Exhibit 10.1

 

DIGITAL GENERATION, INC.
2011 INCENTIVE AWARD PLAN

 

ARTICLE 1.

 

PURPOSE

 

The purpose of the Digital Generation, Inc. 2011 Incentive Award Plan (as it may
be amended or restated from time to time, the “Plan”) is to promote the success
and enhance the value of Digital Generation, Inc. (the “Company”) by linking the
individual interests of the members of the Board, Employees, and Consultants to
those of Company stockholders and by providing such individuals with an
incentive for outstanding performance to generate superior returns to Company
stockholders.  The Plan is further intended to provide flexibility to the
Company in its ability to motivate, attract, and retain the services of members
of the Board, Employees, and Consultants upon whose judgment, interest, and
special effort the successful conduct of the Company’s operation is largely
dependent.  The Plan provides a mechanism through which the Company may grant
equity and equity-based awards as well as cash bonus and other cash awards to
Eligible Individuals.

 

ARTICLE 2.

 

DEFINITIONS AND CONSTRUCTION

 

Wherever the following terms are used in the Plan they shall have the meanings
specified below, unless the context clearly indicates otherwise.  The singular
pronoun shall include the plural where the context so indicates.

 

2.1           “Administrator” shall mean the entity that conducts the general
administration of the Plan as provided in Article 12.  With reference to the
duties of the Committee under the Plan which have been delegated to one or more
persons pursuant to Section 12.6, or as to which the Board has assumed, the term
“Administrator” shall refer to such person(s) unless the Committee or the Board
has revoked such delegation or the Board has terminated the assumption of such
duties.

 

2.2           “Affiliate” shall mean (a) Subsidiary; and (b) any domestic
eligible entity that is disregarded, under Treasury Regulation
Section 301.7701-3, as an entity separate from either (i) the Company or
(ii) any Subsidiary.

 

2.3           “Applicable Accounting Standards” shall mean Generally Accepted
Accounting Principles in the United States, International Financial Reporting
Standards or such other accounting principles or standards as may apply to the
Company’s financial statements under United States federal securities laws from
time to time.

 

2.4           “Applicable Law” shall mean the applicable provisions of the Code,
the Securities Act, the Exchange Act any other federal, state or foreign
corporate, securities or tax or other laws, rules, requirements or regulations,
the rules of any securities exchange or automated quotation system on which the
Shares are listed, quoted or traded and any other applicable law.

 

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2.5           “Automatic Exercise Date” shall mean, with respect to an Option or
a Stock Appreciation Right, the last business day of the applicable Option Term
or Stock Appreciation Right Term that was initially established by the
Administrator for such Option or Stock Appreciation Right (e.g., the last
business day prior to the tenth anniversary of the date of grant of such Option
or Stock Appreciation Right if the Option or Stock Appreciation Right initially
had a ten-year Option Term or Stock Appreciation Right Term, as applicable).

 

2.6           “Award” shall mean an Option, a Restricted Stock award, a
Restricted Stock Unit award, a Performance Award, a Dividend Equivalents award,
a Stock Payment award or a Stock Appreciation Right, which may be awarded or
granted under the Plan (collectively, “Awards”).

 

2.7           “Award Agreement” shall mean any written notice, agreement, terms
and conditions, contract or other instrument or document evidencing an Award,
including through electronic medium, which shall contain such terms and
conditions with respect to an Award as the Administrator shall determine
consistent with the Plan.

 

2.8           “Award Limit” shall mean with respect to Awards that shall be
payable in Shares or in cash, as the case may be, the respective limit set forth
in Section 3.3.

 

2.9           “Board” shall mean the Board of Directors of the Company.

 

2.10         “Cause” shall mean the occurrence of any of, but not limited to,
the following: (a) conviction of a Holder of any felony or any crime involving
fraud or dishonesty; (b) a Holder’s participation (whether by affirmative act or
omission) in a fraud, act or dishonesty or other act of misconduct against the
Company and/or any Affiliate; (c) conduct by a Holder which, based upon a good
faith and reasonable factual investigation by the Company (or, if a Holder is an
executive officer, by the Board), demonstrates such Holder’s unfitness to serve;
(d) a Holder’s violation of any statutory or fiduciary duty, or duty of loyalty
owed to the Company and/or any Affiliate; (e) a Holder’s violation of state or
federal law in connection with the Holder’s performance of his or her job which
has an adverse effect on the Company and/or any Affiliate; and (f) a Holder’s
violation of Company policy which has a material adverse effect on the Company
and/or any Affiliate. Notwithstanding the foregoing, a Holder’s Disability shall
not constitute Cause as set forth herein. The determination that a termination
is for Cause shall be by the Administrator it its sole and exclusive judgment
and discretion. Notwithstanding the foregoing, if a Holder is a party to an
employment or severance agreement with the Company or any Affiliate in effect as
of the date of grant of an Award which defines “Cause” or a similar term, or if
an Award Agreement defined “Cause” in a manner that differs from the foregoing
definition, “Cause” for purposes of the Plan and such Award shall have the
meaning given to such term in such employment or severance agreement or Award
Agreement (and if “Cause” or a similar term is defined in both an employment or
severance agreement with the Company or any Affiliate in effect as of the date
of grant of an Award and in the Award Agreement, the definition of “Cause” in
the employment or severance agreement shall take precedence unless expressly
otherwise provided in the Award Agreement).

 

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2.11         “Change in Control” shall mean and includes each of the following:

 

(a)           any “person” (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) 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;

 

(b)           the majority of the Board is composed of members who (A) have
served less than twelve months and (B) were not approved by a majority of the
Board at the time of their election or appointment;

 

(c)           the merger or consolidation of the Company with or into another
entity or the merger of another entity into the Company or any subsidiary
thereof with the effect that immediately after such transaction the stockholders
of the Company immediately prior to such transaction (or their affiliates) hold
less than 50% of the total voting power of all securities generally entitled to
vote in the election of directors, managers or trustees of the entity surviving
such merger or consolidation;

 

(d)           a tender offer or exchange offer is made and consummated for the
ownership of securities of the Company representing 50% or more of the combined
voting power of the Company’s then outstanding voting securities; or

 

(e)           the sale, lease or other transfer of all or substantially all of
the assets of the Company to any person or group (as such term is used in
Section 13(d)(3) of the Exchange Act).

 

In addition, if a Change in Control constitutes a payment event with respect to
any portion of an Award which provides for the deferral of compensation and is
subject to Section 409A of the Code, the transaction or event described in
subsection (a), (b), (c) or (d) with respect to such Award (or portion thereof)
must also constitute a “change in control event,” as defined in Treasury
Regulation §1.409A-3(i)(5) to the extent required by Section 409A.

 

The Committee shall have full and final authority, which shall be exercised in
its discretion, to determine conclusively whether a Change in Control of the
Company has occurred pursuant to the above definition, and the date of the
occurrence of such Change in Control and any incidental matters relating
thereto.

 

2.12         “Code” shall mean the Internal Revenue Code of 1986, as amended
from time to time, together with the regulations and official guidance
promulgated thereunder.

 

2.13         “Committee” shall mean the Compensation Committee of the Board, or
another committee or subcommittee of the Board, appointed as provided in
Section 12.1.

 

2.14         “Common Stock” shall mean the common stock of the Company, par
value $0.001 per share.

 

2.15         “Company” shall have the meaning set forth in Article 1.

 

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2.16         “Consultant” shall mean any consultant or adviser engaged to
provide services to the Company or any Affiliate that qualifies as a consultant
under the applicable rules of the Securities and Exchange Commission for
registration of shares on a Form S-8 Registration Statement.

 

2.17         “Covered Employee” shall mean any Employee who is, or could be, a
“covered employee” within the meaning of Section 162(m) of the Code.

 

2.18         “Director” shall mean a member of the Board, as constituted from
time to time.

 

2.19         “Disability” shall mean that the Holder is either (a) unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
months, or (b) by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than twelve months, receiving income
replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Company.  For purposes of the
Plan, a Holder shall be deemed to have incurred a Disability if the Holder is
determined to be totally disabled by the Social Security Administration or in
accordance with the applicable disability insurance program of the Company’s,
provided that the definition of “disability” applied under such disability
insurance program complies with the requirements of this definition

 

2.20         “Dividend Equivalent” shall mean a right to receive the equivalent
value (in cash or Shares) of dividends paid on Shares, awarded under
Section 9.2.

 

2.21         “DRO” shall mean a domestic relations order as defined by the Code
or Title I of the Employee Retirement Income Security Act of 1974, as amended
from time to time, or the rules thereunder.

 

2.22         “Effective Date” shall mean the date the Plan is approved by the
Committee or the Board, subject to approval of the Plan by the Company’s
stockholders.

 

2.23         “Eligible Individual” shall mean any person who is an Employee, a
Consultant or a Non-Employee Director, as determined by the Administrator.

 

2.24         “Employee” shall mean any officer or other employee (as determined
in accordance with Section 3401(c) of the Code and the Treasury Regulations
thereunder) of the Company or of any Affiliate.

 

2.25         “Equity Restructuring” shall mean a nonreciprocal transaction
between the Company and its stockholders, such as a stock dividend, stock split,
spin-off, rights offering or recapitalization through a large, nonrecurring cash
dividend, that affects the number or kind of shares of Common Stock (or other
securities of the Company) or the share price of Common Stock (or other
securities) and causes a change in the per share value of the Common Stock
underlying outstanding Awards.

 

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2.26         “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended from time to time.

 

2.27         “Expiration Date” shall have the meaning given to such term in
Section 13.1.

 

2.28         “Fair Market Value” shall mean, as of any given date, the value of
a Share determined as follows:

 

(a)           If the Common Stock is listed on any (i) established securities
exchange (such as the New York Stock Exchange, the NASDAQ Global Market and the
NASDAQ Global Select Market), (ii) national market system or (iii) automated
quotation system on which the Shares are listed, quoted or traded, its Fair
Market Value shall be the closing sales price for a share of Common Stock as
quoted on such exchange or system for such date or, if there is no closing sales
price for a share of Common Stock on the date in question, the closing sales
price for a share of Common Stock on the last preceding date for which such
quotation exists, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;

 

(b)           If the Common Stock is not listed on an established securities
exchange, national market system or automated quotation system, but the Common
Stock is regularly quoted by a recognized securities dealer, its Fair Market
Value shall be the mean of the high bid and low asked prices for such date or,
if there are no high bid and low asked prices for a share of Common Stock on
such date, the high bid and low asked prices for a share of Common Stock on the
last preceding date for which such information exists, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; or

 

(c)           If the Common Stock is neither listed on an established securities
exchange, national market system or automated quotation system nor regularly
quoted by a recognized securities dealer, its Fair Market Value shall be
established by the Administrator in good faith.

 

2.29         “Greater Than 10% Stockholder” shall mean an individual then owning
(within the meaning of Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company or any subsidiary
corporation (as defined in Section 424(f) of the Code) or parent corporation
thereof (as defined in Section 424(e) of the Code).

 

2.30         “Holder” shall mean a person who has been granted an Award.

 

2.31         “Incentive Stock Option” shall mean an Option that is intended to
qualify as an incentive stock option and conforms to the applicable provisions
of Section 422 of the Code.

 

2.32         “Non-Employee Director” shall mean a Director of the Company who is
not an Employee.

 

2.33         “Non-Qualified Stock Option” shall mean an Option that is not an
Incentive Stock Option.

 

2.34         “Option” shall mean a right to purchase Shares at a specified
exercise price, granted under Article 6.  An Option shall be either a
Non-Qualified Stock Option or an Incentive

 

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Stock Option; provided, however, that Options granted to Non-Employee Directors
and Consultants shall only be Non-Qualified Stock Options.

 

2.35         “Option Term” shall have the meaning set forth in Section 6.6.

 

2.36         “Parent” shall mean any entity (other than the Company), whether
domestic or foreign, in an unbroken chain of entities ending with the Company if
each of the entities other than the Company beneficially owns, at the time of
the determination, securities or interests representing at least fifty percent
(50%) of the total combined voting power of all classes of securities or
interests in one of the other entities in such chain.

 

2.37         “Performance Award” shall mean a cash bonus award, stock bonus
award, performance award or incentive award that is paid in cash, Shares or a
combination of both, awarded under Section 9.1.

