Exhibit 10.3

 
SENORX, INC.
 
2006 EQUITY INCENTIVE PLAN
 
(as amended and restated February 26, 2009)
 
1.           Purposes of the Plan.  The purposes of this Plan are:
 
 
·
to attract and retain the best available personnel for positions of substantial
responsibility,

 
 
·
to provide additional incentive to Employees, Directors and Consultants, and

 
 
·
to promote the success of the Company’s business.

 
The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock
Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights,
Performance Units and Performance Shares.
 
2.           Definitions.  As used herein, the following definitions will apply:
 
(a)           “Administrator” means the Board or any of its Committees as will
be administering the Plan, in accordance with Section 4 of the Plan.
 
(b)           “Applicable Laws” means the requirements relating to the
administration of equity-based awards under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Awards are, or will be, granted under
the Plan.
 
(c)           “Award” means, individually or collectively, a grant under the
Plan of Options, SARs, Restricted Stock, Restricted Stock Units, Performance
Units or Performance Shares.
 
(d)           “Award Agreement” means the written or electronic agreement
setting forth the terms and provisions applicable to each Award granted under
the Plan.  The Award Agreement is subject to the terms and conditions of the
Plan.
 
(e)           “Board” means the Board of Directors of the Company.
 
(f)           “Change in Control” means the occurrence of any of the following
events:
 
(i)                 Any “person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule
13d-3 of the Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting power represented
by the Company’s then outstanding voting securities; or

 

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(ii)                 The consummation of the sale or disposition by the Company
of all or substantially all of the Company’s assets;
 
(iii)                 A change in the composition of the Board occurring within
a two-year period, as a result of which fewer than a majority of the directors
are Incumbent Directors.  “Incumbent Directors” means directors who either
(A) are Directors as of the effective date of the Plan, or (B) are elected, or
nominated for election, to the Board with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination
(but will not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating to the election
of directors to the Company); or
 
(iv)                 The consummation of a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or its parent) at
least fifty percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity or its parent outstanding
immediately after such merger or consolidation.
 
(g)           “Code” means the Internal Revenue Code of 1986, as amended.  Any
reference to a section of the Code herein will be a reference to any successor
or amended section of the Code.
 
(h)           “Committee” means a committee of Directors or of other individuals
satisfying Applicable Laws appointed by the Board in accordance with Section 4
hereof.
 
(i)           “Common Stock” means the common stock of the Company.
 
(j)           “Company” means SenoRx, Inc., a Delaware corporation, or any
successor thereto.
 
(k)           “Consultant” means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.
 
(l)           “Director” means a member of the Board.
 
(m)           “Disability” means total and permanent disability as defined in
Section 22(e)(3) of the Code, provided that in the case of Awards other than
Incentive Stock Options, the Administrator in its discretion may determine
whether a permanent and total disability exists in accordance with uniform and
non-discriminatory standards adopted by the Administrator from time to time.
 
(n)           “Employee” means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company.  Neither
service as a Director nor payment of a director’s fee by the Company will be
sufficient to constitute “employment” by the Company.
 
(o)           “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

 
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(p)           “Exchange Program” means a program under which (i) outstanding
Awards are surrendered or cancelled in exchange for Awards of the same type
(which may have lower exercise prices and different terms), Awards of a
different type, and/or cash, (ii) Participants would have the opportunity to
transfer any outstanding Awards to a financial institution or other person or
entity selected by the Administrator, and/or (iii) the exercise price of an
outstanding Award is reduced.  The Administrator will determine the terms and
conditions of any Exchange Program in its sole discretion.
 
(q)           “Fair Market Value” means, as of any date, the value of Common
Stock deter­mined as follows:
 
(i)                  If the Common Stock is listed on any estab­lished stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value will be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such exchange or system on the day
of determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;
 
(ii)                 If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share will be the mean between the high bid and low asked prices for the
Common Stock on the day of determination, as reported in The Wall Street Journal
or such other source as the Administrator deems reliable;
 
(iii)                For purposes of any Awards granted on the Registration
Date, the Fair Market Value will be the initial price to the public as set forth
in the final prospectus included within the registration statement in Form S-1
filed with the Securities and Exchange Commission for the initial public
offering of the Company’s Common Stock; or
 
(iv)                In the absence of an established market for the Common
Stock, the Fair Market Value will be determined in good faith by the
Administrator.
 
(r)            “Fiscal Year” means the fiscal year of the Company.
 
(s)           “Incentive Stock Option” means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
 
(t)           “Inside Director” means a Director who is an Employee.
 
(u)           “Nonstatutory Stock Option” means an Option that by its terms does
not qualify or is not intended to qualify as an Incentive Stock Option.
 
(v)           “Officer” means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
 
(w)          “Option” means a stock option granted pursuant to the Plan.
 
(x)           “Optioned Stock” means the Common Stock subject to an Award.

