Exhibit 10.2
PALO ALTO NETWORKS, INC.
EXECUTIVE INCENTIVE PLAN
PURPOSE
The purpose of the Palo Alto Networks, Inc. Executive Incentive Plan (the
“Plan”) is to motivate and reward eligible Service Providers of Palo Alto
Networks, Inc. (the “Company”) for their service. It is the intent that the
incentives provided for in the Plan to certain executive officers of the Company
do not have their deductibility limited by Section 162(m). However, the Company
cannot guarantee that awards under the Plan will qualify for exemption under
Section 162(m), and in certain circumstances, Actual Cash Awards or Equity
Awards under the Plan may not comply with Section 162(m), either intentionally
or unintentionally. The Plan is subject to the approval of the Company’s
stockholders.
The Plan is divided into three articles: Article I, which addresses the cash
component of the Plan (the “Cash Component”); Article II, which addresses the
equity component of the Plan (the “Equity Component”); and Article III, which
sets forth (i) the terms and conditions that apply to both the Cash Component
and the Equity Component and (ii) the defined terms used in the Plan. The Plan
is effective upon the date of its approval by the Company’s stockholders (the
“Effective Date”) as set forth above.
ARTICLE I
CASH COMPONENT
1.Administration of the Cash Component.
(a)General. The Cash Component will be administered by the Administrator.
(b)Multiple Administrative Bodies. Different Committees with respect to
different groups of Covered Employees may administer the Cash Component.
(c)Powers of the Administrator. Subject to the Plan, any limitations on
delegations and applicable laws, the Administrator will have the authority, in
its sole discretion to make any determinations deemed necessary or advisable to
administer the Cash Component including:
(i)    to select the Cash Component Participants,
(ii)    to establish the length of the Performance Periods,
(iii)    to establish Performance Goals for performance during each Performance
Period,
(iv)    to determine the Payout Calculation Methodology for each Performance
Goal, and
(v)    to make all determinations and take all other actions necessary or
appropriate for the proper administration and operation of the Cash Component.

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Any determination by the Administrator on any matter relating to the Cash
Component shall be made in its sole discretion and need not be uniform among
Cash Component Participants. The Administrator’s interpretation of the Cash
Component shall be final, conclusive, and binding on all parties concerned,
including the Company, its stockholders, and any or all Cash Component
Participants.
2.Eligibility. Actual Cash Awards under the Cash Component may be paid to any
Cash Component Participant.
3.Actual Cash Awards.
(a)General. Actual Cash Awards may be payable to a Cash Component Participant
because of the satisfaction of Performance Goals established with respect to a
Performance Period. A Cash Component Participant may be eligible for Actual Cash
Awards for multiple and overlapping Performance Periods.
(b)Setting Cash Award Criteria. No later than the Determination Date for a
Performance Period (which must be a date on which the outcome of the applicable
Payout Calculation Methodology is substantially uncertain), the Administrator
will,
(i)designate one or more Cash Component Participants,
(ii)select the Performance Goals applicable to the Performance Period,
(iii)establish the Payout Calculation Methodology for such Performance Goals;
and
(iv)establish a target award and Maximum Cash Award for each Cash Component
Participant for the Performance Period.
(c)Performance Goals.
(i)If a Performance Goal is based on, or calculated with respect to, the
Company’s common stock (such as increases in earnings per share, book value per
share or other similar measures), then, if any corporate transaction occurs
involving the Company (including, without limitation, any subdivision or
combination or exchange of the outstanding shares of common stock, stock
dividend, stock split, spin-off, split-off, recapitalization, capital
reorganization, liquidation, reclassification of shares of common stock, merger,
consolidation, extraordinary cash distribution, redemption, stock issuance, or
sale, lease or transfer of substantially all of the assets of the Company), the
Administrator shall make or provide for such adjustments in such Performance
Goal as the Administrator may in good faith determine to be equitably required
to prevent dilution or enlargement of any increase or decrease in the rights of
Cash Component Participants.
(ii)To the extent identified in the Payout Calculation Methodology, evaluation
of performance may include or exclude events or items as specified by the
Administrator including, without limitation, the following unusual or
nonrecurring events: (i) asset write downs; (ii) litigation or claim judgments
or settlements; (iii) the effect of changes in tax laws, accounting principles
or other laws or provisions affecting reported results; (iv) any reorganization
and restructuring programs; (v) extraordinary nonrecurring items as described in
Financial Accounting Standards Board Accounting Standards Codification 225-20
“Extraordinary and Unusual Items” and/or in management’s discussion and analysis
of financial condition and results of operations appearing in the Company’s
Annual Report on Form 10-K for the applicable fiscal year; (vi) acquisitions or
divestitures; and (vii) foreign exchange gains and losses.

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(d)Actual Bonus Determination.
(i)Before any Actual Cash Award is paid, the Administrator must certify in
writing (i) to what extent the Performance Goal(s) were attained and (ii) the
result of the Payout Calculation Methodology for each Cash Component Participant
based upon the attainment of the Performance Goal(s).
(ii)The Administrator may determine to pay a Cash Component Participant an
Actual Cash Award up to the amount specified in the foregoing certification. The
Administrator may also reduce or eliminate the amount of any Actual Cash Award
of any Cash Component Participant at any time prior to payment thereof, based on
such criteria as it shall determine, including but not limited to individual
merit and attainment of, or the failure to attain, specified personal goals
established by the Administrator.
(iii)Under no circumstance may the Administrator, increase the amount of Actual
Cash Award paid to a Cash Component Participant under the Cash Component above
the amount determined in Section 3(d)(i) of the Cash Component based on the
Payout Calculation Methodology.
(e)Payment. Following the Administrator’s determination under Section 3(d) of
the Cash Component, Actual Cash Awards shall be paid in cash as promptly as is
administratively practicable.
(f)Death, Disability, Termination of Employment.
(i)If a Cash Component Participant dies or terminates employment due to
Disability prior to the end of a Performance Period, the Cash Component
Participant (or if the participant’s death occurs, the Cash Component
Participant’s beneficiary) may receive a pro-rata portion of the target award
established for the Cash Component Participant as determined by the
Administrator.
(ii)If a Cash Component Participant’s employment with the Company is otherwise
terminated during the Performance Period, the Cash Component Participant will
not have earned and will not be entitled to payment of any Actual Cash Award.
(g)Annual Maximum. The aggregate of all Actual Cash Awards payable to a Cash
Component Participant under the Cash Component in any fiscal year of the Company
may not exceed the Maximum Cash Award, and any excess will be forfeited.
4.Other Terms.
(a)No Effect on Employment or Service. Neither the Cash Component nor any award
under the Cash Component will confer upon a Cash Component Participant any right
regarding continuing the Cash Component Participant’s relationship as an
employee of the Company or an Affiliate, nor will they interfere with the Cash
Component Participant’s right, or the Cash Component Participant’s employer’s
right, to terminate such relationship with or without cause, to the extent
permitted by applicable laws.
(b)Right to Actual Cash Award. No officer or other person shall have any claim
or right to receive any Actual Cash Award payable under the Cash Component prior
to the actual payment thereof, regardless of whether the Administrator has
certified any amount to be payable to any Cash Component Participant.
(c)Taxes. The Company or any Affiliate employing a Cash Component Participant,
as applicable, may deduct from all Actual Cash Awards payable any federal,
state, local or foreign taxes required by law to be withheld regarding such
payments.

