Exhibit 10.1

 

Agreement

 

This AGREEMENT, dated April 20, 2010 (the “Agreement”), is by and between
Evolving Systems, Inc., a Delaware corporation (the “Company”), and Karen
Singer, as Trustee of the Singer Children’s Management Trust (the “Stockholder”
and, together with the Stockholder’s Affiliates (as defined below) and
Associates (as defined below) from time to time, the “Singer Group”).

 

WHEREAS, the Stockholder is the beneficial owner of 2,184,671 shares of common
stock, par value $0.001 per share, of the Company (the “Shares”); and

 

WHEREAS, the Stockholder has requested that the Company amend the Stockholders’
Rights Agreement dated as of March 4, 2009, as amended to date (the “Rights
Agreement”) so that the threshold at which a person becomes an “Acquiring
Person” under the Rights Agreement is increased from 25% to 30%; and

 

WHEREAS, pursuant to agreements entered into by the Company and Stockholder, the
Stockholder has three (3) representatives on the Board of Directors (the “Singer
Nominees”); and

 

WHEREAS, the Stockholder has requested that the Board of Directors appoint one
of the Singer Nominees to the Compensation Committee of the Board; and

 

WHEREAS, the Company has requested that the Singer Group vote its Shares in
favor of a proposal to amend the Company’s 2007 Stock Incentive Plan, as
attached hereto as Exhibit A.

 

NOW, THEREFORE, in consideration of the premises, mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Stockholder, on
behalf of the Singer Group, and the Company hereby agree as follows:

 

Section 1.  Representations.

 

(a) Binding Agreement; Authority. The Company hereby represents and warrants
that this Agreement has been duly authorized, executed and delivered by the
Company, and is a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms. The Company further represents
and warrants that the Resolutions (as defined below) were duly adopted by the
Board of Directions, have not in any way been amended, modified, revoked or
rescinded, have been in full force and effect since the adoption to and
including the date hereof, are now in full force and effect and are the only
corporate proceedings of the Company now in force relating to or affecting the
matters referred to therein. The Stockholder represents and warrants that this
Agreement has been duly authorized, executed and delivered by such Stockholder,
and is a valid and binding obligation of such Stockholder, enforceable against
such Stockholder in accordance with its terms.

 

(b) Share Ownership. The Stockholder represents and warrants that, as of the
date hereof, it and its Affiliates and Associates are the “beneficial owners”
(as defined below) of the class and series of shares of capital stock of the
Company in the amounts set forth above. None of the Singer Group nor any of
their respective Affiliates and Associates beneficially own, or have any rights,
options or agreements to acquire or vote, any other shares of capital stock of
the Company.

 

(c) Certain Defined Terms. For purposes of this Agreement, the term “Affiliate”
and “Associate” shall have the respective meanings set forth in Rule 12b-2
promulgated by the Securities and Exchange Commission (the “SEC”) under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). For purposes
of this Agreement, the terms “beneficial owner” and “beneficially own” shall
have the same

 

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meanings as set forth in Rule 13d-3 promulgated by the SEC under the Exchange
Act, except that a person shall also be deemed to be the beneficial owner of all
shares of Common Stock that such person has the right to acquire pursuant to the
exercise of any rights in connection with any securities or any agreement,
regardless of when such rights may be exercised and whether they are
conditional.

 

Section 2.  Singer Nominee on the Compensation Committee

 

The Company agrees that for so long as the Singer Group is the beneficial owner
of no less than twenty percent (20%) of the Company’s issued and outstanding
common stock: (a) the Compensation Committee of the Board of Directors shall be
composed of four (4) members and will include at least two (2) Singer Nominees,
or their successors and (b) all action taken by the Compensation Committee,
including but not limited to granting of equity awards and determination of
executive compensation, shall require the unanimous approval of all members of
the Committee.

 

Section 3. Amendment to the Rights Plan. As of the date of this Agreement, the
Board of Directors has approved an amendment to the Rights Plan to increase the
threshold at which a person becomes an Acquiring Person under the Rights
Agreement to 29%, in accordance with the resolutions (collectively, the
“Resolutions”) attached hereto as Exhibit B.

 

Section 4.  Voting.

 

(a) 2010 Meeting of Stockholders. The Singer Group agrees in connection with the
2010 Meeting of Stockholders (i) to be present for quorum purposes and (ii) to
vote all of its Shares as of the record date in favor of the amendments to the
Company’s 2007 Stock Incentive Plan in the form attached as Exhibit A hereto.

 

(b) Further Assurances. The Singer Group shall, at the Company’s sole cost and
expense, take all actions requested in writing by the Company and necessary to
carry out the intention of this Section 4, including, without limitation,
delivering to the Company upon its written request executed proxies naming the
proxies appointed by the Company for all Shares as of the record dates for the
aforementioned meetings of stockholders.

 

Section 5.  Remedies. Each party hereto hereby acknowledges and agrees that
irreparable harm would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to specific relief hereunder, including, without limitation, an injunction or
injunctions to prevent and enjoin breaches of the provisions of this Agreement
and to enforce specifically the terms and provisions hereof in any state or
federal court in the State of Delaware or in any state or federal court in the
State of Colorado, in addition to any other remedy to which they may be entitled
at law or in equity. Any requirements for the securing or posting of any bond
with such remedy are hereby waived.

 

Section 6.  Amendment; Waiver. Any provision of this Agreement may be amended or
waived, if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment by all parties hereto, or in the case of a waiver, by
the party hereto against whom the waiver is to be effective.  No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.

 

Section 7.  No Assignment or Benefit to Third Parties. The Stockholder may not
assign, or cause to be assigned, any of its rights under this Agreement or
delegate, or cause to be delegated, any of the obligations relating to the
Singer Group under this Agreement by operation of law or otherwise, without the
prior written consent of the Company. Nothing in this Agreement, express or
implied, is intended to

 

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confer upon any person, other than the Stockholder and the Company and their
respective permitted successors and permitted assigns, any right or remedy under
or by reason of this Agreement.

 

Section 8.  Entire Agreement. This Agreement, together with the schedule hereto,
contain the entire understanding of the parties with respect to the subject
matter hereof and may be amended only by an agreement in writing executed by the
parties hereto.

