Exhibit 10.5

AMENDED AND RESTATED INTUITIVE SURGICAL, INC.
2009 EMPLOYMENT COMMENCEMENT INCENTIVE PLAN
1.PURPOSES. The purpose of the Amended and Restated Intuitive Surgical, Inc.
2009 Employment Commencement Incentive Plan (the “Plan”) is promote the success
and enhance the value of Intuitive Surgical, Inc. (the “Company”) by linking the
individual interests of Eligible Individuals to those of the Company’s
stockholders and by providing such individuals with an incentive for outstanding
performance to generate superior returns to the Company’s stockholders. The Plan
is further intended to provide flexibility to the Company in its ability to
attract, and retain the services of Eligible Individuals upon whose judgment,
interest, and special effort the successful conduct of the Company’s operation
is largely dependent. Only Eligible Individuals may receive Awards under the
Plan. The Plan amends and restates in its entirety, as of December 19, 2013, the
Intuitive Surgical, Inc. 2009 Employment Inducement Incentive Award Plan (the
“Original Plan”).
2.    DEFINITIONS.
(a)“Administrator” means the entity that conducts the general administration of
the Plan as provided herein. The term “Administrator” shall refer to the
Committee unless the Board has elected to exercise any of the rights and duties
of the Committee under the Plan generally, as provided in Section 3 herein.
(b)    “Affiliate” means (i) Subsidiary; and (ii) any domestic eligible entity
that is disregarded, under Treasury Regulation Section 301.7701-3, as an entity
separate from either (A) the Company or (B) any Subsidiary.
(c)    “Award” means an Option, a Restricted Stock award, a Restricted Stock
Unit award, a Performance Award, a Dividend Equivalents award or a Stock
Appreciation Right, which may be awarded or granted under the Plan
(collectively, “Awards”).
(d)    “Award Agreement” means any written notice, agreement, contract or other
instrument or document evidencing an Award, including through electronic medium,
which shall contain such terms and conditions with respect to an Award as the
Administrator shall determine, consistent with the Plan.
(e)    “Board” means the Board of Directors of the Company.
(f)    “Change in Control” means and includes each of the following:
(i)    Any “person” (as such term is used in Section 13(d) and 14(d) of the
Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting power represented
by the Company’s then outstanding voting securities; or

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(ii)    A change in the composition of the Board occurring within a two-year
period, as a result of which fewer than a majority of the directors are
Incumbent Directors. “Incumbent Directors” shall mean directors who either
(A) are directors of the Company as of the date hereof, or (B) are elected, or
nominated for election, to the Board with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination
(but shall not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating to the election
of directors to the Company); or
(iii)    There is consummated a merger or consolidation of the Company with or
into any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least fifty percent
(50%) of the total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation or the parent of the entity which survives such merger or
consolidation; or
(iv)    The stockholders of the Company approve a plan of complete liquidation
of the Company or there is consummated the sale or disposition by the Company of
all or substantially all of the Company’s assets, other than a sale or
disposition by the Company of all or substantially all of the Company’s assets
to an entity, at least eighty percent (80%) of the combined voting power of the
voting securities of which are owned by persons in substantially the same
proportions as their ownership of the Company immediately prior to such sale.
In addition, if a Change in Control constitutes a payment event with respect to
any Award which provides for the deferral of compensation and is subject to
Section 409A of the Code, the transaction or event described in subsection (a),
(b), (c) or (d) with respect to such Award must also constitute a “change in
control event,” as defined in Treasury Regulation §1.409A-3(i)(5) to the extent
required by Section 409A.

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

(g)    “Code” means the Internal Revenue Code of 1986, as amended.
(h)    “Committee” means the Compensation Committee of the Board, or another
committee or subcommittee of the Board, appointed as provided in Section 3
herein.
(i)    “Common Stock” means the common stock of the Company.
(j)    “Company” means Intuitive Surgical, Inc., a Delaware corporation.
(k)    “Consultant” means any consultant or adviser engaged to provide services
to the Company or any Affiliate that qualifies as a consultant under the
applicable rules of the Securities

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and Exchange Commission for registration of shares on a Form S-8 Registration
Statement or any successor Form thereto.
(l)    “Continuous Service” means that the Participant’s service with the
Company or an Affiliate, whether as an Employee or Consultant, is not
interrupted or terminated. The Participant’s Continuous Service shall not be
deemed to have terminated merely because of a change in the capacity in which
the Participant renders service to the Company or an Affiliate as an Employee or
Consultant or a change in the entity for which the Participant renders such
service; provided, that there is no interruption or termination of the
Participant’s service to the Company or an Affiliate. For example, a change in
status without interruption from an Employee of the Company to a Consultant of
an Affiliate will not constitute an interruption of Continuous Service. Unless
otherwise determined by the Board or chief executive officer of the Company, in
that party’s sole discretion, any bona fide leave of absence authorized by the
Company in accordance with established policies shall not be considered to
constitute an interruption or termination of Continuous Service.
(m)    “Director” means a member of the Board of Directors of the Company.
(n)    “Disability” means the permanent and total disability of a person within
the meaning of Section 22(e)(3) of the Code.
(o)    “Dividend Equivalent” means a right to receive the equivalent value (in
cash or Shares) of dividends paid on Shares, awarded under Section 10 hereof.
(p)    “DRO” means a “domestic relations order” as defined by the Code or Title
I of the Employee Retirement Income Security Act of 1974, as amended from time
to time, or the rules thereunder.
(q)    “Eligible Individual” means any prospective Employee who has not
previously been an Employee or Director of the Company or a Subsidiary, or who
is commencing employment with the Company or a Subsidiary following a bona fide
period of non-employment by the Company or a Subsidiary, if he or she is granted
an Award in connection with his or her commencement of employment with the
Company or a Subsidiary and such grant is an inducement material to his or her
entering into employment with the Company or a Subsidiary (within the meaning of
Nasdaq Stock Market Rule IM-5636-1 or any successor rule, if the Company’s
securities are traded on the Nasdaq Stock Market, and/or the applicable
requirements of any other established stock exchange on which the Company’s
securities are traded, as applicable, as such rules and requirements may be
amended from time to time). The Administrator may in its discretion adopt
procedures from time to time to ensure that a prospective Employee is eligible
to participate in the Plan prior to the granting of any Awards to such
individual under the Plan (including without limitation a requirement that each
such prospective Employee certify to the Company prior to the receipt of an
Award under the Plan that he or she has not been previously employed by the
Company or a Subsidiary, or if previously employed, has had a bona fide period
of non-employment, and that the grant of Awards under the Plan is an inducement
material to his or her agreement to enter into employment with the Company or a
Subsidiary).

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(r)    “Employee” means any person employed by the Company or an Affiliate. Mere
service as a Director or payment of a director’s fee by the Company or an
Affiliate shall not be sufficient to constitute “employment” by the Company or
an Affiliate.
(s)    “Equity Restructuring” means a nonreciprocal transaction between the
Company and its stockholders, such as a stock dividend, stock split, spin-off,
rights offering or recapitalization through a large, nonrecurring cash dividend,
that affects the number or kind of Shares (or other securities of the Company)
or the share price of Common Stock (or other securities) and causes a change in
the per share value of the Common Stock underlying outstanding Awards.
(t)    “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(u)    “Fair Market Value” means, as of any date, the value of the Common Stock
determined as follows:
(i)    If the Common Stock is listed on any (i) established stock exchange (such
as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ Global
Select Market), (ii) national market system or (iii) automated quotation system
on which the Shares are listed, quoted or traded, its Fair Market Value shall be
the closing sales price for a share of Common Stock as quoted on such exchange
or system for such date or, if there is no closing sales price for a share of
Common Stock on the date in question, the closing sales price for a share of
Common Stock on the last preceding date for which such quotation exists, as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable;
(ii)    If the Common Stock is not listed on an established securities exchange,
national market system or automated quotation system, but the Common Stock is
regularly quoted by a recognized securities dealer, its Fair Market Value shall
be the mean of the high bid and low asked prices for such date or, if there are
no high bid and low asked prices for a share of Common Stock on such date, the
high bid and low asked prices for a share of Common Stock on the last preceding
date for which such information exists, as reported in The Wall Street Journal
or such other source as the Administrator deems reliable; or
(iii)    If the Common Stock is neither listed on an established securities
exchange, national market system or automated quotation system nor regularly
quoted by a recognized securities dealer, its Fair Market Value shall be
determined in good faith by the Administrator.
(v)    “Full Value Award” means any Award other than (i) an Option, (ii) a Stock
Appreciation Right or (iii) any other Award for which the Participant pays the
intrinsic value existing as of the date of grant (whether directly or by
forgoing a right to receive a payment from the Company or any Affiliate).
(w)    “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. Incentive Stock Options may not be granted
under the Plan.

