Exhibit 10.4

FINANCIAL ENGINES, INC.

AMENDED AND RESTATED

2009 STOCK INCENTIVE PLAN

(Approved by Stockholders on May 17, 2016)

 

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Table of Contents

 

 

 

Page

SECTION 1. 

ESTABLISHMENT AND PURPOSE.

1

 

 

 

SECTION 2. 

DEFINITIONS.

1

 

 

 

(a) 

“Affiliate”

1

 

 

 

(b) 

“Award”

1

 

 

 

(c) 

“Award Agreement”

1

 

 

 

(d) 

“Board of Directors”

1

 

 

 

(e) 

“Cash-Based Award”

2

 

 

 

(f) 

“Change in Control”

2

 

 

 

(g) 

“Code”

3

 

 

 

(h) 

“Committee”

3

 

 

 

(i) 

“Company”

3

 

 

 

(j) 

“Consultant”

3

 

 

 

(k) 

“Employee”

3

 

 

 

(l) 

“Exchange Act”

3

 

 

 

(m) 

“Exercise Price”

3

 

 

 

(n) 

“Fair Market Value”

3

 

 

 

(o) 

“ISO”

4

 

 

 

(p) 

“Nonstatutory Option” or “NSO”

4

 

 

 

(q) 

“Option”

4

 

 

 

(r) 

“Outside Director”

4

 

 

 

(s) 

“Parent”

4

 

 

 

(t) 

“Participant”

4

 

 

 

(u) 

“Performance Based Award”

4

 

 

 

(v) 

“Plan”

4

 

 

 

(w) 

“Purchase Price”

4

 

 

 

(x) 

“Restricted Share”

4

 

 

 

(y) 

“SAR”

4

 

 

 

(z) 

“Service”

5

 

 

 

Financial Engines, Inc.

Amended and Restated 2009 Stock Incentive Plan

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(aa) 

“Share”

5

 

 

 

(bb) 

“Stock”

5

 

 

 

(cc) 

“Stock Unit”

5

 

 

 

(dd) 

“Stock Unit Agreement”

5

 

 

 

(ee) 

“Subsidiary”

5

 

 

 

(ff) 

“Total and Permanent Disability”

5

 

 

 

SECTION 3. 

ADMINISTRATION.

5

 

 

 

(a) 

Committee Composition

5

 

 

 

(b) 

Committee for Non-Officer Grants

5

 

 

 

(c) 

Committee Procedures

6

 

 

 

(d) 

Committee Responsibilities

6

 

 

 

(e) 

Cancellation and Re-grant of Stock Awards

7

 

 

 

SECTION 4. 

ELIGIBILITY.

7

 

 

 

(a) 

General Rule

7

 

 

 

(b) 

Automatic Grants to Outside Directors

8

 

 

 

(c) 

Ten-Percent Stockholders

9

 

 

 

(d) 

Attribution Rules

9

 

 

 

(e) 

Outstanding Stock

9

 

 

 

SECTION 5. 

STOCK SUBJECT TO PLAN.

9

 

 

 

(a) 

Basic Limitation

9

 

 

 

(b) 

Section 162(m) Award Limitation

10

 

 

 

(c) 

Additional Shares

10

 

 

 

SECTION 6. 

RESTRICTED SHARES.

11

 

 

 

(a) 

Restricted Share Award Agreement

11

 

 

 

(b) 

Payment for Awards

11

 

 

 

(c) 

Vesting

11

 

 

 

(d) 

Voting and Dividend Rights

11

 

 

 

(e) 

Restrictions on Transfer of Shares

11

 

 

 

Financial Engines, Inc.

Amended and Restated 2009 Stock Incentive Plan

- ii -

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SECTION 7. 

TERMS AND CONDITIONS OF OPTIONS.

11

 

 

 

(a) 

Stock Option Award Agreement

11

 

 

 

(b) 

Number of Shares

11

 

 

 

(c) 

Exercise Price

11

 

 

 

(d) 

Withholding Taxes

12

 

 

 

(e) 

Exercisability and Term

12

 

 

 

(f) 

Exercise of Options

12

 

 

 

(g) 

Effect of Change in Control

12

 

 

 

(h) 

No Stockholder or Dividend Rights

12

 

 

 

(i) 

Modification, Extension and Renewal of Options

13

 

 

 

(j) 

Restrictions on Transfer of Shares

13

 

 

 

(k) 

Buyout Provisions

13

 

 

 

SECTION 8. 

PAYMENT FOR SHARES.

13

 

 

 

(a) 

General Rule

13

 

 

 

(b) 

Surrender of Stock

13

 

 

 

(c) 

Services Rendered

13

 

 

 

(d) 

Cashless Exercise

13

 

 

 

(e) 

Exercise/Pledge

13

 

 

 

(f) 

Net Exercise

14

 

 

 

(g) 

Promissory Note

14

 

 

 

(h) 

Other Forms of Payment

14

 

 

 

(i) 

Limitations under Applicable Law

14

 

 

 

SECTION 9. 

STOCK APPRECIATION RIGHTS.

14

 

 

 

(a) 

SAR Award Agreement

14

 

 

 

(b) 

Number of Shares

14

 

 

 

(c) 

Exercise Price

14

 

 

 

(d) 

Exercisability and Term

14

 

 

 

(e) 

Effect of Change in Control

15

 

 

 

(f) 

Exercise of SARs

15

 

 

 

Financial Engines, Inc.

Amended and Restated 2009 Stock Incentive Plan

- iii -

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(g) 

Modification or Assumption of SARs

15

 

 

 

(h) 

Voting and Dividend Rights

15

 

 

SECTION 10.

STOCK UNITS.

15

 

 

 

(a) 

Stock Unit Award Agreement

15

 

 

 

(b) 

Payment for Awards

15

 

 

 

(c) 

Vesting Conditions

15

 

 

 

(d) 

Voting and Dividend Rights

16

 

 

 

(e) 

Form and Time of Settlement of Stock Units

16

 

 

 

(f) 

Death of Participant

16

 

 

 

(g) 

Creditors’ Rights

16

 

 

 

SECTION 11.

CASH-BASED AWARDS.

16

 

 

 

SECTION 12.

ADJUSTMENT OF SHARES.

17

 

 

 

(a) 

Adjustments

17

 

 

 

(b) 

Dissolution or Liquidation

17

 

 

 

(c) 

Reorganizations

17

 

 

 

(d) 

Reservation of Rights

18

 

 

 

SECTION 13.

DEFERRAL OF AWARDS.

18

 

 

 

(a) 

Committee Powers

18

 

 

 

(b) 

General Rules

18

 

 

 

SECTION 14.

AWARDS UNDER OTHER PLANS.

19

 

 

 

SECTION 15.

PAYMENT OF DIRECTOR’S FEES IN SECURITIES.

19

 

 

 

(a) 

Effective Date

19

 

 

 

(b) 

Elections to Receive Awards

19

 

 

 

(c) 

Number and Terms of Awards

19

 

 

 

SECTION 16.

LEGAL AND REGULATORY REQUIREMENTS.

19

 

 

 

SECTION 17.

TAXES.

19

 

 

 

(a) 

Withholding Taxes

19

 

 

 

(b) 

Share Withholding

20

 

 

 

(c) 

Section 409A

20

 

 

 

Financial Engines, Inc.

Amended and Restated 2009 Stock Incentive Plan

- iv -

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SECTION 18.

OTHER PROVISIONS APPLICABLE TO AWARDS.

20

 

 

(a) 

Transferability

20

 

 

 

(b) 

Substitution and Assumption of Awards

20

 

 

 

(c) 

Qualifying Performance Criteria

21

 

 

 

(d) 

Recoupment

23

 

 

 

SECTION 19.

NO EMPLOYMENT RIGHTS.

23

 

 

 

SECTION 20.

DURATION AND AMENDMENTS.

23

 

 

(a) 

Term of the Plan

23

 

 

 

(b) 

Right to Amend or Terminate the Plan

23

 

 

 

(c) 

Effect of Termination

23

 

 

 

SECTION 21.

EXECUTION.

24

 

 

 

Financial Engines, Inc.

