Exhibit 10.2

 

AMGEN INC.

 

AMENDED AND RESTATED 1997 EQUITY INCENTIVE PLAN

 

Amgen Inc. has adopted this Amended and Restated 1997 Equity Incentive Plan (the
“Plan”), effective as of March 7, 2005. The Plan amends and restates in its
entirety the Amended and Restated 1997 Equity Incentive Plan, as previously
amended and restated on August 13, 2004 (the “Restatement Date”), which amended
and restated in its entirety the Tularik Inc. 1997 Equity Incentive Plan, as
amended (the “Original Plan”).

 

ARTICLE I.

 

PROVISIONS APPLICABLE TO AWARDS GRANTED

PRIOR TO RESTATEMENT DATE

 

The following provisions of this Article I shall govern awards granted under the
Plan prior to the effective time (the “Effective Time”) of the merger of Tularik
Inc., with and into Arrow Acquisition, LLC, a Delaware limited liability company
and wholly-owned subsidiary of Amgen Inc., a Delaware corporation, pursuant to
the Agreement and Plan of Merger dated as of March 28, 2004 on the Restatement
Date:

 

1. PURPOSES.

 

(a) The purpose of Article I of the Plan is to provide a means by which selected
Employees and Directors of and Consultants to the Company, and its Affiliates,
may be given an opportunity to benefit from increases in value of the stock of
the Company through the granting of (i) Incentive Stock Options, (ii)
Nonstatutory Stock Options, (iii) stock bonuses and (iv) rights to purchase
restricted stock, all as defined below.

 

(b) The Company, by means of the Plan, seeks to retain the services of persons
who are now Employees or Directors of or Consultants to the Company or its
Affiliates, to secure and retain the services of new Employees, Directors and
Consultants and to provide incentives for such persons to exert maximum efforts
for the success of the Company and its Affiliates.

 

(c) The Company intends that the Stock Awards issued under the Plan shall, in
the discretion of the Board or any Committee to which responsibility for
administration of the Plan has been delegated pursuant to Article I, subsection
3(c), be either (i) Options granted pursuant to Article I, Section 6, including
Incentive Stock Options and Nonstatutory Stock Options or (ii) stock bonuses or
rights to purchase restricted stock granted pursuant to Article I, Section 7.
All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and in such form as issued
pursuant to Article I, Section 6, and a separate certificate or certificates
will be issued for shares purchased on exercise of each type of Option.

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2. DEFINITIONS.

 

(a) “Affiliate” means (i) any parent corporation or subsidiary corporation of
the Company, as those terms are defined in Sections 424(e) and (f),
respectively, of the Code, or (ii) any domestic eligible entity that is
disregarded under Treasury Regulation Section 301.7701-3, as an entity separate
from either (I) the Company or (II) any parent corporation or subsidiary
corporation of the Company, as those terms are defined in Sections 424(e) and
(f), respectively, of the Code.

 

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

 

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

 

(d) “Committee” means a Committee appointed by the Board in accordance with
Article I, subsection 3(c).

 

(e) “Company” means Amgen Inc., a Delaware corporation.

 

(f) “Consultant” means any person, including an advisor, engaged by the Company
or an Affiliate to render consulting services and who is compensated for such
services, provided that the term “Consultant” shall not include Directors who
are paid only a director’s fee by the Company or who are not compensated by the
Company for their services as Directors.

 

(g) “Continuous Status as an Employee, Director or Consultant” means that the
service of an individual to the Company, whether as an Employee, Director or
Consultant, is not interrupted or terminated. The Board or the chief executive
officer of the Company may determine, in that party’s sole discretion, whether
Continuous Status as an Employee, Director or Consultant shall be considered
interrupted in the case of: (i) any leave of absence approved by the Board or
the chief executive officer of the Company, including sick leave, military
leave, or any other personal leave; or (ii) transfers between the Company,
Affiliates or their successors.

 

(h) “Covered Employee” means the chief executive officer and the four (4) other
highest compensated officers of the Company for whom total compensation is
required to be reported to stockholders under the Exchange Act, as determined
for purposes of Section 162(m) of the Code.

 

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

 

(j) “Employee” means any person, including Officers and Directors, employed by
the Company or any Affiliate of the Company. Neither service as a Director nor
payment of a director’s fee by the Company shall be sufficient to constitute
“employment” by the Company.

 

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

 

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(l) “Fair Market Value” means, as of any date, the value of the common stock of
the Company determined as follows (and in each case prior to the Listing Date,
in a manner consistent with Section 260.140.50 of Title 10 of the California
Code of Regulations).

 

(1) If the common stock is listed on any established stock exchange or traded on
the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value
of a share of common stock shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such exchange or market
(or the exchange or market with the greatest volume of trading in the Company’s
common stock) on the day of determination (the most recent day prior to the day
of determination, if the day of determination is not a day on which reported
sales and bids occurred), as reported in The Wall Street Journal or such other
source as the Board deems reliable.

 

(2) In the absence of such markets for the common stock, the Fair Market Value
shall be determined in good faith by the Board or any Committee to which
responsibility for administration of the Plan has been delegated pursuant to
Article I, subsection 3(c).

 

(m) “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.

 

(n) “Listing Date” means the first date upon which any security of the Company
is listed (or approved for listing) upon notice of issuance on any securities
exchange, or designated (or approved for designation) upon notice of issuance as
a national market security on an interdealer quotation system if such securities
exchange or interdealer quotation system has been certified in accordance with
the provisions of Section 25100(o) of the California Corporate Securities Law of
1968.

 

(o) “Non-Employee Director” means a Director who either (i) is not a current
Employee or Officer of the Company or its parent or subsidiary, does not receive
compensation (directly or indirectly) from the Company or its parent or
subsidiary for services rendered as a consultant or in any capacity other than
as a Director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(“Regulation S-K”)), does not possess an interest in any other transaction as to
which disclosure would be required under Item 404(a) of Regulation S-K, and is
not engaged in a business relationship as to which disclosure would be required
under Item 404(b) of Regulation S-K; or (ii) is otherwise considered a
“non-employee director” for purposes of Rule 16b-3.

 

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

 

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(q) “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.

 

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

 

(s) “Option Agreement” means a written agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. Each
Option Agreement shall be subject to the terms and conditions of the Plan.

 

(t) “Optionee” means a person to whom an Option is granted pursuant to the Plan
or, if applicable, such other person who holds an outstanding Option.

 

(u) “Outside Director” means a Director who either (i) is not a current employee
of the Company or an “affiliated corporation” (within the meaning of the
Treasury regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an “affiliated corporation” receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an “affiliated corporation”
at any time, and is not currently receiving direct or indirect remuneration from
the Company or an “affiliated corporation” for services in any capacity other
than as a Director or (ii) is otherwise considered an “outside director” for
purposes of Section 162(m) of the Code.

 

(v) “Plan” means this Amended and Restated 1997 Equity Incentive Plan.

 

(w) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule
16b-3, as in effect with respect to the Company at the time discretion is being
exercised regarding the Plan.

 

(x) “Securities Act” means the Securities Act of 1933, as amended.

 

(y) “Stock Award” means any right granted under the Plan, including any Option,
any stock bonus and any right to purchase restricted stock.

 

(z) “Stock Award Agreement” means a written agreement between the Company and a
holder of a Stock Award evidencing the terms and conditions of an individual
Stock Award grant. Each Stock Award Agreement shall be subject to the terms and
conditions of the Plan.

 

3. ADMINISTRATION.

 

(a) The Plan shall be administered by the Board unless and until the Board
delegates administration to a Committee, as provided in Article I, subsection
3(c).

 

(b) The Board shall have the power, subject to, and within the limitations of,
the express provisions of the Plan:

 

(1) To construe and interpret the Plan and Stock Awards granted under it, and to
establish, amend and revoke rules and regulations for its administration. The
Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Stock Award Agreement, in a manner and to
the extent it shall deem necessary or expedient to make the Plan fully
effective.

 

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(2) To amend a Stock Award as provided in Article I, Section 14.

 

(3) Generally, to exercise such powers and to perform such acts as the Board
deems necessary or expedient to promote the best interests of the Company which
are not in conflict with the provisions of the Plan.

 

(c) The Board may delegate administration of the Plan to a committee composed of
not fewer than two (2) members of the Board (the “Committee”). One or more of
these members may be Non-employee Directors and Outside Directors. If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of Article I of the Plan, as may be adopted from time to time by the
Board. Notwithstanding anything else in this Article I, subsection 3(c) to the
contrary, at any time the Board or the Committee may delegate to a committee of
one or more members of the Board the authority to amend Options to all
Employees, Directors or Consultants or any portion or class thereof.

 

4. SHARES SUBJECT TO THE PLAN.

 

(a) Subject to the provisions of Article I, Section 12 relating to adjustments
upon changes in stock, shares of common stock of the Company shall be available
for issuance under the Plan.

