Exhibit 10.2

 

CUBIST PHARMACEUTICALS, INC.

 

AMENDED AND RESTATED

2002 DIRECTORS’ EQUITY INCENTIVE PLAN

 

(Adopted by the Board of Directors on March 5, 2002, effective upon ratification
and approval by the stockholders of the Company on June 13, 2002, and amended
and restated upon ratification and approval by the stockholders of the Company
on June 10, 2003.  First Amendment effective upon approval by the Board of
Directors on August 2, 2005.  Amended and restated upon ratification and
approval by the stockholders of the Company on June 8, 2006. Amended and
restated again effective upon approval by the Board of Directors on March 8,
2007 and ratified and approved by the stockholders of the Company on June 7,
2007. Amended and restated further effective upon approval by the Board of
Directors on March 10, 2008 and April 9, 2008.)

 

The options granted under this Amended and Restated 2002 Directors’ Equity
Incentive Plan (the “Plan”) of Cubist Pharmaceuticals, Inc. (the “Company”) are
not intended to be treated as “incentive stock options” within the meaning of
Section 422 of the Code.

 

1.             Definitions.  As used in this Plan, the following terms shall
have the following meanings:

 

1.1.          Accelerate, Accelerated, and Acceleration, means: (a) when used
with respect to an Option, that as of the relevant time of reference such Option
will become exercisable with respect to some or all of the shares of Stock for
which it was not then otherwise exercisable by its terms; and (b) when used with
respect to Restricted Stock, that the Risk of Forfeiture otherwise applicable to
the Stock will expire with respect to some or all of the shares of Restricted
Stock for which it was not then still otherwise subject to the Risk of
Forfeiture.

 

1.2           Award means any grant or sale, pursuant to the Plan, of Options,
Stock Grants or Restricted Stock.

 

1.3           Award Agreement means an Option Agreement or any other agreement
between the Company and the recipient of an Award, setting forth the terms and
conditions of the Award.

 

1.4.          Board means the Company’s Board of Directors.

 

1.5.          Change in Corporate Control means (1) the closing of (A) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which Shares would be
converted into cash, securities or other property, other than a merger or
consolidation which the holders of Stock immediately prior to the merger or
consolidation will have the same proportionate ownership of common stock of the
surviving corporation immediately after the merger or

 

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consolidation as before the merger or consolidation, or (B) any sale, lease,
exchange, or other transfer in a single transaction or a series of related
transactions of all or substantially all of the assets of the Company, or
(2) the date on which any “person” (as defined in Section 13(d) of the Exchange
Act), other than the Company or a Subsidiary or employee benefit plan or trust
maintained by the Company or any of its Subsidiaries shall become (together with
its “affiliates” and “associates,” as defined in Rule 12b-2 under the Exchange
Act) the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 100% of the Stock outstanding at the time, with the
prior approval of the Board, or (3) a Hostile Change in Corporate Control.

 

1.6.          Code means the United States Internal Revenue Code of 1986, as
amended.

 

1.7.          Company means Cubist Pharmaceuticals, Inc., a Delaware
corporation.

 

1.8.          Compensation Committee means a committee comprised of two or more
Outside Directors, appointed by the Board, and vested by the Board with the
power and authority to administer the Plan in accordance with the provisions of
Section 5.

 

1.9.          Exchange Act means the Securities Exchange Act of 1934, as
amended.

 

1.10.        Eligible Director means a director of one or more of the Company
and its Subsidiaries who is not also an employee or officer of one or more of
the Company and its Subsidiaries.

 

1.11.        Fair Market Value means on any date (i) if the Stock is listed on
an exchange, the closing price of the Stock on such date or, if no trades were
reported on such date, the closing price on the most recent trading day
preceding such date on which a trade occurred, and (ii) if the Stock is not
traded on an exchange, the price at which the Stock was purchased or sold in the
most recent transaction in the Stock.

 

1.12.        Grant Date means the date as of which an Option is granted.

 

1.13.        Holder means, with respect to any Award, (i) the Eligible Director
to whom such Award shall have been granted under the Plan, or (ii) any
transferee of such Award to whom such Award shall have been transferred in
accordance with the provisions of Section 14.

 

1.14.        Hostile Change in Corporate Control means the date on which any
“person” (as defined in Section 13(d) of the Exchange Act), other than the
Company or a Subsidiary or employee benefit plan or trust maintained by the
Company or any of its Subsidiaries shall become (together with its “affiliates”
and “associates,” as defined in Rule 12b-2 under the Exchange Act) the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of more than 25% of the Stock outstanding at the time, without
the prior approval of the Board.