Amended and Restated 2009 Stock Incentive Plan

- v -

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FINANCIAL ENGINES, INC.

AMENDED AND RESTATED

2009 STOCK INCENTIVE PLAN

SECTION 1.

ESTABLISHMENT AND PURPOSE.

The Plan was adopted by the Board of Directors on November 18, 2009, and became
effective on March 16, 2010, immediately prior to the closing of the initial
offering of Stock to the public pursuant to a registration statement filed by
the Company with the Securities and Exchange Commission (the “Effective Date”).
The Plan was amended and restated effective December 31, 2010 to amend the
vesting provisions for grants to Outside Directors under Section 4(b), effective
December 8, 2011 to further amend the provisions for grants to Outside Directors
under Section 4(b), and effective February 14, 2013 to qualify awards under the
Plan for the performance-based compensation exemption under Section 162(m) of
the Code, and in certain other respects.  The Plan was further amended and
restated effective March 18, 2014 to increase the authorized Share limit under
the Plan, to amend certain automatic grants to Outside Directors as well as to
amend the ratio at which Shares previously subject to Stock Units or Restricted
Share Awards again become available for future grants under the Plan.  The Plan
was most recently amended and restated effective March 21, 2016 (“Restatement
Effective Date”) subject to stockholder approval in order to, among other
changes, increase the authorized Share limit under the Plan and impose a limit
on grants to Outside Directors.

The purpose of the Plan is to promote the long-term success of the Company and
the creation of stockholder value by (a) encouraging Employees, Outside
Directors and Consultants to focus on critical long-range objectives, (b)
encouraging the attraction and retention of Employees, Outside Directors and
Consultants with exceptional qualifications and (c) linking Employees, Outside
Directors and Consultants directly to stockholder interests through increased
stock ownership. The Plan seeks to achieve this purpose by providing for Awards
in the form of restricted shares, stock units, options (which may constitute
incentive stock options or nonstatutory stock options) or stock appreciation
rights.

SECTION 2.

DEFINITIONS.

(a)“Affiliate” shall mean any entity other than a Subsidiary, if the Company
and/or one or more Subsidiaries own not less than 50% of such entity.

(b)“Award” shall mean any award of an Option, a SAR, a Restricted Share or a
Stock Unit under the Plan.

(c)“Award Agreement” shall mean the agreement between the Company and the
recipient of an Award which contains the terms, conditions and restrictions
pertaining to such Award.

(d)“Board of Directors” shall mean the Board of Directors of the Company, as
constituted from time to time.

1

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(e)“Cash-Based Award” shall mean an Award that entitles the Participant to
receive a cash-denominated payment. 

(f)“Change in Control” shall mean the occurrence of any of the following events:

 

(i)

A change in the composition of the Board of Directors occurs, as a result of
which fewer than one-half of the incumbent directors are directors who either:

 

(A)

Had been directors of the Company on the “look-back date” (as defined below)
(the “original directors”); or

 

(B)

Were elected, or nominated for election, to the Board of Directors with the
affirmative votes of at least a majority of the aggregate of the original
directors who were still in office at the time of the election or nomination and
the directors whose election or nomination was previously so approved (the
“continuing directors”); or

 

(ii)

Any “person” (as defined below) who by the acquisition or aggregation of
securities, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company’s then
outstanding securities ordinarily (and apart from rights accruing under special
circumstances) having the right to vote at elections of directors (the “Base
Capital Stock”); except that any change in the relative beneficial ownership of
the Company’s securities by any person resulting solely from a reduction in the
aggregate number of outstanding shares of Base Capital Stock, and any decrease
thereafter in such person’s ownership of securities, shall be disregarded until
such person increases in any manner, directly or indirectly, such person’s
beneficial ownership of any securities of the Company; or

 

(iii)

The consummation of a merger or consolidation of the Company with or into
another entity or any other corporate reorganization, if persons who were not
stockholders of the Company immediately prior to such merger, consolidation or
other reorganization own immediately after such merger, consolidation or other
reorganization 50% or more of the voting power of the outstanding securities of
each of (A) the continuing or surviving entity and (B) any direct or indirect
parent corporation of such continuing or surviving entity; or

 

(iv)

The sale, transfer or other disposition of all or substantially all of the
Company’s assets.

For purposes of subsection (d)(i) above, the term “look-back” date shall mean
the later of (1) the Effective Date or (2) the date 24 months prior to the date
of the event that may constitute a Change in Control.

2

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For purposes of subsection (d)(ii) above, the term “person” shall have the same
meaning as when used in Sections 13(d) and 14(d) of the Exchange Act but shall
exclude (1) a trustee or other fiduciary holding securities under an employee
benefit plan maintained by the Company or a Parent or Subsidiary and (2) a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of the Stock.

Any other provision of this Section 2(d) notwithstanding, a transaction shall
not constitute a Change in Control if its sole purpose is to change the state of
the Company’s incorporation or to create a holding company that will be owned in
substantially the same proportions by the persons who held the Company’s
securities immediately before such transaction, and a Change in Control shall
not be deemed to occur if the Company files a registration statement with the
United States Securities and Exchange Commission for the initial offering of
Stock to the public.

(g)“Code” shall mean the Internal Revenue Code of 1986, as amended.

(h)“Committee” shall mean the Compensation Committee as designated by the Board
of Directors, which is authorized to administer the Plan, as described in
Section 3 hereof.

(i)“Company” shall mean Financial Engines, Inc., a Delaware corporation.

(j)“Consultant” shall mean a consultant or advisor who provides bona fide
services to the Company, a Parent, a Subsidiary or an Affiliate as an
independent contractor (not including service as a member of the Board of
Directors) or a member of the board of directors of a Parent or a Subsidiary, in
each case who is not an Employee.

(k)“Employee” shall mean any individual who is a common-law employee of the
Company, a Parent, a Subsidiary or an Affiliate.

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

(m)“Exercise Price” shall mean, in the case of an Option, the amount for which
one Share may be purchased upon exercise of such Option, as specified in the
applicable Stock Option Agreement. “Exercise Price,” in the case of a SAR, shall
mean an amount, as specified in the applicable SAR Agreement, which is
subtracted from the Fair Market Value of one Share in determining the amount
payable upon exercise of such SAR.

(n)“Fair Market Value” with respect to a Share, shall mean the market price of
one Share, determined by the Committee as follows:

 

(i)

If the Stock was traded over-the-counter on the date in question, then the Fair
Market Value shall be equal to the last transaction price quoted for such date
by the OTC Bulletin Board or, if not so quoted, shall be equal to the mean
between the last reported representative bid and asked prices quoted for such
date by the principal automated inter-dealer quotation system on which the Stock
is quoted or, if the Stock is not quoted on any such system, by the Pink Quote
system;

3

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(ii)

If the Stock was traded on any established stock exchange (such as the New York
Stock Exchange, The Nasdaq Global Market or The Nasdaq Global Select Market) or
national market system on the date in question, then the Fair Market Value shall
be equal to the closing price reported for such date by the applicable exchange
or system; and  

 

(iii)

If none of the foregoing provisions is applicable, then the Fair Market Value
shall be determined by the Committee in good faith on such basis as it deems
appropriate.

In all cases, the determination of Fair Market Value by the Committee shall be
conclusive and binding on all persons.

(o)“ISO” shall mean an employee incentive stock option described in Section 422
of the Code.

(p)“Nonstatutory Option” or “NSO” shall mean an employee stock option that is
not an ISO.

(q)“Option” shall mean an ISO or Nonstatutory Option granted under the Plan and
entitling the holder to purchase Shares.

(r)“Outside Director” shall mean a member of the Board of Directors who is not a
common-law employee of, or paid consultant to, the Company, a Parent or a
Subsidiary.

(s)“Parent” shall mean any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company, if each of the corporations other
than the Company owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Parent on a date after the adoption of
the Plan shall be a Parent commencing as of such date.

(t)“Participant” shall mean a person who holds an Award.

(u)“Performance Based Award” shall mean any Restricted Share Award, Stock Unit
Award or Cash-Based Award granted to a Participant that is intended to qualify
as “performance-based compensation” under Section 162(m) of the Code.

