Exhibit 10.3

DURECT CORPORATION

2000 STOCK PLAN

(as amended on March 13, 2000)

(as further amended on March 31, 2000)

(as further amended on March 15, 2001)

(as further amended April 14, 2005)

(as further amended and restated June 23, 2010)

 

1. Purposes of the Plan. The purposes of this 2000 Stock Plan are to attract and
retain the best available personnel for positions of substantial responsibility,
to provide additional incentive to Employees and Consultants of the Company and
its Subsidiaries and to promote the success of the Company’s business. Options
granted under the Plan may be Incentive Stock Options (as defined under
Section 422 of the Code) or Nonstatutory Stock Options, as determined by the
Administrator at the time of grant of an option and subject to the applicable
provisions of Section 422 of the Code, as amended, and the regulations
promulgated thereunder. Stock Grants, Stock Units, Stock Appreciation Rights,
Stock Purchase Rights and Cash Awards may also be granted under the Plan.

 

2. Definitions. As used herein, the following definitions shall apply:

 

  (a) “Administrator” means the Board or any of its Committees appointed
pursuant to Section 4 of the Plan.

 

  (b) “Applicable Laws” means the legal requirements relating to the
administration of stock option and restricted stock purchase plans under
applicable U.S. state corporate laws, U.S. federal and applicable state
securities laws, the Code, any stock exchange rules or regulations and the
applicable laws of any other country or jurisdiction where Options or Stock
Purchase Rights are granted under the Plan, as such laws, rules, regulations and
requirements shall be in place from time to time.

 

  (c) “Award” means a Stock Award, a Cash Award or an Option granted in
accordance with the terms of the Plan.

 

  (d) “Award Agreement” means a Stock Award Agreement, Cash Award Agreement
and/or Option Agreement, which may be in written or electronic format, in such
form and with such terms and conditions as may be specified by the
Administrator, evidencing the terms and conditions of an individual Award. Each
Award Agreement is subject to the terms and conditions of the Plan.

 

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

 

  (f) “Cash Award” means a bonus opportunity awarded under Section 14 pursuant
to which a Participant may become entitled to receive an amount based on the
satisfaction of such performance criteria as are specified in the agreement or
other documents evidencing the Award (the “Cash Award Agreement”).

 

  (g) “Code” means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or regulation thereunder shall include such section
or regulation, any valid regulation promulgated under such section, and any
comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.

 

  (h) “Committee” means the Committee appointed by the Board of Directors in
accordance with Section 4(a) and (b) of the Plan.

 

  (i) “Common Stock” means the Common Stock of the Company.

 

  (j) “Company” means Durect Corporation, a Delaware corporation.

 

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  (k) “Consultant” means any person, including an advisor, who is engaged by the
Company or any Parent or Subsidiary to render consulting or advisory services
and is compensated for such services, and any Director of the Company whether
compensated for services provided in his or her capacity as a Director or not.

 

  (l) “Continuous Status as an Employee or Consultant” means the absence of any
interruption or termination of service as an Employee or Consultant. Continuous
Status as an Employee or Consultant shall not be considered interrupted in the
case of: (i) sick leave; (ii) military leave; (iii) any other leave of absence
approved by the Administrator, provided that such leave is for a period of not
more than three (3) months, unless reemployment upon the expiration of such
leave is guaranteed by contract or statute, or unless provided otherwise
pursuant to Company policy adopted from time to time; or (iv) in the case of
transfers between locations of the Company or between the Company, its
Subsidiaries or their respective successors. For purposes of this Plan, a change
in status from an Employee to a Consultant or from a Consultant to an Employee
will not constitute an interruption of Continuous Status as an Employee or
Consultant.

 

  (m) “Director” means a member of the Board of Directors of the Company.

 

  (n) “Employee” means any person (including, if appropriate, Officers,
Directors and Named Executives), employed by the Company or any Parent or
Subsidiary of the Company, with the status of employment determined based upon
such minimum number of hours or periods worked as shall be determined by the
Administrator in its discretion, subject to any requirements of the Code. The
payment by the Company of a director’s fee to a Director shall not be sufficient
to constitute “employment” of such Director by the Company.

 

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

 

  (p) “Fair Market Value” means, as of any date, the fair market value of Common
Stock determined as follows:

 

  (i) If the Common Stock is listed on any established stock exchange or a
national market system including without limitation The Nasdaq Global Select
Market, The Nasdaq Global Market or The Nasdaq Capital Market of The Nasdaq
Stock Market, its Fair Market Value shall be the closing sales price for such
stock (or the closing bid, if no sales were reported), as quoted on such system
or exchange, or the exchange with the greatest volume of trading in Common
Stock, on the date of grant or the date of determination, as applicable (or, if
no closing sales price or closing bid was reported on that date, as applicable,
on the last trading date such closing sales price or closing bid was reported),
as reported in The Wall Street Journal or such other source as the Administrator
deems reliable;

 

  (ii) If the Common Stock is regularly quoted on an automated quotation system
(including the OTC Bulletin Board) or by a recognized securities dealer, its
Fair Market Value shall be the closing sales price for such stock as quoted on
such system or by such securities dealer on the date of grant or the date of
determination, as applicable, but if selling prices are not reported, the Fair
Market Value of a share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the date of grant (or, if no such
prices were reported on that date, on the last date such prices were reported),
as reported in The Wall Street Journal or such other source as the Administrator
deems reliable; or

 

  (iii) In the absence of an established market for the Common Stock, the Fair
Market Value thereof shall be determined in good faith by the Administrator.

 

  (q) “Incentive Stock Option” means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable written Option Agreement.

 

  (r) “Listed Security” means any security of the Company that is listed or
approved for listing on a national securities exchange or designated or approved
for designation as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc.

 

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  (s) “Named Executive” means an Employee who is a “covered employee” under
Section 162(m)(3) of the Code.

 

  (t) “Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option, as designated in the applicable written Option
Agreement.

 

  (u) “Officer” means a person who is an officer of the Company (or any Parent
or Subsidiary) within the meaning of Section 16(a) of the Exchange Act and the
rules and regulations promulgated thereunder.