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(d)No Transfers or Assignments. No award under the Cash Component nor any rights
or interests or shall be assigned, transferred, pledged, encumbered, or
hypothecated to, or in favor of, or subject to any lien, obligation, or
liability of a Cash Component Participant to, any party (other than the Company
or any Affiliate).
(e)Non-exclusivity of Cash Component. Nothing in the Cash Component shall be
construed as limiting the authority of the Administrator, the Board, the Company
or any Affiliate to establish any other annual, long-term or other incentive
plan or as limiting the authority of any of the foregoing to pay cash bonuses or
other supplemental or additional incentive compensation to any persons employed
by the Company or any Affiliate, whether or not such person is a Cash Component
Participant in this Cash Component and regardless of how the amount of such
bonus or compensation is determined.
(f)Section 409A. It is intended that all bonuses payable under this Cash
Component will be exempt from the requirements of Section 409A under the
“short-term deferral” exemption or will comply with the requirements of Section
409A so that none of the payments and benefits to be provided under this Cash
Component will be subject to the additional tax imposed under Section 409A, and
any ambiguities or ambiguous terms will be interpreted to so comply or be
exempt. Each payment and benefit payable under this Cash Component is intended
to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the
Treasury Regulations. In no case will the Company or any Affiliate reimburse any
Cash Component Participant for any tax liabilities incurred under Section 409A.
ARTICLE II
EQUITY COMPONENT
1.Shares Issuable Under the Equity Component.
(a)    Shares Subject to Equity Awards. The Shares underlying an Equity Award
will be issued from the Equity Plan.
(b)    Incentive Stock Options. Subject to adjustment as provided in Section 13
of the Equity Plan and/or Section 13 of the Equity Component, the maximum number
of Shares that may be issued upon the exercise of Incentive Stock Options will
equal 200% of the aggregate Share number stated in Section 3(a) of the Equity
Plan, plus, to the extent allowable under Section 422 of the Code and the
Treasury Regulations promulgated thereunder, any Shares that become available
for issuance under the Equity Plan pursuant to Sections 3(b) and 3(c) of the
Equity Plan.
2.Administration of the Equity Component.
(a)    Procedure.
(i)    Generally. The Equity Component will be administered by the
Administrator.
(ii)    Multiple Administrative Bodies. Different Committees with respect to
different groups of Service Providers may administer the Equity Component.
(iii)    Rule 16b-3. To the extent desirable to qualify transactions hereunder
as exempt under Rule 16b-3, the transactions contemplated hereunder will be
structured to satisfy the requirements for exemption under Rule 16b-3.

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(b)    Powers of the Administrator. Subject to the provisions of the Plan, and
in the case of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator will have the authority, in its
discretion:
(i)    to determine the Fair Market Value;
(ii)    to select the Service Providers to whom Equity Awards may be granted
hereunder;
(iii)    to determine the number of Shares to be covered by each Equity Award
granted hereunder;
(iv)    to approve forms of Equity Award Agreements for use under the Equity
Component;
(v)    to determine the terms and conditions, not inconsistent with the terms of
the Equity Component, of any Equity Award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Equity Awards may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Equity Award or the Shares relating
thereto, based in each case on such factors as the Administrator will determine;
(vi)    to construe and interpret the terms of the Equity Component and Equity
Awards granted pursuant to the Equity Component;
(vii)    to prescribe, amend and rescind rules and regulations relating to the
Equity Component, including rules and regulations relating to sub-plans
established for the purpose of satisfying applicable foreign laws or for
qualifying for favorable tax treatment under applicable foreign laws;
(viii)    to modify or amend each Equity Award (subject to Section 3 of
Article III), including but not limited to the discretionary authority to extend
the post-termination exercisability period of Equity Awards and to extend the
maximum term of an Option (subject to Section 5(b) of the Equity Component
regarding Incentive Stock Options);
(ix)    to allow Equity Component Participants to satisfy withholding tax
obligations in such manner as prescribed in Section 14 of the Equity Component;
(x)    to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Equity Award previously granted by
the Administrator;
(xi)    to allow an Equity Component Participant to defer the receipt of the
payment of cash or the delivery of Shares that would otherwise be due to such
Equity Component Participant under an Equity Award; and
(xii)    to make all other determinations deemed necessary or advisable for
administering the Equity Component.
(c)    No Exchange Program. The Administrator may not implement an Exchange
Program.

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(d)    Effect of Administrator’s Decision. The Administrator’s decisions,
determinations, and interpretations will be final and binding on all Equity
Component Participants and any other holders of Equity Awards.
3.Eligibility. Equity Awards may be granted only to Service Providers.
4.Equity Award Limitations.
(a)    Annual Equity Awards for Employees. The limits specified below shall be
applicable to Equity Awards issued under the Equity Component to Employees:
(i)    Limits on Options. No Employee shall be granted Options during any Fiscal
Year with respect to more than 500,000 Shares; provided, however, that in
connection with an Equity Component Participant’s initial service as an
Employee, the Equity Component Participant may be granted Options with respect
to an additional 500,000 Shares during such Fiscal Year.
(ii)    Limits on Restricted Stock. No Employee shall be granted Equity Awards
of Restricted Stock during any Fiscal Year with respect to more than 250,000
Shares; provided, however, that in connection with an Equity Component
Participant’s initial service as an Employee, the Equity Component Participant
may be granted Equity Awards of Restricted Stock with respect to an additional
250,000 Shares during such Fiscal Year.
(iii)    Limits on Restricted Stock Units. No Employee shall be granted
Restricted Stock Units during any Fiscal Year with respect to more than 250,000
Shares; provided, however, that in connection with an Equity Component
Participant’s initial service as an Employee, the Equity Component Participant
may be granted Restricted Stock Units with respect to an additional 250,000
Shares during such Fiscal Year.
(iv)    Limits on Stock Appreciation Rights. No Employee shall be granted Stock
Appreciation Rights during any Fiscal Year with respect to more than 500,000
Shares; provided, however, that in connection with an Equity Component
Participant’s initial service as an Employee, the Equity Component Participant
may be granted Stock Appreciation Rights with respect to an additional 500,000
Shares during such Fiscal Year.
(v)    Limits on Performance Shares. No Employee shall be granted Equity Awards
of Performance Shares during any Fiscal Year with respect to more than 250,000
Shares; provided, however, that in connection with an Equity Component
Participant’s initial service as an Employee, the Equity Component Participant
may be granted Equity Awards of Performance Shares with respect to an additional
250,000 Shares during such Fiscal Year.
(vi)    Limits on Performance Units. No Employee shall be granted Equity Awards
of Performance Units during any Fiscal Year with an aggregate initial value of
greater than 250,000 Shares (or, in the case of any cash-settled Performance
Units, the dollar value based on the product of 250,000 Shares multiplied by the
Fair Market Value as of the day prior to the Effective Date); provided, however,
that in connection with an Equity Component Participant’s initial service as an
Employee, the Equity Component Participant may be granted Equity Awards of
Performance Shares with respect to an additional 250,000 Shares (or, in the case
of any cash-settled Performance Units, the dollar value based on the product of
250,000 Shares multiplied by the Fair Market Value as of the day prior to the
Effective Date) during such Fiscal Year.