(v)“Plan” shall mean this 2009 Stock Incentive Plan of Financial Engines, Inc.,
as amended from time to time.

(w)“Purchase Price” shall mean the consideration for which one Share may be
acquired under the Plan (other than upon exercise of an Option), as specified by
the Committee.

(x)“Restricted Share” shall mean a Share awarded under the Plan.

(y)“SAR” shall mean a stock appreciation right granted under the Plan.

4

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(z)“Service” shall mean service as an Employee, Consultant or Outside Director,
subject to such further limitations as may be set forth in the Plan or the
applicable Award Agreement.  Service does not terminate when an Employee goes on
a bona fide leave of absence, that was approved by the Company in writing, if
the terms of the leave provide for continued Service crediting, or when
continued Service crediting is required by applicable law. However, for purposes
of determining whether an Option is entitled to ISO status, an Employee’s
employment will be treated as terminating three months after such Employee went
on leave, unless such Employee’s right to return to active work is guaranteed by
law or by a contract. Service terminates in any event when the approved leave
ends, unless such Employee immediately returns to active work. The Company
determines which leaves of absence count toward Service, and when Service
terminates for all purposes under the Plan.  

(aa)“Share” shall mean one share of Stock, as adjusted in accordance with
Section 12 (if applicable).

(bb)“Stock” shall mean the Common Stock of the Company.

(cc)“Stock Unit” shall mean a bookkeeping entry representing the Company’s
obligation to deliver one Share (or distribute cash) on a future date in
accordance with the provisions of a Stock Unit Award Agreement.

(dd)“Stock Unit Agreement” shall mean the agreement between the Company and the
recipient of a Stock Unit which contains the terms, conditions and restrictions
pertaining to such Stock Unit.

(ee)“Subsidiary” shall mean any corporation, if the Company and/or one or more
other Subsidiaries own not less than 50% of the total combined voting power of
all classes of outstanding stock of such corporation. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.

(ff)“Total and Permanent Disability” shall mean any permanent and total
disability as defined by Section 22(e)(3) of the Code.

SECTION 3.

ADMINISTRATION.

(a)Committee Composition. The Plan shall be administered by the Board or a
Committee appointed by the Board. The Committee shall consist of two or more
directors of the Company. In addition, to the extent required by the Board, the
composition of the Committee shall satisfy (i) such requirements as the
Securities and Exchange Commission may establish for administrators acting under
plans intended to qualify for exemption under Rule 16b-3 (or its successor)
under the Exchange Act; and (ii) such requirements as the Internal Revenue
Service may establish for outside directors acting under plans intended to
qualify for exemption under Section 162(m)(4)(C) of the Code.

(b)Committee for Non-Officer Grants. The Board may also appoint one or more
separate committees of the Board, each composed of one or more directors of the
Company who need not satisfy the requirements of Section 3(a), who may
administer the Plan with respect to Employees who are not considered officers or
directors of the Company under Section 16 of the

5

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Exchange Act, may grant Awards under the Plan to such Employees and may
determine all terms of such grants. Within the limitations of the preceding
sentence, any reference in the Plan to the Committee shall include such
committee or committees appointed pursuant to the preceding sentence. To the
extent permitted by applicable laws, the Board of Directors may also authorize
one or more officers of the Company to designate Employees, other than officers
under Section 16 of the Exchange Act, to receive Awards and/or to determine the
number of such Awards to be received by such persons; provided, however, that
the Board of Directors shall specify the total number of Awards that such
officers may so award.  

(c)Committee Procedures. The Board of Directors shall designate one of the
members of the Committee as chairman. The Committee may hold meetings at such
times and places as it shall determine. The acts of a majority of the Committee
members present at meetings at which a quorum exists, or acts reduced to or
approved in writing (including via email) by all Committee members, shall be
valid acts of the Committee.

(d)Committee Responsibilities. Subject to the provisions of the Plan, the
Committee shall have full authority and discretion to take the following
actions:

 

(i)

To interpret the Plan and to apply its provisions;

 

(ii)

To adopt, amend or rescind rules, procedures and forms relating to the Plan;

 

(iii)

To adopt, amend or terminate sub-plans established for the purpose of satisfying
applicable foreign laws including qualifying for preferred tax treatment under
applicable foreign tax laws;

 

(iv)

To authorize any person to execute, on behalf of the Company, any instrument
required to carry out the purposes of the Plan;

 

(v)

To determine when Awards are to be granted under the Plan;

 

(vi)

To select the Participants to whom Awards are to be granted;

 

(vii)

To determine the type of Award and number of Shares or amount of cash to be made
subject to each Award;

 

(viii)

To prescribe the terms and conditions of each Award, including (without
limitation) the Exercise Price and Purchase Price, and the vesting or duration
of the Award (including accelerating the vesting of Awards, either at the time
of the Award or thereafter, without the consent of the Participant), to
determine whether an Option is to be classified as an ISO or as a Nonstatutory
Option, and to specify the provisions of the agreement relating to such Award;

 

(ix)

To amend any outstanding Award Agreement, subject to applicable legal
restrictions and to the consent of the Participant if the Participant’s rights
or obligations would be materially impaired;

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(x)

To prescribe the consideration for the grant of each Award or other right under
the Plan and to determine the sufficiency of such consideration;  

 

(xi)

To determine the disposition of each Award or other right under the Plan in the
event of a Participant’s divorce or dissolution of marriage;

 

(xii)

To determine whether Awards under the Plan will be granted in replacement of
other grants under an incentive or other compensation plan of an acquired
business;

 

(xiii)

To correct any defect, supply any omission, or reconcile any inconsistency in
the Plan or any Award Agreement;

 

(xiv)

To establish or verify the extent of satisfaction of any performance goals or
other conditions applicable to the grant, issuance, exercisability, vesting
and/or ability to retain any Award; and

 

(xv)

To take any other actions deemed necessary or advisable for the administration
of the Plan.

Subject to the requirements of applicable law, the Committee may designate
persons other than members of the Committee to carry out its responsibilities
and may prescribe such conditions and limitations as it may deem appropriate,
except that the Committee may not delegate its authority with regard to the
selection for participation of or the granting of Awards or other rights under
the Plan to persons subject to Section 16 of the Exchange Act. All decisions,
interpretations and other actions of the Committee shall be final and binding on
all Participants and all persons deriving their rights from a Participant. No
member of the Committee shall be liable for any action that he has taken or has
failed to take in good faith with respect to the Plan or any Award under the
Plan.

(e)Cancellation and Re-grant of Stock Awards. Notwithstanding any contrary
provision of the Plan, neither the Board nor any Committee, nor their designees,
shall have the authority to: (i) amend the terms of outstanding Options or SARs
to reduce the Exercise Price thereof, or (ii) cancel outstanding Options or SARs
with an Exercise Price above the current Fair Market Value per Share in exchange
for another Option, SAR or other Award or for cash, unless the stockholders of
the Company have previously approved such an action or such action relates to an
adjustment pursuant to Section 12.

SECTION 4.

ELIGIBILITY.

(a)General Rule. Only common-law employees of the Company, a Parent or a
Subsidiary shall be eligible for the grant of ISOs. Only Employees, Consultants
and Outside Directors shall be eligible for the grant of Restricted Shares,
Stock Units, Nonstatutory Options or SARs.

7

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(b)Automatic Grants to Outside Directors.  

 

(i)

Each Outside Director who first joins the Board of Directors on or after
December 8, 2011, and who was not previously an Employee, shall receive a
Nonstatutory Option, subject to approval of the Plan by the Company’s
stockholders, to purchase 25,000 Shares (subject to adjustment under Section 12)
on the date of his or her election to the Board of Directors. The Shares subject
to each Option granted under this Section 4(b)(i) shall vest and become
exercisable on substantially the same terms and conditions as Options granted to
employees at the time of grant under this Section 4(b)(i), subject to the
Committee’s discretion. As of December 8, 2011, that vesting is as
follows:  Twenty-five percent (25%) of the Shares subject to each Option granted
under this Section 4(b)(i) shall vest and become exercisable on the first
anniversary of the date of grant. The balance of the Shares subject to such
Option (i.e. the remaining seventy-five percent (75%)) shall vest and become
exercisable monthly over a 3-year period beginning on the day which is one month
after the first anniversary of the date of grant, at a monthly rate of 2.0833%
of the total number of Shares subject to such Option. Notwithstanding the
foregoing, each such Option shall become vested if a Change in Control occurs
with respect to the Company during the Outside Director’s Service.