 

(b) If any Stock Award shall for any reason expire or otherwise terminate, in
whole or in part, without having been exercised in full, the stock not acquired
under such Stock Award shall revert to and again become available for issuance
under Article II of the Plan.

 

(c) For purposes of Article I, Section 4(a), except as to forfeited shares, the
payment of cash dividends and dividend equivalents in conjunction with
outstanding awards shall not be counted against the shares available for
issuance.

 

5. ELIGIBILITY.

 

(a) Incentive Stock Options may be granted only to Employees. Stock Awards other
than Incentive Stock Options may be granted only to Employees, Directors or
Consultants.

 

(b) Prior to the Listing Date no person shall be eligible for the grant of an
Option or an award to purchase restricted stock if, at the time of grant, such
person owns (or is deemed to own pursuant to Section 424(d) of the Code) stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any of its Affiliates unless the exercise
price of such Option is at least one hundred ten percent (110%) of the Fair
Market Value of such stock at the date of grant and the Option is not
exercisable after

 

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the expiration of five (5) years from the date of grant or, in the case of a
restricted stock purchase award, the purchase price is at least one hundred
percent (100%) of the Fair Market Value of such stock at the date of grant.
After the Listing Date this provision shall apply only to Incentive Stock
Options.

 

(c) Subject to the provisions of Article I, Section 12 relating to adjustments
upon changes in stock, no person shall be eligible to be granted Options
covering more than one million (1,000,000) shares of the Company’s common stock
in any calendar year. This Article I, subsection 5(c) shall not apply prior to
the Listing Date and, following the Listing Date, shall not apply until (i) the
earliest of: (A) the first material modification of the Plan (including any
increase to the number of shares reserved for issuance under the Plan in
accordance with Article I, Section 4); (B) the issuance of all of the shares of
common stock reserved for issuance under the Plan; (C) the expiration of the
Plan; or (D) the first meeting of stockholders at which directors are to be
elected that occurs after the close of the third calendar year following the
calendar year in which occurred the first registration of an equity security
under Section 12 of the Exchange Act or (ii) such other date required by Section
162(m) of the Code and the rules and regulations promulgated thereunder.

 

6. OPTION PROVISIONS.

 

Each Option shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate. The provisions of separate Options need not be
identical, but each Option shall include (through incorporation of provisions
hereof by reference in the Option or otherwise) the substance of each of the
following provisions:

 

(a) Term. No Option shall be exercisable after the expiration of ten (10) years
from the date it was granted.

 

(b) Price. The exercise price of each Incentive Stock Option shall be not less
than one hundred percent (100%) of the Fair Market Value of the stock subject to
the Option on the date the Option is granted; the exercise price of each
Nonstatutory Stock Option shall be not less than eighty-five percent (85%) of
the Fair Market Value of the stock subject to the Option on the date the Option
is granted. Notwithstanding the foregoing, an Option (whether an Incentive Stock
Option or a Nonstatutory Stock Option) may be granted with an exercise price
lower than that set forth in the preceding sentence if such Option is granted
pursuant to an assumption or substitution for another option in a manner
satisfying the provisions of Section 424(a) of the Code.

 

(c) Consideration. The purchase price of stock acquired pursuant to an Option
shall be paid, to the extent permitted by applicable statutes and regulations,
either (i) in cash at the time the Option is exercised or (ii) at the discretion
of the Board or the Committee, at the time of the grant of the Option, (A) by
delivery to the Company of shares of common stock of the Company that have been
held for the period required to avoid a charge to the Company’s

 

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reported earnings and valued at the fair market value on the date of exercise,
(B) according to a deferred payment or other arrangement (however, in the event
the Company reincorporates in Delaware, then payment of the common stock’s “par
value” (as defined in the Delaware General Corporation Law) shall not be made by
deferred payment) with the person to whom the Option is granted or to whom the
Option is transferred pursuant to Article I, subsection 6(d), or (C) in any
other form of legal consideration that may be acceptable to the Board or the
Committee in their discretion; including but not limited to payment of the
purchase price pursuant to a program developed under Regulation T as promulgated
by the Federal Reserve Board which results in the receipt of cash (or a check)
by the Company before stock is issued or the receipt of irrevocable instruction
to pay the aggregate exercise price to the Company from the sales proceeds
before stock is issued.

 

In the case of any deferred payment arrangement, interest shall be payable at
least annually and shall be charged at no less than the minimum rate of interest
necessary to avoid the treatment as interest, under any applicable provisions of
the Code, of any amounts other than amounts stated to be interest under the
deferred payment arrangement.

 

(d) Transferability. Prior to the Listing Date, an Option shall not be
transferable except by will or by the laws of descent and distribution and shall
be exercisable during the lifetime of the person to whom the Option is granted
only by such person. A Nonstatutory Stock Option, but not an Incentive Stock
Option, that is granted after the Listing Date may be transferable to the extent
provided in the Option Agreement. The person to whom the Option is granted may,
by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionee,
shall thereafter be entitled to exercise the Option.

 

(e) Vesting. The total number of shares of stock subject to an Option may, but
need not, be allotted in periodic installments (which may, but need not, be
equal). The Option Agreement may provide that, from time to time during each of
such installment periods, the Option may become exercisable (“vest”) with
respect to some or all of the shares allotted to that period and may be
exercised with respect to some or all of the shares allotted to such period
and/or any prior period as to which the Option became vested but was not fully
exercised. The Option may be subject to such other terms and conditions on the
time or times when it may be exercised (which may be based on performance or
other criteria) as the Board may deem appropriate. Prior to the Listing Date,
the vesting provisions of individual Options may vary but in each case will
provide for vesting of at least twenty percent (20%) per year of the total
number of shares subject to the Option; provided, however, that an Option
granted to an officer, director or consultant (within the meaning of Section
260.140.41 of Title 10 of the California Code of Regulations) may become fully
exercisable, subject to reasonable conditions such as continued employment, at
any time or during any period established by the Company or of any of its
Affiliates. The provisions of this Article I, subsection 6(e) are subject to any
Option provisions governing the minimum number of shares as to which an Option
may be exercised.

 

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(f) Termination of Employment or Relationship as a Director or Consultant. In
the event an Optionee’s Continuous Status as an Employee, Director or Consultant
terminates (other than upon the Optionee’s death or disability), the Optionee
may exercise the Option (to the extent that the Optionee was entitled to
exercise it as of the date of termination) but only within such period of time
ending on the earlier of (i) the date three (3) months following the termination
of the Optionee’s Continuous Status as an Employee, Director or Consultant (or
such longer or shorter period, which shall not be less than thirty (30) days
unless such termination is for cause, specified in the Option Agreement) or (ii)
the expiration of the term of the Option as set forth in the Option Agreement.
If, at the date of termination, the Optionee is not entitled to exercise the
entire Option, the shares covered by the unexercisable portion of the Option
shall revert to and again become available for issuance under the Plan. If,
after termination, the Optionee does not exercise the Option within the time
specified in the Option Agreement, the Option shall terminate and the shares
covered by such Option shall revert to and again become available for issuance
under the Plan.

 

An Optionee’s Option Agreement may also provide that if the exercise of the
Option following the termination of the Optionee’s Continuous Status as an
Employee, Director, or Consultant (other than upon the Optionee’s death or
disability) would result in liability under Section 16(b) of the Exchange Act,
then the Option shall terminate on the earlier of (i) the expiration of the term
of the Option set forth in the Option Agreement or (ii) the tenth (10th) day
after the last date on which such exercise would result in such liability under
Section 16(b) of the Exchange Act. Finally, an Optionee’s Option Agreement may
also provide that if the exercise of the Option following the termination of the
Optionee’s Continuous Status as an Employee, Director or Consultant (other than
upon the Optionee’s death or disability) would be prohibited at any time solely
because the issuance of shares would violate the registration requirements under
the Securities Act, then the Option shall terminate on the earlier of (i) the
expiration of the term of the Option set forth in the first paragraph of this
Article I, subsection 6(f) or (ii) the expiration of a period of three (3)
months after the termination of the Optionee’s Continuous Status as an Employee,
Director or Consultant during which the exercise of the Option would not be in
violation of such registration requirements.

 

Notwithstanding the foregoing or anything in the Plan or any Stock Award
Agreement to the contrary but subject to Sections 13(d) and (e), the Board, in
its sole discretion, may provide, by Board action or otherwise, an Optionee with
the right to continue to vest in an Option for a certain period of time
following the date the Optionee’s Continuous Status as an Employee, Director or
Consultant terminates (“Continued Vesting Period”), as determined by the Board,
and to exercise such Option during such Continued Vesting Period and for a
certain

 

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period of time following such Continued Vesting Period, as determined by the
Board; provided, however, that no Option may be exercised after the expiration
of the term of the Option as set forth in the Option Agreement.

