches
any restrictive covenant agreement between the Participant and the Employer
(which may be set forth in any Grant Instrument) or otherwise engages in
activities that constitute Cause either while employed by, or providing service
to, the Employer or within a specified period of time thereafter, all

 

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Grants held by the Participant shall terminate, and the Company may rescind any
exercise of an Option or SAR and the vesting of any other Grant and delivery of
shares upon such exercise or vesting (including pursuant to dividends and
Dividend Equivalents), as applicable on such terms as the Committee shall
determine, including the right to require that in the event of any such
rescission, (i) the Participant shall return to the Company the shares received
upon the exercise of any Option or SAR and/or the vesting and payment of any
other Grant (including pursuant to dividends and Dividend Equivalents) or,
(ii) if the Participant no longer owns the shares, the Participant shall pay to
the Company the amount of any gain realized or payment received as a result of
any sale or other disposition of the shares (or, in the event the Participant
transfers the shares by gift or otherwise without consideration, the Fair Market
Value of the shares on the date of the breach of the restrictive covenant
agreement (including a Participant’s Grant Instrument containing restrictive
covenants) or activity constituting Cause), net of the price originally paid by
the Participant for the shares. Payment by the Participant shall be made in such
manner and on such terms and conditions as may be required by the Committee. The
Employer shall be entitled to set off against the amount of any such payment any
amounts otherwise owed to the Participant by the Employer. In addition, all
Grants under the Plan shall be subject to any applicable clawback or recoupment
policies, share trading policies and other policies that may be implemented by
the Board from time to time.

(i)    Governing Law; Jurisdiction. The validity, construction, interpretation
and effect of the Plan and Grant Instruments issued under the Plan shall be
governed and construed by and determined in accordance with the laws of the
State of Delaware, without giving effect to the conflict of laws provisions
thereof. Any action arising out of, or relating to, any of the provisions of the
Plan and Grants made hereunder shall be brought only in the United States
District Court for the District of Massachusetts, or if such court does not have
jurisdiction or will not accept jurisdiction, in any court of general
jurisdiction in Boston Massachusetts, and the jurisdiction of such court in any
such proceeding shall be exclusive. Notwithstanding the foregoing sentence, on
and after the date a Participant receives shares of Company Stock hereunder, the
Participant will be subject to the jurisdiction provision set forth in the
Corporation’s bylaws.

 

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