 

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

 

  (w) “Option Agreement” means a written agreement between an Optionee and the
Company reflecting the terms of an Option granted under the Plan and includes
any documents attached to such Option Agreement, including, but not limited to,
a notice of stock option grant and a form of exercise notice.

 

  (x) “Optioned Stock” means the Common Stock subject to an Option or a Stock
Purchase Right.

 

  (y) “Optionee” means an Employee or Consultant who receives an Option.

 

  (z) “Parent” means a “parent corporation,” whether now or hereafter existing,
as defined in Section 424(e) of the Code, or any successor provision.

 

  (aa) “Participant” means any holder of one or more Options or Stock Awards, or
the Shares issuable or issued upon exercise of such Awards, under the Plan.

 

  (bb) “Plan” means this 2000 Stock Plan.

 

  (cc) “Qualifying Performance Criteria” means any one or more of the following
performance criteria, either individually, alternatively or in any combination,
applied to either the Company as a whole or to a business unit, Parent,
Subsidiary or business segment, either individually, alternatively or in any
combination, and measured either annually or cumulatively over a period of
years, on an absolute basis or relative to a pre-established target, to previous
years’ results or to a designated comparison group, and on a pre-tax or
after-tax basis, in each case as specified by the Committee in the Award:
(i) cash flow (including operating cash flow or free cash flow); (ii) earnings
(including gross margin, earnings before interest and taxes, earnings before
taxes, and net earnings); (iii) earnings per share; (iv) growth in earnings or
earnings per share; (v) stock price; (vi) return on equity or average
stockholders’ equity; (vii) total stockholder return; (viii) return on capital;
(ix) return on assets or net assets; (x) return on investment; (xi) revenue;
(xii) income or net income; (xiii) operating income or net operating income;
(xiv) operating profit or net operating profit; (xv) operating margin;
(xvi) return on operating revenue; (xvii) market share; (xviii) contract awards
or backlog; (xix) overhead or other expense reduction; (xx) growth in
stockholder value relative to the moving average of the S&P 500 Index or a peer
group index; (xxi) credit rating; (xxii) strategic plan development and
implementation (including individual performance objectives that relate to
achievement of the Company’s or any business unit’s strategic plan);
(xxiii) improvement in workforce diversity; (xxiv) expenses; (xxv) economic
value added; (xxvi) product quality; (xxvii) number of customers;
(xxviii) objective customer indicators; (xxix) customer satisfaction; (xxx) new
product invention or innovation; (xxxi) profit after taxes; (xxxii) pre-tax
profit; (xxxiii) working capital; (xxxiv) sales; (xxxv) advancement of the
Company’s product pipeline; (xxxvi) consummation of strategic transactions;
(xxxvii) reduction in cash utilization; and (xxxviii) addition of technologies
and products. The Committee may appropriately adjust any evaluation of
performance under a Qualifying Performance Criteria to exclude any of the
following events that occurs during a performance period: (A) asset write-downs;
(B) litigation or claim judgments or settlements; (C) the effect of changes in
tax law, accounting principles or other such laws or provisions affecting
reported results; (D) accruals for reorganization and restructuring programs;
and (E) any gains or losses classified as extraordinary or as discontinued
operations in the Company’s financial statements.

 

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  (dd) “Reporting Person” means an Officer, Director, or greater than 10%
stockholder of the Company within the meaning of Rule 16a-2 under the Exchange
Act, who is required to file reports pursuant to Rule 16a-3 under the Exchange
Act.

 

  (ee) “Restatement Effective Date” means the date of the Company’s 2010 Annual
Meeting of Stockholders.

 

  (ff) “Restricted Stock” means shares of Common Stock acquired pursuant to a
grant of a Stock Award under Sections 11, 12 or 13 below.

 

  (gg) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as the
same may be amended from time to time, or any successor provision.

 

  (hh) “Share” means a share of the Common Stock, as adjusted in accordance with
Section 17 of the Plan.

 

  (ii) “Stock Appreciation Right” means a right to receive cash and/or shares of
Common Stock based on the appreciation in the Fair Market Value of a specific
number of shares of Common Stock granted under Section 13.

 

  (jj) “Stock Award” means a Stock Grant, a Stock Unit, a Stock Appreciation
Right or a Stock Purchase Right granted under Sections 11, 12 or 13.

 

  (kk) “Stock Award Agreement” means a written agreement, the form(s) of which
shall be approved from time to time by the Administrator, 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.

 

  (ll) “Stock Exchange” means any stock exchange or consolidated stock price
reporting system on which prices for the Common Stock are quoted at any given
time.

 

  (mm) “Stock Grant” means the award of a certain number of shares of Common
Stock granted under Section 11 below.

 

  (nn) “Stock Purchase Right” means the right to purchase Common Stock pursuant
to Section 12 below.

 

  (oo) “Stock Unit” means a bookkeeping entry representing an amount equivalent
to the Fair Market Value of one Share, payable in cash, property or Shares.
Stock Units represent an unfunded and unsecured obligation of the Company,
except as otherwise provided for by the Administrator.

 

  (pp) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter
existing, as defined in Section 424(f) of the Code, or any successor provision.

 

  (qq) “Ten Percent Holder” means a person who owns stock representing more than
ten percent (10%) of the voting power of all classes of stock of the Company or
any Parent or Subsidiary.

 

3. Stock Subject to the Plan. Subject to the provisions of Section 17 of the
Plan, the maximum aggregate number of Shares that may be sold or issued under
the Plan is 24,296,500 Shares; provided, however, that the maximum aggregate
number of Shares that may be issued pursuant to Incentive Stock Option is
24,296,500 Shares. The Shares may be authorized, but unissued, or reacquired
Common Stock. Notwithstanding the foregoing, any Shares issued in connection
with Awards granted on or after the date of the 2010 Annual Meeting of
Stockholders, other than Options and Stock Appreciation Rights, shall be counted
against the limit set forth herein as two (2) Shares for every one (1) Share
issued in connection with such Award (and shall be counted as two (2) Shares for
every one (1) Share returned or deemed not have been issued from the Plan
pursuant to this Section 3 in connection with Awards other than Options and
Stock Appreciation Rights).

