Exhibit 10.1
(PHOENIX LOGO) [f37514f3751400.gif]
2007 EQUITY INCENTIVE PLAN
1. Purposes of the Plan.
     The purpose of this Plan is to encourage ownership in Phoenix Technologies
Ltd., a Delaware corporation (the “Company”), by key personnel whose long-term
employment or other service relationship with the Company is considered
essential to the Company’s continued progress and, thereby, encourage recipients
to act in the stockholders’ interest and share in the Company’s success.
2. Definitions.
As used herein, the following definitions shall apply:
(a) “Administrator” means the Board, any Committees or such delegates of the
Board as shall be administering the Plan in accordance with Section 4 of the
Plan.
(b) “Affiliate” means any entity that is directly or indirectly controlled by
the Company or any entity in which the Company has a significant ownership
interest as determined by the Administrator.
(c) “Applicable Laws” means the requirements relating to the administration of
stock option and stock award plans under U.S. federal and state laws, any stock
exchange or quotation system on which the Company has listed or submitted for
quotation the Common Stock to the extent provided under the terms of the
Company’s agreement with such exchange or quotation system and, with respect to
Awards subject to the laws of any foreign jurisdiction where Awards are, or will
be, granted under the Plan, the laws of such jurisdiction.
(d) “Automatic Director Option” means a Nonstatutory Stock Option that is
automatically granted to an Outside Director at the times and subject to the
terms and conditions provided for under Section 12.
(e) “Award” means a Stock Award or Option granted in accordance with the terms
of the Plan.
(f) “Awardee” means an Employee, Consultant or Director of the Company or any
Affiliate who has been granted an Award under the Plan.
(g) “Award Agreement” means a Stock Award Agreement and/or Option Agreement,
which may be in written or electronic format, in such form and with such terms
and conditions as may be specified by the Administrator, evidencing the terms
and conditions of an individual Award. Each Award Agreement is subject to the
terms and conditions of the Plan.

 

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(h) “Board” means the Board of Directors of the Company.
(i) “Change in Control” means, unless such term or an equivalent term is
otherwise defined with respect to an Award by the Awardee’s Option Agreement,
Stock Award Agreement or written contract of employment or service, the
occurrence of any of the following:
(i) the sale, lease, conveyance or other disposition of all or substantially all
of the Company’s assets to any “person” (as such term is used in Section 13(d)
of the Exchange Act), entity or group of persons acting in concert;
(ii) any person or group of persons becoming the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing 50% or more of the total voting power represented by
the Company’s then outstanding voting securities;
(iii) a merger, consolidation or other transaction of the Company with or into
any other corporation, entity or person, other than a transaction in which the
holders of at least 50% of the shares of capital stock of the Company
outstanding immediately prior thereto continue to hold (either by voting
securities remaining outstanding or by their being converted into voting
securities of the surviving entity or its controlling entity) at least 50% of
the total voting power represented by the voting securities of the Company or
such surviving entity (or its controlling entity) outstanding immediately after
such transaction; or
(iv) a contest for the election or removal of members of the Board that results
in the removal from the Board of at least 50% of the incumbent members of the
Board.
(j) “Code” means the United States Internal Revenue Code of 1986, as amended.
(k) “Committee” means the compensation committee of the Board or a committee of
Directors appointed by the Board in accordance with Section 4 of the Plan.
(l) “Common Stock” means the common stock of the Company.
(m) “Company” means Phoenix Technologies Ltd., a Delaware corporation, or its
successor.
(n) “Consultant” means any person engaged by the Company or any Affiliate to
render services to such entity as an advisor or consultant.
(o) “Conversion Award” has the meaning set forth in Section 4(b)(xii) of the
Plan.
(p) “Director” means a member of the Board.
(q) “Employee” means a regular, active employee of the Company or any Affiliate,
including an Officer and/or Inside Director. The Administrator shall determine
whether

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or not the chairman of the Board qualifies as an “Employee.” Within the
limitations of Applicable Law, the Administrator shall have the discretion to
determine the effect upon an Award and upon an individual’s status as an
Employee in the case of (i) any individual who is classified by the Company or
its Affiliate as leased from or otherwise employed by a third party or as
intermittent or temporary, even if any such classification is changed
retroactively as a result of an audit, litigation or otherwise, (ii) any leave
of absence approved by the Company or an Affiliate, (iii) any transfer between
locations of employment with the Company or an Affiliate or between the Company
and any Affiliate or between any Affiliates, (iv) any change in the Awardee’s
status from an Employee to a Consultant or Director, and (v) at the request of
the Company or an Affiliate an Employee becomes employed by any partnership,
joint venture or corporation not meeting the requirements of an Affiliate in
which the Company or an Affiliate is a party.
(r) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(s) “Fair Market Value” means, as of any date, the value of a share of Common
Stock or other property as determined by the Administrator, in its discretion,
subject to the following:
(i) If, on such date, the Common Stock is listed on a national or regional
securities exchange or market system, including without limitation the Nasdaq
Global Market, the Fair Market Value of a share of Common Stock shall be the
closing price on such date of a share of Common Stock (or the mean of the
closing bid and asked prices of a share of Common Stock if the stock is so
quoted instead) as quoted on such exchange or market system constituting the
primary market for the Common Stock, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable. If the relevant date does
not fall on a day on which the Common Stock has traded on such securities
exchange or market system, the date on which the Fair Market Value shall be
established shall be the last day on which the Common Stock was so traded prior
to the relevant date, or such other appropriate day as shall be determined by
the Administrator, in its discretion.
(ii) If, on such date, the Common Stock is not listed on a national or regional
securities exchange or market system, the Fair Market Value of a share of Common
Stock shall be as determined by the Administrator in good faith using a
reasonable application of a reasonable valuation method without regard to any
restriction other than a restriction which, by its terms, will never lapse.
(t) “Grant Date” means, for all purposes, the date on which the Administrator
approves the grant of an Award, or such other date as is determined by the
Administrator, provided that in the case of any Incentive Stock Option, the
grant date shall be the later of the date on which the Administrator makes the
determination granting such Incentive Stock Option or the date of commencement
of the Awardee’s employment relationship with the Company.

