Exhibit 10.2(a)

RELYPSA, INC.

2014 EMPLOYMENT COMMENCEMENT INCENTIVE PLAN

(as amended by the Board on July 8, 2015)

 

ARTICLE 1.

PURPOSE

The purpose of the Relypsa, Inc. 2014 Employment Commencement Incentive Plan (as
it may be amended from time to time, the “Plan”) is to promote the success and
enhance the value of Relypsa, Inc. (the “Company”) by linking the individual
interests of the Eligible Participants to those of the Company’s stockholders
and by providing such individuals with an incentive for outstanding performance
to generate superior returns to the Company’s stockholders.  The Plan is further
intended to provide flexibility to the Company in its ability to motivate,
attract, and retain the services of Eligible Participants upon whose judgment,
interest, and special effort the successful conduct of the Company’s operation
is largely dependent.  Only Eligible Participants may receive awards under the
Plan.

ARTICLE 2.

DEFINITIONS AND CONSTRUCTION

Wherever the following terms are used in the Plan they shall have the meanings
specified below, unless the context clearly indicates otherwise.  The singular
pronoun shall include the plural where the context so indicates.

2.1“Administrator” shall mean the entity that conducts the general
administration of the Plan as provided in Article 13 hereof.  With reference to
the duties of the Administrator under the Plan which have been delegated to one
or more persons pursuant to Section 12.6 hereof, or as to which the Board has
assumed, the term “Administrator” shall refer to such person(s) unless the
Committee or the Board has revoked such delegation or the Board has terminated
the assumption of such duties.

2.2“Affiliate” shall mean any Parent or Subsidiary.

2.3“Applicable Accounting Standards” shall mean Generally Accepted Accounting
Principles in the United States, International Financial Reporting Standards or
such other accounting principles or standards as may apply to the Company’s
financial statements under United States federal securities laws from time to
time.

2.4“Applicable Law” shall mean any applicable law, including without limitation,
(i) provisions of the Code, the Securities Act, the Exchange Act and any rules
or regulations thereunder; (ii) corporate, securities, tax or other laws,
statutes, rules, requirements or regulations, whether federal, state, local or
foreign; and (iii) rules of any securities exchange or automated quotation
system on which the Shares are listed, quoted or traded.

 

--------------------------------------------------------------------------------

 

2.5“Award” shall mean an Option, a Restricted Stock award, a Restricted Stock
Unit award, a Performance Award, a Dividend Equivalents award, a Deferred Stock
award, a Deferred Stock Unit award, a Stock Payment award or a Stock
Appreciation Right, which may be awarded or granted under the Plan
(collectively, “Awards”).

2.6“Award Agreement” shall mean any written notice, agreement, terms and
conditions, contract or other instrument or document evidencing an Award,
including through electronic medium, which shall contain such terms and
conditions with respect to an Award as the Administrator shall determine
consistent with the Plan.

2.7“Board” shall mean the Board of Directors of the Company.

2.8“Cause” shall mean, unless such term or an equivalent term is otherwise
defined by the applicable Award Agreement or other written agreement between a
Participant and the Company applicable to an Award, the occurrence of any of the
following events:  (i) such Participant’s commission of any felony or any crime
involving fraud, dishonesty or moral turpitude under the laws of the United
States or any state thereof; (ii) such Participant’s attempted commission of, or
participation in, a fraud or act of dishonesty against the Company; (iii) such
Participant’s intentional, material violation of any contract or agreement
between the Participant and the Company or of any statutory duty owed to the
Company; (iv) such Participant’s unauthorized use or disclosure of the Company’s
confidential information or trade secrets; or (v) such Participant’s gross
misconduct. The determination that a Participant’s Termination of Service is
either for Cause or without Cause shall be made by the Company in its sole
discretion.  Any determination by the Company that a Participant experienced a
Termination of Service by reason of dismissal without Cause for the purposes of
outstanding Awards held by such Participant shall have no effect upon any
determination of the rights or obligations of the Company or such Participant
for any other purpose.

2.9“Change in Control” shall mean the occurrence, in a single transaction or in
a series of related transactions, of any one or more of the following events:

(a)any natural person, entity or “group” (within the meaning of Section 13(d) or
14(d) of the Exchange Act) becomes the owner, directly or indirectly, of
securities of the Company representing more than fifty percent (50%) of the
combined voting power of the Company’s then outstanding securities other than by
virtue of a merger, consolidation or similar transaction.  Notwithstanding the
foregoing, a Change in Control shall not be deemed to occur (A) on account of
the acquisition of securities of the Company by an investor, any affiliate
thereof or any other natural person, entity or “group” (within the meaning of
Section 13(d) or 14(d) of the Exchange Act) from the Company in a transaction or
series of related transactions the primary purpose of which is to obtain
financing for the Company through the issuance of equity securities or (B)
solely because the level of ownership held by any natural person, entity or
“group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) (the
“Subject Person”) exceeds the designated percentage threshold of the outstanding
voting securities as a result of a repurchase or other acquisition of voting
securities by the Company reducing the number of shares outstanding, provided
that if a Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of voting securities by the Company, and after
such share acquisition, the Subject Person becomes the owner of any additional
voting

2

 

--------------------------------------------------------------------------------

 

securities that, assuming the repurchase or other acquisition had not occurred,
increases the percentage of the then outstanding voting securities owned by the
Subject Person over the designated percentage threshold, then a Change in
Control shall be deemed to occur;

(b)there is consummated a merger, consolidation, share exchange, division, other
reorganization or similar transaction involving (directly or indirectly) the
Company and, immediately after the consummation of such merger, consolidation,
share exchange, division, other reorganization or similar transaction, the
stockholders of the Company immediately prior thereto do not own, directly or
indirectly, either (A) outstanding voting securities representing more than
fifty percent (50%) of the combined outstanding voting power of the surviving
entity in such merger, consolidation or similar transaction or (B) more than
fifty percent (50%) of the combined outstanding voting power of the parent of
the surviving entity in such merger, consolidation or similar transaction, in
each case in substantially the same proportions as their ownership of the
outstanding voting securities of the Company immediately prior to such
transaction;

(c)during any period of two (2) consecutive years, individuals who, at the
beginning of such period, constitute the Board together with any new Director(s)
(other than a Director designated by a person who shall have entered into an
agreement with the Company to effect a transaction described in Section 2.10(a),
Section 2.10(b) or Section 2.10(e) hereof) whose election by the Board or
nomination for election by the Company’s stockholders was approved by a vote of
at least two-thirds (2/3) of the Directors then still in office who either were
directors at the beginning of the two (2)-year period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof;

(d)the stockholders of the Company approve or the Board approves a plan of
complete dissolution or liquidation of the Company, or a complete dissolution or
liquidation of the Company shall otherwise occur; or

(e)there is consummated a sale, lease, exclusive license or other disposition of
all or substantially all of the consolidated assets of the Company and its
Subsidiaries, other than a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries
to an entity, more than fifty percent (50%) of the combined voting power of the
voting securities of which are owned by stockholders of the Company in
substantially the same proportions as their ownership of the outstanding voting
securities of the Company immediately prior to such sale, lease, license or
other disposition.  For the avoidance of doubt, the term Change in Control shall
not include a sale of assets, merger or other transaction effected exclusively
for the purpose of changing the domicile of the Company.

In addition, if a Change in Control constitutes a payment event or a toggle
event with respect to any Award (or any portion of an Award) which provides for
the deferral of compensation and is subject to Section 409A of the Code, to the
extent required to avoid the imposition of additional taxes under Section 409A
of the Code, the transaction or event described in subsection (a), (b), (c) or
(d) with respect to such Award (or portion thereof) shall only constitute a
Change in Control for purposes of the payment timing of such Award if such
transaction also constitutes a “change in control event,” as defined in Treasury
Regulation §1.409A-3(i)(5) to the extent required by Section 409A of the Code.

3

 

--------------------------------------------------------------------------------

 

The Committee shall have full and final authority, which shall be exercised in
its discretion, to determine conclusively whether a Change in Control of the
Company has occurred pursuant to the above definition, and the date of the
occurrence of such Change in Control and any incidental matters relating
thereto.

2.10“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, together with the regulations and official guidance promulgated
thereunder, whether issued prior or subsequent to the grant of any Award.