Any Shares covered by an Award (or portion of an Award) which is forfeited,
canceled or expires (whether voluntarily or involuntarily) shall be deemed not
to have been issued for purposes of determining the maximum aggregate number of
Shares which may be issued under the Plan. Shares that actually have been issued
under the Plan pursuant to an Award shall not be returned to the Plan and shall
not become available for future issuance

 

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under the Plan, except that if unvested Shares are forfeited, or repurchased by
the Company at the lower of their original purchase price or their Fair Market
Value at the time of repurchase, such Shares shall become available for future
grant under the Plan. Notwithstanding anything to the contrary contained herein:
(i) Shares tendered or withheld in payment of an Option exercise price shall not
be returned to the Plan and shall not become available for future issuance under
the Plan; (ii) Shares withheld by the Company to satisfy any tax withholding
obligation shall not be returned to the Plan and shall not become available for
future issuance under the Plan; and (iii) all Shares covered by the portion of a
Stock Appreciation Right that is exercised (whether or not Shares are actually
issued to the Participant upon exercise of the Stock Appreciation Right) shall
be considered issued pursuant to the Plan.

 

4. Administration of the Plan.

 

  (a) General. The Plan shall be administered by the Board or a Committee, or a
combination thereof, as determined by the Board. The Plan may be administered by
different administrative bodies with respect to different classes of Optionees
and, if permitted by the Applicable Laws, the Board may authorize one or more
officers (who may (but need not) be Officers) to grant Options, Stock Awards and
Cash Awards to Employees and Consultants.

 

  (b) Administration With Respect to Reporting Persons. With respect to Options,
Stock Awards and Cash Awards granted to Reporting Persons and Named Executives,
the Plan may (but need not) be administered so as to permit such Options, Stock
Awards and Cash Awards to qualify for the exemption set forth in Rule 16b-3 and
to qualify as performance-based compensation under Section 162(m) of the Code.

 

  (c) Committee Composition. If a Committee has been appointed pursuant to this
Section 4, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. From time to time the Board may increase
the size of any Committee and appoint additional members thereof, remove members
(with or without cause) and appoint new members in substitution therefor, fill
vacancies (however caused) and remove all members of a Committee and thereafter
directly administer the Plan, all to the extent permitted by the Applicable Laws
and, in the case of a Committee administering the Plan pursuant to Section 4(b)
above, to the extent permitted or required by Rule 16b-3 and Section 162(m) of
the Code.

 

  (d) Powers of the Administrator. Subject to the provisions of the Plan and in
the case of a Committee, the specific duties delegated by the Board to such
Committee, and subject to the approval of any relevant authorities, including
the approval, if required, of any Stock Exchange, the Administrator shall have
the authority, in its discretion:

 

  (i) to determine the Fair Market Value of the Common Stock, in accordance with
Section 2(p) of the Plan;

 

  (ii) to select the Consultants and Employees to whom Options, Stock Awards and
Cash Awards or any combination thereof may from time to time be granted
hereunder;

 

  (iii) to determine whether and to what extent Options, Stock Awards and Cash
Awards or any combination thereof are granted hereunder;

 

  (iv) to determine the number of shares of Common Stock to be covered by each
such Award granted hereunder;

 

  (v) to approve forms of agreement for use under the Plan;

 

  (vi) to determine the terms and conditions, not inconsistent with the terms of
the Plan, of any Award granted hereunder. Such terms and conditions include, but
are not limited to, the exercise and/or purchase price (if applicable), the time
or times when an Award may be exercised (which may or may not be based on
performance criteria), the vesting schedule, any vesting and/or exercisability
acceleration or waiver of forfeiture restrictions, the acceptable forms of
consideration, the term, and any restriction or limitation regarding any Award
or the Shares relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine and may be established at
the time an Award is granted or thereafter;

 

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  (vii) to determine the terms and restrictions applicable to Stock Awards and
the Restricted Stock purchased by exercising such Stock Awards; and

 

  (viii) to construe and interpret the terms of the Plan and Awards granted
pursuant to the Plan;

 

  (ix) in order to fulfill the purposes of the Plan and without amending the
Plan, to modify grants of Options, Stock Awards and Cash Awards to participants
who are foreign nationals or employed outside of the United States in order to
recognize differences in local law, tax policies or customs;

 

  (x) to allow Participants to satisfy withholding tax amounts by electing to
have the Company withhold from the Shares to be issued upon exercise of a
Nonstatutory Stock Option or vesting of a Stock Award that number of Shares
having a Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined in such manner and
on such date that the Administrator shall determine or, in the absence of
provision otherwise, on the date that the amount of tax to be withheld is to be
determined. All elections by a Participant to have Shares withheld for this
purpose shall be made in such form and under such conditions as the
Administrator may provide;

 

  (xi) to correct administrative errors;

 

  (xii) to modify or amend each Award, including, but not limited to, the
acceleration of vesting and/or exercisability, provided, however, that any such
amendment is subject to Section 20 of the Plan and except as set forth in that
Section, may not impair any outstanding Award unless agreed to in writing by the
Participant;

 

  (xiii) to authorize conversion or substitution under the Plan of any or all
options, stock appreciation rights or stock awards held by service providers of
an entity acquired by the Company (the “Conversion Awards”). Any conversion or
substitution shall be effective as of the close of the merger, acquisition or
other transaction. The Conversion Awards may be Nonstatutory Stock Options or
Incentive Stock Options, as determined by the Administrator, with respect to
options granted by the acquired entity; provided, however, that with respect to
the conversion of stock appreciation rights in the acquired entity, the
Conversion Awards shall be Nonstatutory Stock Options. Unless otherwise
determined by the Administrator at the time of conversion or substitution, all
Conversion Awards shall have the same terms and conditions as Awards generally
granted by the Company under the Plan;

 

  (xiv) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Award previously granted by the
Administrator;

 

  (xv) to impose such restrictions, conditions or limitations as it determines
appropriate as to the timing and manner of any resales by a Participant or other
subsequent transfers by the Participant of any Shares issued as a result of or
under an Award, including without limitation, (A) restrictions under an insider
trading policy and (B) restrictions as to the use of a specified brokerage firm
for such resales or other transfers;

 

  (xvi) to provide, either at the time an Award is granted or by subsequent
action, that an Award shall contain as a term thereof, a right, either in tandem
with the other rights under the Award or as an alternative thereto, of the
Participant to receive, without payment to the Company, a number of Shares, cash
or a combination thereof, the amount of which is determined by reference to the
value of the Award; and

 

  (xvii) to make all other determinations deemed necessary or advisable for
administering the Plan and any Award granted hereunder.

