EXHIBIT 10.1

 

COHERENT, INC.

 

2001 STOCK PLAN

 

Amended and restated as of March 25, 2004 and further amended February 22, 2008.

 

1. Purposes of the Plan. The purposes of this 2001 Stock Plan are:

 

·                  to attract and retain the best available personnel for
positions of substantial responsibility,

 

·                  to provide additional incentive to Employees, Directors and
Consultants, and

 

·                  to promote the success of the Company’s business by
motivating the Employees and Consultants to superior performance.

 

Awards granted under the Plan may be Incentive Stock Options, Nonstatutory Stock
Options, Restricted Stock, Stock Appreciation Rights, Performance Shares,
Performance Units or Deferred Stock Units, as determined by the Administrator at
the time of grant.

 

2.  Definitions. As used herein, the following definitions shall apply:

 

(a) “Administrator” means the Board or any Committee as shall be administering
the Plan, in accordance with Section 4 of the Plan.

 

(b) “Applicable Laws” means the requirements relating to the administration of
equity compensation plans 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 Awards are, or will be, granted under the Plan.

 

 (c) “Award” means, individually or collectively, a grant under the Plan of
Options, Restricted Stock, Stock Appreciation Rights, Performance Shares,
Performance Units or Deferred Stock Units.

 

(d) “Award Agreement” means the written or electronic agreement setting forth
the terms and provisions applicable to each Award granted under the Plan. The
Award Agreement is subject to the terms and conditions of the Plan.

 

(e) “Awarded Stock” means the Common Stock subject to an Award.

 

(f) “Board” means the Board of Directors of the Company.

 

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

 

 (h) “Committee” means a committee of one or more Directors appointed by the
Board in accordance with Section 4 of the Plan, which shall consist solely of
Independent Directors who are not eligible to receive stock option grants or
Restricted Stock under the Plan or such other committee delegated authority as
set forth in Section 4(c) of the Plan.

 

(i) “Common Stock” means the common stock of the Company, or in the case of
Performance Units, the cash equivalent thereof.

 

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(j) “Company” means Coherent, Inc., a Delaware corporation.

 

(k) “Consultant” means any natural person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render services to such entity.

 

(l) “Deferred Stock Unit” means a deferred stock unit Award granted to a Service
Provider pursuant to Section 13 .

 

(m) “Director” means a member of the Board.

 

(n) “Disability” means total and permanent disability as defined in
Section 22(e)(3) of the Code.

 

(o) “Employee” means any person, including Officers and Directors, employed by
the Company or any Parent or Subsidiary of the Company. A Service Provider shall
not cease to be treated as 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, any Subsidiary, or any successor. For purposes
of Incentive Stock Options, no such leave may exceed ninety days, 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, on the 181st day of such leave any Incentive Stock Option
held by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option. Neither
service as a Director nor payment of a director’s fee by the Company shall be
sufficient to constitute “employment” by the Company.

 

(p) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(q) “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 Nasdaq National Market
or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value
shall be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such exchange or system for the last market trading
day prior to the time of determination, as reported in The Wall Street Journal
or such other source as the Administrator deems reliable or shall be such other
value determined in good faith by the Administrator;

 

(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 of Common
Stock shall be the mean between the high bid and low asked prices for the Common
Stock on the last market trading day prior to the day of determination, as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable or shall be such other value determined in good faith by the
Administrator; or

 

(iii) In the absence of an established market for the Common Stock, the Fair
Market Value shall be determined in good faith by the Administrator.

 

(r) “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.

 

(s) “Independent Director” means a Director of the Company who is not also an
Employee of the Company and who qualifies as an “outside director” within the
meaning of Code Section 162(m) and a “non-employee director” within the meaning
of Section 16(b) of the Exchange Act and Applicable Laws.

 

(t) “Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.

 

(u) “Notice of Grant” means a written or electronic notice evidencing certain
terms and conditions of an individual Award. The Notice of Grant is part of the
Award Agreement.

 

(v) “Officer” means a person who is an officer of the Company within the meaning
of Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.

 

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(w) “Option” means a stock option granted pursuant to the Plan.

