EXHIBIT 10.20

DOCUMENT SCIENCES CORPORATION

MANAGEMENT INCENTIVE RETENTION PLAN FOR SELECT EMPLOYEES

ARTICLE I

Purpose

This Management Incentive Retention Plan for Select Employees (the “Plan”) of
Document Sciences Corporation, a Delaware corporation (the “Company”) became
effective on September 12, 2007 (the “Effective Date”), and was adopted because
the Board determined it to be in the best interests of the Company and the
stockholders of the Company that the interests of selected key management
employees and others providing personal services to the Company be aligned with
that of the stockholders and to recognize the absence of compensatory equity
grants during the preceding two years. The purpose of the Plan is to provide an
incentive to such persons to maximize the valuation of the Company.

ARTICLE II

Definitions and Construction

2.1 Definitions. Where the following capitalized words and phrases appear in the
Plan, each has the respective meaning set forth below, unless the context
clearly indicates to the contrary.

 

(1) Administrator: The Board shall be the administrator unless and until the
Board delegates the administration of the Plan to a Committee, as provided in
Section 3.2. Thereafter, all references in the Plan to the Administrator shall
be to the Committee.

 

(2) Award Letter: A written letter from the Company to an employee, notifying
such person of his selection as a Participant.

 

(3) Bonus Pool: The dollar amount of the aggregate bonus pool to be divided
among the Participants, calculated in accordance with Section 5.3.

 

(4) Board: The Board of Directors of the Company.

 

(5) Change in Control: Either of the following:

(i) the acquisition by one person (or more than one person acting as a group) of
direct or indirect beneficial ownership of the stock of the Company that,
together with stock as to which beneficial ownership is otherwise directly or
indirectly held by such person or group, constitutes more than 80% of the total
fair market value or total voting power of the stock of the Company whether by
merger, reverse merger, consolidation or reorganization of the Company or
otherwise; or

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(ii) any one person, or more than one person acting as a group, directly or
indirectly acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition by such person or persons) assets from the
Company that have a total gross fair market value equal to or more than 80% of
the total gross fair market value of all of the assets of the Company
immediately before such acquisition or acquisitions.

The terms “person”, “group” and “beneficial ownership” as used in this
definition shall be interpreted consistent with Sections 3(a)(9) and 13(d)(3) of
the Securities Exchange Act of 1934, as amended, and Rule 13d-3 promulgated
thereunder.

 

(6) CIC Uplift: The amount by which the enterprise value of the Company on the
Closing Date (as derived from the CIC Price) exceeds the enterprise value of the
Company on the Effective Date (based upon the closing sale price per share of
the Company’s common stock on the Effective Date of $9.52 as quoted on the
National Association of Securities Dealers Automated Quotation System) which was
calculated by the Administrator to be $53,072,553, the valuation of the Company
on the Effective Date. For purposes of the Plan, all calculations to determine
the valuation of the Company at different per share values assumes that all
outstanding compensatory stock options granted by the Company are exercised and
the Company uses the proceeds raised from such exercises to repurchase shares at
the given per share value.

 

(7) CIC Price: Shall mean the aggregate “Value” (as defined herein) paid by the
purchaser in a Change in Control of the Company sale of all cash, non-cash
assets, equity (including stock options, warrants or similar rights to acquire
stock) and debt issued or assumed in connection with a Change in Control and
shall include, without duplication, the Value of equity and debt securities of
any equity created as part of a process to effect a Change in Control. “Value”
shall mean (i) with respect to cash, the amount thereof; (ii) with respect to
marketable securities, the value assigned to such securities in the definitive
agreement relating to the Change in Control or, if not assigned in such
agreement, the mean of the closing sale price of such securities as quoted on
their principal trading market on the tenth through the sixth consecutive
trading days preceding the Closing Date or, if not quoted on such dates, the
mean of the closing sale price of such securities as quoted on their principal
trading market on the last five consecutive trading days for which a price is so
quoted prior to the Closing Date; (iii) if debt, the face amount thereof; and
(iv) with respect to non-cash consideration other than marketable securities or
debt, the fair market value thereof as reasonably determined by the Board of
Directors in good faith. CIC Price shall include (a) any contingent payments, or
similar payments anticipated to be made in the future; and (b) any amounts
placed into escrow otherwise deferred or held back by any purchaser of the
Company in a Change in Control transaction.