2.11“Committee” shall mean the Compensation Committee of the Board, a
subcommittee of the Compensation Committee of the Board or another committee or
subcommittee of the Board, appointed as provided in Section 12.1 hereof.

2.12“Common Stock” shall mean the common stock of the Company, par value $0.001
per share.

2.13“Company” shall have the meaning set forth in Article 1 hereof.

2.14“Deferred Stock” shall mean a right to receive Shares awarded under Section
9.4 hereof.

2.15“Deferred Stock Unit” shall mean a right to receive Shares awarded under
Section 9.5 hereof.  

2.16“Director” shall mean a member of the Board, as constituted from time to
time.

2.17“Dividend Equivalent” shall mean a right to receive the equivalent value (in
cash or Shares) of dividends paid on Shares, awarded under Section 9.2 hereof.

2.18“DRO” shall mean a “domestic relations order” as defined by the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended from
time to time, or the rules thereunder.

2.19“Effective Date” shall mean the date on which the Board has adopted the
Plan.

2.20“Eligible Participant” shall any Employee who has not previously been an
Employee or Director of the Company or a Subsidiary, or is commencing employment
with the Company or a Subsidiary following a bona fide period of non-employment
by the Company or a Subsidiary, if he or she is granted an Award in connection
with his or her commencement of employment with the Company or a Subsidiary and
such grant is an inducement material to his or her entering into employment with
the Company or a Subsidiary.  The Board may in its discretion adopt procedures
from time to time to ensure that an Employee is eligible to participate in the
Plan prior to the granting of any Awards to such Employee under the Plan
(including, without limitation, a requirement, that each such Employee certify
to the Company prior to the receipt of an Award under the Plan that he or she
has not been previously employed by the Company or a Subsidiary, or if
previously employed, has had a bona fide period of non-employment, and that the
grant of Awards under the Plan is an inducement material to his or her agreement
to enter into employment with the Company or a Subsidiary).

4

 

--------------------------------------------------------------------------------

 

2.21“Employee” shall mean any officer or other employee (as determined in
accordance with Section 3401(c) of the Code and the Treasury Regulations
thereunder) of the Company or any Affiliate.

2.22“Equity Restructuring” shall mean a nonreciprocal transaction between the
Company and its stockholders, such as a stock dividend, stock split, spin-off,
rights offering or recapitalization through a large, nonrecurring cash dividend,
that affects the number or kind of Shares (or other securities of the Company)
or the share price of Common Stock (or other securities) and causes a change in
the per share value of the Common Stock underlying outstanding stock-based
Awards.

2.23“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended
from time to time.

2.24“Fair Market Value” shall mean, as of any given date, the value of a Share
determined as follows:

(a)If the Common Stock is (i) listed on any established securities exchange
(such as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ
Global Select Market), (ii) listed on any national market system or (iii)
listed, quoted or traded on any automated quotation system, its Fair Market
Value shall be the closing sales price for a Share as quoted on such exchange or
system for such date or, if there is no closing sales price for a Share on the
date in question, the closing sales price for a Share on the last preceding date
for which such quotation exists, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;

(b)If the Common Stock is not listed on an established securities exchange,
national market system or automated quotation system, but the Common Stock is
regularly quoted by a recognized securities dealer, its Fair Market Value shall
be the mean of the high bid and low asked prices for such date or, if there are
no high bid and low asked prices for a Share on such date, the high bid and low
asked prices for a Share on the last preceding date for which such information
exists, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or

(c)If the Common Stock is neither listed on an established securities exchange,
national market system or automated quotation system nor regularly quoted by a
recognized securities dealer, its Fair Market Value shall be established by the
Administrator in good faith.

2.25“Good Reason” shall mean, unless such term or an equivalent term is
otherwise defined by the applicable Award Agreement or other written agreement
between a Participant and the Company applicable to an Award, with respect to
any particular Participant, the Participant’s resignation from all positions he
or she then-holds with the Company if (A) without Participant’s written consent
(I) there is a material diminution in Participant’s duties and responsibilities
with the Company; provided, however, that a change in title or reporting
relationship will not constitute Good Reason; (II) there is a material reduction
of the Participant’s base salary; provided, however, that a material reduction
in the Participant’s base

5

 

--------------------------------------------------------------------------------

 

salary pursuant to a salary reduction program affecting all or substantially all
of the employees of the Company and that does not adversely affect Holder to a
greater extent than other similarly situated employees shall not constitute Good
Reason; or (III) the Participant is required to relocate his or her primary work
location to a facility or location that would increase the Participant’s one way
commute distance by more than fifty (50) miles from the Participant’s primary
work location as of immediately prior to such change, (B) the Participant
provides written notice outlining such conditions, acts or omissions to the
Company’s General Counsel within thirty (30) days immediately following such
material change or reduction, (C) such material change or reduction is not
remedied by the Company within thirty (30) days following the Company’s receipt
of such written notice and (D) the Participant’s resignation is effective not
later than thirty (30) days after the expiration of such thirty (30) day cure
period.

2.26“Holder” shall mean an Eligible Participant who has been granted an Award
pursuant to the Plan.

2.27“Incentive Stock Option” shall mean an Option that is intended to qualify as
an incentive stock option and conforms to the applicable provisions of Section
422 of the Code.  Incentive Stock Options may not be granted under the Plan.

2.28“Non-Employee Director” shall mean a Director of the Company who is not an
Employee of the Company and who qualifies as “independent” within the meaning of
Nasdaq Stock Market Rule 5605(a)(2), or any successor rule, if the Company’s
securities are traded on the Nasdaq Stock Market, or the requirements of any
other established stock exchange on which the Company’s securities are traded,
as such rules or requirements may be amended from time to time.

2.29“Non-Qualified Stock Option” shall mean an Option that is not an Incentive
Stock Option.

2.30“Option” shall mean a right to purchase Shares at a specified exercise
price, granted under Article 6 hereof.  Any Option granted under this Plan shall
be a Non-Qualified Stock Option.

2.31“Option Term” shall have the meaning set forth in Section 5.4 hereof.

2.32“Parent” shall mean any entity (other than the Company), whether domestic or
foreign, in an unbroken chain of entities ending with the Company if each of the
entities other than the Company beneficially owns, at the time of the
determination, securities or interests representing more than fifty percent
(50%) of the total combined voting power of all classes of securities or
interests in one of the other entities in such chain.

2.33“Performance Award” shall mean a cash bonus award, stock bonus award,
performance award or incentive award that is paid in cash, Shares or a
combination of both, awarded under Section 9.1 hereof.

2.34“Performance Stock Unit” shall mean a Performance Award awarded under
Section 9.1 hereof which is denominated in units of value including dollar value
of shares of Common Stock.

6

 

--------------------------------------------------------------------------------

 

2.35“Permitted Transferee” shall mean, with respect to a Holder, any “family
member” of the Holder, as defined under the General Instructions to Form S-8
Registration Statement under the Securities Act or any successor Form thereto,
or any other transferee specifically approved by the Administrator, after taking
into account Applicable Law.

2.36“Plan” shall have the meaning set forth in Article 1 hereof.

2.37“Program” shall mean any program adopted by the Administrator pursuant to
the Plan containing the terms and conditions intended to govern a specified type
of Award granted under the Plan and pursuant to which such type of Award may be
granted under the Plan.

2.38“Restricted Stock” shall mean an award of Shares made under Article 8 hereof
that is subject to certain restrictions and may be subject to risk of forfeiture
or repurchase.

2.39“Restricted Stock Unit” shall mean a contractual right awarded under Article
9 hereof to receive in the future a Share or the Fair Market Value of a Share in
cash.

2.40“Securities Act” shall mean the Securities Act of 1933, as amended.

2.41“Shares” shall mean shares of Common Stock.

2.42“Stock Appreciation Right” shall mean a stock appreciation right granted
under Article 11 hereof.

2.43“Stock Appreciation Right Term” shall have the meaning set forth in Section
10.4 hereof.

2.44“Stock Payment” shall mean (a) a payment in the form of Shares, or (b) an
option or other right to purchase Shares, as part of a bonus, deferred
compensation or other arrangement, awarded under Section 9.3 hereof.

