Exhibit 10.1

APPLE INC.

2014 EMPLOYEE STOCK PLAN

SECTION 1. INTRODUCTION.

On November 19, 2013 (the “Effective Date”), the Board adopted this 2014
Employee Stock Plan.

The purpose of the Plan is to promote the long-term success of the Company and
the creation of shareholder value by offering Participants the opportunity to
share in such long-term success by acquiring a proprietary interest in the
Company.

The Plan seeks to achieve this purpose by providing for discretionary long-term
incentive Awards in the form of Options (which may be Incentive Stock Options or
Nonstatutory Stock Options), Stock Appreciation Rights, Stock Grants, Restricted
Stock Units and Cash Bonus Awards.

The Plan shall be governed by, and construed in accordance with, the laws of the
State of California (except its choice-of-law provisions). Capitalized terms
shall have the meaning provided in Section 2 unless otherwise provided in this
Plan or any related Award Agreement.

SECTION 2. DEFINITIONS.

(a) “2003 Plan” means the Apple Inc. 2003 Employee Stock Plan as amended from
time to time.

(b) “Applicable Laws” means all applicable securities, tax and exchange control
laws, rules, regulations and requirements relating to the administration of
stock plans, including, but not limited to, all applicable U.S. federal and
state laws, the rules and regulations of any stock exchange or quotation system
on which the Common Stock is listed or quoted, and the applicable securities,
tax and exchange control laws, rules, regulations or requirements of any foreign
country or jurisdiction where Awards are, or will be, granted under the Plan or
where Participants reside or provide services, as such laws, rules, regulations
and requirements shall be in place from time to time.

(c) “Award” means an Option, SAR, Stock Grant, Restricted Stock Unit or Cash
Bonus Award.

(d) “Award Agreement” means any Stock Option Agreement, SAR Agreement, Stock
Grant Agreement, Restricted Stock Unit Agreement or any written document that
evidences a Cash Bonus Award granted under the Plan. Award Agreements shall
consist of either (1) a written award agreement in a form approved by the
Committee and executed by the Company by an officer duly authorized to act on
its behalf, or (2) an electronic notice of award grant in a form approved by the
Committee and recorded by the Company (or its designee) in an electronic
recordkeeping system used for the purpose of tracking award grants under the
Plan generally, as the Committee may provide and, in each case and if required
by the Committee, executed or otherwise electronically accepted by the recipient
of the Award in such form and manner as the Committee may require. The Committee
may authorize any officer of the Company (other than the particular Award
recipient) to execute any or all Award Agreements on behalf of the Company.

(e) “Board” means the Board of Directors of the Company, as constituted from
time to time.

(f) “Cash Bonus Award” means an Award granted pursuant to Section 10(b) of the
Plan.

(g) “Cashless Exercise” means, to the extent that a Stock Option Agreement so
provides and as permitted by Applicable Laws, a program approved by the
Committee in which payment of the aggregate Exercise Price and/or satisfaction
of any applicable tax withholding obligations may be made all or in part by
delivery (on a form prescribed by the Committee) of an irrevocable direction to
a securities broker to sell Shares subject to an Option and to deliver all or
part of the sale proceeds to the Company.

 

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(h) “Code” means the U.S. Internal Revenue Code of 1986, as amended, and the
regulations and interpretations promulgated thereunder.

(i) “Committee” has the meaning given to such term in Section 3.

(j) “Common Stock” means the Company’s common stock.

(k) “Company” means Apple Inc., a California corporation.

(l) “Consultant” means an individual who provides bona fide services to the
Company, a Parent or a Subsidiary, other than as an Employee or Director.

(m) “Covered Employees” means those persons who the Committee determines are
subject to the limitations of Code Section 162(m).

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

(o) “Disability” means that the Participant is classified as disabled under the
long-term disability policy of the Company or, if no such policy applies, the
Participant is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months; provided, however, that with
respect to an Option intended to qualify as an ISO, “Disability” shall mean a
“permanent and total disability” within the meaning of Section 22(e)(3) of the
Code.

(p) “Employee” means any individual who provides services as an employee of the
Company, a Parent or a Subsidiary (including any Director that is also an
Employee).

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

(r) “Exercise Price” means, in the case of an Option, the amount for which a
Share may be purchased upon exercise of such Option, as specified in the
applicable Stock Option Agreement. “Exercise Price,” in the case of a SAR, means
an amount, as specified in the applicable SAR Agreement, which is subtracted
from the Fair Market Value at the time such SAR is exercised in determining the
amount payable upon exercise of such SAR.

(s) “Fair Market Value” means, unless otherwise determined or provided by the
Committee in the circumstances, the closing price (in regular trading) for a
Share on the NASDAQ Stock Market (the “Market”) for the date in question or, if
no sales of Common Stock were reported on the Market on that date, the last
price (in regular trading) for a Share on the Market for the next preceding day
on which sales of Common Stock were reported on the Market. The Committee may,
however, provide with respect to one or more Awards that the Fair Market Value
shall equal the last price for a Share on the Market on the last trading day
preceding the date in question or the average of the high and low trading prices
of a Share on the Market for the date in question or the most recent trading
day. If the Common Stock is no longer listed or is no longer actively traded on
the Market as of the applicable date, the Fair Market Value of the Common Stock
shall be the value as reasonably determined by the Committee for purposes of the
Award in the circumstances. The Committee also may adopt a different methodology
for determining Fair Market Value with respect to one or more Awards if a
different methodology is necessary or advisable to secure any intended favorable
tax, legal or other treatment for the particular Award(s) (for example, and
without limitation, the Committee may provide that Fair Market Value for
purposes of one or more Awards will be based on an average of closing prices (or
the average of high and low daily trading prices) for a specified period
preceding the relevant date).

(t) “Fiscal Year” means the Company’s fiscal year.

(u) “Full-Value Awards” means Awards granted under the Plan other than Options
and SARs.

 

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(v) “Full-Value Award Ratio” means the share-counting ratio applicable to
Full-Value Awards as specified in Section 5(b) of the Plan.

(w) “Grant Date” means the date on which the Committee makes the determination
to grant an Award or such later date as the Committee may specify in making such
determination.

(x) “Incentive Stock Option” or “ISO” means an incentive stock option described
in Code Section 422.

(y) “Non-Employee Director” means a member of the Board who is not an Employee.

(z) “Nonstatutory Stock Option” or “NSO” means a stock option that is not an
ISO.

(aa) “Option” means an ISO or NSO granted under the Plan entitling the
Participant to purchase Shares.