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(b)    Annual Awards for Outside Directors. No Outside Director may, in any
Fiscal Year, be paid, whether under the Plan or otherwise, cash compensation and
granted equity awards (including, but not limited to, Equity Awards issued under
the Equity Component) with an aggregate value (determined as fair value under
GAAP with respect to equity awards) greater than $2,000,000, except that such
limit will be increased to $4,000,000 in the Fiscal Year of his or her initial
service as an Outside Director. Any cash compensation paid or equity awards
granted to an individual for his or her services as an Employee, or for his or
her services as a Consultant (other than as an Outside Director), will not count
for purpose of this limitation.
5.Stock Options.
(a)    Limitations. Each Option will be designated in the Equity Award Agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Equity Component Participant during any
calendar year (under all plans of the Company and any Parent or Subsidiary)
exceeds $100,000, such Options will be treated as Nonstatutory Stock Options.
For purposes of this Section 5(a) of the Equity Component, Incentive Stock
Options will be taken into account in the order in which they were granted. The
Fair Market Value of the Shares will be determined as of the time the Option
with respect to such Shares is granted.
(b)    Term of Option. The term of each Option will be stated in the Equity
Award Agreement. In the case of an Incentive Stock Option, the term will be 10
years from the date of grant or such shorter term as may be provided in the
Equity Award Agreement. Moreover, in the case of an Incentive Stock Option
granted to an Equity Component Participant who, at the time the Incentive Stock
Option is granted, owns stock representing more than 10% of the total combined
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the term of the Incentive Stock Option will be 5 years from the date of grant or
such shorter term as may be provided in the Equity Award Agreement.
(c)    Option Exercise Price and Consideration.
(i)    Exercise Price. The per share exercise price for the Shares to be issued
pursuant to exercise of an Option will be determined by the Administrator,
subject to the following:
(1)    In the case of an Incentive Stock Option
a)    granted to an Employee who, at the time the Incentive Stock Option is
granted, owns stock representing more than 10% of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the per Share
exercise price will be no less than 110% of the Fair Market Value per Share on
the date of grant.
b)    granted to any Employee other than an Employee described in paragraph (a)
immediately above, the per Share exercise price will be no less than 100% of the
Fair Market Value per Share on the date of grant.
(2)    In the case of a Nonstatutory Stock Option, the per Share exercise price
will be no less than 100% of the Fair Market Value per Share on the date of
grant.
(3)    Notwithstanding the foregoing, Options may be granted with a per Share
exercise price of less than 100% of the Fair Market Value per Share on the date
of grant pursuant to a transaction described in, and in a manner consistent
with, Section 424(a) of the Code.

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(ii)    Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator will fix the period within which the Option may be exercised and
will determine any conditions that must be satisfied before the Option may be
exercised.
(iii)    Form of Consideration. The Administrator will determine the acceptable
form of consideration for exercising an Option, including the method of payment.
In the case of an Incentive Stock Option, the Administrator will determine the
acceptable form of consideration at the time of grant. Such consideration may
consist entirely of: (1) cash; (2) check; (3) promissory note, to the extent
permitted by Applicable Laws, (4) other Shares, provided that such Shares have a
Fair Market Value on the date of surrender equal to the aggregate exercise price
of the Shares as to which such Option will be exercised and provided that
accepting such Shares will not result in any adverse accounting consequences to
the Company, as the Administrator determines in its sole discretion; (5)
consideration received by the Company under a broker-assisted (or other)
cashless exercise program (whether through a broker or otherwise) implemented by
the Company in connection with the Equity Component; (6) by net exercise; (7)
such other consideration and method of payment for the issuance of Shares to the
extent permitted by Applicable Laws; or (8) any combination of the foregoing
methods of payment.
(d)    Exercise of Option.
(i)    Procedure for Exercise; Rights as a Stockholder. Any Option granted
hereunder will be exercisable according to the terms of the Equity Component and
at such times and under such conditions as determined by the Administrator and
set forth in the Equity Award Agreement. An Option may not be exercised for a
fraction of a Share.
An Option will be deemed exercised when the Company receives: (i) notice of
exercise (in such form as the Administrator may specify from time to time) from
the person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised (together with applicable
withholding taxes). Full payment may consist of any consideration and method of
payment authorized by the Administrator and permitted by the Equity Award
Agreement and the Equity Component. Shares issued upon exercise of an Option
will be issued in the name of the Equity Component Participant or, if requested
by the Equity Component Participant, in the name of the Equity Component
Participant and his or her spouse. Until the Shares are issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a stockholder will exist with respect to the Shares subject to
an Option, notwithstanding the exercise of the Option. The Company will issue
(or cause to be issued) such Shares promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Shares are issued, except as provided in Section 13 of
the Equity Plan and/or Section 13 of the Equity Component.
Exercising an Option in any manner will decrease the number of Shares thereafter
available, both for purposes of the Equity Component and for sale under the
Option, by the number of Shares as to which the Option is exercised.
(ii)    Termination of Relationship as a Service Provider. If an Equity
Component Participant ceases to be a Service Provider, other than upon the
Equity Component Participant’s termination as the result of the Equity Component
Participant’s death or Disability, the Equity Component Participant may exercise
his or her Option within such period of time as is specified in the Equity Award
Agreement to the extent that the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Equity Award Agreement). In the absence of a specified time in

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the Equity Award Agreement, the Option will remain exercisable for 3 months
following the Equity Component Participant’s termination. Unless otherwise
provided by the Administrator, if on the date of termination the Equity
Component Participant is not vested as to his or her entire Option, the Shares
covered by the unvested portion of the Option will revert to the Equity
Component. If after termination the Equity Component Participant does not
exercise his or her Option within the time specified by the Administrator, the
Option will terminate, and the Shares covered by such Option will revert to the
Equity Component.
(iii)    Disability of Equity Component Participant. If an Equity Component
Participant ceases to be a Service Provider as a result of the Equity Component
Participant’s Disability, the Equity Component Participant may exercise his or
her Option within such period of time as is specified in the Equity Award
Agreement to the extent the Option is vested on the date of termination (but in
no event later than the expiration of the term of such Option as set forth in
the Equity Award Agreement). In the absence of a specified time in the Equity
Award Agreement, the Option will remain exercisable for 12 months following the
Equity Component Participant’s termination. Unless otherwise provided by the
Administrator, if on the date of termination the Equity Component Participant is
not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option will revert to the Equity Component. If after termination
the Equity Component Participant does not exercise his or her Option within the
time specified herein, the Option will terminate, and the Shares covered by such
Option will revert to the Equity Component.
(iv)    Death of Equity Component Participant. If an Equity Component
Participant dies while a Service Provider, the Option may be exercised following
the Equity Component Participant’s death within such period of time as is
specified in the Equity Award Agreement to the extent that the Option is vested
on the date of death (but in no event may the option be exercised later than the
expiration of the term of such Option as set forth in the Equity Award
Agreement), by the Equity Component Participant’s designated beneficiary,
provided such beneficiary has been designated prior to Equity Component
Participant’s death in a form acceptable to the Administrator. If no such
beneficiary has been designated by the Equity Component Participant, then such
Option may be exercised by the personal representative of the Equity Component
Participant’s estate or by the person(s) to whom the Option is transferred
pursuant to the Equity Component Participant’s will or in accordance with the
laws of descent and distribution. In the absence of a specified time in the
Equity Award Agreement, the Option will remain exercisable for 12 months
following Equity Component Participant’s death. Unless otherwise provided by the
Administrator, if at the time of death Equity Component Participant is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option will immediately revert to the Equity Component. If the
Option is not so exercised within the time specified herein, the Option will
terminate, and the Shares covered by such Option will revert to the Equity
Component.
6.Restricted Stock.
(a)    Grant of Restricted Stock. Subject to the terms and provisions of the
Equity Component, the Administrator, at any time and from time to time, may
grant Shares of Restricted Stock to Service Providers in such amounts as the
Administrator, in its sole discretion, will determine.
(b)    Restricted Stock Agreement. Each Equity Award of Restricted Stock will be
evidenced by an Equity Award Agreement that will specify the Period of
Restriction, the number of Shares granted, and such other terms and conditions
as the Administrator, in its sole discretion, will determine. Unless the
Administrator determines otherwise, the Company as escrow agent will hold Shares
of Restricted Stock until the restrictions on such Shares have lapsed.