 

(ii)

On the first business day following the conclusion of each regular annual
meeting of the Company’s stockholders, commencing with the annual meeting
occurring after March 18, 2014, each Outside Director who was not elected to the
Board for the first time at such meeting and who will continue serving as a
member of the Board of Directors thereafter shall receive Stock Units with
respect to a number of Shares equal to the quotient of (1) $200,000 divided by
(2) the Fair Market Value of a Share on the date of grant, rounded up to the
nearest whole Share, provided that such Outside Director has served on the Board
of Directors for at least six months. The Stock Units granted under this Section
4(b)(ii) shall vest in equal annual installments linked to the date of the
Company’s annual meeting of stockholders, which vesting will occur over the
following periods of Service measured from the grant date:  for grants prior to
the Restatement Effective Date, over four (4) years of Service; for grants after
the Restatement Effective Date and during 2016, over three (3) years of Service;
for grants during 2017, over two (2) years of Service; and for grants during and
after 2018, over one (1) year of Service. Notwithstanding the foregoing, each
Stock Unit granted under this Section 4(b)(ii) shall become vested if a Change
in Control occurs with respect to the Company during the Outside Director’s
Service.

 

(iii)

The Exercise Price of all Nonstatutory Options granted to an Outside Director
under this Section 4(b) shall be equal to 100% of the Fair Market Value of a
Share on the date of grant, payable in one of the forms described in Section
8(a), (b) or (d).

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(iv)

All Nonstatutory Options granted to an Outside Director under this Section 4(b)
shall terminate on the earlier of (A) the day before the tenth anniversary of
the date of grant of such Options or (B) the date twelve months after the
termination of such Outside Director’s Service for any reason; provided,
however, that any such Options that are not vested upon the termination of the
Outside Director’s Service as a member of the Board of Directors for any reason
shall terminate immediately and may not be exercised.  

 

(v)

The grant date fair value of all Awards (as determined in accordance with
Financial Accounting Standards Board Accounting Standards Codification Topic
718, or any successor thereto) granted under the Plan to any Outside Director as
compensation for services as an Outside Director during any twelve (12)-month
period may not exceed $500,000, provided that any automatic Nonstatutory Option
granted to a new Outside Director pursuant to Section 4(b)(i) and any Award
granted to an Outside Director in lieu of a cash retainer pursuant to Section
15(b) will be excluded from such limit.

(c)Ten-Percent Stockholders. An Employee who owns more than 10% of the total
combined voting power of all classes of outstanding stock of the Company, a
Parent or Subsidiary shall not be eligible for the grant of an ISO unless such
grant satisfies the requirements of Section 422(c)(5) of the Code.

(d)Attribution Rules. For purposes of Section 4(c) above, in determining stock
ownership, an Employee shall be deemed to own the stock owned, directly or
indirectly, by or for such Employee’s brothers, sisters, spouse, ancestors and
lineal descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be deemed to be owned
proportionately by or for its stockholders, partners or beneficiaries.

(e)Outstanding Stock. For purposes of Section 4(c) above, “outstanding stock”
shall include all stock actually issued and outstanding immediately after the
grant. “Outstanding stock” shall not include shares authorized for issuance
under outstanding options held by the Employee or by any other person.

SECTION 5.

STOCK SUBJECT TO PLAN.

(a)Basic Limitation. Shares offered under the Plan shall be authorized but
unissued Shares or treasury Shares. The aggregate number of Shares authorized
for issuance as Awards under the Plan shall not exceed 13,500,000 Shares, plus
(x) any Shares subject to outstanding options under the Company’s 1998 Stock
Plan (the “Predecessor Plan”) on the effective date of this Plan that are
subsequently forfeited or terminated for any reason before being exercised, such
number of additional Shares not to exceed an aggregate of 2,000,000 Shares, and
(y) an annual increase on the first day of each fiscal year beginning in 2010
and continuing only through the fiscal year beginning in 2013, in an amount
equal to the lesser of (i) 2,000,000 Shares, (ii) 4% of the outstanding Shares
on the last day of the immediately preceding year or (iii) an amount determined
by the Board (the “Absolute Share Limit”). Any Shares granted in connection with
Options and SARs shall be counted against the Absolute Share Limit as one (1)

9

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Share for every one (1) Option or SAR awarded. Any Shares granted in connection
with Stock Unit or Restricted Share Awards granted on or after February 14, 2013
but before March 18, 2014 shall be counted against this limit as 1.72 Shares for
every one (1) Share granted in connection with such Award.  Any Shares granted
in connection with Stock Unit or Restricted Share Awards granted on or after
March 18, 2014 but before the Restatement Effective Date shall be counted
against this limit as 1.8 Shares for every one (1) Share granted in connection
with such Award.  Any Shares granted in connection with Stock Unit or Restricted
Share Awards granted on or after the Restatement Effective Date shall be counted
against this limit as 1.9 Shares for every one (1) Share granted in connection
with such Award.  The limitations of this Section 5(a) shall be subject to
adjustment pursuant to Section 12. The number of Shares that are subject to
Awards outstanding at any time under the Plan shall not exceed the number of
Shares which then remain available for issuance under the Plan. The Company,
during the term of the Plan, shall at all times reserve and keep available
sufficient Shares to satisfy the requirements of the Plan.  

(b)Section 162(m) Award Limitation. Notwithstanding any contrary provisions of
the Plan, and subject to the provisions of Section 12, no Participant may
receive Options or SARs under the Plan in any calendar year that relate to an
aggregate of more than 500,000 Shares, and no more than two times this amount in
the first year of employment.

(c)Additional Shares. If Restricted Shares or Shares issued upon the exercise of
Options are forfeited, then such Shares shall again become available for Awards
under the Plan. If Stock Units, Options or SARs are forfeited or terminate for
any reason before being exercised or settled, or an Award is settled in cash
without the delivery of Shares to the holder, then any Shares subject to the
Award shall again become available for Awards under the Plan.  Any Shares that
again become available for future grants pursuant to this Section 5(c) shall be
added back as one (1) Share if such Shares were subject to Options or SARs, and
as either 1.72 Shares if such Shares were subject to other Stock Unit or
Restricted Share Awards granted on or after February 14, 2013 but before March
18, 2014, or as 1.8 Shares if such Shares were subject to other Stock Unit or
Restricted Share Awards granted on or after March 18, 2014 but before the
Restatement Effective Date, or as 1.9 Shares if such Shares were subject to
other Stock Unit or Restricted Share Awards granted on or after the Restatement
Effective Date. Notwithstanding anything to the contrary contained herein,
Shares subject to an Award under the Plan shall not again be made available for
issuance or delivery under the Plan if such Shares are (a) Shares tendered or
withheld by the Company in payment of the Exercise Price of an Option, or (b)
Shares delivered or withheld by the Company to satisfy any tax withholding
obligation, and the full number of SARs granted that are to be settled by the
issuance of Shares shall be counted against the number of Shares available for
award under the Plan, regardless of the number of Shares actually issued upon
settlement of such SAR.  Notwithstanding the foregoing. the number of Shares
that may be delivered in the aggregate pursuant to the exercise of ISOs granted
under the Plan shall not exceed the Absolute Share Limit plus, to the extent
allowable under Section 422 of the Code and the Treasury Regulations promulgated
thereunder, any Shares that become available for issuance under the Plan
pursuant to this Section 5(c).

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SECTION 6.

RESTRICTED SHARES.  

(a)Restricted Share Award Agreement. Each grant of Restricted Shares under the
Plan shall be evidenced by a Restricted Share Award Agreement between the
Participant and the Company. Such Restricted Shares shall be subject to all
applicable terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Restricted Share Award
Agreements entered into under the Plan need not be identical.