 

(8) Closing Date: The date upon which a Change in Control of the Company closes.

 

(9) Committee: A committee of one or more members of the Board.

 

(10) Code: The Internal Revenue Code of 1986, as amended.

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(11) Covered Parachute Payments: Shall have the meaning set forth in
Section 6.1.

 

(12) Covered Payments: Shall have the meaning set forth in Section 6.1.

 

(13) Excise Tax: The excise tax on excess parachute payments under Section 4999
of the Code (or any successor provision or any comparable provision of state,
local or foreign law), including any interest or penalties with respect to such
excise tax.

 

(14) Holdback Bonus: The amount of the Incentive Bonus that the Participants
would otherwise receive in accordance with Section 5.3 or Section 5.5, as
applicable, multiplied by the Holdback Percentage.

 

(15) Holdback Percentage: That percentage of the CIC Price subject to holdback,
escrow or otherwise deferred or held back by any purchaser of the Company in a
Change in Control transaction.

 

(16) Incentive Bonus: A cash bonus comprised of a percentage of the Bonus Pool
payable under the Plan to a given Participant in accordance with Article V.

 

(17) IRS: The Internal Revenue Service of the United States.

 

(18) Participant: Each employee who is participating in the Plan in accordance
with Article IV.

 

(19) Safe Harbor Amount: The largest portion of the Covered Payments that would
result in no portion of the Covered Payments being subject to the Excise Tax.

 

(20) Section 409A: Section 409A of the Code, the final regulations thereunder
and any additional guidance provided by the Treasury Department pursuant
thereto.

 

(21) Specified Employee: An employee determined by the Company to be a
“specified employee” as defined in Section 1.409A-1(i) of the final regulations
promulgated under Section 409A.

 

(22) Strategic Buyer: A purchaser of the Company that is an operating
corporation or other legal entity that is engaged in the active conduct of a
trade or business in the technology industry and is acquiring the Company for
reasons of cost savings, synergies, increases in market share, complementary
products or other similar reasons, and that is not an institutional, financial
buyer or other type of financial institution, including but not limited to a
private equity firm, venture capital firm, hedge fund, securities brokerage
firm, bank or insurance company.

 

(23) Termination Date: Shall have the meaning set forth in Section 4.1.

2.2 Number and Gender. Wherever appropriate herein, words used in the singular
will be considered to include the plural, and words used in the plural will be
considered to include the singular. The masculine gender, where appearing in the
Plan, will be deemed to include the feminine gender.

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2.3 Headings. The headings of Articles and Sections herein are included solely
for convenience, and, if there is any conflict between such headings and the
text of the Plan, the text will control. All references to Articles, Sections
and Subsections are to this document unless otherwise indicated.

ARTICLE III

Administration of Plan

3.1 Administrator. The Plan shall be interpreted and administered by the
Administrator.

3.2 Right to Delegate. The Board may from time to time delegate some or all of
its powers and responsibilities under the Plan to the Committee. If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board (and references in the Plan to the Administrator shall thereafter
be to the Committee). The Board may at any time revest in itself any delegated
power to administer the Plan. In addition, the Administrator may employ persons
to render advice or to execute its directions with regard to any responsibility
held hereunder and may authorize any person to whom any of its responsibilities
have been properly delegated to employ persons to render such advice or to
execute its directions.

3.3 Discretion to Interpret Plan. The Administrator has absolute discretion to
construe and interpret any and all provisions of the Plan, including, but not
limited to, the discretion to resolve ambiguities, inconsistencies, or omissions
conclusively. The decisions of the Administrator will be binding and conclusive
upon all persons unless determined to have been arbitrary or capricious.