 

(x) “Option Agreement” means an agreement between the Company and an Optionee
evidencing the terms and conditions of an individual Option grant. The Option
Agreement is subject to the terms and conditions of the Plan.

 

(y) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.

 

(z) “Participant” means the holder of an outstanding Award granted under the
Plan.

 

(aa) “Performance Share” means a performance share Award granted to a Service
Provider pursuant to Section 11.

 

(bb) “Performance Unit” a performance unit Award granted to a Service Provider
pursuant to Section 12.

 

(cc) “Plan” means this Coherent, Inc. 2001 Stock Plan.

 

(dd) “Restricted Stock” means shares of Common Stock granted pursuant to
Section 10 of the Plan.

 

(ee) “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
Plan.

 

(ff) “Stock Appreciation Right” or “SAR” means an Award, granted alone or in
connection with a related Option, that pursuant to Section 9 is designated as an
SAR.

 

(gg) “Section 16(b)” means Section 16(b) of the Exchange Act.

 

(hh) “Service Provider” means an Employee or Consultant.

 

(ii) “Share” means a share of the Common Stock, as adjusted in accordance with
Section 16 of the Plan.

 

(jj) “Subsidiary” means a “subsidiary corporation”, whether now or hereafter
existing, as defined in Section 424(f) of the Code.

 

3. Stock Subject to the Plan. Subject to the provisions of Section 16 of the
Plan, the maximum aggregate number of Shares that may be issued under the Plan
is 6,300,000 Shares; provided, however, that in no event shall more than 30% of
the Shares issuable under the Plan be granted pursuant to Awards with an
exercise price or purchase price that is less than 100% of Fair Market Value on
the date of grant. Notwithstanding the foregoing, no Options shall be granted
with an exercise price less than Fair Market Value on the date of grant. The
Shares may be authorized, but unissued, or reacquired Common Stock.

 

If an Award expires or becomes unexercisable without having been exercised in
full, or, with respect to Restricted Stock, Performance Shares, Performance
Units or Deferred Stock Units, is forfeited back to or repurchased by the
Company, the unpurchased Shares (or for Awards other than Options and SARs, the
forfeited or repurchased shares) which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated). With respect to SARs, only shares actually issued pursuant to an
SAR shall cease to be available under the Plan; all remaining shares under SARs,
shall remain available for future grant or sale under the Plan (unless the Plan
has terminated). However, Shares that have actually been issued under the Plan
under any Award shall not be returned to the Plan and shall not become available
for future distribution under the Plan, except that if Shares of Restricted
Stock, Performance Shares, Performance Units or Deferred Stock Units are
repurchased by the Company at their original purchase price or are forfeited to
the Company, such Shares shall become available for future grant under the Plan.
To the extent an Award under the Plan is paid out in cash rather than stock,
such cash payment shall not result in reducing the number of Shares available
for issuance under the Plan.

 

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4. Administration of the Plan.

 

(a) Procedure.

 

(i) Section 162(m). To the extent that the Administrator determines it to be
desirable to qualify Options granted hereunder as “performance-based
compensation” within the meaning of Section 162(m) of the Code, the Plan shall
be administered by a Committee of two or more Independent Directors.

 

(ii) Rule 16b-3. To the extent that the Administrator determines it to be
desirable to qualify transactions hereunder as exempt under Rule 16b-3, the
transactions contemplated hereunder shall be structured to satisfy the
requirements for exemption under Rule 16b-3.

 

(iii) Other Administration. Other than as provided above or in Section 4(c) of
the Plan, the Plan shall be administered by (A) the Board or (B) a Committee of
one or more Independent Directors with the ability to obtain the advice of
independent counsel, which committee shall be constituted to satisfy Applicable
Laws.