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(c)    Transferability. Except as provided in this Section 6 of the Equity
Component or the Equity Award Agreement, Shares of Restricted Stock may not be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated
until the end of the applicable Period of Restriction.
(d)    Other Restrictions. The Administrator, in its sole discretion, may impose
such other restrictions on Shares of Restricted Stock as it may deem advisable
or appropriate.
(e)    Removal of Restrictions. Except as otherwise provided in this Section 6
of the Equity Component, Shares of Restricted Stock covered by each Restricted
Stock grant made under the Equity Component will be released from escrow as soon
as practicable after the last day of the Period of Restriction or at such other
time as the Administrator may determine. The Administrator, in its discretion,
may accelerate the time at which any restrictions will lapse or be removed.
(f)    Voting Rights. During the Period of Restriction, Service Providers
holding Shares of Restricted Stock granted hereunder may exercise full voting
rights with respect to those Shares, unless the Administrator determines
otherwise.
(g)    Dividends and Other Distributions. During the Period of Restriction,
Service Providers holding Shares of Restricted Stock will be entitled to receive
all dividends and other distributions paid with respect to such Shares, unless
the Administrator provides otherwise. If any such dividends or distributions are
paid in Shares, the Shares will be subject to the same restrictions on
transferability and forfeitability as the Shares of Restricted Stock with
respect to which they were paid.
(h)    Return of Restricted Stock to Company. On the date set forth in the
Equity Award Agreement, the Restricted Stock for which restrictions have not
lapsed will revert to the Company and again will become available for grant
under the Equity Component.
7.Restricted Stock Units.
(a)    Grant. Restricted Stock Units may be granted at any time and from time to
time as determined by the Administrator. After the Administrator determines that
it will grant Restricted Stock Units under the Equity Component, it will advise
the Equity Component Participant in an Equity Award Agreement of the terms,
conditions, and restrictions related to the grant, including the number of
Restricted Stock Units.
(b)    Vesting Criteria and Other Terms. The Administrator will set vesting
criteria in its discretion, which, depending on the extent to which the criteria
are met, will determine the number of Restricted Stock Units that will be paid
out to the Equity Component Participant. The Administrator may set vesting
criteria based upon the achievement of Company-wide, divisional, business unit,
or individual goals (including, but not limited to, continued employment or
service), applicable federal or state securities laws or any other basis
determined by the Administrator in its discretion.
(c)    Earning Restricted Stock Units. Upon meeting the applicable vesting
criteria, the Equity Component Participant will be entitled to receive a payout
as determined by the Administrator. Notwithstanding the foregoing, at any time
after the grant of Restricted Stock Units, the Administrator, in its sole
discretion, may reduce or waive any vesting criteria that must be met to receive
a payout.
(d)    Form and Timing of Payment. Payment of earned Restricted Stock Units will
be made as soon as practicable after the date(s) determined by the Administrator
and set forth in the Equity Award Agreement. The Administrator, in its sole
discretion, may only settle earned Restricted Stock Units in cash, Shares, or a
combination of both.

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(e)    Cancellation. On the date set forth in the Equity Award Agreement, all
unearned Restricted Stock Units will be forfeited to the Company.
8.Stock Appreciation Rights.
(a)    Grant of Stock Appreciation Rights. Subject to the terms and conditions
of the Equity Component, a Stock Appreciation Right may be granted to Service
Providers at any time and from time to time as will be determined by the
Administrator, in its sole discretion.
(b)    Number of Shares. The Administrator will have complete discretion to
determine the number of Stock Appreciation Rights granted to any Service
Provider.
(c)    Exercise Price and Other Terms. The per share exercise price for the
Shares to be issued pursuant to exercise of a Stock Appreciation Right will be
determined by the Administrator and will be no less than 100% of the Fair Market
Value per Share on the date of grant. Otherwise, the Administrator, subject to
the provisions of the Equity Component, will have complete discretion to
determine the terms and conditions of Stock Appreciation Rights granted under
the Equity Component.
(d)    Stock Appreciation Right Agreement. Each Stock Appreciation Right grant
will be evidenced by an Equity Award Agreement that will specify the exercise
price, the term of the Stock Appreciation Right, the conditions of exercise, and
such other terms and conditions as the Administrator, in its sole discretion,
will determine.
(e)    Expiration of Stock Appreciation Rights. A Stock Appreciation Right
granted under the Equity Component will expire upon the date determined by the
Administrator, in its sole discretion, and set forth in the Equity Award
Agreement. Notwithstanding the foregoing, the rules of Section 5(b) of the
Equity Component relating to the maximum term and Section 5(d) of the Equity
Component relating to exercise also will apply to Stock Appreciation Rights.
(f)    Payment of Stock Appreciation Right Amount. Upon exercise of a Stock
Appreciation Right, an Equity Component Participant will be entitled to receive
payment from the Company in an amount determined by multiplying:
(i)    The difference between the Fair Market Value of a Share on the date of
exercise over the exercise price; times
(ii)    The number of Shares with respect to which the Stock Appreciation Right
is exercised.
At the discretion of the Administrator, the payment upon Stock Appreciation
Right exercise may be in cash, in Shares of equivalent value, or in some
combination thereof.
9.Performance Units and Performance Shares.
(a)    Grant of Performance Units/Shares. Performance Units and Performance
Shares may be granted to Service Providers at any time and from time to time, as
will be determined by the Administrator, in its sole discretion. The
Administrator will have complete discretion in determining the number of
Performance Units and Performance Shares granted to each Equity Component
Participant.