3.4 Powers and Duties. In addition to the powers described in Section 3.3 and
all other powers specifically granted under the Plan, the Administrator has all
powers necessary or proper to administer the Plan and to discharge his duties
under the Plan, including, but not limited to, the following powers:

3.4.1 to determine whether a transaction or series of related transactions
results in a Change in Control of the Company;

3.4.2 to determine whether the buyer in the Change in Control transaction
qualifies as a Strategic Buyer;

3.4.3 to determine the amount, form, and conditions of any Incentive Bonus under
the Plan, and to authorize or deny the payment of benefits under the Plan;

3.4.4 to designate a later automatic Termination Date;

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3.4.5 to make and enforce such rules, regulations, and procedures as the
Administrator may deem necessary or proper for the orderly and efficient
administration of the Plan;

3.4.6 to decide all questions concerning the Plan and the eligibility of any
person to participate in the Plan; and

3.4.7 to prepare and distribute information explaining the Plan.

3.5 Expenses. Reasonable expenses incident to the administration of the Plan,
including, without limitation, the compensation of legal counsel, advisors, and
other technical or clerical assistance as may be required, the payment of any
bond or security, and any other expenses incidental to the operation of the
Plan, that the Administrator determines are proper will be paid by the Company
or an affiliate of the Company.

3.6 Indemnification. The Company will indemnify and hold harmless any person
exercising authority within the scope of this Article III or at the direction of
the Administrator against any and all reasonable expenses and liabilities
arising out of such exercise of authority or execution of directions, including,
without limitation, any reasonable expenses and liabilities that are caused by
or result from an act or omission constituting the negligence of such person in
the performance of such functions or responsibilities, but excluding expenses
and liabilities arising out of such person’s own gross negligence or reckless or
willful misconduct. Expenses against which such person will be indemnified
hereunder include, without limitation, the amounts of any settlement or
judgment, costs, counsel fees, and related charges reasonably incurred in
connection with a claim asserted or a proceeding brought or settlement thereof.

ARTICLE IV

Term and Participation

4.1 Term. The Plan shall become effective on the Effective Date and, subject to
Section 9.2, shall terminate on September 12, 2010 (the “Termination Date”),
provided that the Administrator shall have the authority to designate a later
Termination Date. If the Administrator exercises such authority, references in
this Plan to the Termination Date shall be to such later date.

4.2 Commencement of Participation. An employee will become a Participant if (and
only if) he is selected to be a Participant by the Administrator in accordance
with and subject to the provisions of the Plan. Such selection will be made by
the Administrator at any time and for any reason and will be effective as of the
date designated by and in the discretion of the Administrator (which date will
not be prior to the Effective Date). Each Participant will receive an Award
Letter informing him of his selection to be a Participant and the effective date
of his participation as soon as administratively practicable after such
selection by the Administrator.

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4.3 Termination of Participation. An employee who has become a Participant will
cease to be a Participant if: (1) such Participant’s employment with the Company
and all subsidiaries and affiliates of the Company is terminated prior to the
Closing Date for any reason or (2) no Closing Date has occurred on or before the
Termination Date.

ARTICLE V

Incentive Bonuses

5.1 Conditions for Incentive Bonus. A Participant will be eligible to receive an
Incentive Bonus, if any, from the Company or the Company’s successor if (and
only if):

5.1.1 The Company has entered into a definitive agreement or agreements with an
acquiror pursuant to which a Change in Control of the Company has or will occur,
as determined by the Administrator.

5.1.2 The Closing Date occurs on or before the Termination Date for the Plan.

5.1.3 The CIC Price exceeds $53,072,553.

5.1.4 Such Participant is continuously employed by the Company or one of its
subsidiaries or affiliates from the date on which he is selected to become a
Participant up to and including the Closing Date.

5.1.5 Such Participant complies with additional conditions, if any, set forth in
his Award Letter, which conditions need not be identical for all Participants.