 

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  (e) Effect of Administrator’s Decision. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all holders
of Options, Stock Awards or Cash Awards.

 

5. Eligibility.

 

  (a) Recipients of Grants. Nonstatutory Stock Options, Stock Awards and Cash
Awards may be granted to Employees and Consultants. Incentive Stock Options may
be granted only to Employees. An Employee or Consultant who has been granted an
Option, Stock Award or Cash Award may, if he or she is otherwise eligible, be
granted additional Options, Stock Awards or Cash Awards.

 

  (b) Type of Option. Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value of Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Optionee during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.
For purposes of this Section 5(b), Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares subject to an Incentive Stock Option shall be determined as of the
date of the grant of such Option.

 

  (c) Employment Relationship. The Plan shall not confer upon the holder of any
Option or Stock Award any right with respect to continuation of employment or
consulting relationship with the Company, nor shall it interfere in any way with
such holder’s right or the Company’s right to terminate his or her employment or
consulting relationship at any time, with or without cause.

 

6. Term of Plan. The Plan became effective upon its initial approval by the
stockholders of the Company in March 2000 and was amended and restated effective
as of the Restatement Effective Date. It shall continue in effect for a term of
ten (10) years from the Restatement Effective Date unless sooner terminated
under Section 20 of the Plan.

 

7. Term of Option. The term of each Option shall be the term stated in the
Option Agreement; provided, however, that the term shall be no more than ten
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement and provided further that, in the case of an Incentive
Stock Option granted to an Optionee who, at the time the Option is granted, owns
stock representing more than 10% of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the
Option shall be five years from the date of grant thereof or such shorter term
as may be provided in the Option Agreement.

 

8. Limitation on Grants to Employees. Subject to adjustment as provided in
Section 17 below, the maximum number of Shares which may be subject to Options
and Stock Awards granted to any one Employee under this Plan for any fiscal year
of the Company shall be 1,500,000 Shares.

 

9. Option Exercise Price and Consideration.

 

  (a) Exercise Price. The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Board and set forth in the applicable agreement, but shall be subject to the
following:

 

  (i) In the case of an Incentive Stock Option that is:

 

  (A) granted to an Employee who, at the time of the grant of such Incentive
Stock Option, is a Ten Percent Holder, the per Share exercise price shall be no
less than 110% of the Fair Market Value per Share on the date of grant.

 

  (B) granted to any other Employee, the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on the date of grant.

 

  (ii) In the case of a Nonstatutory Stock Option, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date of
grant; or

 

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  (iii) Notwithstanding the foregoing, Options may be granted with a per Share
exercise price other than as required above pursuant to a merger or other
corporate transaction.

 

  (b) No Option Repricings, Exchanges or Buyouts. Other than in connection with
a change in the Company’s capitalization, merger or certain other transactions
(as described in Section 17 of the Plan), the following actions will be subject
to stockholder approval: (i) the reduction of the exercise price of any Option
granted under the Plan or (ii) the cancellation of an Option at a time when its
exercise price exceeds the Fair Market Value of the underlying Shares, in
exchange for another Option, Stock Appreciation Right or other Award or for a
cash payment. Notwithstanding the foregoing, canceling an Option in exchange for
another Option, Stock Appreciation Right or other Award with an exercise price,
purchase price or base appreciation amount that is equal to or greater than the
exercise price of the original Option shall not be subject to stockholder
approval.

 

  (c) Permissible Consideration. The consideration to be paid for the Shares to
be issued upon exercise of an Option, including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive Stock Option,
shall be determined at the time of grant) and may consist entirely of (1) cash,
(2) check, (3) promissory note (subject to the provisions of Section 153 of the
Delaware General Corporation Law), (4) other Shares that (x) in the case of
Shares acquired upon exercise of an Option, have been owned by the Optionee for
more than six months on the date of surrender or such other period as may be
required to avoid a charge to the Company’s earnings, and (y) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which such Option shall be exercised, (5) authorization for the
Company to retain from the total number of Shares as to which the Option is
exercised that number of Shares having a Fair Market Value on the date of
exercise equal to the exercise price for the total number of Shares as to which
the Option is exercised, (6) delivery of a properly executed exercise notice
together with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price and
any applicable income or employment taxes, (7) any combination of the foregoing
methods of payment, or (8) such other consideration and method of payment for
the issuance of Shares to the extent permitted under the Applicable Laws. In
making its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.

 

10. Exercise of Option.

 

  (a) Procedure for Exercise; Rights as a Stockholder. Any Option granted
hereunder shall be exercisable at such times and under such conditions as
determined by the Administrator, including performance criteria with respect to
the Company and/or the Optionee, and as shall be permissible under the terms of
the Plan. The Administrator shall have the discretion to determine whether and
to what extent the vesting of Options shall be tolled during any unpaid leave of
absence; provided, however, that in the absence of such determination, vesting
of Options shall be tolled during any leave that is not a leave required to be
provided to the Optionee under Applicable Law. In the event of military leave,
vesting shall toll during any unpaid portion of such leave, provided that, upon
an Optionee’s returning from military leave (under conditions that would entitle
him or her to protection upon such return under the Uniform Services Employment
and Reemployment Rights Act), he or she shall be given vesting credit with
respect to Options to the same extent as would have applied had the Optionee
continued to provide services to the Company throughout the leave on the same
terms as he or she was providing services immediately prior to such leave.

An Option may not be exercised for a fraction of a Share.