 

Section 9.  Notices. All notices, consents, requests, instructions, approvals
and other communications provided for herein and all legal process in regard
hereto shall be validly given, made or served, if in writing and sent by U.S.
registered mail, return receipt requested, by facsimile, with written
confirmation of receipt, or by electronic mail in portable document format, with
written confirmation of receipt:

 

if to the Company:

Evolving Systems, Inc.

 

9777 Pyramid Court

 

Suite 100

 

Englewood, Colorado 80112

 

Facsimile: (303) 802-1138

 

Email:  Anita.Moseley@evolving.com

 

Attention:  General Counsel

 

 

with a copy to:

Holme Roberts & Owen LLP

 

1700 Lincoln Street, Suite 4100

 

Denver, Colorado 80203

 

Facsimile: (303) 866-0200

 

Email:  charles.maguire@hro.com

 

Attention:  Charles D. Maguire, Jr.

 

 

if to the Stockholder:

Karen Singer

 

c/o Romulus Holdings

 

2200 Fletcher Avenue, Fifth Floor

 

Fort Lee, NJ 07024

 

 

with copies to:

Andrews Kurth LLP

 

450 Lexington Avenue

 

New York, NY 10017

 

Attention:  Charles Uniman, Esq.

 

Facsimile:  (212) 850-2929

 

Section 10. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware, without regard to
any conflict of laws provisions thereof. Each party hereto, on behalf of itself
and its Affiliates and Associates, hereby irrevocably and unconditionally
consents to the exclusive jurisdiction of the courts in the State of Delaware
and/or the courts of the United States of America located in the State of
Delaware, for any action, suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby, and agrees not to commence
any action, suit or proceeding related thereto except in such courts. Each party
hereto, on behalf of itself and its Affiliates and Associates, hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby, in the courts in the State of Delaware and/or the courts of
the United States of America located in the State of Delaware, and hereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding in any such court has
been brought in any inconvenient forum.

 

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Section 11. Counterparts. This Agreement may be executed and delivered
(including without limitation by facsimile or PDF signature) in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

Section 12. No Presumption Against Draftsman.  Each party hereto hereby
acknowledges that the parties hereto fully negotiated the terms of this
Agreement, that each such party had an equal opportunity to influence the
drafting of the language contained in this Agreement and that there shall be no
presumption against any such party on the ground that such party was responsible
for preparing this Agreement or any part hereof.

 

Section 13. Enforceability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.  It is hereby stipulated and
declared to be the intention of the parties hereto that the parties hereto would
have executed the remaining terms, provisions, covenants and restrictions
without including any of such which may be hereafter declared invalid, void or
unenforceable. In addition, the parties hereto shall use best efforts to agree
upon and substitute a valid and enforceable term, provision, covenant or
restriction for any such that is held invalid, void or unenforceable by a court
of competent jurisdiction.

 

[SIGNATURES FOLLOW]

 

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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or
caused the same to be executed by its duly authorized representative as of the
date first above written.

 

 

COMPANY

 

 

 

EVOLVING SYSTEMS, INC.

 

 

 

 

 

By:

/s/ Thaddeus Dupper

 

 

Thaddeus Dupper

 

Title:

President & CEO

 

 

 

STOCKHOLDER

 

 

 

 

 

/s/ Karen Singer

 

Karen Singer, Trustee for Singer Children’s

 

Management Trust

 

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Exhibit A

 

EVOLVING SYSTEMS, INC.
AMENDED AND RESTATED

2007 STOCK INCENTIVE PLAN

 

Adopted by the Board of Directors on March 12, 2007

Amended by the Board of Directors on March 2, 2010

 

 

1.             GENERAL

 

(a)           Purpose.  The primary purposes of the Evolving Systems, Inc. 2007
Stock Incentive Plan are to attract, retain and motivate employees, directors
and consultants, to compensate them for their contributions to the growth and
profits of the Company and its Affiliates and to encourage them to own Common
Stock.

 

(b)           Types of Awards.  The Plan permits the award of (i) Incentive
Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights,
(iv) Restricted Stock, (v) Restricted Stock Units, (vi) Performance Awards, and
(vii) Other Stock-Based Awards.

 

2.             DEFINITIONS

 

Except as otherwise provided in an applicable Award Agreement, the following
capitalized terms shall have the meanings indicated below for purposes of the
Plan and any Award:

 

(a)           “Affiliate” means a parent or subsidiary of the Company, with
“parent” meaning an entity that controls the Company directly or indirectly,
through one or more intermediaries, and “subsidiary” meaning an entity that is
controlled by the Company directly or indirectly, through one or more
intermediaries.  Solely with respect to the grant of an Incentive Stock Option,
Affiliate means any parent corporation or subsidiary corporation of the Company,
whether now or hereafter existing, as those terms are defined in Sections
424(e) and (f), respectively, of the Code.

 

(b)           “Award” means any award of an Option, Stock Appreciation Right,
Restricted Stock, Restricted Stock Unit, Performance Award, or Other Stock-Based
Award.

 

(c)           “Award Agreement” means the written or electronic document setting
forth the terms and conditions of an Award.  The Award Agreement is subject to
the terms and conditions of the Plan.

 

(d)           “Board” means the Board of Directors of Evolving Systems, Inc.

 

(e)           “Change of Control” means the occurrence of any of the following
events:

 

(i)        the date any person or group acquires, or has acquired during the
12-month period ending on the date of the most recent acquisition by the person
or group, assets from the Company that have a total gross fair market value
equal to or more than 40% of the total gross fair market value of all assets of
the Company immediately prior to the acquisition;

 

(ii)       the date any person or group within the meaning of the Exchange Act
acquires ownership of our stock that, together with stock held by the person or
group, constitutes more than 50% of the total fair market value or total voting
power entitled to vote in the election of directors or any other change in
ownership described in Treas. Reg. Section 1.409A-3(i)(5)(v);

 

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(iii)      the date any person or group acquires, or has acquired during the
12-month period ending on the date of the most recent acquisition by the person
or group, ownership of stock possessing 30% or more of the total voting power of
the stock of the Company;

 

(iv)      the date a majority of members of the Board is replaced during any
12-month period by directors whose appointment or election is not endorsed by a
majority of the members of our Board before the date of the appointment or
election; or

 

(v)           any other change in effective control described in Treas. Reg.
Section 1.409A(i)(5)(vi).

 

(f)            “Code” means the Internal Revenue Code of 1986, as amended, and
the applicable rulings, regulations and guidance thereunder.