 

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1.15.        Incentive Option means an “incentive stock option” within the
meaning of Section 422 of the Code.

 

1.16.        Incumbent Directors means, in the case of a Hostile Change in
Corporate Control, those individuals who were members of the Company’s Board of
Directors immediately prior to such Hostile Change in Corporate Control.

 

1.17.        Option means an option granted under the Plan to purchase Shares.

 

1.18.        Option Agreement means an agreement between the Company and an
Optionee, setting forth the terms and conditions of an Option.

 

1.19.        Option Price means the price paid by an Optionee for a Share upon
exercise of an Option.

 

1.20.        Optionee means a person eligible to receive an Option, to whom an
Option shall have been granted under the Plan.

 

1.21.        Outside Director shall mean a member of the Board who is not an
officer, employee or consultant of the Company or any Subsidiary.

 

1.22         Plan means this Amended and Restated 2002 Directors’ Equity
Incentive Plan of the Company, as amended from time to time.

 

1.23         Restricted Stock means Shares subject to a Risk of Forfeiture,
rights to which are granted to an Eligible Director under the Plan.

 

1.24         Restriction Period means the period of time, established by the
Compensation Committee in connection with an Award of Restricted Stock, during
which the shares of Restricted Stock are subject to a Risk of Forfeiture
described in the applicable Award Agreement.

 

1.25         Risk of Forfeiture means a limitation on the right of the Eligible
Director to retain Restricted Stock, including a right of the Company to
reacquire shares of Restricted Stock at less than their then Fair Market Value,
arising because of the occurrence or non-occurrence of specified events or
conditions.

 

1.26.        Securities Act means the United States Securities Act of 1933, as
amended.

 

1.27.        Shares means shares of Stock.

 

1.28.        Stock means common stock, $.001 par value per share, of the
Company.

 

1.29         Stock Grant means an Award pursuant to Section 9A below of shares
of Stock not subject to restrictions or other forfeiture conditions.

 

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1.30.        Subsidiary means any corporation which qualifies as a subsidiary of
the Company under the definition of “subsidiary corporation” in
Section 424(f) of the Code.

 

2.             Purpose.  This Plan is intended to promote the recruiting and
retention of highly qualified Eligible Directors, to strengthen commonality of
interest between directors and stockholders by encouraging ownership of Stock by
Eligible Directors, and to provide additional incentives for Eligible Directors
to promote the success of the Company’s business.  The Plan is not intended to
be an incentive stock option plan within the meaning of Section 422 of the
Code.  None of the Options granted hereunder will be Incentive Options.

 

3.             Term of the Plan.  Awards may be granted hereunder at any time in
the period commencing upon the effectiveness of the Plan pursuant to Section 20
and ending on June 30, 2012.

 

4.             Stock Subject to the Plan.  Subject to the provisions of
Section 14 of the Plan, at no time shall the number of Shares issued pursuant to
or subject to outstanding Awards granted under the Plan exceed 975,000 Shares. 
The shares of Stock to be issued under the Plan, will be made available, at the
discretion of the Compensation Committee, from authorized but unissued Shares or
Shares held by the Company in its treasury.  Options awarded shall reduce the
number of Shares available for Awards by one Share for every one Share so
awarded.  Stock Grant Awards and Awards of Restricted Stock shall reduce the
number of Shares available for Awards by two Shares for every one Share so
awarded.  If any Option expires, terminates or is cancelled for any reason
without having been exercised in full, or if any Award other than an Option is
forfeited by the recipient or repurchased by the Company at less than its Fair
Market Value, the Shares not purchased by the Optionee or forfeited by the
recipient or repurchased shall again be available for Awards to be granted under
the Plan.

 

5.             Administration. The Plan shall be administered by the
Compensation Committee.  Subject to the provisions of the Plan, the Compensation
Committee shall have complete authority to interpret the Plan, to prescribe,
amend and rescind rules and regulations relating to it, to determine the terms
and provisions of the respective Award Agreements (which need not be identical),
and to make all other determinations necessary or advisable for the
administration of the Plan.  The Compensation Committee’s determinations on the
matters referred to in this Section 5 shall be final, binding and conclusive on
all persons having or claiming an interest under the Plan or an Award made
pursuant hereto.  Notwithstanding anything expressed or implied in the Plan to
the contrary, at any time and on any one or more occasions, the Board may itself
exercise any of the powers and responsibilities assigned to the Compensation
Committee under the Plan and when so acting shall have the benefit of all of the
provisions of this Plan pertaining to the Compensation Committee’s exercise of
its authorities hereunder.

