VOLITIONRX LIMITED

2015 STOCK INCENTIVE PLAN

As adopted by the Board of Directors on August 18, 2015 and amended on August 5,
2016 and June 13, 2017

 

ARTICLE 1

 

PURPOSES OF THE PLAN

 

1.1Purposes. The purposes of the Plan are (a) to enhance the Company’s ability
to attract and retain the services of qualified employees, officers, directors,
consultants and other service providers upon whose judgment, initiative and
efforts the successful conduct and development of the Company’s business largely
depends and (b) to provide additional incentives to such persons or entities to
devote their utmost effort and skill to the advancement and betterment of the
Company, by providing them an opportunity to participate in the ownership of the
Company and thereby have an interest in the success and increased value of the
Company. 

 

ARTICLE 2

 

DEFINITIONS

 

For purposes of this Plan, terms not otherwise defined herein will have the
meanings indicated below:

 

2.1“Affiliate” means (i) any entity that, directly or indirectly, is controlled
by, controls or is under common control with, the Company and (ii) any entity in
which the Company has a significant equity interest, in either case as
determined by the Committee, whether now or hereafter existing. 

 

2.2“Award” means any award under the Plan, including any Option, Restricted
Stock, Stock Bonus, Stock Appreciation Right, Restricted Stock Unit or
Performance Awards. 

 

2.3“Award Agreement” means, with respect to each Award, the written or
electronic agreement between the Company and the Participant setting forth the
terms and conditions of the Award, and country-specific appendix thereto for
grants to non-U.S. Participants, which will be in substantially a form (which
need not be the same for each Participant) that the Committee (or in the case of
Award agreements that are not used for Insiders, the Committee’s delegate(s))
has from time to time approved, and will comply with and be subject to the terms
and conditions of this Plan. 

 

2.4“Board” means the Board of Directors of the Company. 

 

2.5“Cause” means termination of Service because of (a) any willful, material
violation by the Participant of any law or regulation applicable to the business
of the Company or a Parent, Subsidiary or Affiliate of the Company, the
Participant’s conviction for or guilty plea to a felony or a crime involving
moral turpitude or any willful perpetration by the Participant of a common law
fraud; (b) the Participant’s commission of an act of personal dishonesty which
involves personal profit in connection with the Company or any other entity
having a business relationship with the Company; (c) any material breach by the
Participant of any provision of any agreement or understanding between the
Company or any Parent, Subsidiary or Affiliate of the Company and the
Participant regarding the terms of the Participant’s Service, including the
willful and continued failure or refusal of the Participant to perform the
material duties required of such Participant as an Employee, Officer, Director,
Non-Employee Director or Consultant of the Company or a Parent, Subsidiary or
Affiliate of the Company, other than as a result of having a Disability or a
breach of any applicable invention assignment and confidentiality agreement or
similar agreement between the Company or a Parent, Subsidiary or Affiliate of
the Company and the Participant; (d) Participant’s disregard of the policies of
the Company or any Parent, Subsidiary or Affiliate of the Company so as to cause
loss, damage or injury to the property, reputation or employees of the Company
or a Parent, Subsidiary or Affiliate of the Company or (e) any other misconduct
by the Participant which is materially injurious to the financial condition or
business reputation of or is otherwise materially injurious to the Company or a
Parent, Subsidiary or Affiliate of the Company. The determination as to whether
a Participant is being terminated for Cause will be made in good faith by the
Company and will be final and binding on the Participant. The foregoing
definition does not in any way limit the Company’s ability to terminate a
Participant’s employment or consulting relationship at any time as provided in
Section 13.11, and the term “Company” will be interpreted to include any
Affiliate, Subsidiary or Parent, as appropriate. Notwithstanding the foregoing,
the foregoing definition of “Cause” may, in part or in whole, be modified or
replaced in each individual employment agreement or Award Agreement with any
Participant, provided that such document supersedes the definition provided in
this Section 2.5. 

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2.6“Code” means the United States Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder. 

 

2.7“Committee” means the Compensation Committee of the Board or those persons to
whom administration of the Plan or part of the Plan has been delegated as
permitted by law. 

 

2.8“Common Stock” means the Common Stock of the Company. 

 

2.9“Company” means VolitionRx Limited or any successor corporation. 

 

2.10“Consultant” means any natural person, including an advisor or independent
contractor, engaged by the Company or a Parent, Subsidiary or Affiliate to
render services to such entity. 

 

2.11“Corporate Transaction” means the occurrence of any of the following events:
(a) any “Person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of securities of the Company representing
more than fifty percent (50%) of the total voting power represented by the
Company’s then-outstanding voting securities; provided, however, that for
purposes of this clause (a) the acquisition of additional securities by any one
Person who is considered to own more than fifty percent (50%) of the total
voting power of the securities of the Company will not be considered a Corporate
Transaction; (b) the consummation of the sale or disposition by the Company of
all or substantially all of the Company’s assets; (c) the consummation of a
merger or consolidation of the Company with 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 or its parent) at least fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving
entity or its parent outstanding immediately after such merger or consolidation;
(d) any other transaction which qualifies as a “corporate transaction” under
Section 424(a) of the Code wherein the stockholders of the Company give up all
of their equity interest in the Company (except for the acquisition, sale or
transfer of all or substantially all of the outstanding shares of the Company)
or (e) a change in the effective control of the Company that occurs on the date
that a majority of members of the Board is replaced during any twelve (12) month
period by member of the Board whose appointment or election is not endorsed by
as majority of the members of the Board prior to the date of the appointment or
election; provided, however, that for purposes of this clause (e), if any Person
is considered to be in effective control of the Company, the acquisition of
additional control of the Company by the same Person will not be considered a
Corporate Transaction. For purposes of this definition, Persons will be
considered to be acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase or acquisition of stock or similar
business transaction with the Company. Notwithstanding the foregoing, to the
extent that any amount constituting deferred compensation (as defined in
Section 409A of the Code) would become payable under this Plan by reason of a
Corporate Transaction, such amount will become payable only if the event
constituting a Corporate Transaction would also qualify as a change in ownership
or effective control of the Company or a change in the ownership of a
substantial portion of the assets of the Company, each as defined within the
meaning of Section 409A of the Code, as it has been and may be amended from time
to time, and any proposed or final Treasury Regulations and IRS guidance that
has been promulgated or may be promulgated thereunder from time to time. 

 

2.12“Director” means a member of the Board. 

 

2.13“Disability” means in the case of incentive stock options, total and
permanent disability as defined in Section 22(e)(3) of the Code and in the case
of other Awards, that the Participant is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months. 

 

2.14“Dividend Equivalent Right” means the right of a Participant, granted at the
discretion of the Committee or as otherwise provided by the Plan, to receive a
credit for the account of such Participant in an amount equal to the cash, stock
or other property dividends in amounts equal equivalent to cash, stock or other
property dividends for each Share represented by an Award held by such
Participant. 

 

2.15“Effective Date” means October 30, 2015, the date on which the Plan was
approved by the affirmative vote of the holders of a majority of the Shares of
Common Stock of the Company which are entitled to be voted and are voted on the
proposal to approve this Plan (and for such purpose, any “broker non-votes” will
not be counted as being entitled to be voted on that proposal, but will be
counted for quorum purposes). 

 

2.16“Employee” means any person, including Officers and Directors, providing
services as an employee to the Company or any Parent, Subsidiary or Affiliate.
Neither service as a Director nor payment of a director’s fee by the Company
will be sufficient to constitute “employment” by the Company. 

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2.17“Exchange Act” means the United States Securities Exchange Act of 1934, as
amended. 

 

2.18“Exercise Price” means, with respect to an Option, the price at which a
holder may purchase the Shares issuable upon exercise of an Option and with
respect to a SAR, the price at which the SAR is granted to the holder thereof. 