 

2.38         “Performance-Based Compensation” shall mean any compensation that
is intended to qualify as “performance-based compensation” as described in
Section 162(m)(4)(C) of the Code.

 

2.39         “Performance Criteria” shall mean the criteria (and adjustments)
that the Committee selects for an Award for purposes of establishing the
Performance Goal or Performance Goals for a Performance Period, determined as
follows:

 

(a)           The Performance Criteria that shall be used to establish
Performance Goals are limited to the following:  (i) net earnings (either before
or after one or more of the following: (A) interest, (B) taxes, (C) depreciation
and (D) amortization); (ii) gross or net sales or revenue; (iii) net income
(either before or after taxes); (iv) adjusted net income; (v) operating earnings
or profit; (vi) cash flow (including, but not limited to, operating cash flow
and free cash flow); (vii) return on assets; (viii) return on capital or return
on invested capital; (ix) return on stockholders’ equity; (x) total stockholder
return; (xi) return on sales; (xii) gross or net profit or operating margin;
(xiii) operating or other costs and expenses; (xiv) improvements in expense
levels; (xv) working capital; (xvi) earnings per share or adjusted earnings per
share; (xvii) total shareholder return; (xviii) price per share of Common Stock;
(xix) regulatory body approval for commercialization of a product;
(xx) implementation or completion of critical projects; (xxi) market share;
(xxii) economic value, (xxiiii) comparisons with various stock market indices;
(xxiv) stockholders’ equity; (xxv) market recognition (including but not limited
to awards and analyst ratings); (xxvi) financial ratios; and (xxvii) strategic
team goals, any of which may be measured either in absolute terms or as compared
to any incremental increase or decrease or as compared to results of a peer
group or to market performance indicators or indices.

 

(b)           The Administrator may, in its sole discretion, provide that one or
more objectively determinable adjustments shall be made to one or more of the
Performance Goals.  Such adjustments may include one or more of the following: 
(i) items related to a change in accounting principle; (ii) items relating to
financing activities; (iii) expenses for restructuring or productivity
initiatives; (iv) other non-operating items; (v) items related to acquisitions;
(vi) items attributable to the business operations of any entity acquired by the
Company during the Performance Period; (vii) items related to the disposal of a
business or segment of a business;

 

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(viii) items related to discontinued operations that do not qualify as a segment
of a business under Applicable Accounting Standards; (ix) items attributable to
any stock dividend, stock split, combination or exchange of stock occurring
during the Performance Period; (x) any other items of significant income or
expense which are determined to be appropriate adjustments; (xi) items relating
to unusual or extraordinary corporate transactions, events or developments,
(xii)  items related to amortization of acquired intangible assets; (xiii) items
that are outside the scope of the Company’s core, on-going business activities;
(xiv) items related to acquired in-process research and development; (xv) items
relating to changes in tax laws; (xvi) items relating to major licensing or
partnership arrangements; (xvii) items relating to asset impairment charges;
(xviii) items relating to gains or losses for litigation, arbitration and
contractual settlements; or (xix) items relating to any other unusual or
nonrecurring events or changes in applicable laws, accounting principles or
business conditions.  For all Awards intended to qualify as Performance-Based
Compensation, such determinations shall be made within the time prescribed by,
and otherwise in compliance with, Section 162(m) of the Code.

 

2.40         “Performance Goals” shall mean, for a Performance Period, one or
more goals established in writing by the Administrator for the Performance
Period based upon one or more Performance Criteria.  Depending on the
Performance Criteria used to establish such Performance Goals, the Performance
Goals may be expressed in terms of overall Company performance or the
performance of a Subsidiary, division, business unit, or an individual.  The
achievement of each Performance Goal shall be determined, to the extent
applicable, with reference to Applicable Accounting Standards.

 

2.41         “Performance Period” shall mean one or more periods of time, which
may be of varying and overlapping durations, as the Administrator may select,
over which the attainment of one or more Performance Goals will be measured for
the purpose of determining a Holder’s right to, and the payment of, an Award.

 

2.42         “Performance Stock Unit” shall mean a Performance Award awarded
under Section 9.1 which is denominated in units of value including dollar value
of shares of Common Stock.

 

2.43         “Permitted Transferee” shall mean, with respect to a Holder, any
“family member” of the Holder, as defined under the instructions to use the
Form S-8 Registration Statement under the Securities Act or any other transferee
specifically approved by the Administrator, after taking into Applicable Law.

 

2.44         “Plan” shall have the meaning set forth in Article 1.

 

2.45         “Prior Plan” shall mean the Company’s 2006 Long-Term Stock
Incentive Plan, as such plan may be amended from time to time.

 

2.46         “Prior Plan Award” shall mean an award outstanding under the Prior
Plan as of the Effective Date.

 

2.47         “Program” shall mean any program adopted by the Administrator
pursuant to the Plan containing the terms and conditions intended to govern a
specified type of Award granted under the Plan and pursuant to which such type
of Award may be granted under the Plan.

 

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2.48         “Restricted Stock” shall mean Common Stock awarded under Article 7
that is subject to certain restrictions and may be subject to risk of forfeiture
or repurchase.

 

2.49         “Restricted Stock Units” shall mean the right to receive Shares or
cash awarded under Article 9.

 

2.50         “Securities Act” shall mean the Securities Act of 1933, as amended.

 

2.51         “Shares” shall mean shares of Common Stock.

 

2.52         “Stock Appreciation Right” shall mean a stock appreciation right
granted under Article 11.

 

2.53         “Stock Appreciation Right Term” shall have the meaning set forth in
Section 11.4.

 

2.54         “Stock Payment” shall mean (a) a payment in the form of Shares, or
(b) an option or other right to purchase Shares, as part of a bonus, deferred
compensation or other arrangement, awarded under Section 9.3.

 

2.55         “Subsidiary” shall mean any entity (other than the Company),
whether domestic or foreign, in an unbroken chain of entities beginning with the
Company if each of the entities other than the last entity in the unbroken chain
beneficially owns, at the time of the determination, securities or interests
representing at least 50% of the total combined voting power of all classes of
securities or interests in one of the other entities in such chain.

 

2.56         “Substitute Award” shall mean an Award granted under the Plan upon
the assumption of, or in substitution for, outstanding equity awards previously
granted by a company or other entity in connection with a corporate transaction,
such as a merger, combination, consolidation or acquisition of property or
stock; provided, however, that in no event shall the term “Substitute Award” be
construed to refer to an award made in connection with the cancellation and
repricing of an Option or Stock Appreciation Right.

 

2.57         “Termination of Service” shall mean:

 

(a)           As to a Consultant, the time when the engagement of a Holder as a
Consultant to the Company or an Affiliate is terminated for any reason, with or
without cause, including, without limitation, by resignation, discharge, death
or retirement, but excluding terminations where the Consultant simultaneously
commences or remains in employment or service with the Company or any Affiliate.

 

(b)           As to a Non-Employee Director, the time when a Holder who is a
Non-Employee Director ceases to be a Director for any reason, including, without
limitation, a termination by resignation, failure to be elected, death or
retirement, but excluding terminations where the Holder simultaneously commences
or remains in employment or service with the Company or any Affiliate.

 

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(c)           As to an Employee, the time when the employee-employer
relationship between a Holder and the Company or any Affiliate is terminated for
any reason, including, without limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding terminations where the
Holder simultaneously commences or remains in employment or service with the
Company or any Affiliate.

 

The Administrator, in its sole discretion, shall determine the effect of all
matters and questions relating to Terminations of Service, including, without
limitation, the question of whether a Termination of Service resulted from a
discharge for cause and all questions of whether particular leaves of absence
constitute a Termination of Service; provided, however, that, with respect to
Incentive Stock Options, unless the Administrator otherwise provides in the
terms of the Program, the Award Agreement or otherwise, a leave of absence,
change in status from an employee to an independent contractor or other change
in the employee-employer relationship shall constitute a Termination of Service
only if, and to the extent that, such leave of absence, change in status or
other change interrupts employment for the purposes of Section 422(a)(2) of the
Code and the then applicable regulations and revenue rulings under said
Section.   For purposes of the Plan, a Holder’s employee-employer relationship
or consultancy relationship shall be deemed to be terminated in the event that
the Affiliate employing or contracting with such Holder ceases to remain an
Affiliate following any merger, sale of stock or other corporate transaction or
event (including, without limitation, a spin-off).

 

ARTICLE 3.

 

SHARES SUBJECT TO THE PLAN

 

3.1           Number of Shares.

 

(a)           Subject to Section 13.2 and Section 3.1(b), the aggregate number
of Shares which may be issued or transferred pursuant to Awards under the Plan
is the sum of (i) 2,300,000 and (ii) any Shares which as of the Effective Date
are available for issuance under the Prior Plan, or are subject to Prior Plan
Awards which become available for future grants of Awards under the Plan
following the Effective Date pursuant to Section 3.1(b).  As of the Effective
Date of the Plan, the aggregate number of Shares reserved for issuance under the
Prior Plan was 2,200,000, and therefore the maximum number of Shares that may
become available for issuance under the Plan pursuant to clause (ii) above shall
not exceed such number of Shares.  Notwithstanding anything in this Section 3.1
to the contrary, the number of shares of Common Stock that may be issued or
transferred pursuant to Awards under the Plan shall not exceed an aggregate
4,500,000 Shares, subject to adjustment pursuant to Section 13.2.  From and
after the Effective Date, no awards shall be granted under the Prior Plan;
however, any Prior Plan Award shall continue to be subject to the terms and
conditions of the Prior Plan.

 

(b)           To the extent all or a portion of an Award or Prior Plan Award is
forfeited, expires or such Award, Prior Plan Award or portion thereof, is
settled for cash (in whole or in part), the Shares subject to such Award, Prior
Plan Award, or portion thereof, shall, to the extent of such forfeiture,
expiration or cash settlement, again be available for future grants of Awards
under the Plan.  In addition, the following Shares shall be added to the Shares
authorized for grant under Section 3.1(a) and will be available for future
grants of Awards: (i) Shares tendered

 

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by a Holder or withheld by the Company in payment of the exercise price of an
Option or a Prior Plan Award; (ii) Shares tendered by the Holder or withheld by
the Company to satisfy any tax withholding obligation with respect to an Award
or a Prior Plan Award; (iii) Shares subject to a Stock Appreciation Right that
are not issued in connection with the stock settlement of the Stock Appreciation
Right on exercise thereof; and (iv) Shares purchased on the open market with the
cash proceeds from the exercise of Options.  Any Shares repurchased by the
Company under Section 7.4 or under the Prior Plan at the same price paid by the
Holder, or less, so that such Shares are returned to the Company will again be
available for Awards.  The payment of Dividend Equivalents in cash in
conjunction with any outstanding Awards shall not be counted against the shares
available for issuance under the Plan.  Notwithstanding the provisions of this
Section 3.1(b), no Shares may again be optioned, granted or awarded if such
action would cause an Incentive Stock Option to fail to qualify as an incentive
stock option under Section 422 of the Code.

 

(c)           Substitute Awards shall not reduce the Shares authorized for grant
under the Plan.  Additionally, in the event that a company acquired by the
Company or any Affiliate or with which the Company or any Affiliate combines has
shares available under a pre-existing plan approved by stockholders and not
adopted in contemplation of such acquisition or combination, the shares
available for grant pursuant to the terms of such pre-existing plan (as
adjusted, to the extent appropriate, using the exchange ratio or other
adjustment or valuation ratio or formula used in such acquisition or combination
to determine the consideration payable to the holders of common stock of the
entities party to such acquisition or combination) may be used for Awards under
the Plan and shall not reduce the Shares authorized for grant under the Plan;
provided that Awards using such available shares shall not be made after the
date awards or grants could have been made under the terms of the pre-existing
plan, absent the acquisition or combination, and shall only be made to
individuals who were not employed by or providing services to the Company or its
Affiliates immediately prior to such acquisition or combination.

 

3.2           Stock Distributed.  Any Shares distributed pursuant to an Award
may consist, in whole or in part, of authorized and unissued Common Stock,
treasury Common Stock or Common Stock purchased on the open market.

 

3.3           Limitation on Number of Shares Subject to Awards.  Notwithstanding
any provision in the Plan to the contrary, and subject to Section 13.2, the
maximum aggregate number of Shares with respect to one or more Awards that may
be granted to any one person during any fiscal year of the Company shall be
1,500,000 and the maximum aggregate amount of cash that may be paid in cash to
any one person during any fiscal year of the Company with respect to one or more
Awards payable in cash shall be $5,000,000.