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(b)    Value of Performance Units/Shares. Each Performance Unit will have an
initial value that is established by the Administrator on or before the date of
grant. Each Performance Share will have an initial value equal to the Fair
Market Value of a Share on the date of grant.
(c)    Performance Objectives and Other Terms. The Administrator will set
Performance Goals, performance objectives or other vesting provisions
(including, without limitation, continued status as a Service Provider) in its
discretion which, depending on the extent to which they are met, will determine
the number or value of Performance Units/Shares that will be paid out to the
Equity Component Participants. The time period during which the Performance
Goals, performance objectives or other vesting provisions must be met will be
called the “Performance Period.” Each Equity Award of Performance Units/Shares
will be evidenced by an Equity Award Agreement that will specify the Performance
Period, and such other terms and conditions as the Administrator, in its sole
discretion, will determine. The Administrator may set performance objectives
based upon the achievement of Company-wide, divisional, business unit, or
individual goals (including, but not limited to, continued employment or
service), applicable federal or state securities laws, or any other basis
determined by the Administrator in its discretion.
(d)    Earning of Performance Units/Shares. After the applicable Performance
Period has ended, the holder of Performance Units/Shares will be entitled to
receive a payout of the number of Performance Units/Shares earned by the Equity
Component Participant over the Performance Period, to be determined as a
function of the extent to which the corresponding Performance Goals, performance
objectives or other vesting provisions have been achieved. After the grant of a
Performance Unit/Share, the Administrator, in its sole discretion, may reduce or
waive any performance objectives or other vesting provisions for such
Performance Unit/Share.
(e)    Form and Timing of Payment of Performance Units/Shares. Payment of earned
Performance Units/Shares will be made as soon as practicable after the
expiration of the applicable Performance Period. The Administrator, in its sole
discretion, may pay earned Performance Units/Shares in the form of cash, in
Shares (which have an aggregate Fair Market Value equal to the value of the
earned Performance Units/Shares at the close of the applicable Performance
Period) or in a combination thereof.
(f)    Cancellation of Performance Units/Shares. On the date set forth in the
Equity Award Agreement, all unearned or unvested Performance Units/Shares will
be forfeited to the Company, and again will be available for grant under the
Equity Component.
10.Performance-Based Compensation Under Section 162(m).
(a)    General. The provisions of this Section 10 of the Equity Component will
control over any contrary provision in the Equity Component.
(b)    Performance Goals. The granting and/or vesting of Equity Awards of
Restricted Stock, Restricted Stock Units, Performance Shares and Performance
Units under the Equity Component shall be made subject to the attainment of one
or more Performance Goals. The Administrator will adjust any performance
criteria, Performance Goal, or other feature of an Equity Award that relates to
or is wholly or partially based on the number of, or the value of, any stock of
the Company, to reflect any stock dividend or split, repurchase,
recapitalization, combination, or exchange of shares or other similar changes in
such stock. The Performance Goals may differ from Equity Component Participant
to Equity Component Participant and from Equity Award to Equity Award. Prior to
the Determination Date, the Administrator will determine whether any significant
element(s) will be included in or excluded from the calculation of any
Performance Goal with respect to any Equity Component Participant.

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(c)    Procedures. To the extent necessary to comply with the performance-based
compensation provisions of Section 162(m), no later than the Determination Date
for each Performance Period, the Administrator will, in writing, (i) designate
one or more Equity Component Participants to whom an Equity Award will be made,
(ii) select the Performance Goals applicable to the Performance Period, (iii)
establish the Performance Goals, and amounts of such Equity Awards, as
applicable, which may be earned for such Performance Period, and (iv) specify
the relationship between Performance Goals and the amounts of such Equity
Awards, as applicable, to be earned by each Equity Component Participant for
such Performance Period. Following the completion of each Performance Period,
the Administrator will certify in writing whether the applicable Performance
Goals have been achieved for such Performance Period. In determining the amounts
earned by an Equity Component Participant, the Administrator will 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 Administrator
may deem relevant to the assessment of individual or corporate performance for
the Performance Period. An Equity Component Participant will be eligible to
receive payment pursuant to an Equity Award for a Performance Period only if the
Performance Goals for such period are achieved.
(d)    Additional Limitations. Notwithstanding any other provision of the Equity
Component, any Equity Award will be subject to any additional limitations set
forth in the Code (including any amendment to Section 162(m)) or any regulations
and ruling issued thereunder that are requirements for qualification as
qualified performance-based compensation as described in Section 162(m), and the
Equity Component will be deemed amended to the extent necessary to conform to
such requirements.
11.Leaves of Absence/Transfer Between Locations. Unless the Administrator
provides otherwise, vesting of Equity Awards granted hereunder will be suspended
during any unpaid leave of absence. An Equity Component Participant will not
cease to be an Employee in the case of (i) any leave of absence approved by the
Company or (ii) transfers between locations of the Company or between the
Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options,
no such leave may exceed 3 months, unless reemployment upon expiration of such
leave is guaranteed by statute or contract. If reemployment upon expiration of a
leave of absence approved by the Company is not so guaranteed, then 6 months
following the first day of such leave any Incentive Stock Option held by the
Equity Component Participant will cease to be treated as an Incentive Stock
Option and will be treated for tax purposes as a Nonstatutory Stock Option.
12.Transferability of Equity Awards. Unless determined otherwise by the
Administrator, an Equity Award may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the Equity
Component Participant, only by the Equity Component Participant. If the
Administrator makes an Equity Award transferable, such Equity Award will contain
such additional terms and conditions as the Administrator deems appropriate.
13.Adjustments; Dissolution or Liquidation; Merger or Change in Control.
(a)    Adjustments. In the event that any dividend or other distribution
(whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, or other change in the corporate
structure of the Company affecting the Shares occurs, the Administrator, in
order to prevent diminution or enlargement of the benefits or potential benefits
intended to be made available under the Equity Component, will adjust the
number, class, and price of Shares covered by each outstanding Equity Award and
the numerical Share limits in Sections 1 and 4 of the Equity Component.

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(b)    Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator will notify each Equity Component
Participant as soon as practicable prior to the effective date of such proposed
transaction. To the extent it has not been previously exercised, an Equity Award
will terminate immediately prior to the consummation of such proposed action.
(c)    Change in Control. In the event of a merger of the Company with or into
another corporation or other entity or a Change in Control, each outstanding
Equity Award will be treated as the Administrator determines, including, without
limitation, that each Equity Award be assumed or an equivalent option or right
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. The Administrator will not be required to treat all
Equity Awards similarly in the transaction.
In the event that the successor corporation does not assume or substitute for
the Equity Award, the Equity Component Participant will fully vest in and have
the right to exercise all of his or her outstanding Options and Stock
Appreciation Rights, including Shares as to which such Equity Awards would not
otherwise be vested or exercisable, and, with respect to Equity Awards with
performance-based vesting, all performance goals or other vesting criteria will
be deemed achieved at 100% of target levels and all other terms and conditions
met. In addition, if an Option or Stock Appreciation Right is not assumed or
substituted in the event of a Change in Control, the Administrator will notify
the Equity Component Participant in writing or electronically that the Option or
Stock Appreciation Right will be exercisable for a period of time determined by
the Administrator in its sole discretion, and the Option or Stock Appreciation
Right will terminate upon the expiration of such period.
For the purposes of this subsection (c), an Equity Award will be considered
assumed if, following the Change in Control, the Equity Award confers the right
to purchase or receive, for each Share subject to the Equity Award immediately
prior to the Change in Control, the consideration (whether stock, cash, or other
securities or property) received in the Change in Control by holders of Common
Stock for each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding Shares); provided, however, that
if such consideration received in the Change in Control is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of an Option or Stock Appreciation Right or upon the
payout of a Restricted Stock Unit, Performance Unit or Performance Share, for
each Share subject to such Equity Award, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the Change in Control.
Notwithstanding anything in this Section 13(c) of the Equity Component to the
contrary, an Equity Award that vests, is earned or paid-out upon the
satisfaction of one or more performance goals will not be considered assumed if
the Company or its successor modifies any of such performance goals without the
Equity Component Participant’s consent; provided, however, a modification to
such performance goals only to reflect the successor corporation’s post-Change
in Control corporate structure will not be deemed to invalidate an otherwise
valid Equity Award assumption.
(d)    Outside Director Equity Awards. With respect to Equity Awards granted to
an Outside Director that are assumed or substituted for, if on the date of or
following such assumption or substitution the Equity Component Participant’s
status as a Director or a director of the successor corporation, as applicable,
is terminated other than upon a voluntary resignation by the Equity Component
Participant (unless such resignation is at the request of the acquirer), then
the Equity Component Participant will fully vest in and have the right to
exercise Options and/or Stock Appreciation Rights as to all of the Shares
underlying such Equity Award, including those Shares which would not otherwise
be vested or exercisable, all restrictions