 

(g) Disability of Optionee. In the event an Optionee’s Continuous Status as an
Employee, Director or Consultant terminates as a result of the Optionee’s
disability, the Optionee may exercise the Option (to the extent that the
Optionee was entitled to exercise it as of the date of termination), but only
within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period, which prior
to the Listing Date shall not be less than six (6) months, specified in the
Option Agreement) or (ii) the expiration of the term of the Option as set forth
in the Option Agreement. If, at the date of termination, the Optionee is not
entitled to exercise the entire Option, the shares covered by the unexercisable
portion of the Option shall revert to and again become available for issuance
under the Plan. If, after termination, the Optionee does not exercise the Option
within the time specified herein, the Option shall terminate, and the shares
covered by such Option shall revert to and again become available for issuance
under the Plan.

 

(h) Death of Optionee. In the event of the death of an Optionee during, or
within a period specified in the Option Agreement after the termination of, the
Optionee’s Continuous Status as an Employee, Director or Consultant, the Option
may be exercised (to the extent the Optionee was entitled to exercise the Option
as of the date of death) by the Optionee’s estate, by a person who acquired the
right to exercise the Option by bequest or inheritance or by a person designated
to exercise the option upon the Optionee’s death pursuant to Article I,
subsection 6(d), but only within the period ending on the earlier of (i) the
date eighteen (18) months following the date of death (or such longer or shorter
period, which prior to the Listing Date shall not be less than six (6) months,
specified in the Option Agreement) or (ii) the expiration of the term of such
Option as set forth in the Option Agreement. If, at the time of death, the
Optionee was not entitled to exercise the entire Option, the shares covered by
the unexercisable portion of the Option shall revert to and again become
available for issuance under the Plan. If, after death, the Option is not
exercised within the time specified herein, the Option shall terminate, and the
shares covered by such Option shall revert to and again become available for
issuance under the Plan.

 

(i) Early Exercise. The Option may, but need not, include a provision whereby
the Optionee may elect at any time while an Employee, Director or Consultant to
exercise the Option as to any part or all of the shares subject to the Option
prior to the full vesting of the Option. Any unvested shares so purchased may be
subject to a repurchase right in favor of the Company or to any other
restriction the Board determines to be appropriate. Prior to the Listing Date,
however, any unvested shares so purchased shall be subject to a repurchase right
in favor of the Company, with the repurchase price to be equal to the original
purchase

 

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price of the stock, or to any other restriction the Board determines to be
appropriate; provided, however, that (i) the right to repurchase at the original
purchase price shall lapse at a minimum rate of twenty percent (20%) per year
over five (5) years from the date the Option was granted, (ii) such right shall
be exercisable only within (A) the ninety (90) day period following the
termination of employment or the relationship as a Director or Consultant, or
(B) such longer period as may be agreed to by the Company and the Optionee (for
example, for purposes of satisfying the requirements of Section 1202(c)(3) of
the Code (regarding “qualified small business stock”)) and (iii) such right
shall be exercisable only for cash or cancellation of purchase money
indebtedness for the shares. Notwithstanding the foregoing, shares received on
exercise of an Option by an officer, director or consultant (within the meaning
of Section 260.140.41 of Title 10 of the California Code of Regulations) may be
subject to additional or greater restrictions.

 

(j) Right of First Refusal. The Option may, but need not, include a provision
whereby the Company may elect, prior to the Listing Date, to exercise a right of
first refusal following receipt of notice from the Optionee of the intent to
transfer all or any part of the shares exercised pursuant to the Option. Such
right of first refusal shall be exercised by the Company no more than thirty
(30) days following receipt of notice of the Optionee’s intent to transfer
shares and must be exercised as to all the shares the Optionee intends to
transfer unless the Optionee consents to exercise for less than all the shares
offered. The purchase of the shares following exercise shall be completed within
thirty (30) days of the Company’s receipt of notice of the Optionee’s intent to
transfer shares, or such longer period of time as has been offered by the person
to whom the Optionee intends to transfer the shares, or as may be agreed to by
the Company and the Optionee (for example, for purposes of satisfying the
requirements of Section 1202(c)(3) of the Code (regarding “qualified small
business stock”)).

 

(k) Re-Load Options. Without in any way limiting the authority of the Board or
Committee to make or not to make grants of Options hereunder, the Board or
Committee shall have the authority (but not an obligation) to include as part of
any Option Agreement a provision entitling the Optionee to a further Option (a
“Re-Load Option”) in the event the Optionee exercises the Option evidenced by
the Option Agreement, in whole or in part, by surrendering other shares of
common stock in accordance with the Plan and the terms and conditions of the
Option Agreement. Any such Re-Load Option: (i) shall be for a number of shares
equal to the number of shares surrendered as part or all of the exercise price
of such Option; (ii) shall have an expiration date which is the same as the
expiration date of the Option the exercise of which gave rise to such Re-Load
Option; and (iii) shall have an exercise price which is equal to one hundred
percent (100%) of the Fair Market Value of the common stock subject to the
Re-Load Option on the date of exercise of the original Option. Notwithstanding
the foregoing, a Re-Load Option which is granted to a 10% stockholder (as
described in Article I, subsection 5(b)), shall have an

 

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exercise price which is equal to one hundred ten percent (110%) of the Fair
Market Value of the stock subject to the Re-Load Option on the date of exercise
of the original Option and shall have a term which is no longer than five (5)
years.

 

Any such Re-Load Option may be an Incentive Stock Option or a Nonstatutory Stock
Option, as the Board or Committee may designate at the time of the grant of the
original Option; provided, however, that the designation of any Re-Load Option
as an Incentive Stock Option shall be subject to the one hundred thousand dollar
($100,000) annual limitation on exercisability of Incentive Stock Options
described in Article I, subsection 11(e) and in Section 422(d) of the Code.
There shall be no Re-Load Options on a Re-Load Option. Any such Re-Load Option
shall be subject to the availability of sufficient shares under Article I,
subsection 4(a) and the limits on the grants of Options under Article I,
subsection 5(c) and shall be subject to such other terms and conditions as the
Board or Committee may determine which are not inconsistent with the express
provisions of the Plan regarding the terms of Options.

 

7. TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.

 

Each stock bonus or restricted stock purchase agreement shall be in such form
and shall contain such terms and conditions as the Board or the Committee shall
deem appropriate. The terms and conditions of stock bonus or restricted stock
purchase agreements may change from time to time, and the terms and conditions
of separate agreements need not be identical, but each stock bonus or restricted
stock purchase agreement shall include (through incorporation of provisions
hereof by reference in the agreement or otherwise) the substance of each of the
following provisions as appropriate:

 

(a) Purchase Price. The purchase price under each restricted stock purchase
agreement shall be such amount as the Board or Committee shall determine and
designate in such Stock Award Agreement, but prior to the Listing Date the
purchase price shall not be less than eighty-five percent (85%), and after the
Listing Date the purchase price shall not be less than fifty percent (50%), of
the stock’s Fair Market Value on the date such award is made. Notwithstanding
the foregoing, the Board or the Committee may determine that eligible
participants in the Plan may be awarded stock pursuant to a stock bonus
agreement in consideration for past services actually rendered to the Company or
for its benefit.

 

(b) Transferability. Rights under a stock bonus or restricted stock purchase
agreement shall be transferable only by will or the laws of descent and
distribution, so long as stock awarded under such Stock Award Agreement remains
subject to the terms of the agreement.

 

(c) Consideration. The purchase price of stock acquired pursuant to a stock
purchase agreement shall be paid either: (i) in cash at the time of purchase;
(ii) at the discretion of the Board or the Committee, according to a deferred
payment or other arrangement (however,

 

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in the event the Company reincorporates in Delaware, then payment of the common
stock’s “par value” (as defined in the Delaware General Corporation Law) shall
not be made by deferred payment) with the person to whom the stock is sold; or
(iii) in any other form of legal consideration that may be acceptable to the
Board or the Committee in their discretion; including but not limited to payment
of the purchase price pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board which results in the receipt of cash
(or a check) by the Company before stock is issued or the receipt of irrevocable
instruction to pay the aggregate exercise price of the Company from the sales
proceeds before stock is issued. Notwithstanding the foregoing, the Board or the
Committee to which administration of the Plan has been delegated may award stock
pursuant to a stock bonus agreement in consideration for past services actually
rendered to the Company or for its benefit.