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(x)    “Independent Director” means a Director who is not an Employee and who
qualifies as “independent” within the meaning of Nasdaq Stock Market Rule
5605(a)(2), if the Company’s securities are traded on the Nasdaq Global Market,
or the requirements of any other established stock exchange on which the
Company’s securities are traded, as such rules or requirements may be amended
from time to time.
(y)    “Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.
(z)    “Option” means a Nonstatutory Stock Option granted pursuant to the Plan.
(aa)    “Participant” means a person to whom an Award is granted pursuant to the
Plan or, if applicable, such other person who holds an outstanding Award.
(bb)    “Performance Award” means a cash bonus award, stock bonus award,
performance award or incentive award that is paid in cash, Shares or a
combination of both, awarded under Section 10.
(cc)    “Permitted Transferee” means, with respect to a Participant, any “family
member” of the Participant, as defined under the instructions to use the Form
S-8 Registration Statement under the Securities Act or any other transferee
specifically approved by the Administrator, after taking into applicable law.
(dd)    “Plan” means this Amended and Restated Intuitive Surgical, Inc. 2009
Employment Commencement Incentive Plan.
(ee)    “Restricted Stock” means Common Stock awarded under Section 8 hereof
that is subject to certain restrictions and may be subject to risk of
forfeiture.
(ff)    “Restricted Stock Unit” means a contractual right awarded under Section
9 hereof to receive in the future a Share or the cash value of a Share.
(gg)    “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time.
(hh)    “Securities Act” means the Securities Act of 1933, as amended.
(ii)    “Shares” means shares of Common Stock.
(jj)    “Stock Appreciation Right” means a stock appreciation right granted
under Section 11 hereof.
(kk)    “Subsidiary” means any entity (other than the Company), whether domestic
or foreign, in an unbroken chain of entities beginning with the Company if each
of the entities other than the last entity in the unbroken chain beneficially
owns, at the time of the determination, securities or interests representing
more than 50% of the total combined voting power of all classes of securities or
interests in one of the other entities in such chain.

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3.    ADMINISTRATION.
(a)    Administrator. The Committee (or another committee or a subcommittee of
the Board assuming the functions of the Committee under the Plan) shall
administer the Plan (except as otherwise permitted herein) and, unless otherwise
determined by the Board, shall consist solely of two or more Independent
Directors appointed by and holding office at the pleasure of the Board, each of
whom is intended to qualify as a “non-employee director” as defined by Rule
16b-3 of the Exchange Act and an “independent director” under the rules of any
securities exchange or automated quotation system on which the Shares are
listed, quoted or traded, in each case, to the extent required under such
provision; provided, however, that any action taken by the Committee shall be
valid and effective, whether or not members of the Committee at the time of such
action are later determined not to have satisfied the requirements for
membership set forth in this Section 3 or otherwise provided in any charter of
the Committee. Except as may otherwise be provided in any charter of the
Committee, appointment of Committee members shall be effective upon acceptance
of appointment. Committee members may resign at any time by delivering written
or electronic notice to the Board. Vacancies in the Committee may only be filled
by the Board. As of the effective date of the Plan, the Plan will be
administered by the Compensation Committee of the Board.
(b)    Duties and Powers of Administrator. It shall be the duty of the
Administrator to conduct the general administration of the Plan in accordance
with its provisions. The Administrator shall have the power to interpret the
Plan and all Award Agreements, and to adopt such rules for the administration,
interpretation and application of the Plan as are not inconsistent with the
Plan, to interpret, amend or revoke any such rules and to amend any Award
Agreement; provided, that the rights or obligations of the Participant that is
the subject of any Award Agreement are not affected adversely by such amendment,
unless the consent of the Participant is obtained or such amendment is otherwise
permitted under Section 22 hereof. Any such grant or award under the Plan need
not be the same with respect to each Participant. In its sole discretion, the
Board may at any time and from time to time exercise any and all rights and
duties of the Committee under the Plan except with respect to matters which
under Rule 16b‑3 under the Exchange Act, or the rules of any securities exchange
or automated quotation system on which the Shares are listed, quoted or traded
are required to be determined in the sole discretion of the Committee.
(c)    Action by the Committee. Unless otherwise established by the Board or in
any charter of the Committee, a majority of the Committee shall constitute a
quorum and the acts of a majority of the members present at any meeting at which
a quorum is present, and acts approved in writing by all members of the
Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each
member of the Committee is entitled to, in good faith, rely or act upon any
report or other information furnished to that member by any officer or other
employee of the Company or any Affiliate, the Company’s independent certified
public accountants, or any executive compensation consultant or other
professional retained by the Company to assist in the administration of the
Plan.
(d)    Authority of Administrator. Subject to any specific designation in the
Plan, the Administrator has the exclusive power, authority and sole discretion
to:

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(i)    Adopt procedures from time to time intended to ensure that an individual
is an Eligible Individual prior to the granting of any Awards to such individual
under the Plan (including without limitation a requirement, if any, that each
such individual certify to the Company prior to the receipt of an Award under
the Plan that he or she has not been previously employed by the Company or a
Subsidiary, or if previously employed, has had a bona fide period of
non-employment, and that the grant of Awards under the Plan is an inducement
material to his or her agreement to enter into employment with the Company or a
Subsidiary);
(ii)    Designate Eligible Individuals to receive Awards;
(iii)    Determine the type or types of Awards to be granted to each Eligible
Individual;
(iv)    Determine the number of Awards to be granted and the number of Shares to
which an Award will relate;
(v)    Determine the terms and conditions of any Award granted pursuant to the
Plan, including, but not limited to, the exercise price, grant price, or
purchase price, any performance criteria, any restrictions or limitations on the
Award, any schedule for vesting, lapse of forfeiture restrictions or
restrictions on the exercisability of an Award, and accelerations or waivers
thereof, and any provisions related to non-competition and recapture of gain on
an Award, based in each case on such considerations as the Administrator in its
sole discretion determines;
(vi)    Determine whether, to what extent, and pursuant to what circumstances an
Award may be settled in, or the exercise price of an Award may be paid in cash,
Shares, other Awards, or other property, or an Award may be canceled, forfeited,
or surrendered;
(vii)    Prescribe the form of each Award Agreement, which need not be identical
for each Participant;
(viii)    Decide all other matters that must be determined in connection with an
Award;
(ix)    Establish, adopt, or revise any rules and regulations as it may deem
necessary or advisable to administer the Plan;
(x)    Interpret the terms of, and any matter arising pursuant to, the Plan or
any Award Agreement; and
(xi)    Make all other decisions and determinations that may be required
pursuant to the Plan or as the Administrator deems necessary or advisable to
administer the Plan.
(e)    Actions Required Upon Grant of Award. Following the issuance of any Award
under the Plan, the Company shall, in accordance with the listing requirements
of the applicable securities exchange, (a) promptly issue a press release
disclosing the material terms of the grant, including the recipient(s) of the
grant and the number of shares involved and (b) notify the applicable securities
exchange of such grant no later than the earlier to occur of (i) five (5)
calendar days after entering into the agreement to issue the Award or (ii) the
date of the public announcement of the Award.