 

(b) Powers of the Administrator. Subject to the provisions of the Plan,
including, without limitation Section 8(b)(iii), and in the case of a Committee,
subject to the specific duties delegated by the Board to such Committee, the
Administrator shall have the authority, in its discretion:

 

(i) to determine the Fair Market Value;

 

(ii) to select the Service Providers to whom Awards may be granted hereunder;

 

(iii) to determine the number of shares of Common Stock to be covered by each
Award granted hereunder;

 

 (iv) to approve forms of agreement for use under the Plan;

 

(v) to determine the terms and conditions, not inconsistent with the terms of
the Plan, of any Award granted hereunder. Such terms and conditions include, but
are not limited to, the exercise price, the time or times when Options or SARs
may be exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture or repurchase restrictions, and any
restriction or limitation regarding any Award or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

 

(vi) to construe and interpret the terms of the Plan and Awards granted pursuant
to the Plan;

 

(vii) to prescribe, amend and rescind rules and regulations relating to the
Plan, including rules and regulations relating to sub-plans established for the
purpose of qualifying for preferred tax treatment under foreign tax laws;

 

(viii) to modify or amend each Award (subject to Section 18(c) of the Plan),
including the discretionary authority to extend the post-termination
exercisability period of Options or SARs longer than is otherwise provided for
in the Plan;

 

(ix) to allow Participants to satisfy withholding tax obligations by electing to
have the Company withhold from the Shares or cash to be issued upon exercise or
vesting of an Award that number of Shares or cash having a Fair Market Value
equal to the amount required to be withheld. The Fair Market Value of any Shares
to be withheld shall be determined on the date that the amount of tax to be
withheld is to be determined. All elections by a Participant to have Shares or
cash withheld for this purpose shall be made in such form and under such
conditions as the Administrator may deem necessary or advisable;

 

(x) to authorize any person to execute on behalf of the Company any instrument
required to effect the grant of an Award previously granted by the
Administrator;

 

(xi) to make all other determinations deemed necessary or advisable for
administering the Plan.

 

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(c) Delegation. The Board may delegate responsibility for administering the
Plan, including with respect to designated classes of Employees and Consultants,
to different committees consisting of one or more Directors subject to such
limitations as the Board deems appropriate. To the extent consistent with
applicable law, the Board or the Compensation and H.R. Committee may authorize
one or more officers of the Company to grant Awards to designated classes of
Employees and Consultants, within limits specifically prescribed by the Board or
the Compensation and H.R. Committee; provided, however, that no such officer
shall have or obtain authority to grant Awards to himself or herself.

 

(d) Effect of Administrator’s Decision. The Administrator’s decisions,
determinations and interpretations shall be final and binding on all
Participants.

 

5. Eligibility. Restricted Stock, Performance Shares, Performance Units, Stock
Appreciation Rights, Deferred Stock Units and Nonstatutory Stock Options may be
granted to Service Providers. Incentive Stock Options may be granted only to
Employees.

 

6.  Limitations.

 

(a) ISO $100,000 Rule. Each Option shall be designated in the Option 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 Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

 

(b) No Rights as a Service Provider. Neither the Plan nor any Award shall confer
upon a Participant any right with respect to continuing their relationship as a
Service Provider, nor shall they interfere in any way with the right of the
Participant or the right of the Company or its Parent or Subsidiaries to
terminate such relationship at any time, with or without cause.

 

(c) 162(m) Limitation. The following limitations shall apply to grants of
Options and SARs with an exercise price equal to or exceeding 100% of Fair
Market Value on the grant date:

 

(i) No Service Provider shall be granted, in any fiscal year of the Company,
Option or SARs to purchase more than 250,000 Shares.

 

(ii) In connection with his or her initial service, a Service Provider may be
granted Options or SARs to purchase up to an additional 250,000 Shares which
shall not count against the limit set forth in subsection (i) above.

 

The foregoing limitations shall be adjusted proportionately in connection with
any change in the Company’s capitalization as described in Section 16(a).

 

If an Option or SAR is cancelled in the same fiscal year of the Company in which
it was granted (other than in connection with a transaction described in
Section 16(c)), the cancelled Option or SAR will be counted against the limits
set forth in subsections (i) and (ii) above.

 

7.  Term of Plan. The Plan shall become effective upon its adoption by the
Board. It shall continue in effect for a term of ten (10) years unless
terminated earlier under Section 18 of the Plan.