 
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(y)           “Outside Director” means a Director who is not an Employee.
 
(z)           “Parent” means a “parent corporation,” whether now or hereafter
existing, as defined in Section 424(e) of the Code.
 
(aa)         “Participant” means the holder of an outstanding Award.
 
(bb)         “Performance Share” means an Award denominated in Shares which may
be earned in whole or in part upon attainment of performance goals or other
vesting criteria as the Administrator may determine pursuant to Section 10.
 
(cc)         “Performance Unit” means an Award which may be earned in whole or
in part upon attainment of performance goals or other vesting criteria as the
Administrator may determine and which may be settled for cash, Shares or other
securities or a combination of the foregoing  pursuant to Section 10.
 
(dd)         “Period of Restriction” means the period during which the transfer
of Shares of Restricted Stock are subject to restrictions and therefore, the
Shares are subject to a substantial risk of forfeiture.  Such restrictions may
be based on the passage of time, the achievement of target levels of
performance, or the occurrence of other events as determined by the
Administrator.
 
(ee)         “Plan” means this 2006 Equity Incentive Plan.
 
(ff)          “Registration Date” means the effective date of the first
registration statement that is filed by the Company and declared effective
pursuant to Section 12(g) of the Exchange Act, with respect to any class of the
Company’s securities.
 
(gg)         “Restricted Stock” means Shares issued pursuant to a Restricted
Stock award under Section 7 of the Plan, or issued pursuant to the early
exercise of an Option.
 
(hh)         “Restricted Stock Unit” means a bookkeeping entry representing an
amount equal to the Fair Market Value of one Share, granted pursuant to
Section 8.  Each Restricted Stock Unit represents an unfunded and unsecured
obligation of the Company.
 
(ii)           “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
 
(jj)           “Section 16(b)”  means Section 16(b) of the Exchange Act.
 
(kk)         “Service Provider” means an Employee, Director or Consultant.
 
(ll)           “Share” means a share of the Common Stock, as adjusted in
accordance with Section 14 of the Plan.
 
(mm)       “Stock Appreciation Right” or “SAR” means an Award, granted alone or
in connection with an Option, that pursuant to Section 9 is designated as a SAR.

 
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(nn)         “Subsidiary” means a “subsidiary corporation”, whether now or
hereafter exist­ing, as defined in Section 424(f) of the Code.
 
3.           Stock Subject to the Plan.
 
(a)           Stock Subject to the Plan.  Subject to the provisions of
Section 14 of the Plan, the maximum aggregate number of Shares that may be
issued under the Plan is 10,369,190 (prior to any adjustment to reflect any
stock split which may be completed by the Company prior to the initial
registration by the Company of its Shares under Section 12 of the Exchange Act),
which includes (i) a new number of Shares reserved for issuance, plus (ii) the
number of Shares which have been reserved but not issued under the Company’s
1998 Stock Option Plan (the “1998 Plan”) as of the Registration Date, up to a
maximum of 326,273 Shares (prior to any adjustment to reflect any stock split
which may be completed by the Company prior to the initial registration by the
Company of its Shares under Section 12 of the Exchange Act), and (iii) any
Shares which may be returned to the 1998 Plan as a result of termination of
options or repurchase of Shares issued under the 1998 Plan, up to a maximum of
1,919,190 Shares (prior to any adjustment to reflect any stock split which may
be completed by the Company prior to the initial registration by the Company of
its Shares under Section 12 of the Exchange Act).  The Shares may be authorized,
but unissued, or reacquired Common Stock.
 
(b)           Automatic Share Reserve Increase.  The number of Shares available
for issuance under the Plan shall be increased on the first day of each Fiscal
Year beginning with the 2007 Fiscal Year, in an amount equal to the lesser of
(A) 630,000 Shares, (B) 3.5% of the outstanding Shares on the last day of the
immediately preceding Fiscal Year or (C) such lesser number of Shares determined
by the Board.
 
(c)           Lapsed Awards.  If an Award expires or becomes unexercisable
without having been exercised in full, is surrendered pursuant to an Exchange
Program, or, with respect to Restricted Stock, Restricted Stock Units,
Performance Units or Performance Shares, is forfeited to or repurchased by the
Company due to failure to vest, the unpurchased Shares (or for Awards other than
Options or SARs the forfeited or repurchased Shares) which were subject thereto
will become available for future grant or sale under the Plan (unless the Plan
has terminated).  With respect to SARs, only Shares actually issued pursuant to
an SAR will cease to be available under the Plan; all remaining Shares under
SARs will remain available for future grant or sale under the Plan (unless the
Plan has terminated).  Shares that have actually been issued under the Plan
under any Award will not be returned to the Plan and will not become available
for future distribution under the Plan; provided, however, that if Shares issued
pursuant to Awards of Restricted Stock, Performance Units or Performance Shares
are repurchased by the Company or are forfeited to the Company, such Shares will
become available for future grant under the Plan.  Shares used to pay the
exercise price of an Award or to satisfy the minimum statutory withholding
obligations related to an Award will become available for future grant or sale
under the Plan.  Notwithstanding the foregoing and, subject to adjustment as
provided in Section 14, the maximum number of Shares that may be issued upon the
exercise of Incentive Stock Options shall equal the aggregate Share number
stated in Section 3(a), plus, an additional number of Shares equal to that
portion of each automatic increase specified in Section 3(b) that does not
exceed 630,000 Shares.