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(u) “Incentive Stock Option” means an Option intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.
(v) “Insider Director” means a Director who is an Employee.
(w) “Nasdaq” means the Nasdaq Global Market or its successor.
(x) “1999 Plan” means the Company’s 1999 Stock Plan, as amended.
(y) “Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.
(z) “Officer” means a person who is an officer of the Company within the meaning
of Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.
(aa) “Option” means a right granted under Section 8 to purchase a number of
Shares at such exercise price, at such times, and on such other terms and
conditions as are specified in the agreement or other documents evidencing the
Option (the “Option Agreement”). Both Options intended to qualify as Incentive
Stock Options and Nonstatutory Stock Options may be granted under the Plan.
(bb) “Outside Director” means a Director who is not an Employee.
(cc) “Participant” means the Awardee or any person (including any estate) to
whom an Award has been assigned or transferred as permitted hereunder.
(dd) “Qualifying Performance Criteria” shall have the meaning set forth in
Section 13(b) of the Plan.
(ee) “Plan” means this Phoenix Technologies Ltd. 2007 Equity Incentive Plan.
(ff) “Share” means a share of the Common Stock, as adjusted in accordance with
Section 14 of the Plan.
(gg) “Stock Appreciation Right” means a right to receive cash and/or shares of
Common Stock based on a change in the Fair Market Value of a specific number of
shares of Common Stock between the grant date and the exercise date granted
under Section 11.
(hh) “Stock Award” means an award or issuance of Shares, Stock Units, Stock
Appreciation Rights or other similar awards made under Section 11 of the Plan,
the grant, issuance, retention, vesting, settlement, and/or transferability of
which is subject during specified periods of time to such conditions (including
continued employment or performance conditions) and terms as are expressed in
the agreement or other documents evidencing the Award (the “Stock Award
Agreement”).

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(ii) “Stock Unit” means a bookkeeping entry representing an amount equivalent to
the Fair Market Value of one Share (or a fraction or multiple of such value),
payable in cash, property or Shares. Stock Units represent an unfunded and
unsecured obligation of the Company, except as otherwise provided for by the
Administrator.
(jj) “Subsidiary” means any company (other than the Company) in an unbroken
chain of companies beginning with the Company, provided each company in the
unbroken chain (other than the Company) owns, at the time of determination,
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other companies in such chain.
(kk) “Termination of Employment” shall mean ceasing to be an Employee,
Consultant or Director, as determined in the sole discretion of the
Administrator. However, for Incentive Stock Option purposes, Termination of
Employment will occur when the Awardee ceases to be an employee (as determined
in accordance with Section 3401(c) of the Code and the regulations promulgated
thereunder) of the Company or one of its Subsidiaries. The Administrator shall
determine whether any corporate transaction, such as a sale or spin-off of a
division or business unit, or a joint venture, shall be deemed to result in a
Termination of Employment.
(ll) “Total and Permanent Disability” shall have the meaning set forth in
Section 22(e)(3) of the Code.
3. Stock Subject to the Plan.
(a) Aggregate Limits. Subject to the provisions of Section 14 of the Plan, the
maximum aggregate number of Shares that may be sold or issued under the Plan is
3,500,000 plus up to 3,659,884 Shares that as of October 5, 2007 are subject to
outstanding options granted under the 1999 Plan or have been issued under the
1999 Plan but are subject to repurchase by the Company (the “1999 Plan Shares”);
provided that the 1999 Plan Shares shall only become available for grant under
the Plan if and to the extent that such outstanding options granted under the
1999 Plan are cancelled, expire or are forfeited or such Shares issued under the
1999 Plan are repurchased by the Company. Shares subject to Awards granted under
the Plan that are cancelled, expire or are forfeited shall be available for
re-grant under the Plan, including Shares issued pursuant to an Award granted
under the Plan that are repurchased by the Company upon the Awardee’s failure to
vest in or otherwise earn the Shares. If an Awardee pays the exercise or
purchase price of an Award granted under the Plan or the 1999 Plan through the
tender of Shares, or if Shares are tendered or withheld to satisfy any Company
withholding obligations, the number of Shares so tendered or withheld (whether
issued under the Plan or the 1999 Plan) shall not become available for
re-issuance thereafter under the Plan.
(b) Code Section 162(m) Share Limits. Subject to the provisions of Section 14 of
the Plan, the aggregate number of Shares subject to Awards granted under this
Plan during any fiscal year to any one Awardee shall not exceed 175,000, except
that in connection with his or her first commencing service with the Company or
an Affiliate, an Awardee may be granted Awards covering up to an additional
125,000 Shares during the

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year in which such service commences. Notwithstanding anything to the contrary
in the Plan, the limitations set forth in this Section 3(b) shall be subject to
adjustment under Section 14 of the Plan only to the extent that such adjustment
will not affect the status of any Award intended to qualify as “performance
based compensation” under Code Section 162(m).
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan shall be administered by the Board,
a Committee and/or other delegates approved by the Board consistent with
Applicable Law.
(ii) Section 162(m). To the extent that the Administrator determines it to be
desirable to qualify Awards granted hereunder as “performance-based
compensation” within the meaning of Section 162(m) of the Code, Awards to
“covered employees” within the meaning of Section 162(m) of the Code or
Employees that the Committee determines may be “covered employees” in the future
shall be made by a Committee of two or more “outside directors” within the
meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify transactions hereunder as
exempt under Rule 16b-3 promulgated under the Exchange Act (“Rule 16b-3”),
Awards to Officers and Directors shall be made by the entire Board or a
Committee of two or more “non-employee directors” within the meaning of
Rule 16b-3.
(iv) Other Administration. Except to the extent prohibited by Applicable Law,
the Board may delegate to an authorized officer or officers of the Company the
power to approve Awards to persons eligible to receive Awards under the Plan who
are not (A) subject to Section 16 of the Exchange Act or (B) at the time of such
approval, “covered employees” under Section 162(m) of the Code or (C) any other
executive officer.
(v) Delegation of Authority for the Day-to-Day Administration of the Plan.
Except to the extent prohibited by Applicable Law, the Administrator may
delegate to one or more individuals the day-to-day administration of the Plan
and any of the functions assigned to it in this Plan. Such delegation may be
revoked at any time.
(vi) Nasdaq. The Plan will be administered in a manner that complies with any
applicable Nasdaq or stock exchange listing requirements.
(b) Powers of the Administrator. Subject to the provisions of the Plan and, in
the case of a Committee or delegates acting as the Administrator, subject to the
specific duties delegated to such Committee or delegates, the Administrator
shall have the authority, in its discretion:

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(i) to select the Employees, Consultants and Directors of the Company or its
Affiliates to whom Awards are to be granted hereunder;
(ii) to determine the number of shares of Common Stock to be covered by each
Award granted hereunder;
(iii) to determine the type of Award to be granted to the selected Employees,
Consultants and Directors;
(iv) to approve forms of Award Agreements for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with the terms of
the Plan, of any Award granted hereunder. Such terms and conditions include, but
are not limited to, the exercise and/or purchase price (if applicable), the time
or times when an Award may be exercised (which may or may not be based on
performance criteria), the vesting schedule, any vesting and/or exercisability
acceleration or waiver of forfeiture restrictions, the acceptable forms of
consideration, the term, and any restriction or limitation regarding any Award
or the Shares relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine and may be established at
the time an Award is granted or thereafter;
(vi) to correct administrative errors;
(vii) to construe and interpret the terms of the Plan (including sub-plans and
Plan addenda) and Awards granted pursuant to the Plan;
(viii) to adopt rules and procedures relating to the operation and
administration of the Plan to accommodate the specific requirements of local
laws and procedures. Without limiting the generality of the foregoing, the
Administrator is specifically authorized (A) to adopt the rules and procedures
regarding the conversion of local currency, withholding procedures and handling
of stock certificates which vary with local requirements and (B) to adopt
sub-plans and Plan addenda as the Administrator deems desirable, to accommodate
foreign laws, regulations and practice;
(ix) to prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans and Plan addenda;
(x) to modify or amend each Award, including, but not limited to, the
acceleration of vesting and/or exercisability, provided, however, that any such
amendment is subject to Section 15 of the Plan and except as set forth in that
Section, may not impair any outstanding Award unless agreed to in writing by the
Participant;
(xi) to allow Participants to satisfy withholding tax amounts by electing to
have the Company withhold from the Shares to be issued upon exercise of an
Option or vesting of a Stock Award that number of Shares having a Fair Market

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Value equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined in such manner and on such date that
the Administrator shall determine or, in the absence of provision otherwise, on
the date that the amount of tax to be withheld is to be determined. All
elections by a Participant to have Shares withheld for this purpose shall be
made in such form and under such conditions as the Administrator may provide;
(xii) to authorize conversion or substitution under the Plan of any or all stock
options, stock appreciation rights or other stock awards held by service
providers of an entity acquired by the Company (the “Conversion Awards”). Any
conversion or substitution shall be effective as of the close of the merger,
acquisition or other transaction. The Conversion Awards may be Nonstatutory
Stock Options or Incentive Stock Options, as determined by the Administrator,
with respect to options granted by the acquired entity; provided, however, that
with respect to the conversion of stock appreciation rights in the acquired
entity, the Conversion Awards shall be Nonstatutory Stock Options. Unless
otherwise determined by the Administrator at the time of conversion or
substitution, all Conversion Awards shall have the same terms and conditions as
Awards generally granted by the Company under the Plan;
(xiii) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Award previously granted by the
Administrator;
(xiv) to impose such restrictions, conditions or limitations as it determines
appropriate as to the timing and manner of any resales by a Participant or other
subsequent transfers by the Participant of any Shares issued as a result of or
under an Award, including without limitation, (A) restrictions under an insider
trading policy or under any other Company policy relating to Company stock and
stock ownership and (B) restrictions as to the use of a specified brokerage firm
for such resales or other transfers;
(xv) to provide, either at the time an Award is granted or by subsequent action,
that an Award shall contain as a term thereof, a right, either in tandem with
the other rights under the Award or as an alternative thereto, of the
Participant to receive, without payment to the Company, a number of Shares, cash
or a combination thereof, the amount of which is determined by reference to the
value of the Award; and
(xvi) to make all other determinations deemed necessary or advisable for
administering the Plan and any Award granted hereunder.
(c) Effect of Administrator’s Decision. All decisions, determinations and
interpretations by the Administrator regarding the Plan, any rules and
regulations under the Plan and the terms and conditions of any Award granted
hereunder, shall be final and binding on all Participants and on all other
persons. The Administrator shall consider such factors as it deems relevant, in
its sole and absolute discretion, to making such

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decisions, determinations and interpretations including, without limitation, the
recommendations or advice of any officer or other employee of the Company and
such attorneys, consultants and accountants as it may select.
5. Eligibility.
     Awards may be granted to Employees, Consultants and Directors of the
Company or any of its Affiliates; provided that Incentive Stock Options may be
granted only to Employees of the Company or of a Subsidiary of the Company.
6. Term of Plan.
     The Plan shall become effective on October 5, 2007, contingent upon
approval of the stockholders of the Company. It shall continue in effect for a
term of ten (10) years from the later of the date the stockholders of the
Company approve the Plan or the date any amendment to add shares to the Plan is
approved by stockholders of the Company, unless terminated earlier under
Section 15 of the Plan.
7. Term of Award.
     The term of each Award shall be determined by the Administrator and stated
in the Award Agreement. In the case of an Option, the term shall be ten
(10) years from the Grant Date or such shorter term as may be provided in the
Award Agreement; provided that an Incentive Stock Option granted to an Employee
who on the Grant Date owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Subsidiary shall have
a term of no more than five (5) years from the Grant Date; and provided further
that the term may be ten and one-half (10 1/2) years (or a shorter period) in
the case of Options granted to Employees in certain jurisdictions outside the
United States as determined by the Administrator.
8. Options.
     The Administrator may grant an Option or provide for the grant of an
Option, either from time to time in the discretion of the Administrator or
automatically upon the occurrence of specified events, including, without
limitation, the achievement of performance goals, the satisfaction of an event
or condition within the control of the Awardee or within the control of others.
(a) Option Agreement. Each Option Agreement shall contain provisions regarding
(i) the number of Shares that may be issued upon exercise of the Option,
(ii) the type of Option, (iii) the exercise price of the Shares and the means of
payment for the Shares, (iv) the term of the Option, (v) such terms and
conditions on the vesting and/or exercisability of an Option as may be
determined from time to time by the Administrator, (vi) restrictions on the
transfer of the Option or the Shares issued upon exercise of the Option and
forfeiture provisions and (vii) such further terms and conditions, in each case
not inconsistent with this Plan as may be determined from time to time by the
Administrator.