 

ARTICLE 4.

 

GRANTING OF AWARDS

 

4.1           Participation.  The Administrator may, from time to time, select
from among all Eligible Individuals, those to whom an Award shall be granted and
shall determine the nature and amount of each Award, which shall not be
inconsistent with the requirements of the Plan.  No Eligible Individual shall
have any right to be granted an Award pursuant to the Plan.

 

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4.2           Award Agreement.  Unless otherwise determined by the
Administrator, each Award shall be evidenced by an Award Agreement that sets
forth the terms, conditions and limitations for such Award, which may include
the term of the Award, the provisions applicable in the event of the Holder’s
Termination of Service, and the Company’s authority to unilaterally or
bilaterally amend, modify, suspend, cancel or rescind an Award.  Award
Agreements evidencing Awards intended to qualify as Performance-Based
Compensation shall contain such terms and conditions as may be necessary to meet
the applicable provisions of Section 162(m) of the Code.  Award Agreements
evidencing Incentive Stock Options shall contain such terms and conditions as
may be necessary to meet the applicable provisions of Section 422 of the Code.

 

4.3           Limitations Applicable to Section 16 Persons.  Notwithstanding any
other provision of the Plan, the Plan, and any Award granted or awarded to any
individual who is then subject to Section 16 of the Exchange Act, shall be
subject to any additional limitations set forth in any applicable exemptive
rule under Section 16 of the Exchange Act (including Rule 16b-3 of the Exchange
Act and any amendments thereto) that are requirements for the application of
such exemptive rule.  To the extent permitted by Applicable Law, the Plan and
Awards granted or awarded hereunder shall be deemed amended to the extent
necessary to conform to such applicable exemptive rule.

 

4.4           At-Will Employment; Voluntary Participation.  Nothing in the Plan
or in any Program or Award Agreement shall confer upon any Holder any right to
continue in the employ of, or as a Director or Consultant for, the Company or
any Affiliate, or shall interfere with or restrict in any way the rights of the
Company and any Affiliate, which rights are hereby expressly reserved, to
discharge any Holder at any time for any reason whatsoever, with or without
cause, and with or without notice, or to terminate or change all other terms and
conditions of employment or engagement, except to the extent expressly provided
otherwise in a written agreement between the Holder and the Company or any
Affiliate.  Participation by each Holder in the Plan shall be voluntary and
nothing in the Plan shall be construed as mandating that any Eligible Individual
shall participate in the Plan.

 

4.5           Stand-Alone and Tandem Awards.  Awards granted pursuant to the
Plan may, in the sole discretion of the Administrator, be granted either alone,
in addition to, or in tandem with, any other Award granted pursuant to the
Plan.  Awards granted in addition to or in tandem with other Awards may be
granted either at the same time as or at a different time from the grant of such
other Awards.

 

ARTICLE 5.

 

PROVISIONS APPLICABLE TO AWARDS INTENDED TO QUALIFY AS PERFORMANCE-BASED
COMPENSATION.

 

5.1           Purpose.  The Committee, in its sole discretion, may determine at
the time an Award is granted or at any time thereafter whether such Award is
intended to qualify as Performance-Based Compensation. If the Committee, in its
sole discretion, decides to grant such an Award to an Eligible Individual that
is intended to qualify as Performance-Based Compensation, then the provisions of
this Article 5 shall control over any contrary provision contained in the Plan. 
The Administrator may in its sole discretion grant Awards to other

 

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Eligible Individuals that are based on Performance Criteria or Performance Goals
but that do not satisfy the requirements of this Article 5 and that are not
intended to qualify as Performance-Based Compensation.  Unless otherwise
specified by the Administrator at the time of grant, the Performance Criteria
with respect to an Award intended to be Performance-Based Compensation payable
to a Covered Employee shall be determined on the basis of Applicable Accounting
Standards.

 

5.2           Applicability.  The grant of an Award to an Eligible Individual
for a particular Performance Period shall not require the grant of an Award to
such Individual in any subsequent Performance Period and the grant of an Award
to any one Eligible Individual shall not require the grant of an Award to any
other Eligible Individual in such period or in any other period.

 

5.3           Types of Awards.  Notwithstanding anything in the Plan to the
contrary, the Committee may grant any Award to an Eligible Individual intended
to qualify as Performance-Based Compensation, including, without limitation,
Restricted Stock the restrictions with respect to which lapse upon the
attainment of specified Performance Goals, Restricted Stock Units that vest and
become payable upon the attainment of specified Performance Goals and any
Performance Awards described in Article 9 that vest or become exercisable or
payable upon the attainment of one or more specified Performance Goals.

 

5.4           Procedures with Respect to Performance-Based Awards.  To the
extent necessary to comply with the requirements of Section 162(m)(4)(C) of the
Code, with respect to any Award granted to one or more Eligible Individuals
which is intended to qualify as Performance-Based Compensation, no later than 90
days following the commencement of any Performance Period or any designated
fiscal period or period of service (or such earlier time as may be required
under Section 162(m) of the Code), the Committee shall, in writing,
(a) designate one or more Eligible Individuals, (b) select the Performance
Criteria applicable to the Performance Period, (c) establish the Performance
Goals, and amounts of such Awards, as applicable, which may be earned for such
Performance Period based on the Performance Criteria, and (d) specify the
relationship between Performance Criteria and the Performance Goals and the
amounts of such Awards, as applicable, to be earned by each Covered Employee for
such Performance Period.  Following the completion of each Performance Period,
the Committee shall certify in writing whether and the extent to which the
applicable Performance Goals have been achieved for such Performance Period.

 

5.5           Payment of Performance-Based Awards.  Unless otherwise provided in
the applicable Program or Award Agreement and only to the extent otherwise
permitted by Section 162(m)(4)(C) of the Code, as to an Award that is intended
to qualify as Performance-Based Compensation, the Holder must be employed by the
Company or an Affiliate throughout the Performance Period.  Unless otherwise
provided in the applicable Performance Goals, Program or Award Agreement, a
Holder shall be eligible to receive payment pursuant to such Awards for a
Performance Period only if and to the extent the Performance Goals for such
period are achieved.

 

5.6           Additional Limitations.  Notwithstanding any other provision of
the Plan and except as otherwise determined by the Administrator, any Award
which is granted to an Eligible Individual and is intended to qualify as
Performance-Based Compensation shall be subject to any

 

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additional limitations set forth in Section 162(m) of the Code or any
regulations or rulings issued thereunder that are requirements for qualification
as Performance-Based Compensation, and the Plan, the Program and the Award
Agreement shall be deemed amended to the extent necessary to conform to such
requirements.

 

ARTICLE 6.

 

OPTIONS

 

6.1           Granting of Options to Eligible Individuals.  The Administrator is
authorized to grant Options to Eligible Individuals from time to time, in its
sole discretion, on such terms and conditions as it may determine which shall
not be inconsistent with the Plan.

 

6.2           Option Exercise Price.  The exercise price per Share subject to
each Option shall be set by the Administrator, but shall not be less than 100%
of the Fair Market Value of a Share on the date the Option is granted (or, as to
Incentive Stock Options, on the date the Option is modified, extended or renewed
for purposes of Section 424(h) of the Code).  In addition, in the case of
Incentive Stock Options granted to a Greater Than 10% Stockholder, such price
shall not be less than 110% of the Fair Market Value of a Share on the date the
Option is granted (or the date the Option is modified, extended or renewed for
purposes of Section 424(h) of the Code).

 

6.3           Option Vesting.

 

(a)           The period during which the right to exercise, in whole or in
part, an Option vests in the Holder shall be set by the Administrator and the
Administrator may determine that an Option may not be exercised in whole or in
part for a specified period after it is granted.  Such vesting may be based on
service with the Company or any Affiliate, any of the Performance Criteria, or
any other criteria selected by the Administrator.

 

(b)           No portion of an Option which is unexercisable at a Holder’s
Termination of Service shall thereafter become exercisable, except as may be
otherwise provided by the Administrator either in the Program, the Award
Agreement or by action of the Administrator following the grant of the Option.

 

6.4           Manner of Exercise.  All or a portion of an exercisable Option
shall be deemed exercised upon delivery of all of the following to the Secretary
of the Company, or such other person or entity designated by the Administrator,
or his, her or its office, as applicable:

 

(a)           A written or electronic notice complying with the applicable
rules established by the Administrator stating that the Option, or a portion
thereof, is exercised.  The notice shall be signed by the Holder or other person
then entitled to exercise the Option or such portion of the Option;

 

(b)           Such representations and documents as the Administrator, in its
sole discretion, deems necessary or advisable to effect compliance with
Applicable Law.  The Administrator may, in its sole discretion, also take
whatever additional actions it deems appropriate to effect such compliance
including, without limitation, placing legends on share certificates and issuing
stop-transfer notices to agents and registrars;

 

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(c)           In the event that the Option shall be exercised by any person or
persons other than the Holder, appropriate proof of the right of such person or
persons to exercise the Option, as determined in the sole discretion of the
Administrator; and

 

(d)           Full payment of the exercise price and applicable withholding
taxes to the stock administrator of the Company for the Shares with respect to
which the Option, or portion thereof, is exercised, in a manner permitted by
Section 11.1 and 11.2.

 

6.5           Partial Exercise.  An exercisable Option may be exercised in whole
or in part.  However, an Option shall not be exercisable with respect to
fractional Shares unless determined by the Administrator, and the Administrator
may require that, by the terms of the Option, a partial exercise must be with
respect to a minimum number of Shares.

 

6.6           Option Term.  The term of each Option (the “Option Term”) shall be
set by the Administrator in its sole discretion; provided, however, that the
Option Term shall not be more than 10 years from the date the Option is granted,
or 5 years from the date an Incentive Stock Option is granted to a Greater Than
10% Stockholder.  The Administrator shall determine the time period, including
the time period following a Termination of Service, during which the Holder has
the right to exercise the vested Options, which time period may not extend
beyond the last day of the Option Term.  Except as limited by the requirements
of Section 409A or Section 422 of the Code and regulations and rulings
thereunder, the Administrator may extend the Option Term of any outstanding
Option, and may extend the time period during which vested Options may be
exercised, in connection with any Termination of Service of the Holder, and may
amend any other term or condition of such Option relating to such a Termination
of Service.

 

6.7           Expiration of Option Term:  Automatic Exercise of In-The-Money
Options.  Unless otherwise provided by the Administrator (in an Award Agreement
or otherwise) or as otherwise directed by an Option Holder in writing to the
Company, each Option outstanding on the Automatic Exercise Date with an exercise
price per share that is less than the Fair Market Value per share of Common
Stock as of such date shall automatically and without further action by the
Option Holder or the Company be exercised on the Automatic Exercise Date.  In
the discretion of the Administrator, payment of the exercise price of any such
Option shall be made pursuant to Section 11.1(b) or 11.1(c) and the Company or
any Affiliate shall deduct or withhold an amount sufficient to satisfy all taxes
associated with such exercise in accordance with Section 11.2.  Unless otherwise
determined by the Administrator, this Section 6.7 shall not apply to an Option
if the Holder of such Option experiences a Termination of Service on or before
the Automatic Exercise Date.  For the avoidance of doubt, no Option with an
exercise price per share that is equal to or greater than the Fair Market Value
per share of Common Stock on the Automatic Exercise Date shall be exercised
pursuant to this Section 6.7.

 

6.8           Qualification of Incentive Stock Options.  No Incentive Stock
Option shall be granted to any person who is not an Employee of the Company or
any subsidiary corporation (as defined in Section 424(f) of the Code) of the
Company.  No person who qualifies as a Greater Than 10% Stockholder may be
granted an Incentive Stock Option unless such Incentive Stock Option conforms to
the applicable provisions of Section 422 of the Code.  Any Incentive Stock
Option granted under the Plan may be modified by the Administrator, with the
consent of the Holder, to disqualify such Option from treatment as an “incentive
stock option” under Section

 

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422 of the Code.  To the extent that the aggregate Fair Market Value of stock
with respect to which “incentive stock options” (within the meaning of
Section 422 of the Code, but without regard to Section 422(d) of the Code) are
exercisable for the first time by a Holder during any calendar year under the
Plan, and all other plans of the Company and any subsidiary or parent
corporation thereof (each as defined in Section 424(f) and (e) of the Code,
respectively), exceeds $100,000, the Options shall be treated as Non-Qualified
Stock Options to the extent required by Section 422 of the Code.  The rule set
forth in the preceding sentence shall be applied by taking Options and other
“incentive stock options” into account in the order in which they were granted
and the Fair Market Value of stock shall be determined as of the time the
respective options were granted.