An Option shall be deemed to be exercised when written (including electronic)
notice of such exercise has been given to the Company in accordance with the
terms of the Option by the person entitled to exercise the Option and the
Company has received full payment for the Shares with respect to which the
Option is exercised. Full payment may, as authorized by the Board, consist of
any consideration and method of payment allowable under Section 9(c) of the
Plan. Until the issuance (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a

 

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stockholder shall exist with respect to the Optioned Stock, not withstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly upon exercise of the Option. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 17 of the
Plan.

Exercise of an Option in any manner shall result in a decrease in the number of
Shares that thereafter may be available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

 

  (b) Termination of Employment or Consulting Relationship. Subject to
Section 10(c) below, in the event of termination of an Optionee’s Continuous
Status as an Employee or Consultant with the Company, such Optionee may, but
only within three months (or such other period of time not less than 30 days as
is determined by the Administrator, with such determination in the case of an
Incentive Stock Option being made at the time of grant of the Option and not
exceeding three months) after the date of such termination (but in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement), exercise his or her Option to the extent that the Optionee
was entitled to exercise it at the date of such termination. To the extent that
the Optionee was not entitled to exercise the Option at the date of such
termination, or if the Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate. No
termination shall be deemed to occur and this Section 10(b) shall not apply if
(i) the Optionee is a Consultant who becomes an Employee, or (ii) the Optionee
is an Employee who becomes a Consultant.

 

  (c) Disability of Optionee.

 

  (i) Notwithstanding Section 10(b) above, in the event of termination of an
Optionee’s Continuous Status as an Employee or Consultant as a result of his or
her total and permanent disability (within the meaning of Section 22(e)(3) of
the Code), such Optionee may, but only within twelve months from the date of
such termination (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), exercise the Option to the
extent otherwise entitled to exercise it at the date of such termination. To the
extent that the Optionee was not entitled to exercise the Option at the date of
termination, or if the Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.

 

  (ii) In the event of termination of an Optionee’s Continuous Status as an
Employee or Consultant as a result of a disability which does not fall within
the meaning of total and permanent disability (as set forth in Section 22(e)(3)
of the Code), such Optionee may, but only within six months from the date of
such termination (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), exercise the Option to the
extent otherwise entitled to exercise it at the date of such termination.
However, to the extent that such Optionee fails to exercise an Option which is
an Incentive Stock Option (“ISO”) (within the meaning of Section 422 of the
Code) within three months of the date of such termination, the Option will not
qualify for ISO treatment under the Code. To the extent that the Optionee was
not entitled to exercise the Option at the date of termination, or if the
Optionee does not exercise such Option to the extent so entitled within six
months from the date of termination, the Option shall terminate.

 

  (d) Death of Optionee. In the event of the death of an Optionee during the
period of Continuous Status as an Employee or Consultant since the date of grant
of the Option, or within 30 days following termination of the Optionee’s
Continuous Status as an Employee or Consultant, the Option may be exercised, at
any time within six months following the date of death (but in no event later
than the expiration date of the term of such Option as set forth in the Option
Agreement), by such Optionee’s estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent of the
right to exercise that had accrued at the date of death or, if earlier, the date
of termination of the Optionee’s Continuous Status as an Employee or Consultant.
To the extent that the Optionee was not entitled to exercise the Option at the
date of death or termination, as the case may be, or if the Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate.

 

  (e)

Extension of Exercise Period. The Administrator shall have full power and
authority to extend the period of time for which an Option is to remain
exercisable following termination of an Optionee’s

 

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Continuous Status as an Employee or Consultant from the periods set forth in
Sections 10(b), 10(c) and 10(d) above or in the Option Agreement to such greater
time as the Board shall deem appropriate, provided that in no event shall such
Option be exercisable later than the date of expiration of the term of such
Option as set forth in the Option Agreement.

 

  (f) Rule 16b-3. Options granted to Reporting Persons shall comply with Rule
16b-3 and shall contain such additional conditions or restrictions as may be
required thereunder to qualify for the maximum exemption for Plan transactions.

 

11. Stock Grants and Stock Unit Awards. Each Stock Award Agreement reflecting
the issuance of a Stock Grant or Stock Unit shall be in such form and shall
contain such terms and conditions as the Administrator shall deem appropriate.
The terms and conditions of such agreements may change from time to time, and
the terms and conditions of separate agreements need not be identical, but each
such agreement shall include (through incorporation of provisions hereof by
reference in the agreement or otherwise) the substance of each of the following
provisions:

 

  (a) Consideration. A Stock Grant or Stock Unit may be awarded in consideration
for such property or services as is permitted under Applicable Law, including
for past services actually rendered to the Company or a Subsidiary for its
benefit.

 

  (b) Vesting. Shares of Common Stock awarded under an agreement reflecting a
Stock Grant and a Stock Unit award may, but need not, be subject to a share
repurchase option, forfeiture restriction or other conditions in favor of the
Company in accordance with a vesting or lapse schedule to be determined by the
Administrator.

 

  (c) Termination of Participant’s Continuous Service. In the event a
Participant’s Continuous Service terminates, the Company may reacquire any or
all of the Shares held by the Participant which have not vested or which are
otherwise subject to forfeiture or other conditions as of the date of
termination under the terms of the agreement.

 

  (d) Transferability. Rights to acquire Shares under a Stock Grant or a Stock
Unit agreement shall be transferable by the Participant only by will or by the
laws of descent and distribution.

 

12. Stock Purchase Rights.

 

  (a) Rights to Purchase. Stock Purchase Rights may be issued either alone, in
addition to, or in tandem with other awards granted under the Plan and/or cash
awards made outside of the Plan. After the Administrator determines that it will
offer Stock Purchase Rights under the Plan, it shall advise the offeree in
writing of the terms, conditions and restrictions related to the offer,
including the number of Shares that such person shall be entitled to purchase,
the price to be paid, and the time within which such person must accept such
offer, which shall in no event exceed 30 days from the date upon which the
Administrator made the determination to grant the Stock Purchase Right. The
purchase price of Shares subject to Stock Purchase Rights shall be as determined
by the Administrator. The offer to purchase Shares subject to Stock Purchase
Rights shall be accepted by execution of a Stock Award Agreement in the form
determined by the Administrator.

