Exhibit 10.1

 

KOPIN CORPORATION

 

2020 EQUITY INCENTIVE PLAN

 

Effective as of the Effective Date (as defined below), the Kopin Corporation
2020 Incentive Equity Plan (as in effect from time to time, the “Plan”) is
hereby established.

 

The purpose of the Plan is to provide employees of Kopin Corporation, a Delaware
corporation (together with its successors, the “Company”), and its subsidiaries,
certain consultants and advisors who perform services for the Company or its
subsidiaries, and non-employee members of the Board of Directors of the Company,
with the opportunity to receive grants of incentive stock options, nonqualified
stock options, stock appreciation rights, stock awards, stock units, and other
stock-based awards.

 

The Company believes that the Plan will encourage the participants to contribute
materially to the growth of the Company, thereby benefitting the Company’s
stockholders, and will align the economic interests of the participants with
those of the stockholders.

 

The Plan is a successor to the Kopin Corporation 2010 Equity Incentive Plan, as
amended and restated (the “Prior Plan”). No additional grants shall be made
under the Prior Plan after the Effective Date. Outstanding grants under the
Prior Plan shall continue in effect according to their terms, consistent with
the applicable terms of the Prior Plan.

 

Section 1. Definitions

 

The following terms shall have the meanings set forth below for purposes of the
Plan:

 

(a) “Board” shall mean the Board of Directors of the Company.

 

(b) “Cause” shall have the meaning given to that term in any written employment
agreement, offer letter or severance agreement between the Employer and the
Participant, or if no such agreement exists or if such term is not defined
therein, and unless otherwise defined in the Grant Instrument, Cause shall mean
a finding by the Committee that the Participant (i) has breached his or her
employment or service contract with the Employer, (ii) has engaged in disloyalty
to the Employer, including, without limitation, fraud, embezzlement, theft,
commission of a felony or proven dishonesty, (iii) has disclosed trade secrets
or confidential information of the Employer to persons not entitled to receive
such information, (iv) has breached any written non-competition,
non-solicitation, invention assignment or confidentiality agreement between the
Participant and the Employer or (v) has engaged in such other behavior
detrimental to the interests of the Employer as the Committee determines.

 

(c) “CEO” shall mean the Chief Executive Officer of the Company.

 

(d) Unless otherwise set forth in a Grant Instrument, a “Change of Control”
shall be deemed to have occurred if:

 

(i) Any “person” (as such term is used in sections 13(d) and 14(d) of the
Exchange Act) becomes a “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
more than 50% of the voting power of the then outstanding securities of the
Company; provided that a Change of Control shall not be deemed to occur as a
result of a transaction in which the Company becomes a direct or indirect
subsidiary of another Person and in which the stockholders of the Company,
immediately prior to the transaction, will beneficially own, immediately after
the transaction, shares of such other Person representing more than 50% of the
voting power of the then outstanding securities of such other Person.

 

   

   

 

(ii) The consummation of (A) a merger or consolidation of the Company with
another Person where, immediately after the merger or consolidation, the
stockholders of the Company, immediately prior to the merger or consolidation,
will not beneficially own, in substantially the same proportion as ownership
immediately prior to the merger or consolidation, shares entitling such
stockholders to more than 50% of all votes to which all stockholders of the
surviving Person would be entitled in the election of directors, or where the
members of the Board, immediately prior to the merger or consolidation, will
not, immediately after the merger or consolidation, constitute a majority of the
board of directors of the surviving Person or (B) a sale or other disposition of
all or substantially all of the assets of the Company.

 

(iii) A change in the composition of the Board over a period of 12 consecutive
months or less such that a majority of the Board members ceases, by reason of
one or more contested elections, or threatened election contests, for Board
membership, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (B) have been elected
or nominated for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were still in office
at the time the Board approved such election or nomination.

 

(iv) The consummation of a complete dissolution or liquidation of the Company.

 

The Committee may modify the definition of Change of Control for a particular
Grant as the Committee deems appropriate to comply with section 409A of the Code
or otherwise. Notwithstanding the foregoing, if a Grant constitutes deferred
compensation subject to section 409A of the Code and the Grant provides for
payment upon a Change of Control, then, for purposes of such payment provisions,
no Change of Control shall be deemed to have occurred upon an event described in
items (i) – (iv) above unless the event would also constitute a change in
ownership or effective control of, or a change in the ownership of a substantial
portion of the assets of, the Company under section 409A of the Code.

 

(e) “Code” shall mean the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.

 

(f) “Committee” shall mean the Compensation Committee of the Board or another
committee appointed by the Board to administer the Plan. The Committee shall
consist of directors who are “non-employee directors” as defined under Rule
16b-3 promulgated under the Exchange Act and “independent directors,” as
determined in accordance with the independence standards established by the
stock exchange on which the Company Stock is at the time primarily traded.

 

(g) “Company Stock” shall mean common stock, par value $0.01 per share, of the
Company, and such other securities as may be substituted for Company Stock
pursuant to Section 4(c).

 

(h) “Disability” or “Disabled” shall mean, unless otherwise set forth in the
Grant Instrument, a Participant’s becoming disabled within the meaning of the
Employer’s long-term disability plan applicable to the Participant.

 

(i) “Dividend Equivalent” shall mean an amount determined by multiplying the
number of shares of Company Stock subject to a Stock Unit or Other Stock-Based
Award by the per-share cash dividend paid by the Company on its outstanding
Company Stock, or the per-share Fair Market Value of any dividend paid on its
outstanding Company Stock in consideration other than cash. If interest is
credited on accumulated divided equivalents, the term “Dividend Equivalent”
shall include the accrued interest.

 

   

   

 

(j) “Effective Date” shall mean the date of the Annual Meeting of Stockholders
to be held on May 20, 2020 or such other date upon which the Company’s
stockholders approve the Plan.

 

(k) “Employee” shall mean an employee of the Employer (including an officer or
director who is also an employee), but excluding any person who is classified by
the Employer as a “contractor” or “consultant,” no matter how characterized by
the Internal Revenue Service, other governmental agency or a court. Any change
of characterization of an individual by the Internal Revenue Service or any
court or government agency shall have no effect upon the classification of an
individual as an Employee for purposes of this Plan, unless the Committee
determines otherwise.