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(b) Exercise Price. The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be determined by the Administrator,
subject to the following:
(i) In the case of an Incentive Stock Option, the per Share exercise price shall
be no less than one hundred percent (100%) of the Fair Market Value per Share on
the Grant Date; provided however, that in the case of an Incentive Stock Option
granted to an Employee who on the Grant Date owns stock representing more than
ten percent (10%) of the voting power of all classes of stock of the Company or
any Subsidiary, the per Share exercise price shall be no less than one hundred
ten percent (110%) of the Fair Market Value per Share on the Grant Date.
(ii) In the case of a Nonstatutory Stock Option, the per Share exercise price
shall be no less than one hundred percent (100%) of the Fair Market Value per
Share on the Grant Date.
(iii) Notwithstanding the foregoing, at the Administrator’s discretion,
Conversion Awards may be granted in substitution and/or conversion of options of
an acquired entity, with a per Share exercise price of less than 100% of the
Fair Market Value per Share on the date of such substitution and/or conversion.
(c) No Option Repricings. Other than in connection with a change in the
Company’s capitalization (as described in Section 14(a) of the Plan), the
exercise price of an Option may not be reduced without stockholder approval.
(d) Vesting Period and Exercise Dates. Options granted under this Plan shall
vest and/or be exercisable at such time and in such installments during the
period prior to the expiration of the Option’s term as determined by the
Administrator. The Administrator shall have the right to make the timing of the
ability to exercise any Option granted under this Plan subject to continued
employment, the passage of time and/or such performance requirements as deemed
appropriate by the Administrator. At any time after the grant of an Option, the
Administrator may reduce or eliminate any restrictions surrounding any
Participant’s right to exercise all or part of the Option.
(e) Form of Consideration. The Administrator shall determine the acceptable form
of consideration for exercising an Option, including the method of payment,
either through the terms of the Option Agreement or at the time of exercise of
an Option. Acceptable forms of consideration may include:
(i) cash;
(ii) check or wire transfer (denominated in U.S. Dollars);
(iii) subject to the Company’s discretion to refuse for any reason and at any
time to accept such consideration and subject to any conditions or limitations
established by the Administrator, other Shares held by the Participant which
(x) in the case of Shares acquired upon exercise of an option, if required to
avoid

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adverse accounting consequences, such Shares shall have been owned by the
Awardee for more than six (6) months on the date of surrender, and (y) have a
Fair Market Value on the date of surrender equal to the aggregate exercise price
of the Shares as to which said Option shall be exercised;
(iv) consideration received by the Company under a broker-assisted sale and
remittance program acceptable to the Administrator;
(v) cashless “net exercise” arrangement pursuant to which the Company will
reduce the number of Shares issued upon exercise by the largest whole number of
Shares having an aggregate Fair Market Value that does not exceed the aggregate
exercise price; provided that the Company shall accept a cash or other payment
from the Participant to the extent of any remaining balance of the exercise
price not satisfied by such reduction in the number of whole Shares to be
issued;
(vi) such other consideration and method of payment for the issuance of Shares
to the extent permitted by Applicable Laws; or
(vii) any combination of the foregoing methods of payment.
(f) Effect of Termination on Options
(i) Generally. Unless otherwise provided for by the Administrator or in the
Option Agreement, upon an Awardee’s Termination of Employment other than as a
result of circumstances described in Sections 8(f)(ii)) and ((iii)) below, the
Option shall remain exercisable for three (3) months following the Awardee’s
Termination of Employment; provided that an Option granted to a Director or
Officer shall remain exercisable for six (6) months following the Awardee’s
Termination of Employment. In any case the Option shall not be exerisable beyond
the expiration date of the Option. The Option shall automatically terminate at
the end of such period to the extent the Awardee has not exercised it within
such period.
(ii) Disability of Awardee. Unless otherwise provided for by the Administrator,
upon an Awardee’s Termination of Employment as a result of the Awardee’s
disability, including Total and Permanent Disability, all outstanding Options
granted to such Awardee that were vested and exercisable as of the date of the
Awardee’s Termination of Employment may be exercised by the Awardee until the
earlier of (A) twelve (12) months following Awardee’s Termination of Employment
as a result of Awardee’s disability, including Total and Permanent Disability or
(B) the expiration of the term of such Option. If the Awardee does not exercise
such Option within the time specified, the Option (to the extent not exercised)
shall automatically terminate.
(iii) Death of Awardee. Unless otherwise provided for by the Administrator, upon
an Awardee’s Termination of Employment as a result of the Awardee’s death, all
outstanding Options granted to such Awardee that were vested and exercisable as
of the date of the Awardee’s death may be exercised until the

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earlier of (A) twelve (12) months following the Awardee’s death or (B) the
expiration of the term of such Option. If an Option is held by the Awardee when
he or she dies, such Option may be exercised, to the extent the Option is vested
and exercisable, by the beneficiary designated by the Awardee (as provided in
Section 16 of the Plan), the executor or administrator of the Awardee’s estate
or, if none, by the person(s) entitled to exercise the Option under the
Awardee’s will or the laws of descent or distribution; provided that the Company
need not accept exercise of an Option by such beneficiary, executor or
administrator unless the Company has satisfactory evidence of such person’s
authority to act as such. If the Option is not so exercised within the time
specified, such Option (to the extent not exercised) shall automatically
terminate.
(iv) Other Terminations of Employment. The Administrator may provide in the
applicable Option Agreement for different treatment of Options upon Termination
of Employment of the Awardee than that specified above.
(v) Extension of Exercise Period. The Administrator shall have full power and
authority to extend the period of time for which an Option is to remain
exercisable following an Awardee’s Termination of Employment from the periods
set forth in Sections 8(f)(i)), ((ii)) and ((iii)) above or in the Option
Agreement to such greater time as the Board shall deem appropriate, provided
that in no event shall such Option be exercisable later than the date of
expiration of the term of such Option as set forth in the Option Agreement.
(g) Leave of Absence. The Administrator shall have the discretion to determine
whether and to what extent the vesting of Options shall be tolled during any
unpaid leave of absence; provided, however, that in the absence of such
determination, vesting of Options shall be tolled during any leave that is not a
leave required to be provided to the Awardee under Applicable Law. In the event
of military leave, vesting shall toll during any unpaid portion of such leave,
provided that, upon an Awardee’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 shall be given
vesting credit with respect to Options to the same extent as would have applied
had the Awardee 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.
9. Incentive Stock Option Limitations/Terms.
(a) Eligibility. Only employees (as determined in accordance with Section
3401(c) of the Code and the regulations promulgated thereunder) of the Company
or any of its Subsidiaries may be granted Incentive Stock Options.
(b) $100,000 Limitation. Notwithstanding the designation “Incentive Stock
Option” in an Option Agreement, if and to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Awardee during any calendar year (under
all plans of the Company and any of its