2.45“Subsidiary” shall mean any entity (other than the Company), whether
domestic or foreign, in an unbroken chain of entities beginning with the Company
if each of the entities other than the last entity in the unbroken chain
beneficially owns, at the time of the determination, securities or interests
representing more than fifty percent (50%) of the total combined voting power of
all classes of securities or interests in one of the other entities in such
chain.

2.46“Substitute Award” shall mean an Award granted under the Plan upon the
assumption of, or in substitution for, outstanding equity awards previously
granted by a company or other entity in connection with a corporate transaction,
such as a merger, combination, consolidation or acquisition of property or
stock; provided, however, that in no event shall the term “Substitute Award” be
construed to refer to an award made in connection with the cancellation and
repricing of an Option or Stock Appreciation Right.

2.47“Termination of Service” shall mean the time when the employee-employer
relationship between a Holder and the Company or any Affiliate is terminated for
any reason,

7

 

--------------------------------------------------------------------------------

 

including, without limitation, a termination by resignation, discharge, death,
disability or retirement; but excluding terminations where the Holder
simultaneously commences or remains in employment or service with the Company or
any Affiliate.  

The Administrator, in its sole discretion, shall determine the effect of all
matters and questions relating to Terminations of Service, including, without
limitation, the question of whether a Termination of Service resulted from a
discharge for cause and all questions of whether particular leaves of absence
constitute a Termination of Service. For purposes of the Plan, a Holder’s
employee-employer relationship shall be deemed to be terminated in the event
that the Affiliate employing or contracting with such Holder ceases to remain an
Affiliate following any merger, sale of stock or other corporate transaction or
event (including, without limitation, a spin-off).

ARTICLE 3.

SHARES SUBJECT TO THE PLAN

3.1Number of Shares.

(a)Subject to Sections 13.1, 13.2 and 3.1(b) hereof, the aggregate number of
Shares which may be issued or transferred pursuant to Awards under the Plan
shall be 2,000,000 Shares. Notwithstanding the foregoing, to the extent
permitted under Applicable Law, Awards that provide for the delivery of Shares
subsequent to the applicable grant date may be granted in excess of the share
limit if such Awards provide for the forfeiture or cash settlement of such
Awards to the extent that insufficient Shares remain under the share limit in
this Section 3.1 at the time that Shares would otherwise be issued in respect of
such Award.  

(b)If any Shares subject to an Award are forfeited or expire or such Award is
settled for cash (in whole or in part), the Shares subject to such Award shall,
to the extent of such forfeiture, expiration or cash settlement, again be
available for future grants of Awards under the Plan.  Notwithstanding anything
to the contrary contained herein, the following Shares shall not be added to the
Shares authorized for grant under Section 3.1(a) hereof and will not be
available for future grants of Awards:  (i) Shares tendered by a Holder or
withheld by the Company in payment of the exercise price of an Option; (ii)
Shares tendered by the Holder or withheld by the Company to satisfy any tax
withholding obligation with respect to an Award; (iii) Shares subject to a Stock
Appreciation Right that are not issued in connection with the stock settlement
of the Stock Appreciation Right on exercise thereof; and (iv) Shares purchased
on the open market with the cash proceeds from the exercise of Options.  Any
Shares repurchased by the Company under Section 7.4 hereof at the same price
paid by the Holder or a lower price so that such Shares are returned to the
Company will again be available for Awards.  The payment of Dividend Equivalents
in cash in conjunction with any outstanding Awards shall not be counted against
the shares available for issuance under the Plan.  

(c)Substitute Awards shall not reduce the Shares authorized for grant under the
Plan.  Additionally, in the event that a company acquired by the Company or any
Affiliate or with which the Company or any Affiliate combines has shares
available under a pre-existing plan approved by its stockholders and not adopted
in contemplation of such acquisition or

8

 

--------------------------------------------------------------------------------

 

combination, the shares available for grant pursuant to the terms of such
pre-existing plan (as adjusted, to the extent appropriate, using the exchange
ratio or other adjustment or valuation ratio or formula used in such acquisition
or combination to determine the consideration payable to the holders of common
stock of the entities party to such acquisition or combination) may be used for
Awards under the Plan and shall not reduce the Shares authorized for grant under
the Plan; provided that Awards using such available shares shall not be made
after the date awards or grants could have been made under the terms of the
pre-existing plan, absent the acquisition or combination, and shall only be made
to individuals who were not employed by or providing services to the Company or
its Affiliates immediately prior to such acquisition or combination.

3.2Stock Distributed.  Any Shares distributed pursuant to an Award may consist,
in whole or in part, of authorized and unissued Common Stock, treasury Common
Stock or Common Stock purchased on the open market.

ARTICLE 4.

GRANTING OF AWARDs

4.1Participation.  The Administrator may, from time to time, select from among
all Eligible Participants, those to whom an Award shall be granted and shall
determine the nature and amount of each Award, which shall not be inconsistent
with the requirements of the Plan.  No Eligible Participant shall have any right
to be granted an Award pursuant to the Plan.

4.2Award Agreement.  Each Award shall be evidenced by an Award Agreement that
sets forth the terms, conditions and limitations for such Award, which may
include the term of the Award, the provisions applicable in the event of the
Holder’s Termination of Service, and the Company’s authority to unilaterally or
bilaterally amend, modify, suspend, cancel or rescind an Award.  

4.3Limitations Applicable to Section 16 Persons.  Notwithstanding any other
provision of the Plan, the Plan, and any Award granted or awarded to any
individual who is then subject to Section 16 of the Exchange Act, shall be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including Rule 16b‑3 of the Exchange Act
and any amendments thereto) that are requirements for the application of such
exemptive rule.  To the extent permitted by Applicable Law, the Plan and Awards
granted or awarded hereunder shall be deemed amended to the extent necessary to
conform to such applicable exemptive rule.

4.4At-Will Employment; Voluntary Participation.  Nothing in the Plan or in any
Program or Award Agreement hereunder shall confer upon any Holder any right to
continue in the employ of the Company or any Affiliate, or shall interfere with
or restrict in any way the rights of the Company and any Affiliate, which rights
are hereby expressly reserved, to discharge any Holder at any time for any
reason whatsoever, with or without cause, and with or without notice, or to
terminate or change all other terms and conditions of employment, except to the
extent expressly provided otherwise in a written agreement between the Holder
and the Company or any Affiliate.  Participation by each Holder in the Plan
shall be voluntary and

9

 

--------------------------------------------------------------------------------

 

nothing in the Plan shall be construed as mandating that any Eligible
Participant shall participate in the Plan.  

4.5Foreign Holders.  Notwithstanding any provision of the Plan to the contrary,
in order to comply with the laws in countries other than the United States in
which the Company and its Affiliates operate or have Employees, or in order to
comply with the requirements of any foreign securities exchange, the
Administrator, in its sole discretion, shall have the power and authority to:
(a) determine which Affiliates shall be covered by the Plan; (b) determine which
Eligible Participants outside the United States are eligible to participate in
the Plan; (c) modify the terms and conditions of any Award granted to Eligible
Participants outside the United States to comply with applicable foreign laws or
listing requirements of any such foreign securities exchange; (d) establish
subplans and modify exercise procedures and other terms and procedures, to the
extent such actions may be necessary or advisable (any such subplans and/or
modifications shall be attached to the Plan as appendices); provided, however,
that no such subplans and/or modifications shall increase the share limitations
contained in Section 3.1 hereof; and (e) take any action, before or after an
Award is made, that it deems advisable to obtain approval or comply with any
necessary local governmental regulatory exemptions or approvals or listing
requirements of any such foreign securities exchange.  Notwithstanding the
foregoing, the Administrator may not take any actions hereunder, and no Awards
shall be granted, that would violate the Code, the Exchange Act, the Securities
Act, any other securities law or governing statute, the rules of the securities
exchange or automated quotation system on which the Shares are listed, quoted or
traded or any other Applicable Law.  For purposes of the Plan, all references to
foreign laws, rules, regulations or taxes shall be references to the laws,
rules, regulations and taxes of any applicable jurisdiction other than the
United States or a political subdivision thereof.  

4.6Stand-Alone and Tandem Awards.  Awards granted pursuant to the Plan may, in
the sole discretion of the Administrator, be granted either alone, in addition
to, or in tandem with, any other Award granted pursuant to the Plan.  Awards
granted in addition to or in tandem with other Awards may be granted either at
the same time as or at a different time from the grant of such other Awards.