 

6.             Eligibility.  Only Eligible Directors shall be granted Awards
under the Plan.

 

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7.             Options.

 

7.1.          Directors Elected For First Time.  Subject to the Plan’s
effectiveness as set forth in Section 20, each Eligible Director who is elected
to the Board during the term of the Plan (whether elected at an annual or
special stockholders’ meeting or by action of the Board or written consent of
stockholders without a meeting), and who prior to such election was never
previously a member of the Board, shall be granted, on the date of such meeting
or other appointment, an Option to purchase 10,000 Shares; provided, however,
that if such Eligible Director is elected at such time to be Lead Director or
Chairman of the Board (as such titles may be determined by the Board), then such
Eligible Director shall be granted, on the date of such meeting or other
appointment and in lieu of any such Option to purchase 10,000 Shares, an Option
to purchase 15,000 Shares in the case of a Lead Director or 20,000 Shares in the
case of the Chairman.  Subject to Sections 10, 11 and 12, grants of Options
under this Section 7.1 occur automatically without any action being required of
the Optionee, the Compensation Committee, the Board, the Company or any other
person, entity or body.

 

7.2.          Annual Grants.  Subject to the Plan’s effectiveness as set forth
in Section 20, on the date of each annual meeting of stockholders of the Company
commencing with the 2006 Annual Meeting of Stockholders of the Company, each
Eligible Director who continues to be a director of the Company as of the close
of business on the date of such annual meeting of stockholders shall be granted
an Option on such business day, to purchase Shares in an amount set by
resolution of the Board prior to such business day. Subject to Sections 10, 11
and 12, grants of Options under this Section 7.2 occur automatically without any
action being required of the Optionee, the Compensation Committee, the Board,
the Company or any other person, entity or body.

 

7.3.          Certain Terms of Options.  Each Option granted to an Optionee
under this Section 7 shall have an exercise price equal to at least 100% of the
Fair Market Value of the Stock on the applicable Grant Date.  No Option granted
pursuant to this Section 7 is intended to qualify as an Incentive Option.  The
grants shall be evidenced by Option Agreements containing provisions that are in
all respects consistent with this Section 7.  All of such Option Agreements
shall contain identical terms and conditions, except as otherwise required or
permitted by this Section 7.

 

7.4.          Option Period.  The option period for any Option granted pursuant
to this Section 7 shall be no longer than ten years from the Grant Date.

 

7.5.          Exercisability. Each Option granted to an Eligible Director
pursuant to Section 7.1 hereof (a “Section 7.1 Option”) shall become exercisable
in twelve (12) equal quarterly installments, with the first installment becoming
exercisable on the last day of the first full fiscal quarter following the Grant
Date applicable to such Section 7.1 Option and an additional installment
becoming exercisable on the last day of each of the eleven successive fiscal
quarters following such first fiscal quarter; provided, however, that if the
Optionee with respect to such Section 7.1 Option shall cease to be a director of
the Company, then, notwithstanding anything in this Section 7.5 to the contrary
and subject

 

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to Sections 7.6 and 12 hereof, such Section 7.1 Option shall thereafter be
exercisable only with respect to those of such installments for which such
Section 7.1 Option is exercisable, pursuant to this Section 7.5, at the time of
such cessation.  Each Option granted to an Eligible Director pursuant to
Section 7.2 hereof (a “Section 7.2 Option”) shall be exercisable according to a
schedule determined by the Board in its sole discretion (and not the
Compensation Committee, notwithstanding the responsibilities assigned to the
Compensation Committee pursuant to Section 5), provided, however, that if the
Optionee with respect to such Section 7.2 Option shall cease to be a director of
the Company, then, subject to Sections 7.6 and 12 hereof, such Section 7.2
Option shall thereafter be exercisable only with respect to those of such
installments for which such Section 7.2 Option is exercisable, pursuant to this
Section 7.5, at the time of such cessation.