(bb) “Parent” means any corporation or other entity that beneficially owns
directly or indirectly a majority of the Company’s outstanding voting stock or
voting power. An entity that attains the status of a Parent on a date after the
adoption of the Plan shall be considered a Parent commencing as of such date.

(cc) “Participant” means an Employee or Consultant who has been selected by the
Committee to receive an Award under the Plan or any individual, estate or other
entity that holds an Award.

(dd) “Performance Goals” means one or more objective measurable performance
goals established by the Committee with respect to a Performance Period based
upon one or more of the following criteria: (i) operating income; (ii) earnings
before interest, taxes, depreciation and amortization; (iii) earnings; (iv) cash
flow; (v) market share; (vi) sales or revenue; (vii) expenses; (viii) cost of
goods sold; (ix) profit/loss or profit margin; (x) working capital; (xi) return
on equity or assets; (xii) earnings per share; (xiii) total shareholder return;
(xiv) price/earnings ratio; (xv) debt or debt-to-equity; (xvi) accounts
receivable; (xvii) writeoffs; (xviii) cash; (xix) assets; (xx) liquidity;
(xxi) operations; (xxii) intellectual property (e.g., patents); (xxiii) product
development; (xxiv) manufacturing, production or inventory; (xxv) mergers and
acquisitions or divestitures; (xxvi) individual performance objective; and/or
(xxvii) stock price. Any criteria used may be measured, as applicable, (a) in
absolute terms, (b) in relative terms (including but not limited to, the passage
of time and/or against other companies or financial metrics), (c) on a per share
and/or share per capita basis, (d) against the performance of the Company as a
whole or against particular entities, segments, operating units or products of
the Company and /or (e) on a pre-tax or after tax basis. Awards issued to
persons who are not Covered Employees may take into account any other factors
deemed appropriate by the Committee.

(ee) “Performance Period” means any period not exceeding 120 months as
determined by the Committee, in its sole discretion. The Committee may establish
different Performance Periods for different Participants, and the Committee may
establish concurrent or overlapping Performance Periods.

(ff) “Plan” means this Apple Inc. 2014 Employee Stock Plan as it may be amended
from time to time.

(gg) “Re-Price” or “Re-Pricing” means any of the following actions taken by the
Committee: (1) lowering or reducing the Exercise Price of an outstanding Option
and/or outstanding SAR, (2) cancelling, exchanging or surrendering any
outstanding Option and/or outstanding SAR in exchange for cash or another award
for the purpose of repricing the award; and (3) cancelling, exchanging or
surrendering any outstanding Option and/or outstanding SAR in exchange for an
Option or SAR with an Exercise Price that is less than the Exercise Price of the
original award; provided that, in each case, a Re-Pricing (or Re-Price, as the
case may be) shall not include (y) any action taken with shareholder approval,
and (z) any adjustment of an Option or SAR pursuant to Section 11.

(hh) “Restricted Stock Unit” means a bookkeeping entry representing the
equivalent of one Share awarded under the Plan and represents an unfunded and
unsecured obligation of the Company.

 

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(ii) “Restricted Stock Unit Agreement” means the agreement described in
Section 9 evidencing a Restricted Stock Unit Award.

(jj) “SAR Agreement” means the agreement described in Section 7 evidencing a
Stock Appreciation Right.

(kk) “SEC” means the U.S. Securities and Exchange Commission.

(ll) “Section 16 Persons” means those officers, directors or other persons who
are subject to Section 16 of the Exchange Act.

(mm) “Securities Act” means the U.S. Securities Act of 1933, as amended.

(nn) “Share” means one share of Common Stock.

(oo) “Stock Appreciation Right” or “SAR” means a stock appreciation right
awarded under the Plan.

(pp) “Stock Grant” means Shares awarded under the Plan pursuant to Section 8.

(qq) “Stock Grant Agreement” means the agreement described in Section 8
evidencing a Stock Grant.

(rr) “Stock Option Agreement” means the agreement described in Section 6
evidencing an Option.

(ss) “Subsidiary” means any corporation or other entity a majority of whose
outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Company. An entity that attains the status of a Subsidiary on
a date after the adoption of the Plan shall be considered a Subsidiary
commencing as of such date.

(tt) “10-Percent Stockholder” means an individual who owns more than 10% of the
total combined voting power of all classes of outstanding stock of the Company
or of its parent corporation or subsidiary corporation (as defined in Sections
424(e) and (f) of the Code). In determining stock ownership, the attribution
rules of Code Section 424(d) shall be applied.

(uu) “Termination of Service” means (i) in the case of an Employee, a cessation
of the provision of employment-related services by the Employee for the Company
and its Subsidiaries for any reason, including but not by way of limitation, a
termination by resignation, discharge, death, disability, or retirement, but
excluding any such termination where there is a simultaneous reemployment by the
Company or a Subsidiary and excluding any bona fide and Company (or Subsidiary)
approved leave of absence; and (ii) in the case of a Consultant, a cessation of
the service relationship (as determined by the Committee in its sole discretion)
between the Consultant and the Company and its Subsidiaries for any reason,
including but not by way of limitation, a termination by resignation, discharge,
death or disability, but excluding any such termination where there is a
simultaneous re-engagement of the Consultant by the Company or a Subsidiary. For
purposes of the Plan and any Award, if an entity ceases to be a Subsidiary of
the Company, a Termination of Service shall be deemed to have occurred with
respect to each Employee and Consultant in respect of such Subsidiary who does
not continue as an Employee or Consultant in respect of the Company or another
Subsidiary that continues as such after giving effect to the transaction or
other event giving rise to the change in status unless the Subsidiary that is
sold, spun-off or otherwise divested (or its successor or a direct or indirect
parent of such Subsidiary or successor) assumes the Employee’s or Consultant’s
Award(s) in connection with such transaction.

SECTION 3. ADMINISTRATION.

(a) Committee Composition. The Board or a Committee appointed by the Board shall
administer the Plan. The Committee shall generally have membership composition
which enables (i) Awards to Section 16 Persons to qualify as exempt from
liability under Section 16(b) of the Exchange Act and (ii) Awards to Covered
Employees

 

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to qualify as performance-based compensation as provided under Code
Section 162(m). However, the Board may also appoint one or more separate
Committees, each composed of two or more directors of the Company who need not
qualify under Rule 16b-3 or Code Section 162(m), that may administer the Plan
with respect to Participants who are not Section 16 Persons or Covered
Employees, respectively, may grant Awards under the Plan to such Participants
and may determine all terms of such Awards. Members of any such Committee shall
serve for such period of time as the Board may determine and shall be subject to
removal by the Board at any time. The Board may also at any time terminate the
functions of any Committee and reassume all powers and authority previously
delegated to the Committee.