ARTICLE 5.

granting OF OPTIONS

5.1Granting of Options to Eligible Participants.  The Administrator is
authorized to grant Options to Eligible Participants from time to time, in its
sole discretion, on such terms and conditions as it may determine which shall
not be inconsistent with the Plan.

5.2Option Exercise Price.  Except as provided in Article 14 hereof, the exercise
price per Share subject to each Option shall be set by the Administrator, but
shall not be less than one hundred percent (100%) of the Fair Market Value of a
Share on the date the Option is granted.  

5.3Option Term.  The term of each Option (the “Option Term”) shall be set by the
Administrator in its sole discretion; provided, however, that the Option Term
shall not be more

10

 

--------------------------------------------------------------------------------

 

than ten (10) years from the date the Option is granted.  The Administrator
shall determine the time period, including the time period following a
Termination of Service, during which the Holder has the right to exercise the
vested Options, which time period may not extend beyond the last day of the
Option Term. Except as limited by the requirements of Section 409A of the Code
and regulations and rulings thereunder, the Administrator may extend the Option
Term of any outstanding Option, may extend the time period during which vested
Options may be exercised following any Termination of Service of the Holder, and
may amend any other term or condition of such Option relating to such a
Termination of Service.

5.4Option Vesting.

(a)The period during which the right to exercise, in whole or in part, an Option
vests in the Holder shall be set by the Administrator and the Administrator may
determine that an Option may not be exercised in whole or in part for a
specified period after it is granted.  Such vesting may be based on service with
the Company or any Affiliate, any of performance criteria, or any other criteria
selected by the Administrator.  At any time after the grant of an Option, the
Administrator may, in its sole discretion and subject to whatever terms and
conditions it selects, accelerate the vesting of the Option, including following
a Termination of Service; provided, that in no event shall an Option become
exercisable following its expiration, termination or forfeiture.

(b)No portion of an Option which is unexercisable at a Holder’s Termination of
Service shall thereafter become exercisable, except as may be otherwise provided
by the Administrator either in the Program, the Award Agreement or by action of
the Administrator following the grant of the Option.

5.5Substitute Awards.  Notwithstanding the foregoing provisions of this Article
5 to the contrary, in the case of an Option that is a Substitute Award, the
price per share of the shares subject to such Option may be less than the Fair
Market Value per share on the date of grant; provided that the excess of:  (a)
the aggregate Fair Market Value (as of the date such Substitute Award is
granted) of the shares subject to the Substitute Award, over (b) the aggregate
exercise price thereof does not exceed the excess of:  (x) the aggregate fair
market value (as of the time immediately preceding the transaction giving rise
to the Substitute Award, such fair market value to be determined by the
Administrator) of the shares of the predecessor entity that were subject to the
grant assumed or substituted for by the Company, over (y) the aggregate exercise
price of such shares.

5.6Substitution of Stock Appreciation Rights.  The Administrator may provide in
the applicable Program or the Award Agreement evidencing the grant of an Option
that the Administrator, in its sole discretion, shall have the right to
substitute a Stock Appreciation Right for such Option at any time prior to or
upon exercise of such Option; provided that such Stock Appreciation Right shall
be exercisable with respect to the same number of Shares for which such
substituted Option would have been exercisable, and shall also have the same
exercise price, vesting schedule and remaining Option Term as the substituted
Option.

11

 

--------------------------------------------------------------------------------

 

ARTICLE 6.

EXERCISE OF OPTIONS

6.1Partial Exercise.  An exercisable Option may be exercised in whole or in
part.  However, an Option shall not be exercisable with respect to fractional
shares and the Administrator may require that, by the terms of the Option, a
partial exercise must be with respect to a minimum number of Shares.

6.2Manner of Exercise.  All or a portion of an exercisable Option shall be
deemed exercised upon delivery of all of the following to the Secretary of the
Company, or such other person or entity designated by the Administrator, or his,
her or its office, as applicable:

(a)A written or electronic notice complying with the applicable rules
established by the Administrator stating that the Option, or a portion thereof,
is exercised.  The notice shall be signed by the Holder or other person then
entitled to exercise the Option or such portion of the Option;

(b)Such representations and documents as the Administrator, in its sole
discretion, deems necessary or advisable to effect compliance with all
Applicable Law.  The Administrator may, in its sole discretion, also take
whatever additional actions it deems appropriate to effect such compliance
including, without limitation, placing legends on share certificates and issuing
stop-transfer notices to agents and registrars;

(c)In the event that the Option shall be exercised pursuant to Section 11.3
hereof by any person or persons other than the Holder, appropriate proof of the
right of such person or persons to exercise the Option, as determined in the
sole discretion of the Administrator; and

(d)Full payment of the exercise price and applicable withholding taxes to the
stock administrator of the Company for the shares with respect to which the
Option, or portion thereof, is exercised, in a manner permitted by Sections 11.1
and 11.2 hereof.

ARTICLE 7.

AWARD OF RESTRICTED STOCK

7.1Award of Restricted Stock.

(a)The Administrator is authorized to grant Restricted Stock to Eligible
Participants, and shall determine the terms and conditions, including the
restrictions applicable to each award of Restricted Stock, which terms and
conditions shall not be inconsistent with the Plan, and may impose such
conditions on the issuance of such Restricted Stock as it deems appropriate.

(b)The Administrator shall establish the purchase price, if any, and form of
payment for Restricted Stock; provided, however, that if a purchase price is
charged, such purchase price shall be no less than the par value, if any, of the
Shares to be purchased, unless

12

 

--------------------------------------------------------------------------------

 

otherwise permitted by Applicable Law.  In all cases, legal consideration shall
be required for each issuance of Restricted Stock to the extent required by
Applicable Law.

7.2Rights as Stockholders.  Subject to Section 7.4 hereof, upon issuance of
Restricted Stock, the Holder shall have, unless otherwise provided by the
Administrator, all the rights of a stockholder with respect to said shares,
subject to the restrictions in the applicable Program or in each individual
Award Agreement, including the right to receive all dividends and other
distributions paid or made with respect to the shares; provided, however, that,
in the sole discretion of the Administrator, any extraordinary distributions
with respect to the Shares shall be subject to the restrictions set forth in
Section 7.3 hereof.  

7.3Restrictions.  All shares of Restricted Stock (including any shares received
by Holders thereof with respect to shares of Restricted Stock as a result of
stock dividends, stock splits or any other form of recapitalization) shall, in
the terms of the applicable Program or in each individual Award Agreement, be
subject to such restrictions and vesting requirements as the Administrator shall
provide.  Such restrictions may include, without limitation, restrictions
concerning voting rights and transferability and such restrictions may lapse
separately or in combination at such times and pursuant to such circumstances or
based on such criteria as selected by the Administrator, including, without
limitation, criteria based on the Holder’s duration of employment with the
Company, Company or Affiliate performance, individual performance or other
criteria selected by the Administrator.  By action taken after the Restricted
Stock is issued, the Administrator may, on such terms and conditions as it may
determine to be appropriate, accelerate the vesting of such Restricted Stock by
removing any or all of the restrictions imposed by the terms of the Program
and/or the Award Agreement.  Restricted Stock may not be sold or encumbered
until all restrictions are terminated or expire.

7.4Repurchase or Forfeiture of Restricted Stock.  Except as otherwise determined
by the Administrator at the time of the grant of the Award or thereafter, if no
price was paid by the Holder for the Restricted Stock, upon a Termination of
Service during the applicable restriction period, the Holder’s rights in
unvested Restricted Stock then subject to restrictions shall lapse, and such
Restricted Stock shall be surrendered to the Company and cancelled without
consideration. If a price was paid by the Holder for the Restricted Stock, upon
a Termination of Service during the applicable restriction period, the Company
shall have the right to repurchase from the Holder the unvested Restricted Stock
then subject to restrictions at a cash price per share equal to the price paid
by the Holder for such Restricted Stock or such other amount as may be specified
in the Program or the Award Agreement.  Notwithstanding the foregoing, the
Administrator in its sole discretion may provide that in the event of certain
events, including a Change in Control, the Holder’s death, retirement or
disability or any other specified Termination of Service or any other event, the
Holder’s rights in unvested Restricted Stock shall not lapse, such Restricted
Stock shall vest and, if applicable, the Company shall not have a right of
repurchase.