 

7.6.          Certain Modifications of Options.  Notwithstanding anything in
this Section 7 or any applicable Option Agreement to the contrary, in the case
of an Option not otherwise immediately exercisable in full, the Compensation
Committee may accelerate the exercisability of such Option in whole or in part
at any time.  In the event that the Compensation Committee accelerates the
exercisability of any Option in whole or in part at any time, the Compensation
Committee may require as a condition precedent to the effectiveness of any such
acceleration that the holder of such Option shall enter into a written agreement
with the Company providing, among other things, that the Shares subject to such
Option shall, following their issuance upon exercise of such Option, be subject
to a repurchase option in favor of the Company upon such terms as the
Compensation Committee shall determine in its sole and absolute discretion.

 

8.                                       Exercise of Option.

 

(a)           An Option may be exercised only by giving written notice, in the
manner provided in Section 19 hereof, specifying the number of Shares as to
which the Option is being exercised, accompanied (except as otherwise provided
in paragraphs (b) and (c) of this Section 8) by full payment for such Shares in
the form of a check or bank draft payable to the order of the Company or other
Shares with a current Fair Market Value equal to the Option Price of the Shares
to be purchased.  Receipt by the Company of such notice and payment shall
constitute the exercise of the Option or a part thereof.  Subject to the
provisions of the Plan (including, without limitation, Sections 10, 11 and 12)
or any applicable Option Agreement, within 30 days after receipt of such notice
and payment, the Company shall deliver or cause to be delivered to the Holder
the number of Shares then being purchased by the Holder.  Such Shares shall be
fully paid and nonassessable.

 

(b)           In lieu of payment by check, bank draft or other Shares
accompanying the written notice of exercise as described in paragraph (a) of
this Section 8, a Holder may, unless prohibited by applicable law, elect to
effect payment by including with the written notice referred to in paragraph
(a) of this Section 8 irrevocable instructions to deliver for sale to a
registered securities broker acceptable to the Company that number of Shares
subject to the Option being exercised sufficient, after brokerage

 

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commissions, to cover the aggregate exercise price of such Option and, if the
Holder further elects, the withholding obligations of the Optionee and/or such
Holder pursuant to Section 12 with respect to such exercise, together with
irrevocable instructions to such broker to sell such Shares and to remit
directly to the Company such aggregate exercise price and, if the Holder has so
elected, the amount of such withholding obligation.  The Company shall not be
required to deliver to such securities broker such Shares until it has received
from the broker such exercise price and, if the Holder has so elected, the
amount of such withholding obligation.

 

(c)           No Holder shall be permitted to effect payment of any amount of
the Option Price of the Shares to be purchased by executing and delivering to
the Company a promissory note.

 

(d)           The right of the Holder to exercise an Option pursuant to any
provision of this Section 8, and the obligation of the Company to issue Shares
upon any exercise of an Option pursuant to this Section 8, is subject to
compliance with all of the other provisions of the Plan (including, without
limitation, Sections 10, 11 and 12) or any applicable Option Agreement.

 

9.             Restricted Stock.

 

9.1           Purchase Price.  Shares of Restricted Stock shall be issued under
the Plan for such consideration, in cash, other property or services, or any
combination thereof, as is determined by the Compensation Committee.

 

9.2           Issuance of Certificates.  Each Eligible Director receiving a
Restricted Stock Award, subject to Section 9.3 below, shall be issued a stock
certificate in respect of such shares of Restricted Stock.  Such certificate
shall be registered in the name of such Eligible Director, and, if applicable,
shall bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Award substantially in the following form:

 

The transferability of this certificate and the shares represented by this
certificate are subject to the terms and conditions of the Cubist
Pharmaceuticals, Inc. Amended and Restated 2002 Directors’ Equity Incentive Plan
and an Award Agreement entered into by the registered owner and Cubist
Pharmaceuticals, Inc.  Copies of such Plan and Agreement are on file in the
offices of Cubist Pharmaceuticals, Inc.

 

9.3           Escrow of Shares.  The Compensation Committee may 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 Eligible Director deliver a
stock power, endorsed in blank, relating to the Shares covered by such Award.

 

9.4           Restrictions and Restriction Period.  During the Restriction
Period

 

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applicable to shares of Restricted Stock, such shares shall be subject to
limitations on transferability and a Risk of Forfeiture arising on the basis of
such conditions related to the performance of services, Company or affiliate
performance or otherwise as the Compensation Committee may determine and provide
for in the applicable Award Agreement.  Any such Risk of Forfeiture may be
waived or terminated, or the Restriction Period shortened, at any time by the
Compensation Committee on such basis as it deems appropriate.