The Board and any Committee appointed to administer the Plan is referred to
herein as the “Committee.”

(b) Authority of the Committee. Subject to the provisions of the Plan, the
Committee shall have the full authority, in its sole discretion, to take any
actions it deems necessary or advisable for the administration of the Plan. Such
actions shall include:

(i) selecting Participants who are to receive Awards under the Plan;

(ii) determining the Fair Market Value for purposes of any Award;

(iii) determining the type of and number of securities to be subject to each
Award, and the Grant Date, vesting requirements and other features and
conditions of such Awards;

(iv) approving the forms of Award Agreements to be used under the Plan;

(v) amending any outstanding Awards;

(vi) accelerating the vesting or extending the post-termination exercise term of
Awards at any time and under such terms and conditions as it deems appropriate
(including, without limitation, in connection with a termination of employment
or services or other events of a personal nature) subject to any required
consent under Section 15;

(vii) construing and interpreting the Plan and any agreements defining the
rights and obligations of the Company, its Subsidiaries, and Participants under
the Plan;

(viii) correcting any defect, supplying any omission or reconciling any
inconsistency in the Plan or any Award Agreement;

(ix) adopting such rules or guidelines as it deems appropriate to implement the
Plan;

(x) authorizing any person to execute on behalf of the Company any instrument
required to effect the grant of an Award previously authorized by the Committee;

(xi) adjusting the number of Shares subject to any Award, adjusting the price of
any or all outstanding Awards or otherwise changing previously imposed terms and
conditions, in such circumstances as the Committee may deem appropriate, in each
case subject to Sections 5 and 15, and subject to the no Re-Pricing provision
below;

(xii) determining whether, and the extent to which, adjustments are required
pursuant to Section 13 hereof and authorizing the termination, conversion,
substitution or succession of Awards upon the occurrence of an event of the type
described in Section 13;

(xiii) acquiring or settling (subject to Sections 13 and 15) rights under Awards
in cash, stock of equivalent value, or other consideration, subject to the no
Re-Pricing provision below;

 

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(xiv) making all other decisions relating to the operation of the Plan; and

(xv) adopting such plans or subplans as may be deemed necessary or appropriate
to comply with the laws of other countries, allow for tax-preferred treatment of
Awards or otherwise provide for the participation by Participants who reside
outside of the U.S.

In no event shall the Committee Re-Price any Option or SAR.

The Committee’s determinations under the Plan shall be final and binding on all
persons.

(c) Indemnification. To the maximum extent permitted by applicable laws, each
member of the Committee shall be indemnified and held harmless by the Company
against and from (i) any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by him or her in connection with or resulting from
any claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action taken or failure to act
under the Plan or any Award Agreement, and (ii) from any and all amounts paid by
him or her in settlement thereof, with the Company’s approval, or paid by him or
her in satisfaction of any judgment in any such claim, action, suit, or
proceeding against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The foregoing right
of indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled under the Company’s Articles of
Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under
any power that the Company may have to indemnify them or hold them harmless.

(d) Reliance on Experts. In making any determination or in taking or not taking
any action under the Plan, the Committee may obtain and may rely upon the advice
of experts, including employees and professional advisors to the Company. No
director, officer or agent of the Company or any of its Subsidiaries shall be
liable for any such action or determination taken or made or omitted in good
faith.

SECTION 4. GENERAL.

(a) General Eligibility. Only Employees and Consultants shall be eligible to
participate in the Plan. Non-Employee Directors are not eligible for Award
grants under the Plan.

(b) Incentive Stock Options. Only Participants who are Employees of the Company,
a “parent corporation” of the Company (within the meaning of Section 424(e) of
the Code) or a “subsidiary corporation” of the Company (within the meaning of
Section 424(f) of the Code) shall be eligible for the grant of ISOs. In
addition, a 10-Percent Stockholder shall not be eligible for the grant of an ISO
unless the requirements set forth in Code Section 422(c)(5) are satisfied.

(c) Restrictions on Transfer.

(i) Unless otherwise expressly provided in (or pursuant to) this Section 4(c) or
required by Applicable Law: (A) all Awards are non-transferable and shall not be
subject in any manner to sale, transfer, anticipation, alienation, assignment,
pledge, encumbrance or charge; (B) Awards shall be exercised only by the
Participant; and (C) amounts payable or Shares issuable pursuant to any Award
shall be delivered only to (or for the account of) the Participant.

(ii) The Committee may permit Awards to be exercised by and paid to, or
otherwise transferred to, other persons or entities pursuant to such conditions
and procedures, including limitations on subsequent transfers, as the Committee
may, in its sole discretion, establish in writing. Any permitted transfer shall
be subject to compliance with Applicable Laws and shall not be for value (other
than nominal consideration, settlement of marital property rights, or for
interests in an entity in which more than 50% of the voting interests are held
by the Participant or by the Participant’s family members).

 

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(iii) The exercise and transfer restrictions in Section 4(c) shall not apply to:

 

  (A) transfers to the Company (for example, in connection with the expiration
or termination of the Award),

 

  (B) the designation of a beneficiary to receive benefits in the event of the
Participant’s death or, if the Participant has died, transfers to or exercise by
the Participant’s beneficiary, or, in the absence of a validly designated
beneficiary, transfers by will or the laws of descent and distribution,

 

  (C) subject to any applicable limitations on ISOs, transfers to a family
member (or former family member) pursuant to a domestic relations order if
approved or ratified by the Company,

 

  (D) if the Participant has suffered a Disability, permitted transfers or
exercises on behalf of the participant by his or her legal representative, or

 

  (E) the authorization by the Committee of Cashless Exercise procedures with
third parties who provide financing for the purpose of (or who otherwise
facilitate) the exercise of Awards consistent with Applicable Laws and the
express authorization of the Committee.

(d) Beneficiaries. If permitted by the Committee in the Award Agreement, a
Participant under the Plan may name a beneficiary or beneficiaries to whom any
vested but unpaid Award shall be paid in the event of the Participant’s death.
Each such designation shall revoke all prior beneficiary designations by the
Participant and shall be effective only if given in a form and manner acceptable
to the Committee. In the absence of any such designation, any vested benefits
remaining unpaid at the Participant’s death shall be paid to the Participant’s
estate and, subject to the terms of the Plan and of the applicable Award
Agreement, any unexercised vested Award may be exercised by the administrator or
executor of the Participant’s estate.