7.5Certificates for Restricted Stock.  Restricted Stock granted pursuant to the
Plan may be evidenced in such manner as the Administrator shall
determine.  Certificates or book entries evidencing shares of Restricted Stock
must include an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock.  The Company may, in its sole
discretion, (a) retain physical possession of any stock certificate evidencing
shares of

13

 

--------------------------------------------------------------------------------

 

Restricted Stock until the restrictions thereon shall have lapsed and/or (b)
require that the stock certificates evidencing shares of Restricted Stock be
held in custody by a designated escrow agent (which may but need not be the
Company) until the restrictions thereon shall have lapsed, and that the Holder
deliver a stock power, endorsed in blank, relating to such Restricted Stock.

7.6Section 83(b) Election.  If a Holder makes an election under Section 83(b) of
the Code to be taxed with respect to the Restricted Stock as of the date of
transfer of the Restricted Stock rather than as of the date or dates upon which
the Holder would otherwise be taxable under Section 83(a) of the Code, the
Holder shall be required to deliver a copy of such election to the Company
promptly after filing such election with the Internal Revenue Service.

ARTICLE 8.

Award of restricted stock units

8.1Grant of Restricted Stock Units.  The Administrator is authorized to grant
Awards of Restricted Stock Units to any Eligible Participant selected by the
Administrator in such amounts and subject to such terms and conditions as
determined by the Administrator.  

8.2Term.  Except as otherwise provided herein, the term of a Restricted Stock
Unit award shall be set by the Administrator in its sole discretion.

8.3Purchase Price.  The Administrator shall specify the purchase price, if any,
to be paid by the Holder to the Company with respect to any Restricted Stock
Unit award; provided, however, that value of the consideration shall not be less
than the par value of a Share, unless otherwise permitted by Applicable Law.

8.4Vesting of Restricted Stock Units.  At the time of grant, the Administrator
shall specify the date or dates on which the Restricted Stock Units shall become
fully vested and nonforfeitable, and may specify such conditions to vesting as
it deems appropriate, including, without limitation, vesting based upon the
Holder’s duration of service to the Company or any Affiliate, Company
performance, individual performance or other specific criteria, in each case on
a specified date or dates or over any period or periods, as determined by the
Administrator.  

8.5Maturity and Payment.  At the time of grant, the Administrator shall specify
the maturity date applicable to each grant of Restricted Stock Units which shall
be no earlier than the vesting date or dates of the Award and may be determined
at the election of the Holder (if permitted by the applicable Award Agreement);
provided that, except as otherwise determined by the Administrator, set forth in
any applicable Award Agreement, and subject to compliance with Section 409A of
the Code, in no event shall the maturity date relating to each Restricted Stock
Unit occur following the later of (a) the fifteenth (15th) day of the third
(3rd) month following the end of calendar year in which the Restricted Stock
Unit vests; or (b) the fifteenth (15th) day of the third (3rd) month following
the end of the Company’s fiscal year in which the Restricted Stock Unit
vests.  On the maturity date, the Company shall, subject to Section 11.4(e)
hereof, transfer to the Holder one unrestricted, fully transferable Share for
each Restricted Stock Unit scheduled to be paid out on such date and not
previously forfeited, or, in the sole discretion of the Administrator, an amount
in cash equal to the Fair Market Value of

14

 

--------------------------------------------------------------------------------

 

such shares on the maturity date or a combination of cash and Common Stock as
determined by the Administrator.  

8.6Payment upon Termination of Service.  An Award of Restricted Stock Units
shall only be payable while the Holder is an Employee; provided, however, that
the Administrator, in its sole and absolute discretion may provide (in an Award
Agreement or otherwise) that a Restricted Stock Unit award may be paid
subsequent to a Termination of Service in certain events, including a Change in
Control, the Holder’s death, retirement or disability or any other specified
Termination of Service.

8.7No Rights as a Stockholder.  Unless otherwise determined by the
Administrator,  a Holder who is awarded Restricted Stock Units shall possess no
incidents of ownership with respect to the Shares represented by such Restricted
Stock Units, unless and until the same are transferred to the Holder pursuant to
the terms of this Plan and the Award Agreement.  

8.8Dividend Equivalents.  Subject to Section 9.2 hereof, the Administrator may,
in its sole discretion, provide that Dividend Equivalents shall be earned by a
Holder of Restricted Stock Units based on dividends declared on the Common
Stock, to be credited as of dividend payment dates during the period between the
date an Award of Restricted Stock Units is granted to a Holder and the maturity
date of such Award.  

ARTICLE 9.

award of PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, STOCK PAYMENTS, DEFERRED
STOCK, DEFERRED STOCK UNITS

9.1Performance Awards.

(a)The Administrator is authorized to grant Performance Awards, including Awards
of Performance Stock Units, to any Eligible Participant.  The value of
Performance Awards, including Performance Stock Units, may be linked to any
performance criteria or other specific criteria determined by the Administrator,
in each case on a specified date or dates or over any period or periods
determined by the Administrator.  Performance Awards, including Performance
Stock Unit awards may be paid in cash, Shares, or a combination of cash and
Shares, as determined by the Administrator.

(b)Without limiting Section 9.1(a) hereof, the Administrator may grant
Performance Awards to any Eligible Participant in the form of a cash bonus
payable upon the attainment of objective performance goals, or such other
criteria, whether or not objective, which are established by the Administrator,
in each case on a specified date or dates or over any period or periods
determined by the Administrator.

9.2Dividend Equivalents.

(a)Dividend Equivalents may be granted by the Administrator based on dividends
declared on the Common Stock, to be credited as of dividend payment dates during
the period between the date an Award is granted to a Holder and the date such
Award vests, is exercised, is distributed or expires, as determined by the
Administrator.  Such Dividend

15

 

--------------------------------------------------------------------------------

 

Equivalents shall be converted to cash or additional shares of Common Stock by
such formula and at such time and subject to such limitations as may be
determined by the Administrator.  

(b)Notwithstanding the foregoing, no Dividend Equivalents shall be payable with
respect to Options or Stock Appreciation Rights.

9.3Stock Payments.  The Administrator is authorized to make Stock Payments to
any Eligible Participant.  The number or value of Shares of any Stock Payment
shall be determined by the Administrator and may be based upon performance
criteria or any other specific criteria, including service to the Company or any
Affiliate, determined by the Administrator.  Shares underlying a Stock Payment
which is subject to a vesting schedule or other conditions or criteria set by
the Administrator will not be issued until those conditions have been
satisfied.  Unless otherwise provided by the Administrator, a Holder of a Stock
Payment shall have no rights as a Company stockholder with respect to such Stock
Payment until such time as the Stock Payment has vested and the Shares
underlying the Award have been issued to the Holder.  Stock Payments may, but
are not required to, be made in lieu of base salary, bonus, fees or other cash
compensation otherwise payable to such Eligible Participant.

9.4Deferred Stock.  The Administrator is authorized to grant Deferred Stock to
any Eligible Participant.  The number of shares of Deferred Stock shall be
determined by the Administrator and may (but is not required to) be based on
performance criteria or other specific criteria, including service to the
Company or any Affiliate, as the Administrator determines, in each case on a
specified date or dates or over any period or periods determined by the
Administrator.  Shares underlying a Deferred Stock award which is subject to a
vesting schedule or other conditions or criteria set by the Administrator will
be issued on the vesting date(s) or date(s) that those conditions and criteria
have been satisfied, as applicable.  Unless otherwise provided by the
Administrator, a Holder of Deferred Stock shall have no rights as a Company
stockholder with respect to such Deferred Stock until such time as the Award has
vested and any other applicable conditions and/or criteria have been satisfied
and the Shares underlying the Award have been issued to the Holder.

9.5Deferred Stock Units.  The Administrator is authorized to grant Deferred
Stock Units to any Eligible Participant.  The number of Deferred Stock Units
shall be determined by the Administrator and may (but is not required to) be
based on performance criteria or other specific criteria, including service to
the Company or any Affiliate, as the Administrator determines, in each case on a
specified date or dates or over any period or periods determined by the
Administrator.  Each Deferred Stock Unit shall entitle the Holder thereof to
receive one share of Common Stock on the date the Deferred Stock Unit becomes
vested or upon a specified settlement date thereafter (which settlement date may
(but is not required to) be the date of the Holder’s Termination of
Service).  Shares underlying a Deferred Stock Unit award which is subject to a
vesting schedule or other conditions or criteria set by the Administrator will
not be issued until on or following the date that those conditions and criteria
have been satisfied.  Unless otherwise provided by the Administrator, a Holder
of Deferred Stock Units shall have no rights as a Company stockholder with
respect to such Deferred Stock Units until such time as the Award has vested and
any other applicable conditions and/or criteria have been satisfied and the
Shares underlying the Award have been issued to the Holder.