 

2.19“Fair Market Value” means, as of any date, the value of a share of the
Company’s Common Stock determined as follows: (a) if such Common Stock is
publicly traded and is then listed on a national securities exchange, its
closing price on the date of determination on the principal national securities
exchange on which the Common Stock is listed or admitted to trading as reported
in The Wall Street Journal or such other source as the Committee deems reliable;
(b) if such Common Stock is publicly traded but is neither listed nor admitted
to trading on a national securities exchange, the average of the closing bid and
asked prices on the date of determination as reported in The Wall Street Journal
or such other source as the Committee deems reliable or (c) if none of the
foregoing is applicable, by the Board or the Committee in good faith using any
reasonable method of evaluation in a manner consistent with the valuation
principles under Section 409A of the Code. 

 

2.20“Insider” means an officer or director of the Company or any other person
whose transactions in the Company’s Common Stock are subject to Section 16 of
the Exchange Act. 

 

2.21“IRS” means the United States Internal Revenue Service. 

 

2.22“Non-Employee Director” means a Director who is not an Employee of the
Company or any Parent or Subsidiary. 

 

2.23“Option” means an award of an option to purchase Shares pursuant to Article
4 or Article 10. 

 

2.24“Parent” means any corporation (other than the Company) in an unbroken chain
of corporations ending with the Company if each of such corporations other than
the Company owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain. 

 

2.25“Participant” means a person who holds an Award under this Plan. 

 

2.26“Performance Award” means cash or stock granted pursuant to Article 9 or
Article 10. 

 

2.27“Performance Factors” means any of the factors selected by the Committee and
specified in an Award Agreement, from among the following objective measures,
either individually, alternatively or in any combination, applied to the Company
as a whole or any business unit or Subsidiary, either individually,
alternatively or in any combination, on a GAAP or non-GAAP basis, and measured,
to the extent applicable on an absolute basis or relative to a pre-established
target or index or group of comparator companies, to determine whether the
performance goals established by the Committee with respect to applicable Awards
have been satisfied: (a) profit before tax; (b) billings; (c) revenue; (d) net
revenue; (e) earnings (which may include earnings before interest; earnings
before interest and taxes; earnings before interest, taxes and depreciation;
earnings before interest, taxes, depreciation and amortization; net earnings and
other metrics based on or derived from earnings); (f) operating income;
(g) operating margin; (h) operating profit; (i) controllable operating profit;
(j) net operating profit; (k) net profit; (l) gross margin; (m) operating
expenses or operating expenses as a percentage of revenue; (n) net income;
(o) earnings per share; (p) total stockholder return; (q) market share;
(r) return on assets or net assets; (s) the Company’s stock price; (t) growth in
stockholder value relative to a pre-determined index; (u) return on equity;
(v) return on invested capital; (w) cash flow (including free cash flow or
operating cash flows); (x) cash conversion cycle; (y) economic value added;
(z) individual confidential business objectives; (aa) contract awards or
backlog; (bb) overhead or other expense reduction; (cc) credit rating;
(dd) strategic plan development and implementation; (ee) succession plan
development and implementation; (ff) improvement in workforce diversity;
(gg) customer indicators; (hh) new product invention or innovation;
(ii) attainment of research and development milestones; (jj) improvements in
productivity; (kk) bookings and (ll) attainment of objective operating goals and
employee metrics. The Committee may provide for one or more adjustments to the
Performance Factors in accordance with Section 11.3. 

 

2.28“Performance Period” means the period of service determined by the
Committee, not to exceed five (5) years, during which years of service or
performance is to be measured for the Award. 

 

2.29“Performance Share” means an Award granted pursuant to Article 9 or
Article 10. 

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2.30“Permitted Transferee” means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law (including adoptive relationships) of the Employee, any person
sharing the Employee’s household (other than a tenant or employee), a trust in
which these persons (or the Employee) have more than 50% of the beneficial
interest, a foundation in which these persons (or the Employee) control the
management of assets, and any other entity in which these persons (or the
Employee) own more than 50% of the voting interests. 

 

2.31“Plan” means this VolitionRx Limited 2015 Stock Incentive Plan, as amended. 

 

2.32“Purchase Price” means the price to be paid for Shares acquired under the
Plan, other than Shares acquired upon exercise of an Option or SAR. 

 

2.33“Restricted Stock Award” means an award of Shares pursuant to Article 5 or
Article 10 or issued pursuant to the early exercise of an Option. 

 

2.34“Restricted Stock Unit” means an Award granted pursuant to Article 8 or
Article 10. 

 

2.35“SEC” means the United States Securities and Exchange Commission. 

 

2.36“Securities Act” means the United States Securities Act of 1933, as
amended. 

 

2.37“Service” means service as an Employee, Consultant, Director or Non-Employee
Director, to the Company or a Parent, Subsidiary or Affiliate, subject to such
further limitations as may be set forth in the Plan or the applicable Award
Agreement. An Employee will not be deemed to have ceased to provide Service in
the case of (a) sick leave; (b) military leave or (c) any other leave of absence
approved by the Company; provided, that such leave is for a period of not more
than 90 days (x) unless reemployment upon the expiration of such leave is
guaranteed by contract or statute or (y) unless provided otherwise pursuant to
formal policy adopted from time to time by the Company and issued and
promulgated to employees in writing. In the case of any Employee on an approved
leave of absence or a reduction in hours worked (for illustrative purposes only,
a change in schedule from that of full-time to part-time), the Committee may
make such provisions respecting suspension of or modification of vesting of the
Award while on leave from the employ of the Company or a Parent, Subsidiary or
Affiliate or during such change in working hours as it may deem appropriate,
except that in no event may an Award be exercised after the expiration of the
term set forth in the applicable Award Agreement. In the event of military
leave, if required by applicable laws, vesting will continue for the longest
period that vesting continues under any other statutory or Company approved
leave of absence and, upon a Participant’s returning from military leave (under
conditions that would entitle him or her to protection upon such return under
the Uniform Services Employment and Reemployment Rights Act), he or she will be
given vesting credit with respect to Awards to the same extent as would have
applied had the Participant continued to provide services to the Company
throughout the leave on the same terms as he or she was providing services
immediately prior to such leave. An employee will have terminated employment as
of the date he or she ceases to provide services (regardless of whether the
termination is in breach of local employment laws or is later found to be
invalid) and employment will not be extended by any notice period or garden
leave mandated by local law, provided however, that a change in status from an
employee to a consultant or advisor will not terminate the service provider’s
Service, unless determined by the Committee, in its discretion. The Committee
will have sole discretion to determine whether a Participant has ceased to
provide Services and the effective date on which the Participant ceased to
provide Services. 

 

2.38“Shares” means shares of the Company’s Common Stock and the common stock of
any successor entity. 

 

2.39“Stock Appreciation Right” means an Award granted pursuant to Article 7 or
Article 10. 

 

2.40“Stock Bonus” means an Award granted pursuant to Article 6 or Article 10. 

 

2.41“Subsidiary” means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. 

 

2.42“Treasury Regulations” means regulations promulgated by the United States
Treasury Department. 

 

2.43“Unvested Shares” means Shares that have not yet vested or are subject to a
right of repurchase in favor of the Company (or any successor thereto). 

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ARTICLE 3

 

PLAN SHARES

 

3.1Number of Shares Available. Subject to adjustment as provided in Section 3.5,
the total number of Shares reserved and available for grant and issuance
pursuant to this Plan is two million five hundred thousand (2,500,000) Shares. 

 

3.2Lapsed, Returned Awards. If any Shares subject to an Award are forfeited, an
Award expires or otherwise terminates without issuance of Shares or an Award is
settled for cash (in whole or in part) or otherwise does not result in the
issuance of all or a portion of the Shares subject to such Award (including on
payment in Shares on exercise of a SAR), such Shares shall, to the extent of
such forfeiture, expiration, termination, cash settlement or non-issuance, be
added to the Shares available for grant under the Plan. If (i) any Award granted
hereunder is exercised through the tendering of Shares (either actually or by
attestation) or by the withholding of Shares by the Company or (ii) withholding
tax liabilities arising from such Award are satisfied by the tendering of Shares
(either actually or by attestation) or by the withholding of Shares by the
Company, then in each such case the Shares so tendered or withheld shall be
added to the Shares available for grant under the Plan on a one-for-one basis. 