5.2 Amount of Incentive Bonus; Reallocation. A Participant who is eligible to
receive an Incentive Bonus under Section 3.1 will be entitled to a percentage of
the Bonus Pool as determined by the Administrator in its discretion and as set
forth in the Award Letter. The Administrator’s determinations pursuant to the
preceding sentence will be made on a case-by-case basis with respect to any
individual Participant. The Administrator may provide in its discretion that the
amount of any Incentive Bonus will be offset by other payments or reduced for
any other reason as set forth in the relevant Award Letter. Any Incentive Bonus
forfeited pursuant to the terms of an Award Letter shall be available, but shall
not be required, to be re-granted to one or more Participants under the terms of
the Plan. The Administrator shall not be obligated to award the entire Bonus
Pool to Participants.

5.3 Bonus Pool. If the conditions set forth in Sections 5.1.1 through 5.1.3 are
satisfied, the Bonus Pool shall be funded in an amount equal to 15% of the CIC
Uplift; provided, however, that the amount of the Bonus Pool shall be capped at
$12,545,000.

5.4 Form and Timing of Payment of Incentive Bonus. A Participant who is eligible
to receive an Incentive Bonus under Section 5.1 will be paid such Incentive
Bonus in a lump sum in cash on the Closing Date; provided, however, that if a
portion of the CIC Price is the subject of a holdback or escrow for
indemnification claims, or otherwise, then (a) the Administrator shall calculate
the Holdback Percentage and the amount of the Holdback Bonus, (b) the
Participant shall receive in a lump sum in cash on the Closing Date the amount
of his Incentive Bonus less his pro rata portion of the Holdback Bonus, and
(c) simultaneous with the release

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of the escrow by the escrow agent or holdback by the purchaser of the Company,
the Participant shall receive in a lump sum in cash his pro rata portion of the
funds released. Notwithstanding the foregoing, if some or all of an Incentive
Bonus or Holdback Bonus would not be deductible by the Company pursuant to
Section 162(m) of the Code, then the payment of such portion of the Incentive
Bonus or Holdback Bonus shall be made as soon as administratively possible
following the first day on which the deductibility of such payment shall not be
disallowed under Section 162(m) in accordance with the provisions of
Section 1.409A-2(b)(7)(i) of the final regulations promulgated under
Section 409A, and the Participant shall be credited with interest at the “Wall
Street Journal Prime Rate” (or comparable interest rate selected by the
Administrator) in effect on the Closing Date and adjusted on the first business
day of any subsequent calendar year, compounded monthly.

5.5 Limitations: No Equity Investment. It shall be a condition to receiving an
Incentive Bonus pursuant to Section 5.3 that the Participant not receive or
otherwise acquire any equity security (including, without limitation, any
option, stock appreciation right, phantom stock or other form of derivative
security) of the Company or any entity (or any affiliate of an entity) that
acquires the Company or the Company’s assets pursuant to the transaction
constituting the Change in Control. If the conditions set forth in Section 5.1
are satisfied and the Participant receives or otherwise acquires any equity
security in the Change in Control transaction, the following shall apply in
place of Section 5.3:

5.5.1 If the CIC Price is less than $74,663,364, then the Participant’s
Incentive Bonus shall be zero ($0.00).

5.5.2 If the CIC Price equals or exceeds $74,663,364 but is less than
$77,765,492, the Participant’s Incentive Bonus shall be equal to 25% of the
Participant’s share of the Bonus Pool calculated pursuant to Section 5.3.

5.5.3 If the CIC Price equals or exceeds $77,765,492 but is less than
$80,867,620, the Participant’s Incentive Bonus shall be equal to 50% of the
Participant’s share of the Bonus Pool calculated pursuant to Section 5.3.

5.5.4 If the CIC Price equals or exceeds $80,867,620 but is less than
$83,969,748, the Participant’s Incentive Bonus shall be equal to 75% of the
Participant’s share of the Bonus Pool calculated pursuant to Section 5.3.

5.5.5 If the CIC Price equals or exceeds $83,969,748, the Participant’s
Incentive Bonus shall be equal to 100% of the Participant’s share of the Bonus
Pool calculated pursuant to Section 5.3.