 

(d) Vesting. Shares of stock sold or awarded under the Plan may, but need not,
be subject to a repurchase option in favor of the Company in accordance with a
vesting schedule to be determined by the Board or the Committee. Prior to the
Listing Date, the applicable agreement shall provide (i) that the right to
repurchase at the original purchase price shall lapse at a minimum rate of
twenty percent (20%) per year over five (5) years from the date the Stock Award
was granted (except that a Stock Award granted to an officer, director or
consultant (within the meaning of Section 260.140.41 of Title 10 of the
California Code of Regulations) may become fully vested, subject to reasonable
conditions such as continued employment, at any time or during any period
established by the Company or of any of its Affiliates), (ii) such right shall
be exercisable only (A) within the ninety (90) day period following the
termination of employment or the relationship as a Director or Consultant, or
(B) such longer period as may be agreed to by the Company and the holder of the
Stock Award (for example, for purposes of satisfying the requirements of Section
1202(c)(3) of the Code (regarding “qualified small business stock”)) and (iii)
such right shall be exercisable only for cash or cancellation of purchase money
indebtedness for the shares.

 

(e) Termination of Employment or Relationship as a Director or Consultant. In
the event a Participant’s Continuous Status as an Employee, Director or
Consultant terminates, the Company may repurchase or otherwise reacquire,
subject to the limitations described in Article I, subsection 7(d), any or all
of the shares of stock held by that person which have not vested as of the date
of termination under the terms of the stock bonus or restricted stock purchase
agreement between the Company and such person.

 

8. [RESERVED.]

 

9. COVENANTS OF THE COMPANY.

 

(a) During the terms of the Stock Awards, the Company shall keep available at
all times the number of shares of stock required to satisfy such Stock Awards.

 

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(b) The Company shall seek to obtain from each regulatory commission or agency
having jurisdiction over the Plan such authority as may be required to issue and
sell shares of stock upon exercise of the Stock Award; provided, however, that
this undertaking shall not require the Company to register under the Securities
Act either the Plan, any Stock Award or any stock issued or issuable pursuant to
any such Stock Award. If, after reasonable efforts, the Company is unable to
obtain from any such regulatory commission or agency the authority which counsel
for the Company deems necessary for the lawful issuance and sale of stock under
the Plan, the Company shall be relieved from any liability for failure to issue
and sell stock upon exercise of such Stock Awards unless and until such
authority is obtained.

 

10. USE OF PROCEEDS FROM STOCK.

 

Proceeds from the sale of stock pursuant to Stock Awards shall constitute
general funds of the Company.

 

11. MISCELLANEOUS.

 

(a) Subject to any applicable provisions of the California Corporate Securities
Law of 1968 and related regulations relied upon prior to the Listing Date as a
condition of issuing securities pursuant to the Plan, the Board shall have the
power to accelerate the time at which a Stock Award may first be exercised or
the time during which a Stock Award or any part thereof will vest pursuant to
Article I, subsection 6(e) or 7(d), notwithstanding the provisions in the Stock
Award stating the time at which it may first be exercised or the time during
which it will vest.

 

(b) Neither an Employee, Director or Consultant nor any person to whom a Stock
Award is transferred under Article I, subsection 6(d) or 7(b) shall be deemed to
be the holder of, or to have any of the rights of a holder with respect to, any
shares subject to such Stock Award unless and until such person has satisfied
all requirements for exercise of the Stock Award pursuant to its terms.

 

(c) Throughout the term of any Stock Award, the Company shall deliver to the
holder of such Stock Award, not later than one hundred twenty (120) days after
the close of each of the Company’s fiscal years during the term of such Stock
Award, a balance sheet and an income statement. This subsection shall not apply
(i) after the Listing Date or (ii) when issuance is limited to key employees
whose duties in connection with the Company assure them access to equivalent
information.

 

(d) Nothing in the Plan or any instrument executed or Stock Award granted
pursuant thereto shall confer upon any Employee, Director, Consultant or other
holder of Stock Awards any right to continue in the employ of the Company or any
Affiliate (or to continue acting as a Director or Consultant) or shall affect
the right of the Company or any Affiliate to terminate the employment of any
Employee with or without cause the right of the Company’s

 

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Board of Directors and/or the Company’s stockholders to remove any Director as
provided in the Company’s Bylaws and the provisions of the applicable laws of
the Company’s state of incorporation or the right to terminate the relationship
of any Consultant subject to the terms of such Consultant’s agreement with the
Company or Affiliate.

 

(e) To the extent that the aggregate Fair Market Value (determined at the time
of grant) of stock with respect to which Incentive Stock Options are exercisable
for the first time by any Optionee during any calendar year under all plans of
the Company and its Affiliates exceeds one hundred thousand dollars ($100,000),
the Options or portions thereof which exceed such limit (according to the order
in which they were granted) shall be treated as Nonstatutory Stock Options.

 

(f) The Company may require any person to whom a Stock Award is granted, or any
person to whom a Stock Award is transferred pursuant to Article I, subsection
6(d) or 7(b), as a condition of exercising or acquiring stock under any Stock
Award: (1) to give written assurances satisfactory to the Company as to such
person’s knowledge and experience in financial and business matters and/or to
employ a purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters, and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (2) to
give written assurances satisfactory to the Company stating that such person is
acquiring the stock subject to the Stock Award for such person’s own account and
not with any present intention of selling or otherwise distributing the stock.
The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (i) the issuance of the shares upon the
exercise or acquisition of stock under the Stock Award has been registered under
a then currently effective registration statement under the Securities Act or
(ii) as to any particular requirement, a determination is made by counsel for
the Company that such requirement need not be met in the circumstances under the
then applicable securities laws. The Company may, upon advice of counsel to the
Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer
of the stock.

 

(g) To the extent provided by the terms of a Stock Award Agreement, the person
to whom a Stock Award is granted may satisfy any federal, state or local tax
withholding obligation relating to the exercise or acquisition of stock under a
Stock Award by any of the following means or by a combination of such means: (1)
tendering a cash payment; (2) authorizing the Company to withhold shares from
the shares of the common stock otherwise issuable to the participant as a result
of the exercise or acquisition of stock under the Stock Award having a Fair
Market Value less than or equal to the amount of the Company’s required minimum
statutory withholding; or (3) delivering to the Company owned and unencumbered
shares of the common stock of the Company having a Fair Market Value less than
or equal to the amount of the Company’s required minimum statutory withholding.

 

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12. ADJUSTMENTS UPON CHANGES IN STOCK.

 

(a) If any change is made in the stock subject to the Plan, or subject to any
Stock Award (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the
type(s) of securities subject to the Plan pursuant to Article I, subsection 4(a)
and the outstanding Stock Awards will be appropriately adjusted in the type(s)
and number of securities and price per share of stock subject to such
outstanding Stock Awards. Such adjustments shall be made by the Board or the
Committee, the determination of which shall be final, binding and conclusive.
(The conversion of any convertible securities of the Company shall not be
treated as a “transaction not involving the receipt of consideration by the
Company”.)

 

(b) In the event of: (1) a dissolution, liquidation or sale of all or
substantially all of the assets of the Company; (2) a merger or consolidation in
which the Company is not the surviving corporation; (3) a reverse merger in
which the Company is the surviving corporation but the shares of the Company’s
common stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise; (4) after the Listing Date the acquisition by any person,
entity or group within the meaning of Section 13(d) or 14(d) of the Exchange
Act, or any comparable successor provisions (excluding any employee benefit
plan, or related trust, sponsored or maintained by the Company or any Affiliate
of the Company) of the beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act, or comparable successor rule) of securities
of the Company representing at least fifty percent (50%) of the combined voting
power entitled to vote in the election of directors; or (5) at the time
individuals who, as of the first date as of which the Company has a class of
equity securities which are actively traded on any established stock exchange or
a national market system (including NASDAQ), constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board, provided that any person becoming a director subsequent to such date,
whose election or nomination for election by the Company’s stockholders was
approved by a vote of at least a majority of the directors comprising the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of Directors of the Company, as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) shall be, for purposes of the Plan, considered as though such person were a
member of the Incumbent Board, then: (i) any surviving corporation or acquiring
corporation shall assume any Stock Awards outstanding under

 

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the Plan or shall substitute similar stock awards (including an award to acquire
the same consideration paid to the stockholders in the transaction described in
this Article I, subsection 12(b)) for those outstanding under the Plan; or (ii)
in the event any surviving corporation or acquiring corporation refuses to
assume such Stock Awards or to substitute similar stock awards for those
outstanding under the Plan, (A) with respect to Stock Awards held by persons
then performing services as Employees, Directors or Consultants and subject to
any applicable provisions of the California Corporate Securities Law of 1968 and
related regulations relied upon as a condition of issuing securities pursuant to
the Plan, the vesting of such Stock Awards (and, if applicable, the time during
which such Stock Awards may be exercised) shall be accelerated prior to such
event and the Stock Awards terminated if not exercised (if applicable) after
such acceleration and at or prior to such event, and (B) with respect to any
other Stock Awards outstanding under the Plan, such Stock Awards shall be
terminated if not exercised (if applicable) prior to such event.