 

6.9           Notification Regarding Disposition.  The Holder shall give the
Company prompt written or electronic notice of any disposition of Shares
acquired by exercise of an Incentive Stock Option which occurs within (a) 2
years from the date of granting (including the date the Option is modified,
extended or renewed for purposes of Section 424(h) of the Code) such Option to
such Holder, or (b) one year after the transfer of such Shares to such Holder.

 

6.10         Substitute Awards.  Notwithstanding the foregoing provisions of
this Article 6 to the contrary, in the case of an Option that is a Substitute
Award, the price per share of the Shares subject to such Option may be less than
the Fair Market Value per share on the date of grant; provided that the excess
of:  (a) the aggregate Fair Market Value (as of the date such Substitute Award
is granted) of the shares subject to the Substitute Award, over (b) the
aggregate exercise price thereof does not exceed the excess of: (x) the
aggregate fair market value (as of the time immediately preceding the
transaction giving rise to the Substitute Award, such fair market value to be
determined by the Administrator) of the shares of the predecessor entity that
were subject to the grant assumed or substituted for by the Company, over
(y) the aggregate exercise price of such shares.

 

ARTICLE 7.

 

RESTRICTED STOCK

 

7.1           Award of Restricted Stock.

 

(a)           The Administrator is authorized to grant Restricted Stock to
Eligible Individuals, and shall determine the terms and conditions, including
the restrictions applicable to each award of Restricted Stock, which terms and
conditions shall not be inconsistent with the Plan, and may impose such
conditions on the issuance of such Restricted Stock as it deems appropriate.

 

(b)           The Administrator shall establish the purchase price, if any, and
form of payment for Restricted Stock; provided, however, that if a purchase
price is charged, such purchase price shall be no less than the par value, if
any, of the Shares to be purchased, unless otherwise permitted by Applicable
Law.  In all cases, legal consideration shall be required for each issuance of
Restricted Stock.

 

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7.2           Rights as Stockholders.  Subject to Section 7.4, upon issuance of
Restricted Stock, the Holder shall have, unless otherwise provided by the
Administrator, all the rights of a stockholder with respect to said Shares,
subject to the restrictions in the applicable Program or in each individual
Award Agreement, including the right to vote and the right to receive all
dividends and other distributions paid or made with respect to the Shares;
provided, however, that, in the sole discretion of the Administrator, any
extraordinary distributions with respect to the Shares shall be subject to the
restrictions set forth in Section 7.3.  In addition, with respect to a share of
Restricted Stock with performance-based vesting, dividends which are paid prior
to vesting shall only be paid out to the Holder to the extent that the
performance-based vesting conditions are subsequently satisfied and the share of
Restricted Stock vests.

 

7.3           Restrictions.  All shares of Restricted Stock (including any
shares received by Holders thereof with respect to shares of Restricted Stock as
a result of stock dividends, stock splits or any other form of recapitalization)
shall, in the terms of the applicable Program or in each individual Award
Agreement, be subject to such restrictions and vesting requirements as the
Administrator shall provide.  Such restrictions may include, without limitation,
restrictions concerning voting rights and transferability and such restrictions
may lapse separately or in combination at such times and pursuant to such
circumstances or based on such criteria as selected by the Administrator,
including, without limitation, criteria based on the Holder’s duration of
employment, directorship or consultancy with the Company, the Performance
Criteria, Company performance, individual performance or other criteria selected
by the Administrator.  By action taken after the Restricted Stock is issued, the
Administrator may, on such terms and conditions as it may determine to be
appropriate, accelerate the vesting of such Restricted Stock by removing any or
all of the restrictions imposed by the terms of the Program or the Award
Agreement.  Restricted Stock may not be sold or encumbered until all
restrictions are terminated or expire.

 

7.4           Repurchase or Forfeiture of Restricted Stock.  Except as otherwise
determined by the Administrator at the time of the grant of the Award or
thereafter, (i) if no price was paid by the Holder for the Restricted Stock,
upon a Termination of Service during the applicable restriction period, the
Holder’s rights in unvested Restricted Stock then subject to restrictions shall
lapse, and such Restricted Stock shall be surrendered to the Company and
cancelled without consideration, and (ii) if a price was paid by the Holder for
the Restricted Stock, upon a Termination of Service during the applicable
restriction period, the Company shall have the right to repurchase from the
Holder the unvested Restricted Stock then subject to restrictions at a cash
price per share equal to the price paid by the Holder for such Restricted Stock
or such other amount as may be specified in the Program or the Award Agreement.

 

7.5           Certificates for Restricted Stock.  Restricted Stock granted
pursuant to the Plan may be evidenced in such manner as the Administrator shall
determine.  Certificates or book entries evidencing shares of Restricted Stock
must include an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock.  The Company may, in it sole
discretion, (a) retain physical possession of any stock certificate evidencing
shares of Restricted Stock until the restrictions thereon shall have lapsed
and/or (b) require that the stock certificates evidencing shares of Restricted
Stock be held in custody by a designated escrow agent (which may but need not be
the Company) until the restrictions thereon shall have lapsed, and that the
Holder deliver a stock power, endorsed in blank, relating to such Restricted
Stock.

 

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7.6           Section 83(b) Election.  If a Holder makes an election under
Section 83(b) of the Code to be taxed with respect to the Restricted Stock as of
the date of transfer of the Restricted Stock rather than as of the date or dates
upon which the Holder would otherwise be taxable under Section 83(a) of the
Code, the Holder shall be required to deliver a copy of such election to the
Company promptly after filing such election with the Internal Revenue Service.

 

ARTICLE 8.

 

RESTRICTED STOCK UNITS

 

8.1           Grant of Restricted Stock Units.  The Administrator is authorized
to grant Awards of Restricted Stock Units to any Eligible Individual selected by
the Administrator in such amounts and subject to such terms and conditions as
determined by the Administrator.

 

8.2           Purchase Price.  The Administrator shall specify the purchase
price, if any, to be paid by the Holder to the Company with respect to any
Restricted Stock Unit award; provided, however, that value of the consideration
shall not be less than the par value of a Share, unless otherwise permitted by
Applicable Law.

 

8.3           Vesting of Restricted Stock Units.  At the time of grant, the
Administrator shall specify the date or dates on which the Restricted Stock
Units shall become fully vested and nonforfeitable, and may specify such
conditions to vesting as it deems appropriate, including, without limitation,
vesting based upon the Holder’s duration of service to the Company or any
Affiliate, one or more Performance Criteria, Company performance, individual
performance or other specific criteria, in each case on a specified date or
dates or over any period or periods, as determined by the Administrator, subject
to Section 3.4.

 

8.4           Maturity and Payment.  At the time of grant, the Administrator
shall specify the maturity date applicable to each grant of Restricted Stock
Units which shall be no earlier than the vesting date or dates of the Award and
may be determined at the election of the Holder (if permitted by the applicable
Award Agreement); provided that, except as otherwise expressly  set forth in an
applicable Award Agreement, and subject to compliance with Section 409A of the
Code, in no event shall the maturity date relating to each Restricted Stock Unit
occur following the later of (a) the 15th day of the third month following the
end of calendar year in which the applicable portion of the Restricted Stock
Unit vests; or (b) the 15th day of the third month following the end of the
Company’s fiscal year in which the applicable portion of the Restricted Stock
Unit vests.  On the maturity date, the Company shall, subject to
Section 11.4(e), transfer to the Holder one unrestricted, fully transferable
Share for each Restricted Stock Unit scheduled to be paid out on such date and
not previously forfeited, or in the sole discretion of the Administrator, an
amount in cash equal to the Fair Market Value of such Shares on the maturity
date or a combination of cash and Common Stock as determined by the
Administrator.

 

8.5           No Rights as a Stockholder.  Unless otherwise determined by the
Administrator,  a Holder of Restricted Stock Units shall possess no incidents of
ownership with respect to the Shares represented by such Restricted Stock Units,
unless and until such Shares are transferred to the Holder pursuant to the terms
of this Plan and the Award Agreement.

 

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ARTICLE 9.

 

PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, STOCK PAYMENTS

 

9.1           Performance Awards.

 

(a)           The Administrator is authorized to grant Performance Awards,
including Awards of Performance Stock Units and Awards of cash bonuses or other
cash awards determined in the Administrator’s discretion from time to time, to
any Eligible Individual and to determine whether such Performance Awards shall
be Performance-Based Compensation.  The value of Performance Awards, including
Performance Stock Units and any cash awards, may be linked to any one or more of
the Performance Criteria or other specific criteria determined by the
Administrator, in each case on a specified date or dates or over any period or
periods determined by the Administrator.  Performance Awards, including
Performance Stock Unit awards may be paid in cash, Shares, or a combination of
cash and Shares, as determined by the Administrator.

 

(b)           Without limiting Section 9.1(a), the Administrator may grant
Performance Awards to any Eligible Individual in the form of a cash bonus
payable upon the attainment of Performance Goals, or such other criteria,
whether or not objective, which are established by the Administrator, in each
case on a specified date or dates or over any period or periods determined by
the Administrator.  Any such bonuses paid to a Holder which are intended to be
Performance-Based Compensation shall be based upon objectively determinable
bonus formulas established in accordance with the provisions of Article 5.

 

9.2           Dividend Equivalents.

 

(a)           Dividend Equivalents may be granted by the Administrator based on
dividends declared on the Common Stock, during the period between the date an
Award is granted to a Holder and the date such Award vests, is exercised, is
distributed or expires, as determined by the Administrator.  Such Dividend
Equivalents shall be converted to cash or additional Shares by such formula and
at such time and subject to such limitations as may be determined by the
Administrator.  In addition, Dividend Equivalents with respect to an Award with
performance-based vesting that are based on dividends paid prior to the vesting
of such Award shall only be paid out to the Holder to the extent that the
performance-based vesting conditions are subsequently satisfied and the Award
vests.

 

(b)           Notwithstanding the foregoing, no Dividend Equivalents shall be
payable with respect to Options or Stock Appreciation Rights.

 

9.3           Stock Payments.  The Administrator is authorized to make Stock
Payments to any Eligible Individual.  Stock Payments may, but are not required
to, be made in lieu of base salary, bonus, fees or other cash compensation
otherwise payable to such Eligible Individual.  The number or value of Shares of
any Stock Payment shall be determined by the Administrator and may be based upon
one or more Performance Criteria or any other specific criteria, including
service to the Company or any Affiliate, determined by the Administrator. 
Shares underlying a Stock Payment which is subject to a vesting schedule or
other conditions or criteria set by the Administrator will not be issued until
those conditions have been satisfied.  Unless otherwise provided by the
Administrator, a Holder of a Stock Payment shall have no rights as a Company

 

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stockholder with respect to such Stock Payment until such time as the Stock
Payment has vested and the Shares underlying the Award have been issued to the
Holder.

 

9.4           Term.  The term of a Performance Award, Dividend Equivalent award
and/or Stock Payment award shall be set by the Administrator in its sole
discretion.

 

9.5           Purchase Price.  The Administrator may establish the purchase
price of a Performance Award or Shares distributed as a Stock Payment award;
provided, however, that value of the consideration shall not be less than the
par value of a Share, unless otherwise permitted by Applicable Law.

 

ARTICLE 10.

 

STOCK APPRECIATION RIGHTS

 

10.1         Grant of Stock Appreciation Rights.

 

(a)           The Administrator is authorized to grant Stock Appreciation Rights
to Eligible Individuals from time to time, in its sole discretion, on such terms
and conditions as it may determine consistent with the Plan.

 

(b)           A Stock Appreciation Right shall entitle the Holder (or other
person entitled to exercise the Stock Appreciation Right pursuant to the Plan)
to exercise all or a specified portion of the Stock Appreciation Right (to the
extent then exercisable pursuant to its terms) and to receive from the Company
an amount determined by multiplying the difference obtained by subtracting the
exercise price per share of the Stock Appreciation Right from the Fair Market
Value on the date of exercise of the Stock Appreciation Right by the number of
Shares with respect to which the Stock Appreciation Right shall have been
exercised, subject to any limitations the Administrator may impose.  Except as
described in (c) below, the exercise price per Share subject to each Stock
Appreciation Right shall be set by the Administrator, but shall not be less than
100% of the Fair Market Value on the date the Stock Appreciation Right is
granted.