 
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(d)           Share Reserve.  The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as will be sufficient
to satisfy the requirements of the Plan.
 
4.           Administration of the Plan.
 
(a)           Procedure.
 
(i)                 Multiple Administrative Bodies.  Different Committees with
respect to different groups of Service Providers may administer the Plan.
 
(ii)                 Section 162(m).  To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
“performance-based compensation” within the meaning of Section 162(m) of the
Code, the Plan will be administered by a Committee of two or more “outside
directors” within the meaning of Section 162(m) of the Code.
 
(iii)                 Rule 16b-3.  To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder will be structured to satisfy the requirements for exemption under
Rule 16b-3.
 
(iv)                 Other Administration.  Other than as provided above, the
Plan will be administered by (A) the Board or (B) a Committee, which committee
will be constituted to satisfy Applicable Laws.
 
(b)           Powers of the Administrator.  Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator will have the authority, in
its discre­tion:
 
(i)                  to determine the Fair Market Value;
 
(ii)                 to select the Service Providers to whom Awards may be
granted hereunder;
 
(iii)                to determine the number of Shares to be covered by each
Award granted hereunder;
 
(iv)                to approve forms of Award Agreements for use under the Plan;
 
(v)                 to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any Award granted hereunder.  Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Awards may be exercised (which may be based on performance criteria),
any vesting acceleration or waiver of forfeiture restrictions, and any
restriction or limitation regarding any Award or the Shares relating thereto,
based in each case on such factors as the Administrator will determine;
 
(vi)                to determine the terms and conditions of any, and to
institute any Exchange Program;

 
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(vii)               to construe and interpret the terms of the Plan and Awards
granted pursuant to the Plan;
 
(viii)              to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of satisfying applicable foreign laws;
 
(ix)                 to modify or amend each Award (subject to Section 19(c) of
the Plan), including the discretionary authority to extend the post-termination
exercisability period of Awards;
 
(x)                  to allow Participants to satisfy withholding tax
obligations in such manner as prescribed in Section 15;
 
(xi)                 to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Award previously granted by
the Administrator;
 
(xii)                to allow a Participant to defer the receipt of the payment
of cash or the delivery of Shares that would otherwise be due to such
Participant under an Award
 
(xiii)               to make all other determinations deemed necessary or
advisable for administering the Plan.
 
(c)           Effect of Administrator’s Decision.  The Administrator’s
decisions, determinations and interpretations will be final and binding on all
Participants and any other holders of Awards.
 
5.           Eligibility.  Nonstatutory Stock Options, Restricted Stock,
Restricted Stock Units, SARs, Performance Units and Performance Shares may be
granted to Service Providers.  Incentive Stock Options may be granted only to
Employees.
 
6.           Stock Options.
 
(a)           Limitations.  Each Option will be designated in the Award
Agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option.  However, notwithstanding such designa­tion, to the extent that the
aggregate Fair Market Value of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by the Participant during any
calendar year (under all plans of the Company and any Parent or Subsidiary)
exceeds $100,000, such Options will be treated as Nonstatutory Stock
Options.  For purposes of this Section 6(a), Incentive Stock Options will be
taken into account in the order in which they were granted.  The Fair Market
Value of the Shares will be determined as of the time the Option with respect to
such Shares is granted.
 
(b)           Term of Option.  The term of each Option will be stated in the
Award Agreement.  In the case of an Incentive Stock Option, the term will be ten
(10) years from the date of grant or such shorter term as may be provided in the
Award Agreement.  Moreover, in the case of an Incentive Stock Option granted to
a Participant who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option will be five (5) years from the date of grant or such
shorter term as may be provided in the Award Agreement.

 
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(c)           Option Exercise Price and Consideration.
 
(i)                 Exercise Price.  The per share exercise price for the Shares
to be issued pursuant to exercise of an Option will be determined by the
Administrator, subject to the following:
 
(1)           In the case of an Incentive Stock Option
 
a)           granted to an Employee who, at the time the Incentive Stock Option
is granted, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
per Share exercise price will be no less than 110% of the Fair Market Value per
Share on the date of grant.
 
b)           granted to any Employee other than an Employee described in
paragraph (A) immediately above, the per Share exercise price will be no less
than 100% of the Fair Market Value per Share on the date of grant.
 
c)           Notwithstanding the foregoing, Incentive Stock Options may be
granted with a per Share exercise price of less than 100% of the Fair Market
Value per Share on the date of grant pursuant to a transaction described in, and
in a manner consistent with, Section 424(a) of the Code.
 