 

(l) “Employed by, or providing service to, the Employer” shall mean employment
or service as an Employee, Key Advisor or member of the Board (so that, for
purposes of exercising Options and SARs and satisfying conditions with respect
to Stock Awards, Stock Units, and Other Stock-Based Awards, a Participant shall
not be considered to have terminated employment or service until the Participant
ceases to be an Employee, Key Advisor and member of the Board), unless the
Committee determines otherwise. If a Participant’s relationship is with a
subsidiary of the Company and that entity ceases to be a subsidiary of the
Company, the Participant will be deemed to cease employment or service when the
entity ceases to be a subsidiary of the Company, unless the Participant
transfers employment or service to an Employer. If a Participant has military,
sick leave or other bona fide leave, the Participant will not be deemed to cease
employment or service solely as a result of such leave; provided that such leave
does not exceed the longer of 90 days or the period during which the absent
Participant’s reemployment rights, if any, are guaranteed by statute or
contract. To the extent consistent with applicable law, the Committee may
provide that Grants continue to vest for all or a portion of the period of such
leave, or that vesting shall be tolled during such leave and only recommence
upon the Participant’s return from such leave.

 

(m) “Employer” shall mean the Company and its subsidiaries.

 

(n) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

(o) “Exercise Price” shall mean the per share price at which shares of Company
Stock may be purchased under an Option, as designated by the Committee.

 

(p) “Fair Market Value” shall mean:

 

(i) If the Company Stock is publicly traded, the Fair Market Value per share
shall be determined as follows: (A) if the principal trading market for the
Company Stock is a national securities exchange, the closing sales price during
regular trading hours on the relevant date or, if there were no trades on that
date, the latest preceding date upon which a sale was reported, or (B) if the
Company Stock is not principally traded on any such exchange, the last reported
sale price of a share of Company Stock during regular trading hours on the
relevant date, as reported by the OTC Bulletin Board.

 

(ii) If the Company Stock is not publicly traded or, if publicly traded, is not
subject to reported transactions as set forth above, the Fair Market Value per
share shall be determined by the Committee through any reasonable valuation
method authorized under the Code.

 

(q) “GAAP” shall mean United States generally accepted accounting principles.

 

   

   

 

(r) “Grant” shall mean an Option, SAR, Stock Award, Stock Unit or Other
Stock-Based Award granted under the Plan.

 

(s) “Grant Instrument” shall mean the written agreement that sets forth the
terms and conditions of a Grant, including all amendments thereto.

 

(t) “Incentive Stock Option” shall mean an Option that is intended to meet the
requirements of an incentive stock option under section 422 of the Code.

 

(u) “Key Advisor” shall mean a consultant or advisor of the Employer.

 

(v) “Non-Employee Director” shall mean a member of the Board who is not an
Employee.

 

(w) “Nonqualified Stock Option” shall mean an Option that is not intended to be
taxed as an incentive stock option under section 422 of the Code.

 

(x) “Option” shall mean an option to purchase shares of Company Stock, as
described in Section 6.

 

(y) “Other Stock-Based Award” shall mean any Grant based on, measured by or
payable in Company Stock (other than an Option, Stock Unit, Stock Award, or
SAR), as described in Section 10.

 

(z) “Participant” shall mean an Employee, Key Advisor or Non-Employee Director
designated by the Committee to participate in the Plan.

 

(aa) “Performance Goals” shall mean the business criteria selected by the
Company to measure the level of performance of the Company or an affiliate
during a performance period, which may include, but are not limited to, one or
more of the following criteria: cash flow; free cash flow; earnings (including
gross margin, earnings before interest and taxes, earnings before taxes,
earnings before interest, taxes, depreciation, amortization and charges for
stock-based compensation, earnings before interest, taxes, depreciation and
amortization, adjusted earnings before interest, taxes, depreciation and
amortization and net earnings); earnings per share; growth in earnings or
earnings per share; book value growth; stock price; return on equity or average
stockholder equity; total stockholder return or growth in total stockholder
return either directly or in relation to a comparative group; return on capital;
return on assets or net assets; revenue, growth in revenue or return on sales;
sales; expense reduction or expense control; expense to revenue ratio; income,
net income or adjusted net income; operating income, net operating income,
adjusted operating income or net operating income after tax; operating profit or
net operating profit; operating margin; gross profit margin; return on operating
revenue or return on operating profit; regulatory filings; regulatory approvals,
litigation and regulatory resolution goals; other operational, regulatory or
departmental objectives; budget comparisons; growth in stockholder value
relative to established indexes, or another peer group or peer group index;
development and implementation of strategic plans and/or organizational
restructuring goals; development and implementation of risk and crisis
management programs; improvement in workforce diversity; compliance requirements
and compliance relief; safety goals; productivity goals; workforce management
and succession planning goals; economic value added (including typical
adjustments consistently applied from generally accepted accounting principles
required to determine economic value added performance measures); measures of
customer satisfaction, employee satisfaction or staff development; development
or marketing collaborations, formations of joint ventures or partnerships or the
completion of other similar transactions intended to enhance the Company’s
revenue or profitability or enhance its customer base; merger and acquisitions;
and other similar criteria as determined by the Committee. Performance goals
applicable to a Grant shall be determined by the Committee, and may be
established on an absolute or relative basis and may be established on a
corporate-wide basis or with respect to one or more business units, divisions,
subsidiaries or business segments. Relative performance may be measured against
a group of peer companies, a financial market index or other objective and
quantifiable indices.

 

   

   

 

(bb) “Person” shall mean any natural person, corporation, limited liability
company, partnership, trust, joint stock company, business trust, unincorporated
association, joint venture, governmental authority or other legal entity of any
nature whatsoever.

 

(cc) “Restriction Period” shall have the meaning given that term in Section
7(a).

 

(dd) “SAR” shall mean a stock appreciation right, as described in Section 9.

 

(ee) “Stock Award” shall mean an award of Company Stock, as described in Section
7.

 

(ff) “Stock Unit” shall mean an award of a phantom unit representing a share of
Company Stock, as described in Section 8.

 

(gg) “Substitute Awards” shall have the meaning given that term in Section 4(c).

 

Section 2. Administration

 

(a) Committee. The Plan shall be administered and interpreted by the Committee;
provided, however, that any Grants to members of the Board must be authorized by
a majority of the Board. The Committee may delegate authority to one or more
subcommittees, as it deems appropriate. Subject to compliance with applicable
law and the applicable stock exchange rules, the Board, in its discretion, may
perform any action of the Committee hereunder. To the extent that the Board, a
subcommittee or the CEO, as described below administers the Plan, references in
the Plan to the “Committee” shall be deemed to refer to the Board or such
subcommittee or the CEO.