 

(c)           Notwithstanding the foregoing provisions of Section 10.1(b) to the
contrary, in the case of an Stock Appreciation Right that is a Substitute Award,
the price per share of the Shares subject to such Stock Appreciation Right may
be less than 100% of the Fair Market Value per share on the date of grant;
provided that the excess of:  (i) the aggregate Fair Market Value (as of the
date such Substitute Award is granted) of the Shares subject to the Substitute
Award, over (ii) the aggregate exercise price thereof does not exceed the excess
of:  (x) the aggregate fair market value (as of the time immediately preceding
the transaction giving rise to the Substitute Award, such fair market value to
be determined by the Administrator) of the shares of the predecessor entity that
were subject to the grant assumed or substituted for by the Company, over
(y) the aggregate exercise price of such shares.

 

10.2             Stock Appreciation Right Vesting.

 

(a)           The period during which the right to exercise, in whole or in
part, a Stock Appreciation Right vests in the Holder shall be set by the
Administrator and the Administrator

 

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may determine that a Stock Appreciation Right may not be exercised in whole or
in part for a specified period after it is granted.  Such vesting may be based
on service with the Company or any Affiliate, or any other criteria selected by
the Administrator, such as performance criteria.  At any time after grant of a
Stock Appreciation Right, the Administrator may, in its sole discretion and
subject to whatever terms and conditions it selects, accelerate the period
during which a Stock Appreciation Right vests.

 

(b)           No portion of a Stock Appreciation Right which is unexercisable at
Termination of Service shall thereafter become exercisable, except as may be
otherwise provided by the Administrator either in the applicable Program or
Award Agreement or by action of the Administrator following the grant of the
Stock Appreciation Right.

 

10.3             Manner of Exercise.  All or a portion of an exercisable Stock
Appreciation Right shall be deemed exercised upon delivery of all of the
following to the stock administrator of the Company, or such other person or
entity designated by the Administrator, or his, her or its office, as
applicable:

 

(a)           A written or electronic notice complying with the applicable
rules established by the Administrator stating that the Stock Appreciation
Right, or a portion thereof, is exercised.  The notice shall be signed by the
Holder or other person then entitled to exercise the Stock Appreciation Right or
such portion of the Stock Appreciation Right;

 

(b)           Such representations and documents as the Administrator, in its
sole discretion, deems necessary or advisable to effect compliance with
Applicable Law.  The Administrator may, in its sole discretion, also take
whatever additional actions it deems appropriate to effect such compliance; and

 

(c)           In the event that the Stock Appreciation Right shall be exercised
by any person or persons other than the Holder, appropriate proof of the right
of such person or persons to exercise the Stock Appreciation Right.

 

10.4             Stock Appreciation Right Term.  The term of each Stock
Appreciation Right (the “Stock Appreciation Right Term”) shall be set by the
Administrator in its sole discretion; provided, however, that the term shall not
be more than 10 years from the date the Stock Appreciation Right is granted. 
The Administrator shall determine the time period, including the time period
following a Termination of Service, during which the Holder has the right to
exercise a vested Stock Appreciation Right, which time period may not extend
beyond the expiration date of the Stock Appreciation Right Term applicable to
such Stock Appreciation Right.  Except as limited by the requirements of
Section 409A of the Code and regulations and rulings thereunder, the
Administrator may extend the Stock Appreciation Right Term of any outstanding
Stock Appreciation Right, and may extend the time period during which vested
Stock Appreciation Rights may be exercised, in connection with any Termination
of Service of the Holder, and may amend any other term or condition of such
Stock Appreciation Right relating to such a Termination of Service.

 

10.5             Payment.  Payment of the amounts payable with respect to Stock
Appreciation Rights pursuant to this Article 10 shall be in cash, Shares (based
on its Fair Market Value as of

 

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the date the  Stock Appreciation Right is exercised), or a combination of both,
as determined by the Administrator.

 

10.6             Expiration of Stock Appreciation Right Term:  Automatic
Exercise of In-The-Money Stock Appreciation Rights.  Unless otherwise provided
by the Administrator (in an Award Agreement or otherwise) or as otherwise
directed by a Stock Appreciation Right Holder in writing to the Company, each
Stock Appreciation Right outstanding on the Automatic Exercise Date with an
exercise price per share that is less than the Fair Market Value per share of
Common Stock as of such date shall automatically and without further action by
the Stock Appreciation Right Holder or the Company be exercised on the Automatic
Exercise Date.  In the discretion of the Administrator, the Company or any
Affiliate shall deduct or withhold an amount sufficient to satisfy all taxes
associated with such exercise in accordance with Section 11.2.  Unless otherwise
determined by the Administrator, this Section 10.6 shall not apply to a Stock
Appreciation Right if the Holder of such Stock Appreciation Right experiences a
Termination of Service on or before the Automatic Exercise Date.  For the
avoidance of doubt, no Stock Appreciation Right with an exercise price per share
that is equal to or greater than the Fair Market Value per share of Common Stock
on the Automatic Exercise Date shall be exercised pursuant to this Section 10.6.

 

ARTICLE 11.

 

ADDITIONAL TERMS OF AWARDS

 

11.1         Payment.  The Administrator shall determine the methods by which
payments by any Holder with respect to any Awards granted under the Plan shall
be made, including, without limitation: (a) cash or check, (b) Shares
(including, in the case of payment of the exercise price of an Award, Shares
issuable pursuant to the exercise of the Award) or Shares held for such period
of time as may be required by the Administrator in order to avoid adverse
accounting consequences, in each case, having a Fair Market Value on the date of
delivery equal to the aggregate payments required, (c) delivery of a written or
electronic notice that the Holder has placed a market sell order with a broker
with respect to Shares then issuable upon exercise or vesting of an Award, and
that the broker has been directed to pay a sufficient portion of the net
proceeds of the sale to the Company in satisfaction of the aggregate payments
required; provided that payment of such proceeds is then made to the Company
upon settlement of such sale, or (d) other form of legal consideration
acceptable to the Administrator.  The Administrator shall also determine the
methods by which Shares shall be delivered or deemed to be delivered to
Holders.  Notwithstanding any other provision of the Plan to the contrary, no
Holder who is a Director or an “executive officer” of the Company within the
meaning of Section 13(k) of the Exchange Act shall be permitted to make payment
with respect to any Awards granted under the Plan, or continue any extension of
credit with respect to such payment, with a loan from the Company or a loan
arranged by the Company in violation of Section 13(k) of the Exchange Act.

 

11.2         Tax Withholding.  The Company or any Affiliate shall have the
authority and the right to deduct or withhold, or require a Holder to remit to
the Company, an amount sufficient to satisfy federal, state, local and foreign
taxes (including the Holder’s FICA or employment tax obligation) required by law
to be withheld with respect to any taxable event concerning a Holder arising as
a result of the Plan.  The Administrator may in its sole discretion and in
satisfaction of

 

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the foregoing requirement withhold, or allow a Holder to elect to have the
Company withhold Shares otherwise issuable under an Award (or allow the
surrender of Shares). The number of Shares which may be so withheld or
surrendered shall be limited to the number of Shares which have a Fair Market
Value on the date of withholding or repurchase equal to the aggregate amount of
such liabilities based on the minimum statutory withholding rates for federal,
state, local and foreign income tax and payroll tax purposes that are applicable
to such supplemental taxable income. The Administrator shall determine the fair
market value of the Shares, consistent with applicable provisions of the Code,
for tax withholding obligations due in connection with a broker-assisted
cashless Option or Stock Appreciation Right exercise involving the sale of
Shares to pay the Option or Stock Appreciation Right exercise price or any tax
withholding obligation.

 

11.3         Transferability of Awards.

 

(a)           Except as otherwise provided in Section 11.3(b):

 

(i)            No Award under the Plan may be sold, pledged, assigned or
transferred in any manner other than by will or the laws of descent and
distribution or, subject to the consent of the Administrator, pursuant to a DRO,
unless and until such Award has been exercised, or the Shares underlying such
Award have been issued, and all restrictions applicable to such Shares have
lapsed;

 

(ii)           No Award or interest or right therein shall be liable for the
debts, contracts or engagements of the Holder or his successors in interest or
shall be subject to disposition by transfer, alienation, anticipation, pledge,
hypothecation, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect, except to the extent that such disposition is permitted
by the preceding sentence; and

 

(iii)          During the lifetime of the Holder, only the Holder may exercise
an Award (or any portion thereof) granted to such Holder under the Plan, unless
it has been disposed of pursuant to a DRO; after the death of the Holder, any
exercisable portion of an Award may, prior to the time when such portion becomes
unexercisable under the Plan or the applicable Program or Award Agreement, be
exercised by the Holder’s personal representative or by any person empowered to
do so under the deceased Holder’s will or under the then applicable laws of
descent and distribution.

 

(b)           Notwithstanding Section 11.3(a), the Administrator, in its sole
discretion, may determine to permit a Holder to transfer an Award other than an
Incentive Stock Option to any one or more Permitted Transferees, subject to the
following terms and conditions:  (i) an Award transferred to a Permitted
Transferee shall not be assignable or transferable by the Permitted Transferee
other than by will or the laws of descent and distribution or pursuant to a DRO;
(ii) an Award transferred to a Permitted Transferee shall continue to be subject
to all the terms and conditions of the Award as applicable to the original
Holder (other than the ability to further transfer the Award); (iii) any
transfer of an Award to a Permitted Transferee shall be without consideration;
and (iv) the Holder and the Permitted Transferee shall execute any and all

 

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documents requested by the Administrator, including, without limitation
documents to (A) confirm the status of the transferee as a Permitted Transferee,
(B) satisfy any requirements for an exemption for the transfer under Applicable
Law and (C) evidence the transfer.

 

(c)           Notwithstanding Section 11.3(a), a Holder may, in the manner
determined by the Administrator, designate a beneficiary to exercise the rights
of the Holder and to receive any distribution with respect to any Award upon the
Holder’s death.  A beneficiary, legal guardian, legal representative, or other
person claiming any rights pursuant to the Plan is subject to all terms and
conditions of the Plan and any Program or Award Agreement applicable to the
Holder, except to the extent the Plan, the Program and the Award Agreement
otherwise provide, and to any additional restrictions deemed necessary or
appropriate by the Administrator.  If the Holder is married or a domestic
partner in a domestic partnership qualified under Applicable Law and resides in
a community property state, a designation of a person other than the Holder’s
spouse or domestic partner, as applicable, as his or her beneficiary with
respect to more than 50% of the Holder’s interest in the Award shall not be
effective without the prior written or electronic consent of the Holder’s spouse
or domestic partner.  If no beneficiary has been designated or survives the
Holder, payment shall be made to the person entitled thereto pursuant to the
Holder’s will or the laws of descent and distribution.  Subject to the
foregoing, a beneficiary designation may be changed or revoked by a Holder at
any time; provided that the change or revocation is filed with the Administrator
prior to the Holder’s death.

 

11.4         Conditions to Issuance of Shares.

 

(a)           Notwithstanding anything herein to the contrary, the Company shall
not be required to issue or deliver any certificates or make any book entries
evidencing Shares pursuant to the exercise of any Award, unless and until the
Board or the Committee has determined, with advice of counsel, that the issuance
of such Shares is in compliance with Applicable Law and the Shares are covered
by an effective registration statement or applicable exemption from
registration.  In addition to the terms and conditions provided herein, the
Board or the Committee may require that a Holder make such reasonable covenants,
agreements, and representations as the Board or the Committee, in its
discretion, deems advisable in order to comply with Applicable Law.

 

(b)           All Share certificates delivered pursuant to the Plan and all
Shares issued pursuant to book entry procedures are subject to any stop-transfer
orders and other restrictions as the Administrator deems necessary or advisable
to comply with Applicable Law.  The Administrator may place legends on any Share
certificate or book entry to reference restrictions applicable to the Shares.

 

(c)           The Administrator shall have the right to require any Holder to
comply with any timing or other restrictions with respect to the settlement,
distribution or exercise of any Award, including a window-period limitation, as
may be imposed in the sole discretion of the Administrator.