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on Restricted Stock and Restricted Stock Units will lapse, and, with respect to
Performance Units and Performance Shares, all performance goals or other vesting
criteria will be deemed achieved at one hundred percent (100%) of target levels
and all other terms and conditions met.
14.Tax.
(a)    Withholding Requirements. Prior to the delivery of any Shares or cash
pursuant to an Equity Award (or exercise thereof), or such earlier time as any
tax withholding obligations are due, the Company will have the power and the
right to deduct or withhold, or require an Equity Component Participant to remit
to the Company, an amount sufficient to satisfy federal, state, local, foreign
or other taxes (including the Equity Component Participant’s FICA obligation)
required to be withheld with respect to such Equity Award (or exercise thereof).
(b)    Withholding Arrangements. The Administrator, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit an
Equity Component Participant to satisfy such tax withholding obligation, in
whole or in part by (without limitation) (i) paying cash, (ii) electing to have
the Company withhold otherwise deliverable cash or Shares having a Fair Market
Value equal to the minimum statutory amount required to be withheld, or (iii)
delivering to the Company already-owned Shares having a Fair Market Value equal
to the minimum statutory amount required to be withheld. The Fair Market Value
of the Shares to be withheld or delivered will be determined as of the date that
the taxes are required to be withheld.
(c)    Compliance With Section 409A. Equity Awards will be designed and operated
in such a manner that they are either exempt from the application of, or comply
with, the requirements of Section 409A such that the grant, payment, settlement
or deferral will not be subject to the additional tax or interest applicable
under Section 409A, except as otherwise determined in the sole discretion of the
Administrator. The Equity Component and each Equity Award Agreement under the
Equity Component is intended to meet the requirements of Section 409A and will
be construed and interpreted in accordance with such intent, except as otherwise
determined in the sole discretion of the Administrator. To the extent that an
Equity Award or payment, or the settlement or deferral thereof, is subject to
Section 409A the Equity Award will be granted, paid, settled or deferred in a
manner that will meet the requirements of Section 409A, such that the grant,
payment, settlement or deferral will not be subject to the additional tax or
interest applicable under Section 409A.
15.No Effect on Employment or Service. Neither the Equity Component nor any
Equity Award will confer upon an Equity Component Participant any right with
respect to continuing the Equity Component Participant’s relationship as a
Service Provider with the Company or any Parent or Subsidiary of the Company,
nor will they interfere in any way with the Equity Component Participant’s right
or the Company’s right, or any Parent’s or Subsidiary’s right, to terminate such
relationship at any time, with or without cause, to the extent permitted by
Applicable Laws.
16.Date of Grant. The date of grant of an Equity Award will be, for all
purposes, the date on which the Administrator makes the determination granting
such Equity Award, or such other later date as is determined by the
Administrator. Notice of the determination will be provided to each Equity
Component Participant within a reasonable time after the date of such grant.
17.Conditions Upon Issuance of Shares.
(a)    Legal Compliance. Shares will not be issued pursuant to the exercise of
an Equity Award unless the exercise of such Equity Award and the issuance and
delivery of such Shares will comply

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with Applicable Laws and will be further subject to the approval of counsel for
the Company with respect to such compliance.
(b)    Investment Representations. As a condition to the exercise of an Equity
Award, the Company may require the person exercising such Equity Award to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.
18.Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction or to complete or comply
with the requirements of any registration or other qualification of the Shares
under any state, federal or foreign law or under the rules and regulations of
the Securities and Exchange Commission, the stock exchange on which Shares of
the same class are then listed, or any other governmental or regulatory body,
which authority, registration, qualification or rule compliance is deemed by the
Company’s counsel to be necessary or advisable for the issuance and sale of any
Shares hereunder, will relieve the Company of any liability in respect of the
failure to issue or sell such Shares as to which such requisite authority,
registration, qualification, or rule compliance will not have been obtained.
ARTICLE III
OTHER TERMS
1.Forfeiture Events.
(a)    All Awards will be subject to recoupment under any clawback policy that
the Company is required to adopt pursuant to the listing standards of any
national securities exchange or association on which the Company’s securities
are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and
Consumer Protection Act or other applicable laws. In addition, the Administrator
may impose such other clawback, recovery, or recoupment provisions in a Cash
Award Agreement or Equity Award Agreement as the Administrator determines
necessary or appropriate, including but not limited to a reacquisition right
regarding previously acquired Shares or other cash or property. Unless this
Section 1 of Article III is specifically mentioned and waived in a Cash Award
Agreement, Equity Award Agreement, or other document, no recovery of
compensation under a clawback policy or otherwise will be an event that triggers
or contributes to any right of a Participant to resign for “good reason” or
“constructive termination” (or similar term) under any agreement with the
Company, any Parent or Subsidiary of the Company, or any Affiliate.
(b)    The Administrator may specify in a Cash Award Agreement or Equity Award
Agreement that the applicable Participant’s rights, payments, and benefits with
respect to such Participant’s Actual Cash Award or Equity Award will be subject
to reduction, cancellation, forfeiture, or recoupment upon the occurrence of
specified events, in addition to any otherwise applicable vesting or performance
conditions of an Actual Cash Award or Equity Award. Such events may include, but
will not be limited to, a Cash Component Participant’s Termination of Employment
for cause, termination of an Equity Component Participant’s status as a Service
Provider for cause, or any specified action or inaction by the Participant,
whether before or after the date of such Termination of Employment or
termination of Service Provider status, that would constitute cause for such
individual’s Termination of Employment or termination of Service Provider
status.
(c)    If the Company is required to prepare an accounting restatement due to
the material noncompliance of the Company, as a result of misconduct, with any
financial reporting requirement under securities laws, any Participant who (i)
knowingly or through gross negligence engaged in the misconduct