 

8.  Stock Options.

 

(a) Term of Options. The term of each Option shall be ten (10) years from the
date of grant or such shorter term as may be provided in the Option Agreement.
Moreover, in the case of an Incentive Stock Option granted to an Optionee who,
at the time the Incentive Stock Option is granted, owns stock representing more
than ten percent (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 shall be five (5) years from the date of grant or such shorter term
as may be provided in the Option Agreement.

 

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(b) 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 shall be determined by the Administrator,
subject to the following:

 

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 ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the per
Share exercise price shall 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 shall be no less than 100%
of the Fair Market Value per Share on the date of grant.

 

(ii) In the case of a Nonstatutory Stock Option, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date of
grant

 

(iii) The exercise price for the Shares to be issued pursuant to an already
granted Option may not be changed without the consent of the Company’s
shareholders. This shall include, without limitation, a repricing of the Option
as well as an option exchange program whereby the Optionee agrees to cancel an
existing Option in exchange for an Option to be granted in the future with an
exercise price equal to the Fair Market Value of the Shares on the date of
grant.

 

(c) Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator shall fix the period within which the Option may be exercised and
shall determine any conditions that must be satisfied before the Option may be
exercised.

 

(d) Form of Consideration. The Administrator shall 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 shall determine the
acceptable form of consideration at the time of grant. Such consideration, to
the extent permitted by Applicable Laws, may consist entirely of:

 

(i) cash;

 

(ii) check;

 

(iii) other Shares which have a Fair Market Value on the date of surrender equal
to the aggregate exercise price of the Shares as to which said Option shall be
exercised;

 

(iv) broker-assisted cashless exercise;

 

(v) any combination of the foregoing methods of payment; or such other
consideration and method of payment for the issuance of Shares to the extent
permitted by Applicable Laws; or

 

(vi) such other consideration and method of payment for the issuance of Shares
to the extent permitted by Applicable Laws.

 

(e) Exercise of Option.

 

(i) Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement. An Option may not be exercised for a fraction of a
Share.

 

An Option shall be deemed exercised when the Company receives: (i) written or
electronic notice of exercise (in accordance with the Option Agreement) from the
person entitled to exercise the Option, and (ii) full payment for

 

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the Shares with respect to which the Option is exercised. Full payment may
consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee 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 shareholder shall exist
with respect to the Awarded Stock, notwithstanding the exercise of the Option.
The Company shall 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 16 of the Plan.

 

Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.

 

(f) Termination of Relationship as Service Provider. If an Optionee ceases to be
Service Provider, other than upon the Optionee’s death or Disability, the
Optionee may exercise his or her Option within such period of time as is
specified in the Option 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 Option Agreement). In the absence of a specified
time in the Option Agreement, the Option shall remain exercisable for ninety
(90) days following the Optionee’s termination. If, on the date of termination,
the Optionee is not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

 

(g) Disability of Optionee. If an Optionee ceases to be a Service Provider as a
result of the Optionee’s Disability, the Optionee may exercise his or her Option
within such period of time as is specified in the Option 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 Option Agreement). In
the absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee’s termination. If, on
the date of termination, the Optionee is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall revert to
the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

 

(h) Death of Optionee. If an Optionee dies while a Service Provider, the Option
may be exercised within such period of time as is specified in the Option
Agreement (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee’s estate or by a person
who acquires the right to exercise the Option by bequest or inheritance, but
only to the extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee’s termination. If, at
the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately
revert to the Plan. The Option may be exercised by the executor or administrator
of the Optionee’s estate or, if none, by the person(s) entitled to exercise the
Option under the Optionee’s will or the laws of descent or distribution. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

 

(i) Buyout Provisions. The Administrator may at any time offer to buy out for a
payment in cash or Shares an Option previously granted based on such terms and
conditions as the Administrator shall establish and communicate to the Optionee
at the time that such offer is made.

 

9.  Stock Appreciation Rights.

 

(a) Grant of SARs. Subject to the terms and conditions of the Plan, SARs may be
granted to Service Providers at any time and from time to time as shall be
determined by the Administrator, in its sole discretion. The Administrator shall
have complete discretion to determine the number of SARs granted to any
Participant.

