Exhibit 10.12

ADVERUM BIOTECHNOLOGIES, INC.

2014 EQUITY INCENTIVE AWARD PLAN

AMENDED FEBRUARY 14, 2019

 

ARTICLE 1. PURPOSE

The purpose of the Adverum Biotechnologies, Inc. 2014 Equity Incentive Award
Plan (as

it may be amended from time to time, the “Plan”) is to promote the success and
enhance the value of Adverum Biotechnologies, Inc. (the “Company”) by linking
the individual interests of the members of the Board, Employees, and Consultants
to those of the Company’s stockholders and by providing such individuals with an
incentive for outstanding performance to generate superior returns to the
Company’s 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.

 

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 13 hereof. With reference to the duties of
the Administrator under the Plan which have been delegated to one or more
persons pursuant to Section 13.6 hereof, 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 any Parent or 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 any applicable law, including without limitation,

(i) provisions of the Code, the Securities Act, the Exchange Act and any rules
or regulations thereunder; (ii) corporate, securities, tax or other laws,
statutes, rules, requirements or regulations, whether federal, state, local or
foreign; and (iii) rules of any securities exchange or automated quotation
system on which the Shares are listed, quoted or traded.

 

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Exhibit 10.12

2.5

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

 

 

2.6

“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.

 

 

 

2.7

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

 

2.8

“Cause” shall mean, unless such term or an equivalent term is otherwise defined
by the applicable Award Agreement or other written agreement between a Holder
and the Company applicable to an Award, the occurrence of any of the following
events:  (i)  conviction of any felony or crime involving moral turpitude or
dishonesty; (ii) willful and material breach of the Holder’s duties that has not
been cured within 30 days after written notice from the Board of Directors;
(iii) intentional and material damage to the Company’s property; or (iv)
material breach of the Proprietary Information and Inventions Agreement executed
by the Holder.

 

 

2.9

“Change in Control” shall mean the occurrence, in a single transaction or in a
series of related transactions, of any one or more of the following events:

 

 

(a)A transaction or series of transactions (other than an offering of Common
Stock to the general public through a registration statement filed with the
Securities and Exchange Commission) whereby any “person” or related “group” of
“persons” (as such terms  are used in Sections 13(d) and 14(d)(2) of the
Exchange Act) (other than the Company, any of its subsidiaries, an employee
benefit plan maintained by the Company or any of its subsidiaries or a “person”
that, prior to such transaction, directly or indirectly controls, is controlled
by, or is under common control with, the Company) directly or indirectly
acquires beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of securities of the Company possessing more than 50% of the total
combined voting power of the Company’s securities outstanding immediately after
such acquisition; or

 

(b)During any period of two consecutive years, individuals who, at the beginning
of such period, constitute the Board together with any new Director(s) (other
than a Director designated by a person who shall have entered into an agreement
with the Company to effect a transaction described in Section 2.9(a) or 2.9(c))
whose election by the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least two- thirds of the Directors
then still in office who either were Directors at the beginning of the two- year
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof; or

 

(c)The consummation by the Company (whether directly involving the Company or
indirectly involving the Company through one or more intermediaries) of (x) a
merger, consolidation, reorganization, or business combination or (y) a sale or
other disposition

 

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Exhibit 10.12

of all or substantially all of the Company’s assets in any single transaction or
series of related transactions or (z) the acquisition of assets or stock of
another entity, in each case other than a transaction:

 

(i)which results in the Company’s voting securities outstanding immediately
before the transaction continuing to represent (either by remaining outstanding
or by being converted into voting securities of the Company or the person that,
as a result of the transaction, controls, directly or indirectly, the Company or
owns, directly or indirectly, all or substantially all of the Company’s assets
or otherwise succeeds to the business of the Company (the Company or such
person, the “Successor Entity”)) directly or indirectly, at least a majority of
the combined voting power of the Successor Entity’s outstanding voting
securities immediately after the transaction, and

 

(ii)after which no person or group beneficially owns voting securities
representing 50% or more of the combined voting power of the Successor Entity;
provided, however, that no person or group shall be treated for purposes of this
Section 2.9(c)(ii) as beneficially owning 50% or more of the combined voting
power of the Successor Entity solely as a result of the voting power held in the
Company prior to the consummation of the transaction;  or

 

 

(d)

The Company’s stockholders approve a liquidation or dissolution of the

Company.

 

Notwithstanding the foregoing, if a Change in Control constitutes a payment
event with respect to any portion of an Award that 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 Section 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; provided that any exercise of authority is in conjunction with a
determination of whether a Change in Control is a “change in control event” as
defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with
such regulation.

 

2.10

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, together with the regulations and official guidance promulgated
thereunder, whether issued prior or subsequent to the grant of any Award.

 

 

2.11

“Committee” shall mean the Compensation Committee of the Board, a subcommittee
of the Compensation Committee of the Board or another committee or subcommittee
of the Board, appointed as provided in Section 13.1 hereof.