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(f)    Decisions Binding. The Administrator’s interpretation of the Plan, any
Awards granted pursuant to the Plan, any Award Agreement and all decisions and
determinations by the Administrator with respect to the Plan are final, binding,
and conclusive on all parties.
(g)    Delegation of Authority. To the extent permitted by applicable law or the
rules of any securities exchange or automated quotation system on which the
Shares are listed, quoted or traded, the Board or Committee may from time to
time delegate to a committee of one or more members of the Board or one or more
officers of the Company the authority to amend Awards or to take other
administrative actions pursuant to this Section 3; provided, however, that in no
event shall an officer of the Company be delegated the authority to (a) grant
awards or (b) amend awards held by the following individuals: (i) individuals
who are subject to Section 16 of the Exchange Act or (ii) officers of the
Company (or Directors) to whom authority to amend Awards has been delegated
hereunder; provided, further, that any delegation of administrative authority
shall only be permitted to the extent it is permissible under applicable
securities laws or the rules of any securities exchange or automated quotation
system on which the Shares are listed, quoted or traded. Any delegation
hereunder shall be subject to the restrictions and limits that the Board or
Committee specifies at the time of such delegation, and the Board may at any
time rescind the authority so delegated or appoint a new delegatee. At all
times, the delegatee appointed under this Section 3(g) shall serve in such
capacity at the pleasure of the Board and the Committee. Notwithstanding
anything to the contrary provided herein (x) Awards shall be approved by (i) the
Company’s Compensation Committee comprised of at least two members, each of whom
are Independent Directors or (ii) a majority of the Company’s Independent
Directors and (y) the authority to grant Awards shall not be delegated under any
circumstances.
4.    SHARES SUBJECT TO THE PLAN.
(a)    Share Reserve. The shares of stock subject to Awards shall be Common
Stock, subject to adjustment as provided in Section 16 hereof. Subject to
adjustment as provided in Section 16 hereof, the aggregate number of such shares
which may be issued with respect to Awards granted under the Plan shall not
exceed 1,155,000 (the “Share Limit”); provided, however, that any Shares that
are subject to Awards of Options or Stock Appreciation Rights shall be counted
against the Share Limit as one (1) Share for every one (1) Share granted and any
Shares that are subject to Full Value Awards shall be counted against the Share
Limit as 2.3 Shares for every one (1) Share granted.
(b)    Reversion of Shares to the Share Reserve. To the extent all or a portion
of an Award is forfeited, expires or such Award or portion thereof is settled
for cash (in whole or in part), the Shares subject to such Award or portion
thereof shall, to the extent of such forfeiture, expiration or cash settlement,
again be available for future grants of Awards under the Plan and shall be added
back to the Share Limit in the same number of Shares as were debited from the
Share Limit in respect of the grant of such Award (as may be adjusted in
accordance with Section 16 hereof). Notwithstanding anything to the contrary
contained here, the following Shares shall not be added back to the Shares
authorized for grant under Section 4(a) and will not be available for future
grants of Awards: (i) Shares tendered by a Participant or withheld by the
Company in payment of the exercise price of an Option; (ii) Shares tendered by
the Participant or withheld by the Company to

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satisfy any tax withholding obligation with respect to an Award; (iii) Shares
subject to a Stock Appreciation Right that are not issued in connection with the
stock settlement of the Stock Appreciation Right on exercise thereof; and (iv)
Shares purchased on the open market with the cash proceeds from the exercise of
Options. Any Shares repurchased by the Company under Section 8(d) at the same
price paid by the Participant, or less, so that such Shares are returned to the
Company will again be available for Awards. The payment of Dividend Equivalents
in cash in conjunction with any outstanding Awards shall not be counted against
the shares available for issuance under the Plan.
(c)    Source of Shares. The Shares subject to the Plan may consist, in whole or
in part, of authorized and unissued Shares or reacquired shares, bought on the
market or otherwise.
5.    ELIGIBILITY.
Awards may be granted only to Eligible Individuals. All Options granted under
the Plan shall be Nonstatutory Stock Options.
6.    GRANTING OF AWARDS.
(a)    Participation. The Administrator may, from time to time, select from
among all Eligible Individuals, those to whom one or more Awards shall be
granted and shall determine the nature and amount of each Award, which shall not
be inconsistent with the requirements of the Plan. No Eligible Individual shall
have any right to be granted an Award pursuant to the Plan.
(b)    Award Agreement. Each Award shall be evidenced by an Award Agreement
stating the terms and conditions applicable to such Award, consistent with the
requirements of the Plan.
(c)    Limitations Applicable to Section 16 Persons. Notwithstanding anything
contained herein to the contrary, with respect to any Award granted or awarded
to any individual who is then subject to Section 16 of the Exchange Act, the
Plan and the applicable Award Agreement shall be subject to any additional
limitations set forth in any applicable exemptive rule under Section 16 of the
Exchange Act (including Rule 16b‑3 of the Exchange Act and any amendments
thereto) that are requirements for the application of such exemptive rule, and
such additional limitations shall be deemed to be incorporated by reference into
such Award to the extent permitted by applicable law.
(d)    At-Will Service. Nothing in the Plan or in any Award Agreement hereunder
shall confer upon any Participant any right to continue as an Employee, Director
or Consultant of the Company or any Affiliate, or shall interfere with or
restrict in any way the rights of the Company and any Affiliate, which rights
are hereby expressly reserved, to discharge any Participant at any time for any
reason whatsoever, with or without cause, and with or without notice, or to
terminate or change all other terms and conditions of employment or engagement,
except to the extent expressly provided otherwise in a written agreement between
the Participant and the Company or any Affiliate.

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(e)    Foreign Participants. Notwithstanding any provision of the Plan to the
contrary, in order to comply with the laws in other countries in which the
Company and its Affiliates operate, or in order to comply with the requirements
of any foreign securities exchange, the Administrator, in its sole discretion,
shall have the power and authority to: (a) determine which Affiliates shall be
covered by the Plan; (b) determine which Eligible Individuals outside the United
States are eligible to participate in the Plan; (c) modify the terms and
conditions of any Award granted to Eligible Individuals outside the United
States to comply with applicable foreign laws or listing requirements of any
such foreign securities exchange; (d) establish subplans and modify exercise
procedures and other terms and procedures, to the extent such actions may be
necessary or advisable (any such subplans and/or modifications shall be attached
to the Plan as appendices); provided, however, that no such subplans and/or
modifications shall increase the Share Limit; and (e) take any action, before or
after an Award is made, that it deems advisable to obtain approval or comply
with any necessary local governmental regulatory exemptions or approvals or
listing requirements of any such foreign securities exchange. Notwithstanding
the foregoing, the Administrator may not take any actions hereunder, and no
Awards shall be granted, that would violate the Code, the Exchange Act, the
Securities Act, any other securities law or governing statute, the rules of the
securities exchange or automated quotation system on which the Shares are
listed, quoted or traded or any other applicable law.
(f)    Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may,
in the sole discretion of the Administrator, be granted either alone, in
addition to, or in tandem with, any other Award granted pursuant to the Plan.
Awards granted in addition to or in tandem with other Awards may be granted
either at the same time as or at a different time from the grant of such other
Awards.
7.    OPTION PROVISIONS. The Administrator may grant Options, the terms of which
Options shall be set forth in an appropriate Award Agreement. Each Option shall
be in such form and shall contain such terms and conditions as the Administrator
shall deem appropriate. The provisions of separate Options need not be
identical, but each Option shall include (through incorporation of provisions
hereof by reference in the Option or otherwise) the substance of each of the
following provisions:
(a)    Option Exercise Price and Option Term. The exercise price of each Option
shall be not less than the Fair Market Value of the Common Stock subject to the
Option on the date the Option is granted. The term of an Option granted to an
Eligible Individual shall be set by the Administrator in its discretion, but in
no event shall the term of an Option exceed ten years from the date the Option
is granted.
(b)    Vesting Generally. The total number of Shares subject to an Option may,
but need not, vest and therefore become exercisable in periodic installments
that may, but need not, be equal. The Option may be subject to such other terms
and conditions on the time or times when it may be exercised (which may be based
on performance or other criteria) as the Administrator may deem appropriate. The
vesting provisions of individual Options may vary. The provisions of this
Section 7(b) are subject to any Option provisions governing the minimum number
of Shares as to which an Option may be exercised.