(e) No Rights as a Shareholder. A Participant, or a transferee of a Participant,
shall have no rights as a shareholder with respect to any Common Stock covered
by an Award until such person has satisfied all of the terms and conditions to
receive such Common Stock, has satisfied any applicable withholding or tax
obligations relating to the Award and the Shares have been issued (as evidenced
by an appropriate entry on the books of the Company or a duly authorized
transfer agent of the Company).

(f) Termination of Service. The Committee shall establish the effect of a
Termination of Service on the rights and benefits under each Award under the
Plan and in so doing may make distinctions based upon, inter alia, the cause of
termination and type of Award.

(g) Consideration. The purchase price for any Award granted under the Plan or
the Common Stock to be delivered pursuant to an award, as applicable, may be
paid by means of any lawful consideration as determined by the Committee.

SECTION 5. SHARES SUBJECT TO PLAN AND SHARE LIMITS.

(a) Basic Limitation. The stock issuable under the Plan shall be authorized but
unissued Shares. The aggregate number of Shares that may be issued pursuant to
Awards under the Plan, subject to adjustment pursuant to Section 11, is equal
to:

(i) 55,000,000 Shares, plus

(ii) the number of any Shares that remain available under the 2003 Plan for new
award grants on the date the Company’s shareholders approve the Plan (the
“Approval Date”), and determined immediately before giving effect to the
termination of the authority to grant new awards under the 2003 Plan in
connection with such approval, plus

 

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(iii) the number of any Shares subject to stock options granted under the 2003
Plan and outstanding as of the Approval Date which expire, or for any reason are
cancelled or terminated, after the Approval Date without being exercised, plus

(iv) the number of any Shares subject to restricted stock and restricted stock
unit awards granted under the 2003 Plan that are outstanding and unvested on the
Approval Date that are forfeited, terminated, cancelled or otherwise reacquired
by the Company after the Approval Date without having become vested or that are
exchanged by a Participant or withheld by the Company or one of its Subsidiaries
after the Approval Date to satisfy the tax withholding obligations related to
the award (in each case, with any such Shares increasing the Shares available
for issuance under the Plan based on the Full-Value Award Ratio).

provided that in no event shall the Shares available for issuance under the Plan
exceed 109,477,027 Shares (which is the sum of (1) the 55,000,000 Shares set
forth above, plus (2) the number of Shares available for new award grants under
the 2003 Plan on November 11, 2013, plus (3) the aggregate number of Shares
subject to stock options previously granted and outstanding under the 2003 Plan
as of November 11, 2013, plus (4) two (2) (the Full-Value Award Ratio) times the
aggregate number of Shares subject to restricted stock and restricted stock
units previously granted and outstanding under the 2003 Plan as of November 11,
2013).

(b) Share Count. Shares issued pursuant to Awards under the Plan other than
Options or SARs will count against the Shares available for issuance under the
Plan as two (2) Shares for every one (1) Share issued in connection with the
Award. Shares issued pursuant to the exercise of Options or SARs under the Plan
will count against the Shares available for issuance under the Plan as one
(1) Share for every one Share to which such exercise relates. For purposes of
clarity, the total number of Shares subject to SARs that are exercised and
settled in Shares, and the total number of Shares subject to Options that are
exercised, shall be counted in full on a one-for-one basis against the number of
Shares available for issuance under the Plan, regardless of the number of Shares
actually issued upon settlement of the SARs or Options. If Awards are settled in
cash, the Shares that would have been delivered had there been no cash
settlement shall not be counted against the Shares available for issuance under
the Plan. Except as provided in the next sentence, Shares that are subject to
Awards that are forfeited, are terminated, fail to vest or for any other reason
are not paid or delivered, shall again become available for Awards under the
Plan; provided that any one (1) Share issued pursuant to a Stock Grant or
subject to a Restricted Stock Unit Award (including Shares subject to
stock-settled dividend equivalent rights) that is forfeited or terminated shall
be credited as two (2) Shares when determining the number of Shares that shall
again become available for Awards under the Plan if upon grant, the Shares
underlying such forfeited or terminated Awards were counted as two (2) Shares
against the Plan reserve. Shares that are exchanged by a Participant or withheld
by the Company as full or partial payment in connection with any Option or SAR,
as well as any Shares exchanged by a Participant or withheld by the Company or
one of its Subsidiaries to satisfy the tax withholding obligations related to
any Option or SAR, shall not be available for subsequent Awards under the Plan.
Shares that are exchanged by a Participant or withheld by the Company as full or
partial payment in connection with any Full-Value Award, as well as any Shares
exchanged by a Participant or withheld by the Company or one of its Subsidiaries
to satisfy the tax withholding obligations related to any Full-Value Award,
shall be available for subsequent Awards under the Plan; provided that any one
(1) Share so exchanged or withheld in connection with any Full-Value Award shall
be credited as two (2) Shares when determining the number of Shares that shall
again become available for Awards under the Plan if upon grant, the Shares
underlying the related Full-Value Award were counted as two (2) Shares against
the Plan reserve. Refer to Section 15(i) for application of the foregoing share
limits with respect to substituted awards.

(c) Share Limits

(i) Limits on Options and SARs. No Participant shall receive Options or SARs
during any Fiscal Year covering, in the aggregate, in excess of 1,000,000
Shares, subject to adjustment pursuant to Section 11.

 

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(ii) Limits on Stock Grants and Restricted Stock Units. No Participant shall
receive Stock Grants or Restricted Stock Units during any Fiscal Year covering,
in the aggregate, in excess of 1,000,000 Shares (for this purpose, counting such
Shares on a 1-for-1 basis), subject to adjustment pursuant to Section 11.

(d) Reservation of Shares; No Fractional Shares. The Company shall at all times
reserve a number of Shares sufficient to cover the Company’s obligations and
contingent obligations to deliver Shares with respect to Awards then outstanding
under the Plan (exclusive of (i) any Awards payable in cash and (ii) any
dividend equivalent obligations to the extent the Company has the right to
settle such rights in cash). No fractional Shares shall be delivered under the
Plan. The Committee may pay cash in lieu of any fractional Shares in settlements
of Awards under the Plan.

SECTION 6. TERMS AND CONDITIONS OF OPTIONS.

(a) Stock Option Agreement. Each Option granted under the Plan shall be
evidenced and governed exclusively by a Stock Option Agreement between the
Participant and the Company. Such Option shall be subject to all applicable
terms and conditions of the Plan and may be subject to any other terms and
conditions that are not inconsistent with the Plan and that the Committee deems
appropriate for inclusion in a Stock Option Agreement. Dividend equivalent
rights shall not be awarded on Options. The provisions of the various Stock
Option Agreements entered into under the Plan need not be identical. The Stock
Option Agreement shall specify whether the Option is an ISO or an NSO.