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Subsidiaries) exceeds U.S. $100,000, such Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 9(b), Incentive Stock
Options shall be taken into account in the order in which they were granted. The
Fair Market Value of the Shares shall be determined as of the Grant Date.
(c) Transferability. An Incentive Stock Option may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner by the Awardee
otherwise than by will or the laws of descent and distribution, and, during the
lifetime of such Awardee, may only be exercised by the Awardee. If the terms of
an Incentive Stock Option are amended to permit transferability, the Option will
be treated for tax purposes as a Nonstatutory Stock Option. The designation of a
beneficiary by an Awardee will not constitute a transfer.
(d) Exercise Price. The per Share exercise price of an Incentive Stock Option
shall be determined by the Administrator in accordance with Section 8(b)(i)) of
the Plan.
(e) Leave of Absence. For purposes of Incentive Stock Options, no leave of
absence may exceed ninety (90) days, unless reemployment upon expiration of such
leave is guaranteed by statute or contract. If reemployment upon expiration of a
leave of absence approved by the Company is not so guaranteed, on the
ninety-first (91st) day of such leave any Incentive Stock Option held by the
Awardee shall be treated for tax purposes as a Nonstatutory Stock Option.
(f) Other Terms. Option Agreements evidencing Incentive Stock Options shall
contain such other terms and conditions as may be necessary to qualify, to the
extent determined desirable by the Administrator, with the applicable provisions
of Section 422 of the Code.
10. Exercise of Option.
(a) Procedure for Exercise.
(i) Any Option granted hereunder shall be exercisable according to the terms of
the Plan and at such times and under such conditions as determined by the
Administrator and set forth in the respective Option Agreement.
(ii) An Option shall be deemed exercised when the Company receives (A) written
or electronic notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option; (B) full payment for the Shares with
respect to which the related Option is exercised; and (C) payment of applicable
withholding taxes (if any).
(iii) An Option may not be exercised for a fraction of a Share.
(b) Rights as a Stockholder. The Company shall issue (or cause to be issued)
such Shares as soon as administratively practicable after the Option is
exercised. Shares issued upon exercise of an Option shall be issued in the name
of the Participant or, if requested by the Participant, in the name of the
Participant and his or her spouse. Unless

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provided otherwise by the Administrator or pursuant to this Plan, 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 shall exist with
respect to the Shares subject to an Option, notwithstanding the exercise of the
Option.
11. Stock Awards.
(a) Stock Award Agreement. Each Stock Award Agreement shall contain provisions
regarding (i) the number of Shares subject to such Stock Award or a formula for
determining such number, (ii) the purchase price of the Shares, if any, and the
means of payment for the Shares, (iii) the performance criteria (including
Qualifying Performance Criteria) , if any, and level of achievement versus these
criteria that shall determine the number of Shares granted, issued, retainable
and/or vested, (iv) such terms and conditions on the grant, issuance, vesting,
settlement and/or forfeiture of the Shares as may be determined from time to
time by the Administrator, (v) restrictions on the transferability of the Stock
Award and (vi) such further terms and conditions in each case not inconsistent
with this Plan as may be determined from time to time by the Administrator.
(b) Restrictions and Performance Criteria. The grant, issuance, retention,
settlement and/or vesting of each Stock Award or the Shares subject thereto may
be subject to such performance criteria (including Qualifying Performance
Criteria) and level of achievement versus these criteria as the Administrator
shall determine, which criteria may be based on financial performance, personal
performance evaluations and/or completion of service by the Awardee. Unless
otherwise permitted in compliance with the requirements of Code Section 162(m)
with respect to an Award intended to comply as “performance-based compensation”
thereunder, the Committee shall establish the Qualifying Performance Criteria
applicable to, and the formula for calculating the amount payable under, the
Award no later than the earlier of (a) the date ninety (90) days after the
commencement of the applicable performance period, or (b) the date on which 25%
of the performance period has elapsed, and in any event at a time when the
achievement of the applicable Qualifying Performance Criteria remains
substantially uncertain.
(c) Forfeiture. Unless otherwise provided for by the Administrator, upon the
Awardee’s Termination of Employment, the Stock Award and the Shares subject
thereto shall be forfeited, provided that to the extent that the Participant
purchased or earned any Shares, the Company shall have a right to repurchase the
unvested Shares at such price and on such terms and conditions as the
Administrator determines.
(d) Rights as a Stockholder. Unless otherwise provided by the Administrator in
the Award Agreement, the Participant shall have the rights equivalent to those
of a stockholder and shall be a stockholder only after 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) to the Participant. Unless otherwise
provided by the Administrator, a Participant holding Stock Units shall not be
entitled to receive dividend payments or any credit therefor as if he or she was
an actual stockholder.

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(e) Stock Appreciation Rights.
(i) General. Stock Appreciation Rights may be granted either alone, in addition
to, or in tandem with other Awards granted under the Plan. The Board may grant
Stock Appreciation Rights to eligible Participants subject to terms and
conditions not inconsistent with this Plan and determined by the Board. The
specific terms and conditions applicable to the Participant shall be provided
for in the Stock Award Agreement. Stock Appreciation Rights shall be
exercisable, in whole or in part, at such times as the Board shall specify in
the Stock Award Agreement.
(ii) Exercise of Stock Appreciation Right. Upon the exercise of a Stock
Appreciation Right, in whole or in part, the Participant shall be entitled to a
payment in an amount equal to the excess of the Fair Market Value on the date of
exercise of a fixed number of Shares covered by the exercised portion of the
Stock Appreciation Right, over the Fair Market Value on the Grant Date of the
Shares covered by the exercised portion of the Stock Appreciation Right (or such
other amount calculated with respect to Shares subject to the Award as the Board
may determine). The amount due to the Participant upon the exercise of a Stock
Appreciation Right shall be paid in such form of consideration as determined by
the Board and may be in cash, Shares or a combination thereof, over the period
or periods specified in the Stock Award Agreement. A Stock Award Agreement may
place limits on the amount that may be paid over any specified period or periods
upon the exercise of a Stock Appreciation Right, on an aggregate basis or as to
any Participant. A Stock Appreciation Right shall be considered exercised when
the Company receives written notice of exercise in accordance with the terms of
the Stock Award Agreement from the person entitled to exercise the Stock
Appreciation Right.
(iii) Nonassignability of Stock Appreciation Rights. Except as determined by the
Administrator, no Stock Appreciation Right shall be assignable or otherwise
transferable by the Participant except by will or by the laws of descent and
distribution.
12. Automatic Director Options.