 

 

 

2.12

“Common Stock” shall mean the common stock of the Company, par value

$0.0001 per share.

 

 

2.13

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

 

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Exhibit 10.12

2.14

“Consultant” shall mean any consultant or advisor engaged to provide services to
the Company or any Affiliate who qualifies as a consultant or advisor under the
applicable rules of the Securities and Exchange Commission for registration of
shares on a Form S-8 Registration Statement or any successor Form thereto or,
prior to the Public Trading Date, under Rule 701 of the Securities Act.

 

 

2.15

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

 

 

 

2.16

“Deferred Stock” shall mean a right to receive Shares awarded under Section

10.4 hereof.

 

2.17

“Deferred Stock Unit” shall mean a right to receive Shares awarded under Section
10.5 hereof.

 

 

2.18

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

 

2.19

“Dividend Equivalent” shall mean a right to receive the equivalent value (in
cash or Shares) of dividends paid on Shares, awarded under Section 10.2 hereof.

 

 

2.20

“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.

 

 

2.21

“Effective Date” shall mean immediately prior to the time at which the Company
registration statement relating to its initial public offering becomes
effective, provided that the Board has adopted the Plan prior to or on such
date, subject to approval of the Plan by the Company’s stockholders.

 

 

2.22

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

 

 

2.23

“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 any Affiliate.

 

 

2.24“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 (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 stock-based
Awards.

 

2.25

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

 

 

2.26

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

 

 

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Exhibit 10.12

(a)If the Common Stock is (i) listed on any established securities exchange
(such as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ
Global Select Market), (ii) listed on any national market system or (iii)
listed, quoted or traded on any automated quotation system, its Fair Market
Value shall be the closing sales price for a Share as quoted on such exchange or
system for such date or, if there is no closing sales price for a Share on the
date in question, the closing sales price for a Share 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 on such date, the high bid and low
asked prices for a Share 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.

 

Notwithstanding the foregoing, with respect to any Award granted after the
effectiveness of the Company’s registration statement relating to its initial
public offering and prior to the Public Trading Date, the Fair Market Value
shall mean the initial public offering price of a Share as set forth in the
Company’s final prospectus relating to its initial public offering filed with
the Securities and Exchange Commission.

 

2.27

“Good Reason” shall mean, unless such term or an equivalent term is otherwise
defined by the applicable Award Agreement or other written agreement between a
Holder and the Company applicable to an Award, with respect to any particular
Holder, the Holder’s resignation from all positions he or she then-holds with
the Company if (A) without Holder’s written consent (I) there is a material
reduction of the Holder’s base salary; provided, however, that a material
reduction in the Holder’s base salary pursuant to a salary reduction program
affecting all or substantially all of the employees of the Company and that does
not adversely affect Holder to a greater extent than other similarly situated
employees shall not constitute Good Reason; or (II) the Holder is required to
relocate his or her primary work location to a facility or location that would
increase the Holder’s one way commute distance by more than fifty (50) miles
from the Holder’s primary work location as of immediately prior to such change,
(B) the Holder provides written notice outlining such conditions, acts or
omissions to the Company’s General Counsel within thirty (30) days immediately
following such material change or reduction, (C) such material change or
reduction is not remedied by the Company within thirty (30) days following the
Company’s receipt of such written notice and (D) the Holder’s resignation is
effective not later than thirty (30) days after the expiration of such thirty

 

(30) day cure period.

 

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Exhibit 10.12

2.28

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

 

 

 

2.29

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

 

2.30

“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.

 

 

2.31

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

 

 

2.32

“Non-Employee Director Equity Compensation Policy” shall have the meaning set
forth in Section 4.6 hereof.

 

 

2.33

“Non-Qualified Stock Option” shall mean an Option that is not an Incentive Stock
Option or which is designated as an Incentive Stock Option but does not meet the
applicable requirements of Section 422 of the Code.

 

 

2.34

“Option” shall mean a right to purchase Shares at a specified exercise price,
granted under Article 6 hereof. An Option shall be either a Non-Qualified Stock
Option or an Incentive 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 6.4 hereof.

 

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 more than 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 10.1 hereof.