 

(d)           No fractional Shares shall be issued and the Administrator shall
determine, in its sole discretion, whether cash shall be given in lieu of
fractional Shares or whether such fractional Shares shall be eliminated by
rounding down.

 

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(e)           Notwithstanding any other provision of the Plan, unless otherwise
determined by the Administrator or required by Applicable Law, the Company shall
not deliver to any Holder certificates evidencing Shares issued in connection
with any Award and instead such Shares shall be recorded in the books of the
Company (or, as applicable, its transfer agent or stock plan administrator).

 

11.5         Forfeiture and Claw-Back Provisions.  Pursuant to its general
authority to determine the terms and conditions applicable to Awards under the
Plan, the Administrator shall have the right to provide, in an Award Agreement
or otherwise, or to require a Holder to agree by separate written or electronic
instrument, that all Awards (including any proceeds, gains or other economic
benefit actually or constructively received by the Holder upon any receipt or
exercise of any Award or upon the receipt or resale of any Shares underlying the
Award) shall be subject to the provisions of any claw-back policy implemented by
the Company, including, without limitation, any claw-back policy adopted to
comply with the requirements of Applicable Law or the Dodd-Frank Wall Street
Reform and Consumer Protection Act and any rules or regulations promulgated
thereunder, to the extent set forth in such claw-back policy and/or in the
applicable Award Agreement.

 

11.6         Prohibition on Repricing.  Subject to Section 13.2, the
Administrator shall not, without the approval of the stockholders of the
Company, (i) authorize the amendment of any outstanding Option or Stock
Appreciation Right to reduce its price per share, or (ii) cancel any Option or
Stock Appreciation Right in exchange for cash or another Award when the Option
or Stock Appreciation Right price per share exceeds the Fair Market Value of the
underlying Shares.  Subject to Section 13.2, the Administrator shall have the
authority, without the approval of the stockholders of the Company, to amend any
outstanding Award to increase the price per share or to cancel and replace an
Award with the grant of an Award having a price per share that is greater than
or equal to the price per share of the original Award.  Furthermore, for
purposes of this Section 11.6, except in connection with a corporate transaction
involving the Company (including, without limitation, any stock dividend, stock
split, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, or exchange of shares), the
terms of outstanding Awards may not be amended to reduce the exercise price per
share of outstanding Options or Stock Appreciation Rights or cancel outstanding
Options or Stock Appreciation Rights in exchange for cash, other Awards or
Options or Stock Appreciation Rights with an exercise price per share that is
less than the exercise price per share of the original Options or Stock
Appreciation Rights without the approval of the stockholders of the Company.

 

ARTICLE 12.

 

ADMINISTRATION

 

12.1         Administrator.  The Committee (or another committee or a
subcommittee of the Board assuming the functions of the Committee under the
Plan) shall administer the Plan (except as otherwise permitted herein) and,
unless otherwise determined by the Board, shall consist solely of two or more
Non-Employee Directors appointed by and holding office at the pleasure of the
Board, each of whom is intended to qualify as both a “non-employee director” as
defined by Rule 16b-3 of the Exchange Act or any successor rule, an “outside
director” for purposes of

 

24

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Section 162(m) of the Code and an “independent director” under the rules of any
securities exchange or automated quotation system on which the Shares are
listed, quoted or traded; provided that any action taken by the Committee shall
be valid and effective, whether or not members of the Committee at the time of
such action are later determined not to have satisfied the requirements for
membership set forth in this Section 12.l or otherwise provided in any charter
of the Committee.  Except as may otherwise be provided in any charter of the
Committee, appointment of Committee members shall be effective upon acceptance
of appointment.  Committee members may resign at any time by delivering written
or electronic notice to the Board.  Vacancies in the Committee may only be
filled by the Board.  Notwithstanding the foregoing, (a) the full Board, acting
by a majority of its members in office, shall conduct the general administration
of the Plan with respect to Awards granted to Non-Employee Directors and, with
respect to such Awards, the terms “Administrator” and “Committee” as used in the
Plan shall be deemed to refer to the Board and (b) the Board or Committee may
delegate its authority hereunder to the extent permitted by Section 12.6.

 

12.2         Duties and Powers of Committee.  It shall be the duty of the
Committee to conduct the general administration of the Plan in accordance with
its provisions.  The Committee shall have the power to interpret the Plan, the
Program  and the Award Agreement, and to adopt such rules for the
administration, interpretation and application of the Plan as are not
inconsistent therewith, to interpret, amend or revoke any such rules and to
amend any Program or Award Agreement; provided that the rights or obligations of
the Holder of the Award that is the subject of any such Program or Award
Agreement are not affected adversely by such amendment, unless the consent of
the Holder is obtained or such amendment is otherwise permitted under
Section 13.10.  Any such grant or award under the Plan need not be the same with
respect to each Holder.  Any such interpretations and rules with respect to
Incentive Stock Options shall be consistent with the provisions of Section 422
of the Code.  In its sole discretion, the Board may at any time and from time to
time exercise any and all rights and duties of the Committee under the Plan
except with respect to matters which under Rule 16b-3 under the Exchange Act or
any successor rule, or Section 162(m) of the Code, or any regulations or
rules issued thereunder, or the rules of any securities exchange or automated
quotation system on which the Shares are listed, quoted or traded are required
to be determined in the sole discretion of the Committee.

 

12.3         Action by the Committee.  Unless otherwise established by the Board
or in any charter of the Committee, a majority of the Committee shall constitute
a quorum and the acts of a majority of the members present at any meeting at
which a quorum is present, and acts approved in writing by all members of the
Committee in lieu of a meeting, shall be deemed the acts of the Committee.  Each
member of the Committee is entitled to, in good faith, rely or act upon any
report or other information furnished to that member by any officer or other
employee of the Company or any Affiliate, the Company’s independent certified
public accountants, or any executive compensation consultant or other
professional retained by the Company to assist in the administration of the
Plan.

 

12.4         Authority of Administrator.  Subject to the Company’s Bylaws, the
Committee’s Charter and any specific designation in the Plan, the Administrator
has the exclusive power, authority and sole discretion to:

 

(a)           Designate Eligible Individuals to receive Awards;

 

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(b)           Determine the type or types of Awards to be granted to Eligible
Individuals;

 

(c)           Determine the number of Awards to be granted and the number of
Shares to which an Award will relate;

 

(d)           Determine the terms and conditions of any Award granted pursuant
to the Plan, including, but not limited to, the exercise price, grant price, or
purchase price, any performance criteria, any restrictions or limitations on the
Award, any schedule for vesting, lapse of forfeiture restrictions or
restrictions on the exercisability of an Award, and accelerations or waivers
thereof, and any provisions related to non-competition and recapture of gain on
an Award, based in each case on such considerations as the Administrator in its
sole discretion determines;

 

(e)           Determine whether, to what extent, and pursuant to what
circumstances an Award may be settled in, or the exercise price of an Award may
be paid in cash, Shares, other Awards, or other property, or an Award may be
canceled, forfeited, or surrendered;

 

(f)            Prescribe the form of each Award Agreement, which need not be
identical for each Holder;

 

(g)           Decide all other matters that must be determined in connection
with an Award;

 

(h)           Establish, adopt, or revise any rules and regulations as it may
deem necessary or advisable to administer the Plan;

 

(i)            Interpret the terms of, and any matter arising pursuant to, the
Plan, any Program or any Award Agreement;

 

(j)            Make all other decisions and determinations that may be required
pursuant to the Plan or as the Administrator deems necessary or advisable to
administer the Plan; and

 

(k)           Accelerate wholly or partially the vesting or lapse of
restrictions of any Award or portion thereof at any time after the grant of an
Award, subject to whatever terms and conditions it selects and Sections 3.4 and
13.2(d).

 

12.5         Decisions Binding.  The Administrator’s interpretation of the Plan,
any Awards granted pursuant to the Plan, any Program, any Award Agreement and
all decisions and determinations by the Administrator with respect to the Plan
are final, binding, and conclusive on all parties.

 

12.6         Delegation of Authority.  To the extent permitted by Applicable
Law, the Board or Committee may from time to time delegate to a committee of one
or more members of the Board or one or more officers of the Company the
authority to grant or amend Awards or to take other administrative actions
pursuant to this Article 12; provided, however, that in no event shall an
officer of the Company be delegated the authority to grant awards to, or amend
awards held

 

26

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by, the following individuals: (a) individuals who are subject to Section 16 of
the Exchange Act, (b) Covered Employees, or (c) officers of the Company (or
Directors) to whom authority to grant or amend Awards has been delegated
hereunder; provided, further, that any delegation of administrative authority
shall only be permitted to the extent it is permissible under Section 162(m) of
the Code and other Applicable Law.  Any delegation hereunder shall be subject to
the restrictions and limits that the Board or Committee specifies at the time of
such delegation, and the Board may at any time rescind the authority so
delegated or appoint a new delegatee.  At all times, the delegatee appointed
under this Section 12.6 shall serve in such capacity at the pleasure of the
Board and the Committee.

 

ARTICLE 13.

 

MISCELLANEOUS PROVISIONS

 

13.1         Amendment, Suspension or Termination of the Plan.  Except as
otherwise provided in this Section 13.1, the Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Board or the Committee.  However, without approval of the
Company’s stockholders given within twelve (12) months before or after the
action by the Administrator, no action of the Administrator may, except as
provided in Section 13.2, (a) increase the limits imposed in Section 3.1 on the
maximum number of Shares which may be issued under the Plan, or (b) reduce the
price per share of any outstanding Option or Stock Appreciation Right granted
under the Plan or take any action prohibited under Section 11.6, or (c) cancel
any Option or Stock Appreciation Right in exchange for cash or another Award
when the Option or Stock Appreciation Right price per share exceeds the Fair
Market Value of the underlying Shares.  Except as provided in Section 13.10, no
amendment, suspension or termination of the Plan shall, without the consent of
the Holder, impair any rights or obligations under any Award theretofore granted
or awarded, unless the Award itself otherwise expressly so provides.  No Awards
may be granted or awarded during any period of suspension or after termination
of the Plan, and in no event may any Award be granted under the Plan after the
tenth (10th) anniversary of the Effective Date (the “Expiration Date”).  Any
Awards that are outstanding on the Expiration Date shall remain in force
according to the terms of the Plan and the applicable Award Agreement.

 

13.2         Changes in Common Stock or Assets of the Company, Acquisition or
Liquidation of the Company and Other Corporate Events.

 

(a)           In the event of any stock dividend, stock split, combination or
exchange of shares, merger, consolidation or other distribution (other than
normal cash dividends) of Company assets to stockholders, or any other change
affecting the Shares of the Company’s stock or the share price of the Company’s
stock other than an Equity Restructuring, the Administrator may make equitable
adjustments, if any, to reflect such change with respect to (i) the aggregate
number and kind of Shares that may be issued under the Plan (including, but not
limited to, adjustments of the limitations in Section 3.1 on the maximum number
and kind of Shares which may be issued under the Plan and adjustments of the
Award Limit; (ii) the number and kind of Shares (or other securities or
property) subject to outstanding Awards; (iii) the terms and conditions of any
outstanding Awards (including, without limitation, any applicable performance
targets or criteria with respect thereto); and (iv) the grant or exercise price
per share

 

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for any outstanding Awards under the Plan.  Any adjustment affecting an Award
intended as Performance-Based Compensation shall be made consistent with the
requirements of Section 162(m) of the Code.