 

(g)           “Committee” means the Compensation Committee of the Board which
shall consist of four (4) members of the Board, and, so long as the Singer
Children’s Management Trust (the “Trust”) is the beneficial owner of no less
than twenty percent (20%) of the Company’s issued and outstanding Common Stock,
shall further consist of at least two (2) members of the Board that have been
nominated by the Trust.

 

(h)           “Common Stock” means a share of Evolving Systems, Inc., common
stock, $0.001 par value per share.

 

(i)            “Company” means Evolving Systems, Inc., a Delaware corporation.

 

(j)            “Consultant” means any person, including an advisor, engaged by
the Company or an Affiliate to render consulting or advisory services and who is
compensated for such services.

 

(k)           “Continuous Service” means continuous service as an Employee,
Director or Consultant to the Company or an Affiliate.  Unless otherwise stated
in the applicable Award Agreement, a Participant’s change in position or duties
with the Company or any Affiliate shall not result in interrupted or terminated
service, so long as such Participant continues service as an Employee, Director
or Consultant.  Whether a termination or interruption in service shall have
occurred for purposes of the Plan shall be determined by the Committee (or its
designee), which determination shall be final, binding and conclusive.

 

(l)            “Covered Employee” means the chief executive officer and other
highest compensated officers of the Company for whom total compensation is
required to be reported to stockholders under the Exchange Act, as determined
for purposes of Section 162(m) of the Code and other employees who may become
subject to such reporting.

 

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

 

(n)           “Dividend Equivalents” means any right granted under Section 11 of
the Plan.

 

(o)           “Employee” means any person employed by the Company or an
Affiliate, determined in accordance with the Company’s standard personnel
policies and practices.

 

(p)           “Exchange Act” means the U.S. Securities Exchange Act of 1934, as
it may be amended from time to time, or any successor act thereto.

 

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

 

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(i)        If the Common Stock is listed on any established stock exchange, or
traded on the Nasdaq Market, the Fair Market Value of a share of Common Stock
shall be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such exchange or market (or the exchange or market
with the greatest volume of trading in Common Stock) on the determination date,
as reported in The Wall Street Journal or such other source as the Board deems
reliable.  Unless otherwise provided by the Committee, if there is no closing
sales price (or closing bid if no sales were reported) for the Common Stock on
the determination date, then the Fair Market Value shall be the closing sales
price (or closing bid if no sales were reported) on the last preceding date for
which such quotation exists.

 

(ii)       In the absence of such markets for the Common Stock, the Fair Market
Value shall be determined in good faith by the Committee.

 

(r)            “Full-Value Award” means an Award of Restricted Stock, Restricted
Stock Units, Performance Award or Other Stock-Based Award.

 

(s)           “Incentive Stock Option” means an Option granted under Section 6
of the Plan that is intended to meet the requirements of Section 422 of the
Code, or any successor provision thereto.

 

(t)            “Non-statutory Stock Option” means an Option granted under
Section 6 of the Plan that is not intended to be an Incentive Stock Option.

 

(u)           “Option” or “Stock Option” means a right to purchase one or more
shares of Common Stock.

 

(v)           “Other Stock-Based Award” means any right granted under Section 10
of the Plan.

 

(w)          “Participant” means an eligible individual who is granted an Award
under the Plan.

 

(x)            “Performance Award” means any right granted under Section 9 of
the Plan.

 

(y)           “Performance Criteria” means any quantitative or qualitative
measures, as determined by the Committee, which may be used to measure the level
of performance of the Company, an Affiliate or any individual Participant during
a Performance Period, including any Qualifying Performance Criteria.

 

(z)            “Performance Period” means any period as determined by the
Committee in its sole discretion.

 

(aa)         “Person” means any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.

 

(bb)         “Qualifying Performance Criteria” means one or more of the
following performance criteria applied to the individual, the Company as a
whole, an Affiliate, a business unit, or any combination thereof, and measured
quarterly, annually or cumulatively over a period of years, on an absolute basis
or relative to a pre-established target, to a previous quarter or year’s results
or to a designated comparison group, in each case as specified by the Committee
in the Award Agreement: (i) revenue (ii) earnings before interest, taxes,
depreciation and amortization (EBITDA), (iii) adjusted EBITDA (earnings before
interest, taxes, depreciation, amortization, impairment, stock compensation and
gain/loss on foreign exchange transaction, (iv) net earnings, (v) net income,
(vi) product-related targets and (vi) cash flow, subject to adjustment by the
Committee to remove the effect of charges for restructurings, discontinued
operations, extraordinary items and all items of gain, loss or expense

 

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determined to be extraordinary or unusual in nature or infrequent in occurrence,
related to the disposal of a segment or a business, or related to a change in
accounting principle or otherwise.

 

(cc)         “Plan” means this Evolving Systems, Inc. 2007 Stock Incentive Plan.

 

(dd)         “Restricted Stock” means an Award of shares of Common Stock granted
under Section 8 of the Plan.

 

(ee)         “Restricted Stock Unit” means a right granted under Section 8 of
the Plan that is denominated in shares of Common Stock.

 

(ff)           “Share Reserve” means as defined in Section 4 of the Plan.

 

(gg)         “Stock Appreciation Right” means any right granted under Section 7
of the Plan.

 

(hh)         “Substitute Award” means an Award granted in substitution for, or
in assumption of, outstanding awards previously granted by an entity acquired by
the Company or an Affiliate or with which the Company or Affiliate combines.

 

3.             PLAN ADMINISTRATION

 

(a)           Authority of the Committee.  Except as otherwise provided herein,
the Plan shall be administered by the Committee, which shall have the power to
interpret the Plan and to adopt such rules and guidelines for implementing the
terms of the Plan as it may deem appropriate.  The Committee, shall have the
ability to modify the Plan provisions, to the extent necessary, or delegate such
authority, to accommodate any changes in law and regulations in jurisdictions in
which Participants will receive Awards.  Subject to the terms of the Plan and
applicable law, the Committee shall have full power and authority to:

 

(i)        designate Participants;

 

(ii)       determine the type or types of Awards to be granted to each
Participant under the Plan;

 

(iii)      determine the number of shares of Common Stock to be covered by (or
with respect to which payments, rights, or other matters are to be calculated in
connection with) Awards, ;

 

(iv)      determine the terms and conditions of any Award;

 

(v)       determine whether, to what extent, and under what circumstances Awards
may be settled or exercised in cash, shares of Common Stock, other securities,
or other Awards, or canceled, forfeited, or suspended, and the method or methods
by which Awards may be settled, exercised, canceled, forfeited, or suspended;

 

(vi)      determine whether, to what extent, and under what circumstances cash,
shares of Common Stock, other securities, other Awards, and other amounts
payable with respect to an Award under the Plan shall be deferred either
automatically or at the election of the holder thereof or of the Committee;;

 

(vii)     interpret and administer the Plan and any instrument or agreement
relating to, or Award made under, the Plan;

 

(viii)    establish, amend, suspend, or waive such rules and guidelines;

 

(ix)       appoint such agents as it shall deem appropriate for the proper
administration of the Plan;

 

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(x)        make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan; and

 

(xi)       correct any defect, supply any omission, or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem desirable to carry the Plan into effect.