 

 

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, (D)
amortization and (E) non-cash equity-

 

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Exhibit 10.12

based compensation expense); (ii) gross or net sales or revenue; (iii) net
income (either before or after taxes); (iv) adjusted net income; (v) operating
income, earnings or profit (either before or after taxes); (vi) cash flow
(including, but not limited to, cash flow return on investments, operating cash
flow and free cash flow); (vii) return on assets; (viii) return on capital; (ix)
return on stockholders’ equity; (x) total stockholder return; (xi) return on
sales; (xii) gross or net profit or operating margin; (xiii) costs; (xiv) funds
from operations; (xv) expenses; (xvi) working capital; (xvii) earnings per
Share; (xviii) adjusted earnings per share; (xix) price per Share; (xx)
regulatory body approval for commercialization of a product; (xxi)
implementation or completion of critical projects; (xxii) market share; (xxiii)
economic value; (xxiv) debt levels or reduction; (xxv) customer retention;
(xxvi) sales-related goals; (xxvii) comparisons with other stock market indices;
(xxviii) operating efficiency; (xxix) customer satisfaction and/or growth;

(xxx) employee satisfaction; (xxxi) research and development achievements;
(xxxii) financing and other capital raising transactions; (xxxiii) recruiting
and maintaining personnel; and (xxxiv) year-end cash, any of which may be
measured either in absolute terms for the Company or any operating unit of the
Company 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, but are not limited to, 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 sale or disposition of a business or segment of a
business; (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, with respect to 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 an
Affiliate, a division, business unit or one or more individuals. The achievement
of each Performance Goal shall be determined, to the extent applicable, with
reference to Applicable Accounting Standards.

 

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Exhibit 10.12

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, a Performance Award.

 

 

2.42

“Performance Stock Unit” shall mean a Performance Award awarded under Section
10.1 hereof 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, (a) prior to the
Public Trading Date, any “family member” of the Holder, as defined under Rule
701 of the Securities Act and (b) on or after the Public Trading Date, any
“family member” of the Holder, as defined under the General Instructions to Form
S-8 Registration Statement under the Securities Act or any successor Form
thereto, or any other transferee specifically approved by the Administrator,
after taking into account Applicable Law.

 

 

 

2.44

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

 

2.45

“Prior Plan” shall mean the Avalanche Biotechnologies, Inc. Amended and Restated
2006 Equity Incentive Plan, as such plan may be amended from time to time.

 

 

2.46

“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.

 

 

2.47

“Public Trading Date” shall mean the first date upon which the Common Stock is
listed (or approved for listing) upon notice of issuance on any securities
exchange or designated (or approved for designation) upon notice of issuance as
a national market security on an interdealer quotation system.

 

 

2.48

“Restricted Stock” shall mean an award of Shares made under Article 8 hereof
that is subject to certain restrictions and may be subject to risk of forfeiture
or repurchase.

 

 

2.49

“Restricted Stock Unit” shall mean a contractual right awarded under Article 9
hereof to receive in the future a Share or the Fair Market Value of a Share in
cash.

 

 

2.50

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

 

2.51

“Shares” shall mean shares of Common Stock.

 

2.52

“Share Limit” shall have the meaning set forth in Section 3.1(a) hereof.

 

2.53

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

 

 

2.54

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

11.4 hereof.

 

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Exhibit 10.12

2.55

“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 10.3 hereof.

 

 

2.56

“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 more than
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.

 

 

2.57

“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.

 

 

2.58

“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.

 

(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

 

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Exhibit 10.12

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 relations 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 Sections 14.1, 14.2 and 3.1(b) hereof, the aggregate number of
Shares which may be issued or transferred pursuant to Awards under the Plan
shall be equal to the sum of (i) 2,088,332 Shares, (ii) any of the Shares which
as of the Effective Date are available for issuance under the Prior Plan, or are
subject to awards under the Prior Plan that, on or after the Effective Date,
terminate, expire or lapse for any reason without the delivery of Shares to the
holder thereof, up to a maximum of 5,384,000 Shares, and (iii) an annual
increase on the first day of each year beginning in 2015 and ending in 2024,
equal to the lesser of (A) four percent (4%) of the Shares outstanding (on an as
converted basis) on the last day of the immediately preceding fiscal year and
(B) such smaller number of Shares as determined by the Board (such sum, the
“Share Limit”); provided, however, no more than 10,441,663 Shares may be issued
upon the exercise of Incentive Stock Options. Notwithstanding the foregoing,
Shares added to the Share Limit pursuant to Section 3.1(a)(ii) or Section
3.1(a)(iii) hereof shall be available for issuance as Incentive Stock Options
only to the extent that making such Shares available for issuance as Incentive
Stock Options would not cause any Incentive Stock Option to cease to qualify as
such. Notwithstanding the foregoing, to the extent permitted under Applicable
Law, Awards that provide for the delivery of Shares subsequent to the applicable
grant date may be granted in excess of the Share Limit if such Awards provide
for the forfeiture or cash settlement of such Awards to the extent that
insufficient Shares remain under the Share Limit in this Section 3.1 at the time
that Shares would otherwise be issued in respect of such Award. As of the
Effective Date, no further awards may be granted under the Prior Plan; however,
any awards under the Prior Plan that are outstanding as of the Effective Date
shall continue to be subject to the terms and conditions of the Prior Plan.