 

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(b) Exercise Price and other Terms. The Administrator, subject to the provisions
of the Plan, shall have complete discretion to determine the terms and
conditions of SARs granted under the Plan; provided, however, that no SAR may
have a term of more than ten (10) years from the date of grant.

 

(c) Payment of SAR Amount. Upon exercise of a SAR, a Participant shall 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 SAR is exercised.

 

(d) Payment upon Exercise of SAR. At the discretion of the Administrator,
payment for a SAR may be in cash, Shares or a combination thereof.

 

(e) SAR Agreement. Each SAR grant shall be evidenced by an Award Agreement that
shall specify the exercise price, the term of the SAR, the conditions of
exercise, and such other terms and conditions as the Administrator, in its sole
discretion, shall determine.

 

(f) Expiration of SARs. A SAR granted under the Plan shall expire upon the date
determined by the Administrator, in its sole discretion, and set forth in the
Award Agreement.

 

(g) Termination of Relationship as a Service Provider. If a Participant ceases
to be a Service Provider, other than upon the Participant’s death or Disability,
the Participant may exercise his or her Stock Appreciation Right within such
period of time as is specified in the Stock Appreciation Right Agreement to the
extent that the Stock Appreciation Right is vested and exercisable on the date
of termination (but in no event later than the expiration of the term of such
Stock Appreciation Right as set forth in the Stock Appreciation Right
Agreement). In the absence of a specified time in the Stock Appreciation Right
Agreement, the Stock Appreciation Right shall remain exercisable for three
(3) months following the Participant’s termination. If, on the date of
termination, the Participant is not vested as to his or her entire Stock
Appreciation Right, the Shares covered by the unvested portion of the Stock
Appreciation Right shall revert to the Plan. If, after termination, the
Participant does not exercise his or her Stock Appreciation Right within the
time specified by the Administrator, the Stock Appreciation Right shall
terminate, and the Shares covered by such Stock Appreciation Right shall revert
to the Plan.

 

Notwithstanding the above, in the event of a Participant’s change in status from
Consultant, Employee or Director to Employee, Consultant or Director, a
Participant’s status as a Service Provider shall continue notwithstanding the
change in status.

 

(h) Disability of Participant. If a Participant ceases to be a Service Provider
as a result of the Participant’s Disability, the Participant may exercise his or
her Stock Appreciation Right within such period of time as is specified in the
Stock Appreciation Right Agreement to the extent the Stock Appreciation Right is
vested and exercisable on the date of termination (but in no event later than
the expiration of the term of such Stock Appreciation Right as set forth in the
Stock Appreciation Right Agreement). In the absence of a specified time in the
Stock Appreciation Right Agreement, the Stock Appreciation Right shall remain
exercisable for twelve (12) months following the Participant’s termination. If,
on the date of termination, the Participant is not vested as to his or her
entire Stock Appreciation Right, the Shares covered by the unvested portion of
the Stock Appreciation Right shall revert to the Plan. If, after termination,
the Participant does not exercise his or her Stock Appreciation Right within the
time specified herein, the Stock Appreciation Right shall terminate, and the
Shares covered by such Stock Appreciation Right shall revert to the Plan.

 

(i) Death of Participant. If a Participant dies while a Service Provider, the
Stock Appreciation Right may be exercised within such period of time as is
specified in the Stock Appreciation Right Agreement (but in no event later than
the expiration of the term of such Stock Appreciation Right as set forth in the
Notice of Grant), by the Participant’s estate or by a person who acquires the
right to exercise the Stock Appreciation Right by bequest or inheritance, but
only to the extent that the Stock Appreciation Right is vested and exercisable
on the date of death. In the absence of a specified time in the Stock
Appreciation Right Agreement, the Stock Appreciation Right shall remain
exercisable for twelve (12) months following the Participant’s termination. If,
at the time of death, the

 

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Participant is not vested as to his or her entire Stock Appreciation Right, the
Shares covered by the unvested portion of the Stock Appreciation Right shall
immediately revert to the Plan. The Stock Appreciation Right may be exercised by
the executor or administrator of the Participant’s estate or, if none, by the
person(s) entitled to exercise the Stock Appreciation Right under the
Participant’s will or the laws of descent or distribution. If the Stock
Appreciation Right is not so exercised within the time specified herein, the
Stock Appreciation Right shall terminate, and the Shares covered by such Stock
Appreciation Right shall revert to the Plan.