 

  (b) Repurchase Option. Unless the Administrator determines otherwise, the
Stock Award Agreement shall grant the Company a repurchase option exercisable
upon the voluntary or involuntary termination of the purchaser’s employment with
the Company for any reason (including death or disability). The purchase price
for Shares repurchased pursuant to the Restricted Stock Award Agreement shall be
the original purchase price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The repurchase
option shall lapse at such rate as the Administrator may determine.

 

  (c) Other Provisions. The Restricted Stock Purchase Agreement shall contain
such other terms, provisions and conditions not inconsistent with the Plan as
may be determined by the Administrator in its sole discretion. In addition, the
provisions of Restricted Stock Purchase Agreements need not be the same with
respect to each purchaser.

 

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  (d) Rights as a Stockholder. Once the Stock Purchase Right is exercised, the
purchaser shall have the rights equivalent to those of a stockholder, and shall
be a stockholder when his or her purchase is entered upon the records of the
duly authorized transfer agent of the Company. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the Stock
Purchase Right is exercised, except as provided in Section 17 of the Plan.

 

13. Stock Appreciation Rights.

 

  (a) General. Stock Appreciation Rights may be granted either alone, in
addition to, or in tandem with other Awards granted under the Plan. The
Administrator may grant Stock Appreciation Rights to eligible Participants
subject to terms and conditions not inconsistent with this Plan and determined
by the Administrator. The specific terms and conditions applicable to the
Participant shall be provided for in the Stock Award Agreement. Stock
Appreciation Rights shall be exercisable, in whole or in part, at such times as
the Administrator shall specify in the Stock Award Agreement.

 

  (b) Exercise of Stock Appreciation Right. Upon the exercise of a Stock
Appreciation Right, in whole or in part, the Participant shall be entitled to a
payment in an amount equal to the excess of the Fair Market Value on the date of
exercise of a fixed number of Shares covered by the exercised portion of the
Stock Appreciation Right, over the base appreciation amount of the Shares
pursuant to the Stock Appreciation Right. The amount due to the Participant upon
the exercise of a Stock Appreciation Right shall be paid in such form of
consideration as determined by the Administrator and may be in cash, Shares or a
combination thereof, over the period or periods, in each case as specified in
the Stock Award Agreement. A Stock Award Agreement may place limits on the
amount that may be paid over any specified period or periods upon the exercise
of a Stock Appreciation Right, on an aggregate basis or as to any Participant. A
Stock Appreciation Right shall be considered exercised when the Company receives
written notice of exercise in accordance with the terms of the Stock Award
Agreement from the person entitled to exercise the Stock Appreciation Right.

 

  (c) Nonassignability of Stock Appreciation Rights. Except as determined by the
Board, no Stock Appreciation Right shall be assignable or otherwise transferable
by the Participant except by will or by the laws of descent and distribution.

 

  (d) Base Appreciation Amount and Term of Stock Appreciation Right.
Notwithstanding anything herein to the contrary, the price used to determine the
amount payable to a Participant (in accordance with Section 13(b) above) upon
exercise of any Stock Appreciation Right granted under the Plan (referred to in
the Plan as the “base appreciation amount”) shall be no less than 100% of the
Fair Market Value per Share on the date of grant; provided, however, that Stock
Appreciation Rights may be granted with a base appreciation amount other than as
required above pursuant to a merger or other corporate transaction. The term of
each Stock Appreciation Right shall be the term stated in the Stock Award
Agreement; provided, however, that the term shall be no more than ten years from
the date of grant thereof or such shorter term as may be provided in the Stock
Award Agreement.

 

  (e) No Repricings, Exchanges or Buyouts. Other than in connection with a
change in the Company’s capitalization, merger or certain other transactions (as
described in Section 17 of the Plan), the following actions will be subject to
stockholder approval: (i) the reduction of the base appreciation amount of any
Stock Appreciation Right granted under the Plan or (ii) the cancellation of a
Stock Appreciation Right at a time when its base appreciation amount exceeds the
Fair Market Value of the underlying Shares, in exchange for another Option,
Stock Appreciation Right or other Award or for a cash payment. Notwithstanding
the foregoing, canceling a Stock Appreciation Right in exchange for another
Option, Stock Appreciation Right or other Award with an exercise price, purchase
price or base appreciation amount that is equal to or greater than the base
appreciation amount of the original Stock Appreciation Right shall not be
subject to stockholder approval.

 

14. Cash Awards. Each Cash Award will confer upon the Participant the
opportunity to earn a future payment tied to the level of achievement with
respect to one or more performance criteria established for a performance period
of not less than one (1) year.

 

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  (a) Cash Award. Each Cash Award shall contain provisions regarding (i) the
target and maximum amount payable to the Participant as a Cash Award, (ii) the
performance criteria and level of achievement versus these criteria which shall
determine the amount of such payment, (iii) the period as to which performance
shall be measured for establishing the amount of any payment, (iv) the timing of
any payment earned by virtue of performance, (v) restrictions on the alienation
or transfer of the Cash Award prior to actual payment, (vi) forfeiture
provisions, and (vii) such further terms and conditions, in each case not
inconsistent with the Plan, as may be determined from time to time by the
Administrator. The maximum amount payable as a Cash Award may be a multiple of
the target amount payable, but the maximum amount payable pursuant to that
portion of a Cash Award granted under this Plan for any fiscal year to any
Participant that is intended to satisfy the requirements for “performance based
compensation” under Section 162(m) of the Code shall not exceed U.S. $1,000,000.

 

  (b) Performance Criteria. The Administrator shall establish the performance
criteria and level of achievement versus these criteria which shall determine
the target and the minimum and maximum amount payable under a Cash Award, which
criteria may be based on financial performance and/or personal performance
evaluations. The Administrator may specify the percentage of the target Cash
Award that is intended to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code. Notwithstanding anything to the
contrary herein, the performance criteria for any portion of a Cash Award that
is intended to satisfy the requirements for “performance-based compensation”
under Section 162(m) of the Code shall be a measure established by the
Administrator based on one or more Qualifying Performance Criteria selected by
the Administrator and specified in writing not later than 90 days after the
commencement of the period of service to which the performance goals relates,
provided that the outcome is substantially uncertain at that time (or in such
other manner that complies with Section 162(m)).