 

(b)           Administrative Actions. Unless otherwise expressly provided in the
Plan, Subject to the limitations described in subsection (a) above, all
designations, determinations, interpretations, and other decisions under or with
respect to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time, and shall be final, conclusive, and binding
upon all Persons, including the Company, any Affiliate, any Participant, any
holder or beneficiary of any Award, any stockholder, and any employee of the
Company or of any Affiliate.

 

(c)           No Liability.  No member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan, any Award
or any Award Agreement.

 

(d)           Action by the Committee.  Notwithstanding anything to the contrary
expressed or implied in this Plan, any and all actions by the Committee required
or permitted under this Plan shall require the unanimous approval of all
Committee members.

 

4.             SHARES SUBJECT TO THE PLAN

 

(a)           Shares Available.  Subject to adjustment as provided in Section 14
of the Plan, the maximum aggregate number of shares of Common Stock that may be
issued pursuant to Awards granted under the Plan (exclusive of shares of Common
Stock that have been issued pursuant to Awards (““Existing Awards”) that have
been granted under the Plan prior to April 20, 2010 and that have not, prior to
such date (x) expired or been cancelled or otherwise terminated, without having
been exercised or redeemed in full, (y) been reacquired by the Company prior to
vesting or (z) been repurchased by the Company at cost prior to vesting) shall
be 250,000 shares (“Share Reserve”).  Each share of Common Stock issued pursuant
to an Award shall reduce the Share Reserve by one (1) share.  To the extent that
a distribution pursuant to an Award is made in cash, the Share Reserve shall be
reduced by the number of shares of Common Stock subject to the redeemed or
exercised portion of the Award.  Notwithstanding any other provision of the Plan
to the contrary, the maximum aggregate number of shares of Common Stock that may
be issued under the Plan pursuant to Incentive Stock Options (exclusive of
shares of Common Stock that have been issued pursuant to Existing Awards) is
250,000 shares, subject to adjustment as provided in Section 14 of the Plan.

 

(b)           Individual Annual Award Limits. The following calendar year annual
limits apply to grants of Awards unless the Committee specifically determines at
the time of grant that the Award is not intended to qualify as performance-based
compensation under the Plan:  125,000 shares, subject to adjustment as provided
in Section 14, for grants of stock options, stock appreciation rights,
restricted stock awards, restricted stock units, performance shares and other
stock-based awards; and (ii) $0.00 in annual Performance Awards payable in cash
or other cash-based awards.

 

(c)           Changes to the Share Reserve.  If an Award  granted under the Plan
shall for any reason (i) expire, be canceled or otherwise terminate, in whole or
in part, without having been exercised or redeemed in full, (ii) be reacquired
by the Company prior to vesting, or (iii) be repurchased at cost by the Company
prior to vesting, the shares of Common Stock not acquired by the Participant
under such

 

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Award shall revert or be added to the Share Reserve and become available for
issuance under the Plan; provided, however, that shares of Common Stock shall
not revert or be added to the Share Reserve that are (A) had been awarded under
an Existing Award,  (B) tendered in payment of an Option, (C) withheld by the
Company to satisfy any tax withholding obligation, or (D) purchased by the
Company with the proceeds from the exercise of Options, and provided, further,
that shares of Common Stock covered by a Stock Appreciation Right, to the extent
the right is exercised and settled in shares of Common Stock, and whether or not
shares of Common Stock are actually issued to the Participant upon exercise of
the Stock Appreciation Right, shall be considered issued or transferred pursuant
to the Plan.

 

(d)           Source of Shares.  Any shares of Common Stock delivered pursuant
to an Award may consist, in whole or in part, of authorized and unissued shares
or reacquired shares, bought on the market or otherwise.

 

(e)           Substitute Awards.  In the case of Substitute Awards, the shares
of Common Stock subject to the Substitute Award shall not reduce the Share
Reserve.  If a Substitute Award shall for any reason expire, be canceled or
otherwise terminate, in whole or in part, be settled in cash or otherwise
settled by issuance of fewer shares, the shares of Common Stock not acquired by
the Participant shall not be added to the Share Reserve.  Further, any shares of
Common Stock withheld or delivered to pay tax withholding obligations relating
to a Substitute Award shall not reduce the Share Reserve.

 

5.             ELIGIBILITY

 

Individuals eligible to participate in this Plan include Employees, Directors
and Consultants of the Company, or any Affiliate; provided, however, to the
extent required under Section 409A of the Code, an Affiliate of the Company
shall include only an entity in which the Company possesses at least twenty
percent (20%) of the total combined voting power of the entity’s outstanding
voting securities or such other threshold ownership percentage permitted under
Section 409A of the Code.

 

6.             STOCK OPTIONS

 

(a)           Grant of Options.  The Committee is hereby authorized to grant
Options to Participants with the following terms and conditions, and any other
terms and conditions not inconsistent with the provisions of the Plan, as the
Committee shall determine.  Incentive Stock Options may be granted only to
eligible Employees of the Company or of any parent corporation or subsidiary
corporation (as permitted by Section 422 of the Code).

 

(b)           Award Agreement.  Each Option granted under the Plan shall be
evidenced by an Award Agreement.  The Award Agreement shall specify whether the
Option is intended to be an Incentive Stock Option or a Nonstatutory Stock
Option.

 

(i)        Exercise Price.  The purchase price per share of Common Stock that
may be purchased by an Option shall be determined by the Committee; provided,
however, and except with respect to Substitute Awards or as provided in
Section 14, that such purchase price shall not be less than 100% of the Fair
Market Value of a share of Common Stock on the date of grant of such Option.