 

(j) Buyout Provisions. The Administrator may at any time offer to buy out for a
payment in cash or Shares a Stock Appreciation Right previously granted based on
such terms and conditions as the Administrator shall establish and communicate
to the Participant at the time that such offer is made.

 

10.  Restricted Stock.

 

(a) Grant of Restricted Stock. Subject to the terms and conditions of the Plan,
Restricted Stock may be granted to Service Providers at any time and from time
to time as shall be determined by the Administrator, in its sole discretion. The
Administrator shall have complete discretion to determine (i) the number of
Shares subject to a Restricted Stock award granted to any Participant, and
(ii) the conditions that must be satisfied, which typically will be based
principally or solely on continued provision of services but may include a
performance-based component, upon which is conditioned the grant or vesting of
Restricted Stock. Restricted Stock may be granted either in the form of Shares
or units/rights to acquire Shares. Each such unit/right shall be the equivalent
of one Share of Common Stock for purposes of determining the number of Shares
subject to an Award. Until the Shares are issued, no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
units/rights to acquire Shares.

 

(b) Other Terms. The Administrator, subject to the provisions of the Plan, shall
have complete discretion to determine the terms and conditions of Restricted
Stock granted under the Plan. Restricted Stock grants shall be subject to the
terms, conditions, and restrictions determined by the Administrator at the time
the Restricted Stock is awarded. The Administrator may require the recipient to
sign a Restricted Stock Award agreement as a condition of the award. Any
certificates representing the Shares of stock awarded shall bear such legends as
shall be determined by the Administrator.

 

(c) Restricted Stock Award Agreement. Each Restricted Stock grant shall be
evidenced by an agreement that shall specify the purchase price (if any) and
such other terms and conditions as the Administrator, in its sole discretion,
shall determine; provided; however, that if the Restricted Stock grant has a
purchase price, such purchase price must be paid no more than ten (10) years
following the date of grant.

 

11.  Performance Shares.

 

(a) Grant of Performance Shares. Subject to the terms and conditions of the
Plan, Performance Shares may be granted to Service Providers at any time and
from time to time as shall be determined by the Administrator, in its sole
discretion. The Administrator shall have complete discretion to determine
(i) the number of Shares subject to a Performance Share award granted to any
Participant, and (ii) the conditions that must be satisfied, which typically
will be based principally or solely on achievement of performance milestones but
may include a service-based component, upon which is conditioned the grant or
vesting of Performance Shares. Performance Shares may be granted either in the
form of Shares or units/rights to acquire Shares. Each such unit/right shall be
the equivalent of one Share of Common Stock for purposes of determining the
number of Shares subject to an Award. Until the Shares are issued, no right to
vote or receive dividends or any other rights as a stockholder shall exist with
respect to the units/rights to acquire Shares.

 

(b) Other Terms. The Administrator, subject to the provisions of the Plan, shall
have complete discretion to determine the terms and conditions of Performance
Shares granted under the Plan. Performance Share grants shall be subject to the
terms, conditions, and restrictions determined by the Administrator at the time
the stock is awarded, which may include such performance-based milestones as are
determined appropriate by the Administrator. The Administrator may require the
recipient to sign a Performance Shares agreement as a condition of the award.
Any certificates representing the Shares of stock awarded shall bear such
legends as shall be determined by the Administrator.

 

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(c) Performance Share Award Agreement. Each Performance Share grant shall be
evidenced by an agreement that shall specify such other terms and conditions as
the Administrator, in its sole discretion, shall determine.