16

 

--------------------------------------------------------------------------------

 

9.6Term.  The term of a Performance Award, Dividend Equivalent award, Stock
Payment award, Deferred Stock award and/or Deferred Stock Unit award shall be
set by the Administrator in its sole discretion.

9.7Purchase Price.  The Administrator may establish the purchase price of a
Performance Award, shares distributed as a Stock Payment award, shares of
Deferred Stock or shares distributed pursuant to a Deferred Stock Unit award;
provided, however, that value of the consideration shall not be less than the
par value of a Share, unless otherwise permitted by Applicable Law.

9.8Termination of Service.  A Performance Award, Stock Payment award, Dividend
Equivalent award, Deferred Stock award and/or Deferred Stock Unit award is
distributable only while the Holder is an Employee.  The Administrator, however,
in its sole discretion may provide that the Performance Award, Dividend
Equivalent award, Stock Payment award, Deferred Stock award and/or Deferred
Stock Unit award may be distributed subsequent to a Termination of Service in
certain events, including a Change in Control, the Holder’s death, retirement or
disability or any other specified Termination of Service.

ARTICLE 10.

award of STOCK APPRECIATION RIGHTS

10.1Grant of Stock Appreciation Rights.

(a)The Administrator is authorized to grant Stock Appreciation Rights to
Eligible Participants from time to time, in its sole discretion, on such terms
and conditions as it may determine consistent with the Plan.

(b)A Stock Appreciation Right shall entitle the Holder (or other person entitled
to exercise the Stock Appreciation Right pursuant to the Plan) to exercise all
or a specified portion of the Stock Appreciation Right (to the extent then
exercisable pursuant to its terms) and to receive from the Company an amount
determined by multiplying the difference obtained by subtracting the exercise
price per Share of the Stock Appreciation Right from the Fair Market Value on
the date of exercise of the Stock Appreciation Right by the number of Shares
with respect to which the Stock Appreciation Right shall have been exercised,
subject to any limitations the Administrator may impose.  Except as described in
(c) below or in Section 13.2 hereof, the exercise price per Share subject to
each Stock Appreciation Right shall be set by the Administrator, but shall not
be less than one hundred percent (100%) of the Fair Market Value on the date the
Stock Appreciation Right is granted.

(c)Notwithstanding the foregoing provisions of Section 10.1(b) hereof to the
contrary, in the case of an Stock Appreciation Right that is a Substitute Award,
the price per Share of the Shares subject to such Stock Appreciation Right may
be less than one hundred percent (100%) of the Fair Market Value per share on
the date of grant; provided that the excess of:  (i) the aggregate Fair Market
Value (as of the date such Substitute Award is granted) of the shares subject to
the Substitute Award, over (ii) the aggregate exercise price thereof does not
exceed the excess of:  (x) the aggregate fair market value (as of the time
immediately preceding the transaction giving rise to the Substitute Award, such
fair market value to be determined by

17

 

--------------------------------------------------------------------------------

 

the Administrator) of the shares of the predecessor entity that were subject to
the grant assumed or substituted for by the Company, over (y) the aggregate
exercise price of such shares.

10.2Stock Appreciation Right Vesting.

(a)The period during which the right to exercise, in whole or in part, a Stock
Appreciation Right vests in the Holder shall be set by the Administrator and the
Administrator may determine that a Stock Appreciation Right may not be exercised
in whole or in part for a specified period after it is granted.  Such vesting
may be based on service with the Company or any Affiliate, performance criteria
or any other criteria selected by the Administrator.  At any time after grant of
a Stock Appreciation Right, the Administrator may, in its sole discretion and
subject to whatever terms and conditions it selects, accelerate the period
during which a Stock Appreciation Right vests.

(b)No portion of a Stock Appreciation Right which is unexercisable at
Termination of Service shall thereafter become exercisable, except as may be
otherwise provided by the Administrator either in the applicable Program or
Award Agreement or by action of the Administrator following the grant of the
Stock Appreciation Right, including following a Termination of Service;
provided, that in no event shall a Stock Appreciation Right become exercisable
following its expiration, termination or forfeiture.

10.3Manner of Exercise.  All or a portion of an exercisable Stock Appreciation
Right shall be deemed exercised upon delivery of all of the following to the
stock administrator of the Company, or such other person or entity designated by
the Administrator, or his, her or its office, as applicable:

(a)A written or electronic notice complying with the applicable rules
established by the Administrator stating that the Stock Appreciation Right, or a
portion thereof, is exercised.  The notice shall be signed by the Holder or
other person then entitled to exercise the Stock Appreciation Right or such
portion of the Stock Appreciation Right;

(b)Such representations and documents as the Administrator, in its sole
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any other federal, state or
foreign securities laws or regulations.  The Administrator may, in its sole
discretion, also take whatever additional actions it deems appropriate to effect
such compliance; and

(c)In the event that the Stock Appreciation Right shall be exercised pursuant to
this Section 10.3 hereof by any person or persons other than the Holder,
appropriate proof of the right of such person or persons to exercise the Stock
Appreciation Right.

10.4Stock Appreciation Right Term.  The term of each Stock Appreciation Right
(the “Stock Appreciation Right Term”) shall be set by the Administrator in its
sole discretion; provided, however, that the term shall not be more than ten
(10) years from the date the Stock Appreciation Right is granted.  The
Administrator shall determine the time period, including the time period
following a Termination of Service, during which the Holder has the right to
exercise the vested Stock Appreciation Rights, which time period may not extend
beyond the expiration date of the Stock Appreciation Right Term.  Except as
limited by the requirements

18

 

--------------------------------------------------------------------------------

 

of Section 409A of the Code and regulations and rulings thereunder, the
Administrator may extend the Stock Appreciation Right Term of any outstanding
Stock Appreciation Right, may extend the time period during which vested Stock
Appreciation Rights may be exercised following any Termination of Service of the
Holder, and may amend any other term or condition of such Stock Appreciation
Right relating to such a Termination of Service.

10.5Payment.  Payment of the amounts payable with respect to Stock Appreciation
Rights pursuant to this Article 10 shall be in cash, Shares (based on its Fair
Market Value as of the date the  Stock Appreciation Right is exercised), or a
combination of both, as determined by the Administrator.

ARTICLE 11.

ADditional terms of awards

11.1Payment.  The Administrator shall determine the methods by which payments by
any Holder with respect to any Awards granted under the Plan shall be made,
including, without limitation: (a) cash or check, (b) Shares (including, in the
case of payment of the exercise price of an Award, Shares issuable pursuant to
the exercise of the Award) or Shares held for such period of time as may be
required by the Administrator in order to avoid adverse accounting consequences,
in each case, having a Fair Market Value on the date of delivery equal to the
aggregate payments required, (c) delivery of a written or electronic notice that
the Holder has placed a market sell order with a broker with respect to Shares
then issuable upon exercise or vesting of an Award, and that the broker has been
directed to pay a sufficient portion of the net proceeds of the sale to the
Company in satisfaction of the aggregate payments required; provided that
payment of such proceeds is then made to the Company upon settlement of such
sale, or (d) other form of legal consideration acceptable to the
Administrator.  The Administrator shall also determine the methods by which
Shares shall be delivered or deemed to be delivered to Holders.  Notwithstanding
any other provision of the Plan to the contrary, no Holder who is an “executive
officer” of the Company within the meaning of Section 13(k) of the Exchange Act
shall be permitted to make payment with respect to any Awards granted under the
Plan, or continue any extension of credit with respect to such payment, with a
loan from the Company or a loan arranged by the Company in violation of Section
13(k) of the Exchange Act.