 

3.3Minimum Share Reserve. At all times the Company will reserve and keep
available a sufficient number of Shares as will be required to satisfy the
requirements of all outstanding Awards granted under this Plan. 

 

3.4Limitations; Eligibility. No more than two million five hundred thousand
(2,500,000) Shares will be issued pursuant to the exercise of ISOs. ISOs may be
granted only to Employees. All other Awards may be granted to Employees,
Consultants, Directors and Non-Employee Directors; provided such Consultants,
Directors and Non-Employee Directors render bona fide services not in connection
with the offer and sale of securities in a capital-raising transaction. Subject
to adjustment as provided in Section 3.5, no Participant may be granted
(a) Options or SARs during any 12-month period with respect to more than five
hundred thousand (500,000) Shares and (b) Restricted Stock Awards, Restricted
Stock Unit Awards, Performance Awards or Stock Bonus Awards during any calendar
year that are intended to comply with the performance-based exception under
Section 162(m) of the Code and are denominated in Shares under which more than
five hundred thousand (500,000) Shares may be earned for each twelve (12) months
in the vesting period or Performance Period. Each of the limitations in the
preceding sentence of this Section 3.4 shall be multiplied by two (2) with
respect to Awards granted to a Participant during the first calendar year in
which the Participant commences employment with the Company and its
Subsidiaries. If an Award is cancelled, the cancelled Award shall continue to be
counted toward the applicable limitation in this Section 3.4. 

 

3.5Adjustment of Shares. If the number of outstanding Shares is changed by a
stock dividend, extraordinary dividends or distributions (whether in cash,
shares or other property, other than a regular cash dividend), recapitalization,
stock split, reverse stock split, subdivision, combination, reclassification,
spin-off or similar change in the capital structure of the Company, then (a) the
number of Shares reserved for issuance and future grant under the Plan set forth
in Section 3.1; (b) the Exercise Prices of and number of Shares subject to
outstanding Options and SARs; (c) the number of Shares subject to other
outstanding Awards; (d) the maximum number of shares that may be issued as ISOs
or other Awards set forth in Section 3.4 and (e) the maximum number of Shares
that may be issued to an individual or to a new Employee in any one calendar
year set forth in Section 3.4, will be proportionately adjusted, subject to any
required action by the Board or the stockholders of the Company and in
compliance with applicable securities laws, provided that fractions of a Share
will not be issued. 

 

ARTICLE 4

 

OPTIONS

 

4.1Options. An Option is the right but not the obligation to purchase a Share,
subject to certain conditions, if applicable. The Committee may grant Options to
eligible Employees, Consultants and Directors and will determine whether such
Options will be Incentive Stock Options within the meaning of the Code (“ISOs”)
or Nonqualified Stock Options (“NSOs”), the number of Shares subject to the
Option, the Exercise Price of the Option, the period during which the Option may
vest and be exercised, and all other terms and conditions of the Option, subject
to the following terms of this Section 4.1. 

 

4.2Option Grant. Each Option granted under this Plan will identify the Option as
an ISO or an NSO. An Option may be, but need not be, awarded upon satisfaction
of such Performance Factors during any Performance Period as are set out in
advance in the Participant’s individual Award Agreement. If the Option is being
earned upon the satisfaction of Performance Factors, then the Committee will:
(a) determine the nature, length and starting date of any Performance Period for
each Option and (b) select from among the Performance Factors to be used to
measure the performance, if any. Performance Periods may overlap and
Participants may participate simultaneously with respect to Options that are
subject to different performance goals and other criteria. 

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4.3Date of Grant. The date of grant of an Option will be the date on which the
Committee makes the determination to grant such Option or a specified future
date. The Award Agreement and a copy of this Plan will be delivered to the
Participant within a reasonable time after the granting of the Option. 

 

4.4Exercise Period. Options may be vested and exercisable within the times or
upon the conditions as set forth in the Award Agreement governing such Option;
provided, however, that no Option will be exercisable after the expiration of
ten (10) years from the date the Option is granted; and provided further that no
ISO granted to a person who, at the time the ISO is granted, directly or by
attribution owns more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or of any Parent or Subsidiary of the
Company (“Ten Percent Stockholder”) will be exercisable after the expiration of
five (5) years from the date the ISO is granted. The Committee also may provide
for Options to become exercisable at one time or from time to time, periodically
or otherwise, in such number of Shares or percentage of Shares as the Committee
determines. 

 

4.5Exercise Price. The Exercise Price of an Option will be determined by the
Committee when the Option is granted, provided that (a) the Exercise Price of an
Option will be not less than one hundred percent (100%) of the Fair Market Value
of the Shares on the date of grant and (b) the Exercise Price of any ISO granted
to a Ten Percent Stockholder will not be less than one hundred ten percent
(110%) of the Fair Market Value of the Shares on the date of grant. Payment for
the Shares purchased may be made in accordance with Section 13.1 and the Award
Agreement and in accordance with any procedures established by the Company. 

 

4.6Method of Exercise. Any Option granted hereunder will be vested and
exercisable according to the terms of the Plan and at such times and under such
conditions as determined by the Committee and set forth in the Award Agreement.
An Option may not be exercised for a fraction of a Share. An Option will be
deemed exercised when the Company receives: (a) notice of exercise (in such form
as the Committee may specify from time to time) from the person entitled to
exercise the Option (and/or via electronic execution through the authorized
third party administrator) and (b) full payment for the Shares with respect to
which the Option is exercised (together with applicable withholding taxes). Full
payment may consist of any consideration and method of payment authorized by the
Committee and permitted by the Award Agreement and the Plan. Shares issued upon
exercise of an Option will be issued in the name of the Participant. Until the
Shares are issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder will exist with
respect to the Shares, notwithstanding the exercise of the Option. The Company
will issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 3.5. Exercising an Option in any manner will decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised. 

 

4.7Termination of Service. Unless otherwise provided in the Award Agreement, if
the Participant’s Service terminates for any reason except for Cause or the
Participant’s death or Disability, then the Participant may exercise such
Participant’s Options only to the extent that such Options would have been
exercisable by the Participant on the date Participant’s Service terminates no
later than three (3) months after the date Participant’s Service terminates (or
such shorter or longer time period as may be determined by the Committee, with
any exercise beyond three (3) months after the date Participant’s Service
terminates deemed to be the exercise of an NSO), but in any event no later than
the expiration date of the Options. Unless otherwise provided in the Award
Agreement, if the Participant’s Service terminates because of the Participant’s
death (or the Participant dies within three (3) months after Participant’s
Service terminates other than for Cause or because of the Participant’s
Disability), then the Participant’s Options may be exercised only to the extent
that such Options would have been exercisable by the Participant on the date
Participant’s Service terminates and must be exercised by the Participant’s
legal representative or authorized assignee no later than twelve (12) months
after the date Participant’s Service terminates (or such shorter time period or
longer time period as may be determined by the Committee), but in any event no
later than the expiration date of the Options. Unless otherwise provided in the
Award Agreement, if the Participant’s Service terminates because of the
Participant’s Disability, then the Participant’s Options may be exercised only
to the extent that such Options would have been exercisable by the Participant
on the date Participant’s Service terminates and must be exercised by the
Participant (or the Participant’s legal representative or authorized assignee)
no later than twelve (12) months after the date Participant’s Service terminates
(or such shorter or longer time period as may be determined by the Committee,
with any exercise beyond (a) three (3) months after the date Participant’s
Service terminates when the termination of Service is for a Disability that is
not a “permanent and total disability” as defined in Section 22(e)(3) of the
Code or (b) twelve (12) months after the date Participant’s Service terminates
when the termination of Service is for a Disability that is a “permanent and
total disability” as defined in Section 22(e)(3) of the Code, deemed to be
exercise of an NSO), but in any event no later than the expiration date of the
Options. Unless otherwise provided in the Award Agreement, if the Participant is
terminated for Cause, then Participant’s Options will expire on such
Participant’s date of termination of Service or at such later time and on such
conditions as are determined by the Committee, but in any no event later than
the expiration date of the Options. Unless otherwise provided in the Award
Agreement, Cause will have the meaning set forth in the Plan. 