(b)Payment for Awards. Restricted Shares may be sold or awarded under the Plan
for such consideration as the Committee may determine, including (without
limitation) cash, cash equivalents, full-recourse promissory notes, past
services and future services.

(c)Vesting. Each Award of Restricted Shares may or may not be subject to
vesting. Vesting shall occur, in full or in installments, upon satisfaction of
the conditions specified in the Restricted Share Award Agreement. A Restricted
Share Award Agreement may provide for accelerated vesting in the event of the
Participant’s death, disability or retirement or other events. The Committee may
determine, at the time of granting Restricted Shares or thereafter, that all or
part of such Restricted Shares shall become vested in the event that a Change in
Control occurs with respect to the Company.

(d)Voting and Dividend Rights. The holders of Restricted Shares awarded under
the Plan shall have the same voting, dividend and other rights as the Company’s
other stockholders. A Restricted Share Award Agreement, however, may require
that the holders of Restricted Shares invest any cash dividends received in
additional Restricted Shares. Such additional Restricted Shares shall be subject
to the same conditions and restrictions as the Award with respect to which the
dividends were paid.

(e)Restrictions on Transfer of Shares. Restricted Shares shall be subject to
such rights of repurchase, rights of first refusal or other restrictions as the
Committee may determine. Such restrictions shall be set forth in the applicable
Restricted Share Award Agreement and shall apply in addition to any general
restrictions that may apply to all holders of Shares.

SECTION 7.

TERMS AND CONDITIONS OF OPTIONS.

(a)Stock Option Award Agreement. Each grant of an Option under the Plan shall be
evidenced by a Stock Option Award Agreement between the Participant and the
Company. Such Option shall be subject to all applicable terms and conditions of
the Plan and may be subject to any other terms and conditions which are not
inconsistent with the Plan and which the Committee deems appropriate for
inclusion in a Stock Option Award Agreement. The Stock Option Award Agreement
shall specify whether the Option is an ISO or an NSO. The provisions of the
various Stock Option Award Agreements entered into under the Plan need not be
identical.

(b)Number of Shares. Each Stock Option Award Agreement shall specify the number
of Shares that are subject to the Option and shall provide for the adjustment of
such number in accordance with Section 12.

(c)Exercise Price. Each Stock Option Award Agreement shall specify the Exercise
Price. The Exercise Price of an ISO shall not be less than 100% of the Fair
Market Value of a

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Share on the date of grant, except as otherwise provided in 4(c), and the
Exercise Price of an NSO shall not be less 100% of the Fair Market Value of a
Share on the date of grant.  Notwithstanding the foregoing, Options may be
granted with an Exercise Price of less than 100% of the Fair Market Value per
Share on the date of grant pursuant to a transaction described in, and in a
manner consistent with, Section 424(a) of the Code.  Subject to the foregoing in
this Section 7(c), the Exercise Price under any Option shall be determined by
the Committee in its sole discretion. The Exercise Price shall be payable in one
of the forms described in Section 8.  

(d)Withholding Taxes. As a condition to the exercise of an Option, the
Participant shall make such arrangements as the Committee may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations
that may arise in connection with such exercise. The Participant shall also make
such arrangements as the Committee may require for the satisfaction of any
federal, state, local or foreign withholding tax obligations that may arise in
connection with the disposition of Shares acquired by exercising an Option.

(e)Exercisability and Term. Each Stock Option Award Agreement shall specify the
date when all or any installment of the Option is to become exercisable. The
Stock Option Award Agreement shall also specify the term of the Option; provided
that the term of an Option shall in no event exceed 10 years from the date of
grant (five years for ISOs granted to Employees described in Section 4(c)). A
Stock Option Award Agreement may provide for accelerated exercisability in the
event of the Participant’s death, disability, or retirement or other events and
may provide for expiration prior to the end of its term in the event of the
termination of the Participant’s Service. Options may be awarded in combination
with SARs, and such an Award may provide that the Options will not be
exercisable unless the related SARs are forfeited. Subject to the foregoing in
this Section 7(e), the Committee at its sole discretion shall determine when all
or any installment of an Option is to become exercisable and when an Option is
to expire.

(f)Exercise of Options. Each Stock Option Award Agreement shall set forth the
extent to which the Participant shall have the right to exercise the Option
following termination of the Participant’s Service with the Company and its
Subsidiaries, and the right to exercise the Option of any executors or
administrators of the Participant’s estate or any person who has acquired such
Option(s) directly from the Participant by bequest or inheritance. Such
provisions shall be determined in the sole discretion of the Committee, need not
be uniform among all Options issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination of Service.

(g)Effect of Change in Control. The Committee may determine, at the time of
granting an Option or thereafter, that such Option shall become exercisable as
to all or part of the Shares subject to such Option in the event that a Change
in Control occurs with respect to the Company.

(h)No Stockholder or Dividend Rights. A Participant, or a transferee of a
Participant, shall have no rights as a stockholder (including dividend rights)
with respect to any Shares covered by his Option until the date of the issuance
of such Shares. No adjustments shall be made, except as provided in Section 12.
No dividend equivalents shall be payable with respect to Options.

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(i)Modification, Extension and Renewal of Options. Within the limitations of the
Plan, including Section 3(e) (which limits the cancellation and re-grant of
stock awards without stockholder approval), the Committee may modify, extend or
renew outstanding options. The foregoing notwithstanding, no modification of an
Option shall, without the consent of the Participant, materially impair his or
her rights or obligations under such Option.  

(j)Restrictions on Transfer of Shares. Any Shares issued upon exercise of an
Option shall be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall be set forth in the applicable
Stock Option Award Agreement and shall apply in addition to any general
restrictions that may apply to all holders of Shares.

(k)Buyout Provisions. Subject to Section 3(e), the Committee may at any time (a)
offer to buy out for a payment in cash or cash equivalents an Option previously
granted or (b) authorize a Participant to elect to cash out an Option previously
granted, in either case at such time and based upon such terms and conditions as
the Committee shall establish.

SECTION 8.

PAYMENT FOR SHARES.

(a)General Rule. The entire Exercise Price or Purchase Price of Shares issued
under the Plan shall be payable in lawful money of the United States of America
at the time when such Shares are purchased, except as provided in Section 8(b)
through Section 8(h) below.

(b)Surrender of Stock. To the extent that a Stock Option Award Agreement so
provides, payment may be made all or in part by surrendering, or attesting to
the ownership of, Shares which have already been owned by the Participant or his
representative. Such Shares shall be valued at their Fair Market Value on the
date when the new Shares are purchased under the Plan. The Participant shall not
surrender, or attest to the ownership of, Shares in payment of the Exercise
Price if such action would cause the Company to recognize compensation expense
(or additional compensation expense) with respect to the Option for financial
reporting purposes.

(c)Services Rendered. At the discretion of the Committee, Shares may be awarded
under the Plan in consideration of services rendered to the Company or a
Subsidiary. If Shares are awarded without the payment of a Purchase Price in
cash, the Committee shall make a determination (at the time of the Award) of the
value of the services rendered by the Participant and the sufficiency of the
consideration to meet the requirements of Section 6(b).

(d)Cashless Exercise. To the extent that a Stock Option Award Agreement so
provides, payment may be made all or in part by delivery (on a form prescribed
by the Committee) of an irrevocable direction to a securities broker to sell
Shares and to deliver all or part of the sale proceeds to the Company in payment
of the aggregate Exercise Price.

(e)Exercise/Pledge. To the extent that a Stock Option Award Agreement so
provides, payment may be made all or in part by delivery (on a form prescribed
by the Committee) of an irrevocable direction to a securities broker or lender
to pledge Shares, as security for a loan, and to deliver all or part of the loan
proceeds to the Company in payment of the aggregate Exercise Price.

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(f)Net Exercise. To the extent that a Stock Option Award Agreement so provides,
by a “net exercise” arrangement pursuant to which the number of Shares issuable
upon exercise of the Option shall be reduced by the largest whole number of
Shares having an aggregate Fair Market Value that does not exceed the aggregate
exercise price (plus tax withholdings, if applicable) and any remaining balance
of the aggregate exercise price (and/or applicable tax withholdings) not
satisfied by such reduction in the number of whole Shares to be issued shall be
paid by the Participant in cash other form of payment permitted under the Stock
Option Award Agreement. 