 

(ii)       Term.  The term of each Option shall not exceed ten (10) years from
the date of grant.

 

(iii)      Vesting; Restrictions on Exercise.  The Award Agreement shall set
forth any installment or other restrictions on exercise of the Option during the
term of the Option.  Each Option

 

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shall become exercisable and shall vest over such period of time, or upon such
events or such Performance Criteria, as determined by the Committee.

 

(iv)      Time and Method of Exercise.  The Committee shall establish in the
applicable Award Agreement the time or times at which an Option may be exercised
in whole or in part, and the method or methods by which, and the form or forms,
including, without limitation, cash, shares of Common Stock, or other Awards or
any combination thereof, having a Fair Market Value on the exercise date equal
to the relevant exercise price, in which payment of the exercise price with
respect thereto may be made or deemed to have been made.

 

(v)       Termination of Continuous Service.  Each Award Agreement shall set
forth the extent, if any, to which the Participant shall have the right to
exercise the Option following termination of the Participant’s Continuous
Service.  Such provisions shall be determined in the sole discretion of the
Committee, need not be uniform among all Options issued pursuant to the Plan,
and may reflect distinctions based on the reasons for termination of Continuous
Service.  In the absence of specific provisions in an Award Agreement setting
forth rights to exercise following termination of a Participant’s Continuous
Service, the following shall apply:

 

(A)          Termination of Continuous Service Other than as a Result of
Disability or Death.  In the event a Participant’s Continuous Service terminates
(other than upon the Participant’s death or disability), the Participant may
exercise his or her Option (to the extent that the Participant was entitled to
exercise it as of the date of termination) but only within such period of time
ending on the earlier of (a) the date three (3) months after the termination of
the Participant’s Continuous Status as an Employee, Director or Consultant (or
such longer or shorter period specified in the Option Agreement), or (b) the
expiration of the term of the Option as set forth in the Option Agreement.  If,
at the date of termination, the Participant is not entitled to exercise his or
her entire Option, the shares covered by the un-exercisable portion of the
Option shall revert to and again become available for issuance under the Plan. 
If, after termination, the Participant does not exercise his or her Option
within the time specified in the Option Agreement, the Option shall terminate,
and the shares covered by such Option shall revert to and again become available
for issuance under the Plan.

 

(B)           Disability of a Participant.  In the event a Participant’s
Continuous Service terminates as a result of the Participant’s disability, the
Participant may exercise his or her Option (to the extent that the Participant
was entitled to exercise it as of the date of termination), but only within such
period of time ending on the earlier of (i) the date twelve (12) months
following such termination (or such longer or shorter period specified in the
Option Agreement), or (ii) the expiration of the term of the Option as set forth
in the Option Agreement.  If, at the date of termination, the Participant is not
entitled to exercise his or her entire Option, the shares covered by the
un-exercisable portion of the Option shall revert to and again become available
for issuance under the Plan.  If, after termination, the Participant does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the shares covered by such Option shall revert to and again
become available for issuance under the Plan.

 

(C)           Death of a Participant.  In the event of the death of a
Participant during, or within a period specified in the Option Agreement after
the termination of, the Participant’s Continuous Service, the Option may be
exercised (to the extent the Participant was entitled to exercise the Option as
of the date of death) by the Participant’s estate, by a person who acquired the
right to exercise the Option by bequest or inheritance or by a person designated
to exercise the option upon the Participant’s death pursuant to subsection
15(b), but only within the period ending on the earlier of (1) the date eighteen
(18) months following the date of death (or such longer or shorter period
specified in the Option Agreement), or (2) the expiration of the term of such
Option as set forth in the Option

 

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Agreement.  If, at the time of death, the Participant was not entitled to
exercise his or her entire Option, the shares covered by the un-exercisable
portion of the Option shall revert to and again become available for issuance
under the Plan.  If, after death, the Option is not exercised within the time
specified herein, the Option shall terminate, and the shares covered by such
Option shall revert to and again become available for issuance under the Plan.

 

(c)           Limitations on Incentive Stock Options.

 

(i)        Initial Exercise.  The aggregate Fair Market Value of the shares of
Common Stock with respect to which Incentive Stock Options are exercisable for
the first time by a Participant in any calendar year, under the Plan or
otherwise, shall not exceed $100,000.  For this purpose, the Fair Market Value
of the shares of Common Stock shall be determined as of the date of grant and
each Incentive Stock Option shall be taken into account in the order granted.

 

(ii)       Ten Percent Stockholders.  An Incentive Stock Option granted to a
Participant who is the holder of record of more than ten percent (10%) of the
combined voting power of all classes of stock of the Company shall have an
exercise price at least equal to 110% of the Fair Market Value of a share of
Common Stock on the date of grant and the term of the Option shall not exceed
five (5) years.

 

(iii)      Notification of Disqualifying Disposition.  If any Participant shall
make any disposition of shares of Common Stock acquired pursuant to the exercise
of an Incentive Stock Option under the circumstances described in
Section 421(b) of the Code (relating to certain disqualifying dispositions), the
Participant shall notify the Company of such disposition within ten (10) days
thereof.

 

7.             STOCK APPRECIATION RIGHTS

 

(a)           Grant of Stock Appreciation Rights.  The Committee is hereby
authorized to grant Stock Appreciation Rights to Participants.  Subject to the
terms of the Plan and any applicable Award Agreement, a Stock Appreciation Right
granted under the Plan shall confer on the holder thereof a right to receive,
upon exercise thereof, the excess of (i) the Fair Market Value of a share of
Common Stock on the date of exercise over (ii) the grant price of the Stock
Appreciation Right as specified by the Committee.

 

(b)           Award Agreement.  Each Stock Appreciation Right granted under the
Plan shall be evidenced by an Award Agreement.

 

(i)        Grant Price.  The grant price shall be determined by the Committee;
provided, however, and except as provided in Section 14, that such price shall
not be less than 100% of the Fair Market Value of one share of Common Stock on
the date of grant, except that if a Stock Appreciation Right is at any time
granted in tandem with an Option, the grant price of the Stock Appreciation
Right shall not be less than the exercise price of such Option.

 

(ii)       Term. The term of each Stock Appreciation Right shall not exceed ten
(10) years from the date of grant.