11.2Tax Withholding.  The Company or any Affiliate shall have the authority and
the right to deduct or withhold, or require a Holder to remit to the Company, an
amount sufficient to satisfy federal, state, local and foreign taxes (including
the Holder’s FICA or employment tax obligation) required by law to be withheld
with respect to any taxable event concerning a Holder arising as a result of the
Plan.  The Administrator may in its sole discretion and in satisfaction of the
foregoing requirement allow a Holder to satisfy such obligations by any payment
means described in Section 11.1 hereof, including without limitation, by
allowing such Holder to elect to have the Company withhold Shares otherwise
issuable under an Award (or allow the surrender of Shares). The number of Shares
which may be so withheld or surrendered shall be limited to the number of Shares
which have a Fair Market Value on the date of withholding or repurchase equal to
the aggregate amount of such liabilities based on the minimum statutory
withholding rates for federal, state, local and foreign

19

 

--------------------------------------------------------------------------------

 

income tax and payroll tax purposes that are applicable to such supplemental
taxable income. The Administrator shall determine the fair market value of the
Shares, consistent with applicable provisions of the Code, for tax withholding
obligations due in connection with a broker-assisted cashless Option or Stock
Appreciation Right exercise involving the sale of Shares to pay the Option or
Stock Appreciation Right exercise price or any tax withholding obligation.

11.3Transferability of Awards.

(a)Except as otherwise provided in Section 11.3(b) hereof:

(i)No Award under the Plan may be sold, pledged, assigned or transferred in any
manner other than by will or the laws of descent and distribution or, subject to
the consent of the Administrator, pursuant to a DRO, unless and until such Award
has been exercised, or the Shares underlying such Award have been issued, and
all restrictions applicable to such Shares have lapsed;

(ii)No Award or interest or right therein shall be liable for the debts,
contracts or engagements of the Holder or his or her successors in interest or
shall be subject to disposition by transfer, alienation, anticipation, pledge,
hypothecation, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy) unless and until such Award has been exercised, or the
Shares underlying such Award have been issued, and all restrictions applicable
to such Shares have lapsed, and any attempted disposition of an Award prior to
the satisfaction of these conditions shall be null and void and of no effect,
except to the extent that such disposition is permitted by clause (i) of this
provision; and

(iii)During the lifetime of the Holder, only the Holder may exercise an Award
(or any portion thereof) granted to him under the Plan, unless it has been
disposed of pursuant to a DRO; after the death of the Holder, any exercisable
portion of an Award may, prior to the time when such portion becomes
unexercisable under the Plan or the applicable Program or Award Agreement, be
exercised by his personal representative or by any person empowered to do so
under the deceased Holder’s will or under the then applicable laws of descent
and distribution.

(b)Notwithstanding Section 11.3(a) hereof, the Administrator, in its sole
discretion, may determine to permit a Holder or a Permitted Transferee of such
Holder to transfer an Award to any one or more Permitted Transferees, subject to
the following terms and conditions:  (i) an Award transferred to a Permitted
Transferee shall not be assignable or transferable by the Permitted Transferee
(other than to another Permitted Transferee of the applicable Holder) other than
by will or the laws of descent and distribution; (ii) an Award transferred to a
Permitted Transferee shall continue to be subject to all the terms and
conditions of the Award as applicable to the original Holder (other than the
ability to further transfer the Award); and (iii) the Holder (or transferring
Permitted Transferee) and the Permitted Transferee shall execute any and all
documents requested by the Administrator, including, without limitation
documents to (A) confirm the status of the transferee as a Permitted Transferee,
(B)

20

 

--------------------------------------------------------------------------------

 

satisfy any requirements for an exemption for the transfer under applicable
federal, state and foreign securities laws and (C) evidence the transfer.  

(c)Notwithstanding Section 11.3(a) hereof, a Holder may, in the manner
determined by the Administrator, designate a beneficiary to exercise the rights
of the Holder and to receive any distribution with respect to any Award upon the
Holder’s death.  A beneficiary, legal guardian, legal representative, or other
person claiming any rights pursuant to the Plan is subject to all terms and
conditions of the Plan and any Program or Award Agreement applicable to the
Holder, except to the extent the Plan, the Program and the Award Agreement
otherwise provide, and to any additional restrictions deemed necessary or
appropriate by the Administrator.  If the Holder is married or a domestic
partner in a domestic partnership qualified under Applicable Law and resides in
a community property state, a designation of a person other than the Holder’s
spouse or domestic partner, as applicable, as his or her beneficiary with
respect to more than fifty percent (50%) of the Holder’s interest in the Award
shall not be effective without the prior written or electronic consent of the
Holder’s spouse or domestic partner, as applicable.  If no beneficiary has been
designated or survives the Holder, payment shall be made to the person entitled
thereto pursuant to the Holder’s will or the laws of descent and
distribution.  Subject to the foregoing, a beneficiary designation may be
changed or revoked by a Holder at any time; provided that the change or
revocation is filed with the Administrator prior to the Holder’s death.

11.4Conditions to Issuance of Shares.

(a)Notwithstanding anything herein to the contrary, the Company shall not be
required to issue or deliver any certificates or make any book entries
evidencing Shares pursuant to the exercise of any Award, unless and until the
Board or the Committee has determined, with advice of counsel, that the issuance
of such shares is in compliance with all Applicable Laws, and the Shares are
covered by an effective registration statement or applicable exemption from
registration.  In addition to the terms and conditions provided herein, the
Board or the Committee may require that a Holder make such reasonable covenants,
agreements, and representations as the Board or the Committee, in its
discretion, deems advisable in order to comply with any such laws, regulations,
or requirements.

(b)All Share certificates delivered pursuant to the Plan and all Shares issued
pursuant to book entry procedures are subject to any stop-transfer orders and
other restrictions as the Administrator deems necessary or advisable to comply
with Applicable Law.  The Administrator may place legends on any Share
certificate or book entry to reference restrictions applicable to the Shares.

(c)The Administrator shall have the right to require any Holder to comply with
any timing or other restrictions with respect to the settlement, distribution or
exercise of any Award, including a window-period limitation, as may be imposed
in the sole discretion of the Administrator.

(d)No fractional Shares shall be issued and the Administrator shall determine,
in its sole discretion, whether cash shall be given in lieu of fractional Shares
or whether such fractional Shares shall be eliminated by rounding down.

21

 

--------------------------------------------------------------------------------

 

(e)Notwithstanding any other provision of the Plan, unless otherwise determined
by the Administrator or required by any Applicable Law, the Company shall not
deliver to any Holder certificates evidencing Shares issued in connection with
any Award and instead such Shares shall be recorded in the books of the Company
(or, as applicable, its transfer agent or stock plan administrator).

11.5Forfeiture and Claw-Back Provisions.  Pursuant to its general authority to
determine the terms and conditions applicable to Awards under the Plan, the
Administrator shall have the right to provide, in an Award Agreement or
otherwise, or to require a Holder to agree by separate written or electronic
instrument, that:  

(a)(i) Any proceeds, gains or other economic benefit actually or constructively
received by the Holder upon any receipt or exercise of the Award, or upon the
receipt or resale of any Shares underlying the Award, must be paid to the
Company, and (ii) the Award shall terminate and any unexercised portion of the
Award (whether or not vested) shall be forfeited, if (x) a Termination of
Service occurs prior to a specified date, or within a specified time period
following receipt or exercise of the Award, or (y) the Holder at any time, or
during a specified time period, engages in any activity in competition with the
Company, or which is inimical, contrary or harmful to the interests of the
Company, as further defined by the Administrator or (z) the Holder incurs a
Termination of Service for “cause” (as such term is defined in the sole
discretion of the Administrator, or as set forth in a written agreement relating
to such Award between the Company and the Holder); and

(b)All Awards (including any proceeds, gains or other economic benefit actually
or constructively received by the Holder upon any receipt or exercise of any
Award or upon the receipt or resale of any Shares underlying the Award) shall be
subject to the provisions of any claw-back policy implemented by the Company,
including, without limitation, any claw-back policy adopted to comply with the
requirements of Applicable Law, including, without limitation, the Dodd-Frank
Wall Street Reform and Consumer Protection Act and any rules or regulations
promulgated thereunder, to the extent set forth in such claw-back policy and/or
in the applicable Award Agreement.