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4.8Limitations on Exercise. The Committee may specify a minimum number of Shares
that may be purchased on any exercise of an Option, provided that such minimum
number will not prevent any Participant from exercising the Option for the full
number of Shares for which it is then exercisable. 

 

4.9Limitations on ISOs. With respect to Awards granted as ISOs, to the extent
that the aggregate Fair Market Value of the Shares with respect to which such
ISOs are exercisable for the first time by the Participant during any calendar
year (under all plans of the Company and any Parent or Subsidiary) exceeds one
hundred thousand dollars ($100,000), such Options will be treated as NSOs. For
purposes of this Section 4.9, ISOs will be taken into account in the order in
which they were granted. The Fair Market Value of the Shares will be determined
as of the time the Option with respect to such Shares is granted. In the event
that the Code or the regulations promulgated thereunder are amended after the
Effective Date to provide for a different limit on the Fair Market Value of
Shares permitted to be subject to ISOs, such different limit will be
automatically incorporated herein and will apply to any Options granted after
the effective date of such amendment. 

 

4.10Modification or Extension. Subject in all cases to Section 13.8, the
Committee may modify or extend outstanding Options (but not beyond their
original term) and authorize the grant of new Options in substitution therefor,
provided that any such action may not, without the written consent of a
Participant, impair any of such Participant’s rights under any Option previously
granted. Any outstanding ISO that is modified, extended or otherwise altered
will be treated in accordance with Section 424(h) of the Code. 

 

4.11No Disqualification. Notwithstanding any other provision in this Plan, no
term of this Plan relating to ISOs will be interpreted, amended or altered, nor
will any discretion or authority granted under this Plan be exercised, so as to
disqualify this Plan under Section 422 of the Code or, without the consent of
the Participant affected, to disqualify any ISO under Section 422 of the Code. 

 

ARTICLE 5

 

RESTRICTED STOCK AWARDS

 

5.1Restricted Stock Awards. A Restricted Stock Award is an offer by the Company
to sell to an eligible Employee, Consultant or Director Shares that are subject
to restrictions (“Restricted Stock”). The Committee will determine to whom an
offer will be made, the number of Shares the Participant may purchase, the
Purchase Price (if any), the restrictions under which the Shares will be subject
and all other terms and conditions of the Restricted Stock Award, subject to the
Plan. 

 

5.2Award Agreement. All Restricted Stock Awards will be evidenced by an Award
Agreement. Except as may otherwise be provided in an Award Agreement, a
Participant accepts a Restricted Stock Award by signing and delivering to the
Company an Award Agreement with full payment of the Purchase Price (if any),
within thirty (30) days from the date the Award Agreement was delivered to the
Participant. If the Participant does not accept such Award within thirty (30)
days, then the offer of such Restricted Stock Award will terminate, unless the
Committee determines otherwise. 

 

5.3Purchase Price. The Purchase Price (if any) for a Restricted Stock Award will
be determined by the Committee and may be less than Fair Market Value on the
date the Restricted Stock Award is granted. Payment of the Purchase Price (if
any) must be made in accordance with Section 13.1, the Award Agreement and any
procedures established by the Company. 

 

5.4Terms of Restricted Stock Awards. Restricted Stock Awards will be subject to
such restrictions as the Committee may impose or are required by law. These
restrictions may be based on completion of a specified number of years of
service with the Company or upon completion of Performance Factors, if any,
during any Performance Period as set out in advance in the Participant’s Award
Agreement. Prior to the grant of a Restricted Stock Award, the Committee will:
(a) determine the nature, length and starting date of any Performance Period for
the Restricted Stock Award; (b) select from among the Performance Factors to be
used to measure performance goals, if any and (c) determine the number of Shares
that may be awarded to the Participant. Performance Periods may overlap and a
Participant may participate simultaneously with respect to Restricted Stock
Awards that are subject to different Performance Periods and having different
performance goals and other criteria. 

 

5.5Termination of Service. Except as may be set forth in the Participant’s Award
Agreement, vesting ceases on such date Participant’s Service terminates (unless
determined otherwise by the Committee). 

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ARTICLE 6

 

STOCK BONUS AWARDS

 

6.1Stock Bonus Awards. A Stock Bonus Award is an award to an eligible Employee,
Consultant or Director of Shares for Services to be rendered or for past
Services already rendered to the Company or any Parent or Subsidiary. All Stock
Bonus Awards will be made pursuant to an Award Agreement. No payment from the
Participant will be required for Shares awarded pursuant to a Stock Bonus
Award. 

 

6.2Terms of Stock Bonus Awards. The Committee will determine the number of
Shares to be awarded to the Participant under a Stock Bonus Award and any
restrictions thereon. These restrictions may be based upon completion of a
specified number of years of service with the Company or upon satisfaction of
performance goals based on Performance Factors during any Performance Period as
set out in advance in the Participant’s Stock Bonus Agreement. Prior to the
grant of any Stock Bonus Award the Committee will: (a) determine the nature,
length and starting date of any Performance Period for the Stock Bonus Award;
(b) select from among the Performance Factors to be used to measure performance
goals (if any) and (c) determine the number of Shares that may be awarded to the
Participant. Performance Periods may overlap and a Participant may participate
simultaneously with respect to Stock Bonus Awards that are subject to different
Performance Periods and different performance goals and other criteria. 

 

6.3Form of Payment to Participant. Payment may be made in the form of cash,
whole Shares or a combination thereof, based on the Fair Market Value of the
Shares earned under a Stock Bonus Award on the date of payment, as determined in
the sole discretion of the Committee. 

 

6.4Termination of Service. Except as may be set forth in the Participant’s Award
Agreement, vesting ceases on such date Participant’s Service terminates (unless
determined otherwise by the Committee). 

 

ARTICLE 7

 

STOCK APPRECIATION RIGHTS

 

7.1Stock Appreciation Rights. A Stock Appreciation Right (“SAR”) is an award to
an eligible Employee, Consultant or Director that may be settled in cash or
Shares (which may consist of Restricted Stock) having a value equal to (a) the
difference between the Fair Market Value on the date of exercise over the
Exercise Price multiplied by (b) the number of Shares with respect to which the
SAR is being settled (subject to any maximum number of Shares that may be
issuable as specified in an Award Agreement). All SARs will be made pursuant to
an Award Agreement. 

 

7.2Terms of SARs. The Committee will determine the terms of each SAR, including:
(a) the number of Shares subject to the SAR; (b) the Exercise Price and the time
or times during which the SAR may be settled; (c) the consideration to be
distributed on settlement of the SAR and (d) the effect of the Participant’s
termination of Service on each SAR. The Exercise Price of the SAR will be
determined by the Committee when the SAR is granted, and may not be less than
Fair Market Value. A SAR may be awarded upon satisfaction of Performance
Factors, if any, during any Performance Period as are set out in advance in the
Participant’s individual Award Agreement. If the SAR is being earned upon the
satisfaction of Performance Factors, then the Committee will: (x) determine the
nature, length and starting date of any Performance Period for each SAR and
(y) select from among the Performance Factors to be used to measure the
performance, if any. Performance Periods may overlap and Participants may
participate simultaneously with respect to SARs that are subject to different
Performance Factors and other criteria. 