 

(b)If any Shares subject to an Award are forfeited or expire or such Award is
settled for cash (in whole or in part), the Shares subject to such Award shall,
to the extent of such forfeiture, expiration or cash settlement, again be
available for future grants of Awards under the Plan and shall be added back to
the Share Limit. In addition, the following Shares shall be available for future
grants of Awards under the Plan and shall be added back to the Share Limit:

(i)Shares tendered by a Holder or withheld by the Company in payment of the
exercise price of an Option; (ii) Shares tendered by the Holder or withheld by
the Company to satisfy any tax withholding obligation with respect to an Award;
and (iii) Shares subject to Stock Appreciation Rights that are not issued in
connection with the stock settlement of the Stock Appreciation

 

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Exhibit 10.12

Rights on exercise thereof. Notwithstanding anything to the contrary contained
herein, Shares purchased on the open market with the cash proceeds from the
exercise of Options shall not be added back to the Share Limit and shall not be
available for future grants of Awards.  Any  Shares repurchased by the Company
under Section 8.4 hereof at the same price paid by the Holder or a lower price
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 its 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 to Non-Employee Directors. The
maximum aggregate value of Awards (with such value determined as of the date of
grant under Applicable Accounting Standards) that may be granted to any
Non-Employee Director during any calendar year shall be $750,000.

 

 

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. Except as provided in Section 4.6 hereof
regarding the grant of Awards pursuant to the Non- Employee Director Equity
Compensation Policy, no Eligible Individual shall have any right to be granted
an Award pursuant to the Plan.

 

 

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Exhibit 10.12

4.2

Award Agreement. 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 hereunder 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.

 

 

4.5Foreign Holders. Notwithstanding any provision of the Plan to the contrary,
in order to comply with the laws in countries other than the United States in
which the Company and its Affiliates operate or have Employees, Non-Employee
Directors or Consultants, or in order to comply with the requirements of any
foreign securities exchange, the Administrator, in its sole discretion, shall
have the power and authority to: (a) determine which Affiliates shall  be
covered by the Plan; (b) determine which Eligible Individuals outside the United
States are eligible to participate in the Plan; (c) modify the terms and
conditions of any Award granted to Eligible Individuals outside the United
States to comply with applicable foreign laws or listing requirements of any
such foreign securities exchange; (d) establish subplans and modify exercise
procedures and other terms and procedures, to the extent such actions may be
necessary or advisable (any such subplans and/or modifications shall be attached
to the Plan as appendices); provided, however, that no such subplans and/or
modifications shall increase the share limitations contained in Sections 3.1 and
3.3 hereof; and (e) take any action, before or after an Award is made, that it
deems advisable to obtain approval or comply with any necessary local
governmental regulatory exemptions or approvals or listing requirements of any
such foreign securities exchange. Notwithstanding the foregoing, the
Administrator may not take any actions hereunder, and no Awards shall be
granted, that would violate the Code,

 

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Exhibit 10.12

the Exchange Act, the Securities Act, any other securities law or governing
statute, the rules of the securities exchange or automated quotation system on
which the Shares are listed, quoted or traded or any other Applicable Law. For
purposes of the Plan, all references to foreign laws, rules, regulations or
taxes shall be references to the laws, rules, regulations and taxes of any
applicable jurisdiction other than the United States or a political subdivision
thereof.

 

4.6

Non-Employee Director Awards. The Administrator may, in its discretion, provide
that Awards granted to Non-Employee Directors shall be granted pursuant to a
written non-discretionary formula established by the Administrator (the
“Non-Employee Director Equity Compensation Policy”), subject to the limitations
of the Plan. The Non-Employee Director Equity Compensation Policy shall set
forth the type of Award(s) to be granted to Non- Employee Directors, the number
of Shares to be subject to Non-Employee Director Awards, the conditions on which
such Awards shall be granted, become exercisable and/or payable and expire, and
such other terms and conditions as the Administrator shall determine in its
discretion. The Non-Employee Director Equity Compensation Policy may be modified
by the Administrator from time to time in its discretion.

 

 

4.7

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 any 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 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
Committee 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 Eligible
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.

 

 

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Exhibit 10.12

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 10 hereof 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 ninety (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 Goals, and (d) specify the relationship between the 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. In determining the amount earned
under such Awards, unless otherwise provided in an applicable Program or Award
Agreement, the Committee shall have the right to reduce or eliminate (but not to
increase) the amount payable at a given level of performance to take into
account additional factors that the Committee may deem relevant, including the
assessment of individual or corporate performance for the Performance Period.

 

 

5.5

Payment of Performance-Based Awards. Unless otherwise provided in the applicable
Program or Award Agreement or pursuant to Section 14.2 hereof 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 applicable 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 applicable Performance 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 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.

 

 

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Exhibit 10.12

ARTICLE 6.

 

GRANTING OF 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

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 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. In addition, to the extent that any Options
otherwise fail to qualify as Incentive Stock Options, such Options shall be
treated as Nonqualified Stock Options.