(b) Number of Shares. Each Stock Option Agreement shall specify the number of
Shares that are subject to the Option, which number is subject to adjustment in
accordance with Section 11.

(c) Exercise Price. Each Stock Option Agreement shall specify the Option’s
Exercise Price which shall be established by the Committee and is subject to
adjustment in accordance with Section 11. The Exercise Price of an Option shall
not be less than 100% of the Fair Market Value (110% for an ISO granted to a
10-Percent Stockholder) on the Grant Date.

(d) Exercisability and Term. Each Stock Option Agreement shall specify the date
when all or any installment of the Option is to become exercisable and/or any
performance conditions or Performance Goals pursuant to Section 10 that must be
satisfied before the Option may be exercised. The Stock Option Agreement shall
also specify the maximum term of the Option; provided that the maximum term of
an Option shall in no event exceed seven (7) years from the Grant Date. A Stock
Option Agreement may provide for accelerated vesting in the event of the
Participant’s death, Disability, retirement or other circumstances that the
Committee may determine to be appropriate and may provide for tolling of vesting
in the event of a Participant’s leave of absence. Notwithstanding any other
provision of the Plan or the Stock Option Agreement, no Option can be exercised
after the expiration date provided in the applicable Stock Option Agreement.

(e) Method of Exercise. An Option may be exercised, in whole or in part, by
giving written notice of exercise to the Company or the Company’s designee (or,
subject to Applicable Laws and if the Company permits, by electronic or voice
methods) of the number of Shares to be purchased. Such notice shall be
accompanied by payment in full of the aggregate Exercise Price, plus any
required withholdings (unless satisfactory arrangements have been made to
satisfy such withholdings). The Company reserves the right to delay issuance of
the Shares until the such payment obligations are fully satisfied.

(f) Payment for Option Shares. The Exercise Price of an Option shall be paid in
cash at the time of exercise, except as follows and if so provided for in the
applicable Stock Option Agreement:

(i) Cashless Exercise. Payment of all or a part of the Exercise Price may be
made through Cashless Exercise.

(ii) Other Forms of Payment. Payment may be made in any other form that is
consistent with Applicable Laws, regulations and rules and approved by the
Committee.

 

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In the case of an ISO granted under the Plan, except to the extent permitted by
Applicable Laws, payment shall be made only pursuant to the express provisions
of the applicable Stock Option Agreement. In the case of an NSO granted under
the Plan, the Committee may, in its discretion at any time, accept payment in
any form(s) described in this Section 6(f).

SECTION 7. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.

(a) SAR Agreement. Each SAR granted under the Plan shall be evidenced by a SAR
Agreement between the Participant and the Company. Such SAR shall be subject to
all applicable terms of the Plan and may be subject to any other terms that are
not inconsistent with the Plan. A SAR Agreement may provide for a maximum limit
on the amount of any payout notwithstanding the Fair Market Value on the date of
exercise of the SAR. Dividend equivalent rights shall not be awarded on SARs.
The provisions of the various SAR Agreements entered into under the Plan need
not be identical.

(b) Number of Shares. Each SAR Agreement shall specify the number of Shares to
which the SAR pertains, which number is subject to adjustment in accordance with
Section 11.

(c) Exercise Price. Each SAR Agreement shall specify the Exercise Price, which
is subject to adjustment in accordance with Section 11. A SAR Agreement may
specify an Exercise Price that varies in accordance with a predetermined formula
while the SAR is outstanding, provided that in all cases the Exercise Price of a
SAR shall not be less than 100% of the Fair Market Value on the Grant Date.

(d) Exercisability and Term. Each SAR Agreement shall specify the date when all
or any installment of the SAR is to become exercisable and/or any performance
conditions or Performance Goals pursuant to Section 10 that must be satisfied
before the SAR is exercised. The SAR Agreement shall also specify the maximum
term of the SAR which shall not exceed seven (7) years from the Grant Date. A
SAR Agreement may provide for accelerated vesting in the event of the
Participant’s death, Disability, retirement or other circumstances the Committee
may determine to be appropriate and may provide for tolling of vesting in the
event of a Participant’s leave of absence. SARs may be awarded in combination
with Options or Stock Grants, and such an Award shall provide that the SARs will
not be exercisable unless the related Options or Stock Grants are forfeited. A
SAR may be included in an ISO only at the time of grant but may be included in
an NSO at the time of grant or at any subsequent time. Notwithstanding any other
provision of the Plan or the SAR Agreement, no SAR can be exercised after the
expiration date provided in the applicable SAR Agreement.

(e) Exercise of SARs. Upon exercise of a SAR, the Participant (or any person
having the right to exercise the SAR after Participant’s death) shall receive
from the Company (i) Shares, (ii) cash or (iii) any combination of Shares and
cash, as the Committee shall determine at the time of grant of the SAR, in its
sole discretion. The amount of cash and/or the Fair Market Value of Shares
received upon exercise of SARs shall, in the aggregate, be equal to the amount
by which the Fair Market Value (on the date of exercise) of the Shares subject
to the SARs exceeds the Exercise Price of the Shares.

SECTION 8. TERMS AND CONDITIONS FOR STOCK GRANTS.

(a) Time, Amount and Form of Awards. Awards under this Section 8 may be granted
in the form of a Stock Grant.

(b) Stock Grant Agreement. Each Stock Grant awarded under the Plan shall be
evidenced and governed exclusively by a Stock Grant Agreement between the
Participant and the Company. Each Stock Grant shall be subject to all applicable
terms and conditions of the Plan and may be subject to any other terms and
conditions that are not inconsistent with the Plan that the Committee deems
appropriate for inclusion in the applicable Stock Grant Agreement. The
provisions of the Stock Grant Agreements entered into under the Plan need not be
identical.

 

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(c) Number of Shares. Each Stock Grant Agreement shall specify the number of
Shares to which the Stock Grant pertains, which number is subject to adjustment
in accordance with Section 11.

(d) Vesting Conditions. The Committee shall determine the vesting schedule of
each Stock Grant. Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Stock Grant Agreement, which may
include performance conditions or Performance Goals pursuant to Section 10.