 

7.3Exercise Period and Expiration Date. A SAR will be exercisable within the
times or upon the occurrence of events determined by the Committee and set forth
in the Award Agreement governing such SAR. The SAR Agreement will set forth the
expiration date; provided that no SAR will be exercisable after the expiration
of ten (10) years from the date the SAR is granted. The Committee may also
provide for SARs to become exercisable at one time or from time to time,
periodically or otherwise (including upon the attainment during a Performance
Period of performance goals based on Performance Factors), in such number of
Shares or percentage of the Shares subject to the SAR as the Committee
determines. Except as may be set forth in the Participant’s Award Agreement,
vesting ceases on the date Participant’s Service terminates (unless determined
otherwise by the Committee). Notwithstanding the foregoing, the rules of
Section 4.7 also will apply to SARs. 

 

7.4Form of Settlement. Upon exercise of a SAR, a Participant will be entitled to
receive payment from the Company in an amount determined by multiplying (a) the
difference between the Fair Market Value of a Share on the date of exercise over
the Exercise Price; times (b) the number of Shares with respect to which the SAR
is exercised. At the discretion of the Committee, the payment from the Company
for the SAR exercise may be in cash, in Shares of equivalent value or in some
combination thereof. The portion of a SAR being settled may be paid currently or
on a deferred basis with such interest or dividend equivalent, if any, as the
Committee determines, provided that the terms of the SAR and any deferral
satisfy the requirements of Section 409A of the Code. 

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7.5Termination of Service. Except as may be set forth in the Participant’s Award
Agreement, vesting ceases on such date Participant’s Service terminates (unless
determined otherwise by the Committee). 

 

ARTICLE 8

 

RESTRICTED STOCK UNITS

 

8.1Restricted Stock Units. A Restricted Stock Unit (“RSU”) is an award to an
eligible Employee, Consultant or Director covering a number of Shares that may
be settled in cash and/or by issuance of Shares (which may consist of Restricted
Stock). All RSUs will be made pursuant to an Award Agreement. 

 

8.2Terms of RSUs. The Committee will determine the terms of an RSU including:
(a) the number of Shares subject to the RSU; (b) the time or times during which
the RSU may be settled; (c) the amount (including any minimum amount), nature
(which may include cash, Shares or a combination of both) and valuation of the
consideration to be paid or distributed on settlement; (d) the effect of the
Participant’s termination of Service on each RSU; and (e) such other terms as
the Committee may determine. An RSU may be awarded upon satisfaction of such
performance goals based on Performance Factors during any Performance Period as
are set out in advance in the Participant’s Award Agreement. If the RSU is being
earned upon satisfaction of Performance Factors, then the Committee will:
(x) determine the nature, length and starting date of any Performance Period for
the RSU; (y) select from among the Performance Factors to be used to measure the
performance, if any and (z) determine the number of Shares deemed subject to the
RSU. Performance Periods may overlap and participants may participate
simultaneously with respect to RSUs that are subject to different Performance
Periods and different performance goals and other criteria. 

 

8.3Timing of Settlement. Payment of earned RSUs will be made as soon as
practicable after the date(s) determined by the Committee and set forth in the
Award Agreement. The Committee may permit a Participant to defer payment under a
RSU to a date or dates after the RSU is earned provided that the terms of the
RSU and any deferral satisfy the requirements of Section 409A of the Code. 

 

8.4Termination of Service. Except as may be set forth in the Participant’s Award
Agreement, vesting ceases on such date Participant’s Service terminates (unless
determined otherwise by the Committee). 

 

ARTICLE 9

 

PERFORMANCE AWARDS

 

9.1Performance Awards. A Performance Award is an award to an eligible Employee,
Consultant or Director of a cash bonus or an award of Performance Shares
denominated in Shares that may be settled in cash or by issuance of those Shares
(which may consist of Restricted Stock). Grants of Performance Awards will be
made pursuant to an Award Agreement. 

 

9.2Terms of Performance Shares. The Committee will determine, and each Award
Agreement will set forth, the terms of each Performance Award including: (a) the
amount of any cash bonus; (b) the number of Shares deemed subject to an award of
Performance Shares; (c) the Performance Factors and Performance Period that will
determine the time and extent to which each Performance Award will be settled;
(d) the consideration to be distributed on settlement and (e) the effect of the
Participant’s termination of Service on each Performance Award. In establishing
Performance Factors and the Performance Period the Committee will: (x) determine
the nature, length and starting date of any Performance Period; (y) select from
among the Performance Factors to be used and (z) determine the number of Shares
deemed subject to the award of Performance Shares. Prior to settlement the
Committee will determine the extent to which Performance Awards have been
earned. Performance Periods may overlap and Participants may participate
simultaneously with respect to Performance Awards that are subject to different
Performance Periods and different performance goals and other criteria. During
any calendar year no Participant may be granted Performance Awards that are
intended to comply with the performance-based exception under Section 162(m) of
the Code and are denominated in cash under which more than $10,000,000 may be
earned for each twelve (12) months in the Performance Period. This limitation
shall be multiplied by two (2) with respect to Awards granted to a Participant
during the first calendar year in which the Participant commences employment
with the Company and its Subsidiaries. If an Award is cancelled, the cancelled
Award shall continue to be counted toward the limitation in this Section 9.2. 

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9.3Value, Earning and Timing of Performance Shares. Each Performance Share will
have an initial value equal to the Fair Market Value of a Share on the date of
grant. After the applicable Performance Period has ended, the holder of
Performance Shares will be entitled to receive a payout of the number of
Performance Shares earned by the Participant over the Performance Period, to be
determined as a function of the extent to which the corresponding Performance
Factors or other vesting provisions have been achieved. The Committee, in its
sole discretion, may pay earned Performance Shares in the form of cash, in
Shares (which have an aggregate Fair Market Value equal to the value of the
earned Performance Shares at the close of the applicable Performance Period) or
in a combination thereof. 

 

9.4Termination of Service. Except as may be set forth in the Participant’s Award
Agreement, vesting ceases on the date Participant’s Service terminates (unless
determined otherwise by the Committee). 

 

ARTICLE 10

 

GRANTS TO NON-EMPLOYEE DIRECTORS

 

10.1Grants To Non-Employee Directors. Non-Employee Directors are eligible to
receive any type of Award offered under this Plan except ISOs. Awards pursuant
to this Article 10 may be automatically made pursuant to policy adopted by the
Board or made from time to time as determined in the discretion of the Board. No
Non-Employee Director may be granted Awards pursuant to this Article 10 in any
calendar year with a grant date fair value (determined in accordance with U.S.
generally accepted accounting principles) of more than $1,000,000. The
limitation in the preceding sentence of this Section 10.1 shall be multiplied by
two (2) with respect to Awards granted to a Non-Employee Director during the
first calendar year in which the Non-Employee Director provides services as a
Non-Employee Director. 

 

10.2Eligibility. Awards pursuant to this Article 10 will be granted only to
Non-Employee Directors. A Non-Employee Director who is elected or re-elected as
a member of the Board will be eligible to receive an Award under this
Article 10. 

 

10.3Vesting, Exercisability and Settlement. Except as set forth in Article 12,
Awards will vest, become exercisable and be settled as determined by the Board.
With respect to Options and SARs, the exercise price granted to Non-Employee
Directors will not be less than the Fair Market Value of the Shares at the time
that such Option or SAR is granted. 

 

10.4Election to receive Awards in Lieu of Cash. A Non-Employee Director may
elect to receive his or her annual retainer payments and/or meeting fees from
the Company in the form of cash or Awards or a combination thereof, as
determined by the Committee. Such Awards will be issued under the Plan. An
election under this Section 10.4 will be filed with the Company on the form
prescribed by the Company. 