 

 

6.3

Option Exercise Price. Except as provided in Article 14 hereof, the exercise
price per Share subject to each Option shall be set by the Administrator, but
shall not be less than one hundred percent (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 one
hundred ten percent (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).

 

 

6.4

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 ten (10) years from the date the Option is granted, or
five (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, may extend the time

 

 

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Exhibit 10.12

period during which vested Options may be exercised following 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.

 

 

6.5

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. At any time after the grant of an
Option, the Administrator may, in its sole discretion and subject to whatever
terms and conditions it selects, accelerate the vesting of the Option, including
following a Termination of Service; provided, that in no event shall an Option
become exercisable following its expiration, termination or forfeiture.

 

(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.

 

6.6

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.

 

 

6.7

Substitution of Stock Appreciation Rights. The Administrator may provide in the
applicable Program or the Award Agreement evidencing the grant of an Option that
the Administrator, in its sole discretion, shall have the right to substitute a
Stock Appreciation Right for such Option at any time prior to or upon exercise
of such Option; provided that such Stock Appreciation Right shall be exercisable
with respect to the same number of Shares for which such substituted Option
would have been exercisable, and shall also have the same exercise price,
vesting schedule and remaining Option Term as the substituted Option.

 

 

ARTICLE 7.

 

EXERCISE OF OPTIONS

 

7.1

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
and the

 

 

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Exhibit 10.12

Administrator may require that, by the terms of the Option, a partial exercise
must be with respect to a minimum number of Shares.

 

7.2

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 all
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;

 

(c)In the event that the Option shall be exercised pursuant to Section 12.3
hereof 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 12.1
and 12.2 hereof.

 

7.3Notification 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) two (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) of such Option to such Holder, or (b)
one (1) year after the transfer of such shares to such Holder.

 

ARTICLE 8.

 

AWARD OF RESTRICTED STOCK

 

8.1Award 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

 

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Exhibit 10.12

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 to the
extent required by Applicable Law.

 

8.2

Rights as Stockholders. Subject to Section 8.4 hereof, 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 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 8.3 hereof. 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 performance-based vesting
conditions are subsequently satisfied and the share of Restricted Stock vests.

 

 

8.3

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 or Affiliate
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 and/or the Award
Agreement. Restricted Stock may not be sold or encumbered until all restrictions
are terminated or expire.

 

 

8.4

Repurchase or Forfeiture of Restricted Stock. Except as otherwise determined by
the Administrator at the time of the grant of the Award or thereafter, 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. 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. Notwithstanding the foregoing, the
Administrator in its sole discretion may provide that in the event of certain
events, including a Change in Control, the Holder’s death, retirement or
disability or any other specified Termination of Service or any other event, the
Holder’s rights in unvested Restricted Stock shall not lapse, such Restricted
Stock shall vest and, if applicable, the Company shall not have a right of
repurchase.

 

 

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Exhibit 10.12

8.5

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.

 

 

8.6

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 9.

AWARD OF RESTRICTED STOCK UNITS

 

9.1

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.

 

 

9.2

Term. Except as otherwise provided herein, the term of a Restricted Stock Unit
award shall be set by the Administrator in its sole discretion.

 

 

9.3

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.

 

 

9.4

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.

 

 

9.5

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 determined by the Administrator, set forth in
any 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 fifteenth (15th) day of the third
(3rd) month

 

 

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Exhibit 10.12

following the end of calendar year in which the Restricted Stock Unit vests; or
(b) the fifteenth (15th) day of the third (3rd) month following the end of the
Company’s fiscal year in which the Restricted Stock Unit vests. On the maturity
date, the Company shall, subject to Section 12.4(e) hereof, 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.

 

9.6

Payment upon Termination of Service. An Award of Restricted Stock Units shall
only be payable while the Holder is an Employee, a Consultant or a member of the
Board, as applicable; provided, however, that the Administrator, in its sole and
absolute discretion may provide (in an Award Agreement or otherwise) that a
Restricted Stock Unit award may be paid subsequent to a Termination of Service
in certain events, including a Change in Control, the Holder’s death, retirement
or disability or any other specified Termination of Service.

 

 

9.7

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

 

 

9.8

Dividend Equivalents. Subject to Section 10.2 hereof, the Administrator may,  in
its sole discretion, provide that Dividend Equivalents shall be earned by a
Holder of Restricted Stock Units based on dividends declared on the Common
Stock, to be credited as of dividend payment dates during the period between the
date an Award of Restricted Stock Units is granted to a Holder and the maturity
date of such Award.

 

 

ARTICLE 10.

 

AWARD OF PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, STOCK PAYMENTS, DEFERRED
STOCK, DEFERRED STOCK UNITS

 

10.1Performance Awards.