 

(b) Delegation to CEO. Subject to compliance with applicable law and applicable
stock exchange requirements, the Committee may delegate all or part of its
authority and power to the CEO, as it deems appropriate, with respect to Grants
to Employees or Key Advisors who are not executive officers under section 16 of
the Exchange Act.

 

(c) Committee Authority. The Committee shall have the sole authority to (i)
determine the individuals to whom Grants shall be made under the Plan, (ii)
determine the type, size, terms and conditions of the Grants to be made to each
such individual, (iii) determine the time when the Grants will be made and the
duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, (v) amend
the terms of any previously issued Grant, subject to the provisions of Section
17 below, (vi) determine and adopt terms, guidelines, and provisions, not
inconsistent with the Plan and applicable law, that apply to individuals
residing outside of the United States who receive Grants under the Plan, and
(vii) deal with any other matters arising under the Plan.

 

(d) Committee Determinations. The Committee shall have full power and express
discretionary authority to administer and interpret the Plan, to make factual
determinations and to adopt or amend such rules, regulations, agreements and
instruments for implementing the Plan and for the conduct of its business as it
deems necessary or advisable, in its sole discretion. The Committee’s
interpretations of the Plan and all determinations made by the Committee
pursuant to the powers vested in it hereunder shall be conclusive and binding on
all persons having any interest in the Plan or in any awards granted hereunder.
All powers of the Committee shall be executed in its sole discretion, in the
best interest of the Company, not as a fiduciary, and in keeping with the
objectives of the Plan and need not be uniform as to similarly situated
individuals.

 

   

   

 

(e) Indemnification. No member of the Committee or the Board, and no employee of
the Company shall be liable for any act or failure to act with respect to the
Plan, except in circumstances involving his or her bad faith or willful
misconduct, or for any act or failure to act hereunder by any other member of
the Committee or employee or by any agent to whom duties in connection with the
administration of this Plan have been delegated. The Company shall indemnify
members of the Committee and the Board and any agent of the Committee or the
Board who is an employee of the Company or a subsidiary against any and all
liabilities or expenses to which they may be subjected by reason of any act or
failure to act with respect to their duties on behalf of the Plan, except in
circumstances involving such person’s bad faith or willful misconduct.

 

Section 3. Grants

 

Grants under the Plan may consist of Options as described in Section 6, Stock
Awards as described in Section 7, Stock Units as described in Section 8, SARs as
described in Section 9, and Other Stock-Based Awards as described in Section 10.
All Grants shall be subject to the terms and conditions set forth herein and to
such other terms and conditions consistent with this Plan as the Committee deems
appropriate and as are specified in writing by the Committee to the individual
in the Grant Instrument. All Grants shall be made conditional upon the
Participant’s acknowledgement, in writing or by acceptance of the Grant, that
all decisions and determinations of the Committee shall be final and binding on
the Participant, his or her beneficiaries and any other person having or
claiming an interest under such Grant. Grants under a particular Section of the
Plan need not be uniform as among the Participants.

 

Section 4. Shares Subject to the Plan

 

(a) Shares Authorized. Subject to adjustment as described below in Sections 4(b)
and 4(e) below, the aggregate number of shares of Company Stock that may be
issued or transferred under the Plan shall be 4,000,000 shares of Company Stock.
In addition, shares of the Company Stock underlying any outstanding award
granted under the Prior Plan that, following the Effective Date, expires, or is
terminated, surrendered or forfeited for any reason without issuance of such
shares shall be available for the award of new Grants under this Plan. Subject
to adjustment as described below in Sections 4(b) and 4(e) below, the aggregate
number of shares of Company Stock that may be issued or transferred under the
Plan pursuant to Incentive Stock Options shall not exceed 4,000,000 shares of
Company Stock.

 

(b) Source of Shares; Share Counting. Shares issued or transferred under the
Plan may be authorized but unissued shares of Company Stock or reacquired shares
of Company Stock, including shares purchased by the Company on the open market
for purposes of the Plan. If and to the extent Options or SARs granted under the
Plan, expire or are canceled, forfeited, exchanged or surrendered without having
been exercised, or if any Stock Awards, Stock Units or Other Stock-Based Awards
are forfeited, terminated or otherwise not paid in full, the shares subject to
such Grants shall again be available for purposes of the Plan. If shares of
Company Stock otherwise issuable under the Plan are surrendered in payment of
the Exercise Price of an Option, then the number of shares of Company Stock
available for issuance under the Plan shall be reduced only by the net number of
shares actually issued by the Company upon such exercise and not by the gross
number of shares as to which such Option is exercised. Upon the exercise of any
SAR under the Plan, the number of shares of Company Stock available for issuance
under the Plan shall be reduced by only by the net number of shares actually
issued by the Company upon such exercise. If shares of Company Stock otherwise
issuable under the Plan are withheld by the Company in satisfaction of the
withholding taxes incurred in connection with the issuance, vesting or exercise
of any Grant or the issuance of Company Stock thereunder, then the number of
shares of Company Stock available for issuance under the Plan shall be reduced
by the net number of shares issued, vested or exercised under such Grant,
calculated in each instance after payment of such share withholding. To the
extent any Grants are paid in cash, and not in shares of Company Stock, any
shares previously subject to such Grants shall again be available for issuance
or transfer under the Plan. For the avoidance of doubt, if shares are
repurchased by the Company on the open market with the proceeds of the Exercise
Price of Options, such shares may not again be made available for issuance under
the Plan.

 

   

   

 

(c) Substitute Awards. Shares issued or transferred under Grants made pursuant
to an assumption, substitution or exchange for previously granted awards of a
company acquired by the Company in a transaction (“Substitute Awards”) shall not
reduce the number of shares of Company Stock available under the Plan and
available shares under a stockholder approved plan of an acquired company (as
appropriately adjusted to reflect the transaction) may be used for Grants under
the Plan and shall not reduce the Plan’s share reserve (subject to applicable
stock exchange listing and Code requirements).

 

(d) Individual Limits for Non-Employee Directors. Subject to adjustment as
described below in Section 4(e), the maximum aggregate grant date value of
shares of Company Stock subject to Grants granted to any Non-Employee Director
during any calendar year, taken together with any cash fees earned by such
Non-Employee Director for services rendered during the calendar year, shall not
exceed $250,000 in total value. For purposes of this limit, the value of such
Grants shall be calculated based on the grant date fair value of such Grants for
financial reporting purposes.