(g)Promissory Note. To the extent that a Stock Option Award Agreement or
Restricted Share Award Agreement so provides, payment may be made all or in part
by delivering (on a form prescribed by the Company) a full-recourse promissory
note.

(h)Other Forms of Payment. To the extent that a Stock Option Award Agreement or
Restricted Share Award Agreement so provides, payment may be made in any other
form that is consistent with applicable laws, regulations and rules.

(i)Limitations under Applicable Law. Notwithstanding anything herein or in a
Stock Option Award Agreement or Restricted Share Award Agreement to the
contrary, payment may not be made in any form that is unlawful, as determined by
the Committee in its sole discretion.

SECTION 9.

STOCK APPRECIATION RIGHTS.

(a)SAR Award Agreement. Each grant of a SAR under the Plan shall be evidenced by
a SAR Award Agreement between the Participant and the Company. Such SAR shall be
subject to all applicable terms of the Plan and may be subject to any other
terms that are not inconsistent with the Plan. The provisions of the various SAR
Award Agreements entered into under the Plan need not be identical.

(b)Number of Shares. Each SAR Award Agreement shall specify the number of Shares
to which the SAR pertains and shall provide for the adjustment of such number in
accordance with Section 12.

(c)Exercise Price. Each SAR Award Agreement shall specify the Exercise Price.
The Exercise Price of a SAR shall not be less than 100% of the Fair Market Value
of a Share on the date of grant.  Notwithstanding the foregoing, SARs may be
granted with an Exercise Price of less than 100% of the Fair Market Value per
Share on the date of grant pursuant to a transaction described in, and in a
manner consistent with, Section 424(a) of the Code.  Subject to the foregoing in
this Section 9(c), the Exercise Price under any SAR shall be determined by the
Committee in its sole discretion.

(d)Exercisability and Term. Each SAR Award Agreement shall specify the date when
all or any installment of the SAR is to become exercisable. The SAR Award
Agreement shall also specify the term of the SAR; provided that the term of a
SAR shall in no event exceed 10 years from the date of grant. A SAR Award
Agreement may provide for accelerated exercisability in the event of the
Participant’s death, disability or retirement or other events and may provide
for expiration prior to the end of its term in the event of the termination of
the Participant’s service. SARs may be awarded in combination with Options, and
such an Award

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may provide that the SARs will not be exercisable unless the related Options are
forfeited. A SAR may be included in an ISO only at the time of grant but may be
included in an NSO at the time of grant or thereafter. A SAR granted under the
Plan may provide that it will be exercisable only in the event of a Change in
Control.  

(e)Effect of Change in Control. The Committee may determine, at the time of
granting a SAR or thereafter, that such SAR shall become fully exercisable as to
all Common Shares subject to such SAR in the event that a Change in Control
occurs with respect to the Company.

(f)Exercise of SARs. Upon exercise of a SAR, the Participant (or any person
having the right to exercise the SAR after his or her death) shall receive from
the Company (a) Shares, (b) cash or (c) a combination of Shares and cash, as the
Committee shall determine. The amount of cash and/or the Fair Market Value of
Shares received upon exercise of SARs shall, in the aggregate, be equal to the
amount by which the Fair Market Value (on the date of surrender) of the Shares
subject to the SARs exceeds the Exercise Price.

(g)Modification or Assumption of SARs. Within the limitations of the Plan,
including Section 3(e), the Committee may modify, extend or assume outstanding
SARs or may accept the cancellation of outstanding SARs (whether granted by the
Company or by another issuer) in return for the grant of new SARs for the same
or a different number of shares and at the same or a different exercise price.
The foregoing notwithstanding, no modification of a SAR shall, without the
consent of the holder, materially impair his or her rights or obligations under
such SAR.

(h)Voting and Dividend Rights. The holders of SARs shall have no rights as a
stockholder (including dividend rights) with respect to any Shares covered by
his SAR unless and until the date of the issuance of Shares in settlement of
such SAR. No adjustments shall be made, except as provided in Section 12. No
dividend equivalents shall be payable with respect to SARs.

SECTION 10.

STOCK UNITS.

(a)Stock Unit Award Agreement. Each grant of Stock Units under the Plan shall be
evidenced by a Stock Unit Award Agreement between the Participant and the
Company. Such Stock Units shall be subject to all applicable terms of the Plan
and may be subject to any other terms that are not inconsistent with the Plan.
The provisions of the various Stock Unit Award Agreements entered into under the
Plan need not be identical.

(b)Payment for Awards. To the extent that an Award is granted in the form of
Stock Units, no cash consideration shall be required of the Award recipients.

(c)Vesting Conditions. Each Award of Stock Units may or may not be subject to
vesting. Vesting shall occur, in full or in installments, upon satisfaction of
the conditions specified in the Stock Unit Award Agreement. A Stock Unit Award
Agreement may provide for accelerated vesting in the event of the Participant’s
death, disability or retirement or other events. The Committee may determine, at
the time of granting Stock Units or thereafter, that all or part

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of such Stock Units shall become vested in the event that a Change in Control
occurs with respect to the Company.  

(d)Voting and Dividend Rights. The holders of Stock Units shall have no voting
rights. Prior to settlement or forfeiture, any Stock Unit awarded under the Plan
may, at the Committee’s discretion, carry with it a right to dividend
equivalents. Such right entitles the holder to be credited with an amount equal
to all cash dividends paid on one Share while the Stock Unit is outstanding.
Dividend equivalents may be converted into additional Stock Units. Settlement of
dividend equivalents may be made in the form of cash, in the form of Shares, or
in a combination of both. Prior to distribution, any dividend equivalents which
are not paid shall be subject to the same conditions and restrictions (including
without limitation, any forfeiture conditions) as the Stock Units to which they
attach.

(e)Form and Time of Settlement of Stock Units. Settlement of vested Stock Units
may be made in the form of (a) cash, (b) Shares or (c) any combination of both,
as determined by the Committee. The actual number of Stock Units eligible for
settlement may be larger or smaller than the number included in the original
Award, based on predetermined performance factors. Methods of converting Stock
Units into cash may include (without limitation) a method based on the average
Fair Market Value of Shares over a series of trading days. A Stock Unit Award
Agreement may provide that vested Stock Units may be settled in a lump sum or in
installments. A Stock Unit Award Agreement may provide that the distribution may
occur or commence when all vesting conditions applicable to the Stock Units have
been satisfied or have lapsed, or it may be deferred to any later date, subject
to compliance with Section 409A of the Code. The amount of a deferred
distribution may be increased by an interest factor or by dividend equivalents.
Until an Award of Stock Units is settled, the number of such Stock Units shall
be subject to adjustment pursuant to Section 12.

(f)Death of Participant. Any Stock Units Award that becomes payable after the
Participant’s death shall be distributed to the Participant’s beneficiary or
beneficiaries. Each Participant of a Stock Units Award under the Plan shall
designate one or more beneficiaries for this purpose by filing the prescribed
form with the Company. A beneficiary designation may be changed by filing the
prescribed form with the Company at any time before the Participant’s death. If
no beneficiary was designated or if no designated beneficiary survives the
Participant, then any Stock Unit Award that becomes payable after the
Participant’s death shall be distributed to the Participant’s estate.

(g)Creditors’ Rights. A holder of Stock Units shall have no rights other than
those of a general creditor of the Company. Stock Units represent an unfunded
and unsecured obligation of the Company, subject to the terms and conditions of
the applicable Stock Unit Award Agreement.

SECTION 11.

CASH-BASED AWARDS

The Committee may, in its sole discretion, grant Cash-Based Awards to any
Participant in such number or amount and upon such terms, and subject to such
conditions, as the Committee shall determine at the time of grant and specify in
an applicable Award Agreement.  The Committee shall determine the maximum
duration of the Cash-Based Award, the amount of

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cash which may be payable pursuant to the Cash-Based Award, the conditions upon
which the Cash-Based Award shall become vested or payable, and such other
provisions as the Committee shall determine.  Each Cash-Based Award shall
specify a cash-denominated payment amount, formula or payment ranges as
determined by the Committee.  Payment, if any, with respect to a Cash-Based
Award shall be made in accordance with the terms of the Award and may be made in
cash or in shares of Stock, as the Committee determines.