 

(b)           In the event of any transaction or event described in
Section 13.2(a) or any unusual or nonrecurring transactions or events affecting
the Company, any Affiliate of the Company, or the financial statements of the
Company or any Affiliate, or of changes in Applicable Law or accounting
principles, the Administrator, in its sole discretion, and on such terms and
conditions as it deems appropriate, either by the terms of the Award or by
action taken prior to the occurrence of such transaction or event and either
automatically or upon the Holder’s request, is hereby authorized to take any one
or more of the following actions whenever the Administrator determines that such
action is appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan or
with respect to any Award under the Plan, to facilitate such transactions or
events or to give effect to such changes in laws, regulations or principles:

 

(i)            To provide for either (A) termination of any such Award in
exchange for an amount of cash, if any, equal to the amount that would have been
attained upon the exercise of such Award or realization of the Holder’s rights
(and, for the avoidance of doubt, if as of the date of the occurrence of the
transaction or event described in this Section 13.2 the Administrator determines
in good faith that no amount would have been attained upon the exercise of such
Award or realization of the Holder’s rights, then such Award may be terminated
by the Company without payment) or (B) the replacement of such Award with other
rights or property selected by the Administrator in its sole discretion having
an aggregate value not exceeding the amount that could have been attained upon
the exercise of such Award or realization of the Holder’s rights had such Award
been currently exercisable or payable or fully vested;

 

(ii)           To provide that such Award be assumed by the successor or
survivor corporation, or a parent or subsidiary thereof, or shall be substituted
for by similar options, rights or awards covering the stock of the successor or
survivor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices;

 

(iii)          To make adjustments in the number and type of Shares of the
Company’s stock (or other securities or property) subject to outstanding Awards,
and in the number and kind of outstanding Restricted Stock and/or in the terms
and conditions of (including the grant or exercise price), and the criteria
included in, outstanding Awards and Awards which may be granted in the future;

 

(iv)          To provide that such Award shall be exercisable or payable or
fully vested with respect to all shares covered thereby, notwithstanding
anything to the contrary in the Plan or the applicable Program or Award
Agreement; and

 

(v)           To provide that the Award cannot vest, be exercised or become
payable after such event.

 

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(c)           In connection with the occurrence of any Equity Restructuring, and
notwithstanding anything to the contrary in Sections 13.2(a) and 13.2(b):

 

(i)            The number and type of securities subject to each outstanding
Award and the exercise price or grant price thereof, if applicable, shall be
equitably adjusted; and/or

 

(ii)           The Administrator shall make such equitable adjustments, if any,
as the Administrator in its discretion may deem appropriate to reflect such
Equity Restructuring with respect to the aggregate number and kind of Shares
that may be issued under the Plan (including, but not limited to, adjustments of
the limitations in Section 3.1 on the maximum number and kind of Shares which
may be issued under the Plan and adjustments of the Award Limit).  The
adjustments provided under this Section 13.2(c) shall be nondiscretionary and
shall be final and binding on the affected Holder and the Company.

 

(d)           Notwithstanding any other provision of the Plan, in the event of a
Change in Control, each outstanding Award shall continue in effect or be assumed
or an equivalent Award substituted by the successor corporation or a parent or
subsidiary of the successor corporation.

 

(e)           In the event that the successor corporation in a Change in Control
refuses to assume or substitute for an Award upon the Change of Control, each
Award which is at the time outstanding under the Plan shall (i) except as
provided otherwise in an individual Award or Award Agreement, automatically
become, subject to all other terms of the Award or Award Agreement, fully vested
and exercisable or payable, as appropriate, and be released from any repurchase
or forfeiture provisions, immediately prior to the specified effective date of
such Change in Control, for all of the shares of Common Stock at the time
represented by such Award, (ii) the forfeiture or repurchase restrictions
applicable to all outstanding Awards shall lapse and shares of Common Stock
subject to such Awards shall be released from escrow (or transferred from book
entry with the Company’s transfer agent, if applicable), and delivered to the
Holders of the Awards free of any such restrictions, (iii) all other Awards
shall become fully vested and payment thereof shall be accelerated using, if
applicable, the then-current Fair Market Value to measure any payment that is
based on the value of the Common Stock or using such higher amount as the
Administrator may determine to be more reflective of the actual value of such
stock.

 

(f)            For the purposes of this Section 13.2, an Award shall be
considered assumed if, following the Change in Control, the Award confers the
right to purchase or receive, for each Share subject to the Award immediately
prior to the Change in Control, the consideration (whether stock, cash, or other
securities or property) received in the Change in Control by holders of Common
Stock for each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding shares); provided, however, that
if such consideration received in the Change in Control was not solely common
stock of the successor corporation or its parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Award, for each Share subject to an Award,

 

29

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to be solely common stock of the successor corporation or its Parent equal in
fair market value to the per share consideration received by holders of Common
Stock in the Change in Control.

 

(g)           The Administrator may, in its sole discretion, include such
further provisions and limitations in any Award, agreement or certificate, as it
may deem equitable and in the best interests of the Company that are not
inconsistent with the provisions of the Plan.

 

(h)           With respect to Awards which are granted to Covered Employees and
are intended to qualify as Performance-Based Compensation, no adjustment or
action described in this Section 13.2 or in any other provision of the Plan
shall be authorized to the extent that such adjustment or action would cause
such Award to fail to so qualify as Performance-Based Compensation, unless the
Administrator determines that the Award should not so qualify.  No adjustment or
action described in this Section 13.2 or in any other provision of the Plan
shall be authorized to the extent that such adjustment or action would cause the
Plan to violate Section 422(b)(1) of the Code.  Furthermore, no such adjustment
or action shall be authorized to the extent such adjustment or action would
result in short-swing profits liability under Section 16 or violate the
exemptive conditions of Rule 16b-3 unless the Administrator determines that the
Award is not to comply with such exemptive conditions.

 

(i)            The existence of the Plan, the Program, any Award Agreement and
the Awards granted hereunder shall not affect or restrict in any way the right
or power of the Company or the stockholders of the Company to make or authorize
any adjustment, recapitalization, reorganization or other change in the
Company’s capital structure or its business, any merger or consolidation of the
Company, any issue of stock or of options, warrants or rights to purchase stock
or of bonds, debentures, preferred or prior preference stocks whose rights are
superior to or affect the Common Stock or the rights thereof or which are
convertible into or exchangeable for Common Stock, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

 

(j)            No action shall be taken under this Section 13.2 which shall
cause an Award to fail to comply with Section 409A of the Code or the Treasury
Regulations thereunder, to the extent applicable to such Award.

 

(k)           In the event of any pending stock dividend, stock split,
combination or exchange of shares, merger, consolidation or other distribution
(other than normal cash dividends) of Company assets to stockholders, or any
other change affecting the shares of Common Stock or the share price of the
Common Stock including any Equity Restructuring, for reasons of administrative
convenience, the Company in its sole discretion may refuse to permit the
exercise of any Award during a period of 30 days prior to the consummation of
any such transaction.

 

13.3         Approval of Plan by Stockholders.  The Plan will be submitted for
the approval of the Company’s stockholders within 12 months after the date of
the Board’s initial adoption of the Plan.

 

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13.4         No Stockholders Rights.  Except as otherwise provided herein, a
Holder shall have none of the rights of a stockholder with respect to Shares
covered by any Award until the Holder becomes the record owner of such Shares.

 

13.5         Paperless Administration.  In the event that the Company
establishes, for itself or using the services of a third party, an automated
system for the documentation, granting or exercise of Awards, such as a system
using an online website or interactive voice response, then the paperless
documentation, granting or exercise of Awards by a Holder may be permitted
through the use of such an automated system.

 

13.6         Effect of Plan upon Other Compensation Plans.  The adoption of the
Plan shall not affect any other compensation or incentive plans in effect for
the Company or any Affiliate.  Nothing in the Plan shall be construed to limit
the right of the Company or any Affiliate:  (a) to establish any other forms of
incentives or compensation for Employees, Directors or Consultants of the
Company or any Affiliate, or (b) except as otherwise provided herein, to grant
or assume options or other rights or awards otherwise than under the Plan in
connection with any proper corporate purpose including without limitation, the
grant or assumption of options in connection with the acquisition by purchase,
lease, merger, consolidation or otherwise, of the business, stock or assets of
any corporation, partnership, limited liability company, firm or association.

 

13.7         Compliance with Laws.  The Plan, the granting and vesting of Awards
under the Plan and the issuance and delivery of Shares and the payment of money
under the Plan or under Awards granted or awarded hereunder are subject to
compliance with all Applicable Laws (including but not limited to margin
requirements), and to such approvals by any listing, regulatory or governmental
authority as may, in the opinion of counsel for the Company, be necessary or
advisable in connection therewith.  Any securities delivered under the Plan
shall be subject to such restrictions, and the person acquiring such securities
shall, if requested by the Company, provide such assurances and representations
to the Company as the Company may deem necessary or desirable to assure
compliance with all Applicable Laws.  To the extent permitted by Applicable
Laws, the Plan and Awards granted or awarded hereunder shall be deemed amended
to the extent necessary to conform to such Applicable Laws.

 

13.8         Titles and Headings, References to Sections of the Code or Exchange
Act.  The titles and headings of the Sections in the Plan are for convenience of
reference only and, in the event of any conflict, the text of the Plan, rather
than such titles or headings, shall control. References to sections of the Code
or the Exchange Act shall include any amendment or successor thereto.

 

13.9         Governing Law.  The Plan and any agreements hereunder shall be
administered, interpreted and enforced under the internal laws of the State of
Texas without regard to conflicts of laws thereof or of any other jurisdiction.

 

13.10       Section 409A.  To the extent that the Administrator determines that
any Award granted under the Plan is subject to Section 409A of the Code, the
Program pursuant to which such Award is granted and the Award Agreement
evidencing such Award shall incorporate the terms and conditions required by
Section 409A of the Code.  To the extent applicable, the Plan, the Program and
any Award Agreements shall be interpreted in accordance with Section 409A of

 

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the Code and Department of Treasury regulations and other interpretive guidance
issued thereunder, including without limitation any such regulations or other
guidance that may be issued after the Effective Date.  Notwithstanding any
provision of the Plan to the contrary, in the event that following the Effective
Date the Administrator determines that any Award may be subject to Section 409A
of the Code and related Department of Treasury guidance (including such
Department of Treasury guidance as may be issued after the Effective Date), the
Administrator may adopt such amendments to the Plan and the applicable Program
and Award Agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other
actions, that the Administrator determines are necessary or appropriate to
(a) exempt the Award from Section 409A of the Code and/or preserve the intended
tax treatment of the benefits provided with respect to the Award, or (b) comply
with the requirements of Section 409A of the Code and related Department of
Treasury guidance and thereby avoid the application of any penalty taxes under
such Section.

 

13.11       No Rights to Awards.  No Eligible Individual or other person shall
have any claim to be granted any Award pursuant to the Plan, and neither the
Company nor the Administrator is obligated to treat Eligible Individuals,
Holders or any other persons uniformly.

 

13.12       Unfunded Status of Awards.  The Plan is intended to be an “unfunded”
plan for incentive compensation.  With respect to any payments not yet made to a
Holder pursuant to an Award, nothing contained in the Plan or any Program or
Award Agreement shall give the Holder any rights that are greater than those of
a general creditor of the Company or any Affiliate.

 

13.13       Indemnification.  To the extent allowable pursuant to Applicable
Law, each member of the Committee or of the Board shall be indemnified and held
harmless by the Company from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by such member in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action or failure
to act pursuant to the Plan and against and from any and all amounts paid by him
or her in satisfaction of judgment in such action, suit, or proceeding against
him or her; provided he or she gives the Company an opportunity, at its own
expense, to handle and defend the same before he or she undertakes to handle and
defend it on his or her own behalf.  The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such
persons may be entitled pursuant to the Company’s Articles of Incorporation or
Bylaws, as a matter of law, or otherwise, or any power that the Company may have
to indemnify them or hold them harmless.

 

13.14       Relationship to other Benefits.  No payment pursuant to the Plan
shall be taken into account in determining any benefits under any pension,
retirement, savings, profit sharing, group insurance, welfare or other benefit
plan of the Company or any Affiliate except to the extent otherwise expressly
provided in writing in such other plan or an agreement thereunder.

 

13.15       Expenses.  The expenses of administering the Plan shall be borne by
the Company and its Affiliates.

 

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DIGITAL GENERATION, INC.

2011 INCENTIVE AWARD PLAN

 

SUB-PLAN FOR ISRAELI HOLDERS

 

ARTICLE 1.

 

GENERAL

 

1.1           This sub-plan (the “Sub-Plan”) shall apply only to Holders who are
residents of the state of Israel upon the date of grant of the Award, as defined
below in Article 2, or who are deemed Israeli tax residents (collectively,
“Israeli Holders”). The provisions specified hereunder shall form an integral
part of the Digital Generation, Inc. 2011 Incentive Award Plan (hereinafter the
“Plan”).

 

1.2           This Sub-Plan is to be read as a continuation of the Plan and
modifies Awards granted to Israeli Holders only to the extent necessary to
comply with the requirements set by the Israeli law in general, and in
particular, with the provisions of the Israeli Income Tax Ordinance [New
Version] 1961, as may be amended or replaced from time to time. This Sub-Plan
does not add to or modify the Plan in respect of any other category of Holders.