 

9.5           Rights Pending Lapse of Risk of Forfeiture or Forfeiture of
Award.  Except as otherwise provided in the Plan or the applicable Award
Agreement, at all times prior to lapse of any Risk of Forfeiture applicable to,
or forfeiture of, an Award of Restricted Stock, the Eligible Director shall have
all of the rights of a stockholder of the Company, including the right to vote,
and the right to receive any dividends with respect to, the shares of Restricted
Stock.  The Compensation Committee, as determined at the time of Award, may
permit or require the payment of cash dividends to be deferred and, if the
Compensation Committee so determines, reinvested in additional Restricted Stock
to the extent Shares are available under Section 4.

 

9.6           Lapse of Restrictions.  If and when the Restriction Period expires
without a prior forfeiture of the Restricted Stock, the certificates for such
Shares shall be delivered to the Eligible Director promptly if not theretofore
so delivered.

 

9A.          Stock Grants.  In recognition of contributions to the success of
the Company, in lieu of compensation otherwise already due and in such other
circumstances as the Compensation Committee deems appropriate, shares of Stock
may be issued to Eligible Directors, either alone or in addition to other Awards
granted under the Plan at such price, if any, as the Compensation Committee may
determine. Stock Grant Awards shall be made without forfeiture conditions of any
kind and otherwise pursuant to such terms and conditions as the Compensation
Committee may determine.

 

10.                                 Restrictions on Issue of Shares.

 

(a)           Notwithstanding any other provision of the Plan, if, at any time,
in the reasonable opinion of the Company the issuance of Shares covered by an
Award may constitute a violation of law, then the Company may delay such
issuance and the delivery of such Shares until (i) approval shall have been
obtained from such governmental agencies, other than the Securities and Exchange
Commission, as may be required under any applicable law, rule, or regulation;
and (ii) in the case where such issuance would constitute a violation of a law
administered by or a regulation of the Securities and Exchange Commission, one
of the following conditions shall have been satisfied:

 

(1)           the Shares are at the time of the issue of such Shares effectively
registered under the Securities Act; or

 

(2)           the Company shall have determined, on such basis as it deems
appropriate (including an opinion of counsel or a no-action letter, each in form
and substance

 

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reasonably satisfactory to the Company) that the sale, transfer, assignment,
pledge, encumbrance or other disposition of such Shares or such beneficial
interest, as the case may be, does not require registration under the Securities
Act or any applicable state securities laws.

 

The Company shall make all reasonable efforts to bring about the occurrence of
said events.

 

(b)           If the Company shall deem it necessary or desirable to register
under the Securities Act or other applicable statutes any Shares covered by an
Award, or to qualify any such Shares for exemption from the Securities Act or
other applicable statutes, then the Company shall take such action at its own
expense.  The Company may require from each Holder, such information in writing
for use in any registration statement, prospectus, preliminary prospectus or
offering circular as is reasonably necessary for such purpose and may require
reasonable indemnity to the Company and its officers and directors from such
holder against all losses, claims, damage and liabilities arising from such use
of the information so furnished and caused by any untrue statement of any
material fact therein or caused by the omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made.

 

(c)           All Shares or other securities delivered under the Plan shall be
subject to such stop-transfer orders and other restrictions as the Compensation
Committee may deem advisable under the rules, regulations, and other
requirements of any stock exchange upon which the Stock is then listed, and any
applicable federal or state securities law, and the Compensation Committee may,
if certificated, cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.

 

11.           Purchase for Investment.

 

(a)           Without limiting the generality of Section 10 hereof, if the
Shares covered by an Award granted under the Plan have not been effectively
registered under the Securities Act, the Company shall be under no obligation to
issue any such Shares unless the Holder shall have made such written
representations and covenants to the Company (upon which the Company believes it
may reasonably rely) as the Company may deem necessary or appropriate for
purposes of ensuring that the issuance of such Shares will be exempt from the
registration requirements of the Securities Act and any applicable state
securities laws and otherwise in compliance with all applicable laws, rules and
regulations, including but not limited to written representations that the
Holder is acquiring the shares for his or her own account for the purpose of
investment and not with a view to, or for sale in connection with, the
distribution of any such Shares.

 

(b)           Each Share to be issued pursuant to an Award granted pursuant to
this Plan may bear a reference to the investment representation made in
accordance with this Section 11 and to the fact that no registration statement
has been filed with the Securities

 

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and Exchange Commission in respect to such Shares of Stock.

 

12.                                 Withholding; Notice of Disposition of Stock
Prior to Expiration of Specified Holding Period.