 

12.  Performance Units.

 

(a) Grant of Performance Units. Performance Units are similar to Performance
Shares, except that they shall be settled in a cash equivalent to the Fair
Market Value of the underlying Shares, determined as of the vesting date.
Subject to the terms and conditions of the Plan, Performance Units may be
granted to Service Providers at any time and from time to time as shall be
determined by the Administrator, in its sole discretion. The Administrator shall
have complete discretion to determine (i) the number of Shares subject to a
Performance Unit award granted to any Participant, and (ii) the conditions that
must be satisfied, which typically will be based principally or solely on
achievement of performance milestones but may include a service-based component,
upon which is conditioned the grant or vesting of Performance Units. Performance
Units shall be granted in the form of units/rights. Each such unit/right shall
be the cash equivalent of one Share of Common Stock. No right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to
Performance Units or the cash payable thereunder.

 

(b) Other Terms. The Administrator, subject to the provisions of the Plan, shall
have complete discretion to determine the terms and conditions of Performance
Units granted under the Plan. Performance Unit grants shall be subject to the
terms, conditions, and restrictions determined by the Administrator at the time
the Performance Unit is awarded, which may include such performance-based
milestones as are determined appropriate by the Administrator. The Administrator
may require the recipient to sign a Performance Unit agreement as a condition of
the award.

 

(c) Performance Unit Award Agreement. Each Performance Unit grant shall be
evidenced by an agreement that shall specify such terms and conditions as the
Administrator, in its sole discretion, shall determine.

 

13.  Deferred Stock Units. Deferred Stock Units shall consist of a Restricted
Stock, Performance Share or Performance Unit Award that the Administrator, in
its sole discretion permits to be paid out in installments or on a deferred
basis, in accordance with rules and procedures established by the Administrator.

 

14.  Non-Transferability of Awards. Unless determined otherwise by the
Administrator, an 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
recipient, only by the recipient. If the Administrator makes an Award
transferable, such Award shall contain such additional terms and conditions as
the Administrator deems appropriate.

 

15.  Leaves of Absence. Unless the Administrator provides otherwise or as
otherwise required by Applicable Laws, vesting of Awards granted hereunder shall
cease commencing on the first day of any unpaid leave of absence and shall only
recommence upon return to active service.

 

16.  Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset
Sale.

 

(a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Award, the number of shares of Common Stock which have been
authorized for issuance under the Plan but as to which no Awards have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Award, as well as the price per share of Common Stock covered by each such
outstanding Award and the 162(m) annual share issuance limits under
Section 6(c) shall be proportionately adjusted for any increase or decrease in
the number of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, or any other increase or decrease in the number of issued shares
of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been “effected without receipt of consideration.”
Such adjustment shall be made by the Compensation Committee, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities

 

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convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Award.

 

(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Participant as
soon as practicable prior to the effective date of such proposed transaction.
The Administrator in its discretion may provide for a Participant to have the
right to exercise his or her Option or SAR until ten (10) days prior to such
transaction as to all of the Awarded Stock covered thereby, including Shares as
to which the Award would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option or forfeiture
rights applicable to any Award shall lapse 100%, and that any Award vesting
shall accelerate 100%, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been
previously exercised (with respect to Options and SARs) or vested (with respect
to other Awards), an Award will terminate immediately prior to the consummation
of such proposed action.

 

(c) Merger or Asset Sale.

 

(i) Stock Options and SARs. In the event of a merger of the Company with or into
another corporation, or the sale of substantially all of the assets of the
Company, each outstanding Option and SAR shall be assumed or an equivalent
option or SAR substituted by the successor corporation or a Parent or Subsidiary
of the successor corporation. In the event that the successor corporation
refuses to assume or substitute for the Option or SAR, the Participant shall
fully vest in and have the right to exercise the Option or SAR as to all of the
Awarded Stock, including Shares as to which it would not otherwise be vested or
exercisable. If an Option or SAR becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Participant in writing or electronically that the
Option or SAR shall be fully vested and exercisable for a period of fifteen (15)
days from the date of such notice, and the Option or SAR shall terminate upon
the expiration of such period. For the purposes of this paragraph, the Option or
SAR shall be considered assumed if, following the merger or sale of assets, the
option or stock appreciation right confers the right to purchase or receive, for
each Share of Awarded Stock subject to the Option or SAR immediately prior to
the merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets 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 merger or sale of assets 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 the Option or SAR, for
each Share of Awarded Stock subject to the Option or SAR, 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 merger or
sale of assets.