 

(e) Adjustments. If there is any change in the number or kind of shares of
Company Stock outstanding by reason of (i) a stock dividend, spinoff,
recapitalization, stock split, or combination or exchange of shares, (ii) a
merger, reorganization or consolidation, (iii) a reclassification or change in
par value, or (iv) any other extraordinary or unusual event affecting the
outstanding Company Stock as a class without the Company’s receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spinoff or the Company’s payment of an
extraordinary dividend or distribution, the maximum number and kind of shares of
Company Stock available for issuance under the Plan, the maximum amount of
Grants which a Non-Employee Director may receive in any year, the number and
kind of shares covered by outstanding Grants, the number and kind of shares
issued and to be issued under the Plan, and the price per share or the
applicable market value of such Grants shall be equitably adjusted by the
Committee to reflect any increase or decrease in the number of, or change in the
kind or value of, the issued shares of Company Stock to preclude, to the extent
practicable, the enlargement or dilution of rights and benefits under the Plan
and such outstanding Grants; provided, however, that any fractional shares
resulting from such adjustment shall be eliminated. In addition, in the event of
a Change of Control, the provisions of Section 12 of the Plan shall apply. Any
adjustments to outstanding Grants shall be consistent with section 409A or 424
of the Code, to the extent applicable. The adjustments of Grants under this
Section 4(e) shall include adjustment of shares, Exercise Price of Stock
Options, base amount of SARs, Performance Goals or other terms and conditions,
as the Committee deems appropriate. The Committee shall have the sole discretion
and authority to determine what appropriate adjustments shall be made and any
adjustments determined by the Committee shall be final, binding and conclusive.

 

Section 5. Eligibility for Participation

 

(a) Eligible Persons. All Employees and Non-Employee Directors shall be eligible
to participate in the Plan. Key Advisors shall be eligible to participate in the
Plan if the Key Advisors render bona fide services to the Employer, the services
are not in connection with the offer and sale of securities in a capital-raising
transaction and the Key Advisors do not directly or indirectly promote or
maintain a market for the Company’s securities.

 

   

   

 

(b) Selection of Participants. The Committee shall select the Employees,
Non-Employee Directors and Key Advisors to receive Grants and shall determine
the number of shares of Company Stock subject to a particular Grant in such
manner as the Committee determines.

 

Section 6. Options

 

The Committee may grant Options to an Employee, Non-Employee Director or Key
Advisor upon such terms as the Committee deems appropriate. The following
provisions are applicable to Options:

 

(a) Number of Shares. The Committee shall determine the number of shares of
Company Stock that will be subject to each Grant of Options to Employees,
Non-Employee Directors and Key Advisors.

 

(b) Type of Option and Exercise Price.

 

(i) The Committee may grant Incentive Stock Options or Nonqualified Stock
Options or any combination of the two, all in accordance with the terms and
conditions set forth herein. Incentive Stock Options may be granted only to
employees of the Company or its parent or subsidiary corporations, as defined in
section 424 of the Code. Nonqualified Stock Options may be granted to Employees,
Non-Employee Directors and Key Advisors.

 

(ii) The Exercise Price of Company Stock subject to an Option shall be
determined by the Committee and shall be equal to or greater than the Fair
Market Value of a share of Company Stock on the date the Option is granted.
However, an Incentive Stock Option may not be granted to an Employee who, at the
time of grant, owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company, or any parent or subsidiary
corporation of the Company, as defined in section 424 of the Code, unless the
Exercise Price per share is not less than 110% of the Fair Market Value of a
share of Company Stock on the date of grant.

 

(c) Option Term. The Committee shall determine the term of each Option. The term
of any Option shall not exceed ten years from the date of grant. However, an
Incentive Stock Option that is granted to an Employee who, at the time of grant,
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company, or any parent or subsidiary corporation of the
Company, as defined in section 424 of the Code, may not have a term that exceeds
five years from the date of grant. Notwithstanding the foregoing, in the event
that on the last business day of the term of an Option (other than an Incentive
Stock Option), the exercise of the Option is prohibited by applicable law,
including a prohibition on purchases or sales of Company Stock under the
Company’s insider trading policy, the term of the Option shall be extended for a
period of 30 days following the end of the legal prohibition, unless the
Committee determines otherwise.

 

(d) Exercisability of Options. Options shall become exercisable in accordance
with such terms and conditions, consistent with the Plan, as may be determined
by the Committee and specified in the Grant Instrument. The Committee may
accelerate the exercisability of any or all outstanding Options at any time for
any reason.

 

(e) Grants to Non-Exempt Employees. Notwithstanding the foregoing, Options
granted to persons who are non-exempt employees under the Fair Labor Standards
Act of 1938, as amended, may not be exercisable for at least six months after
the date of grant (except that such Options may become exercisable, as
determined by the Committee, upon the Participant’s death, Disability or
retirement, or upon a Change of Control or other circumstances permitted by
applicable regulations).

 

   

   

 

(f) Termination of Employment or Service. Except as provided in the Grant
Instrument, an Option may only be exercised while the Participant is employed
by, or providing services to, the Employer. The Committee shall determine in the
Grant Instrument under what circumstances and during what time periods a
Participant may exercise an Option after termination of employment or service.

 

(g) Exercise of Options. A Participant may exercise an Option that has become
exercisable, in whole or in part, by delivering a notice of exercise to the
Company. The Participant shall pay the Exercise Price for an Option as specified
by the Committee (i) in cash, (ii) unless the Committee determines otherwise, by
delivering shares of Company Stock owned by the Participant and having a Fair
Market Value on the date of exercise at least equal to the Exercise Price or by
attestation (on a form prescribed by the Committee) to ownership of shares of
Company Stock having a Fair Market Value on the date of exercise at least equal
to the Exercise Price, (iii) by payment through a broker in accordance with
procedures permitted by Regulation T of the Federal Reserve Board, (iv) if
permitted by the Committee, by withholding shares of Company Stock subject to
the exercisable Option, which have a Fair Market Value on the date of exercise
equal to the Exercise Price, or (v) by such other method as the Committee may
approve. Shares of Company Stock used to exercise an Option shall have been held
by the Participant for the requisite period of time necessary to avoid adverse
accounting consequences to the Company with respect to the Option. Payment for
the shares to be issued or transferred pursuant to the Option, and any required
withholding taxes, must be received by the Company by the time specified by the
Committee depending on the type of payment being made, but in all cases prior to
the issuance or transfer of such shares.