 

1.3           The Plan and this Sub-Plan are complimentary to each other and
shall be deemed as one. In the event of any conflict, whether explicit or
implied, between the provisions of this Sub-Plan and the Plan, the provisions
set out in the Sub-Plan shall prevail.

 

1.4           Any capitalized term not specifically defined in this Sub-Plan
shall be construed according to the interpretation given to it in the Plan.

 

ARTICLE 2.

 

DEFINITIONS

 

2.1           “102 Award” means any Award granted to an Approved Israeli Holder
pursuant to Section 102 of the Ordinance.

 

2.2           “Approved Israeli Holder” means an Israeli Holder who is an
employee, director or an officer of the Israel resident Affiliate of the
Company, excluding any Controlling Share Holder of the Company, provided that
the Affiliate is an Israeli resident company or otherwise meets the definition
of an Employing Company under Section 102.

 

2.3           “Award” solely for the purpose of this Sub-Plan means any Award of
Options, Restricted Stock, Restricted Stock Units, Dividend Equivalents, Stock
Payments or Stock Appreciation Rights granted by the Company to an Israeli
Holder, in accordance with the provisions of the Plan, provided that they are
payable only or settled only using Shares.

 

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2.4           “Capital Gain Award” or “CGA” means a Trustee 102 Award elected
and designated by the Company to qualify under the capital gain tax treatment in
accordance with the provisions of Section 102(b)(2) of the Ordinance.

 

2.5           “Controlling Share Holder” shall have the meaning ascribed to it
in Section 32(9) of the Ordinance.

 

2.6           “ITA” means the Israeli Tax Authority.

 

2.7           “Israeli Award Agreement” means the Agreement between the Company
and an Israeli Holder that sets out the terms and conditions of an Award.

 

2.8           “Non-Trustee 102 Award” means a 102 Award granted pursuant to
Section 102(c) of the Ordinance and not held in trust by a Trustee.

 

2.9           “Ordinary Income Award” or “OIA” means a Trustee 102 Award elected
and designated by the Company to qualify under the ordinary income tax treatment
in accordance with the provisions of Section 102(b)(1) of the Ordinance.

 

2.10         “Ordinance” means the Israeli Income Tax Ordinance [New Version]
1961 as now in effect or as hereafter amended.

 

2.11         “Section 102” means Section 102 of the Ordinance and any
regulations, rules, orders or procedures promulgated thereunder as now in effect
or as hereafter amended.

 

2.12         “Tax” means any applicable tax and other compulsory payments such
as social security and health tax contributions under any applicable law.

 

2.13        “Trustee” means any person or entity appointed by the Company to
serve as a trustee and approved by the ITA, all in accordance with the
provisions of Section 102(a) of the Ordinance, as may be replaced from time to
time.

 

2.14         “Trustee 102 Award” means a 102 Award granted to an Approved
Israeli Holder pursuant to Section 102(b) of the Ordinance and held in trust by
a Trustee for the benefit of an Approved Israeli Holder.

 

2.15         “Unapproved Israeli Holder” means an Israeli Holder who is not an
Approved Israeli Holder, including a consultant or a Controlling Share Holder of
the Company.

 

ARTICLE 3.

 

ISSUANCE OF AWARDS

 

3.1           The persons eligible for participation in the Plan as Israeli
Holders shall include Approved Israeli Holder s and Unapproved Israeli Holder s,
provided, however, that only Approved Israeli Holder s may be granted 102
Awards.

 

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3.2           The Company may designate Awards granted to Approved Israeli
Holders pursuant to Section 102 as Trustee 102 Awards or Non-Trustee 102 Awards.

 

3.3           The grant of Trustee 102 Awards shall be made under this Sub-Plan
shall not be made until thirty days from the date the Plan has been submitted
for approval by the ITA and shall be conditioned upon the approval of the Plan
and this Sub-Plan by the ITA.

 

3.4           Trustee 102 Awards may either be classified as Capital Gain Awards
(CGAs) or Ordinary Income Awards (OIAs).

 

3.5           No Trustee 102 Award may be granted under this Sub-Plan to any
Approved Israeli Holder, unless and until the Company has filed with the ITA its
election regarding the type of Trustee 102 Awards, whether CGAs or OIAs, that
will be granted under the Plan and this Sub-Plan (the “Election”).  Such
Election shall become effective beginning the first date of grant of a Trustee
102 Award under this Sub-Plan and shall remain in effect at least until the end
of the year following the year during which the Company first granted Trustee
102 Awards. The Election shall obligate the Company to grant only the type of
Trustee 102 Award it has elected, and shall apply to all Israeli Holders who are
granted Trustee 102 Awards during the period indicated herein, all in accordance
with the provisions of Section 102(g) of the Ordinance. The Election shall not
prevent the Company from granting Non-Trustee 102 Awards simultaneously.

 

3.6           All Trustee 102 Awards must be held in trust by, or subject to the
approval of the ITA, under the control or supervision of a Trustee, as described
in Article 4 below.

 

3.7           The designation of Non-Trustee 102 Awards and Trustee 102 Awards
shall be subject to the terms and conditions set forth in Section 102.

 

3.8           Awards granted to Unapproved Israeli Holders shall be subject to
tax according to the provisions of the Ordinance and shall not be subject to the
Trustee arrangement detailed herein.

 

ARTICLE 4.

 

TRUSTEE

 

4.1           Trustee 102 Awards which shall be granted under this Sub-Plan
and/or any Share allocated or issued upon exercise or vesting of a Trustee 102
Award and/or other Shares received following any realization of rights under the
Plan, including Dividend Equivalents, shall be allocated or issued to the
Trustee or controlled by the Trustee, for the benefit of the Approved Israeli
Holders, in accordance with the provisions of Section 102. In the event that the
requirements for Trustee 102 Awards are not met, the Trustee 102 Awards may be
regarded as Non-Trustee 102 Awards or as Awards which are not subject to
Section 102, all in accordance with the provisions of Section 102.

 

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4.2           With respect to any Trustee 102 Award, subject to the provisions
of Section 102, an Approved Israeli Holder shall not sell or release from trust
any Share received upon the exercise or vesting of a Trustee 102 Award and/or
any Share received following any realization of rights, including, without
limitation, stock dividends, under the Plan at least until the lapse of the
period of time required under Section 102 or any shorter period of time
determined by the ITA (the “Holding Period”). Notwithstanding the above, if any
such sale or release occurs during the Holding Period, the sanctions under
Section 102 shall apply to and shall be borne by such Approved Israeli Holder.

 

4.3           Notwithstanding anything to the contrary, the Trustee shall not
release or sell any Shares allocated or issued upon exercise or vesting of a
Trustee 102 Award unless the Company, its Israeli Affiliate and the Trustee are
satisfied that the full amounts of Tax due have been paid or will be paid.

 

4.4           Upon receipt of any Trustee 102 Award, the Approved Israeli Holder
will consent to the grant of the Award under Section 102 and undertake to comply
with the terms of Section 102 and the trust arrangement between the Company and
the Trustee.

 

ARTICLE 5.

 

THE AWARDS

 

The terms and conditions upon which the Awards shall be issued and exercised or
vest, as applicable, shall be specified in the Israeli Award Agreement to be
executed pursuant to the Plan and to this Sub-Plan.  Each Israeli Award
Agreement shall state, inter alia, the number of Shares to which the Award
relates, the type of Award granted thereunder (i.e., a CGA, OIA or Non-Trustee
102 Award), and any applicable vesting provisions and exercise price that may be
payable.

 

ARTICLE 6.

 

EXERCISE AND VESTING OF AWARDS

 

Vesting and exercise of Awards granted to Israeli Holders shall be subject to
the terms and conditions and, with respect to exercise, the method, as may be
determined by the Company (including the provisions of the Plan) and, when
applicable, by the Trustee, in accordance with the requirements of Section 102. 
Notwithstanding Section 3.2 of the Plan, Shares distributed pursuant to a 102
Award may consist only of, in whole or in part, authorized and unissued Common
Stock or treasury Common Stock.

 

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ARTICLE 7.

 

ASSIGNABILITY, DESIGNATION AND SALE OF AWARDS

 

7.1.          Notwithstanding any other provision of the Plan, no Award or any
right with respect thereto, or purchasable hereunder, whether fully paid or not,
shall be assignable, transferable or given as collateral, or any right with
respect to any Award given to any third party whatsoever, and during the
lifetime of the Israeli Holder, each and all of such Israeli Holder’s rights
with respect to an Award shall belong only to the Israeli Holder. Any such
action made directly or indirectly, for an immediate or future validation, shall
be void.

 

7.2           As long as Awards or Shares issued or purchased hereunder are held
by the Trustee on behalf of the Israeli Holder, all rights of the Israeli Holder
over the Shares cannot be transferred, assigned, pledged or mortgaged, other
than by will or laws of descent and distribution.

 

7.3           It is hereby clarified that any transfer executed in accordance
with Section 11.3 of the Plan shall constitute a taxable event.

 

ARTICLE 8.

 

INTEGRATION OF SECTION 102 AND TAX ASSESSING OFFICER’S APPROVAL

 

8.1.          With regard to Trustee 102 Awards, the provisions of the Plan
and/or the Sub-Plan and/or the Israeli Award Agreement shall be subject to the
provisions of Section 102 and any approval issued by the ITA and the said
provisions shall be deemed an integral part of the Plan, the Sub-Plan and the
Israeli Award Agreement.

 

8.2.          Any provision of Section 102 and/or said approval issued by the
ITA which must be complied with in order to receive and/or to maintain any tax
Award pursuant to Section 102, which is not expressly specified in the Plan, the
Sub-Plan or the Israeli Award Agreement, shall be considered binding upon the
Company, the Israeli Affiliate and the Israeli Holders.

 

ARTICLE 9.

 

DIVIDEND

 

Subject to the provisions of the Plan, with respect to all Shares allocated or
issued upon the exercise or vesting of Awards granted to the Israeli Holder and
held by the Israeli Holder or by the Trustee, as the case may be, the Israeli
Holder shall be entitled to receive dividends, if any, in accordance with the
quantity of such Shares, subject to the provisions of the Company’s Certificate
of Incorporation (and all amendments thereto) and subject to any applicable
taxation on distribution of dividends, and when applicable subject to the
provisions of Section 102 and the rules, regulations or orders promulgated
thereunder.

 

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ARTICLE 10.

 

TAX CONSEQUENCES

 

10.1         Any tax consequences arising from the grant, exercise, vesting or
sale of any Award, from the payment for Shares covered thereby or from any other
event or act (of the Company, and/or its Subsidiaries, and the Trustee or the
Israeli Holder), hereunder, shall be borne solely by the Israeli Holder. The
Company and/or its Affiliates, and/or the Trustee shall withhold Tax according
to the requirements under the applicable laws, rules, and regulations, including
withholding taxes at source. Furthermore, the Israeli Holder agrees to indemnify
the Company and/or its Affiliates and/or the Trustee and hold them harmless
against and from any and all liability for any such Tax or interest or penalty
thereon, including without limitation, liabilities relating to the necessity to
withhold, or to have withheld, any such Tax from any payment made to the Israeli
Holder.

 

10.2         The Company and/or, when applicable, the Trustee shall not be
required to release any Award or Share to an Israeli Holder until all required
Tax payments have been fully made.

 

10.3         With respect to Non-Trustee 102 Awards, if the Israeli Holder
ceases to be employed by the Company or any Affiliate, or otherwise if so
requested by the Company or the Affiliate, the Israeli Holder shall extend to
the Company and/or the Affiliate a security or guarantee for the payment of Tax
due at the time of sale of Shares, in accordance with the provisions of
Section 102.

 

ARTICLE 11.

 

TERM OF PLAN AND SUB-PLAN

 

Notwithstanding anything to the contrary in the Plan and in addition thereto,
the Company shall obtain all approvals for the adoption of this Sub-Plan or for
any amendment to this Sub-Plan as are necessary to comply with any Applicable
Law, applicable to Awards granted to Israeli Holders under this Sub-Plan or with
the Company’s incorporation documents.

 

ARTICLE 12.

 

ONE TIME AWARD

 

The Awards and underlying Shares are extraordinary, one-time Awards granted to
the Holders, and are not and shall not be deemed a salary component for any
purpose whatsoever, including in connection with calculating severance
compensation under Applicable Law.

 

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