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(c)    Limitations on Exercise of Options Granted. Unless otherwise provided by
the Administrator in the Award Agreement, no Option granted to an Eligible
Individual may be exercised to any extent by anyone after the first to occur of
the following events:
(i)    The expiration of 18 months from the date of the Participant’s death;
(ii)    The expiration of 12 months from the date of the Participant’s
termination of Continuous Service by reason of his or her Disability;
(iii)    The expiration of three months from the date of the Participant’s
termination of Continuous Service for any reason other than such Participant’s
termination by the Company or an Affiliate for “Cause” (as defined in the
Participant’s employment or consulting agreement with the Company in effect on
the grant date of the Option, or, if the Participant does not have an employment
or consulting agreement with the Company or the Participant’s employment or
consulting agreement does not include a definition of “Cause”, as defined in the
Award Agreement, or, if the Award Agreement does not include a definition of
“Cause,” Cause shall mean the occurrence of any of, but not limited to, the
following: (A) conviction of a Participant of any felony or any crime involving
fraud or dishonesty; (B) a Participant’s participation (whether by affirmative
act or omission) in a fraud, act or dishonesty or other act of misconduct
against the Company and/or any Affiliate; (C) conduct by a Participant which,
based upon a good faith and reasonable factual investigation by the Company (or,
if a Participant is an executive officer, by the Board), demonstrates such
Participant’s unfitness to serve; (D) a Participant’s violation of any statutory
or fiduciary duty, or duty of loyalty owed to the Company and/or any Affiliate;
(E) a Participant’s violation of state or federal law in connection with the
Participant’s performance of his or her job which has an adverse effect on the
Company and/or any Affiliate; (F) a Participant’s violation of Company policy
which has a material adverse effect on the Company and/or any Affiliate and (G)
failure to properly meet the duties and responsibilities of Participant’s
position in a competent fashion; the determination that a termination is for
Cause shall be by the Administrator it its sole and exclusive judgment and
discretion), death or Disability, unless the Participant dies within said
three-month period;
(iv)    The Participant’s termination by the Company or an Affiliate for “Cause”
(as defined in Section 7(c)(iii) above);
(v)    The expiration of the term of the Option, as set forth in the Award
Agreement; or
(vi)    Ten years from the date the Option was granted.
(d)    Conditions to Issuance of Stock Certificates. The Company shall not be
required to issue or deliver any certificate or certificates for shares of stock
purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:
(i)    A written or electronic notice complying with the applicable rules
established by the Administrator stating that the Option, or a portion thereof,
is exercised. The notice shall be signed by the Participant who was granted such
Option or other person then entitled to exercise the Option or such portion of
the Option;

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(ii)    The admission of such shares to listing on all stock exchanges on which
such class of stock is then listed;
(iii)    The completion of any registration or other qualification of such
shares under any state or federal law, or under the rulings or regulations of
the Securities and Exchange Commission or any other governmental regulatory body
which the Administrator shall, in its absolute discretion, deem necessary or
advisable. The Administrator may, in its sole discretion, also take whatever
additional actions it deems appropriate to effect such compliance including,
without limitation, placing legends on share certificates and issuing
stop-transfer notices to agents and registrars;
(iv)    The obtaining of any approval or other clearance from any state or
federal governmental agency which the Administrator shall, in its absolute
discretion, determine to be necessary or advisable;
(v)    The lapse of such reasonable period of time following the exercise of the
Option as the Administrator may establish from time to time for reasons of
administrative convenience;
(vi)    In the event that the Option shall be exercised by any person or persons
other than the Participant who was granted such Option, appropriate proof of the
right of such person or persons to exercise the Option, as determined in the
sole discretion of the Administrator; and
(vii)    The receipt by the Company of full payment for such shares, including
payment of any applicable withholding tax, which in the discretion of the
Administrator may be in the form of consideration used by the Participant to pay
for such shares under Sections 14(a)and 14(b).
(e)    Extension of Termination Date. A Participant’s Award Agreement may also
provide that if the exercise of the Option following the termination of the
Participant’s Continuous Service (other than upon the Participant’s death or
Disability) would be prohibited at any time solely because the issuance of
Shares would violate the registration requirements under the Securities Act,
then the Option shall terminate on the earlier of:
(i)    the expiration of the term of the Option set forth in Section 7(a)
hereof;
(ii)    ten years from the date the Option was granted; or
(iii)    the expiration of a period of three months after the termination of the
Participant’s Continuous Service during which the exercise of the Option would
not be in violation of such registration requirements.
(f)    Additional Limitations on Exercise of Options. Participants may be
required to comply with any timing or other restrictions with respect to the
settlement or exercise of an Option, including a window-period limitation, as
may be imposed in the discretion of the Administrator.

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(g)    Substitution of Stock Appreciation Rights. The Administrator may provide
in an applicable Award Agreement evidencing the grant of an Option that the
Administrator, in its sole discretion, shall have the right to substitute a
Stock Appreciation Right for such Option at any time prior to or upon exercise
of such Option; provided, however, that such Stock Appreciation Right shall be
exercisable with respect to the same number of Shares for which such substituted
Option would have been exercisable, and shall also have the same exercise price
and remaining term as the substituted Option.
8.    RESTRICTED STOCK.
(a)    Award of Restricted Stock.
(i)    The Administrator is authorized to grant Restricted Stock to Eligible
Individuals, and shall determine the terms and conditions, including the
restrictions applicable to each award of Restricted Stock, which terms and
conditions shall not be inconsistent with the Plan, and may impose such
conditions on the issuance of such Restricted Stock as it deems appropriate.
(ii)    The Administrator shall establish the purchase price, if any, and form
of payment for Restricted Stock; provided, however, that if a purchase price is
charged, such purchase price shall be no less than the par value of the Shares
to be purchased, unless otherwise permitted by applicable law. In all cases,
legal consideration shall be required for each issuance of Restricted Stock to
the extent required by applicable law.
(b)    Rights as Stockholders. Subject to Section 8(d) hereof, upon issuance of
Restricted Stock, the Participant shall have, unless otherwise provided by the
Administrator, all the rights of a stockholder with respect to said shares,
subject to the restrictions in the applicable Award Agreement; provided,
however, that, in the sole discretion of the Administrator, any extraordinary
distributions with respect to the Shares shall be subject to the restrictions
set forth in Section 8(c) hereof; provided, further, that with respect to a
share of Restricted Stock with vesting conditions, dividends which are paid by
the Company with respect to Shares prior to vesting shall only be paid out to
the extent that, and at such time or times as, the vesting conditions are
subsequently satisfied and the underlying shares of Restricted Stock vest.
(c)    Restrictions. All shares of Restricted Stock (including any shares
received by Participants thereof with respect to shares of Restricted Stock as a
result of stock dividends, stock splits or any other form of recapitalization)
shall, in the terms of an applicable Award Agreement, be subject to such
restrictions and vesting requirements as the Administrator shall provide. Such
restrictions may include, without limitation, restrictions concerning voting
rights and transferability and such restrictions may lapse separately or in
combination at such times and pursuant to such circumstances or based on such
criteria as selected by the Administrator, including, without limitation,
criteria based on the Participant’s duration of employment, Company or Affiliate
performance, individual performance or other criteria selected by the
Administrator. By action taken after the Restricted Stock is issued, the
Administrator may, on such terms and conditions as it may determine to be
appropriate, accelerate the vesting of such Restricted Stock by removing any or
all of the restrictions imposed by the terms of the applicable Award Agreement.
Restricted Stock may not be sold or encumbered until all restrictions are
terminated or expire.