 

(a)The Administrator is authorized to grant Performance Awards, including Awards
of Performance Stock Units, 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, 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 10.1(a) hereof, the Administrator may grant
Performance Awards to any Eligible Individual in the form of a cash bonus
payable upon the attainment of objective 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

 

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Exhibit 10.12

are intended to be Performance-Based Compensation shall be based upon
objectively determinable bonus formulas established in accordance with the
provisions of Article 5 hereof.

 

10.2Dividend Equivalents.

 

(a)Dividend Equivalents may be granted by the Administrator based on dividends
declared on the Common Stock, to be credited as of dividend payment dates 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 of Common Stock 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 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.

 

10.3Stock Payments. The Administrator is authorized to make Stock Payments to
any 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 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. 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.

 

10.4Deferred Stock. The Administrator is authorized to grant Deferred Stock to
any Eligible Individual. The number of shares of Deferred Stock shall be
determined by the Administrator and may (but is not required to) be based on one
or more Performance Criteria or other specific criteria, including service to
the Company or any Affiliate, as the Administrator determines, in each case on a
specified date or dates or over any period or periods determined by the
Administrator. Shares underlying a Deferred Stock award which is subject to a
vesting schedule or other conditions or criteria set by the Administrator will
be issued on the vesting date(s) or date(s) that those conditions and criteria
have been satisfied, as applicable. Unless otherwise provided by the
Administrator, a Holder of Deferred Stock shall have no rights as a Company
stockholder with respect to such Deferred Stock until such time as the Award has
vested and any other applicable conditions and/or criteria have been satisfied
and the Shares underlying the Award have been issued to the Holder.

 

10.5

Deferred Stock Units. The Administrator is authorized to grant Deferred Stock
Units to any Eligible Individual. The number of Deferred Stock Units shall be
determined by

 

 

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Exhibit 10.12

the Administrator and may (but is not required to) be based on one or more
Performance Criteria or other specific criteria, including service to the
Company or any Affiliate, as the Administrator determines, in each case on a
specified date or dates or over any period or periods determined by the
Administrator. Each Deferred Stock Unit shall entitle the Holder thereof to
receive one share of Common Stock on the date the Deferred Stock Unit becomes
vested or upon a specified settlement date thereafter (which settlement date may
(but is not required to) be the date of the Holder’s Termination of Service).
Shares underlying a Deferred Stock Unit award which is subject to a vesting
schedule or other conditions or criteria set by the Administrator will not be
issued until on or following the date that those conditions and criteria have
been satisfied. Unless otherwise provided by the Administrator, a Holder of
Deferred Stock Units shall have no rights as a Company stockholder with respect
to such Deferred Stock Units until such time as the Award has vested and any
other applicable conditions and/or criteria have been satisfied and the Shares
underlying the Award have been issued to the Holder.

 

10.6

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

 

 

10.7

Purchase Price. The Administrator may establish the purchase price of a
Performance Award, Shares distributed as a Stock Payment award, shares of
Deferred Stock or Shares distributed pursuant to a Deferred 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.

 

 

10.8

Termination of Service. A Performance Award, Stock Payment award, Dividend
Equivalent award, Deferred Stock award and/or Deferred Stock Unit award is
distributable only while the Holder is an Employee, Director or Consultant, as
applicable. The Administrator, however, in its sole discretion may provide that
the Performance Award, Dividend Equivalent award, Stock Payment award, Deferred
Stock award and/or Deferred Stock Unit award may be distributed subsequent to a
Termination of Service in certain events, including a Change in Control, the
Holder’s death, retirement or disability or any other specified Termination of
Service.

 

 

ARTICLE 11.

 

AWARD OF STOCK APPRECIATION RIGHTS

 

 

11.1

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

 

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Exhibit 10.12

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 or in Section

14.2 hereof, the exercise price per Share subject to each Stock Appreciation
Right shall be set by the Administrator, but shall not be less than one hundred
percent (100%) of the Fair Market Value on the date the Stock Appreciation Right
is granted.

 

(c)Notwithstanding the foregoing provisions of Section 11.1(b) hereof to the
contrary, in the case of a 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 one hundred percent (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.

 

11.2

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 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, any of the Performance
Criteria or any other criteria selected by the Administrator. 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, including following a Termination of Service;
provided, that in no event shall a Stock Appreciation Right become exercisable
following its expiration, termination or forfeiture.

 

11.3Manner 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;

 

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Exhibit 10.12

(b)Such representations and documents as the Administrator, in its sole
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any other federal, state or
foreign securities laws or regulations. 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 pursuant to
this Section 11.3 hereof 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.

 

11.4

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 ten (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 the
vested Stock Appreciation Rights, which time period may not extend beyond the
expiration date of the Stock Appreciation Right Term. Except as limited by the
requirements  of Section 409A of the Code and regulations and rulings thereunder
or the first sentence of this Section 11.4, the Administrator may extend the
Stock Appreciation Right Term of any outstanding Stock Appreciation Right, may
extend the time period during which vested Stock Appreciation Rights may be
exercised following 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.