 

(ii) Restricted Stock, Performance Shares, Performance Units and Deferred Stock
Units. In the event of a merger of the Company with or into another corporation,
or the sale of substantially all of the assets of the Company, each outstanding
Restricted Stock, Performance Share, Performance Unit and Deferred Stock Unit
award shall be assumed or an equivalent Restricted Stock, Performance Share,
Performance Unit and Deferred Stock Unit award substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the
Restricted Stock, Performance Share, Performance Unit or Deferred Stock Unit
award, the Participant shall fully vest in the Restricted Stock, Performance
Share, Performance Unit or Deferred Stock Unit including as to Shares (or with
respect to Performance Units, the cash equivalent thereof) which would not
otherwise be vested. For the purposes of this paragraph, a Restricted Stock,
Performance Share, Performance Unit and Deferred Stock Unit award shall be
considered assumed if, following the merger or sale of assets, the award confers
the right to purchase or receive, for each Share (or with respect to Performance
Units, the cash equivalent thereof) subject to the Award immediately prior to
the merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets 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 merger or sale of assets 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, for each Share and each unit/right to acquire
a

 

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Share subject to the 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 merger or sale of
assets.

 

17.  Date of Grant. The date of grant of an Award shall be, for all purposes,
the date on which the Administrator makes the determination granting such Award,
or such other later date as is determined by the Administrator. Notice of the
determination shall be provided to each recipient within a reasonable time after
the date of such grant.

 

18.  Amendment and Termination of the Plan.

 

(a) Amendment and Termination. The Board may at any time amend, alter, suspend
or terminate the Plan.

 

(b) Shareholder Approval. The Company shall obtain shareholder approval of any
Plan amendment to the extent necessary and desirable to comply with Applicable
Laws.

 

(c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Participant, unless
mutually agreed otherwise between the Participant and the Administrator, which
agreement must be in writing and signed by the Participant and the Company.
Termination of the Plan shall not affect the Administrator’s ability to exercise
the powers granted to it hereunder with respect to Awards granted under the Plan
prior to the date of such termination.

 

19.  Conditions Upon Issuance of Shares.

 

(a) Legal Compliance. Shares shall not be issued pursuant to the exercise of an
Award unless the exercise of the Award or the issuance and delivery of such
Shares (or with respect to Performance Units, the cash equivalent thereof) shall
comply with Applicable Laws and shall 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 or receipt of an
Award, the Company may require the person exercising or receiving such Award to
represent and warrant at the time of any such exercise or receipt 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.

 

20.  Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder (or with respect to Performance Units, the cash
equivalent thereof), shall relieve the Company of any liability in respect of
the failure to issue or sell such Shares (or with respect to Performance Units,
the cash equivalent thereof) as to which such requisite authority shall not have
been obtained.

 

21.  Reservation of Shares. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

 

22.  Shareholder Approval. The 2004 amendment to the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months after the
date the amendment is adopted by the Board. Such shareholder approval shall be
obtained in the manner and to the degree required under Applicable Laws.

 

23.  Section 409A Compliance.  Awards granted hereunder are intended to comply
with the requirements of Section 409A of the Code to the extent Section 409A of
the Code applies to such Awards and the terms of the Plan and any Award granted
under the Plan shall be interpreted, operated and administered in a manner
consistent with this intention to the extent the Administrator deems necessary
or advisable in its sole discretion.  Notwithstanding any other provision in the
Plan, the Administrator, to the extent it unilaterally deems necessary or
advisable in its sole discretion, reserves the right, but shall not be required,
to amend or modify the Plan and any Award granted under the Plan so that the
Award qualifies for exemption from or complies with Section 409A of the Code;
provided, however, that the Company makes no representation that the Awards
granted under the Plan shall be exempt from or comply with Section 409A of the
Code and makes no undertaking to preclude Section 409A of the Code from applying
to Awards granted under the Plan.

 

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