 

  (c) Timing and Form of Payment. The Administrator shall determine the timing
of payment of any Cash Award. The Administrator may provide for or, subject to
such terms and conditions as the Administrator may specify, may permit a
Participant to elect for the payment of any Cash Award to be deferred to a
specified date or event. The Administrator may specify the form of payment of
Cash Awards, which may be cash or other property, or may provide for a
Participant to have the option for his or her Cash Award, or such portion
thereof as the Administrator may specify, to be paid in whole or in part in cash
or other property.

 

  (d) Termination of Employment. The Administrator shall have the discretion to
determine the effect a Termination of Employment due to (i) disability,
(ii) death or (iii) otherwise shall have on any Cash Award.

 

15. Section 162(m) Compliance. Any Stock Award (other than an Option or any
other Stock Award having a purchase price equal to 100% of the Fair Market Value
on the date such award is made) or Cash Award that is intended as “qualified
performance-based compensation” within the meaning of Section 162(m) of the Code
must not be granted before achievement of one or more Qualifying Performance
Criteria or may be granted before such achievement, provided that the Award does
not vest or become exercisable before achievement of the Qualifying Performance
Criteria. Notwithstanding anything to the contrary herein, the Committee shall
have the discretion to determine the time and manner of compliance with
Section 162(m) of the Code as required under applicable regulations and to
conform the procedures related to the Award to the requirements of
Section 162(m).

 

16. Taxes.

 

  (a) As a condition of the grant, exercise or vesting of an Option, Stock Award
or Cash Award granted under the Plan or issuance of Shares under the Plan, the
Participant (or in the case of the Participant’s death, the person exercising
the Option, Stock Award or Cash Award) shall make such arrangements as the
Administrator may require for the satisfaction of any applicable federal, state,
local or foreign withholding tax obligations that may arise in connection with
the exercise of Option, Stock Award or Cash Award and the issuance of Shares.
The Company shall not be required to issue any Shares or pay any cash under the
Plan until such obligations are satisfied.

 

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  (b) In the case of an Employee and in the absence of any other arrangement,
the Employee shall be deemed to have directed the Company to withhold or collect
from his or her compensation an amount sufficient to satisfy such tax
obligations from the next payroll payment otherwise payable after the date of an
exercise of the Option or Stock Award.

 

  (c) In the case of Participant other than an Employee (or in the case of an
Employee where the next payroll payment is not sufficient to satisfy such tax
obligations, with respect to any remaining tax obligations), in the absence of
any other arrangement and to the extent permitted under the Applicable Laws, the
Participant shall be deemed to have elected to have the Company withhold from
the Shares to be issued upon exercise of the Option or Stock Award that number
of Shares having a Fair Market Value determined as of the applicable Tax Date
(as defined below) equal to the minimum statutory amounts required to be
withheld. For purposes of this Section 16, the Fair Market Value of the Shares
to be withheld shall be determined on the date that the amount of tax to be
withheld is to be determined under the Applicable Laws (the “Tax Date”).

 

  (d) If permitted by the Administrator, in its discretion, a Participant may
satisfy his or her tax withholding obligations upon exercise of an Option or
Stock Award by surrendering to the Company Shares that (i) in the case of Shares
previously acquired from the Company, have been owned by the Participant for
more than six (6) months on the date of surrender, and (ii) have a Fair Market
Value determined as of the applicable Tax Date equal to the minimum statutory
amounts required to be withheld.

 

  (e) Any election or deemed election by a Participant to have Shares withheld
to satisfy tax withholding obligations under Section 16(c) or (d) above shall be
irrevocable as to the particular Shares as to which the election is made and
shall be subject to the consent or disapproval of the Administrator. Any
election by a Participant under Section 16(d) above must be made on or prior to
the applicable Tax Date.

 

  (f) In the event an election to have Shares withheld is made by a Participant
and the Tax Date is deferred under Section 83 of the Code because no election is
filed under Section 83(b) of the Code, the Participant shall receive the full
number of Shares with respect to which the Option is exercised but such
Participant shall be unconditionally obligated to tender back to the Company the
proper number of Shares on the applicable Tax Date.

 

17. Adjustments Upon Changes in Capitalization, Merger or Certain Other
Transactions.

 

  (a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Award, and the number of shares of Common Stock
that have been authorized for issuance under the Plan but as to which no Options
or Stock Awards have yet been granted or that have been returned to the Plan
upon cancellation or expiration of an Option or Stock Award, and the number of
shares set forth in Sections 3(i) and 8 above, as well as the price per share of
Common Stock covered by each such outstanding Option or Stock Award, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination, recapitalization or reclassification of the Common Stock,
or any other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been “effected without receipt of consideration.” In the event of any
distribution of cash or other assets to stockholders other than a normal cash
dividend, the Board shall also make such adjustments as provided in this
Section 17(a) or substitute, exchange or grant Awards to effect such adjustments
(collectively “adjustments”). Any such adjustments to outstanding Awards will be
effected in a manner that precludes the enlargement of rights and benefits under
such Awards. Such adjustment shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or Stock Award.

 

  (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Board shall notify the Optionee at least 15 days
prior to such proposed action. To the extent it has not been previously
exercised, the Option or Stock Award will terminate immediately prior to the
consummation of such proposed action.