  (a)   Procedure for Grants. Subject to Section 12(f) below, (i) all Automatic
Director Options under this Plan shall be automatic and nondiscretionary and
shall be made strictly in accordance with the provisions of this Section 12 and
(ii) no person shall have any discretion to select which Outside Directors shall
be granted Automatic Director Options or to determine the number of Shares to be
covered by Automatic Director Options granted to Outside Directors.     (b)  
Number of Shares Subject to Automatic Director Options.         (i) Each Outside
Director shall be automatically granted an Option to purchase 40,000 Shares (the
“First Option”) on the date on which such person

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      first becomes an Outside Director, whether through election by the
stockholders of the Company or appointment by the Board to fill a vacancy;
provided, however, that an Inside Director who ceases to be an Inside Director
but who remains a Director shall not receive a First Option.         (ii) Each
Outside Director shall be automatically granted an option to purchase 15,000
Shares (a “Subsequent Option”) on the anniversary date on which each director
became an Outside Director provided he or she is then an Outside Director and if
as of such date, he or she shall have served on the Board for at least the
preceding six (6) months.     (c)   Option Agreement. Each Option Agreement for
an Automatic Director Option shall contain the following provisions: (i) the
term of the Option shall be ten (10) years; (ii) the Option shall be exercisable
only while the Outside Director remains a Director of the Company (subject to
subsection (e) below); (iii) the exercise price per Share shall be 100% of the
Fair Market Value per Share on the Grant Date of the Option; and (iv) the Option
shall vest and become exercisable for 100% of the shares subject to the Option
on the Grant Date.     (d)   Shares Available in Plan. In the event that any
Automatic Director Option granted under the Plan would cause the number of
Shares subject to outstanding Options plus the number of Shares previously
issued to exceed the maximum number of shares available for issuance under the
Plan pursuant to Section 0, then the remaining Shares available for Option
grants shall be granted under Automatic Director Options to the Outside
Directors on a pro rata basis. No further grants shall be made until such time,
if any, as additional Shares become available for grant under the Plan through
action of the Board or the stockholders to increase the number of Shares which
may be issued under the Plan or through cancellation or expiration of Awards
previously granted under the Plan.     (e)   Termination of Continuous Status as
a Director. Subject to Section 14 hereof, in the event an Awardee’s status as a
Director terminates (other than upon the Awardee’s death or Disability), the
Awardee may exercise all outstanding Options granted to such Awardee that were
vested and exercisable as of the date of the Awardee’s termination as a Director
within the lesser of (i) six (6) months following the date of such termination
and (ii) the expiration of the term of such Option as set forth in the Option
Agreement; provided that the Board shall have full power and authority to extend
the period of time for which an Automatic Director Option is to remain
exercisable to such greater time as the Board shall deem appropriate (but in no
event later than the date of expiration of the term of such Option as set forth
in the Option Agreement). To the extent that the Awardee does not exercise such
Option (to the extent otherwise so entitled) within the time specified herein,
the Option shall terminate.     (f)   Amendment and Termination of Automatic
Director Option Program. The Board shall have sole and exclusive authority to
establish, maintain, amend, suspend,

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      and terminate the program by which Non-Employee Directors are granted
Automatic Director Options pursuant to this Section 12(a).

13. Other Provisions Applicable to Awards.

  (a)   Non-Transferability of Awards. Unless determined otherwise by the
Administrator, an Award may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner for value other than by beneficiary
designation, will or by the laws of descent or distribution. Subject to
Section 9(c), the Administrator may in its discretion make an Award transferable
to an Awardee’s family member or any other person or entity as it deems
appropriate. If the Administrator makes an Award transferable, either at the
time of grant or thereafter, such Award shall contain such additional terms and
conditions as the Administrator deems appropriate, and any transferee shall be
deemed to be bound by such terms upon acceptance of such transfer.     (b)  
Qualifying Performance Criteria. For purposes of this Plan, the term “Qualifying
Performance Criteria” shall mean any one or more of the following performance
criteria, either individually, alternatively or in any combination, applied to
either the Company as a whole or to a business unit, Affiliate or business
segment, either individually, alternatively or in any combination, and measured
either annually or cumulatively over a period of years, on an absolute basis or
relative to a pre-established target, to previous years’ results or to a
designated comparison group, in each case as specified by the Administrator in
the Award: (i) cash flow; (ii) earnings (including gross margin; earnings before
interest and taxes; earnings before interest, taxes, depreciation and
amortization; earnings before stock compensation expense pursuant to SFAS
123(R); earnings before taxes; and net earnings); (iii) earnings per share;
(iv) growth in earnings or earnings per share; (v) stock price; (vi) return on
equity or average stockholders’ equity; (vii) total stockholder return;
(viii) return on capital; (ix) return on assets or net assets; (x) return on
investment; (xi) revenue or growth in revenue; (xii) income or net income;
(xiii) operating income or net operating income, in aggregate or per share;
(xiv) operating profit or net operating profit; (xv) operating margin;
(xvi) return on operating revenue; (xvii) market share; (xviii) contract awards
or backlog; (xix) overhead or other expense reduction; (xx) growth in
stockholder value relative to the moving average of the S&P 500 Index or a peer
group index; (xxi) credit rating; (xxii) strategic plan development and
implementation (including individual performance objectives that relate to
achievement of the Company’s or any business unit’s strategic plan);
(xxiii) improvement in workforce diversity; (xxiv) growth of revenue, operating
income or net income; (xxv) efficiency ratio; and (xxvi) ratio of nonperforming
assets to total assets. The Committee may appropriately adjust any evaluation of
performance under a Qualifying Performance Criteria to exclude any of the
following events that occurs during a performance period: (A) asset write-downs;
(B) litigation or claim judgments or settlements; (C) the effect of changes in
tax law, accounting principles or other such laws or provisions affecting
reported results; (D) accruals for reorganization and restructuring programs;
and (E) any

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      gains or losses classified as extraordinary or as discontinued operations
in the Company’s financial statements.     (c)   Certification. Prior to the
payment of any compensation under an Award intended to qualify as
“performance-based compensation” under Section 162(m) of the Code, the Committee
shall certify the extent to which any Qualifying Performance Criteria and any
other material terms under such Award have been satisfied (other than in cases
where such relate solely to the increase in the value of the Common Stock).    
(d)   Discretionary Adjustments Pursuant to Section 162(m). Notwithstanding
satisfaction of any completion of any Qualifying Performance Criteria, to the
extent specified at the time of grant of an Award to “covered employees” within
the meaning of Section 162(m) of the Code, the number of Shares, Options or
other benefits granted, issued, retainable and/or vested under an Award on
account of satisfaction of such Qualifying Performance Criteria may be reduced
by the Committee on the basis of such further considerations as the Committee in
its sole discretion shall determine.     (e)   Tax Withholding Obligation. As a
condition of the grant, issuance, vesting, exercise or settlement of an Award
granted under the Plan, the Participant shall make such arrangements as the
Administrator may require for the satisfaction of any applicable federal, state,
local or foreign withholding tax obligations that may arise in connection with
such grant, issuance, vesting, exercise or settlement of the Award. The Company
shall not be required to issue any Shares under the Plan until such obligations
are satisfied.     (f)   Compliance with Section 409A. Notwithstanding anything
to the contrary contained herein, to the extent that the Administrator
determines that any Award granted under the Plan is subject to Code Section 409A
and unless otherwise specified in the applicable Award Agreement, the Award
Agreement evidencing such Award shall incorporate the terms and conditions
necessary for such Award to avoid the consequences described in Code
Section 409A(a)(1), and to the maximum extent permitted under Applicable Law
(and unless otherwise stated in the applicable Award Agreement), the Plan and
the Award Agreements shall be interpreted in a manner that results in their
conforming to the requirements of Code Section 409A(a)(2), (3) and (4) and any
Department of Treasury or Internal Revenue Service regulations or other
interpretive guidance issued under Section 409A (whenever issued, the
“Guidance”). Notwithstanding anything to the contrary in this Plan (and unless
the Award Agreement provides otherwise, with specific reference to this
sentence), to the extent that a Participant holding an Award that constitutes
“deferred compensation” under Section 409A and the Guidance is a “specified
employee” (also as defined thereunder), no distribution or payment of any amount
shall be made before a date that is six (6) months following the date of such
Participant’s “separation from service” (as defined in Section 409A and the
Guidance) or, if earlier, the date of the Participant’s death.