(2)           In the case of a Nonstatutory Stock Option, the per Share exercise
price will be no less than 100% of the Fair Market Value per Share on the date
of grant.
 
(ii)                 Waiting Period and Exercise Dates.  At the time an Option
is granted, the Administrator will fix the period within which the Option may be
exercised and will determine any conditions that must be satisfied before the
Option may be exercised.
 
(iii)                 Form of Consideration.  The Administrator will determine
the acceptable form of consideration for exercising an Option, including the
method of payment.  In the case of an Incentive Stock Option, the Administrator
will determine the acceptable form of consideration at the time of grant.  Such
consideration may consist entirely of: (1) cash; (2) check; (3) other Shares,
provided Shares acquired directly or indirectly from the Company, (A) have been
owned by the Participant and not subject to substantial risk of forfeiture for
more than six months on the date of surrender, and (B) have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares as
to which said Option will be exercised; (4) consideration received by the
Company under a broker-assisted cashless exercise program; (5) any combination
of the foregoing methods of payment; or (6) such other consideration and method
of payment for the issuance of Shares to the extent permitted by Applicable
Laws.
 
(d)           Exercise of Option.
 
(i)                 Procedure for Exercise; Rights as a Stockholder.  Any Option
granted hereunder will be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Award Agreement.  An Option may not be exercised for a fraction of
a Share.

 
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An Option will be deemed exercised when the Company receives: (i) notice of
exercise (in such form as the Administrator specify from time to time) from the
person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised (together with an applicable
withholding taxes).  Full payment may consist of any consideration and method of
payment authorized by the Administrator and permitted by the Award Agreement and
the Plan.  Shares issued upon exercise of an Option will be issued in the name
of the Participant or, if requested by the Participant, in the name of the
Participant and his or her spouse.  Until the Shares are issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a stockholder will exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option.  The Company will issue (or cause to
be issued) such Shares promptly after the Option is exercised.  No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Shares are issued, except as provided in Section 14 of the Plan.
 
Exercising an Option in any manner will decrease the number of Shares thereafter
available, both for purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised.
 
(ii)                 Termination of Relationship as a Service Provider.  If a
Participant ceases to be a Service Provider, other than upon the Participant’s
death or Disability, the Participant may exercise his or her Option within such
period of time as is specified in the Award Agreement to the extent that the
Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Award Agreement).  In
the absence of a specified time in the Award Agreement, the Option will remain
exercisable for three (3) months following the Participant’s
termination.  Unless otherwise provided by the Administrator, if on the date of
termination the Participant is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option will revert to the
Plan.  If after termination the Participant does not exercise his or her Option
within the time specified by the Administrator, the Option will terminate, and
the Shares covered by such Option will revert to the Plan.
 
(iii)                 Disability of Participant.  If a Participant ceases to be
a Service Provider as a result of the Participant’s Disability, the Participant
may exercise his or her Option within such period of time as is specified in the
Award Agreement to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Award Agreement).  In the absence of a specified time in the Award
Agreement, the Option will remain exercisable for twelve (12) months following
the Participant’s termination.  Unless otherwise provided by the Administrator,
if on the date of termination the Participant is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option will
revert to the Plan.  If after termination the Participant does not exercise his
or her Option within the time specified herein, the Option will terminate, and
the Shares covered by such Option will revert to the Plan.

 
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(iv)                 Death of Participant.  If a Participant dies while a
Service Provider, the Option may be exercised following the Participant’s death
within such period of time as is specified in the Award Agreement to the extent
that the Option is vested on the date of death (but in no event may the option
be exercised later than the expiration of the term of such Option as set forth
in the Award Agreement), by the Participant’s designated beneficiary, provided
such beneficiary has been designated prior to Participant’s death in a form
acceptable to the Administrator.  If no such beneficiary has been designated by
the Participant, then such Option may be exercised by the personal
representative of the Participant’s estate or by the person(s) to whom the
Option is transferred pursuant to the Participant’s will or in accordance with
the laws of descent and distribution.  In the absence of a specified time in the
Award Agreement, the Option will remain exercisable for twelve (12) months
following Participant’s death.  Unless otherwise provided by the Administrator,
if at the time of death Participant is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option will
immediately revert to the Plan.  If the Option is not so exercised within the
time specified herein, the Option will terminate, and the Shares covered by such
Option will revert to the Plan.
 
7.           Restricted Stock.
 
(a)           Grant of Restricted Stock.  Subject to the terms and provisions of
the Plan, the Administrator, at any time and from time to time, may grant Shares
of Restricted Stock to Service Providers in such amounts as the Administrator,
in its sole discretion, will determine.
 