(e) Voting and Dividend Rights. The holder of a Stock Grant awarded under the
Plan shall have the same voting, dividend and other rights as the Company’s
other shareholders, except as otherwise stated in the Stock Grant Agreement;
provided, however, that any dividends as to the portion of a Stock Grant that is
subject to performance-based vesting requirements will be subject to forfeiture
and termination (or repayment, as applicable) to the same extent as the
corresponding portion of the Stock Grant to which such dividends relate. A Stock
Grant Agreement may require that the holder of such Stock Grant invest any cash
dividends received in additional Shares subject to the Stock Grant. Such
additional Shares and any Shares received as a dividend pursuant to the Stock
Grant shall be subject to the same conditions and restrictions as the Stock
Grant with respect to which the dividends were paid.

SECTION 9. TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS.

(a) Restricted Stock Unit Agreement. Each Restricted Stock Unit granted under
the Plan shall be evidenced by a Restricted Stock Unit Agreement between the
Participant and the Company. Such Restricted Stock Units shall be subject to all
applicable terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Restricted Stock Unit
Agreements entered into under the Plan need not be identical.

(b) Number of Shares. Each Restricted Stock Unit Agreement shall specify the
number of Restricted Stock Units to which the Restricted Stock Unit Award
pertains, which number is subject to adjustment in accordance with Section 11.

(c) Vesting Conditions. The Committee shall determine the vesting schedule of
each Restricted Stock Unit Award. Vesting shall occur, in full or in
installments, upon satisfaction of the conditions specified in the Restricted
Stock Unit Agreement, which may include performance conditions or Performance
Goals pursuant to Section 10.

(d) Form and Time of Settlement of Restricted Stock Units. Settlement of vested
Restricted Stock Units may be made in the form of (i) cash, (ii) Shares or
(iii) any combination of both, as determined by the Committee at the time of the
grant of the Restricted Stock Units, in its sole discretion. Vested Restricted
Stock Units may be settled in a lump sum or in installments. The distribution
may occur or commence when the vesting conditions applicable to the Restricted
Stock Units have been satisfied or have lapsed, or, if the Committee so provides
in the Restricted Stock Unit Agreement, it may be deferred, in accordance with
Applicable Laws, to any later date. The amount of a deferred distribution may be
increased by an interest factor or by dividend equivalents, as determined by the
Committee and provided in the Restricted Stock Unit Agreement.

(e) Voting and Dividend Rights. The holders of Restricted Stock Units shall have
no voting rights. Prior to settlement or forfeiture, any Restricted Stock Unit
awarded under the Plan may, at the Committee’s discretion, carry with it a right
to dividend equivalents. Such right entitles the holder to be credited with an
amount equal to all cash dividends paid on one Share while the Restricted Stock
Unit is outstanding. Dividend equivalents may be converted into additional
Restricted Stock Units and may (and will, to the extent required below) be made
subject to the same conditions and restrictions as the Restricted Stock Units to
which they attach. Settlement of dividend equivalents may be made in the form of
cash, in the form of Shares, or in a combination of both. Dividend equivalents
as to Restricted Stock Units that are subject to performance-based vesting
requirements will be subject to forfeiture and termination to the same extent as
the corresponding Restricted Stock Units to which the dividend equivalents
relate.

 

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(f) Creditors’ Rights. A holder of Restricted Stock Units shall have no rights
other than those of a general creditor of the Company. Restricted Stock Units
represent an unfunded and unsecured obligation of the Company, subject to the
terms and conditions of the applicable Restricted Stock Unit Agreement.

SECTION 10. PERFORMANCE-BASED AWARDS; CASH BONUS AWARDS.

(a) General. The Committee may, in its discretion, include performance
conditions in an Award. If performance conditions are included in Awards to
Covered Employees and such Awards are intended to qualify as “performance-based
compensation” under Code Section 162(m), then such Awards will be subject to the
achievement of Performance Goals with respect to a Performance Period
established by the Committee. Such Awards shall be granted and administered
pursuant to the requirements of Code Section 162(m). The Committee may provide
at the time it establishes the applicable Performance Goals for the Performance
Goals (or performance against the Performance Goals, as the case may be) to be
adjusted to mitigate the unbudgeted impact of material, unusual or nonrecurring
gains and losses, accounting changes or other events specified by the the
Committee. Before any Shares underlying an Award or any Award payments are
released to a Covered Employee with respect to a Performance Period, the
Committee shall certify in writing that the Performance Goals for such
Performance Period have been satisfied. Awards with performance conditions that
are granted to Participants who are not Covered Employees need not comply with
the requirements of Code Section 162(m).

(b) Cash Bonus Awards. The Committee may, in its discretion, grant Cash Bonus
Awards under the Plan to one or more Employees of the Company or any of its
Subsidiaries. Cash Bonus Awards may be subject to performance conditions as
described in Section 10(a) above and, to the extent such Cash Bonus Awards are
granted to Covered Persons and intended to qualify as “performance-based
compensation” under Section 162(m), shall be subject to the requirements of
Section 162(m), including without limitation, the establishment of Performance
Goals and certification of performance by the Committee as set forth above. In
addition, the aggregate amount of compensation to be paid to any one participant
in respect of all Cash Bonus Awards payable only in cash (and exclusive of
Restricted Stock Unit awards settled in cash based on the fair market value of a
Share in connection with the payment of the Award, which Awards are subject to
the limit of Section 5(c)(ii), and exclusive of cash-settled SARs which are
subject to the limit of Section 5.2(c)(i)) and granted to that Participant in
any one calendar year shall not exceed $10,000,000. Awards that are cancelled
during the year shall be counted against this limit to the extent required by
Section 162(m) of the Code.

(c) Expiration of Grant Authority. As required pursuant to Section 162(m) of the
Code and the regulations promulgated thereunder, the Committee’s authority to
grant new Awards that are intended to qualify as performance-based compensation
within the meaning of Section 162(m) of the Code (other than Options and SARs
with an Exercise Price that is not less than the Fair Market Value of a Share on
the Grant Date) shall terminate upon the first meeting of the Company’s
shareholders that occurs in 2019.

SECTION 11. PROTECTION AGAINST DILUTION.

(a) Adjustments. Subject to Section 12, upon (or, as may be necessary to effect
the adjustment, immediately prior to): any reclassification, recapitalization,
stock split (including a stock split in the form of a stock dividend) or reverse
stock split; any merger, combination, consolidation, or other reorganization;
any spin-off, split-up, or similar extraordinary dividend distribution in
respect of the Common Stock; or any exchange of Common Stock or other securities
of the Company, or any similar, unusual or extraordinary corporate transaction
in respect of the Common Stock; then the Committee shall equitably and
proportionately adjust (1) the number and type of Shares (or other securities)
that thereafter may be made the subject of Awards (including the specific Share
limits, maximums and numbers of Shares set forth elsewhere in the Plan), (2) the
number, amount and type of Shares (or other securities or property) subject to
any outstanding Awards, (3) the grant, purchase, or Exercise Price of any
outstanding Awards, and/or (4) the securities, cash or other property
deliverable upon exercise or payment of any outstanding Awards, in each case to
the extent necessary to preserve (but not increase) the level of incentives
intended by the Plan and the then-outstanding Awards.