 

(a)           Whenever Shares are to be issued in satisfaction of an Award
granted hereunder, the Company shall have the right to require the Award
recipient and/or any subsequent Holder to remit to the Company an amount
sufficient to satisfy federal, state, local, employment or other tax withholding
requirements if, when and to the extent required by law (whether so required to
secure for the Company an otherwise available tax deduction or otherwise) prior
to the delivery of any such Shares.  The obligations of the Company under the
Plan shall be conditional on such payment and the Company shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to the recipient of an Award.

 

(b)           The Compensation Committee may, at or after grant, permit an Award
recipient and/or subsequent Holder to satisfy any tax withholding requirements
pertaining to the exercise of an Option or the receipt of shares of Restricted
Stock by delivery to the Company of Shares (including, without limitation,
Shares obtained pursuant to the Award that is creating the tax obligation)
having a value equal to the amount to be withheld.  The value of Shares to be so
delivered shall be based on the Compensation Committee’s determination of the
Fair Market Value of a Share on the date the amount of tax to be withheld is to
be determined.

 

13.                                 Termination of Association with the Company.

 

(a)           If an Optionee ceases to be a director of the Company, and if
applicable, its Subsidiaries, for any reason other than death of such Optionee,
any Option held by such Optionee and/or any subsequent Holder may be exercised
by such Optionee and/or such subsequent Holder at any time within 90 days after
the termination of such relationship, but only to the extent exercisable at
termination and in no event after the applicable option period.  If an Optionee
dies, any Option held by such Optionee and/or any subsequent Holder may be
exercised by such Optionee, such subsequent Holder and/or the executor or
administrator of such Optionee or such subsequent Holder at any time within the
shorter of the applicable option period or 12 months after the date of the
Optionee’s death, but only to the extent exercisable at the time of such
Optionee’s death.  Options which are not exercisable at the time of termination
between the Company and the Optionee or which are so exercisable but are not
exercised within the time periods described above shall terminate.

 

(b)           If an Eligible Director ceases to be a director of the Company,
and if applicable, its Subsidiaries, for any reason other than death of such
Eligible Director, any Awards of Restricted Stock held by such Eligible Director
at such time shall be forfeited or otherwise subject to return to or repurchase
by the Company on the terms specified in the applicable Award Agreement.

 

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(c)           Notwithstanding anything to the contrary in this Section 13, in
the event that (i) the applicable Award Agreement with respect to an Award shall
contain specific provisions governing the effect that any termination of
association with the Company shall have on the Award, or (ii) the Board shall at
any time adopt specific provisions governing the effect that any such
termination shall have on the Award, then such provisions shall, to the extent
that they are inconsistent with the provisions of this Section 13, control and
be deemed to supersede the provisions of this Section 13.

 

14.          Transferability of Awards. Awards shall not be transferable;
provided, however, that Awards shall be transferable by will or the laws of
descent and distribution; and provided, further, that Awards may be transferred
to a third party if and to the extent authorized and permitted by the
Compensation Committee at the time of grant of such Awards or at any time
thereafter.  In granting its authorization and permission to any proposed
transfer of an Award to a third party, the Compensation Committee may impose
conditions or requirements that must be satisfied by the transferor or the third
party transferee prior to or in connection with such transfer, including,
without limitation, any conditions or requirements that may be necessary or
desirable, in the sole and absolute discretion of the Compensation Committee, to
ensure that such proposed transfer complies with applicable securities laws or
to prevent the Company, such transferor or such third party transferee from
violating or otherwise not be in compliance with applicable securities laws as a
result of such transfer.  The Compensation Committee may at any time and from
time to time delegate to one or more officers of the Company the authority to
permit transfers of Awards to third parties pursuant to this Section 14, which
authorization shall be exercised by such officer or officers in accordance with
guidelines established by the Compensation Committee at any time and from time
to time.  The restrictions on transferability set forth in this Section 14 shall
in no way preclude any Holder from effecting “cashless” exercises of an Option
pursuant to, and in accordance with, Section 8(b) hereof.