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or who knowingly or through gross negligence failed to prevent the misconduct or
(ii) is one of the individuals subject to automatic forfeiture under Section 304
of the Sarbanes-Oxley Act of 2002, must reimburse the Company the amount of any
payment in settlement of any Award earned or accrued during the 12-month period
following the first public issuance or filing with the Securities and Exchange
Commission (whichever first occurred) of the financial document embodying such
financial reporting requirement.
2.Term of Plan. The Plan will become effective upon the Effective Date. It will
continue in effect for a term of 5 years from the Effective Date, unless
terminated earlier under Section 3 of this Article III.
3.Amendment and Termination.
(a)Amendment and Termination. The Board or Administrator may at any time amend,
alter, suspend or terminate the Plan.
(b)Stockholder Approval. The Company will obtain stockholder approval of any
Plan amendment to the extent necessary or desirable to comply with applicable
laws.
(c)Consent of Participants Generally Required. Subject to Section 1(d)3(d) of
this Article III, no amendment, alteration, suspension or termination of the
Plan or an Award under it will impair the rights of any Participant, unless
mutually agreed otherwise between such Participant and the Administrator, which
agreement must be in writing and signed by the Participant and the Company (any
such agreement with respect to an award under the Cash Component, a “Cash Award
Agreement”). Termination of the Plan will not affect the Administrator’s ability
to exercise the powers granted to it regarding Awards established under the Plan
prior to such termination.
(d)Exceptions to Consent Requirement.
(i)    A Participant’s rights will not be deemed to have been impaired by any
amendment, alteration, suspension or termination if the Administrator, in its
sole discretion, determines that the amendment, alteration, suspension or
termination does not materially impair the Participant’s rights, and
(ii)    subject to any limitations of applicable laws, the Administrator may
amend the terms of any Awards under the Plan without the affected Participant’s
consent even if it does materially impair the Participant’s right if such
amendment is done:
(1)    in a manner permitted under the Plan;
(2)    to avoid imposition of any additional tax or income recognition under
Section 409A prior to actual payment to the Participant;
(3)    to comply with other applicable laws; or
(4)    as necessary based on rulings or guidance issued to ensure compliance
with the requirements of Section 162(m).
4.Stockholder Approval. The Plan will be subject to approval by the stockholders
of the Company within 12 months after the date the Plan is adopted. Such
stockholder approval will be obtained in the manner and to the degree required
under applicable laws.

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5.Law Governing. The validity and construction of the Plan shall be governed by
the laws of the State of California but without regard to the choice of law
principles thereof.
6.Definitions. As used herein, the following definitions will apply to the Plan,
and any term not specifically defined herein shall have the meaning ascribed to
it in the Equity Plan:
(a)“Actual Cash Award” means as to any Performance Period, the actual award (if
any) payable to a Cash Component Participant for the Performance Period. Each
Actual Cash Award is determined by the Payout Calculation Methodology for the
Performance Period, subject to the Administrator’s authority under Section
3(d)(ii) of the Cash Component to eliminate or reduce the award otherwise
determined by the Payout Calculation Methodology. To apply the Maximum Cash
Award limitation, the Actual Cash Award will be deemed to have been determined
on the last day of the applicable Performance Period, so that if there are
multiple Performance Periods ending in a particular fiscal year of the Company,
the Actual Cash Awards, in the aggregate, may not exceed the Maximum Cash Award
regarding all such Performance Periods ending in that fiscal year of the
Company.
(b)“Administrator” means the Compensation Committee of the Board or any other
Committee.
(c)“Affiliate” means any corporation or other entity (including, but not limited
to, partnerships and joint ventures) controlled by the Company.
(d)“Applicable Laws” means the requirements relating to the administration of
equity-based awards under U.S. state corporate laws, U.S. federal and state
securities laws, the Code, any stock exchange or quotation system on which the
Common Stock is listed or quoted and the applicable laws of any foreign country
or jurisdiction where Equity Awards are, or will be, granted under the Equity
Component.
(e)“Award” means an award under the Cash Component or an Equity Award.
(f)“Board” means the Board of Directors of the Company.
(g)“Cash Component Participant” means as to any Performance Period, an employee
of the Company or an Affiliate selected by the Administrator for participation
in the Cash Component for that Performance Period.
(h)“Change in Control” means the occurrence of any of the following events:
(i)    A change in the ownership of the Company which occurs on the date that
any one person, or more than one person acting as a group (“Person”), acquires
ownership of the stock of the Company that, together with the stock held by such
Person, constitutes more than 50% of the total voting power of the stock of the
Company; provided, however, that for purposes of this subsection (i), the
acquisition of additional stock by any one Person, who is considered to own more
than 50% of the total voting power of the stock of the Company will not be
considered a Change in Control; or
(ii)    A change in the effective control of the Company which occurs on the
date that a majority of members of the Board is replaced during any 12 month
period by Directors whose appointment or election is not endorsed by a majority
of the members of the Board prior to the date of the appointment or election.
For purposes of this clause (ii), if any Person is considered to be in effective
control of the Company, the acquisition of additional control of the Company by
the same Person will not be considered a Change in Control; or

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(iii)    A change in the ownership of a substantial portion of the Company’s
assets which occurs on the date that any Person acquires (or has acquired during
the 12 month period ending on the date of the most recent acquisition by such
person or persons) assets from the Company that have a total gross fair market
value equal to or more than 50% of the total gross fair market value of all of
the assets of the Company immediately prior to such acquisition or acquisitions;
provided, however, that for purposes of this subsection (iii), the following
will not constitute a change in the ownership of a substantial portion of the
Company’s assets: (A) a transfer to an entity that is controlled by the
Company’s stockholders immediately after the transfer, or (B) a transfer of
assets by the Company to: (1) a stockholder of the Company (immediately before
the asset transfer) in exchange for or with respect to the Company’s stock, (2)
an entity, 50% or more of the total value or voting power of which is owned,
directly or indirectly, by the Company, (3) a Person, that owns, directly or
indirectly, 50% or more of the total value or voting power of all the
outstanding stock of the Company, or (4) an entity, at least 50% of the total
value or voting power of which is owned, directly or indirectly, by a Person
described in this subsection (iii)(B)(3). For purposes of this subsection (iii),
gross fair market value means the value of the assets of the Company, or the
value of the assets being disposed of, determined without regard to any
liabilities associated with such assets.
For purposes of this definition, persons will be considered to be acting as a
group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction
with the Company.
Notwithstanding the foregoing, a transaction will not be deemed a Change in
Control unless the transaction qualifies as a change in control event within the
meaning of Section 409A, as it has been and may be amended from time to time,
and any proposed or final Treasury Regulations and Internal Revenue Service
guidance that has been promulgated or may be promulgated thereunder from time to
time.
Further and for the avoidance of doubt, a transaction will not constitute a
Change in Control if: (i) its sole purpose is to change the state of the
Company’s incorporation, or (ii) its sole purpose is to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company’s securities immediately before such transaction.
(i)“Code” means the U.S. Internal Revenue Code of 1986, as amended. Reference to
a specific section of the Code or regulation thereunder shall include such
section or regulation, any valid regulation promulgated under such section, and
any comparable provision of any future legislation or regulation amending,
supplementing, or superseding such section or regulation.
(j)“Committee” means a duly authorized committee of the Board consisting of 2 or
more “outside directors” within the meaning of Section 162(m).
(k)“Common Stock” means the common stock of the Company.
(l)“Consultant” means any person, including an advisor, engaged by the Company
or a Parent or Subsidiary to render services to such entity.
(m)“Covered Employee” means any Service Provider who would be considered a
“covered employee” within the meaning of Section 162(m).
(n)“Determination Date” means the latest possible date that will not jeopardize
the qualification of an Actual Cash Award or Equity Award as “performance-based
compensation” under Section 162(m).