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(d)    Repurchase or Forfeiture of Restricted Stock. If no price was paid by the
Participant for the Restricted Stock, upon the termination of Continuous
Service, the Participant’s rights in unvested Restricted Stock then subject to
restrictions shall lapse, and such Restricted Stock shall be surrendered to the
Company and cancelled without consideration. If a price was paid by the
Participant for the Restricted Stock, upon the termination of Continuous Service
the Company shall have the right to repurchase from the Participant the unvested
Restricted Stock then-subject to restrictions at a cash price per share equal to
the price paid by the Participant for such Restricted Stock or such other amount
as may be specified in the applicable Award Agreement. The Administrator in its
sole discretion may provide that, upon certain events, including without
limitation a Change in Control, the Participant’s death, retirement or
disability, any other specified termination of Continuous Service or any other
event, the Participant’s rights in unvested Restricted Stock shall not lapse,
such Restricted Stock shall vest and cease to be forfeitable and, if applicable,
the Company cease to have a right of repurchase.
(e)    Certificates for Restricted Stock. Restricted Stock granted pursuant to
the Plan may be evidenced in such manner as the Administrator shall determine.
Certificates or book entries evidencing shares of Restricted Stock must include
an appropriate legend referring to the terms, conditions, and restrictions
applicable to such Restricted Stock, and the Company may, in its sole
discretion, retain physical possession of any stock certificate until such time
as all applicable restrictions lapse.
(f)    Section 83(b) Election. If a Participant makes an election under Section
83(b) of the Code to be taxed with respect to the Restricted Stock as of the
date of transfer of the Restricted Stock rather than as of the date or dates
upon which the Participant would otherwise be taxable under Section 83(a) of the
Code, the Participant shall be required to deliver a copy of such election to
the Company promptly after filing such election with the Internal Revenue
Service.
9.    RESTRICTED STOCK UNITS.
(a)    Grant of Restricted Stock Units. The Administrator is authorized to grant
Awards of Restricted Stock Units to any Eligible Individual selected by the
Administrator in such amounts and subject to such terms and conditions as
determined by the Administrator.
(b)    Purchase Price. The Administrator shall specify the purchase price, if
any, to be paid by the Participant to the Company with respect to any Restricted
Stock Unit award; provided, however, that value of the consideration shall not
be less than the par value of a Share, unless otherwise permitted by applicable
law.
(c)    Vesting of Restricted Stock Units. At the time of grant, the
Administrator shall specify the date or dates on which the Restricted Stock
Units shall become fully vested and nonforfeitable, and may specify such
conditions to vesting as it deems appropriate, including, without limitation,
vesting based upon the Participant’s duration of service to the Company or any
Affiliate, the attainment of one or more performance criteria established by the
Administrator, Company performance, individual performance or other specific
criteria, in each case on a specified date or dates or over any period or
periods, as determined by the Administrator.

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(d)    Maturity and Payment. At the time of grant, the Administrator shall
specify the maturity date applicable to each grant of Restricted Stock Units
which shall be no earlier than the vesting date or dates of the Award and may be
determined at the election of the Participant (if permitted by the applicable
Award Agreement); provided, that, except as otherwise expressly set forth in an
applicable Award Agreement, and subject to compliance with Section 409A of the
Code, in no event shall the maturity date relating to each Restricted Stock Unit
occur following the later of (a) the 15th day of the third month following the
end of calendar year in which the applicable portion of the Restricted Stock
Unit vests; or (b) the 15th day of the third month following the end of the
Company’s fiscal year in which the applicable portion of the Restricted Stock
Unit vests. On the maturity date, the Company shall, subject to Section 14(d)(v)
transfer to the Participant one unrestricted, fully transferable Share for each
Restricted Stock Unit scheduled to be paid out on such date and not previously
forfeited, or in the sole discretion of the Administrator, an amount in cash
equal to the Fair Market Value of such Shares on the maturity date or a
combination of cash and Common Stock as determined by the Administrator.
(e)    No Rights as a Stockholder. Unless otherwise determined by the
Administrator, a Participant of Restricted Stock Units shall possess no
incidents of ownership with respect to the Shares represented by such Restricted
Stock Units, unless and until such Shares are transferred to the Participant
pursuant to the terms of the Plan and the Award Agreement.
10.    PERFORMANCE AWARDS AND DIVIDEND EQUIVALENTS.
(a)    Performance Awards. The Administrator is authorized to grant Performance
Awards, including Awards of cash bonuses or other cash awards determined in the
Administrator’s discretion from time to time, to any Eligible Individual. The
value of Performance Awards, including any cash awards, may be linked to any
specific criteria determined by the Administrator, in each case on a specified
date or dates or over any period or periods determined by the Administrator.
Performance Awards may be paid in cash, Shares, or a combination of cash and
Shares, as determined by the Administrator.
(b)    Dividend Equivalents.
(i)    Dividend Equivalents may be granted by the Administrator based on
dividends declared on the Common Stock, during the period between the date an
Award is granted to a Participant and the date such Award vests, is exercised,
is distributed or expires, as determined by the Administrator. Such Dividend
Equivalents shall be converted to cash or additional Shares by such formula and
at such time and subject to such limitations as may be determined by the
Administrator. In addition, Dividend Equivalents with respect to an Award with
performance-based vesting that are based on dividends paid prior to the vesting
of such Award shall only be paid out to the Holder to the extent that the
performance-based vesting conditions are subsequently satisfied and the Award
vests.
(ii)    Notwithstanding the foregoing, no Dividend Equivalents shall be payable
with respect to Options or Stock Appreciation Rights.

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(c)    Cash Settlement. Without limiting the generality of any other provision
of the Plan, the Administrator may provide, in an Award Agreement or subsequent
to the grant of an Award, in its discretion, that any Award may be settled in
cash, Shares or a combination thereof.
(d)    Other Terms and Conditions. All applicable terms and conditions of each
Award described in this Section 10, including without limitation, as applicable,
the term, vesting and exercise/purchase price applicable to the Award, shall be
set by the Administrator in its sole discretion, provided, however, that the
value of the consideration shall not be less than the par value of a Share,
unless otherwise permitted by applicable law.
11.    STOCK APPRECIATION RIGHTS
(a)    Grant of Stock Appreciation Rights.
(i)    The Administrator is authorized to grant Stock Appreciation Rights to
Eligible Individuals from time to time, in its sole discretion, on such terms
and conditions as it may determine consistent with the Plan.
(ii)    A Stock Appreciation Right shall entitle the Participant (or other
person entitled to exercise the Stock Appreciation Right pursuant to the Plan)
to exercise all or a specified portion of the Stock Appreciation Right (to the
extent then-exercisable pursuant to its terms) and to receive from the Company
an amount determined by multiplying the difference obtained by subtracting the
exercise price per share of the Stock Appreciation Right from the Fair Market
Value on the date of exercise of the Stock Appreciation Right by the number of
Shares with respect to which the Stock Appreciation Right shall have been
exercised, subject to any limitations the Administrator may impose. The exercise
price per Share subject to each Stock Appreciation Right shall be set by the
Administrator, but shall not be less than 100% of the Fair Market Value on the
date the Stock Appreciation Right is granted.
(b)    Stock Appreciation Right Vesting.
(i)    The period during which the right to exercise, in whole or in part, a
Stock Appreciation Right vests in the Participant shall be set by the
Administrator and the Administrator may determine that a Stock Appreciation
Right may not be exercised in whole or in part for a specified period after it
is granted. Such vesting may be based on service with the Company or any
Affiliate, the attainment of performance goals or any other criteria selected by
the Administrator. At any time after grant of a Stock Appreciation Right, the
Administrator may, in its sole discretion and subject to whatever terms and
conditions it selects, accelerate the period during which a Stock Appreciation
Right vests.
(ii)    No portion of a Stock Appreciation Right which is unexercisable at
termination of Continuous Service shall thereafter become exercisable, except as
may be otherwise provided by the Administrator either in an applicable Award
Agreement or by action of the Administrator following the grant of the Stock
Appreciation Right.