 

(iii)      Time and Method of Exercise.  The Committee shall establish in the
applicable Award Agreement the time or times at which a Stock Appreciation Right
may be exercised in whole or in part.  At the discretion of the Committee, the
payment upon exercise may be in cash, shares of Common Stock or any combination
thereof, or in any other manner approved by the Committee in its sole
discretion.  The Committee’s determination as to the form of settlement shall be
set forth in the Award Agreement.

 

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(iv)      Termination of Continuous Service.  Each Award Agreement shall set
forth the extent, if any, to which the Participant shall have the right to
exercise the Stock Appreciation Right following termination of the Participant’s
Continuous Service.  Such provisions shall be determined in the sole discretion
of the Committee, need not be uniform among all Stock Appreciation Rights issued
pursuant to the Plan, and may reflect distinctions based on the reasons for
termination of Continuous Service.

 

8.             RESTRICTED STOCK AND RESTRICTED STOCK UNITS

 

(a)           Grant of Restricted Stock or Restricted Stock Units. The Committee
is hereby authorized to grant Awards of Restricted Stock and Restricted Stock
Units to Participants.

 

(b)           Award Agreement.  Each grant of Restricted Stock or Restricted
Stock Units shall be evidenced by an Award Agreement.

 

(i)        Restrictions on Transfer.  Shares of Restricted Stock and Restricted
Stock Units shall be subject to such restrictions as the Committee may establish
in the applicable Award Agreement (including, without limitation, any limitation
on the right to vote a share of Restricted Stock or the right to receive any
dividend or other right), which restrictions may lapse separately or in
combination at such time or times, in such installments or otherwise, as the
Committee may deem appropriate.  Unrestricted shares of Common Stock, evidenced
in such manner as the Committee shall deem appropriate, shall be delivered to
the holder of Restricted Stock promptly after such restrictions have lapsed.

 

(ii)       Share Registration.  Any Restricted Stock granted under the Plan may
be evidenced in such manner as the Committee may deem appropriate, including,
without limitation, book-entry registration or issuance of a stock certificate
or certificates.  In the event any stock certificate is issued in respect of
shares of Restricted Stock granted under the Plan, such certificate shall be
registered in the name of the Participant and shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such
Restricted Stock.

 

(iii)      Forfeiture.  Upon termination of Continuous Service during the
restriction period, except as determined otherwise by the Committee, all shares
of Restricted Stock and all Restricted Stock Units that are then subject to
restrictions shall be forfeited and reacquired by the Company.

 

9.             PERFORMANCE AWARDS

 

(a)           Grant of Performance Awards.  The Committee is hereby authorized
to grant Performance Awards to Participants.  Performance Awards include
arrangements under which the grant, issuance, retention, vesting and/or
transferability of any Award is subject to such Performance Criteria and such
additional conditions or terms as the Committee may designate.

 

(b)           Award Agreement.  Each grant of a Performance Award shall be
evidenced by an Award Agreement.  Subject to the terms of the Plan and any
applicable Award Agreement, a Performance Award granted under the Plan:

 

(i)        may be denominated or payable in cash, shares of Common Stock
(including, without limitation, Restricted Stock), other securities, or other
Awards; and

 

(ii)       shall confer on the holder thereof rights valued as determined by the
Committee and payable to, or exercisable by, the holder of the Performance
Award, in whole or in part, upon the

 

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achievement of such performance goals during such Performance Periods as the
Committee shall establish.

 

(c)           Covered Employee.  The Committee may from time to time grant
Awards to Covered Employees that are intended to satisfy the performance-based
compensation requirements of Section 162(m) of the Code.  For purposes of such
Awards, the Committee shall consider all of the requirements of Section 162(m),
including the Qualifying Performance Criteria, approvals and certification by
solely outside directors, the individual Award limits and any other requirements
under Section 162(m) of the Code.

 

10.          OTHER STOCK-BASED AWARDS

 

The Committee is hereby authorized to grant to Participants such other Awards
that are denominated or payable in, valued in whole or in part by reference to,
or otherwise based on or related to, shares of Common Stock, as are deemed by
the Committee to be consistent with the purposes of the Plan; provided, however,
that such grants must comply with applicable law.  Subject to the terms of the
Plan and any applicable Award Agreement, the Committee shall determine the terms
and conditions of such Awards.  Shares of Common Stock or other securities
delivered pursuant to a purchase right granted under this Section 10 shall be
purchased for such consideration, which may be paid by such method or methods
and in such form or forms, including, without limitation, cash, shares of Common
Stock, other securities, or other Awards, or any combination thereof, as the
Committee shall determine.

 

11.          DIVIDEND EQUIVALENTS

 

The Committee is hereby authorized to grant to Participants the right, if so
determined by the Committee, to receive, currently, or on a deferred basis,
dividends or Dividend Equivalents, with respect to the shares of Common Stock
covered by the Award.  The Committee may provide that any dividends paid on
shares of Common Stock subject to an Award must be reinvested in additional
shares of Common Stock, which may or may not be subject to the same vesting
conditions and restrictions applicable to the Award.  Notwithstanding the award
of Dividend Equivalents or dividends, a Participant shall not be entitled to
receive a special or extraordinary dividend or distribution unless the Committee
shall have expressly authorized such receipt.  All distributions, if any,
received by a Participant with respect to an Award as a result of any split,
Common Stock dividend, combination of shares of Common Stock, or other similar
transaction shall be subject to the restrictions applicable to the original
Award.

 

12.          TAX WITHHOLDING

 

The Company or any Affiliate shall be authorized to withhold from any Award
granted or any payment due or transfer made under any Award or under the Plan
the amount (in cash, shares of Common Stock, other securities, or other Awards)
of withholding taxes due in respect of an Award, its exercise, or any payment or
transfer under such Award or under the Plan and to take such other action as may
be necessary in the opinion of the Company or Affiliate to satisfy statutory
withholding obligations for the payment of such taxes.

 

13.          CANCELLATION AND RE-GRANT OF OPTIONS

 

(a)           Subject to subsection (b) of this Article 13, the Board shall have
the authority to effect, at any time and from time to time (i) the repricing of
any outstanding Options under the Plan and/or (ii) with the consent of the
affected holders of Options, the cancellation of any outstanding Options and the
grant in substitution of new Options under the Plan covering the same or
different numbers of shares of Common Stock, but having an exercise price per
share not less than 100% of the Fair Market Value, or,

 

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in the case of a ten percent (10%) stockholder (as defined in subsection 6(c)),
not less than 110% of the Fair Market Value) per share of Common Stock on the
new grant date.