 

(h) Limits on Incentive Stock Options. Each Incentive Stock Option shall provide
that, if the aggregate Fair Market Value of the Company Stock on the date of the
grant with respect to which Incentive Stock Options are exercisable for the
first time by a Participant during any calendar year, under the Plan or any
other stock option plan of the Company or a parent or subsidiary, exceeds
$100,000, then the Option, as to the excess, shall be treated as a Nonqualified
Stock Option.

 

Section 7. Stock Awards

 

The Committee may issue or transfer shares of Company Stock to an Employee,
Non-Employee Director or Key Advisor under a Stock Award, upon such terms as the
Committee deems appropriate. The following provisions are applicable to Stock
Awards:

 

(a) General Requirements. Shares of Company Stock issued or transferred pursuant
to Stock Awards may be issued or transferred for consideration or for no
consideration, and subject to restrictions or no restrictions, as determined by
the Committee. The Committee may, but shall not be required to, establish
conditions under which restrictions on Stock Awards shall lapse over a period of
time or according to such other criteria as the Committee deems appropriate,
including, without limitation, restrictions based on the achievement of specific
Performance Goals. The period of time during which the Stock Awards will remain
subject to restrictions will be designated in the Grant Instrument as the
“Restriction Period.”

 

(b) Number of Shares. The Committee shall determine the number of shares of
Company Stock to be issued or transferred pursuant to a Stock Award and the
restrictions applicable to such shares.

 

(c) Requirement of Employment or Service. If the Participant ceases to be
employed by, or provide service to, the Employer during a period designated in
the Grant Instrument as the Restriction Period, or if other specified conditions
are not met, the Stock Award shall terminate as to all shares covered by the
Grant as to which the restrictions have not lapsed, and those shares of Company
Stock must be immediately returned to the Company. The Committee may, however,
provide for complete or partial exceptions to this requirement as it deems
appropriate.

 

   

   

 

(d) Restrictions on Transfer and Legend on Stock Certificate. During the
Restriction Period, a Participant may not sell, assign, transfer, pledge or
otherwise dispose of the shares of a Stock Award except under Section 15 below.
Unless otherwise determined by the Committee, the Company will retain possession
of certificates for shares of Stock Awards until all restrictions on such shares
have lapsed. Each certificate for a Stock Award, unless held by the Company,
shall contain a legend giving appropriate notice of the restrictions in the
Grant. The Participant shall be entitled to have the legend removed from the
stock certificate covering the shares subject to restrictions when all
restrictions on such shares have lapsed. The Committee may determine that the
Company will not issue certificates for Stock Awards until all restrictions on
such shares have lapsed.

 

(e) Right to Vote and to Receive Dividends. Unless the Committee determines
otherwise, during the Restriction Period, the Participant shall have the right
to vote shares of Stock Awards and to receive any dividends or other
distributions paid on such shares, subject to any restrictions deemed
appropriate by the Committee, including, without limitation, the achievement of
specific Performance Goals. Dividends with respect to Stock Awards that vest
based on performance shall vest if and to the extent that the underlying Stock
Award vests, as determined by the Committee.

 

(f) Lapse of Restrictions. All restrictions imposed on Stock Awards shall lapse
upon the expiration of the applicable Restriction Period and the satisfaction of
all conditions, if any, imposed by the Committee. The Committee may determine,
as to any or all Stock Awards, that the restrictions shall lapse without regard
to any Restriction Period.

 

Section 8. Stock Units

 

The Committee may grant Stock Units, each of which shall represent one
hypothetical share of Company Stock, to an Employee, Non-Employee Director or
Key Advisor upon such terms and conditions as the Committee deems appropriate.
The following provisions are applicable to Stock Units:

 

(a) Crediting of Units. Each Stock Unit shall represent the right of the
Participant to receive a share of Company Stock or an amount of cash based on
the value of a share of Company Stock, if and when specified conditions are met.
All Stock Units shall be credited to bookkeeping accounts established on the
Company’s records for purposes of the Plan.

 

(b) Terms of Stock Units. The Committee may grant Stock Units that vest and are
payable if specified Performance Goals or other conditions are met, or under
other circumstances. Stock Units may be paid at the end of a specified
performance period or other period, or payment may be deferred to a date
authorized by the Committee. The Committee may accelerate vesting or payment, as
to any or all Stock Units at any time for any reason, provided such acceleration
complies with section 409A of the Code. The Committee shall determine the number
of Stock Units to be granted and the requirements applicable to such Stock
Units.

 

(c) Requirement of Employment or Service. If the Participant ceases to be
employed by, or provide service to, the Employer prior to the vesting of Stock
Units, or if other conditions established by the Committee are not met, the
Participant’s Stock Units shall be forfeited. The Committee may, however,
provide for complete or partial exceptions to this requirement as it deems
appropriate.

 

(d) Payment With Respect to Stock Units. Payments with respect to Stock Units
shall be made in cash, Company Stock or any combination of the foregoing, as the
Committee shall determine.

 

   

   

 

Section 9. Stock Appreciation Rights

 

The Committee may grant SARs to an Employee, Non-Employee Director or Key
Advisor separately or in tandem with any Option. The following provisions are
applicable to SARs:

 

(a) General Requirements. The Committee may grant SARs to an Employee,
Non-Employee Director or Key Advisor separately or in tandem with any Option
(for all or a portion of the applicable Option). Tandem SARs may be granted
either at the time the Option is granted or at any time thereafter while the
Option remains outstanding; provided, however, that, in the case of an Incentive
Stock Option, SARs may be granted only at the time of the grant of the Incentive
Stock Option. The Committee shall establish the base amount of the SAR at the
time the SAR is granted. The base amount of each SAR shall be equal to or
greater than the Fair Market Value of a share of Company Stock as of the date of
grant of the SAR. The term of any SAR shall not exceed ten years from the date
of grant. Notwithstanding the foregoing, in the event that on the last business
day of the term of a SAR, the exercise of the SAR is prohibited by applicable
law, including a prohibition on purchases or sales of Company Stock under the
Company’s insider trading policy, the term shall be extended for a period of 30
days following the end of the legal prohibition, unless the Committee determines
otherwise.

 

(b) Tandem SARs. In the case of tandem SARs, the number of SARs granted to a
Participant that shall be exercisable during a specified period shall not exceed
the number of shares of Company Stock that the Participant may purchase upon the
exercise of the related Option during such period. Upon the exercise of an
Option, the SARs relating to the Company Stock covered by such Option shall
terminate. Upon the exercise of SARs, the related Option shall terminate to the
extent of an equal number of shares of Company Stock.