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  (g)   Deferral of Award Benefits. The Administrator may in its discretion and
upon such terms and conditions as it determines appropriate permit one or more
Participants whom it selects to (a) defer compensation payable pursuant to the
terms of an Award, or (b) defer compensation arising outside the terms of this
Plan pursuant to a program that provides for deferred payment in satisfaction of
such other compensation amounts through the issuance of one or more Awards. Any
such deferral arrangement shall be evidenced by an Award Agreement in such form
as the Administrator shall from time to time establish, and no such deferral
arrangement shall be a valid and binding obligation unless evidenced by a fully
executed Award Agreement, the form of which the Administrator has approved,
including through the Administrator’s establishing a written program (the
“Program”) under this Plan to govern the form of Award Agreements participating
in such Program. Any such Award Agreement or Program shall specify the treatment
of dividends or dividend equivalent rights (if any) that apply to Awards
governed thereby, and shall further provide that any elections governing payment
of amounts pursuant to such Program shall be in writing, shall be delivered to
the Company or its agent in a form and manner that complies with Code
Section 409A and the Guidance, and shall specify the amount to be distributed in
settlement of the deferral arrangement, as well as the time and form of such
distribution in a manner that complies with Code Section 409A and the Guidance.

14. Adjustments upon Changes in Capitalization, Dissolution or Change in
Control.

  (a)   Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Award, the number of shares of Common Stock which have been
authorized for issuance under the Plan, but as to which no Awards have yet been
granted or which have been returned to the Plan upon cancellation, forfeiture or
expiration of an Award, the price per Share subject to each such outstanding
Award, the number of Shares issuable pursuant to Automatic Director Options and
the share limits set forth in Section 3 and shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Award.  
  (b)   Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Participant as

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      soon as practicable prior to the effective date of such proposed
transaction. To the extent it has not been previously exercised or the Shares
subject thereto issued to the Awardee and unless otherwise determined by the
Administrator, an Award will terminate immediately prior to the consummation of
such proposed transaction.     (c)   Change in Control. In the event there is a
Change in Control of the Company, as determined by the Board or a Committee, the
Board or Committee may, in its discretion, (i) provide for the assumption or
substitution of, or adjustment (including to the number and type of Shares and
exercise or purchase price applicable) to, each outstanding Award;
(ii) accelerate the vesting of Options and terminate any restrictions on Stock
Awards and/or (iii) provide for termination of Awards as a result of the Change
in Control on such terms and conditions as it deems appropriate, including
providing for the cancellation of Awards for a cash or other payment to the
Participant.         For purposes of this Section 14(c), an Award shall be
considered assumed, without limitation, if, at the time of issuance of the stock
or other consideration upon a Change in Control, as the case may be, each holder
of an Award would be entitled to receive upon exercise of the Award the same
number and kind of shares of stock or the same amount of property, cash or
securities as such holder would have been entitled to receive upon the
occurrence of the transaction if the holder had been, immediately prior to such
transaction, the holder of the number of Shares covered by the Award at such
time (after giving effect to any adjustments in the number of Shares covered by
the Award as provided for in Section 14(c)); provided that if such consideration
received in the transaction is not solely common stock of the successor
corporation, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received upon exercise of the
Award to be solely common stock of the successor corporation equal to the Fair
Market Value of the per Share consideration received by holders of Common Stock
in the transaction.

15. Amendment and Termination of the Plan.

  (a)   Amendment and Termination. The Administrator may amend, alter or
discontinue the Plan or any Award Agreement, but any such amendment shall be
subject to approval of the stockholders of the Company in the manner and to the
extent required by Applicable Law. In addition, without limiting the foregoing,
unless approved by the stockholders of the Company, no such amendment shall be
made that would:

  (i)   materially increase the maximum number of Shares for which Awards may be
granted under the Plan, other than an increase pursuant to Section 14 of the
Plan;     (ii)   reduce the minimum exercise price at which Options may be
granted under the Plan;

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  (iii)   result in a repricing of Options by (x) reducing the exercise price of
outstanding Options or (y) canceling an outstanding Option held by an Awardee
and re-granting to the Awardee a new Option with a lower exercise price, in
either case other than in connection with a change in the Company’s
capitalization pursuant to Section 14 of the Plan; or     (iv)   change the
class of persons eligible to receive Awards under the Plan.

  (b)   Effect of Amendment or Termination. No amendment, suspension or
termination of the Plan shall impair the rights of any Award, unless mutually
agreed otherwise between the Participant and the Administrator, which agreement
must be in writing and signed by the Participant and the Company; provided
further that the Administrator may amend an outstanding Award in order to
conform it to the Administrator’s intent (in its sole discretion) that such
Award not be subject to Code Section 409A(a)(1)(B). Termination of the Plan
shall not affect the Administrator’s ability to exercise the powers granted to
it hereunder with respect to Awards granted under the Plan prior to the date of
such termination.     (c)   Effect of the Plan on Other Arrangements. Neither
the adoption of the Plan by the Board or a Committee nor the submission of the
Plan to the stockholders of the Company for approval shall be construed as
creating any limitations on the power of the Board or any Committee to adopt
such other incentive arrangements as it or they may deem desirable, including
without limitation, the granting of restricted stock or stock options otherwise
than under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases. The value of Awards granted pursuant to the
Plan will not be included as compensation, earnings, salaries or other similar
terms used when calculating an Awardee’s benefits under any employee benefit
plan sponsored by the Company or any Subsidiary except as such plan otherwise
expressly provides.