 

(b)           Prior to the implementation of any such repricing or cancellation
of one or more outstanding Options as described in Section 13(c), the Board
shall obtain the approval of the stockholders of the Company to the extent
required by the New York Stock Exchange, Nasdaq or other securities exchange
listing requirements applicable to the Company, or applicable law.

 

(c)           To the extent required by Section 162(m) of the Code, shares
subject to an Option canceled under this Section 13 shall continue to be counted
against the maximum award of Options permitted to be granted during any calendar
year to an individual Participant pursuant to Section 4(b) of the Plan.  The
repricing of an Option hereunder resulting in a reduction of the exercise price
shall be deemed to be a cancellation of the original Option and the grant of a
new Option; in the event of such repricing, both the original and the new
Options shall be counted against the maximum awards of Options permitted to be
granted during any calendar year to an individual Participant pursuant to
Section 4(b) of the Plan.  The provisions of this Section 13(c) shall be
applicable only to the extent required by Section 162(m) of the Code.

 

14.          ADJUSTMENTS UPON CHANGES IN STOCK

 

(a)           Changes in Capital.  If any change is made in the Common Stock
subject to the Plan, or subject to any Award, without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan will be appropriately
adjusted in the class(es) and maximum number of shares subject to the Plan and
the maximum number of shares subject to award to any person during any calendar
year, and the outstanding Awards will be appropriately adjusted in the class(es)
and number of shares and price per share of stock subject to such outstanding
Awards.  Such adjustments shall be made by the Committee proportionately, so as
to put the Participant in the same economic position both prior to and after the
change in capital.  The determination of the Committee shall be final, binding
and conclusive.  (The conversion of any convertible securities of the Company
shall not be treated as a “transaction not involving the receipt of
consideration by the Company.”)

 

(b)           Change of Control.  In the event of a Change of Control, to the
extent permitted by applicable law: (i) any surviving corporation (or an
Affiliate thereof) shall assume any Awards outstanding under the Plan or shall
substitute similar Awards for those outstanding under the Plan and (ii) such
Awards shall continue in full force and effect.  In the event any surviving
corporation (or an Affiliate) refuses to assume or continue such Awards, or to
substitute similar Awards for those outstanding under the Plan, then vesting (or
release from the repurchase option) shall accelerate such that such Awards are
fully vested at such event and shall be exercisable for a period of 15 days
after notice from the Company.  If not so exercised within the 15 day period,
then such Awards shall be terminated.

 

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15.          GENERAL PROVISIONS

 

(a)           Forms of Payment for Awards.  Subject to the terms of the Plan and
any applicable Award Agreement, payments or transfers to be made by the Company
or an Affiliate upon the grant, exercise, or payment of an Award may be made in
such form or forms as the Committee shall determine, including, without
limitation, cash, shares of Common Stock, rights in or shares issuable under the
Award or other Awards, other securities, or other Awards or any combination
thereof, and may be in a single payment or transfer, in installments, or on a
deferred basis, in each case in accordance with the rules and procedures
established by the Committee.  Such rules and procedures may include, without
limitation, provisions for the payment or crediting of reasonable interest on
installment or deferred payments or the grant or crediting of Dividend
Equivalents in respect of installment or deferred payments.

 

(b)           Limits on Transfer of Awards.  Except as provided by the
Committee, no Award, and no right under any such Award, shall be assignable,
alienable, saleable, or transferable by a Participant otherwise than by will or
by the laws of descent and distribution; provided, however, that, if so
determined by the Committee, a Participant may, in the manner established by the
Committee, designate a beneficiary or beneficiaries to exercise the rights of
the Participant with respect to any Award upon the death of a Participant.  Each
Award, and each right under any Award, shall be exercisable, during the
Participant’s lifetime, only by the Participant or, if permissible under
applicable law, by the Participant’s guardian or legal representative.  No
Award, and no right under any such Award, may be pledged, alienated, attached,
or otherwise encumbered, and any purported pledge, alienation, attachment, or
encumbrance thereof shall be void and unenforceable against the Company or any
Affiliate.

 

(c)           Conditions and Restrictions Upon Securities Subject to Awards. 
The Committee may provide that the shares of Common Stock issued upon exercise
of an Option or Stock Appreciation Right or otherwise subject to or issued under
an Award shall be subject to such further agreements, restrictions, conditions
or limitations as the Committee in its discretion may specify prior to the
exercise of such Option or Stock Appreciation Right or the grant, vesting or
settlement of such Award, including without limitation, conditions on vesting or
transferability and forfeiture or repurchase provisions or provisions on payment
of taxes arising in connection with an Award.  Without limiting the foregoing,
such restrictions may address the timing and manner of any resales by the
Participant or other subsequent transfers by the Participant of any shares of
Common Stock issued under an Award, including without limitation:
(i) restrictions under an insider trading policy or pursuant to applicable law;
(ii) restrictions designed to delay and/or coordinate the timing and manner of
sales by Participant and holders of other Company equity compensation
arrangements; (iii) restrictions as to the use of a specified brokerage firm for
such resales or other transfers; and (iv) provisions requiring shares to be sold
on the open market or to the Company in order to satisfy tax withholding or
other obligations.

 

(d)           Share Certificates.  All shares or other securities delivered
under the Plan pursuant to any Award or the exercise thereof shall be subject to
such stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations, and other requirements of
the Securities and Exchange Commission, any stock exchange upon which such
shares of Common Stock or other securities are then listed, and any applicable
Federal, state, or local securities laws, and the

 

17

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Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.  Notwithstanding any other
provision of this Plan to the contrary, the Company may elect to satisfy any
requirement under this Plan for the registration or delivery of stock
certificates through the use of book-entry registration.

 

(e)           Changes in Accounting or Tax Rules.  Except as provided otherwise
at the time an Award is granted, notwithstanding any other provision of the Plan
to the contrary, if, during the term of the Plan, any changes in the financial
or tax accounting rules applicable to any Award shall occur which, in the sole
judgment of the Committee, may have a material adverse effect on the reported
earnings, assets or liabilities of the Company, the Committee shall have the
right and power to modify, as necessary, any then outstanding and unexercised
Options, Stock Appreciation Rights and other outstanding Awards as to which the
applicable services or other restrictions have not been satisfied.