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ARTICLE 11

 

ADMINISTRATION OF THE PLAN

 

11.1Committee Composition; Authority. This Plan will be administered by the
Committee or by the Board acting as the Committee. Subject to the general
purposes, terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan, except,
however, the Board will establish the terms for the grant of an Award to
Non-Employee Directors. The Committee will have the authority to: (a) construe
and interpret this Plan, any Award Agreement and any other agreement or document
executed pursuant to this Plan; (b) prescribe, amend and rescind rules and
regulations relating to this Plan or any Award; (c) select persons to receive
Awards; (d) determine the form and terms and conditions, not inconsistent with
the terms of the Plan, of any Award granted hereunder, including the exercise
price, the time or times when Awards may vest and be exercised (which may be
based on performance criteria) or settled, any vesting acceleration or waiver of
forfeiture restrictions, the method to satisfy tax withholding obligations or
any other tax liability legally due and any restriction or limitation regarding
any Award or the Shares relating thereto, based in each case on such factors as
the Committee will determine; (e) determine the number of Shares or other
consideration subject to Awards; (f) determine the Fair Market Value in good
faith and interpret the applicable provisions of this Plan and the definition of
Fair Market Value in connection with circumstances that impact the Fair Market
Value, if necessary; (g) determine whether Awards will be granted singly, in
combination with, in tandem with, in replacement of or as alternatives to other
Awards under this Plan or any other incentive or compensation plan of the
Company or any Parent or Subsidiary of the Company; (h) grant waivers of Plan or
Award conditions; (i) determine the vesting, exercisability and payment of
Awards; (j) correct any defect, supply any omission or reconcile any
inconsistency in this Plan, any Award or any Award Agreement; (k) determine
whether an Award has been earned; (l) reduce or waive any criteria with respect
to Performance Factors (subject to any applicable requirements or limitations
under Section 162(m) of the Code); (m) adjust Performance Factors in accordance
with Section 11.3 with respect to persons whose compensation is subject to
Section 162(m) of the Code; (n) adopt terms and conditions, rules and procedures
(including the adoption of any sub-plan under this Plan) relating to the
operation and administration of the Plan to accommodate requirements of local
law and procedures outside of the United States; (o) make all other
determinations necessary or advisable for the administration of this Plan and
(p) delegate any of the foregoing to a subcommittee consisting of one or more
executive officers pursuant to a specific delegation as permitted by applicable
law, including Section 157(c) of the Delaware General Corporation Law. 

 

11.2Committee Interpretation and Discretion. Any determination made by the
Committee with respect to any Award will be made in its sole discretion at the
time of grant of the Award or, unless in contravention of any express term of
the Plan or Award, at any later time, and such determination will be final and
binding on the Company and all persons having an interest in any Award under the
Plan. Any dispute regarding the interpretation of the Plan or any Award
Agreement will be submitted by the Participant or Company to the Committee for
review. The resolution of such a dispute by the Committee will be final and
binding on the Company and the Participant. The Committee may delegate to one or
more executive officers the authority to review and resolve disputes with
respect to Awards held by Participants who are not Insiders, and such resolution
will be final and binding on the Company and the Participant. 

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11.3Section 162(m) of the Code and Section 16 of the Exchange Act. When
necessary or desirable for an Award to qualify as “performance-based
compensation” under Section 162(m) of the Code the Committee will include at
least two persons who are “outside directors” (as defined under Section 162(m)
of the Code) and at least two of such “outside directors” (or a majority if more
than two “outside directors” then serve on the Committee) will approve the grant
of such Award and timely determine (as applicable) the Performance Period and
any Performance Factors upon which vesting or settlement of any portion of such
Award is to be subject. If the Committee determines that an Award (other than an
Option or SAR) is intended to qualify as “performance-based compensation” under
Section 162(m) of the Code, the lapsing of restrictions thereon and the
distribution of cash, Shares or other property pursuant thereto, as applicable,
shall be subject to the achievement of one or more objective performance goals
established by the Committee, which shall be based on the attainment of
specified levels of one or any combination of the Performance Factors. Such
performance goals (and any exclusions) shall (a) be set by the Committee prior
to the earlier of 90 days after the commencement of the applicable Performance
Period and the expiration of 25% of the Performance Period and (b) otherwise
comply with the requirements of Section 162(m) of the Code and the regulations
thereunder. When required by Section 162(m) of the Code, prior to settlement of
any such Award at least two (or a majority if more than two then serve on the
Committee) of such “outside directors” then serving on the Committee will
determine and certify in writing the extent to which such Performance Factors
have been timely achieved and the extent to which the Award has thereby been
earned, and the Committee may adjust downwards, but not upwards, the amount
payable pursuant to such Award. Awards granted to Participants who are subject
to Section 16 of the Exchange Act must be approved by two or more “non-employee
directors” (as defined in the regulations promulgated under Section 16 of the
Exchange Act). With respect to Participants whose compensation is subject to
Section 162(m) of the Code, the Committee may specify, in its sole discretion,
at the time of the initial grant of the Award, the manner of adjustment of any
Performance Factors upon which vesting or settlement of any portion of such
Award is to be subject to the extent necessary to prevent dilution or
enlargement of any Award as a result of extraordinary events or circumstances,
as determined by the Committee, or to exclude the effects of an event or
occurrence which the Committee determines should appropriately be excluded,
including: extraordinary, unusual, infrequent, or non-recurring items; an event
either not directly related to the operations of the Company or not within the
reasonable control of the Company’s management; changes in applicable laws,
regulations or accounting principles or standards; currency fluctuations;
discontinued operations; non-cash items, such as amortization, depreciation, or
reserves; asset impairment; or any recapitalization, restructuring,
reorganization, merger, acquisition, divestiture, consolidation, spin-off,
split-up, combination, liquidation, dissolution, sale of assets, or other
similar corporate transaction, but only to the extent such adjustments would be
permitted under Section 162(m) of the Code. 

 

11.4Documentation. The Award Agreement for a given Award, the Plan and any other
documents may be delivered to, and accepted by, a Participant or any other
person in any manner (including electronic distribution or posting) that meets
applicable legal requirements. 

 

11.5Foreign Award Recipients. Notwithstanding any provision of the Plan to the
contrary, in order to comply with the laws and practices in other countries in
which the Company and its Subsidiaries operate or have employees or other
individuals eligible for Awards, the Committee, in its sole discretion, will
have the power and authority to: (a) determine which Subsidiaries and Affiliates
will be covered by the Plan; (b) determine which individuals outside the United
States are eligible to participate in the Plan, which may include individuals
who provide services to the Company, Subsidiary or Affiliate under an agreement
with a foreign nation or agency; (c) modify the terms and conditions of any
Award granted to individuals outside the United States or foreign nationals to
comply with applicable foreign laws, policies, customs and practices;
(d) establish sub-plans and modify exercise procedures and other terms and
procedures, to the extent the Committee determines such actions to be necessary
or advisable (and such sub-plans and/or modifications will be attached to this
Plan as appendices); provided, however, that no such sub-plans and/or
modifications will increase the share limitations contained in Section 3.4
hereof and (e) take any action, before or after an Award is made, that the
Committee determines to be necessary or advisable to obtain approval or comply
with any local governmental regulatory exemptions or approvals. Notwithstanding
the foregoing, the Committee may not take any actions hereunder, and no Awards
will be granted, that would violate the Exchange Act or any other applicable
United States securities law, the Code or any other applicable United States
governing statute or law. 

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ARTICLE 12

 

CORPORATE TRANSACTIONS

 

12.1Assumption or Replacement of Awards by Successor. In the event of a
Corporate Transaction, any or all outstanding Awards may be assumed or replaced
by the successor corporation, which assumption or replacement will be binding on
all Participants. In the alternative, the successor corporation may substitute
equivalent Awards or provide substantially similar consideration to Participants
as was provided to stockholders (after taking into account the existing
provisions of the Awards). The successor corporation may also issue, in place of
outstanding Shares of the Company held by the Participant, substantially similar
shares or other property subject to repurchase restrictions no less favorable to
the Participant. In the event such successor or acquiring corporation (if any)
refuses to assume, convert, replace or substitute Awards, as provided above,
pursuant to a Corporate Transaction, then notwithstanding any other provision in
this Plan to the contrary, such Awards will have their vesting accelerate as to
all shares subject to such Award (and any applicable right of repurchase fully
lapse) immediately prior to the Corporate Transaction. In addition, in the event
such successor or acquiring corporation (if any) refuses to assume, convert,
replace or substitute Awards, as provided above, pursuant to a Corporate
Transaction, the Committee will notify the Participants in writing or
electronically that such Award will be exercisable for a period of time
determined by the Committee in its sole discretion, and such Award will
terminate upon the expiration of such period. Awards need not be treated
similarly in a Corporate Transaction. 