(b)           Restricted Stock Agreement.  Each Award of Restricted Stock will
be evidenced by an Award Agreement that will specify the Period of Restriction,
the number of Shares granted, and such other terms and conditions as the
Administrator, in its sole discretion, will determine.  Unless the Administrator
determines otherwise, the Company as escrow agent will hold Shares of Restricted
Stock until the restrictions on such Shares have lapsed.
 
(c)           Transferability.  Except as provided in this Section 7, Shares of
Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the end of the applicable Period of Restriction.
 
(d)           Other Restrictions.  The Administrator, in its sole discretion,
may impose such other restrictions on Shares of Restricted Stock as it may deem
advisable or appropriate.
 
(e)           Removal of Restrictions.  Except as otherwise provided in this
Section 7, Shares of Restricted Stock covered by each Restricted Stock grant
made under the Plan will be released from escrow as soon as practicable after
the last day of the Period of Restriction or at such other time as the
Administrator may determine.  The Administrator, in its discretion, may
accelerate the time at which any restrictions will lapse or be removed.
 
(f)           Voting Rights.  During the Period of Restriction, Service
Providers holding Shares of Restricted Stock granted hereunder may exercise full
voting rights with respect to those Shares, unless the Administrator determines
otherwise.
 
(g)           Dividends and Other Distributions.  During the Period of
Restriction, Service Providers holding Shares of Restricted Stock will be
entitled to receive all dividends and other distributions paid with respect to
such Shares unless otherwise provided in the Award Agreement.  If any such
dividends or distributions are paid in Shares, the Shares will be subject to the
same restrictions on transferability and forfeitability as the Shares of
Restricted Stock with respect to which they were paid.

 
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(h)           Return of Restricted Stock to Company.  On the date set forth in
the Award Agreement, the Restricted Stock for which restrictions have not lapsed
will revert to the Company and again will become available for grant under the
Plan.
 
8.           Restricted Stock Units.
 
(a)           Grant.  Restricted Stock Units may be granted at any time and from
time to time as determined by the Administrator.  After the Administrator
determines that it will grant Restricted Stock Units under the Plan, it shall
advise the Participant in an Award Agreement of the terms, conditions, and
restrictions related to the grant, including the number of Restricted Stock
Units.
 
(b)           Vesting Criteria and Other Terms.  The Administrator shall set
vesting criteria in its discretion, which, depending on the extent to which the
criteria are met, will determine the number of Restricted Stock Units that will
be paid out to the Participant.  The Administrator may set vesting criteria
based upon the achievement of Company-wide, business unit, or individual goals
(including, but not limited to, continued employment), or any other basis
determined by the Administrator in its discretion.
 
(c)           Earning Restricted Stock Units.  Upon meeting the applicable
vesting criteria, the Participant shall be entitled to receive a payout as
specified in the Restricted Stock Unit Award Agreement.  Notwithstanding the
foregoing, at any time after the grant of Restricted Stock Units, the
Administrator, in its sole discretion, may reduce or waive any vesting criteria
that must be met to receive a payout.
 
(d)           Form and Timing of Payment.  Payment of earned Restricted Stock
Units shall be made as soon as practicable after the date(s) set forth in the
Restricted Stock Unit Award Agreement.  The Administrator may only settle earned
Restricted Stock Units in Shares.
 
(e)           Cancellation.  On the date set forth in the Restricted Stock Unit
Award Agreement, all unearned Restricted Stock Units shall be forfeited to the
Company.
 
9.           Stock Appreciation Rights.
 
(a)           Grant of SARs.  Subject to the terms and conditions of the Plan, a
SAR may be granted to Service Providers at any time and from time to time as
will be determined by the Administrator, in its sole discretion.
 
(b)           Number of Shares.  The Administrator will have complete discretion
to determine the number of SARs granted to any Service Provider.
 
(c)           Exercise Price and Other Terms.  The per share exercise price for
the Shares to be issued pursuant to exercise of an SAR shall be determined by
the Administrator and shall be no less than 100% of the Fair Market Value per
share on the date of grant.  Otherwise, subject to Section 6(a) of the Plan, the
Administrator, subject to the provisions of the Plan, shall have complete
discretion to determine the terms and conditions of SARs granted under the Plan;
provided, however, that no SAR may have a term of more than ten (10) years from
the date of grant.

 
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(d)           SAR Agreement.  Each SAR grant will be evidenced by an Award
Agreement that will specify the exercise price, the term of the SAR, the
conditions of exercise, and such other terms and conditions as the
Administrator, in its sole discretion, will determine.
 
(e)           Expiration of SARs.  An SAR granted under the Plan will expire
upon the date determined by the Administrator, in its sole discretion, and set
forth in the Award Agreement.  Notwithstanding the foregoing, the rules of
Section 6(d) also will apply to SARs.
 