 

13. QUALIFIED DOMESTIC RELATIONS ORDERS.

 

(a) Anything in the Plan to the contrary notwithstanding, rights under Stock
Awards may be assigned to an Alternate Payee to the extent that a QDRO so
provides. (The terms “Alternate Payee” and “QDRO” are defined in Article I,
subsection 13(c) below.) The assignment of a Stock Award to an Alternate Payee
pursuant to a QDRO shall not be treated as having caused a new grant. The
transfer of an Incentive Stock Option to an Alternate Payee may, however, cause
it to fail to qualify as an Incentive Stock Option. If a Stock Award is assigned
to an Alternate Payee, the Alternate Payee generally has the same rights as the
grantee under the terms of the Plan; provided, however, that (i) the Stock Award
shall be subject to the same vesting terms and exercise period as if the Stock
Award were still held by the grantee, and (ii) an Alternate Payee may not
transfer a Stock Award.

 

(b) In the event of the Plan administrator’s receipt of a domestic relations
order or other notice of adverse claim by an Alternate Payee of a grantee of a
Stock Award, transfer of the proceeds of the exercise of such Stock Award,
whether in the form of cash, stock or other property, may be suspended. Such
proceeds shall thereafter be transferred pursuant to the terms of a QDRO or
other agreement between the grantee and Alternate Payee. A grantee’s ability to
exercise a Stock Award may be barred if the Plan administrator receives a court
order directing the Plan administrator not to permit exercise.

 

(c) The word “QDRO” as used in Article I of the Plan shall mean a court order
(i) that creates or recognizes the right of the spouse, former spouse or child
(an “Alternate Payee”) of an individual who is granted a Stock Award to an
interest in such Stock Award relating to marital property rights or support
obligations and (ii) that the administrator of the Plan determines would be a
“qualified domestic relations order,” as that term is defined in Section 414(p)
of the Code and Section 206(d) of the Employee Retirement Income Security Act
(“ERISA”), but for the fact that the Plan is not a plan described in Section
3(3) of ERISA.

 

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14. AMENDMENT OF STOCK AWARDS.

 

(a) Rights and obligations under any Stock Award granted before amendment of the
Plan shall not be impaired by any amendment of the Plan unless (i) the Company
requests the consent of the person to whom the Stock Award was granted and (ii)
such person consents in writing.

 

(b) The Board at any time, and from time to time, may amend the terms of any one
or more Stock Award; provided, however, that the rights and obligations under
any Stock Award shall not be impaired by any such amendment unless (i) the
Company requests the consent of the person to whom the Stock Award was granted
and (ii) such person consents in writing.

 

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ARTICLE II.

 

PROVISIONS APPLICABLE TO OPTIONS GRANTED

ON OR AFTER RESTATEMENT DATE

 

The following provisions of this Article II shall govern awards granted under
the Plan after the Effective Time:

 

1. PURPOSE.

 

(a) The purpose of Article II of the Plan is to provide a means by which
employees or directors of and consultants to Amgen Inc., a Delaware corporation
(the “Company”), and its Affiliates, as defined in Article II, subsection 1(b),
directly, or indirectly through Trusts, may be given an opportunity to benefit
from increases in value of the stock of the Company through the granting of (i)
incentive stock options, (ii) nonqualified stock options, (iii) stock bonuses,
and (iv) rights to purchase restricted stock, all as defined below.

 

(b) The word “Affiliate” as used in Article II of the Plan means (i) any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended (the “Code”), or (ii) any domestic eligible entity that is
disregarded under Treasury Regulation Section 301.7701-3, as an entity separate
from either (I) the Company or (II) any parent corporation or subsidiary
corporation of the Company, as those terms are defined in Sections 424(e) and
(f), respectively, of the Code.

 

(c) The Company, by means of Article II of the Plan, seeks to retain the
services of persons now employed by or serving as directors or consultants to
the Company, to secure and retain the services of persons capable of filling
such positions, and to provide incentives for such persons to exert maximum
efforts for the success of the Company.

 

(d) The Company intends that the rights issued under Article II of the Plan
shall, in the discretion of the Board of Directors of the Company (the “Board”)
or any committee to which responsibility for administration of the Plan has been
delegated pursuant to Article II, subsection 2(c), be either (i) stock options
granted pursuant to Article II, Sections 5 or 6 hereof, including incentive
stock options as that term is used in Section 422 of the Code (“Incentive Stock
Options”), or options which do not qualify as Incentive Stock Options
(“Nonqualified Stock Options”) (together hereinafter referred to as “Options”),
or (ii) stock bonuses or rights to purchase restricted stock granted pursuant to
Article II, Section 7 hereof (all such rights included in (i) and (ii),
collectively “Stock Awards”).

 

(e) The word “Trust” as used in Article II of the Plan shall mean a trust
created for the benefit of the employee, director or consultant, his or her
spouse, or members of their

 

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immediate family. The word optionee shall mean the person to whom the option is
granted or the employee, director or consultant for whose benefit the option is
granted to a Trust, as the context shall require.

 

2. ADMINISTRATION.

 

(a) The Plan shall be administered by the Board unless and until the Board
delegates administration to a committee, as provided in Article II, subsection
2(c).

 

(b) The Board shall have the power, subject to, and within the limitations of,
the express provisions of the Plan:

 

(1) To determine from time to time which of the persons eligible under the Plan
shall be granted Stock Awards; when and how Stock Awards shall be granted;
whether a Stock Award will be an Incentive Stock Option, a Nonqualified Stock
Option, a stock bonus, a right to purchase restricted stock, or a combination of
the foregoing; the provisions of each Stock Award granted (which need not be
identical), including the time or times when a person shall be permitted to
purchase or receive stock pursuant to a Stock Award; and the number of shares
with respect to which Stock Awards shall be granted to each such person.

 

(2) To construe and interpret the Plan and Stock Awards granted under it, and to
establish, amend and revoke rules and regulations for its administration. The
Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Stock Award, in a manner and to the extent
it shall deem necessary or expedient to make the Plan fully effective.

 

(3) To amend the Plan as provided in Article II, Section 14.

 

(4) Generally, to exercise such powers and to perform such acts as the Board
deems necessary or expedient to promote the best interests of the Company.

 

(c) The Board may delegate administration of the Plan to a committee composed of
not fewer than two (2) members of the Board (the “Committee”). One or more of
these members may be non-employee directors and outside directors, if required
and as defined by the provisions of Article II, subsections 2(e) and 2(f). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board (except amendment of any program adopted pursuant to Article II,
Section 6 or any Non-Discretionary Director Awards granted thereunder shall only
be by action taken by the Board or a committee of one or more members of the
Board to which such authority has been specifically delegated by the Board),
subject, however, to such resolutions, not inconsistent with the provisions of
Article II of the Plan, as may be adopted from time to time by the Board.
Notwithstanding anything else in this Article II, subsection 2(c) to the
contrary, at any time the Board or the Committee may delegate to a committee of
one or more members of the Board the authority to grant or amend Stock Awards to
all employees, directors or consultants or any portion or class thereof.

 

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(d) Notwithstanding anything else in the Plan to the contrary, at any time the
Board or the Committee may authorize by duly adopted resolution one or more
Officers (as defined below) (each a “Delegated Officer”) to take the actions
described in Article II, subsection 2(b)(1) of the Plan with respect to Options
only, subject to, and within the limitations of, the express provisions of
Article II of the Plan; provided, however, that a Delegated Officer shall not
have the power to (1) grant any Options to himself, any non-employee director,
consultant, Trust, other Delegated Officer or Officer, (2) determine the time or
times when a person shall be permitted to purchase stock pursuant to the
exercise of an Option (i.e., vesting), (3) determine the exercise price of an
Option, or (4) grant any Option to a parent corporation of the Company, as
defined in Section 424(e) of the Code. The resolution authorizing a Delegated
Officer to act as such shall specify the total number of shares of Common Stock
that a Delegated Officer may grant with respect to Options. The exercise price
(including any formula by which such price or prices may be determined) and the
time or times when a person shall be permitted to purchase stock pursuant to the
exercise of an Option shall, however, be set by the Board or the Committee and
not by a Delegated Officer to the extent required by Delaware General
Corporation Law Section 157 or any other applicable law. The term “Officer”
shall include any natural person who is elected as a corporate officer of the
Company by the Board.