 

15.                               Adjustment Provisions.

 

15.1                        Adjustment for Corporate Actions.  All of the share
numbers set forth in the Plan reflect the capital structure of the Company as of
April 9, 2008.  If subsequent to such date the outstanding shares of Stock (or
any other securities covered by the Plan by reason of the prior application of
this Section) are increased, decreased, or exchanged for a different number or
kind of shares or other securities or property (including cash), or if
subsequent to such date additional shares or new or different shares or other
securities or property (including cash) are distributed with respect to or in
exchange for shares of Stock or other securities upon the merger, consolidation,
sale of all or substantially all the property or assets of the Company, sale of
all of the outstanding Stock of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split, or other
distribution with respect to shares of Stock, or other securities (each of the
foregoing events an “Adjustment Event”), an appropriate and proportionate
adjustment will be made in (i) the maximum number and kind of shares or other
securities subject to the provisions of Section 4, (ii)  the numbers and kinds
of shares or other securities or property (including cash) subject to the then
outstanding Awards, (iii) the exercise price

 

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for each share or other unit of any other securities subject to then outstanding
Options (without change in the aggregate purchase price as to which such Options
remain exercisable), and (iv) the repurchase price of each share of Restricted
Stock then subject to a Risk of Forfeiture in the form of a Company repurchase
right.  Without limiting the generality of the foregoing provisions of this
Section 15.1, upon the occurrence of an Adjustment Event, Holders of Options
outstanding immediately prior to such Adjustment Event shall upon exercise of
such Options at any time following such Adjustment Event be entitled to receive
the shares of stock, other securities or property (including cash) that such
Holders would have received as a result of such Adjustment Event if such Holders
had exercised such Options immediately prior to such Adjustment Event.  The
provisions of this Section 15.1 (including, without limitation, the immediately
preceding sentence) shall apply successively with respect to multiple Adjustment
Events that occur over time.

 

15.2        Change in Corporate Control.  Subject to any provisions of then
outstanding Awards granting greater rights to the holders thereof, in the event
of a Change in Corporate Control any then outstanding Awards shall Accelerate. 
For the purposes of the preceding sentence, (i) in the case of a Change in
Corporate Control that is not a Hostile Change in Corporate Control, the Board
(and not the Compensation Committee, notwithstanding the responsibilities
assigned to the Compensation Committee pursuant to Section 5) shall have the
discretion to exclude any such Change in Corporate Control from the application
of the provisions of the immediately preceding sentence, and (ii) in the case of
a Hostile Change in Corporate Control, a majority of the Incumbent Directors
prior to such Hostile Change in Corporate Control shall have the discretion to
exclude any such Change in Corporate Control from the application of the
provisions of the immediately preceding sentence.  To the extent Awards are not
assumed, substituted or replaced upon a Change in Corporate Control that is not
a Hostile Change in Corporate Control, the Board (and not the Compensation
Committee, notwithstanding the responsibilities assigned to the Compensation
Committee pursuant to Section 5) shall have the discretion to (a) terminate any
outstanding Options to the extent not exercised prior to or simultaneously with
such Change in Corporate Control and (b) cause any shares of Restricted Stock
still subject to a Risk of Forfeiture immediately prior to such Change in
Corporate Control to be forfeited or repurchased by the Company in accordance
with the terms specified in the applicable Award Agreement.  Upon a Change in
Corporate Control, each outstanding Award will be appropriately adjusted
simultaneously with such Change in Corporate Control in accordance with
Section 15.1.

 

15.3          Dissolution or Liquidation.  Upon dissolution or liquidation of
the Company each outstanding Option shall terminate, but the Optionee (if at the
time in the employ of or otherwise associated with the Company or any of its
Subsidiaries) shall have the right, immediately prior to such dissolution or
liquidation, to exercise the Option to the extent exercisable on the date of
such dissolution or liquidation.

 

15.4        Related Matters.  Any adjustment in Awards made pursuant to this
Section 15 shall be determined and made, if at all, by the Compensation
Committee and shall include any correlative modification of terms, including of
Option Prices, rates of vesting or exercisability, Risks of Forfeiture,
applicable repurchase prices for Restricted

 

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Stock and other financial objectives which the Compensation Committee may deem
necessary or appropriate so as to ensure the rights of the Holders are not
substantially diminished nor enlarged as a result of the adjustment and
corporate action other than as expressly contemplated in this Section 15.  No
fraction of a share shall be purchasable or deliverable upon exercise, but in
the event any adjustment hereunder of the number of shares covered by an Award
shall cause such number to include a fraction of a share, such number of shares
shall be adjusted to the nearest smaller whole number of shares.

 

16.          Reservation of Stock.  The Company shall at all times during the
term of the Plan and, without duplication, of any outstanding Awards, reserve or
otherwise keep available such number of Shares as will be sufficient to satisfy
the requirements of the Plan (if not then terminated) and such outstanding
Awards and shall pay all fees and expenses necessarily incurred by the Company
in connection therewith.