 

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  (c) Merger or Sale of Assets. In the event of a proposed sale of all or
substantially all of the Company’s assets or a merger of the Company with or
into another corporation, each outstanding Award shall be assumed or an
equivalent option or right shall be substituted by such successor corporation or
a parent or subsidiary of such successor corporation, unless the successor
corporation does not agree to assume the Award or to substitute an equivalent
award, in which case such Award shall accelerate immediately prior to the
consummation of the merger or sale of assets. For purposes of this
Section 17(c), an Option or Stock Award shall be considered assumed, without
limitation, if, at the time of issuance of the stock or other consideration upon
such merger or sale of assets, each holder of an Option or Stock Award would be
entitled to receive upon exercise of the Option or Stock Award the same number
and kind of shares of stock or the same amount of property, cash or securities
as such holder would have been entitled to receive upon the occurrence of such
transaction if the holder had been, immediately prior to such transaction, the
holder of the number of Shares of Common Stock covered by the Option or the
Stock Award at such time (after giving effect to any adjustments in the number
of Shares covered by the Option or Stock Award as provided for in this
Section 17); provided, however, that if such consideration received in the
merger or sale of assets is not solely common stock of the successor corporation
or its Parent, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received upon the exercise of
an Option or Stock Award (or, as applicable, vesting of a Stock Award), for each
Share subject to such Award, to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per Share
consideration received by holders of Common Stock in the merger or sale of
assets.

 

  (d) Certain Distributions. In the event of any distribution to the Company’s
stockholders of securities of any other entity or other assets (other than
dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per share of Common Stock covered by each
outstanding Option or Stock Award to reflect the effect of such distribution.

 

18. Non-Transferability of Awards.

 

  (a) General. Except as set forth in this Section 18, Awards may not be sold,
pledged, assigned, hypothecated, transferred or disposed of in any manner other
than by will or by the laws of descent or distribution. The designation of a
beneficiary by a Participant will not constitute a transfer. An Option or Stock
Award may be exercised, during the lifetime of the holder of an Option or Stock
Award, only by such holder or a transferee permitted by this Section 18.

 

  (b) Limited Transferability Rights. The Administrator may in its discretion
grant transferable Nonstatutory Stock Options pursuant to Option Agreements
specifying the manner in which such Nonstatutory Stock Options are transferable.

 

19. Time of Granting Awards. The date of grant of an Award shall, for all
purposes, be the date on which the Administrator makes the determination
granting such Award, or such other date as is determined by the Board; provided,
however, that in the case of any Incentive Stock Option, the grant date shall be
the later of the date on which the Administrator makes the determination
granting such Incentive Stock Option or the date of commencement of the
Optionee’s employment relationship with the Company. Notice of the determination
shall be given to each Employee or Consultant to whom an Award is so granted
within a reasonable time after the date of such grant.

 

20. Amendment and Termination of the Plan.

 

  (a)

Authority to Amend or Terminate. The Board may at any time amend, alter, suspend
or discontinue the Plan, but no amendment, alteration, suspension or
discontinuation shall be made that would impair the rights of any Optionee or
holder of Stock Awards or Cash Awards under any grant theretofore made, without
his or her consent. In addition, to the extent necessary and desirable to comply
with the Applicable Laws, the Company shall obtain stockholder approval of any
Plan amendment in such a manner and to such a degree as required. In addition,
unless approved by the stockholders of the

 

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Company, no amendment shall be made that would result in a repricing of Options
or Stock Appreciation Rights by (x) reducing the exercise price or base
appreciation amount of outstanding Options and Stock Appreciation Rights or
(y) canceling an outstanding Option or Stock Appreciation Right held by a
Participant and re-granting to the Participant a new Option with a lower
exercise price, a Stock Appreciation Right with a lower base appreciation
amount, or another Award, in either case other than in connection with a change
in the Company’s capitalization, merger or certain other transactions pursuant
to Section 17 of the Plan.

 

  (b) Effect of Amendment or Termination. No amendment or termination of the
Plan shall adversely affect Options, Stock Awards or Cash Awards already
granted, unless mutually agreed otherwise between the Optionee or holder of the
Stock Awards or Cash Awards and the Board, which agreement must be in writing
and signed by the Optionee or holder of the Stock Awards or Cash Awards and the
Company.

 

21. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to
the exercise of an Option or Stock Award unless the exercise of such Option or
Stock Award and the issuance and delivery of such Shares pursuant thereto shall
comply with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any Stock Exchange.
Notwithstanding any other provision of the Plan or any agreement entered into by
the Company pursuant to the Plan, the Company shall not be obligated, and shall
have no liability for failure, to issue or deliver any Shares under the Plan
unless such issuance or delivery would comply with the Applicable Laws, with
such compliance determined by the Company in consultation with its legal
counsel.

As a condition to the exercise of an Option or Stock Award, the Company may
require the person exercising such Award to represent and warrant at the time of
any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by law.

 

22. Reservation of Shares. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company’s counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

 

23. Agreements. Options, Stock Awards and Cash Awards shall be evidenced by
written Option Agreements, and Stock Award Agreements and Cash Award Agreements
respectively, in such form(s) as the Administrator shall approve from time to
time.

 

24. Stockholder Approval. If required by Applicable Laws, continuance of the
Plan shall be subject to approval by the stockholders of the Company within
twelve months before or after the date the Plan, as amended and restated
effective June 23, 2010, is adopted. Such stockholder approval shall be obtained
in the degree and manner required under the Applicable Laws.

 

25. Unfunded Obligation. Participants shall have the status of general unsecured
creditors of the Company. Any amounts payable to Participants pursuant to the
Plan shall be unfunded and unsecured obligations for all purposes, including,
without limitation, Title I of the Employee Retirement Income Security Act of
1974, as amended. Neither the Company nor any Parent or Subsidiary shall be
required to segregate any monies from its general funds, or to create any
trusts, or establish any special accounts with respect to such obligations. The
Company shall retain at all times beneficial ownership of any investments,
including trust investments, which the Company may make to fulfill its payment
obligations hereunder. Any investments or the creation or maintenance of any
trust or any Participant account shall not create or constitute a trust or
fiduciary relationship between the Administrator, the Company or any Parent or
Subsidiary and a Participant, or otherwise create any vested or beneficial
interest in any Participant or the Participant’s creditors in any assets of the
Company or a Parent or Subsidiary. The Participants shall have no claim against
the Company or any Parent or Subsidiary for any changes in the value of any
assets that may be invested or reinvested by the Company with respect to the
Plan.

 

15