 

12.2Assumption of Awards by the Company. The Company, from time to time, also
may substitute or assume outstanding awards granted by another company, whether
in connection with an acquisition of such other company or otherwise, by either;
(a) granting an Award under this Plan in substitution of such other company’s
award or (b) assuming such award as if it had been granted under this Plan if
the terms of such assumed award could be applied to an Award granted under this
Plan (“Substitute Awards”). Such substitution or assumption will be permissible
if the holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(except that the Purchase Price or the Exercise Price, as the case may be, and
the number and nature of Shares issuable upon exercise or settlement of any such
Award will be adjusted appropriately pursuant to Section 424(a) of the Code). In
the event the Company elects to grant a new Option in substitution rather than
assuming an existing option, such new Option may be granted with a similarly
adjusted Exercise Price. Substitute Awards shall not reduce the Shares
authorized for grant under the Plan or the limitations on grants to a
Participant under Section 3.4, nor shall Shares subject to a Substitute Award be
added to the Shares available for Awards under the Plan. Additionally, in the
event that a company acquired by the Company or any Subsidiary or with which the
Company or any Subsidiary combines has shares available under a pre-existing
plan approved by stockholders and not adopted in contemplation of such
acquisition or combination, the shares available for grant pursuant to the terms
of such pre-existing plan (as adjusted, to the extent appropriate, using the
exchange ratio or other adjustment or valuation ratio or formula used in such
acquisition or combination to determine the consideration payable to the holders
of common stock of the entities party to such acquisition or combination) may be
used for Awards under the Plan and shall not reduce the Shares authorized for
grant under the Plan (and Shares subject to such Awards shall not be added to
the Shares available for Awards under the Plan); provided that Awards using such
available shares shall not be made after the date awards or grants could have
been made under the terms of the pre-existing plan, absent the acquisition or
combination, and shall only be made to individuals who were not Employees or
Directors prior to such acquisition or combination. 

 

12.3Non-Employee Directors’ Awards. Notwithstanding any provision to the
contrary herein, in the event of a Corporate Transaction, the vesting of all
Awards granted to Non-Employee Directors will accelerate and such Awards will
become exercisable (as applicable) in full prior to the consummation of such
event at such times and on such conditions as the Committee determines. 

 

ARTICLE 13

 

MISCELLANEOUS

 

13.1Payment For Share Purchases. Payment from a Participant for Shares purchased
pursuant to this Plan may be made in cash or by check or, where expressly
approved for the Participant by the Committee and where permitted by law (and to
the extent not otherwise set forth in the applicable Award Agreement): (a) by
cancellation of indebtedness of the Company to the Participant; (b) by surrender
of shares of the Company held by the Participant that have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares as
to which said Award will be exercised or settled; (c) by waiver of compensation
due or accrued to the Participant for services rendered or to be rendered to the
Company or a Parent or Subsidiary of the Company; (d) by consideration received
by the Company pursuant to a broker-assisted or other form of cashless exercise
program implemented by the Company in connection with the Plan; (e) by any
combination of the foregoing or (f) by any other method of payment as is
permitted by applicable law. 

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13.2Withholding Taxes. Whenever Shares are to be issued in satisfaction of
Awards granted under this Plan or the applicable tax event occurs, the Company
may require the Participant to remit to the Company or to the Parent or
Subsidiary employing the Participant an amount sufficient to satisfy applicable
U.S. federal, state, local and international withholding tax requirements or any
other tax or social insurance liability legally due from the Participant prior
to the delivery of Shares pursuant to exercise or settlement of any Award.
Whenever payments in satisfaction of Awards granted under this Plan are to be
made in cash, such payment will be net of an amount sufficient to satisfy
applicable U.S. federal, state, local and international withholding tax or
social insurance requirements or any other tax liability legally due from the
Participant. The Fair Market Value of the Shares will be determined as of the
date that the taxes are required to be withheld and such Shares will be valued
based on the value of the actual trade or, if there is none, the Fair Market
Value of the Shares as of the previous trading day. The Committee, or its
delegate(s), as permitted by applicable law, in its sole discretion and pursuant
to such procedures as it may specify from time to time and to limitations of
local law, may require or permit a Participant to satisfy such tax withholding
obligation or any other tax liability legally due from the Participant, in whole
or in part by paying cash, electing to have the Company withhold otherwise
deliverable cash or Shares having a Fair Market Value equal to the minimum
statutory amount required to be withheld (or such other amount that will not
cause an adverse accounting consequence or cost), delivering to the Company
already-owned Shares having a Fair Market Value equal to the minimum amount
required to be withheld or withholding from the proceeds of the sale of
otherwise deliverable Shares acquired pursuant to an Award either through a
voluntary sale or through a mandatory sale arranged by the Company. 

 

13.3Transferability. Unless determined otherwise by the Committee, an Award may
not be sold, pledged, assigned, hypothecated, transferred or disposed of in any
manner other than by will or by the laws of descent or distribution. If the
Committee makes an Award transferable, including by instrument to an inter vivos
or testamentary trust in which the Awards are to be passed to beneficiaries upon
the death of the trustor (settlor) or by gift or by domestic relations order to
a Permitted Transferee, such Award will contain such additional terms and
conditions as the Committee deems appropriate. All Awards will be exercisable:
(a) during the Participant’s lifetime only by (i) the Participant or (ii) the
Participant’s guardian or legal representative; (b) after the Participant’s
death, by the legal representative of the Participant’s heirs or legatees and
(c) in the case of all awards except ISOs, by a Permitted Transferee. 

 

13.4Voting and Dividends. No Participant will have any of the rights of a
stockholder with respect to any Shares until the Shares are issued to the
Participant, except for any Dividend Equivalent Rights permitted by an
applicable Award Agreement. Any Dividend Equivalent Rights will be subject to
the same vesting or performance conditions as the underlying Award. In addition,
the Committee may provide that any Dividend Equivalent Rights permitted by an
applicable Award Agreement will be deemed to have been reinvested in additional
Shares or otherwise reinvested. After Shares are issued to the Participant, the
Participant will be a stockholder and have all the rights of a stockholder with
respect to such Shares, including the right to vote and receive all dividends or
other distributions made or paid with respect to such Shares; provided, that if
such Shares are Restricted Stock, then any new, additional or different
securities the Participant may become entitled to receive with respect to such
Shares by virtue of a stock dividend, stock split or any other change in the
corporate or capital structure of the Company will be subject to the same
restrictions as the Restricted Stock; provided, further, that the Participant
will have no right to retain such stock dividends or stock distributions with
respect to Shares that are repurchased at the Participant’s Purchase Price or
Exercise Price, as the case may be, pursuant to Section 13.5. 

 

13.5Restrictions on Shares. At the discretion of the Committee, the Company may
reserve to itself and/or its assignee(s) a right to repurchase (a “Right of
Repurchase”) a portion of any or all Unvested Shares held by a Participant
following such Participant’s termination of Service at any time within ninety
(90) days (or such longer or shorter time determined by the Committee) after the
later of the date Participant’s Service terminates and the date the Participant
purchases Shares under this Plan, for cash and/or cancellation of purchase money
indebtedness, at the Participant’s Purchase Price or Exercise Price, as the case
may be. Dividend Equivalent Rights will not be granted in connection with any
Options or SARs. 