 

(c) Exercisability. A SAR shall be exercisable during the period specified by
the Committee in the Grant Instrument and shall be subject to such vesting and
other restrictions as may be specified in the Grant Instrument. The Committee
may accelerate the exercisability of any or all outstanding SARs at any time for
any reason. SARs may only be exercised while the Participant is employed by, or
providing service to, the Employer or during the applicable period after
termination of employment or service as specified by the Committee. A tandem SAR
shall be exercisable only during the period when the Option to which it is
related is also exercisable.

 

(d) Grants to Non-Exempt Employees. Notwithstanding the foregoing, SARs granted
to persons who are non-exempt employees under the Fair Labor Standards Act of
1938, as amended, may not be exercisable for at least six months after the date
of grant (except that such SARs may become exercisable, as determined by the
Committee, upon the Participant’s death, Disability or retirement, or upon a
Change of Control or other circumstances permitted by applicable regulations).

 

(e) Value of SARs. When a Participant exercises SARs, the Participant shall
receive in settlement of such SARs an amount equal to the value of the stock
appreciation for the number of SARs exercised. The stock appreciation for a SAR
is the amount by which the Fair Market Value of the underlying Company Stock on
the date of exercise of the SAR exceeds the base amount of the SAR as described
in subsection (a).

 

(f) Form of Payment. The appreciation in a SAR shall be paid in shares of
Company Stock, cash or any combination of the foregoing, as the Committee shall
determine. For purposes of calculating the number of shares of Company Stock to
be received, shares of Company Stock shall be valued at their Fair Market Value
on the date of exercise of the SAR.

 

   

   

 

Section 10. Other Stock-Based Awards

 

The Committee may grant Other Stock-Based Awards, which are awards (other than
those described in Sections 6, 7, 8 and 9 of the Plan) that are based on or
measured by Company Stock, to any Employee, Non-Employee Director or Key
Advisor, on such terms and conditions as the Committee shall determine. Other
Stock-Based Awards may be awarded subject to the achievement of Performance
Goals or other criteria or other conditions and may be payable in cash, Company
Stock or any combination of the foregoing, as the Committee shall determine.

 

Section 11. Dividend Equivalents

 

The Committee may grant Dividend Equivalents in connection with Stock Units or
Other Stock-Based Awards. Dividend Equivalents may be paid currently or accrued
as contingent cash obligations and may be payable in cash or shares of Company
Stock, and upon such terms and conditions as the Committee shall determine.
Dividend Equivalents with respect to Stock Units or Other Stock-Based Awards
that vest based on performance shall vest and be paid only if and to the extent
the underlying Stock Units or Other Stock-Based Awards vest and are paid, as
determined by the Committee.

 

Section 12. Consequences of a Change of Control

 

(a) Assumption of Outstanding Grants. Upon a Change of Control where the Company
is not the surviving corporation (or survives only as a subsidiary of another
corporation), unless the Committee determines otherwise, all outstanding Grants
that are not exercised or paid at the time of the Change of Control shall be
assumed by, or replaced with grants (with respect to cash, securities, or a
combination thereof) that have comparable terms by, the surviving corporation
(or a parent or subsidiary of the surviving corporation). After a Change of
Control, references to the “Company” as they relate to employment matters shall
include the successor employer in the transaction, subject to applicable law.

 

(b) Vesting Upon Certain Terminations of Employment. Unless the Grant Instrument
provides otherwise, if a Participant’s employment is terminated by the Employer
without Cause upon or within 12 months following a Change of Control, the
Participant’s outstanding Grants shall become fully vested as of the date of
such termination; provided that if the vesting of any such Grants is based, in
whole or in part, on performance, the applicable Grant Instrument shall specify
how the portion of the Grant that becomes vested pursuant to this Section 12(b)
shall be calculated.

 

(c) Other Alternatives. In the event of a Change of Control, if any outstanding
Grants are not assumed by, or replaced with grants that have comparable terms
by, the surviving corporation (or a parent or subsidiary of the surviving
corporation), the Committee may (but is not obligated to) make adjustments to
the terms and conditions of outstanding Grants, including, without limitation,
taking any of the following actions (or combination thereof) with respect to any
or all outstanding Grants, without the consent of any Participant: (i) the
Committee may determine that outstanding Stock Options and SARs shall
automatically accelerate and become fully exercisable and the restrictions and
conditions on outstanding Stock Awards, Stock Units and Dividend Equivalents
shall immediately lapse; (ii) the Committee may determine that Participants
shall receive a payment in settlement of outstanding Stock Units or Dividend
Equivalents, in such amount and form as may be determined by the Committee;
(iii) the Committee may require that Participants surrender their outstanding
Stock Options and SARs in exchange for a payment by the Company, in cash or
Company Stock as determined by the Committee, in an amount equal to the amount,
if any, by which the then Fair Market Value of the shares of Company Stock
subject to the Participant’s unexercised Stock Options and SARs exceeds the
Stock Option Exercise Price or SAR base amount, and (iv) after giving
Participants an opportunity to exercise all of their outstanding Stock Options
and SARs, the Committee may terminate any or all unexercised Stock Options and
SARs at such time as the Committee deems appropriate. Such surrender,
termination or payment shall take place as of the date of the Change of Control
or such other date as the Committee may specify. Without limiting the foregoing,
if the per share Fair Market Value of the Company Stock does not exceed the per
share Stock Option Exercise Price or SAR base amount, as applicable, the Company
shall not be required to make any payment to the Participant upon surrender of
the Stock Option or SAR.

 

   

   

 

Section 13. Deferrals

 

The Committee may permit or require a Participant to defer receipt of the
payment of cash or the delivery of shares that would otherwise be due to such
Participant in connection with any Grant. If any such deferral election is
permitted or required, the Committee shall establish rules and procedures for
such deferrals and may provide for interest or other earnings to be paid on such
deferrals. The rules and procedures for any such deferrals shall be consistent
with applicable requirements of section 409A of the Code.

 

Section 14. Withholding of Taxes

 

(a) Required Withholding. All Grants under the Plan shall be subject to
applicable United States federal (including FICA), state and local, foreign
country or other tax withholding requirements. The Employer may require that the
Participant or other person receiving Grants or exercising Grants pay to the
Employer an amount sufficient to satisfy such tax withholding requirements with
respect to such Grants, or the Employer may deduct from other wages and
compensation paid by the Employer the amount of any withholding taxes due with
respect to such Grants.