 

(e) The term “non-employee director” shall mean a member of the Board who (i) is
not currently an officer of the Company or a parent or subsidiary of the Company
(as defined in Rule 16a-1(f) promulgated by the Securities and Exchange
Commission under Section 16 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) or an employee of the Company or a parent or subsidiary of
the Company; (ii) does not receive compensation from the Company or a parent or
subsidiary of the Company for services rendered in any capacity other than as a
member of the Board (including a consultant) in an amount required to be
disclosed to the Company’s stockholders under Rule 404 of Regulation S-K
promulgated by the Securities and Exchange Commission (“Rule 404”); (iii) does
not possess an interest in any other transaction required to be disclosed under
Rule 404; or (iv) is not engaged in a business relationship required to be
disclosed under Rule 404, as all of these provisions are interpreted by the
Securities and Exchange Commission under Rule 16b-3 promulgated under the
Exchange Act.

 

(f) The term “outside director,” as used in Article II of the Plan, shall mean
an administrator of the Plan, whether a member of the Board or of any Committee
to which responsibility for administration of the Plan has been delegated
pursuant to Article II, subsection 2(c), who is considered to be an “outside
director” in accordance with the rules, regulations or interpretations of
Section 162(m) of the Code.

 

(g) Any requirement that an administrator of the Plan be a “non-employee
director” or “outside director” shall not apply if the Board or the Committee
expressly declares that such requirement shall not apply.

 

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3. SHARES SUBJECT TO THE PLAN.

 

(a) Subject to the provisions of Article II, Section 11 relating to adjustments
upon changes in stock, the stock that may be issued pursuant to Stock Awards
granted under the Plan after the Effective Time shall not exceed in the
aggregate 1,153,152 shares of the Company’s common stock (the “Common Stock”),
plus any forfeited shares and any shares which revert to and become available
for issuance under Article II of the Plan pursuant to Article I, subsection
4(b). For purposes of this Article II, subsection 3(a), “forfeited shares” means
any shares issued pursuant to Stock Awards made under the Plan which are
forfeited to the Company pursuant to the Stock Award’s terms and conditions;
provided, however, that the term “forfeited shares” shall not include shares as
to which the original recipient received any benefits of ownership (other than
voting rights).

 

(b) If any Stock Award shall for any reason expire or otherwise terminate, in
whole or in part, without having been exercised in full, the Common Stock not
acquired under such Stock Award shall revert to and again become available for
issuance under Article II of the Plan.

 

(c) For purposes of Article II, subsection 3(a), except as to forfeited shares,
the payment of cash dividends and dividend equivalents in conjunction with
outstanding awards shall not be counted against the shares available for
issuance.

 

(d) An Incentive Stock Option may be granted to an eligible person under the
Plan only if the aggregate fair market value (determined at the time the
Incentive Stock Option is granted) of the Common Stock with respect to which
incentive stock options (as defined by the Code) are exercisable for the first
time by such optionee during any calendar year under all such plans of the
Company and its Affiliates does not exceed one hundred thousand dollars
($100,000). If it is determined that an entire Option or any portion thereof
does not qualify for treatment as an Incentive Stock Option by reason of
exceeding such maximum, such Option or the applicable portion shall be
considered a Nonqualified Stock Option. In no event, however, except as adjusted
pursuant to Article II, Section 11, shall be more than 902,006 of the shares
eligible for issuance under the Plan in any calendar year be issued upon
exercise of Incentive Stock Options under the Plan. Notwithstanding anything to
the contrary, no Incentive Stock Options shall be granted under Article II of
the Plan unless the Company’s stockholders approve the Plan within twelve months
after the Restatement Date.

 

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4. ELIGIBILITY.

 

(a) Incentive Stock Options may be granted only to employees (including
officers) of the Company or its Affiliates. A director of the Company shall not
be eligible to receive Incentive Stock Options unless such director is also an
employee of the Company or any Affiliate. Stock Awards other than Incentive
Stock Options may be granted to employees (including officers) or directors of
or consultants to the Company or any Affiliate or to Trusts of any such
employee, director or consultant. Notwithstanding any provision of the Plan to
the contrary, no Stock Award may be granted to any person who is an employee or
director of or consultant to the Company or its Affiliates (other than Tularik
Inc.) on the Restatement Date.

 

(b) A director shall in no event be eligible for the benefits of the Plan (other
than Non-Discretionary Director Awards, as defined in Article II, Section 6)
unless and until such director is expressly declared eligible to participate in
the Plan by action of the Board or the Committee, and only if, at any time
discretion is exercised by the Board or the Committee in the selection of a
director as a person to whom Stock Awards may be granted, or in the
determination of the number of shares which may be covered by Stock Awards
granted to a director, the Plan complies with the requirements of Rule 16b-3
promulgated under the Exchange Act, as from time to time in effect. The Board
shall otherwise comply with the requirements of Rule 16b-3 promulgated under the
Exchange Act, as from time to time in effect. Notwithstanding the foregoing, the
restrictions set forth in this Article II, subsection 4(b) shall not apply if
the Board or Committee expressly declares that such restrictions shall not
apply.

 

(c) No person shall be eligible for the grant of an Incentive Stock Option under
the Plan if, at the time of grant, such person owns (or is deemed to own
pursuant to Section 424(d) of the Code) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or of any of its Affiliates unless the exercise price of such Incentive Stock
Option is at least one hundred and ten percent (110%) of the fair market value
of the Common Stock at the date of grant and the Incentive Stock Option is not
exercisable after the expiration of five (5) years from the date of grant.

 

(d) Subject to the provisions of Article II, Section 11 relating to adjustments
upon changes in Common Stock, no person shall be eligible to be granted Stock
Awards covering more than 451,000 shares of Common Stock per person per calendar
year.

 

5. TERMS OF DISCRETIONARY STOCK OPTIONS.

 

An option granted pursuant to this Article II, Section 5 (a “Discretionary Stock
Option”) shall be in such form and shall contain such terms and conditions as
the Board or the Committee shall deem appropriate. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

 

(a) No Option shall be exercisable after the expiration of ten (10) years from
the date it was granted.

 

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(b) The exercise price of each Incentive Stock Option and each Nonqualified
Stock Option shall be not less than one hundred percent (100%) of the fair
market value of the Common Stock subject to the Option on the date the Option is
granted.

 

(c) The purchase price of Common Stock acquired pursuant to an Option shall be
paid, to the extent permitted by applicable statutes and regulations, either:
(i) in cash at the time the Option is exercised; or (ii) at the discretion of
the Board or the Committee, at the time of grant of the Option (A) by delivery
to the Company of shares of Common Stock that have been held for the period
required to avoid a charge to the Company’s reported earnings and valued at the
fair market value on the date of exercise, (B) according to a deferred payment
or other arrangement with the person to whom the Option is granted or to whom
the Option is transferred pursuant to Article II, subsection 5(d), or (C) in any
other form of legal consideration that may be acceptable to the Board or the
Committee in their discretion; including but not limited to payment of the
purchase price pursuant to a program developed under Regulation T as promulgated
by the Federal Reserve Board which results in the receipt of cash (or a check)
by the Company before Common Stock is issued or the receipt of irrevocable
instruction to pay the aggregate exercise price to the Company from the sales
proceeds before Common Stock is issued.

 

In the case of any deferred payment arrangement, interest shall be payable at
least annually and shall be charged at not less than the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.

 

(d) An Option granted to a natural person shall be exercisable during the
lifetime of such person only by such person, provided that such person during
such person’s lifetime may designate a Trust to be such person’s beneficiary
with respect to any Incentive Stock Options and with respect to any Nonqualified
Stock Options, and such beneficiary shall, after the death of the person to whom
the Option was granted, have all the rights that such person has while living,
including the right to exercise the Option. In the absence of such designation,
after the death of the person to whom the Option is granted, the Option shall be
exercisable by the person or persons to whom the optionee’s rights under such
Option pass by will or by the laws of descent and distribution.

 

(e) The total number of shares of Common Stock subject to an Option may, but
need not, be allotted in periodic installments (which may, but need not, be
equal). From time to time during each of such installment periods, the Option
may become exercisable (“vest”) with respect to some or all of the shares
allotted to that period, and may be exercised with respect to some or all of the
shares allotted to such period and/or any prior period as to which the Option
was not fully exercised. During the remainder of the term of the Option (if its
term extends beyond the end of the installment periods), the Option may be
exercised from time to time with

 

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respect to any shares then remaining subject to the Option. The provisions of
this Article II, subsection 5(e) are subject to any Option provisions governing
the minimum number of shares as to which an Option may be exercised.

 

(f) The Company may require any optionee, or any person to whom an Option is
transferred under Article II, subsection 5(d), as a condition of exercising any
such Option: (i) to give written assurances satisfactory to the Company as to
such person’s knowledge and experience in financial and business matters and/or
to employ a purchaser representative who has such knowledge and experience in
financial and business matters, and that such person is capable of evaluating,
alone or together with the purchaser representative, the merits and risks of
exercising the Option; and (ii) to give written assurances satisfactory to the
Company stating that such person is acquiring the Common Stock subject to the
Option for such person’s own account and not with any present intention of
selling or otherwise distributing the Common Stock. These requirements, and any
assurances given pursuant to such requirements, shall be inoperative if: (x) the
issuance of the shares upon the exercise of the Option has been registered under
a then currently effective registration statement under the Securities Act of
1933, as amended (the “Securities Act”); or (y) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities law.