 

13.6Certificates. All Shares or other securities whether or not certificated,
delivered under this Plan will be subject to such stock transfer orders, legends
and other restrictions as the Committee may deem necessary or advisable,
including restrictions under any applicable U.S. federal, state or foreign
securities law or any rules, regulations and other requirements of the SEC or
any stock exchange or automated quotation system upon which the Shares may be
listed or quoted and any non-U.S. exchange controls or securities law
restrictions to which the Shares are subject. 

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13.7Escrow; Pledge of Shares. To enforce any restrictions on a Participant’s
Shares, the Committee may require the Participant to deposit all certificates
representing Shares, together with stock powers or other instruments of transfer
approved by the Committee, appropriately endorsed in blank, with the Company or
an agent designated by the Company to hold in escrow until such restrictions
have lapsed or terminated, and the Committee may cause a legend or legends
referencing such restrictions to be placed on the certificates. Any Participant
who is permitted to execute a promissory note as partial or full consideration
for the purchase of Shares under this Plan will be required to pledge and
deposit with the Company all or part of the Shares so purchased as collateral to
secure the payment of the Participant’s obligation to the Company under the
promissory note; provided, however, that the Committee may require or accept
other or additional forms of collateral to secure the payment of such obligation
and, in any event, the Company will have full recourse against the Participant
under the promissory note notwithstanding any pledge of the Participant’s Shares
or other collateral. In connection with any pledge of the Shares, the
Participant will be required to execute and deliver a written pledge agreement
in such form as the Committee will from time to time approve. The Shares
purchased with the promissory note may be released from the pledge on a pro rata
basis as the promissory note is paid. 

 

13.8Repricing Prohibited. Other than pursuant to Section 3.5, the Committee will
not (a) amend the terms of outstanding Options or SARs to reduce the Exercise
Price of outstanding Options or SARs; (b) cancel outstanding Options or SARs
when the Exercise Price per Share exceeds the Fair Market Value of one Share in
exchange for cash or another Award (other than in connection with a Corporate
Transaction); or (c) take any other action with respect to an Option or SAR that
would be treated as a repricing under the rules and regulations of the principal
U.S. national securities exchange on which the Shares are listed, in any case
without prior stockholder approval. 

 

13.9Deferrals. The Committee may determine that the delivery of Shares, payment
of cash or a combination thereof upon the exercise, vesting or settlement of all
or a portion of any Award may be deferred and may establish programs and
procedures for deferral elections to be made by Participants. Deferrals by
Participants will be made only in accordance with Section 409A of the Code.
Consistent with Section 409A of the Code, the Committee may provide for
distributions while a Participant is providing Services to the Company or any
Parent or Subsidiary. 

 

13.10Securities Law and Other Regulatory Compliance. An Award will not be
effective unless such Award is in compliance with all applicable U.S. and
foreign federal and state securities and exchange control laws, rules and
regulations of any governmental body, and the requirements of any stock exchange
or automated quotation system upon which the Shares may then be listed or
quoted, as they are in effect on the date of grant of the Award and also on the
date of exercise or other issuance. Notwithstanding any other provision in this
Plan, the Company will have no obligation to issue or deliver certificates for
Shares under this Plan prior to: (a) obtaining any approvals from governmental
agencies that the Company determines are necessary or advisable and
(b) completion of any registration or other qualification of such Shares under
any state or federal or foreign law or ruling of any governmental body that the
Company determines to be necessary or advisable. The Company will be under no
obligation to register the Shares with the SEC or to effect compliance with the
registration, qualification or listing requirements of any foreign or state
securities laws, exchange control laws, stock exchange or automated quotation
system, and the Company will have no liability for any inability or failure to
do so. 

 

13.11No Obligation To Employ. Nothing in this Plan or any Award granted under
this Plan will confer or be deemed to confer on any Participant any right to
continue in the employ of or to continue any other relationship with the Company
or any Parent, Subsidiary or Affiliate or limit in any way the right of the
Company or any Parent, Subsidiary or Affiliate to terminate Participant’s
employment or other relationship at any time. 

 

13.12Adoption and Stockholder Approval. This Plan was submitted for the approval
of the Company’s stockholders, consistent with applicable laws, within twelve
(12) months after the date this Plan is adopted by the Board, and such approval
was obtained on October 30, 2015. 

 

13.13Term of Plan; Governing Law. Unless earlier terminated as provided herein,
this Plan will become effective on the Effective Date and will terminate on
August 18, 2025, which is ten (10) years from the date this Plan is adopted by
the Board. This Plan and all Awards granted hereunder will be governed by and
construed in accordance with the laws of the State of Delaware (excluding its
conflict of law rules). 

 

13.14Amendment or Termination of Plan. The Board may at any time terminate or
amend this Plan in any respect, including amendment of any form of Award
Agreement or instrument to be executed pursuant to this Plan; provided, however,
that the Board will not, without the approval of the stockholders of the
Company, amend this Plan in any manner that requires such stockholder approval
or amend Section 13.8; provided further, that a Participant’s Award will be
governed by the version of this Plan then in effect at the time such Award was
granted. 

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13.15Nonexclusivity of the Plan. Neither the adoption of this Plan by the Board,
the submission of this Plan to the stockholders of the Company for approval, nor
any provision of this Plan will be construed as creating any limitations on the
power of the Board to adopt such additional compensation arrangements as it may
deem desirable, including the granting of stock awards and bonuses otherwise
than under this Plan, and such arrangements may be either generally applicable
or applicable only in specific cases. 

 

13.16Insider Trading Policy. Each Participant who receives an Award will comply
with any policy adopted by the Company from time to time covering transactions
in the Company’s securities by Employees, officers and/or directors of the
Company. 

 

13.17All Awards Subject to Company Clawback or Recoupment Policy. All Awards,
subject to applicable law, will be subject to clawback or recoupment pursuant to
any compensation clawback or recoupment policy adopted by the Board or required
by law during the term of Participant’s employment or other service with the
Company that is applicable to executive officers, employees, directors or other
service providers of the Company, and in addition to any other remedies
available under such policy and applicable law, may require the cancellation of
outstanding Awards and the recoupment of any gains realized with respect to
Awards. 

 

13.18Compliance with Section 409A of the Code. This Plan is intended to comply
and shall be administered in a manner that is intended to comply with Section
409A of the Code and shall be construed and interpreted in accordance with such
intent. To the extent that an Award or the payment, settlement or deferral
thereof is subject to Section 409A of the Code, the Award shall be granted,
paid, settled or deferred in a manner that will comply with Section 409A of the
Code, including regulations or other guidance issued with respect thereto,
except as otherwise determined by the Committee. Any provision of this Plan that
would cause the grant of an Award or the payment, settlement or deferral thereof
to fail to satisfy Section 409A of the Code shall be amended to comply with
Section 409A of the Code on a timely basis, which may be made on a retroactive
basis, in accordance with regulations and other guidance issued under Section
409A of the Code. Notwithstanding any contrary provision in the Plan or any
Award Agreement, any payment(s) of “nonqualified deferred compensation” (within
the meaning of Section 409A) that are otherwise required to be made under the
Plan or any Award Agreement to a “specified employee” (as defined under Section
409A) as a result of his or her “separation from service” (as defined below)
(other than a payment that is not subject to Section 409A) shall be delayed for
the first six (6) months following such “separation from service” and shall
instead be paid (in a manner set forth in the Award Agreement) on the payment
date that immediately follows the end of such six-month period (or, if earlier,
within 10 business days following the date of death of the specified employee)
or as soon as administratively practicable within 60 days thereafter, but in no
event later than the end of the applicable taxable year. A termination of
employment shall not be deemed to have occurred for purposes of any provision of
the Plan or any Award Agreement providing for the payment of any amounts or
benefits that are considered nonqualified deferred compensation under Section
409A upon or following a termination of employment, unless such termination is
also a “separation from service” within the meaning of Section 409A and the
payment thereof prior to a “separation from service” would violate Section 409A.
For purposes of any such provision of the Plan or any Award Agreement relating
to any such payments or benefits, references to a “termination,” “termination of
employment,” “termination of continuous Service” or like terms shall mean
“separation from service.” 

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