5.6 Additional Conditions. The Administrator may include in the Award Letter one
or more conditions on the receipt or continued receipt of an Incentive Bonus
that the Administrator deems appropriate. Such conditions are absolutely within
the sole discretion of the Administrator and may vary among individual
Participants.

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5.7 Discretionary Bonus for Non-Strategic Buyer Transaction. On the basis of the
CIC Price and the Administrator’s analysis of the Participants’ efforts in
securing such CIC Price, the Administrator may waive the conditions set forth in
Sections 5.1, 5.5 and/or 5.6 in whole or in part, or for some or all
Participants, in its sole discretion.

ARTICLE VI

Tax Considerations

6.1 Parachute Payments. Notwithstanding the foregoing, if the payment of an
Incentive Bonus under the Plan by itself or when combined with any other payment
or benefit the Participant receives from the Company or any of its subsidiaries
or affiliates (collectively “Covered Payments”), would (i) constitute a
“parachute payment” within the meaning of Section 280G of the Code (the “Covered
Parachute Payments”), and (ii) is or may become subject to the Excise Tax, then
the portion of the Covered Payments that would be treated as Covered Parachute
Payments, in the aggregate, in excess of the Safe Harbor Amount shall be either
(a) paid in full in accordance with the terms governing such payments, or
(b) reduced so that the Covered Parachute Payments, in the aggregate in excess
of the Safe Harbor Amount, whichever of the foregoing actions, taking into
account the applicable federal, state and local employment taxes, income taxes,
and the Excise Tax, results in the Participant’s receipt, on an after-tax basis,
of the greater amount of the payments notwithstanding that all or some portion
of the payments may remain subject to the Excise Tax. If it is determined that
any payments are to be reduced as set forth above, the Participant shall have
the right to designate which of the payments shall be reduced and to what
extent, provided that the Participant may not so elect to the extent that, in
the determination of the accounting firm referred to in Section 6.2, such
election would cause the Participant to be subject to the Excise Tax.

6.2 Accounting. The accounting firm engaged by the Company for general audit
purposes as of the day prior to the Closing Date shall make the determination of
(i) whether an event described in Section 280G(b)(2)(A)(i) of the Code has
occurred, (ii) the value of any Covered Parachute Payments and the Safe Harbor
Amount, (iii) whether any reduction in the Covered Payments is required under
Section 6.1, and (iv) the amount of any such reduction. If the accounting firm
so engaged by the Company is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Administrator
shall appoint a nationally recognized accounting firm to make the determinations
required hereunder. The Company shall bear all expenses with respect to the
determinations by such accounting firm required to be made hereunder. The
accounting firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to the Company
and the Participant at such time as requested by the Company. If the accounting
firm determines that no Excise Tax is payable, it shall furnish the Company and
the Participant with an opinion reasonably acceptable to the Participant that no
Excise Tax will be imposed. Any good faith determinations of the accounting firm
made hereunder shall be final, binding and conclusive upon the Company and the
Participant.

6.3 IRS Determination. If, notwithstanding any reduction described in
Section 6.1, the IRS determines that the Participant is liable for the Excise
Tax as a result of the receipt of an Incentive Bonus payable under this Plan or
otherwise as described above, then the Participant shall be obligated to pay
back to the

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Company, within thirty (30) days after a final IRS determination or in the event
that the Participant challenges the final IRS determination, a final judicial
determination, a portion of such amounts equal to the “Repayment Amount”. The
Repayment Amount with respect to the payment of benefits shall be the smallest
such amount, if any, as shall be required to be paid to the Company so that the
Participant’s net after-tax proceeds with respect to any payment of benefits
(after taking into account the payment of the Excise Tax and all other
applicable taxes imposed on such payment) shall be maximized. The Repayment
Amount with respect to the payment of benefits shall be zero if a Repayment
Amount of more than zero would not result in the Participant’s net after-tax
proceeds with respect to the payment of such benefits being maximized. If the
Excise Tax is not eliminated pursuant to this paragraph, the Participant shall
pay the Excise Tax.