 

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Unless otherwise expressly provided in the applicable Award Agreement, upon (or,
as may be necessary to effect the adjustment, immediately prior to) any event or
transaction described in the preceding paragraph or a sale of all or
substantially all of the business or assets of the Company as an entirety, the
Company shall equitably and proportionately adjust the Performance Goals
applicable to any then-outstanding performance-based Awards to the extent
necessary to preserve (but not increase) the level of incentives intended by the
Plan and the then-outstanding performance-based Awards.

It is intended that, if possible, any adjustments contemplated by the preceding
two paragraphs be made in a manner that satisfies applicable legal, tax
(including, without limitation and as applicable in the circumstances,
Section 424 of the Code, Section 409A of the Code and Section 162(m) of the
Code) and accounting (so as to not trigger any charge to earnings with respect
to such adjustment) requirements.

Without limiting the generality of Section 3, any good faith determination by
the Committee as to whether an adjustment is required in the circumstances
pursuant to this Section 11(a), and the extent and nature of any such
adjustment, shall be conclusive and binding on all persons.

(b) Participant Rights. Except as provided in this Section 11, a Participant
shall have no rights by reason of any issue by the Company of stock of any class
or securities convertible into stock of any class, any subdivision or
consolidation of shares of stock of any class, the payment of any stock dividend
or any other increase or decrease in the number of shares of stock of any class.
If by reason of an adjustment pursuant to this Section 11 a Participant’s Award
covers additional or different shares of stock or securities, then such
additional or different shares and the Award in respect thereof shall be subject
to all of the terms, conditions and restrictions which were applicable to the
Award and the Shares subject to the Award prior to such adjustment.

SECTION 12. CORPORATE TRANSACTIONS.

Upon the occurrence of any of the following: any merger, combination,
consolidation, or other reorganization in which the Company does not survive (or
does not survive as a public company in respect of its Common Stock); any
exchange of Common Stock or other securities of the Company in which the Company
does not survive (or does not survive as a public company in respect of its
Common Stock; a sale of all or substantially all the business, stock or assets
of the Company; a dissolution of the Company; or any other event in which the
Company does not survive (or does not survive as a public company in respect of
its Common Stock); then the Committee may make provision for a cash payment in
settlement of, or for the assumption, substitution or exchange of any or all
outstanding Share-based Awards or the cash, securities or property deliverable
to the holder of any or all outstanding Share-based Awards, based upon, to the
extent relevant under the circumstances, the distribution or consideration
payable to holders of the Common Stock upon or in respect of such event. Upon
the occurrence of any event described in the preceding sentence, then, unless
the Committee has made a provision for the substitution, assumption, exchange or
other continuation or settlement of the Award or the Award would otherwise
continue in accordance with its terms in the circumstances, each Award shall
terminate upon the related event; provided that the holder of an Option or SAR
shall be given reasonable advance notice of the impending termination and a
reasonable opportunity to exercise his or her outstanding vested Options and
SARs in accordance with their terms before the termination of such Awards
(except that in no case shall more than ten days’ notice of the impending
termination be required).

The Committee may adopt such valuation methodologies for outstanding Awards as
it deems reasonable in the event of a cash or property settlement and, in the
case of Options, SARs or similar rights, but without limitation on other
methodologies, may base such settlement solely upon the excess if any of the per
share amount payable upon or in respect of such event over the Exercise Price of
the Award.

In any of the events referred to in this Section 12, the Committee may take such
action contemplated by this Section 12 prior to such event (as opposed to on the
occurrence of such event) to the extent that the Committee deems the action
necessary to permit the Participant to realize the benefits intended to be
conveyed with respect to the underlying Shares.

 

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Without limiting the generality of Section 3, any good faith determination by
the Committee pursuant to its authority under this Section 12 shall be
conclusive and binding on all persons.

SECTION 13. LIMITATIONS ON RIGHTS.

(a) Participant Rights. A Participant’s rights, if any, in respect of or in
connection with any Award are derived solely from the discretionary decision of
the Company to permit the individual to participate in the Plan and to benefit
from a discretionary Award. By accepting an Award under the Plan, a Participant
expressly acknowledges that there is no obligation on the part of the Company to
continue the Plan and/or grant any additional Awards. Any Award granted
hereunder is not intended to be compensation of a continuing or recurring
nature, or part of a Participant’s normal or expected compensation, and in no
way represents any portion of a Participant’s salary, compensation, or other
remuneration for purposes of pension benefits, severance, redundancy,
resignation or any other purpose.

Neither the Plan nor any Award granted under the Plan shall be deemed to give
any individual a right to remain an Employee, Consultant or director of the
Company, a Parent, or any Subsidiary. The Company and its Parent and
Subsidiaries reserve the right to terminate the service of any person at any
time, and for any reason, subject to applicable laws, the Company’s Articles of
Incorporation and Bylaws and any applicable written employment agreement (if
any), and such terminated person shall be deemed irrevocably to have waived any
claim to damages or specific performance for breach of contract or dismissal,
compensation for loss of office, tort or otherwise with respect to the Plan or
any outstanding Award that is forfeited and/or is terminated by its terms or to
any future Award.

(b) Shareholders’ Rights. Except as provided in Section 8(e), a Participant
shall have no dividend rights, voting rights or other rights as a shareholder
with respect to any Shares covered by his or her Award prior to the issuance of
such Shares (as evidenced by an appropriate entry on the books of the Company or
a duly authorized transfer agent of the Company). No adjustment shall be made
for cash dividends or other rights for which the record date is prior to the
date when such Shares are issued, except as expressly provided in Sections
8(e), 9(e) and 11.

(c) Regulatory Requirements. Any other provision of the Plan notwithstanding,
the obligation of the Company to issue Shares or other securities under the Plan
shall be subject to all Applicable Laws and such approval by any regulatory body
as may be required. The Company reserves the right to restrict, in whole or in
part, the delivery of Shares or other securities pursuant to any Award prior to
the satisfaction of all legal requirements relating to the issuance of such
Shares or other securities, to their registration, qualification or listing or
to an exemption from registration, qualification or listing. The person
acquiring any securities under the Plan will, if requested by the Company or one
of its Subsidiaries, provide such assurances and representations to the Company
or one of its Subsidiaries as the Committee may deem necessary or desirable to
assure compliance with all applicable legal and accounting requirements.