SECTION 12.

ADJUSTMENT OF SHARES.

(a)Adjustments. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of a dividend payable
in a form other than Shares in an amount that has a material effect on the price
of Shares, a combination or consolidation of the outstanding Stock (by
reclassification or otherwise) into a lesser number of Shares, a
recapitalization, a spin-off or a similar occurrence, the Committee shall make
appropriate and equitable adjustments in:

 

(i)

The number of Shares available for future Awards under Section 5;

 

(ii)

The limitations set forth in Sections 5(a) and (b) and Section 18(c)(v);

 

(iii)

The number of NSOs to be granted to Outside Directors under Section 4(b);

 

(iv)

The number of Shares covered by each outstanding Award; and

 

(v)

The Exercise Price under each outstanding Option and SAR.

(b)Dissolution or Liquidation. To the extent not previously exercised or
settled, Options, SARs and Stock Units shall terminate immediately prior to the
dissolution or liquidation of the Company.

(c)Reorganizations. In the event that the Company is a party to a merger or
other reorganization, outstanding Awards shall be subject to the agreement of
merger or reorganization. Subject to compliance with Section 409A of the Code,
such agreement shall provide for:

 

(i)

The continuation of the outstanding Awards by the Company, if the Company is a
surviving corporation;

 

(ii)

The assumption of the outstanding Awards by the surviving corporation or its
parent or subsidiary;

 

(iii)

The substitution by the surviving corporation or its parent or subsidiary of its
own awards for the outstanding Awards;

 

(iv)

Full exercisability or vesting and accelerated expiration of the outstanding
Awards; or

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(v)

Settlement of the intrinsic value of the outstanding Awards in cash or cash
equivalents followed by cancellation of such Awards.    

Any acceleration of payment of an amount that is subject to Section 409A of the
Code will be delayed, if necessary, until the earliest time that such payment
would be permissible under Section 409A without triggering any additional taxes
applicable under Section 409A.

(d)Reservation of Rights. Except as provided in this Section 12, a Participant
shall have no rights by reason of any subdivision or consolidation of shares of
stock of any class, the payment of any dividend or any other increase or
decrease in the number of shares of stock of any class. Any issue by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number or Exercise Price of Shares subject to an
Award. The grant of an Award pursuant to the Plan shall not affect in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets. In the event of any change affecting the Shares or the
Exercise Price of Shares subject to an Award, including a merger or other
reorganization, for reasons of administrative convenience, the Company in its
sole discretion may refuse to permit the exercise of any Award during a period
of up to thirty (30) days prior to the occurrence of such event.

SECTION 13.

DEFERRAL OF AWARDS.

(a)Committee Powers. Subject to compliance with Section 409A of the Code, the
Committee (in its sole discretion) may permit or require a Participant to:

 

(i)

Have cash that otherwise would be paid to such Participant as a result of the
exercise of a SAR or the settlement of Stock Units credited to a deferred
compensation account established for such Participant by the Committee as an
entry on the Company’s books;

 

(ii)

Have Shares that otherwise would be delivered to such Participant as a result of
the exercise of an Option or SAR converted into an equal number of Stock Units;
or

 

(iii)

Have Shares that otherwise would be delivered to such Participant as a result of
the exercise of an Option or SAR or the settlement of Stock Units converted into
amounts credited to a deferred compensation account established for such
Participant by the Committee as an entry on the Company’s books. Such amounts
shall be determined by reference to the Fair Market Value of such Shares as of
the date when they otherwise would have been delivered to such Participant.

(b)General Rules. A deferred compensation account established under this Section
13 may be credited with interest or other forms of investment return, as
determined by the Committee. A Participant for whom such an account is
established shall have no rights other than those of a general creditor of the
Company. Such an account shall represent an unfunded and unsecured obligation of
the Company and shall be subject to the terms and conditions of the

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applicable agreement between such Participant and the Company. If the deferral
or conversion of Awards is permitted or required, the Committee (in its sole
discretion) may establish rules, procedures and forms pertaining to such Awards,
including (without limitation) the settlement of deferred compensation accounts
established under this Section 13.  

SECTION 14.

AWARDS UNDER OTHER PLANS.

The Company may grant awards under other plans or programs. Such awards may be
settled in the form of Shares issued under this Plan. Such Shares shall be
treated for all purposes under the Plan like Shares issued in settlement of
Stock Units and shall, when issued, reduce the number of Shares available under
Section 5.

SECTION 15.

PAYMENT OF DIRECTOR’S FEES IN SECURITIES.

(a)Effective Date. No provision of this Section 15 shall be effective unless and
until the Board has determined to implement such provision.

(b)Elections to Receive Awards. An Outside Director may elect to receive his or
her annual retainer payments and/or meeting fees from the Company in the form of
cash, NSOs, SARs, Restricted Shares or Stock Units, or a combination thereof, as
determined by the Board. Such Awards shall be issued under the Plan. An election
under this Section 15 shall be filed with the Company on the prescribed form.

(c)Number and Terms of Awards. The number of NSOs, SARs, Restricted Shares or
Stock Units to be granted to Outside Directors in lieu of annual retainers and
meeting fees that would otherwise be paid in cash shall be calculated in a
manner determined by the Board. The terms of such Awards shall also be
determined by the Board.

SECTION 16.

LEGAL AND REGULATORY REQUIREMENTS.

Shares shall not be issued under the Plan unless the issuance and delivery of
such Shares complies with (or is exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and
regulations and the regulations of any stock exchange on which the Company’s
securities may then be listed, and the Company has obtained the approval or
favorable ruling from any governmental agency which the Company determines is
necessary or advisable. The Company shall not be liable to a Participant or
other persons as to: (a) the non-issuance or sale of Shares as to which the
Company has not obtained from any regulatory body having jurisdiction the
authority deemed by the Company’s counsel to be necessary to the lawful issuance
and sale of any Shares under the Plan; and (b) any tax consequences expected,
but not realized, by any Participant or other person due to the receipt,
exercise or settlement of any Award granted under the Plan.

SECTION 17.

TAXES.

(a)Withholding Taxes. To the extent required by applicable federal, state, local
or foreign law, a Participant or his or her successor shall make arrangements
satisfactory to the Company for the satisfaction of any withholding tax
obligations that arise in connection with the

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Plan. The Company shall not be required to issue any Shares or make any cash
payment under the Plan until such obligations are satisfied.  

(b)Share Withholding. The Committee may permit a Participant to satisfy all or
part of his or her withholding or income tax obligations by having the Company
withhold all or a portion of any Shares that otherwise would be issued to him or
her or by surrendering all or a portion of any Shares that he or she previously
acquired. Such Shares shall be valued at their Fair Market Value on the date
when taxes otherwise would be withheld in cash. In no event may a Participant
have Shares withheld that would otherwise be issued to him or her in excess of
the number necessary to satisfy the minimum legally required tax withholding,
except to the extent such additional withholding does not result in adverse
accounting treatment to the Company.

(c)Section 409A. Each Award that provides for “nonqualified deferred
compensation” within the meaning of Section 409A of the Code shall be subject to
such additional rules and requirements as specified by the Committee from time
to time in order to comply with Section 409A.  If any amount under such an Award
is payable upon a “separation from service” (within the meaning of Section 409A)
to a Participant who is then considered a “specified employee” (within the
meaning of Section 409A), then no such payment shall be made prior to the date
that is the earlier of (i) six months and one day after the Participant’s
separation from service, or (ii) the Participant’s death, but only to the extent
such delay is necessary to prevent such payment from being subject to interest,
penalties and/or additional tax imposed pursuant to Section 409A.  In addition,
the settlement of any such Award may not be accelerated except to the extent
permitted by Section 409A.

SECTION 18.

OTHER PROVISIONS APPLICABLE TO AWARDS.