 

(g) An Option shall terminate three (3) months after termination of the
optionee’s employment or relationship as a consultant or director with the
Company or an Affiliate, unless the Option by its term specifies either (i) that
it shall terminate sooner than three (3) months after termination of the
optionee’s employment or relationship as a consultant or director with the
Company or an Affiliate; or (ii) that it may be exercised more than three (3)
months after termination of the optionee’s employment or relationship as a
consultant or director with the Company or an Affiliate. This Article II,
subsection 5(g) shall not be construed to extend the term of any Option or to
permit anyone to exercise the Option after expiration of its term, nor shall it
be construed to increase the number of shares as to which any Option is
exercisable from the amount exercisable on the date of termination of the
optionee’s employment or relationship as a consultant or director.

 

(h) The Option may, but need not, include a provision whereby the optionee may
elect at any time during the term of the optionee’s employment or relationship
as a consultant or director with the Company or any Affiliate to exercise the
Option as to any part or all of the shares subject to the Option prior to the
stated vesting dates of the Option. Any shares so purchased from any unvested
installment or Option may be subject to a repurchase right in favor of the
Company or to any other restriction the Board or the Committee determines to be
appropriate.

 

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(i) To the extent provided by the terms of an Option, each optionee may satisfy
any federal, state or local tax withholding obligation relating to the exercise
of such Option by any of the following means or by a combination of such means:
(i) tendering a cash payment; (ii) authorizing the Company to withhold from the
shares of the Common Stock otherwise issuable to the optionee as a result of the
exercise of the Option a number of shares having a fair market value less than
or equal to the amount of the Company’s required minimum statutory withholding;
or (iii) delivering to the Company owned and unencumbered shares of the Common
Stock having a fair market value less than or equal to the amount of the
Company’s required minimum statutory withholding.

 

6. NON-DISCRETIONARY DIRECTOR AWARDS.

 

The Board may from time to time adopt award programs under the Plan providing
for the grant of formula or non-discretionary Stock Awards to directors of the
Company who are not employees of the Company or any Affiliate
(“Non-Discretionary Director Awards”). The terms and conditions of any such
program shall be established by the Board in its sole discretion, subject to the
terms and conditions of the Plan.

 

7. TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.

 

Each stock bonus or restricted stock purchase agreement shall be in such form
and shall contain such terms and conditions as the Board or the Committee shall
deem appropriate. The terms and conditions of stock bonus or restricted stock
purchase agreements may change from time to time, and the terms and conditions
of separate agreements need not be identical, but each stock bonus or restricted
stock purchase agreement shall include (through incorporation of provisions
hereof by reference in the agreement or otherwise) the substance of each of the
following provisions as appropriate:

 

(a) The purchase price under each stock purchase agreement shall be such amount
as the Board or Committee shall determine and designate in such agreement, but
the purchase price shall not be less than fifty percent (50%) of the fair market
value of the Common Stock on the date such award is made. Notwithstanding the
foregoing, the Board or the Committee may determine that eligible participants
in the Plan may be awarded stock pursuant to a stock bonus agreement in
consideration for past services actually rendered to the Company or for its
benefit.

 

(b) No rights under a stock bonus or restricted stock purchase agreement shall
be assignable by any participant under the Plan, either voluntarily or by
operation of law, except where such assignment is required by law or expressly
authorized by the terms of the applicable stock bonus or restricted stock
purchase agreement.

 

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(c) The purchase price of stock acquired pursuant to a stock purchase agreement
shall be paid either: (i) in cash at the time of purchase; (ii) at the
discretion of the Board or the Committee, according to a deferred payment or
other arrangement with the person to whom the Common Stock is sold; or (iii) in
any other form of legal consideration that may be acceptable to the Board or the
Committee in their discretion; including but not limited to payment of the
purchase price pursuant to a program developed under Regulation T as promulgated
by the Federal Reserve Board which results in the receipt of cash (or a check)
by the Company before Common Stock is issued or the receipt of irrevocable
instruction to pay the aggregate exercise price of the Company from the sales
proceeds before Common Stock is issued. Notwithstanding the foregoing, the Board
or the Committee to which administration of the Plan has been delegated may
award Common Stock pursuant to a stock bonus agreement in consideration for past
services actually rendered to the Company or for its benefit.

 

(d) Shares of Common Stock sold or awarded under the Plan may, but need not, be
subject to a repurchase option in favor of the Company in accordance with a
vesting schedule to be determined by the Board or the Committee.

 

(e) In the event a person ceases to be an employee of or ceases to serve as a
director or consultant to the Company or an Affiliate, the Company may
repurchase or otherwise reacquire any or all of the shares of Common Stock held
by that person which have not vested as of the date of termination under the
terms of the stock bonus or restricted stock purchase agreement between the
Company and such person.

 

(f) To the extent provided by the terms of a stock bonus or restricted stock
purchase agreement, a participant may satisfy any federal, state or local tax
withholding obligation relating to the lapsing of a repurchase option in favor
of the Company or vesting of a stock bonus or a restricted stock award by any of
the following means or by a combination of such means: (i) tendering a cash
payment; (ii) authorizing the Company to withhold from the shares of the Common
Stock otherwise deliverable to a participant as a result of the lapsing of a
repurchase option in favor of the Company or the vesting of a stock bonus or a
restricted stock award a number of shares having a fair market value less than
or equal to the amount of the Company’s required minimum statutory withholding;
or (iii) delivering to the Company owned and unencumbered shares of the Common
Stock having a fair market value less than or equal to the amount of the
Company’s required minimum statutory withholding.

 

8. COVENANTS OF THE COMPANY.

 

(a) During the terms of the Stock Awards granted under the Plan, the Company
shall keep available at all times the number of shares of Common Stock required
to satisfy such Stock Awards up to the number of shares of Common Stock
authorized under the Plan.

 

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(b) The Company shall seek to obtain from each regulatory commission or agency
having jurisdiction over the Plan such authority as may be required to issue and
sell shares of Common Stock under the Stock Awards granted under the Plan;
provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any Stock Award granted under
the Plan or any Common Stock issued or issuable pursuant to any such Stock
Award. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority that counsel for the Company
deems necessary for the lawful issuance and sale of Common Stock under the Plan,
the Company shall be relieved from any liability for failure to issue and sell
Common Stock upon exercise of such Stock Awards unless and until such authority
is obtained.

 

9. USE OF PROCEEDS FROM COMMON STOCK.

 

Proceeds from the sale of Common Stock pursuant to Stock Awards granted under
the Plan shall constitute general funds of the Company.

 

10. MISCELLANEOUS.

 

(a) The Board or Committee shall have the power to accelerate the time during
which a Stock Award may be exercised or the time during which a Stock Award or
any part thereof will vest, notwithstanding the provisions in the Stock Award
stating the time during which it may be exercised or the time during which it
will vest. Each Discretionary Stock Option providing for vesting pursuant to
Article II, subsection 5(e) may also provide that if the employee’s employment
or a director’s or consultant’s affiliation with the Company or an Affiliate of
the Company is terminated by reason of death or disability, then the vesting
schedule of Discretionary Stock Options granted to such employee, director or
consultant or to the Trusts of such employee, director or consultant may be
accelerated.

 

(b) Neither an optionee nor any person to whom an Option is transferred under
the provisions of the Plan shall be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares subject to such Option
unless and until such person has satisfied all requirements for exercise of the
Option pursuant to its terms.

 

(c) Nothing in the Plan or any instrument executed or Stock Award granted
pursuant thereto shall confer upon any eligible employee, consultant, director,
optionee or holder of Stock Awards under the Plan any right to continue in the
employ of the Company or any Affiliate or to continue acting as a consultant or
director or shall affect the right of the Company or any Affiliate to terminate
the employment or consulting relationship or directorship of any eligible
employee, consultant, director, optionee or holder of Stock Awards under the
Plan with or without cause. In the event that a holder of Stock Awards under the
Plan is permitted or otherwise entitled to take a leave of absence, the Company
shall have the unilateral right to (i) determine whether such leave of absence
will be treated as a termination of employment or

 

27

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relationship as consultant or director for purposes hereof, and (ii) suspend or
otherwise delay the time or times at which exercisability or vesting would
otherwise occur with respect to any outstanding Stock Awards under the Plan.