 

(b) Share Withholding. The Committee may permit or require the Employer’s tax
withholding obligation with respect to Grants paid in Company Stock to be
satisfied by having shares withheld up to an amount that does not exceed the
Participant’s applicable withholding tax rate for United States federal
(including FICA), state and local, foreign country or other tax liabilities. The
Committee may, in its discretion, and subject to such rules as the Committee may
adopt, allow Participants to elect to have such share withholding applied to all
or a portion of the tax withholding obligation arising in connection with any
particular Grant. Unless the Committee determines otherwise, share withholding
for taxes shall not exceed the Participant’s minimum applicable tax withholding
amount.

 

Section 15. Transferability of Grants

 

(a) Nontransferability of Grants. Except as described in subsection (b) below,
only the Participant may exercise rights under a Grant during the Participant’s
lifetime. A Participant may not transfer those rights except (i) by will or by
the laws of descent and distribution or (ii) with respect to Grants other than
Incentive Stock Options, pursuant to a domestic relations order. When a
Participant dies, the personal representative or other person entitled to
succeed to the rights of the Participant may exercise such rights. Any such
successor must furnish proof satisfactory to the Company of his or her right to
receive the Grant under the Participant’s will or under the applicable laws of
descent and distribution.

 

(b) Transfer of Nonqualified Stock Options and Stock Awards. Notwithstanding the
foregoing, the Committee may provide, in a Grant Instrument or at such other
time after the grant of an award, that a Participant may transfer Nonqualified
Stock Options or Stock Awards to family members, or one or more trusts or other
entities for the benefit of or owned by family members, consistent with the
applicable securities laws, according to such terms as the Committee may
determine; provided that the Participant receives no consideration for the
transfer of an Option or Stock Award and the transferred Option or Stock Award
shall continue to be subject to the same terms and conditions as were applicable
to the Option or Stock Award immediately before the transfer.

 

   

   

 

Section 16. Requirements for Issuance or Transfer of Shares

 

No Company Stock shall be issued or transferred in connection with any Grant
hereunder unless and until all legal requirements applicable to the issuance or
transfer of such Company Stock have been complied with to the satisfaction of
the Committee. The Committee shall have the right to condition any Grant on the
Participant’s undertaking in writing to comply with such restrictions on his or
her subsequent disposition of the shares of Company Stock as the Committee shall
deem necessary or advisable, and certificates representing such shares may be
legended to reflect any such restrictions. Certificates representing shares of
Company Stock issued or transferred under the Plan may be subject to such
stop-transfer orders and other restrictions as the Committee deems appropriate
to comply with applicable laws, regulations and interpretations, including any
requirement that a legend be placed thereon.

 

Section 17. Amendment and Termination of the Plan

 

(a) Amendment. The Board may amend or terminate the Plan at any time; provided,
however, that the Board shall not amend the Plan without stockholder approval if
such approval is required in order to comply with the Code or other applicable
law, or to comply with applicable stock exchange requirements.

 

(b) No Repricing of Options or SARs. Except in connection with a corporate
transaction involving the Company (including, without limitation, any stock
dividend, distribution (whether in the form of cash, Company Stock, other
securities or property), stock split, extraordinary cash dividend,
recapitalization, change in control, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase or exchange of shares of Company
Stock or other securities, or similar transactions), the Company may not,
without obtaining stockholder approval, (i) amend the terms of outstanding Stock
Options or SARs to reduce the Exercise Price of such outstanding Stock Options
or base price of such SARs, (ii) cancel outstanding Stock Options or SARs in
exchange for Stock Options or SARs with an Exercise Price or base price, as
applicable, that is less than the Exercise Price or base price of the original
Stock Options or SARs or (iii) cancel outstanding Stock Options or SARs with an
Exercise Price or base price, as applicable, above the current stock price in
exchange for cash or other securities.

 

(c) Termination of Plan. The Plan shall terminate on the day immediately
preceding the tenth anniversary of its Effective Date, unless the Plan is
terminated earlier by the Board or is extended by the Board with the approval of
the stockholders.

 

(d) Termination and Amendment of Outstanding Grants. A termination or amendment
of the Plan that occurs after a Grant is made shall not materially impair the
rights of a Participant with respect to such Grant unless the Participant
consents or unless the Committee acts under Section 18(f) below. The termination
of the Plan shall not impair the power and authority of the Committee with
respect to an outstanding Grant. Whether or not the Plan has terminated, an
outstanding Grant may be terminated or amended under Section 18(f) below or may
be amended by agreement of the Company and the Participant consistent with the
Plan.

 

Section 18. Miscellaneous

 

(a) Grants in Connection with Corporate Transactions and Otherwise. Nothing
contained in the Plan shall be construed to (i) limit the right of the Committee
to make Grants under the Plan in connection with the acquisition, by purchase,
lease, merger, consolidation or otherwise, of the business or assets of any
corporation, firm or association, including Grants to employees thereof who
become Employees, or (ii) limit the right of the Company to grant stock options
or make other awards outside of the Plan. The Committee may make a Grant to an
employee of another corporation who becomes an Employee by reason of a corporate
merger, consolidation, acquisition of stock or property, reorganization or
liquidation involving the Company, in substitution for a stock option or stock
awards grant made by such corporation. Notwithstanding anything in the Plan to
the contrary, the Committee may establish such terms and conditions of the new
Grants as it deems appropriate, including setting the Exercise Price of Options
or the base price of SARs at a price necessary to retain for the Participant the
same economic value as the prior options or rights.

 

   

   

 

(b) Governing Document. The Plan shall be the controlling document. No other
statements, representations, explanatory materials or examples, oral or written,
may amend the Plan in any manner. The Plan shall be binding upon and enforceable
against the Company and its successors and assigns.

 

(c) Funding of the Plan. The Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Grants under the Plan.

 

(d) Rights of Participants. Nothing in the Plan shall entitle any Employee,
Non-Employee Director, Key Advisor or other person to any claim or right to
receive a Grant under the Plan. Neither the Plan nor any action taken hereunder
shall be construed as giving any individual any rights to be retained by or in
the employ of the Employer or any other employment rights.

 

(e) No Fractional Shares. No fractional shares of Company Stock shall be issued
or delivered pursuant to the Plan or any Grant. Except as otherwise provided
under the Plan, the Committee shall determine whether cash, other awards or
other property shall be issued or paid in lieu of such fractional shares or
whether such fractional shares or any rights thereto shall be forfeited or
otherwise eliminated.

 

(f) Compliance with Law.