ARTICLE VII

Funding of Plan; Other Benefits; Future Service

7.1 Funding of Plan. The Plan will be unfunded, and benefits provided hereunder
will be paid from the general assets of the Company. No segregation of funds by
the Company is or shall be required.

7.2 Impact on Other Benefits. Amounts paid under the Plan are intended to have
no impact on any other employee benefit plans or other compensatory arrangements
sponsored by the Company or made between the Company (or its subsidiaries or
affiliates) and the Participant.

7.3 Nonalienation of Benefits. Except as the Administrator may otherwise permit
or as may be required by law: (1) no interest in or benefit payable under the
Plan will be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any action by a Participant to
anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the
same will be void and of no effect, and (2) no interest in or benefit payable
under the Plan will be in any way subject to any legal or equitable process,
including, but not limited to, garnishment, attachment, levy, seizure, or the
lien of any person. This provision will be construed to provide each
Participant, or other person claiming any interest or benefit in the Plan
through a Participant, with the maximum protection against alienation,
encumbrance, and any legal and equitable process, including, but not limited to,
attachment, garnishment, levy, seizure, or other lien, afforded his interest in
the Plan (and the benefits provided thereunder) by law and any applicable
regulations.

7.4 No Guarantee of Future Service. Designation as a Participant shall not
provide any guarantee or promise to the Participant of continued service with
the Company. The Company expressly retains the right to terminate the employment
of the Participant consistent with the terms of the Participant’s contractual
arrangement with the Company, if any, the terms of which shall be unaffected by
the terms of the Plan. This provision shall not be limited or abridged to any
extent by any other provision or the Plan which may suggest otherwise and shall
be applied regardless of any such provision. Notwithstanding the foregoing, the
Company’s obligations to make payments under the Plan shall not be affected by
the fact that any defined term or other provision in the Plan is different than
or not consistent with any defined term or other provision in any contractual
arrangement the Participant has with the Company or in any other compensation or
benefit plan of the Company.

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7.5 No Vested Right to Benefits. No Participant or other person will have any
right to, or interest in, any benefits provided under the Plan upon termination
of his employment or retirement occurring before the Closing Date or upon
termination of Plan, except as specifically provided hereunder.

ARTICLE VIII

Amendment and Termination

8.1 Right to Amend or Terminate the Plan. Notwithstanding any provision(s) of
any other communication, whether oral or written, made by the Company, the
Administrator, or any other individual or entity to employees of the Company or
to any other individual or entity, the Company, by action of the Board, reserves
the absolute and unconditional right to amend or terminate the Plan, including,
but not limited to, the right to reduce or eliminate benefits provided pursuant
to the provisions of the Plan as such provisions currently exist or may
hereafter exist; provided, however, that any amendment or termination of the
Plan made after the Closing Date will be void and of no effect to the extent
such amendment or termination would reduce or eliminate the amount of any
Incentive Bonus for any Participant without the written consent of the adversely
affected Participant. All amendments to, or termination of, the Plan must be in
writing, signed by an authorized officer of the Company, and adopted by the
Board. Any oral statements or representations made by the Company, the
Administrator, or any other individual or entity that alter, modify, amend,
terminate or are inconsistent with the written terms of the Plan will be invalid
and unenforceable and may not be relied upon by any Participant or by any other
individual or entity.

8.2 Automatic Termination. The Plan shall automatically terminate upon the
earlier to occur of the following:

8.2.1 The date of completion of all payments of Incentive Bonuses under the
Plan; or

8.2.2 The Termination Date if the Closing Date has not occurred on or before
such date. The Administrator shall have the authority to amend the Plan to
designate a later Termination Date pursuant to Section 4.1.

8.3 Effect of Amendment or Termination. In the event of an amendment to or
termination of the Plan as provided under this Article VIII, each Participant
will have no further rights hereunder, and the Company will have no further
obligations hereunder, except as otherwise specifically provided under the terms
of the Plan as so amended or terminated.