 

(d) Notwithstanding any provision of the Plan to the contrary, the Board or the
Committee shall have the power to condition the grant or vesting of stock
bonuses and rights to purchase restricted stock under the Plan upon the
attainment of performance goals, determined by the Board or the Committee in
their respective sole discretion, with respect to any one or more of the
following business criteria with respect to the Company, any Affiliate, any
division, any operating unit or any product line: (i) return on capital, assets
or equity, (ii) sales or revenue, (iii) net income, (iv) cash flow, (v) earnings
per share, (vi) adjusted earnings or adjusted net income as defined below, (vii)
working capital, (vii) total shareholder return, (ix) economic value or (x)
product development, research, in-licensing, out-licensing, litigation, human
resources, information services, manufacturing, manufacturing capacity,
production, inventory, site development, plant, building or facility
development, government relations, product market share, mergers, acquisitions
or sales of assets or subsidiaries. “Adjusted net income” and “adjusted
earnings” shall mean net income or earnings, as the case may be, for the
relevant performance period computed in accordance with accounting principles
generally accepted in the U.S. which may be adjusted by the Committee, as
specified in writing, for such performance period, at the time a performance
goal is established for the performance period, for the following: (a) any item
of significant gain or loss for the performance period determined to be related
to a change in accounting principle as reflected in the Company’s audited
consolidated financial statements, (b) amortization expenses associated with
acquired intangible assets, (c) expenses associated with acquired in-process
research and development and (d) any other items of significant income or
expense which are determined to be appropriate adjustments and are specified in
writing by the Committee at the time the goal is established for the performance
period. With respect to any stock bonuses or rights to purchase restricted stock
granted to persons who are or who may be “covered employees” within the meaning
of Section 162(m) of the Code, the Board or the Committee shall have the power
to grant such awards upon terms and conditions that qualify such awards as
“qualified performance-based compensation” within the meaning of Section 162(m)
of the Code. Stock bonuses and rights to purchase restricted stock made in
accordance with this Article II, subsection 10(d) shall contain the terms and
conditions of Article II, Section 7 above.

 

11. ADJUSTMENTS UPON CHANGES IN COMMON STOCK.

 

If any change is made in the Common Stock subject to the Plan, or subject to any
Stock Award granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating

 

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dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company), the Plan and outstanding Stock Awards will be appropriately adjusted
in the class(es) and maximum number of shares subject to the Plan, the maximum
number of shares which may be granted to a participant in a calendar year, the
class(es) and number of shares and price per share of stock subject to
outstanding Stock Awards, and the number of shares of Common Stock to be granted
as Non-Discretionary Director Awards, if any. Such adjustment shall be made by
the Board or the Committee, the determination of which shall be final, binding
and conclusive. (The conversion of any convertible securities of the Company
shall not be treated as a “transaction not involving the receipt of
consideration”.)

 

12. CHANGE OF CONTROL.

 

(a) Notwithstanding anything to the contrary in the Plan, in the event of a
Change in Control (as hereinafter defined), then, to the extent permitted by
applicable law: (i) the time during which Stock Awards become vested shall
automatically be accelerated so that the unvested portions of all Stock Awards
shall be vested prior to the Change in Control and (ii) the time during which
the Options may be exercised shall automatically be accelerated to prior to the
Change in Control. Upon and following the acceleration of the vesting and
exercise periods, at the election of the holder of the Stock Award, the Stock
Award may be: (x) exercised (with respect to Options) or, if the surviving or
acquiring corporation agrees to assume the Stock Awards or substitute similar
stock awards, (y) assumed; or (z) replaced with substitute stock awards. Options
not exercised, substituted or assumed prior to or upon the Change in Control
shall be terminated.

 

(b) For purposes of Article II of the Plan, a “Change of Control” shall be
deemed to have occurred at any of the following times:

 

(i) upon the acquisition (other than from the Company) by any person, entity or
“group,” within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act
(excluding, for this purpose, the Company or its affiliates, or any employee
benefit plan of the Company or its affiliates which acquires beneficial
ownership of voting securities of the Company), of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent
(50%) or more of either the then outstanding shares of Common Stock or the
combined voting power of the Company’s then outstanding voting securities
entitled to vote generally in the election of directors; or

 

(ii) at the time individuals who, as of the Restatement Date, constitute the
Board (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director subsequent
to the Restatement Date, whose election, or nomination for election by the
Company’s stockholders, was approved by a vote of

 

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at least a majority of the directors then comprising the Incumbent Board (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the Directors of the Company, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for
purposes of Article II of the Plan, considered as though such person were a
member of the Incumbent Board; or

 

(iii) immediately prior to the consummation by the Company of a reorganization,
merger, consolidation, (in each case, with respect to which persons who were the
stockholders of the Company immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own more than fifty percent (50%)
of the combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated company’s then outstanding
voting securities) or a liquidation or dissolution of the Company or of the sale
of all or substantially all of the assets of the Company; or

 

(iv) the occurrence of any other event which the Incumbent Board in its sole
discretion determines constitutes a Change of Control.

 

13. QUALIFIED DOMESTIC RELATIONS ORDERS.

 

(a) Anything in the Plan to the contrary notwithstanding, rights under Stock
Awards may be assigned to an Alternate Payee to the extent that a QDRO so
provides. (The terms “Alternate Payee” and “QDRO” are defined in Article II,
subsection 13(c) below.) The assignment of a Stock Award to an Alternate Payee
pursuant to a QDRO shall not be treated as having caused a new grant. The
transfer of an Incentive Stock Option to an Alternate Payee may, however, cause
it to fail to qualify as an Incentive Stock Option. If a Stock Award is assigned
to an Alternate Payee, the Alternate Payee generally has the same rights as the
grantee under the terms of the Plan; provided, however, that (i) the Stock Award
shall be subject to the same vesting terms and exercise period as if the Stock
Award were still held by the grantee, and (ii) an Alternate Payee may not
transfer a Stock Award.

 

(b) In the event of the Plan administrator’s receipt of a domestic relations
order or other notice of adverse claim by an Alternate Payee of a grantee of a
Stock Award, transfer of the proceeds of the exercise of such Stock Award,
whether in the form of cash, stock or other property, may be suspended. Such
proceeds shall thereafter be transferred pursuant to the terms of a QDRO or
other agreement between the grantee and Alternate Payee. A grantee’s ability to
exercise a Stock Award may be barred if the Plan administrator receives a court
order directing the Plan administrator not to permit exercise.

 

(c) The word “QDRO” as used in Article II of the Plan shall mean a court order
(i) that creates or recognizes the right of the spouse, former spouse or child
(an “Alternate Payee”) of an individual who is granted a Stock Award

 

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to an interest in such Stock Award relating to marital property rights or
support obligations and (ii) that the administrator of the Plan determines would
be a “qualified domestic relations order,” as that term is defined in Section
414(p) of the Code and Section 206(d) of the Employee Retirement Income Security
Act (“ERISA”), but for the fact that the Plan is not a plan described in Section
3(3) of ERISA.

 

14. AMENDMENT OF THE PLAN.

 

(a) The Board at any time, and from time to time, may amend the Plan. However,
except as provided in Article II, Section 11 relating to adjustments upon
changes in the Common Stock, no amendment shall be effective unless approved by
the stockholders of the Company within twelve (12) months before or after the
adoption of the amendment, where the amendment will:

 

(i) increase the number of shares reserved for Stock Awards under the Plan;

 

(ii) modify the requirements as to eligibility for participation in the Plan (to
the extent such modification requires stockholder approval in order for the Plan
to satisfy the requirements of Section 422(b) of the Code); or

 

(iii) modify the Plan in any other way if such modification requires stockholder
approval in order for the Plan to satisfy the requirements of Section 422(b) of
the Code.

 

(b) The Board may in its sole discretion submit any other amendment to the Plan
for stockholder approval, including, but not limited to, amendments to the Plan
intended to satisfy the requirements of Section 162(m) of the Code and the
regulations promulgated thereunder regarding the exclusion of performance-based
compensation from the limit on corporate deductibility of compensation to
certain executive officers.

 

(c) It is expressly contemplated that the Board may amend the Plan in any
respect the Board deems necessary or advisable to provide optionees with the
maximum benefits provided or to be provided under the provisions of the Code and
the regulations promulgated thereunder relating to employee Incentive Stock
Options and/or to bring the Plan and/or Options granted under it into compliance
therewith.

 

(d) Rights and obligations under any Stock Award granted before amendment of the
Plan shall not be impaired by any amendment of the Plan, unless: (i) the Company
requests the consent of the person to whom the Stock Award was granted; and (ii)
such person consents in writing.

 

15. TERMINATION OR SUSPENSION OF THE PLAN.

 

(a) The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on March 2, 2007. No Stock Awards may be
granted under the Plan while the Plan is suspended or after it is terminated.

 

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(b) Rights and obligations under any Stock Awards granted while the Plan is in
effect shall not be impaired by suspension or termination of the Plan, except
with the consent of the person to whom the Stock Award was granted.

 

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