 

 

11.5

Payment. Payment of the amounts payable with respect to Stock Appreciation
Rights pursuant to this Article 11 shall be in cash, Shares (based on its Fair
Market Value as of the date the Stock Appreciation Right is exercised), or a
combination of both, as determined  by the Administrator.

 

 

ARTICLE 12.

 

 

ADDITIONAL TERMS OF AWARDS

 

12.1

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

 

 

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Exhibit 10.12

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.

 

12.2Tax 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 the foregoing requirement allow a Holder to satisfy such
obligations by any payment means described in Section 12.1 hereof, including
without limitation, by allowing such 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.

 

 

12.3

Transferability of Awards.

 

(a)Except as otherwise provided in Sections 12.3(b) and 12.3(c) hereof:

 

(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 the Holder’s 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) 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, and any attempted disposition of an Award prior to
the satisfaction of these conditions shall be null and void and of no effect,
except to the extent that such disposition is permitted by clause (i) of this
provision; and

 

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Exhibit 10.12

(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 12.3(a) hereof, the Administrator, in its sole
discretion, may determine to permit a Holder or a Permitted Transferee of such
Holder to transfer an Award other than an Incentive Stock Option (unless such
Incentive Stock Option is to become a Non-Qualified 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 to another Permitted
Transferee of the applicable Holder) other than by will or the laws of descent
and distribution;

(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); and (iii) the
Holder (or transferring Permitted Transferee) and the Permitted Transferee shall
execute any and all 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 federal, state and foreign securities laws and (C) evidence the
transfer.

 

(c)Notwithstanding Section 12.3(a) hereof, 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 fifty percent (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, as applicable. 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.

 

 

12.4

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 all Applicable Law, and

 

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Exhibit 10.12

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.

 

(e)Notwithstanding any other provision of the Plan, unless otherwise determined
by the Administrator or required by any 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).

 

12.5

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:

 

 

(a)(i) Any proceeds, gains or other economic benefit actually or constructively
received by the Holder upon any receipt or exercise of the Award, or upon the
receipt or resale of any Shares underlying the Award, must be paid to the
Company, and (ii) the Award shall terminate and any unexercised portion of the
Award (whether or not vested) shall be forfeited, if (x) a Termination of
Service occurs prior to a specified date, or within a specified time period
following receipt or exercise of the Award, or (y) the Holder at any time, or
during a specified time period, engages in any activity in competition with the
Company, or which is inimical, contrary or harmful to the interests of the
Company, as further defined by the Administrator or (z) the Holder incurs a
Termination of Service for “cause” (as such term is defined in the sole
discretion of the Administrator, or as set forth in a written agreement relating
to such Award between the Company and the Holder); and

 

(b)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

 

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Exhibit 10.12

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, including, without limitation, 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.

 

12.6

Prohibition on Repricing. Subject to Section 14.2 hereof, 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.

 

 

12.7

Leave of Absence. Unless the Administrator provides otherwise, vesting of Awards
granted hereunder shall be suspended during any unpaid leave of absence. A
Holder shall not cease to be considered an Employee, Non-Employee Director or
Consultant, as applicable, in the case of any (a) leave of absence approved by
the Company, (b) transfer between locations of the Company or between the
Company and any of its Affiliates or any successor thereof, or (c) change in
status (Employee to Director, Employee to Consultant, etc.), provided that such
change does not affect the specific terms applying to the Holder’s Award.

 

 

ARTICLE 13.

 

ADMINISTRATION

 

13.1

Administrator. The Committee (or another committee or a subcommittee of the
Board or the Compensation Committee 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 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 13.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 13.6 hereof.

 

 

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Exhibit 10.12

13.2

Duties and Powers of Administrator. It shall be the duty of the Administrator to
conduct the general administration of the Plan in accordance with its
provisions. The Administrator 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
materially and adversely by such amendment, unless the consent of the Holder is
obtained or such amendment is otherwise permitted under Section 14.10 hereof.
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.

 

 

13.3

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.

 

 

13.4

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;

 

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

Individual;

 

(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;

 

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Exhibit 10.12

(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 14.2(d) hereof.

 

13.5

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.

 

 

13.6

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 Article 13;
provided, however, that in no event shall an officer of the Company be delegated
the authority to grant awards to, or amend awards held 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 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 13.6 hereof
shall serve in such capacity at the pleasure of the Board and the Committee.

 

 

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Exhibit 10.12

ARTICLE 14.

 

MISCELLANEOUS PROVISIONS

 

14.1

Amendment, Suspension or Termination of the Plan. Except as otherwise provided
in this Section 14.1, 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 14.2 hereof, (a) increase the
limits imposed in Section 3.1 hereof 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 (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 14.10 hereof, no
amendment, suspension or termination of the Plan shall, without the consent of
the Holder, materially and adversely affect 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.