 

(f)            Non-exclusivity of the Plan.  The adoption of the Plan shall not
be construed as creating any limitations upon the right and authority of the
Committee to adopt such other incentive compensation arrangements (which
arrangements may be applicable either generally to a class or classes of
individuals or specifically to a particular individual or particular
individuals) as the Committee in its discretion determines desirable.

 

(g)           Other Award Agreement Provisions.  Each Award Agreement may
contain such other terms and conditions not inconsistent with the Plan as may be
determined by the Committee, in its sole discretion.

 

(h)           Other Employee Benefits.  The amount of any compensation deemed to
be received by a Participant as a result of the exercise of an Option or Stock
Appreciation Right, the sale of shares received upon such exercise, the vesting
of any Restricted Stock, receipt of Performance Shares, distributions with
respect to Restricted Stock Units, Performance Awards, or Other Stock-Based
Awards shall not constitute “earnings” or “compensation” with respect to which
any other employee benefits of such employee are determined, including without
limitation, benefits under any pension, profit sharing, 401(k), life insurance
or salary continuation plan.

 

(i)            Severability.  If any provision of the Plan or any Award
Agreement shall be determined to be illegal or unenforceable by any court of law
in any jurisdiction, the remaining provisions hereof and thereof shall be
severable and enforceable in accordance with their terms, and all provisions
shall remain enforceable in any other jurisdiction.

 

(j)            Governing Law.  The validity and construction of this Plan and
the Award Agreements shall be construed in accordance with and governed by the
laws of the State of Delaware other than any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation of this Plan
and the Award Agreements to the substantive laws of any other jurisdiction.

 

(k)           Section 409A.  Notwithstanding anything in this Plan to the
contrary, the Plan and Awards made under the Plan are intended to comply with
the requirements imposed by Section 409A of the Code.  If any Plan provision or
Award under the Plan would result in the imposition of an additional tax under
Section 409A of the Code, the Company and the Participant intend that the Plan
provision or Award will be reformed to avoid imposition, to the extent possible,
of the applicable tax and no action taken to comply with Section 409A of the
Code shall be deemed to adversely affect the Participant’s

 

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rights to an Award.  The Participant further agrees that the Committee, in the
exercise of its sole discretion and without the consent of the Participant, may
amend or modify an Award in any manner and delay the payment of any amounts
payable pursuant to an Award to the minimum extent necessary to meet the
requirements of Section 409A of the Code as the Committee deems appropriate or
desirable.

 

(l)            Stockholder Rights.  No Participant nor any other holder of an
Award granted under the Plan shall be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares subject to such Award
unless and until such person has satisfied all requirements for exercise of the
Award or lapse of restrictions pursuant to its terms.

 

16.          AMENDMENT, MODIFICATION AND TERMINATION

 

(a)           Amendment, Modification, and Termination.  Subject to Sections 3,
15(k) and 16(b), and only upon unanimous approval of the entire Board, the Board
may at any time terminate, and from time to time may amend or modify the Plan;
provided, however, that no amendment or modification may become effective
without approval of the stockholders of the Company if stockholder approval is
required to enable the Plan to satisfy any applicable statutory or regulatory
requirements, or if the Company, on the advice of counsel, determines that
stockholder approval is otherwise necessary or desirable.

 

(b)           Awards Previously Granted.  Except as otherwise may be required
under Section 15(k), notwithstanding Section 16(a), to the contrary, no
amendment, modification or termination of the Plan or Award Agreement shall
adversely affect in any material way any previously granted Award, without the
written consent of the Participant holding such Award.

 

17.          STOCKHOLDER APPROVAL; EFFECTIVE DATE OF PLAN

 

The Plan shall be effective immediately upon approval by the stockholders. 
Unless sooner terminated by the Board, this Plan shall terminate automatically
on March 11, 2017.  After the Plan is terminated, no Awards may be granted. 
Awards outstanding at the time the Plan is terminated shall remain outstanding
in accordance with the terms and conditions of the Plan and the Award Agreement.

 

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EXHIBIT B

 

ADOPTION OF SECOND AMENDMENT TO THE SHAREHOLDER RIGHTS PLAN

 

WHEREAS, Evolving Systems, Inc. (the “Company’’) and American Stock Transfer &
Trust Company LLC (the “Rights Agent’’) have entered into that certain Rights
Agreement dated as of March 4, 2009, as amended on December 10, 2009 (as
amended, the “Rights Agreement’’); and

 

WHEREAS, the Singer Children’s Management Trust (the “Trust’’), which owns
approximately 21.8% of the Company’s common stock, par value $0.001 per share
(“Common Stock’’), has requested that the Company amend the Rights Agreement to
increase the percentage of the outstanding shares of Common Stock that a person
or group of affiliated or associated persons may beneficially own without
becoming an Acquiring Person (as defined in the Rights Agreement) to 29.0% (the
“Rights Plan Amendment”); and

 

WHEREAS, the Board has been presented with a form of the second Amendment to
Rights Agreement evidencing the Rights Plan Amendment (the “Amendment
Agreement’’); and

 

WHEREAS, the Board believes that approving the Rights Plan Amendment and the
Amendment Agreement (in substantially the form presented) is in the best
interests of the Company and its stockholders.

 

NOW THEREFORE, BE IT RESOLVED, that the Rights Plan Amendment and the Company’s
entry into the Amendment Agreement (in substantially the form presented to the
Board) is hereby approved, effective April 20, 2010; and

 

FURTHER RESOLVED, that the proper officers of the Company are each hereby
authorized and directed, for and on behalf of the Company, to execute the
Amendment Agreement and to deliver the same to the Rights Agent thereunder, such
execution and delivery conclusively to evidence the due authorization and
approval thereof by the Company.

 

GENERAL AUTHORIZING RESOLUTIONS

 

RESOLVED, that the proper officers of the Company are hereby authorized and
directed, jointly and severally, for and on behalf of the Company, to execute
and deliver any and all certificates, agreements and other documents, take any
and all steps and perform any other acts that they deem necessary or advisable
in order to effectuate the purposes and intent of each and all of the foregoing
resolutions; and

 

FURTHER RESOLVED, that any actions taken by proper officers of the Company prior
to the adoption of the foregoing resolutions that are within the authority
conferred thereby are hereby ratified, confirmed and approved in all respects as
the act and deed of the Company.

 

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