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ARTICLE IX

Miscellaneous Provisions

9.1 Plan Binding on Successors. This Plan and the terms and provisions hereof,
including the obligation to make the payments of the Incentive Bonuses to the
Participants, shall be binding upon any successor to the Company, whether by
merger, consolidation or otherwise.

9.2 Payments to Incompetents. If a Participant entitled to receive any benefits
under the Plan is determined by the Administrator in its sole discretion to be
incompetent, or is adjudged by a court of competent jurisdiction to be legally
incapable of giving valid receipt and discharge for benefits provided under the
Plan, the Administrator may pay such benefits to the duly appointed guardian or
conservator of such person or to any third party who is determined in the
discretion of the Administrator to be eligible to receive any benefit under the
Plan for the account of such Participant. Such payment will operate as a full
discharge of all liabilities and obligations of the Company, the Administrator,
and any other person under the Plan with respect to such benefits.

9.3 Unknown Whereabouts. It will be the affirmative duty of each Participant to
inform the Company of, and to keep on file with the Company, his current mailing
address. If a Participant fails to inform the Company of his current mailing
address, neither the Administrator nor the Company will be responsible for any
late payment or loss of benefits or for failure of any notice to be provided or
provided timely under the terms of the Plan to such individual.

9.4 Jurisdiction. The Plan will be construed, enforced, and administered
according to the laws of the State of California, excluding any conflict-of-law
rule or principle that might refer to the laws of another state.

9.5 Severability. It is the desire and intent of the Company that the provisions
of this Plan and the Award Letter be enforced to the fullest extent permissible
under the laws and public policies of each jurisdiction in which enforcement is
sought. Accordingly, if any provision in this Plan or the Award Letter shall be
adjudicated to be invalid or unenforceable, such provision, without any action
on the part of the Company or the Participants, shall be deemed amended to
delete or to modify the portion adjudicated to be invalid or unenforceable, such
deletion or modification to apply only with respect to the operation of such
provision in the particular jurisdiction in which such adjudication is made, and
such deletion or modification to be made only to the extent necessary to cause
the provision as amended to be valid and enforceable. In case any provision of
the Plan or Award Letter is held to be illegal, invalid, or unenforceable for
any reason, such illegal, invalid, or unenforceable provision will not affect
the remaining provisions of the Plan or the Award Letter, as applicable.

9.6 Incorrect Information, Fraud, Concealment, or Error. Any contrary provisions
of the Plan notwithstanding, in the event that the Administrator or the Company
pays a benefit, incurs a liability for failure to so pay a benefit, or makes any
overpayment or erroneous payment to any individual or entity because of a human
or systems error or because of incorrect information provided by, correct
information failed to be provided by, or fraud, misrepresentation, or
concealment of any relevant fact (determined in the sole opinion of the
Administrator) by, any Participant or other individual, the Administrator will
be entitled to recover in any manner

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deemed necessary or appropriate for such recovery (in the sole opinion of the
Administrator) from such Participant or other individual such benefit paid or
the amount of such liability incurred and any and all expenses incidental to or
necessary for such recovery. Human or systems error or omission will not affect
in any way the amount of a benefit to which such Participant is otherwise
entitled under the terms of the Plan.

9.7 Withholding of Taxes and Other Deductions. The Company shall satisfy any
income and employment tax withholding obligations related to the payment of an
Incentive Bonus to the Participant pursuant to the Plan, as well as any other
withholding authorized by the Participant or required by applicable law, by
deduction from such Incentive Bonus.

9.8 Exclusion from Section 409A. To the extent applicable, it is intended that
this Plan and any payment made hereunder shall not be subject to the
requirements of Section 409A of the Code. Except to the extent that the payment
is deferral pursuant to Section 5.4, any provision that would cause the Plan or
any payment hereof to become subject to Section 409A shall have no force or
effect until amended to the minimum extent required to be excluded from the
application of Section 409A, which amendment may be retroactive to the extent
permitted by Section 409A.

IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the
foregoing Plan was duly adopted by the Board of Directors on October 24, 2007.

 

/s/ T. W. Schmidt Signature T.W.Schmidt Print Name