14.2

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 hereof on the maximum number and
kind of shares which may be issued under the Plan); (ii) the number and kind of
shares of Common Stock (or other securities or property) subject to outstanding
Awards; (iii) the number and kind of shares of Common Stock (or other securities
or property) for which grants are subsequently to be made to new and continuing
Non-Employee Directors pursuant to Section 4.6 hereof; (iv) the terms and
conditions of any outstanding Awards (including, without limitation, any
applicable performance targets or criteria with respect thereto); and (v) the
grant or exercise price per share 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 14.2(a) hereof
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, 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

 

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Exhibit 10.12

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 and/or other property, 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 14.2 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 or Deferred 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.

 

(c)In connection with the occurrence of any Equity Restructuring, and
notwithstanding anything to the contrary in Sections 14.2(a) and 14.2(b) hereof:

 

(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

 

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Exhibit 10.12

(including, but not limited to, adjustments of the limitations in Section 3.1
hereof on the maximum number and kind of shares which may be issued under the
Plan).

 

The adjustments provided under this Section 14.2(c) shall be nondiscretionary
and shall be final and binding on the affected Holder and the Company.

 

(d)Change in Control.

 

(i)Notwithstanding any other provision of the Plan, in the event of a Change in
Control, each outstanding Award shall be assumed or an equivalent Award
substituted by the successor corporation or a parent or subsidiary of the
successor corporation, in each case, as determined by the Administrator.

 

(ii)In the event that the successor corporation in a Change in Control and its
parents and subsidiaries refuse to assume or substitute for any Award in
accordance with Section 14.2(d)(i) hereof, each such non-assumed/substituted
Award, except for any  Performance Awards, shall become fully vested and, as
applicable, exercisable and shall be deemed exercised, immediately prior to the
consummation of such transaction, and all forfeiture restrictions on any or all
such Awards shall lapse at such time. For the avoidance of doubt, the vesting of
any Performance Awards not assumed in a Change in Control will not be
automatically accelerated pursuant to this Section 14.2(d)(ii) and will instead
vest pursuant to the terms and conditions of the applicable Award Agreement upon
a Change in Control where the successor corporation and its parents and
subsidiaries refuse to assume or substitute for any Award in accordance with
Section 14.2(d)(i) hereof. If an Award vests and, as applicable, is exercised in
lieu of assumption or substitution in connection with a Change in Control, the
Administrator shall notify the Holder of such vesting and any applicable
exercise period, and the Award shall terminate upon the Change in Control. For
the avoidance of doubt, if the value of  an Award that is terminated in
connection with this Section 14.2(d)(ii) is zero or negative at the time of such
Change in Control, such Award shall be terminated upon the Change in Control
without payment of consideration therefor.

 

(iii)Notwithstanding anything to the contrary, in the event that, within the
twelve (12) month period immediately following a Change in Control, a Holder
experiences  a Termination of Service by the Company for other than Cause or by
a Holder for Good Reason, then the vesting and, if applicable, exercisability of
that number of Shares equal to one hundred percent (100%) of the then-unvested
Shares subject to the outstanding Awards held by such Holder shall accelerate
upon the date of such Termination of Service.

 

(e)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.

 

(f)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 14.2 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

 

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Exhibit 10.12

adjustment or action described in this Section 14.2 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 of the Exchange Act or violate the exemptive conditions of Rule 16b-3 of the
Exchange Act unless the Administrator determines that the Award is not to comply
with such exemptive conditions.

 

(g)The existence of the Plan, the Program, the 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.

 

(h)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 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 thirty (30) days prior to the consummation of any such transaction.

 

14.3

Approval of Plan by Stockholders. The Plan will be submitted for the approval of
the Company’s stockholders within twelve (12) months after the date of the
Board’s initial adoption of the Plan. Awards may be granted or awarded prior to
such stockholder approval; provided that such Awards shall not be exercisable,
shall not vest and the restrictions thereon shall not lapse and no Shares shall
be issued pursuant thereto prior to the time when the Plan is approved by the
stockholders; and provided, further, that if such approval has not been obtained
at the end of said twelve (12) month period, all Awards previously granted or
awarded under the Plan shall thereupon be canceled and become null and void.

 

 

14.4

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.

 

 

14.5

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
internet 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.

 

 

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Exhibit 10.12

14.6

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) 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.

 

 

14.7

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 Law, 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 Law. 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 Law.

 

 

14.8

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.

 

 

14.9

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

 

 

14.10

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 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

 

 

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Exhibit 10.12

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.

 

14.11

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.

 

 

14.12

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.

 

 

14.13

Indemnification. To the extent allowable pursuant to Applicable Law, each member
of the Committee or of the Board and any officer or other employee to whom
authority to administer any component of the Plan is delegated 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
Certificate 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.

 

 

14.14

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.

 

 

14.15

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

 

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