(a)Transferability. Unless the agreement evidencing an Award (or an amendment
thereto authorized by the Committee) expressly provides otherwise, no Award
granted under this Plan, nor any interest in such Award, may be sold, assigned,
conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner
(prior to the vesting and lapse of any and all restrictions applicable to Shares
issued under such Award), other than by will or the laws of descent and
distribution; provided, however, that an ISO may be transferred or assigned only
to the extent consistent with Section 422 of the Code. Any purported assignment,
transfer or encumbrance in violation of this Section 18(a) shall be void and
unenforceable against the Company.

(b)Substitution and Assumption of Awards. The Committee may make Awards under
the Plan by assumption, substitution or replacement of stock options, stock
appreciation rights, stock units or similar awards granted by another entity
(including a Parent or Subsidiary), if such assumption, substitution or
replacement is in connection with an asset acquisition, stock acquisition,
merger, consolidation or similar transaction involving the Company (and/or its
Parent or Subsidiary) and such other entity (and/or its
affiliate).  Notwithstanding any provision of the Plan (other than the maximum
number of Shares that may be issued under the Plan), the terms of such assumed,
substituted or replaced Awards shall be as the Committee, in its discretion,
determines is appropriate.

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(c)Qualifying Performance Criteria. The number of Shares or other benefits
granted, issued, retainable and/or vested under an Award may be made subject to
the attainment of performance goals.  The Committee may utilize any performance
criteria selected by it in its sole discretion to establish performance goals;
provided, however, that in the case of any Performance Based Award, the
following conditions shall apply: 

 

(i)

The amount potentially available under a Performance Based Award shall be
subject to the attainment of pre-established, objective performance goals
relating to a specified performance period based on one or more of the following
performance criteria: (a) cash flow, (b) earnings per share, (c) adjusted
earnings per share (adjusted net income divided by the weighted average of
dilutive common share equivalents outstanding), (d) earnings before interest,
taxes, depreciation and amortization (“EBITDA”), (e) adjusted EBITDA (net income
before interest, taxes, depreciation, and amortization (internal use software,
direct response advertising, and commissions), and non-cash stock-based
compensation expense, (f) EBITDA margin (EBITDA/total revenue), (g) adjusted
EBITDA margin (adjusted EBITDA/total revenue) (h) income or net income, (i)
adjusted net income (net income before non-cash stock-based compensation
expense, net of tax and other specified items), (j) return on equity, (k) total
stockholder return, (l) share price performance, (m) return on capital, (n)
return on assets or net assets, (o) revenue, (p) operating income or net
operating income, (q) operating profit or net operating profit, (r) operating
margin or profit margin, (s) return on operating revenue, (t) return on invested
capital, (u) market segment shares, (v) costs, (w) expenses, (x) regulatory body
approval (including without limitation for commercialization of a product), (y)
implementation or completion of critical projects, including acquisition
integration, (z) management fee run rate (“MFRR”) (annualized fees which would
be generated from managed or advised assets or from financial planning services
over the following twelve months or other specified period, including those
generated from enrollees into the professional management program, but excluding
platform fees, set up fees and consulting fees), (aa) market adjusted MFRR, (bb)
new MFRR, (cc) net new MFRR (new MFRR net of voluntary cancellations), (dd)
assets under management, (ee) asset retention rates, (ff) sales or other
contract revenue, (gg) number of media impressions, (hh) customer satisfaction,
(ii) economic value added measurements, (jj) sales pipeline, (kk) employee
turnover, (ll) cancellation amounts or rates or (mm) assets under contract
(“Qualifying Performance Criteria”), any of which may be measured either
individually, alternatively or in any combination, applied to either the
individual, the Company as a whole or to a business unit or subsidiary of the
Company, either individually, alternatively or in any combination, and measured
either annually or cumulatively over a period of years, or on the basis of any
other specified period, on an absolute basis or relative to a pre-established
target, to previous years’ results or to a designated

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comparison group or index, and subject to specified adjustments, in each case as
specified by the Committee in the Award; 

 

(ii)

Unless specified otherwise by the Committee at the time the performance goals
are established or otherwise within the time prescribed by Section 162(m) of the
Code, the Committee shall appropriately adjust the method of evaluating
performance under a Qualifying Performance Criteria for a performance period as
follows: (i) to exclude asset write-downs, (ii) to exclude litigation or claim
judgments or settlements, (iii) to exclude the effect of changes in tax law,
accounting principles or other such laws or provisions affecting reported
results, (iv) to exclude accruals for reorganization and restructuring programs,
(v) to exclude any extraordinary nonrecurring items as determined under
generally accepted accounting principles and/or described in managements’
discussion and analysis of financial condition and results of operations
appearing in the Company’s annual report to stockholders for the applicable
year, (vi) to exclude the dilutive and/or accretive effects of acquisitions or
joint ventures, (vii) to assume that any business divested by the Company
achieved performance objectives at targeted levels during the balance of a
performance period following such divestiture, (viii) to exclude the effect of
any change in the outstanding shares of common stock of the Company by reason of
any stock dividend or split, stock repurchase, reorganization, recapitalization,
merger, consolidation, spin-off, combination or exchange of shares or other
similar corporate change, or any distributions to common stockholders other than
regular cash dividends, (ix) to exclude the effects of stock based compensation;
and (x) to exclude costs incurred in connection with potential acquisitions or
divestitures that are required to be expensed under generally accepted
accounting principles, in each case in compliance with Section 162(m);

 

(iii)

The Committee shall establish the applicable performance goals in writing and an
objective method for determining the Award earned by a Participant if the goals
are attained, while the outcome is substantially uncertain and not later than
the 90th day of the performance period (but in no event after 25% of the period
of service with respect to which the performance goals relate has elapsed), and
shall determine and certify in writing, for each Participant, the extent to
which the performance goals have been met prior to payment or vesting of the
Award; and

 

(iv)

The Committee may not in any event increase the amount of compensation payable
under the Plan upon the attainment of the pre-established performance goals to a
Participant who is a “covered employee” within the meaning of Section 162(m) of
the Code.

 

(v)

The maximum aggregate number of Shares that may be subject to Performance Based
Awards granted to a Participant in any calendar year is 500,000 Shares (subject
to adjustment under Section 12), and no more

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than two times this amount in the first year of employment, and the maximum
aggregate amount of cash that may be payable to a Participant under Performance
Based Awards granted to a Participant in any calendar year that are Cash-Based
Awards is $5,000,000. 

(d)Recoupment. Notwithstanding any other provision of the Plan or any Award
granted under the Plan, any recoupment or “clawback” policies adopted by the
Committee pursuant to Section 954 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act or other applicable law shall apply to Awards granted
under the Plan and any Shares that may be issued pursuant to such Awards to the
extent the Compensation Committee provides at the time the policy is adopted.

SECTION 19.

NO EMPLOYMENT RIGHTS.

No provision of the Plan, nor any Award granted under the Plan, shall be
construed to give any person any right to become, to be treated as, or to remain
an Employee or Consultant. The Company and its Subsidiaries reserve the right to
terminate any person’s Service at any time and for any reason, with or without
notice.

SECTION 20.

DURATION AND AMENDMENTS.

(a)Term of the Plan. The Plan, as set forth herein, shall terminate
automatically on March 20, 2026, and may be terminated on any earlier date
pursuant to Subsection (b) below.

(b)Right to Amend or Terminate the Plan. The Board of Directors may amend or
terminate the Plan at any time and from time to time. Rights and obligations
under any Award granted before amendment of the Plan shall not be materially
impaired by such amendment, except with consent of the Participant. An amendment
of the Plan shall be subject to the approval of the Company’s stockholders only
to the extent required by applicable laws, regulations or rules.

(c)Effect of Termination. No Awards shall be granted under the Plan after the
termination thereof. The termination of the Plan shall not affect Awards
previously granted under the Plan.

[Remainder of this page intentionally left blank]

 

 

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SECTION 21.

EXECUTION.  

To record the adoption of the Amended and Restated Plan by the Board of
Directors, the Company has caused its authorized officer to execute the same.

 

FINANCIAL ENGINES, INC.

 

 

 

By

/s/ Raymond J. Sims

 

Name

Raymond J. Sims

 

Title

Chief Financial Officer

 

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