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(c)    Manner of Exercise. All or a portion of an exercisable Stock Appreciation
Right shall be deemed exercised upon delivery of all of the following to the
stock administrator of the Company, or such other person or entity designated by
the Administrator, or his, her or its office, as applicable:
(i)    A written or electronic notice complying with the applicable rules
established by the Administrator stating that the Stock Appreciation Right, or a
portion thereof, is exercised. The notice shall be signed by the Participant or
other person then-entitled to exercise the Stock Appreciation Right or such
portion of the Stock Appreciation Right;
(ii)    Such representations and documents as the Administrator, in its sole
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any other federal, state or
foreign securities laws or regulations. The Administrator may, in its sole
discretion, also take whatever additional actions it deems appropriate to effect
such compliance; and
(iii)    In the event that the Stock Appreciation Right shall be exercised
pursuant to this Section 11(c) by any person or persons other than the
Participant, appropriate proof of the right of such person or persons to
exercise the Stock Appreciation Right.
(d)    Stock Appreciation Right Term. The term of each Stock Appreciation Right
shall be set by the Administrator in its sole discretion; provided, however,
that the term shall not be more than ten (10) years from the date the Stock
Appreciation Right is granted. The Administrator shall determine the time
period, including the time period following a termination of Continuous Service,
during which the Participant has the right to exercise the vested Stock
Appreciation Rights, which time period may not extend beyond the expiration date
of the Stock Appreciation Right term. Except as limited by the requirements of
Section 409A of the Code, the Administrator may extend the term of any
outstanding Stock Appreciation Right, and may extend the time period during
which vested Stock Appreciation Rights may be exercised, in connection with any
termination of Continuous Service of the Participant, and may amend any other
term or condition of such Stock Appreciation Right relating to such a
termination of Continuous Service.
(e)    Payment. Payment of the amounts payable with respect to Stock
Appreciation Rights pursuant to this Section 11 shall be in cash, Shares (based
on its Fair Market Value as of the date the Stock Appreciation Right is
exercised), or a combination of both, as determined by the Administrator.
12.    COVENANTS OF THE COMPANY.
(a)    Availability of Shares. During the terms of the Awards, the Company shall
keep available at all times the number of Shares required to satisfy such
Awards.
(b)    Securities Law Compliance. The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such authority
as may be required to grant Awards and to issue and sell Shares upon exercise or
vesting of the Awards; provided, however, that this undertaking shall not
require the Company to register under the Securities Act the Plan,

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any Awards or any Common Stock issued or issuable pursuant to any such Award.
If, after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of Common Stock under the Plan,
the Company shall be relieved from any liability for failure to issue and sell
Common Stock upon exercise or vesting of such Awards unless and until such
authority is obtained.
13.    USE OF PROCEEDS FROM STOCK
Proceeds from the sale of Common Stock pursuant to Awards shall constitute
general funds of the Company.
14.    ADDITIONAL TERMS OF AWARDS.
(a)    Payment. The Administrator shall determine the methods by which payments
by any Participant with respect to any Awards granted under the Plan shall be
made, including, without limitation: (a) cash or check, (b) Shares (including,
in the case of payment of the exercise price of an Award, Shares issuable
pursuant to the exercise of the Award) held for such period of time as may be
required by the Administrator in order to avoid adverse accounting consequences,
in each case, having a Fair Market Value on the date of delivery equal to the
aggregate payments required, (c) delivery of a written or electronic notice that
the Participant has placed a market sell order with a broker with respect to
Shares then-issuable upon exercise or vesting of an Award, and that the broker
has been directed to pay a sufficient portion of the net proceeds of the sale to
the Company in satisfaction of the aggregate payments required; provided,
however, that payment of such proceeds is then made to the Company upon
settlement of such sale, or (d) other form of legal consideration acceptable to
the Administrator. The Administrator shall also determine the methods by which
Shares shall be delivered or deemed to be delivered to Participants.
Notwithstanding any other provision of the Plan to the contrary, no Participant
who is a Director or an “executive officer” of the Company within the meaning of
Section 13(k) of the Exchange Act shall be permitted to make payment with
respect to any Awards granted under the Plan, or continue any extension of
credit with respect to such payment with a loan from the Company or a loan
arranged by the Company in violation of Section 13(k) of the Exchange Act.
(b)    Tax Withholding. The Company or any Affiliate shall have the authority
and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state, local and foreign taxes
(including the Participant’s FICA or employment tax obligation) required by law
to be withheld with respect to any taxable event concerning a Participant
arising as a result of the Plan. The Administrator may in its sole discretion
and in satisfaction of the foregoing requirement allow a Participant to elect to
have the Company withhold Shares otherwise issuable under an Award (or allow the
surrender of Shares). The number of Shares which may be so withheld or
surrendered shall be limited to the minimum number of shares which have a fair
market value on the date of withholding or repurchase sufficient to satisfy the
aggregate amount of such liabilities based on the minimum statutory withholding
rates for federal, state, local and foreign income tax and payroll tax purposes
that are applicable to such supplemental taxable income. The Administrator shall
determine the fair market value of the Shares, consistent with applicable
provisions of the Code, for tax withholding obligations due in connection with a
broker-

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assisted cashless Option or Stock Appreciation Right exercise involving the sale
of shares to pay the Option or Stock Appreciation Right exercise price or any
tax withholding obligation.
(c)    Transferability of Awards.
(i)    Except as otherwise provided in Section 14(c)(ii) or (iii) hereof:
a.    No Award under the Plan may be sold, pledged, assigned or transferred in
any manner other than by will or the laws of descent and distribution or,
subject to the consent of the Administrator, pursuant to a DRO, unless and until
such Award has been exercised, or the shares underlying such Award have been
issued, and all restrictions applicable to such shares have lapsed;
b.    No Award or interest or right therein shall be liable for the debts,
contracts or engagements of the Participant or his successors in interest or
shall be subject to disposition by transfer, alienation, anticipation, pledge,
hypothecation, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy) unless and until such Award has been exercised, or the
Shares underlying such Award have been issued, and all restrictions applicable
to such Shares have lapsed, and any attempted disposition of an Award prior to
the satisfaction of these conditions shall be null and void and of no effect,
except to the extent that such disposition is permitted by clause (a) of this
provision; and
c.    During the lifetime of the Participant, only the Participant may exercise
an Award (or any portion thereof) granted to him under the Plan, unless it has
been disposed of pursuant to a DRO; after the death of the Participant, any
exercisable portion of an Award may, prior to the time when such portion becomes
unexercisable under the Plan or the applicable Award Agreement, be exercised by
his personal representative or by any person empowered to do so under the
deceased Participant’s will or under the then applicable laws of descent and
distribution.
(ii)    Notwithstanding Section 14(c)(i) hereof, the Administrator, in its sole
discretion, may determine to permit a Participant to transfer an Award to any
one or more Permitted Transferees, subject to the following terms and
conditions: (i) an Award transferred to a Permitted Transferee shall not be
assignable or transferable by the Permitted Transferee other than by will or the
laws of descent and distribution; (ii) an Award transferred to a Permitted
Transferee shall continue to be subject to all the terms and conditions of the
Award as applicable to the original Participant (other than the ability to
further transfer the Award); and (iii) the Participant and the Permitted
Transferee shall execute any and all documents requested by the Administrator,
including without limitation, documents to (A) confirm the status of the
transferee as a Permitted Transferee, (B) satisfy any requirements for an
exemption for the transfer under applicable federal, state and foreign
securities laws and (C) evidence the transfer.
(iii)    Notwithstanding Section 14(c)(i) hereof, a Participant may, in the
manner determined by the Administrator, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Award upon the Participant’s death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights pursuant to the Plan is