 

17.          Limitation of Rights in Stock; No Special Employment or Other
Rights.  A Holder shall not be deemed for any purpose to be a stockholder of the
Company with respect to any of the Shares covered by an Award, unless and until
the Company shall have issued and delivered to the Holder or his agent such
Shares.  Any Stock issued pursuant to Awards granted under the Plan shall be
subject to all restrictions upon the transfer thereof which may be now or
hereafter imposed by the Certificate of Incorporation, and the By-laws of the
Company, if any.  Nothing contained in the Plan or in any Award Agreement shall
confer upon any Eligible Director any right with respect to the continuation of
his or her retention as a director to the Company (or any Subsidiary), or
interfere in any way with the right of the Company (or any Subsidiary), subject
to the terms of any separate employment or consulting agreement or provision of
law or corporate articles or by-laws to the contrary, at any time to terminate
such directorship or to increase or decrease the compensation of the Eligible
Director from the rate in existence at the time of the grant of an Award.

 

18.          Termination and Amendment of the Plan.  The Board may at any time
terminate the Plan or make such modifications of the Plan as it shall deem
advisable.  Any termination of the Plan shall not affect the terms of any Award
outstanding on the date of such termination.  Unless the Board otherwise
expressly provides and except to the extent otherwise provided in the next
sentence, amendments of the Plan shall apply to all Awards outstanding on the
date of such amendments to the same extent as if such amendments had been in
effect at the time that each of such outstanding Awards were granted. 
Notwithstanding the foregoing, no amendment of the Plan may, without the consent
of any recipient of an Award outstanding on the date of such amendment,
(i) reduce the number of shares of Stock subject to such Award, (ii) increase
the Option Price of such Award, or (iii) change the vesting schedule of such
Award in a manner that adversely affects the rights of the recipient thereof. 
The Compensation Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, provided that the Award as amended is consistent
with the terms of the Plan, and provided, further, that no such amendment of
such Award may, without the consent of the Holder thereof, (x) reduce the number
of shares of Stock subject to such Award, (y) increase the Option Price, or
(z) change the vesting schedule of such Award in a manner

 

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that adversely affects the rights of the recipient under such Award. 
Notwithstanding the foregoing or anything to the contrary in the Plan, no
repricing of outstanding Awards shall be permitted under the Plan without first
receiving approval from the holders of Stock representing not less than a
majority of the then outstanding Shares.  For this purpose, the term “repricing”
shall mean any of the following or any other action that has the same effect:
 (i) lowering the Option Price of an Option after it is granted, (ii) buying-out
an outstanding Option at a time when its Option Price exceeds the Fair Market
Value of the Stock for cash or shares, (iii) any other action that is treated as
a repricing under generally accepted accounting principles, or (iv) canceling an
Option at a time when its Option Price exceeds the Fair Market Value of the
Stock in exchange for another Option, Restricted Stock, a Stock Grant or other
equity of the Company, unless the cancellation and exchange occurs in connection
with a Change in Corporate Control.

 

19.            Notices and Other Communications.  All notices and other
communications required or permitted under the Plan shall be effective if in
writing and if delivered or sent by certified or registered mail, return receipt
requested (a) if to the Holder, at his or her residence address last filed with
the Company, and (b) if to the Company, at 65 Hayden Avenue, Lexington,
Massachusetts 02421, Attention: General Counsel or to such other persons or
addresses as the Holder or the Company may specify by a written notice to the
other from time to time.  Copies of all notices sent to any Holder that is not
the Award recipient shall also be sent to the Award recipient in the manner set
forth in this Section 19.

 

              20.            Effectiveness.  This Plan was originally entitled
the “2002 Directors’ Stock Option Plan” and was first approved by the Board on
March 5, 2002.  The Plan was first ratified and approved by the stockholders of
the Company on June 13, 2002.  The Plan, as previously amended and restated, was
ratified and approved by the stockholders on June 10, 2003 and on June 10,
2004.  The First Amendment to the Plan was approved by the Board on August 2,
2005.  A further amendment and restatement of the Plan was ratified and approved
by the stockholders of the Company on June 8, 2006.  A further amendment and
restatement of the Plan was approved by the Board on March 8, 2007, and was
ratified and approved by the stockholders of the Company on June 7, 2007.  A
further amendment and restatement of the Plan was approved by the Board on
March 10, 2008 and April 9, 2008

 

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