(f)           Payment of SAR Amount.  Upon exercise of an SAR, a Participant
will be entitled to receive payment from the Company in an amount determined by
multiplying:
 
(i)                 The difference between the Fair Market Value of a Share on
the date of exercise over the exercise price; times
 
(ii)                 The number of Shares with respect to which the SAR is
exercised.
 
The payment upon SAR exercise may only be in Shares of equivalent value (rounded
down to the nearest whole Share).
 
10.            Performance Units and Performance Shares.
 
(a)           Grant of Performance Units/Shares.  Performance Units and
Performance Shares may be granted to Service Providers at any time and from time
to time, as will be determined by the Administrator, in its sole
discretion.  The Administrator will have complete discretion in determining the
number of Performance Units and Performance Shares granted to each Participant.
 
(b)           Value of Performance Units/Shares.  Each Performance Unit will
have an initial value that is established by the Administrator on or before the
date of grant.  Each Performance Share will have an initial value equal to the
Fair Market Value of a Share on the date of grant.
 
(c)           Performance Objectives and Other Terms.  The Administrator will
set performance objectives or other vesting provisions (including, without
limitation, continued status as a Service Provider) in its discretion which,
depending on the extent to which they are met, will determine the number or
value of Performance Units/Shares that will be paid out to the Service
Providers.  The time period during which the performance objectives or other
vesting provisions must be met will be called the “Performance Period.”  Each
Award of Performance Units/Shares will be evidenced by an Award Agreement that
will specify the Performance Period, and such other terms and conditions as the
Administrator, in its sole discretion, will determine.  The Administrator may
set performance objectives based upon the achievement of Company-wide,
divisional, or individual goals, applicable federal or state securities laws, or
any other basis determined by the Administrator in its discretion.
 
(d)           Earning of Performance Units/Shares.  After the applicable
Performance Period has ended, the holder of Performance Units/Shares will be
entitled to receive a payout of the number of Performance Units/Shares earned by
the Participant over the Performance Period, to be determined as a function of
the extent to which the corresponding performance objectives or other vesting
provisions have been achieved.  After the grant of a Performance Unit/Share, the
Administrator, in its sole discretion, may reduce or waive any performance
objectives or other vesting provisions for such Performance Unit/Share.

 
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(e)           Form and Timing of Payment of Performance Units/Shares.  Payment
of earned Performance Units/Shares will be made as soon as practicable after the
expiration of the applicable Performance Period.  The Administrator, in its sole
discretion, may pay earned Performance Units/Shares in the form of cash, in
Shares (which have an aggregate Fair Market Value equal to the value of the
earned Performance Units/Shares at the close of the applicable Performance
Period) or in a combination thereof.
 
(f)           Cancellation of Performance Units/Shares.  On the date set forth
in the Award Agreement, all unearned or unvested Performance Units/Shares will
be forfeited to the Company, and again will be available for grant under the
Plan.
 
11.           Formula Awards to Outside Directors.
 
(a)           General.  Outside Directors will be entitled to receive all types
of Awards (except Incentive Stock Options) under this Plan, including
discretionary Awards not covered under this Section 11.  All grants of Awards to
Outside Directors pursuant to this Section will be automatic and
nondiscretionary, except as otherwise provided herein, and will be made in
accordance with the following provisions:
 
(b)           Type of Option.  If Options are granted pursuant to this Section
they will be Nonstatutory Stock Options and, except as otherwise provided
herein, will be subject to the other terms and conditions of the Plan.
 
(c)           No Discretion.  No person will have any discretion to select which
Outside Directors will be granted Awards under this Section or to determine the
number of Shares to be covered by such Awards (except as provided in
Sections 11(h) and 14).
 
(d)           Initial Award.  When each person first becomes an Outside
Director, they will be automatically granted both an Option for 15,000 Shares
and 6,522 Restricted Stock Units (collectively the “Initial Award”) on or about
the date on which such person first becomes an Outside Director, whether through
election by the stockholders of the Company or appointment by the Board to fill
a vacancy; provided, however, that an Inside Director who ceases to be an Inside
Director, but who remains a Director, will not receive an Initial Award.
 
(e)           Annual Award.  On each date of the first open trading window of
each fiscal year beginning in 2009, each Outside Director will be automatically
granted both an Option for 12,000 Shares and 1,305 Restricted Stock Units
(collectively the “Annual Award”), if as of such date, he or she will have
served on the Board for at least the preceding six (6) months.
 
(f)           Options.  The terms of each Option granted pursuant to this
Section will be as follows:

 
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(i)                 The term of the Option will be ten (10) years.
 
(ii)                 The exercise price for Shares subject to Options will be
100% of the Fair Market Value on the grant date.
 