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subject to all terms and conditions of the Plan and any Award Agreement
applicable to the Participant, except to the extent the Plan, the Award
Agreement otherwise provide, and to any additional restrictions deemed necessary
or appropriate by the Administrator. If the Participant is married and resides
in a “community property” state, a designation of a person other than the
Participant’s spouse as his or her beneficiary with respect to more than 50% of
the Participant’s interest in the Award shall not be effective without the prior
written or electronic consent of the Participant’s spouse. If no beneficiary has
been designated or survives the Participant, payment shall be made to the person
entitled thereto pursuant to the Participant’s will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed
or revoked by a Participant at any time provided the change or revocation is
filed with the Administrator prior to the Participant’s death.
(d)    Conditions to Issuance of Shares.
(i)    Notwithstanding anything herein to the contrary, neither the Company nor
its Affiliates shall be required to issue or deliver any certificates or make
any book entries evidencing Shares pursuant to the exercise of any Award, unless
and until the Administrator has determined, with advice of counsel, that the
issuance of such Shares is in compliance with all applicable laws, regulations
of governmental authorities and, if applicable, the requirements of any exchange
on which the Shares are listed or traded, and the Shares are covered by an
effective registration statement or applicable exemption from registration. In
addition to the terms and conditions provided herein, the Administrator may
require that a Participant make such reasonable covenants, agreements, and
representations as the Administrator, in its discretion, deems advisable in
order to comply with any such laws, regulations, or requirements.
(ii)    All Share certificates delivered pursuant to the Plan and all shares
issued pursuant to book entry procedures are subject to any stop-transfer orders
and other restrictions as the Administrator deems necessary or advisable to
comply with federal, state, or foreign securities or other laws, rules and
regulations and the rules of any securities exchange or automated quotation
system on which the Shares are listed, quoted, or traded. The Administrator may
place legends on any Share certificate or book entry to reference restrictions
applicable to the Shares.
(iii)    The Administrator shall have the right to require any Participant to
comply with any timing or other restrictions with respect to the settlement,
distribution or exercise of any Award, including a window-period limitation, as
may be imposed in the sole discretion of the Administrator.
(iv)    No fractional Shares shall be issued and the Administrator shall
determine, in its sole discretion, whether cash shall be given in lieu of
fractional shares or whether such fractional shares shall be eliminated by
rounding down.
(v)    Notwithstanding any other provision of the Plan, unless otherwise
determined by the Administrator or required by any applicable law, rule or
regulation, the Company and/or its Affiliates may, in lieu of delivering to any
Participant certificates evidencing Shares issued in connection with any Award,
record the issuance of Shares in the books of the Company (or, as applicable,
its transfer agent or stock plan administrator).

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(e)    Forfeiture Provisions. Pursuant to its general authority to determine the
terms and conditions applicable to Awards under the Plan, the Administrator
shall have the right to provide, in the terms of Awards made under the Plan, or
to require a Participant to agree by separate written or electronic instrument,
that: (a) any proceeds, gains or other economic benefit actually or
constructively received by the Participant upon any receipt or exercise of the
Award, or upon the receipt or resale of any Shares underlying the Award, must be
paid to the Company, and (b) the Award shall terminate and any unexercised
portion of the Award (whether or not vested) shall be forfeited, if (i) a
termination of Continuous Service occurs prior to a specified date, or within a
specified time period following receipt or exercise of the Award, or (ii) the
Participant at any time, or during a specified time period, engages in any
activity in competition with the Company, or which is inimical, contrary or
harmful to the interests of the Company, as further defined by the Administrator
or (iii) the Participant incurs a termination of Continuous Service for “cause”
(as such term is defined in the sole discretion of the Administrator).
(f)    Prohibition on Repricing. Subject to Section 16(b), the Administrator
shall not, without the approval of the stockholders of the Company, (i)
authorize the amendment of any outstanding Option or Stock Appreciation Right to
reduce its price per share, or (ii) cancel any Option or Stock Appreciation
Right in exchange for cash or another Award when the Option or Stock
Appreciation Right price per share exceeds the Fair Market Value of the
underlying Shares. Subject to Section 16(b), the Administrator shall have the
authority, without the approval of the stockholders of the Company, to amend any
outstanding Award to increase the price per share or to cancel and replace an
Award with the grant of an Award having a price per share that is greater than
or equal to the price per share of the original Award.
15.    MISCELLANEOUS.
(a)    Acceleration of Exercisability and Vesting. The Administrator shall have
the power to accelerate the time at which an Award may first vest and/or be
exercised in accordance with the Plan, notwithstanding the provisions in the
Award stating the time at which it may first be exercised or the time during
which it will vest.
(b)    No Stockholder Rights. Except as otherwise provided herein, a Participant
shall have none of the rights of a stockholder with respect to Shares covered by
any Award until the Participant becomes the record owner of such Shares.
(c)    Paperless Administration. In the event that the Company establishes, for
itself or using the services of a third party, an automated system for the
documentation, granting or exercise of Awards, such as a system using an
internet website or interactive voice response, then the paperless
documentation, granting or exercise of Awards by a Participant may be permitted
through the use of such an automated system.
(d)    Effect of Plan upon Other Compensation Plans. The adoption of the Plan
shall not affect any other compensation or incentive plans in effect for the
Company or any Affiliate. Nothing in the Plan shall be construed to limit the
right of the Company or any Affiliate: (a) to establish any other forms of
incentives or compensation for Employees of the Company or any Affiliate, or
(b) except as otherwise provided herein, to grant or assume options or other
rights or awards

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otherwise than under the Plan in connection with any proper corporate purpose
including without limitation, the grant or assumption of options in connection
with the acquisition by purchase, lease, merger, consolidation or otherwise, of
the business, stock or assets of any corporation, partnership, limited liability
company, firm or association.
(e)    Compliance with Laws. The Plan, the granting and vesting of Awards under
the Plan and the issuance and delivery of Shares and the payment of money under
the Plan or under Awards granted or awarded hereunder are subject to compliance
with all applicable laws (including but not limited to margin requirements), and
to such approvals by any listing, regulatory or governmental authority as may,
in the opinion of counsel for the Company, be necessary or advisable in
connection therewith. Any securities delivered under the Plan shall be subject
to such restrictions, and the person acquiring such securities shall, if
requested by the Company, provide such assurances and representations to the
Company as the Company may deem necessary or desirable to assure compliance with
all applicable laws. To the extent permitted by applicable laws, the Plan and
Awards granted or awarded hereunder shall be deemed amended to the extent
necessary to conform to such applicable laws.
(f)    Indemnification. To the extent allowable pursuant to applicable law, each
member of the Committee or of the Board shall be indemnified and held harmless
by the Company from any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by such member in connection with or resulting from
any claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action or failure to act
pursuant to the Plan and against and from any and all amounts paid by him or her
in satisfaction of judgment in such action, suit, or proceeding against him or
her; provided he or she gives the Company an opportunity, at its own expense, to
handle and defend the same before he or she undertakes to handle and defend it
on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled pursuant to the Company’s Articles of Incorporation or Bylaws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.
(g)    Relationship to other Benefits. No payment pursuant to the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or other benefit plan of the
Company or any Affiliate except to the extent otherwise expressly provided in
writing in such other plan or an agreement thereunder.
(h)    Expenses. The expenses of administering the Plan shall be borne by the
Company and its Affiliates.
16.    ADJUSTMENTS UPON CHANGES IN STOCK.
(a)    In the event of any stock dividend, stock split, combination or exchange
of shares, merger, consolidation or other distribution (other than normal cash
dividends) of Company assets to stockholders, Change in Control or any other
change affecting the Shares of the Company’s stock or the share price of the
Company’s stock other than an Equity Restructuring, the Administrator shall make
equitable adjustments, if any, to reflect such change with respect to (i) the
aggregate number and kind of Shares that may be issued under the Plan
(including, but not limited to,

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adjustments of the of the limitations in Section 4 on the maximum number and
kind of shares which may be issued under the Plan, and adjustments of the manner
in which Shares subject to Full Value Awards will be counted); (ii) the number
and kind of Shares (or other securities or property) subject to outstanding
Awards; (iii) the terms and conditions of any outstanding Awards (including,
without limitation, any applicable performance targets or criteria with respect
thereto); and (iv) the grant or exercise price per share for any outstanding
Awards under the Plan.
(b)    In the event of any transaction or event described in Section 16(a) or
any unusual or nonrecurring transactions or events affecting the Company, any
Affiliate of the Company, or the financial statements of the Company or any
Affiliate, or of changes in applicable laws, regulations or accounting
principles, the Administrator, in its sole discretion, and on such terms and
conditions as it deems appropriate, either by the terms of the Award or by
action taken prior to the occurrence of such transaction or event and either
automatically or upon the Participant’s request, is hereby authorized to take
any one or more of the following actions whenever the Administrator determines
that such action is appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan
or with respect to any Award under the Plan, to facilitate such transactions or
events or to give effect to such changes in laws, regulations or principles:
(i)    To provide for either (A) termination of any such Award in exchange for
an amount of cash, if any, equal to the amount that would have been attained
upon the exercise of such Award or realization of the Participant’s rights (and,
for the avoidance of doubt, if as of the date of the occurrence of the
transaction or event described in this Section 16 the Administrator determines
in good faith that no amount would have been attained upon the exercise of such
Award or realization of the Participant’s rights, then such Award may be
terminated by the Company without payment) or (B) the replacement of such Award
with other rights or property selected by the Administrator in its sole
discretion having an aggregate value not exceeding the amount that could have
been attained upon the exercise of such Award or realization of the
Participant’s rights had such Award been currently exercisable or payable or
fully vested;
(ii)    To provide that such Award be assumed by the successor or survivor
corporation, or a parent or subsidiary thereof, or shall be substituted for by
similar options, rights or awards covering the stock of the successor or
survivor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices;
(iii)    To make adjustments in the number and type of Shares of the Company’s
stock (or other securities or property) subject to outstanding Awards, and in
the number and kind of outstanding Restricted Stock and/or in the terms and
conditions of (including the grant or exercise price), and the criteria included
in, outstanding Awards and Awards which may be granted in the future;
(iv)    To provide that such Award shall be exercisable or payable or fully
vested with respect to all shares covered thereby, notwithstanding anything to
the contrary in the Plan or the applicable Award Agreement; and