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(o)“Director” means a member of the Board.
(p)“Disability” means a permanent and total disability determined under uniform
and nondiscriminatory standards adopted by the Administrator from time to time;
provided, however, that in the case of Incentive Stock Options, “Disability”
means total and permanent disability as defined in Section 22(e)(3) of the Code.
(q)“Employee” means any person, including Directors, employed by the Company or
any Parent or Subsidiary of the Company. Neither service as a Director nor
payment of a director’s fee by the Company will be sufficient to constitute
“employment” by the Company.
(r)“Equity Award” means, individually or collectively, a grant under the Equity
Component of Options, Restricted Stock, Restricted Stock Units, Stock
Appreciation Rights, Performance Units, or Performance Shares.
(s)“Equity Award Agreement” means the written or electronic agreement setting
forth the terms and provisions applicable to each Equity Award granted under the
Equity Component. The Equity Award Agreement is subject to the terms and
conditions of the Equity Component.
(t)“Equity Component Participant” means the holder of an outstanding Equity
Award.
(u)“Equity Plan” means the Company’s 2012 Equity Incentive Plan as hereinafter
may be amended.
(v)“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
(w)“Exchange Program” means a program under which (i) outstanding Equity Awards
are surrendered or cancelled in exchange for awards of the same type (which may
have higher or lower exercise prices and different terms), awards of a different
type, and/or cash, (ii) Equity Component Participants would have the opportunity
to transfer any outstanding Equity Awards to a financial institution or other
person or entity selected by the Administrator, and/or (iii) the exercise price
of an outstanding Equity Award is increased or reduced.
(x)“Fair Market Value” means, as of any date, the value of Common Stock
determined as follows:
(i)    If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the New York Stock
Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market or the
NASDAQ Capital Market of The NASDAQ Stock Market, its Fair Market Value will be
the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system on the day of determination, as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable;
(ii)    If the Common Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, the Fair Market Value of a Share
will be the mean between the high bid and low asked prices for the Common Stock
on the day of determination (or, if no bids and asks were reported on that date,
as applicable, on the last trading date such bids and asks were reported), as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable; or

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(iii)    In the absence of an established market for the Common Stock, the Fair
Market Value will be determined in good faith by the Administrator.
(y)“Fiscal Year” means the fiscal year of the Company.
(z)“Incentive Stock Option” means an Option intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.
(aa)“Maximum Cash Award” means as to any Cash Component Participant for any
fiscal year of the Company, $5,000,000.
(bb)“Nonstatutory Stock Option” means an Option that by its terms does not
qualify or is not intended to qualify as an Incentive Stock Option.
(cc)“Option” means a stock option granted pursuant to the Equity Component.
(dd)“Outside Director” means a Director who is not an Employee.
(ee)“Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.
(ff)“Participant” means a Cash Component Participant or an Equity Component
Participant.
(gg)“Payout Calculation Methodology” means as to any Performance Goal, the
methodology for calculating the maximum amount earned by performance against the
Performance Goal.
(hh)“Performance Goals” mean any one or more of the following objective
performance criteria, applied to either the Company or, except regarding
stockholder return metrics, to a region, business unit, affiliate or business
segment, and measured either on an absolute basis, a per share basis or relative
to a pre-established target, to a previous period’s results or to a designated
comparison group, and, with respect to financial metrics, which may be
determined under United States Generally Accepted Accounting Principles
(“GAAP”), under accounting principles established by the International
Accounting Standards Board (“IASB Principles”) or which may be adjusted when
established to exclude any items otherwise includable under GAAP or under IASB
Principles: (i) cash flow (including operating cash flow or free cash flow),
(ii) revenue (on an absolute basis or adjusted for currency effects),
(iii) gross margin, (iv) operating expenses or operating expenses as a
percentage of revenue, (v) earnings (which may include earnings before interest
and taxes, earnings before taxes, net earnings or EBITDA), (vi) earnings per
share, (vii) stock price, (viii) return on equity, (ix) total stockholder
return, (x) growth in stockholder value relative to the moving average of the
S&P 500 Index, or another index, (xi) return on capital, (xii) return on assets
or net assets, (xiii) return on investment, (xiv) operating income or net
operating income, (xv) operating margin, (xvi) market share, (xvii) overhead or
other expense reduction, (xviii) objective customer indicators,
(xix) improvements in productivity, (xx) attainment of objective operating
goals, (xxi) objective employee metrics, (xxii) return ratios, (xxiii) objective
qualitative milestones, or (xxiv) other objective financial or other metrics
relating to the progress of the Company, any Parent or Subsidiary of the
Company, any Affiliate (with respect to Actual Cash Awards only), or any
division or department thereof. Each Performance Goal may be expressed on an
absolute and/or relative basis, may be based on, or otherwise employ,
comparisons based on internal targets, the past performance of the Company
and/or the past or current performance of other companies. Unless the
Administrator provides otherwise in accordance with the preceding sentence,
Performance Goals will be calculated in accordance with the Company’s financial
statements, generally accepted accounting

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principles, or under a methodology established by the Administrator prior to or
at the time of the issuance of an Equity Award and which is consistently applied
with respect to a Performance Goal in the relevant Performance Period.
(ii)“Performance Period” means any Fiscal Year of the Company or such other
period as determined by the Administrator, in its sole discretion.
(jj)“Performance Share” means an Equity Award denominated in Shares which may be
earned in whole or in part upon attainment of Performance Goals, performance
objectives, or other vesting criteria as the Administrator may determine
pursuant to Section 9 of the Equity Component.
(kk)“Performance Unit” means an Equity Award which may be earned in whole or in
part upon attainment of Performance Goals, performance objectives, or other
vesting criteria as the Administrator may determine and which may be settled for
cash, Shares or other securities or a combination of the foregoing pursuant to
Section 9 of the Equity Component, and which, for the avoidance, will include
any Restricted Stock Units (as defined in Equity Plan) which may be earned in
whole or in part upon attainment of Performance Goals or performance objectives
in accordance with the same terms as applicable to Performance Units described
herein.
(ll)“Restricted Stock” means Shares issued pursuant to a Restricted Stock award
under Section 6 of the Equity Component, or issued pursuant to the early
exercise of an Option.
(mm)“Restricted Stock Unit” means a bookkeeping entry representing an amount
equal to the Fair Market Value of one Share, granted pursuant to Section 7 of
the Equity Component. Each Restricted Stock Unit represents an unfunded and
unsecured obligation of the Company.
(nn)“Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule
16b-3, as in effect when discretion is being exercised with respect to the
Equity Component.
(oo)“Section 16(b)” means Section 16(b) of the Exchange Act.
(pp)“Section 162(m)” means Section 162(m) of the Code and the regulations and
interpretations promulgated thereunder.
(qq)“Section 409A” means Section 409A of the Code and any proposed, temporary,
or final U.S. Treasury Regulations and U.S. Internal Revenue Service guidance,
as each may be amended from time to time.
(rr)“Service Provider” means an Employee, Director, or Consultant.
(ss)“Share” means a share of the Common Stock, as adjusted in accordance with
Section 13 of the Equity Plan and/or Section 13 of the Equity Component.
(tt)“Stock Appreciation Right” means an Equity Award, granted alone or in
connection with an Option, that pursuant to Section 68 of the Equity Component
is designated as a Stock Appreciation Right.
(uu)“Subsidiary” means a “subsidiary corporation”, whether now or hereafter
existing, as defined in Section 424(f) of the Code.

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(vv)“Termination of Employment” means a cessation of the employee-employer
relationship between a Cash Component Participant and the Company or an
Affiliate for any reason, including, but not by way of limitation, a termination
by resignation, discharge, death, Disability, retirement, or the disaffiliation
of an Affiliate, but excluding any such termination where there is a
simultaneous reemployment by the Company or an Affiliate.

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