SECTION 14. WITHHOLDING TAXES.

(a) General. A Participant shall make arrangements satisfactory to the Company
for the satisfaction of any withholding tax obligations that arise in connection
with his or her Award. The Company shall have the right to deduct from any
amount payable under the Plan, including delivery of Shares to be made pursuant
to an Award granted under the Plan, all federal, state, city, local or foreign
taxes of any kind required by law to be withheld with respect to such payment
and the Company may take any such actions as may be necessary in the opinion of
the Company to satisfy all obligations for the payment of such taxes. The
Company shall not be required to issue any Shares or make any cash payment under
the Plan until such obligations are satisfied.

(b) Share Withholding. The Committee may (i) permit or require a Participant to
satisfy all or part of his or her withholding or income tax obligations by
having the Company withhold all or a portion of any Shares that

 

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otherwise would be issued to him or her, or (ii) permit a Participant to satisfy
such obligations by Cashless Exercise or by surrendering all or a portion of any
Shares that he or she previously acquired; provided that Shares withheld or
previously owned Shares that are tendered shall not exceed the amount necessary
to satisfy the Company’s tax withholding obligations at the minimum statutory
withholding rates, including, but not limited to, U.S. federal and state income
taxes, payroll taxes and foreign taxes, if applicable, unless the previously
owned Shares have been held for a minimum duration (if any) determined
satisfactory as established by the Committee in its sole and absolute
discretion. Any payment of taxes by assigning Shares to the Company may be
subject to restrictions, including, but not limited to, any restrictions
required by rules of the SEC. If any Shares are used to satisfy withholding
taxes, such Shares shall be valued based on the Fair Market Value thereof on the
date when the withholding for taxes is required to be made.

SECTION 15. DURATION AND AMENDMENTS; MISCELLANEOUS.

(a) Term of the Plan. The Plan shall terminate on the day before the tenth
anniversary of the Effective Date and may be terminated on any earlier date
pursuant to this Section 15.

(b) Amendment or Termination of the Plan. The Board may, at any time, terminate
or, from time to time, amend, modify or suspend the Plan, in whole or in part.
No awards may be granted during any period that the Board suspends the Plan. To
the extent then required by Applicable Laws or required under Sections 162, 422
or 424 of the Code to preserve the intended tax consequences of the Plan, or
deemed necessary or advisable by the Board, any amendment to the Plan shall be
subject to shareholder approval.

(c) Amendments to Awards. Without limiting any other express authority of the
Committee under (but subject to) the express limits of the Plan, the Committee
by agreement or resolution may waive conditions of or limitations on Awards to
Participants that the Committee in the prior exercise of its discretion has
imposed, without the consent of a Participant, and (subject to the requirements
of Sections 3 and 15(d)) may make other changes to the terms and conditions of
Awards. No amendment of an Award shall constitute a Re-Pricing without
shareholder approval.

(d) Limitations on Amendments to Plan and Awards. No amendment, suspension or
termination of the Plan or amendment of any outstanding Award Agreement shall,
without written consent of the Participant, affect in any manner materially
adverse to the Participant any rights or benefits of the Participant or
obligations of the Company under any Award granted under the Plan prior to the
effective date of such change. Changes, settlements and other actions
contemplated by Section 11 shall not be deemed to constitute changes or
amendments for purposes of this Section 15.

(e) Governing Law. The Plan shall be governed by, and construed in accordance
with the laws of the State of California (except its choice-of-law provisions)
and applicable U.S. Federal Laws.

(f) Severability. If a court of competent jurisdiction holds any provision
invalid and unenforceable, the remaining provisions of the Plan shall continue
in effect.

(g) Section Headings. Captions and headings are given to the sections and
subsections of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the construction
or interpretation of the Plan or any provision thereof.

(h) No Corporate Action Restriction. The existence of the Plan, the Award
Agreements and the Awards granted hereunder shall not limit, affect or restrict
in any way the right or power of the Board or the shareholders of the Company to
make or authorize: (i) any adjustment, recapitalization, reorganization or other
change in the capital structure or business of the Company or any Subsidiary,
(ii) any merger, amalgamation, consolidation or change in the ownership of the
Company or any Subsidiary, (iii) any issue of bonds, debentures, capital,
preferred or prior preference stock ahead of or affecting the capital stock (or
the rights thereof) of the Company

 

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or any Subsidiary, (iv) any dissolution or liquidation of the Company or any
Subsidiary, (v) any sale or transfer of all or any part of the assets or
business of the Company or any Subsidiary, or (vi) any other corporate act or
proceeding by the Company or any Subsidiary. No Participant, beneficiary or any
other person shall have any claim under any Award or Award Agreement against any
member of the Board or the Committee, or the Company or any Employees, officers
or agents of the Company or any Subsidiary, as a result of any such action.

(i) Stock-Based Awards in Substitution for Stock Options or Awards Granted by
Other Company. Awards may be granted under the Plan in substitution for or in
connection with an assumption of employee, director and/or consultant stock
options, stock appreciation rights, restricted stock or other stock-based awards
granted by other entities to persons who are or who will become Employees or
Consultants in respect of the Company or one of its Subsidiaries in connection
with a distribution, merger or other reorganization by or with the granting
entity or an affiliated entity, or the acquisition by the Company or one of its
Subsidiaries, directly or indirectly, of all or a substantial part of the stock
or assets of the granting entity. The Awards so granted may reflect the original
terms of the related award being assumed or substituted for and need not comply
with other specific terms of the Plan, with Common Stock substituted for the
securities covered by the original award and with the number of Shares subject
to such awards, as well as any exercise or purchase prices applicable to such
awards, adjusted to account for differences in stock prices in connection with
the transaction. Any shares that are delivered and any Awards that are granted
by, or become obligations of, the Company, as a result of any such assumption or
substitution in connection with any such transaction shall not be counted
against the Share limit or other limits on the number of Shares available for
issuance under the Plan, unless determined otherwise by the Company.

(j) An Award granted under the Plan will be subject to any provisions of
Applicable Laws providing for the recoupment or clawback of incentive
compensation; the terms of any Company recoupment, clawback or similar policy in
effect at the time of grant of the Award; and any recoupment, clawback or
similar provisions that may be included in the applicable Award Agreement.

 

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