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(v)    To provide that the Award cannot vest, be exercised or become payable
after such event.
(c)    In connection with the occurrence of any Equity Restructuring, and
notwithstanding anything to the contrary in Sections 16(a) and 16(b):
(i)    The number and type of securities subject to each outstanding Award and
the exercise price or grant price thereof, if applicable, shall be equitably
adjusted; and/or
(ii)    The Administrator shall make such equitable adjustments, if any, as the
Administrator in its discretion may deem appropriate to reflect such Equity
Restructuring with respect to the aggregate number and kind of Shares that may
be issued under the Plan (including, but not limited to, adjustments of the
limitations in Section 4 on the maximum number and kind of shares which may be
issued under the Plan). The adjustments provided under this Section 16(c) shall
be nondiscretionary and shall be final and binding on the affected Participant
and the Company.
(d)    Notwithstanding any other provision of the Plan, the Board, in its sole
discretion, and on such terms and conditions as it deems appropriate, is
authorized to adopt or put into place a change in control program to determine
the vesting schedule, exercisability and other terms of outstanding Awards on or
after a Change in Control.
(e)    The Administrator may, in its sole discretion, include such further
provisions and limitations in any Award, agreement or certificate, as it may
deem equitable and in the best interests of the Company that are not
inconsistent with the provisions of the Plan.
(f)    No adjustment or action described in this Section 16 or in any other
provision of the Plan shall be authorized to the extent such adjustment or
action would result in short-swing profits liability under Section 16 or violate
the exemptive conditions of Rule 16b-3 unless the Administrator determines that
the Award is not to comply with such exemptive conditions.
(g)    The existence of the Plan, any Award Agreement and the Awards granted
hereunder shall not affect or restrict in any way the right or power of the
Company or the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any issue
of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.
(h)    No action shall be taken under this Section 16 which shall cause an Award
to fail to comply with Section 409A of the Code or the Treasury Regulations
thereunder, to the extent applicable to such Award.
(i)    In the event of any pending stock dividend, stock split, combination or
exchange of shares, merger, consolidation or other distribution (other than
normal cash dividends) of Company

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assets to stockholders, Change in Control or any other change affecting the
Shares or the share price of the Common Stock including any Equity
Restructuring, for reasons of administrative convenience, the Company in its
sole discretion may refuse to permit the exercise of any Award during a period
of 30 days prior to the consummation of any such transaction.
17.    AMENDMENT OF THE PLAN AND AWARDS.
(a)    Amendment of Plan. Except as otherwise provided in this Section 17(a),
the Plan may be wholly or partially amended or otherwise modified at any time or
from time to time by the Board. No amendment, suspension or termination of the
Plan shall, without the consent of the Participant, alter or impair any rights
or obligations under any Award theretofore granted or awarded, unless the Award
itself otherwise expressly so provides.
(b)    Contemplated Amendments. It is expressly contemplated that the Board may
amend the Plan in any respect the Board deems necessary or advisable to provide
Eligible Individuals with the maximum benefits provided or to be provided under
the provisions of the Code.
(c)    Amendment of Awards. The Board at any time, and from time to time, may
amend the terms of any one or more Awards; provided, however, that the rights
under any Award shall not be impaired by any such amendment unless: (i) the
Company requests the consent of the Participant; and (ii) the Participant
consents in writing.
18.    TERMINATION OR SUSPENSION OF THE PLAN.
(a)    Plan Term. The Board may suspend or terminate the Plan at any time. No
Award may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b)    No Impairment of Rights. Suspension or termination of the Plan shall not
impair rights and obligations under any Award granted while the Plan is in
effect except with the written consent of the Participant.
19.    EFFECTIVE DATE OF PLAN. The Plan shall become effective upon its adoption
by the Board.
20.    CHOICE OF LAW/INTERPRETATION. The law of the State of Delaware shall
govern all questions concerning the construction, validity and interpretation of
the Plan, without regard to such state’s conflict of laws rules.
21.    STOCKHOLDER APPROVAL NOT REQUIRED. It is expressly intended that approval
of the Company’s stockholders not be required as a condition of the
effectiveness of the Plan, and the Plan’s provisions shall be interpreted in a
manner consistent with such intent for all purposes. Specifically, Rule 5635(c)
promulgated by The Nasdaq Stock Market generally requires stockholder approval
for stock option plans or other equity compensation arrangements adopted by
companies whose securities are listed on the Nasdaq Global Market pursuant to
which stock awards or stock may be acquired by officers, directors, employees or
consultants of such companies. Nasdaq Stock Market Rule 5635(c)(4) provides an
exception to this requirement for issuances of securities to a

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person not previously an employee or director of the issuer, or following a bona
fide period of non-employment, as an inducement material to the individual’s
entering into employment with the issuer, provided such issuances are approved
by either the issuer’s independent compensation committee or a majority of the
issuer’s independent directors. Notwithstanding anything to the contrary herein,
Awards under the Plan may only be made to Employees who have not previously been
an Employee or member of the Board of the Company or an Employee or director of
an Affiliate, or following a bona fide period of non-employment by the Company
or an Affiliate, as an inducement material to the Employee’s entering into
employment with the Company or an Affiliate. Awards under the Plan will be
approved as set forth herein by: (i) the Committee, provided it is comprised
solely of two or more Independent Directors, or (ii) a majority of the Company’s
Independent Directors. Accordingly, pursuant to Nasdaq Stock Market
Rule 5635(c)(4), the issuance of Awards and the Shares issuable upon exercise or
vesting of such Awards pursuant to the Plan are not subject to the approval of
the Company’s stockholders.
22.    SECTION 409A. To the extent that the Administrator determines that any
Award granted under the Plan is subject to Section 409A of the Code, the Award
Agreement evidencing such Award shall incorporate the terms and conditions
required by Section 409A of the Code. To the extent applicable, the Plan and
Award Agreements shall be interpreted in accordance with Section 409A of the
Code and Department of Treasury regulations and other interpretive guidance
issued thereunder, including without limitation any such regulations or other
guidance that may be issued after the adoption of the Plan. Notwithstanding any
provision of the Plan to the contrary, in the event that following the adoption
of the Plan the Administrator determines that any Award may be subject to
Section 409A of the Code and related Department of Treasury guidance (including
such Department of Treasury guidance as may be issued after the adoption of the
Plan), the Administrator may adopt such amendments to the Plan and the
applicable Award Agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other
actions, that the Administrator determines are necessary or appropriate to:
(a) exempt the Award from Section 409A of the Code and/or preserve the intended
tax treatment of the benefits provided with respect to the Award; or (b) comply
with the requirements of Section 409A of the Code and related Department of
Treasury guidance. Notwithstanding the foregoing, nothing herein shall create
any obligation on the part of the Administrator or the Company or its Affiliates
to take any action described in this Section 22 or give rise to any liability on
the part of the Administrator or the Company or its Affiliates for failing to
take any such action.
23.    UNFUNDED STATUS OF AWARDS. The Plan is intended to be an “unfunded” plan
for incentive compensation. With respect to any payments not yet made to a
Participant pursuant to an Award, nothing contained in the Plan or any Award
Agreement shall give the Participant any rights that are greater than those of a
general creditor of the Company or any Affiliate.

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