 

(i) The Plan, the exercise of Options and SARs and the obligations of the
Company to issue or transfer shares of Company Stock under Grants shall be
subject to all applicable laws and regulations, and to approvals by any
governmental or regulatory agency as may be required. With respect to persons
subject to section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act. In addition,
it is the intent of the Company that Incentive Stock Options comply with the
applicable provisions of section 422 of the Code, and that, to the extent
applicable, Grants comply with the requirements of section 409A of the Code. To
the extent that any legal requirement of section 16 of the Exchange Act or
section 422 or 409A of the Code as set forth in the Plan ceases to be required
under section 16 of the Exchange Act or section 422 or 409A of the Code, that
Plan provision shall cease to apply. The Committee may revoke any Grant if it is
contrary to law or modify a Grant to bring it into compliance with any valid and
mandatory government regulation. The Committee may also adopt rules regarding
the withholding of taxes on payments to Participants. The Committee may, in its
sole discretion, agree to limit its authority under this Section.

 

(ii) The Plan is intended to comply with the requirements of section 409A of the
Code, to the extent applicable. Each Grant shall be construed and administered
such that the Grant either (A) qualifies for an exemption from the requirements
of section 409A of the Code or (B) satisfies the requirements of section 409A of
the Code. If a Grant is subject to section 409A of the Code, (I) distributions
shall only be made in a manner and upon an event permitted under section 409A of
the Code, (II) payments to be made upon a termination of employment or service
shall only be made upon a “separation from service” under section 409A of the
Code, (III) unless the Grant specifies otherwise, each installment payment shall
be treated as a separate payment for purposes of section 409A of the Code, and
(IV) in no event shall a Participant, directly or indirectly, designate the
calendar year in which a distribution is made except in accordance with section
409A of the Code.

 

   

   

 

(iii) Any Grant that is subject to section 409A of the Code and that is to be
distributed to a Key Employee (as defined below) upon separation from service
shall be administered so that any distribution with respect to such Grant shall
be postponed for six months following the date of the Participant’s separation
from service, if required by section 409A of the Code. If a distribution is
delayed pursuant to section 409A of the Code, the distribution shall be paid
within 15 days after the end of the six-month period. If the Participant dies
during such six-month period, any postponed amounts shall be paid within 90 days
of the Participant’s death. The determination of Key Employees, including the
number and identity of persons considered Key Employees and the identification
date, shall be made by the Committee or its delegate each year in accordance
with section 416(i) of the Code and the “specified employee” requirements of
section 409A of the Code.

 

(iv) Notwithstanding anything in the Plan or any Grant agreement to the
contrary, each Participant shall be solely responsible for the tax consequences
of Grants under the Plan, and in no event shall the Company or any subsidiary or
affiliate of the Company have any responsibility or liability if a Grant does
not meet any applicable requirements of section 409A of the Code. Although the
Company intends to administer the Plan to prevent taxation under section 409A of
the Code, the Company does not represent or warrant that the Plan or any Grant
complies with any provision of federal, state, local or other tax law.

 

(g) Grants in Foreign Countries; Establishment of Subplans. The Committee has
the authority to award Grants to Participants who are foreign nationals or
employed outside the United States on any different terms and conditions than
those specified in the Plan that the Committee, in its discretion, believes to
be necessary or desirable to accommodate differences in applicable law, tax
policy, or custom, while furthering the purposes of the Plan. The Board may from
time to time establish one or more sub-plans under the Plan for purposes of
satisfying applicable blue sky, securities or tax laws of various jurisdictions.
The Board shall establish such sub-plans by adopting supplements to the Plan
setting forth (i) such limitations on the Committee’s discretion under the Plan
as the Board deems necessary or desirable and (ii) such additional terms and
conditions not otherwise inconsistent with the Plan as the Board shall deem
necessary or desirable. All supplements adopted by the Board shall be deemed to
be part of the Plan, but each supplement shall apply only to Participants within
the affected jurisdiction and the Employer shall not be required to provide
copies of any supplement to Participants in any jurisdiction that is not
affected. Notwithstanding the foregoing, the Committee may not approve any
sub-plan inconsistent with the terms or share limits in the Plan or which would
otherwise cause the Plan to cease to satisfy any conditions under Rule 16b-3
under the 1934 Act.

 

(h) Clawback Rights. Subject to the requirements of applicable law, the
Committee may provide in any Grant Instrument that, if a Participant breaches
any restrictive covenant agreement between the Participant and the Employer
(which may be set forth in any Grant Instrument) or otherwise engages in
activities that constitute Cause either while employed by, or providing service
to, the Employer or within a specified period of time thereafter, all Grants
held by the Participant shall terminate, and the Company may rescind any
exercise of an Option or SAR and the vesting of any other Grant and delivery of
shares upon such exercise or vesting (including pursuant to dividends and
Dividend Equivalents), as applicable on such terms as the Committee shall
determine, including the right to require that in the event of any such
rescission, (i) the Participant shall return to the Company the shares received
upon the exercise of any Option or SAR and/or the vesting and payment of any
other Grant (including pursuant to dividends and Dividend Equivalents) or, (ii)
if the Participant no longer owns the shares, the Participant shall pay to the
Company the amount of any gain realized or payment received as a result of any
sale or other disposition of the shares (or, in the event the Participant
transfers the shares by gift or otherwise without consideration, the Fair Market
Value of the shares on the date of the breach of the restrictive covenant
agreement (including a Participant’s Grant Instrument containing restrictive
covenants) or activity constituting Cause), net of the price originally paid by
the Participant for the shares. Payment by the Participant shall be made in such
manner and on such terms and conditions as may be required by the Committee. The
Employer shall be entitled to set off against the amount of any such payment any
amounts otherwise owed to the Participant by the Employer. In addition, all
Grants under the Plan shall be subject to any applicable clawback or recoupment
policies, share trading policies and other policies that may be implemented by
the Board from time to time.

 

(i) Governing Law; Jurisdiction. The validity, construction, interpretation and
effect of the Plan and Grant Instruments issued under the Plan shall be governed
and construed by and determined in accordance with the laws of the Commonwealth
of Massachusetts, without giving effect to the conflict of laws provisions
thereof. Any action arising out of, or relating to, any of the provisions of the
Plan and Grants made hereunder shall be brought only in the United States
District Court for the District of Massachusetts, or if such court does not have
jurisdiction or will not accept jurisdiction, in any court of general
jurisdiction in Massachusetts, and the jurisdiction of such court in any such
proceeding shall be exclusive.