16. Designation of Beneficiary.

  (a)   An Awardee may file a written designation of a beneficiary who is to
receive the Awardee’s rights pursuant to Awardee’s Award or the Awardee may
include his or her Awards in an omnibus beneficiary designation for all benefits
under the Plan. To the extent that Awardee has completed a designation of
beneficiary while employed with the Company, such beneficiary designation shall
remain in effect with respect to any Award hereunder until changed by the
Awardee to the extent enforceable under Applicable Law.     (b)   Such
designation of beneficiary may be changed by the Awardee at any time by written
notice. In the event of the death of an Awardee and in the absence of a
beneficiary validly designated under the Plan who is living at the time of such
Awardee’s death, the Company shall allow the executor or administrator of the
estate of the Awardee to exercise the Award, or if no such executor or
administrator has been appointed (to the knowledge of the Company), the Company,
in its discretion, may allow the spouse or one or more dependents or

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      relatives of the Awardee to exercise the Award to the extent permissible
under Applicable Law or if no spouse, dependent or relative is known to the
Company, then to such other person as the Company may designate.

17. No Right to Awards or to Employment.
     No person shall have any claim or right to be granted an Award and the
grant of any Award shall not be construed as giving an Awardee the right to
continue in the employ or service of the Company or its Affiliates. Further, the
Company and its Affiliates expressly reserve the right, at any time, to dismiss
any Employee, Consultant or Awardee at any time without liability or any claim
under the Plan, except as provided herein or in any Award Agreement entered into
hereunder.
18. Legal Compliance.
     Subject to Section 22, shares shall not be issued pursuant to the exercise
of an Option or Stock Award unless the exercise of such Option or Stock Award
and the issuance and delivery of such Shares shall comply with Applicable Laws
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
19. Reservation of Shares.
     The Company, during the term of this Plan, will at all times reserve and
keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
20. Notice.
     Any written notice to the Company required by any provisions of this Plan
shall be addressed to the Secretary of the Company and shall be effective when
received.
21. Governing Law; Interpretation of Plan and Awards.
(a) This Plan and all determinations made and actions taken pursuant hereto
shall be governed by the substantive laws, but not the choice of law rules, of
the state of Delaware.
(b) In the event that any provision of the Plan or any Award granted under the
Plan is declared to be illegal, invalid or otherwise unenforceable by a court of
competent jurisdiction, such provision shall be reformed, if possible, to the
extent necessary to render it legal, valid and enforceable, or otherwise
deleted, and the remainder of the terms of the Plan and/or Award shall not be
affected except to the extent necessary to reform or delete such illegal,
invalid or unenforceable provision.
(c) The headings preceding the text of the sections hereof are inserted solely
for convenience of reference, and shall not constitute a part of the Plan, nor
shall they affect its meaning, construction or effect.

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(d) The terms of the Plan and any Award shall inure to the benefit of and be
binding upon the parties hereto and their respective permitted heirs,
beneficiaries, successors and assigns.
(e) All questions arising under the Plan or under any Award shall be decided by
the Administrator in its total and absolute discretion. In the event the
Participant believes that a decision by the Administrator with respect to such
person was arbitrary or capricious, the Participant may request arbitration with
respect to such decision. The review by the arbitrator shall be limited to
determining whether the Administrator’s decision was arbitrary or capricious.
This arbitration shall be the sole and exclusive review permitted of the
Administrator’s decision, and the Awardee shall as a condition to the receipt of
an Award be deemed to explicitly waive any right to judicial review.
(f) Notice of demand for arbitration shall be made in writing to the
Administrator within thirty (30) days after the applicable decision by the
Administrator. The arbitrator shall be selected from amongst those members of
the Board who are neither Administrators nor Employees. If there are no such
members of the Board, the arbitrator shall be selected by the Board. The
arbitrator shall be an individual who is an attorney licensed to practice law in
the State of Delaware. Such arbitrator shall be neutral within the meaning of
the Commercial Rules of Dispute Resolution of the American Arbitration
Association; provided, however, that the arbitration shall not be administered
by the American Arbitration Association. Any challenge to the neutrality of the
arbitrator shall be resolved by the arbitrator whose decision shall be final and
conclusive. The arbitration shall be administered and conducted by the
arbitrator pursuant to the Commercial Rules of Dispute Resolution of the
American Arbitration Association. The decision of the arbitrator on the issue(s)
presented for arbitration shall be final and conclusive and may be enforced in
any court of competent jurisdiction.
22. Limitation on Liability.
     The Company and any Affiliate which is in existence or hereafter comes into
existence shall not be liable to a Participant, an Employee, an Awardee or any
other persons as to:
(a) The Non-Issuance of Shares. The non-issuance or sale of Shares (including
under Section 18 above) as to which the Company has been unable, or the
Administrator deems it infeasible, to obtain from any regulatory body having
jurisdiction the authority deemed by the Company’s counsel to be necessary to
the lawful issuance and sale of any shares hereunder; and
(b) Tax Consequences. Any tax consequence realized by any Participant, Employee,
Awardee or other person due to the receipt, vesting, exercise or settlement of
any Option or other Award granted hereunder or due to the transfer of any Shares
issued hereunder. The Participant is responsible for, and by accepting an Award
under the Plan agrees to bear, all taxes of any nature that are legally imposed
upon the Participant in connection with an Award, and the Company does not
assume, and will not be liable to any party for, any cost or liability arising
in connection with such tax liability legally imposed on the Participant. In
particular, Awards issued under the Plan may be

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characterized by the Internal Revenue Service (the “IRS”) as “deferred
compensation” under the Code resulting in additional taxes, including in some
cases interest and penalties. In the event the IRS determines that an Award
constitutes deferred compensation under the Code or challenges any good faith
characterization made by the Company or any other party of the tax treatment
applicable to an Award, the Participant will be responsible for the additional
taxes, and interest and penalties, if any, that are determined to apply if such
challenge succeeds, and the Company will not reimburse the Participant for the
amount of any additional taxes, penalties or interest that result.
(c) Forfeiture. The requirement that Participant forfeit an Award, or the
benefits received or to be received under an Award, pursuant to any Applicable
Law.
23. Unfunded Plan.
     Insofar as it provides for Awards, the Plan shall be unfunded. Although
bookkeeping accounts may be established with respect to Awardees who are granted
Stock Awards under this Plan, any such accounts will be used merely as a
bookkeeping convenience. The Company shall not be required to segregate any
assets which may at any time be represented by Awards, nor shall this Plan be
construed as providing for such segregation, nor shall the Company nor the
Administrator be deemed to be a trustee of stock or cash to be awarded under the
Plan. Any liability of the Company to any Participant with respect to an Award
shall be based solely upon any contractual obligations which may be created by
the Plan; no such obligation of the Company shall be deemed to be secured by any
pledge or other encumbrance on any property of the Company. Neither the Company
nor the Administrator shall be required to give any security or bond for the
performance of any obligation which may be created by this Plan.

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