(iii)                Subject to Section 14, the portion of the Initial Award
granted as an Option, if applicable, will vest and become exercisable as to one
thirty-sixth (1/36) of the Shares per month, so as to be 100% vested on the
third anniversary of the grant date, provided that the Participant continues to
serve as a Director through each such date.
 
(iv)                Subject to Section 14, the portion of the Annual Award
granted as an Option, if applicable, will vest and become exercisable as to one
thirty-sixth (1/36) of the Shares per month, so as to be 100% vested on the
third anniversary of the grant date, provided that the Participant continues to
serve as a Director through such date.
 
(g)           Restricted Stock Units.  The terms of each Restricted Stock Unit
granted pursuant to this Section will be as follows:
 
(i)                  Restricted Stock Units shall be settled in Shares, on a one
unit for one Share basis.
 
(ii)                 Subject to Section 14, the portion of the Initial Award
granted as Restricted Stock Units, if applicable, will vest and become
exercisable as to fifty percent (50%) of the Restricted Stock Units on the first
anniversary of the grant date and as to fifty percent (50%) of the Restricted
Stock Units on the second anniversary of the grant date, so as to be 100% vested
on the second anniversary of the grant date, provided that the Participant
continues to serve as a Director through each such date.
 
(iii)                 Subject to Section 14, the portion of the Annual Award
granted as Restricted Stock Units, if applicable, will vest and become
exercisable as to fifty percent (50%) of the Restricted Stock Units on the first
anniversary of the grant date and as to fifty percent (50%) of the Restricted
Stock Units on the second anniversary of the grant date, so as to be 100% vested
on the second anniversary of the grant date, provided that the Participant
continues to serve as a Director through each such date.
 
(h)           Adjustments.  The Administrator in its discretion may change and
otherwise revise the terms of Awards granted under this Section 11, including,
without limitation, the number of Shares and exercise prices thereof, for Awards
granted on or after the date the Administrator determines to make any such
change or revision.
 
12.           Leaves of Absence.  Unless the Administrator provides otherwise,
vesting of Awards granted hereunder will be suspended during any unpaid leave of
absence.  A Service Provider will not cease to be an Employee in the case of
(i) any leave of absence approved by the Company or (ii) transfers between
locations of the Company or between the Company, its Parent, or any
Subsidiary.  For purposes of Incentive Stock Options, no such leave may exceed
ninety (90) days, unless reemployment upon expiration of such leave is
guaranteed by statute or contract.  If reemployment upon expiration of a leave
of absence approved by the Company is not so guaranteed, then three (3) months
following the 91st day of such leave any Incentive Stock Option held by the
Participant will cease to be treated as an Incentive Stock Option and will be
treated for tax purposes as a Nonstatutory Stock Option.

 
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13.           Transferability of Awards.  Unless determined otherwise by the
Administrator, an Award may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Participant, only by the Participant.  If the Administrator makes an Award
transferable, such Award will contain such additional terms and conditions as
the Administrator deems appropriate.
 
14.           Adjustments; Dissolution or Liquidation; Merger or Change in
Control.
 
(a)           Adjustments.  In the event that any dividend or other distribution
(whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, or other change in the corporate
structure of the Company affecting the Shares occurs, the Administrator, in
order to prevent diminution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, may (in its sole discretion)
adjust the number and class of Shares that may be delivered under the Plan
and/or the number, class, and price of Shares covered by each outstanding Award,
the numerical Share limits in Section 3 of the Plan and the number of Shares
issuable pursuant to Awards to be granted under Section 11.
 
(b)           Dissolution or Liquidation.  In the event of the proposed
dissolution or liquida­tion of the Company, the Administrator will notify each
Participant as soon as practicable prior to the effective date of such proposed
transaction.  To the extent it has not been previously exercised, an Award will
terminate immediately prior to the consummation of such proposed action.
 
(c)           Change in Control.  In the event of a merger or Change in Control,
each outstanding Award will be treated as the Administrator determines,
including, without limitation, that each Award be assumed or an equivalent
option or right substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation.  The Administrator shall not be
required to treat all Awards similarly in the transaction.
 
In the event that the successor corporation does not assume or substitute for
the Award, the Participant will fully vest in and have the right to exercise all
of his or her outstanding Options and SARs, including Shares as to which such
Awards would not otherwise be vested or exercisable, all restrictions on
Restricted Stock and Restricted Stock Units will lapse, and, with respect to
Awards with performance-based vesting, all performance goals or other vesting
criteria will be deemed achieved at 100% on-target levels and all other terms
and conditions met.  In addition, if an Option or SAR is not assumed or
substituted in the event of a Change in Control, the Administrator will notify
the Participant in writing or electronically that the Option or SAR will be
exercisable for a period of time determined by the Administrator in its sole
discretion, and the Option or SAR will terminate upon the expiration of such
period.
 
For the purposes of this subsection (c), an Award will be considered assumed if,
following the Change in Control, the Award confers the right to purchase or
receive, for each Share subject to the Award immediately prior to the Change in
Control, the consideration (whether stock, cash, or other securities or
property) received in the Change in Control by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the Change in Control is not solely common stock of
the successor corporation or its Parent, the Administrator may, with the consent
of the successor corporation, provide for the consideration to be received upon
the exercise of an Option or SAR or upon the payout of a Restricted Stock Unit,
Performance Unit or Performance Share, for each Share subject to such Award, to
be solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the Change in Control.

 
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Notwithstanding anything in this Section 14(c) to the contrary, an Award that
vests, is earned or paid-out upon the satisfaction of one or more performance
goals will not be considered assumed if the Company or its successor modifies
any of such performance goals without the Participant’s consent; provided,
however, a modification to such performance goals only to reflect the successor
corporation’s post-Change in Control corporate structure will not be deemed to
invalidate an otherwise valid Award assumption.
 
(d)           Outside Director Awards.  With respect to Awards granted to an
Outside Director that are assumed or substituted for, if on the date of or
following such assumption or substitution the Participant’s status as a Director
or a director of the successor corporation, as applicable, is terminated other
than upon a voluntary resignation by the Participant (unless such resignation is
at the request of the acquirer), then the Participant will fully vest in and
have the right to exercise Options and/or SARs as to all of the Shares
underlying such Award, including those Shares which would not otherwise be
vested or exercisable, all restrictions on Restricted Stock and Restricted Stock
Units will lapse, and, with respect to Performance Units and Performance Shares,
all performance goals or other vesting criteria will be deemed achieved at 100%
on-target levels and all other terms and conditions met.
 
15.           Tax Withholding.
 
(a)           Withholding Requirements.  Prior to the delivery of any Shares or
cash pursuant to an Award (or exercise thereof), the Company will have the power
and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state, local, foreign or other
taxes (including the Participant’s FICA obligation) required to be withheld with
respect to such Award (or exercise thereof).
 
(b)           Withholding Arrangements.  The Administrator, in its sole
discretion and pursuant to such procedures as it may specify from time to time,
may permit a Participant to satisfy such tax withholding obligation, in whole or
in part by (a) paying cash, (b) electing to have the Company withhold otherwise
deliverable cash or Shares having a Fair Market Value equal to the minimum
statutory amount required to be withheld, or (c) delivering to the Company
already-owned Shares having a Fair Market Value equal to the minimum statutory
amount required to be withheld.  The Fair Market Value of the Shares to be
withheld or delivered will be determined as of the date that the taxes are
required to be withheld.

 
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16.           No Effect on Employment or Service.  Neither the Plan nor any
Award will confer upon a Participant any right with respect to continuing the
Participant’s relationship as a Service Provider with the Company, nor will they
interfere in any way with the Participant’s right or the Company’s right to
terminate such relationship at any time, with or without cause, to the extent
permitted by Applicable Laws.
 
17.           Date of Grant.  The date of grant of an Award will be, for all
purposes, the date on which the Administrator makes the determination granting
such Award, or such other later date as is determined by the
Administrator.  Notice of the determination will be provided to each Participant
within a reasonable time after the date of such grant.
 
18.           Term of Plan.  Subject to Section 22 of the Plan, the Plan will
become effective upon its adoption by the Board.  It will continue in effect for
a term of ten (10) years from the date adopted by the Board unless terminated
earlier under Section 19 of the Plan.
 
19.           Amendment and Termination of the Plan.
 
(a)           Amendment and Termination.  The Board may at any time amend,
alter, suspend or terminate the Plan.
 
(b)           Stockholder Approval.  The Company will obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.
 
(c)           Effect of Amendment or Termination.  No amendment, alteration,
suspension or termination of the Plan will impair the rights of any Participant,
unless mutually agreed otherwise between the Participant and the Administrator,
which agreement must be in writing and signed by the Participant and the
Company.  Termination of the Plan will not affect the Administrator’s ability to
exercise the powers granted to it hereunder with respect to Awards granted under
the Plan prior to the date of such termination.
 
20.           Conditions Upon Issuance of Shares.
 
(a)           Legal Compliance.  Shares will not be issued pursuant to the
exercise of an Award unless the exercise of such Award and the issuance and
delivery of such Shares will comply with Applicable Laws and will be further
subject to the approval of counsel for the Company with respect to such
compliance.
 
(b)           Investment Representations.  As a condition to the exercise of an
Award, the Company may require the person exercising such Award to represent and
warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.
 
21.           Inability to Obtain Authority.  The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company’s counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, will relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority will not have been obtained.

 
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22.           Stockholder Approval.  The Plan will be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is
adopted by the Board.  Such stockholder approval will be obtained in the manner
and to the degree required under Applicable Laws.
 
 
 
 
 
 
 
 
 
 
 
 
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