11.6Prohibition on Repricing.  Subject to Section 13.2 hereof, the Administrator
shall not, without the approval of the stockholders of the Company, (i)
authorize the amendment of any outstanding Option or Stock Appreciation Right to
reduce its price per Share, or (ii) cancel any Option or Stock Appreciation
Right in exchange for cash or another Award when the Option or Stock
Appreciation Right price per Share exceeds the Fair Market Value of the
underlying Shares. Subject to Section 13.2 hereof, the Administrator shall have
the authority, without the approval of the stockholders of the Company, to amend
any outstanding Award to increase the price per Share or to cancel and replace
an Award with the grant of an Award having a price per Share that is greater
than or equal to the price per Share of the original Award.

11.7Leave of Absence.  Unless the Administrator provides otherwise, vesting of
Awards granted hereunder shall be suspended during any unpaid leave of
absence.  A Holder shall not cease to be considered an Employee, , in the case
of any (a) leave of absence approved by the Company, or (b) transfer between
locations of the Company or between the

22

 

--------------------------------------------------------------------------------

 

Company and any of its Affiliates or any successor thereof, provided that such
change does not affect the specific terms applying to the Holder’s Award.

ARTICLE 12.

ADMINISTRATION

12.1Administrator.  The Committee (or another committee or a subcommittee of the
Board or the Compensation Committee of the Board assuming the functions of the
Committee under the Plan) shall administer the Plan (except as otherwise
permitted herein).  Any action taken by the Board in connection with the
administration of the Plan shall not be deemed approved by the Board unless such
actions are approved by a majority of the Non-Employee Directors.  The Committee
shall consist of a majority of or solely of two or more Non-Employee Directors
appointed by and holding office at the pleasure of the Board, each of whom is
intended to qualify as a “non-employee director” as defined by Rule 16b-3 of the
Exchange Act or any successor rule and an “independent director” under the rules
of any securities exchange or automated quotation system on which the Shares are
listed, quoted or traded.  Except as may otherwise be provided in any charter of
the Committee, appointment of Committee members shall be effective upon
acceptance of appointment.  Committee members may resign at any time by
delivering written or electronic notice to the Board.  Vacancies in the
Committee may only be filled by the Board.  Notwithstanding the foregoing, the
Board or Committee may delegate its authority hereunder to the extent permitted
by Section 12.6 hereof.

12.2Duties and Powers of Administrator.  It shall be the duty of the
Administrator to conduct the general administration of the Plan in accordance
with its provisions.  The Administrator shall have the power to interpret the
Plan, the Program and the Award Agreement, and to adopt such rules for the
administration, interpretation and application of the Plan as are not
inconsistent therewith, to interpret, amend or revoke any such rules and to
amend any Program or Award Agreement; provided that the rights or obligations of
the Holder of the Award that is the subject of any such Program or Award
Agreement are not affected materially and adversely by such amendment, unless
the consent of the Holder is obtained or such amendment is otherwise permitted
under Section 13.10 hereof.  Any such grant or award under the Plan need not be
the same with respect to each Holder.  In its sole discretion, the Board may at
any time and from time to time exercise any and all rights and duties of the
Committee under the Plan except with respect to matters which under Rule 16b‑3
under the Exchange Act or any successor rule or any regulations or rules issued
thereunder, or the rules of any securities exchange or automated quotation
system on which the Shares are listed, quoted or traded are required to be
determined in the sole discretion of the Committee.  

12.3Action by the Committee.  Unless otherwise established by the Board or in
any charter of the Committee, a majority of the Committee shall constitute a
quorum and the acts of a majority of the members present at any meeting at which
a quorum is present, and acts approved in writing by all members of the
Committee in lieu of a meeting, shall be deemed the acts of the Committee.  Each
member of the Committee is entitled to, in good faith, rely or act upon any
report or other information furnished to that member by any officer or other
employee of the Company or any Affiliate, the Company’s independent certified
public

23

 

--------------------------------------------------------------------------------

 

accountants, or any executive compensation consultant or other professional
retained by the Company to assist in the administration of the Plan.

12.4Authority of Administrator.  Subject to the Company’s Bylaws, the
Committee’s Charter and any specific designation in the Plan, the Administrator
has the exclusive power, authority and sole discretion to:

(a)Adopt procedures from time to time in the Administrator’s discretion to
ensure that an Employee is eligible to participate in the Plan prior to the
granting of any Awards to such Employee under the Plan (including, without
limitation, a requirement, if any, that each such Employee certify to the
Company prior to the receipt of an Award under the Plan that he or she has not
been previously employed by the Company or a Subsidiary, or if previously
employed, has had a bona fide period of non-employment, and that the grant of
Awards under the Plan is an inducement material to his or her agreement to enter
into employment with the Company or a Subsidiary);

(b)Designate Eligible Participants to receive Awards;

(c)Determine the type or types of Awards to be granted to each Eligible
Participant;

(d)Determine the number of Awards to be granted and the number of Shares to
which an Award will relate;

(e)Determine the terms and conditions of any Award granted pursuant to the Plan,
including, but not limited to, the exercise price, grant price, or purchase
price, any performance criteria, any restrictions or limitations on the Award,
any schedule for vesting, lapse of forfeiture restrictions or restrictions on
the exercisability of an Award, and accelerations or waivers thereof, and any
provisions related to non-competition and recapture of gain on an Award, based
in each case on such considerations as the Administrator in its sole discretion
determines;

(f)Determine whether, to what extent, and pursuant to what circumstances an
Award may be settled in, or the exercise price of an Award may be paid in cash,
Shares, other Awards, or other property, or an Award may be canceled, forfeited,
or surrendered;

(g)Prescribe the form of each Award Agreement, which need not be identical for
each Holder;

(h)Decide all other matters that must be determined in connection with an Award;

(i)Establish, adopt, or revise any rules and regulations as it may deem
necessary or advisable to administer the Plan;

(j)Interpret the terms of, and any matter arising pursuant to, the Plan, any
Program or any Award Agreement;

24

 

--------------------------------------------------------------------------------

 

(k)Make all other decisions and determinations that may be required pursuant to
the Plan or as the Administrator deems necessary or advisable to administer the
Plan; and

(l)Accelerate wholly or partially the vesting or lapse of restrictions of any
Award or portion thereof at any time after the grant of an Award, subject to
whatever terms and conditions it selects and Section 13.2(d) hereof.

12.5Decisions Binding.  The Administrator’s interpretation of the Plan, any
Awards granted pursuant to the Plan, any Program, any Award Agreement and all
decisions and determinations by the Administrator with respect to the Plan are
final, binding, and conclusive on all parties.

12.6Delegation of Authority.  To the extent permitted by Applicable Law, the
Board or Committee may from time to time delegate to a committee of one or more
Non-Employee Directors the authority to grant or amend Awards or to take other
administrative actions pursuant to Article 12; provided, however, that such
sub-committee be comprised of a majority of or solely two or more Non-Employee
Directors..  Any delegation hereunder shall be subject to the restrictions and
limits that the Board or Committee specifies at the time of such delegation, and
the Board may at any time rescind the authority so delegated or appoint a new
delegatee.  At all times, the delegatee appointed under this Section 12.6 hereof
shall serve in such capacity at the pleasure of the Board and the Committee.

ARTICLE 13.

MISCELLANEOUS PROVISIONS

13.1Amendment, Suspension or Termination of the Plan. Except as otherwise
provided in this Section 13.1, the Plan may be wholly or partially amended or
otherwise modified, suspended or terminated at any time or from time to time by
the Board or the Committee.  However, without approval of the Company’s
stockholders given within twelve (12) months before or after the action by the
Administrator, no action of the Administrator may, except as provided in Section
13.2 hereof, (a) reduce the price per share of any outstanding Option or Stock
Appreciation Right granted under the Plan, or (c) cancel any Option or Stock
Appreciation Right in exchange for cash or another Award when the Option or
Stock Appreciation Right price per share exceeds the Fair Market Value of the
underlying Shares.  Except as provided in Section 13.10 hereof, no amendment,
suspension or termination of the Plan shall, without the consent of the Holder,
materially and adversely affect any rights or obligations under any Award
theretofore granted or awarded, unless the Award itself otherwise expressly so
provides.  No Awards may be granted or awarded during any period of suspension
or after termination of the Plan.

13.2Changes in Common Stock or Assets of the Company, Acquisition or Liquidation
of the Company and Other Corporate Events.

(a)In the event of any stock dividend, stock split, combination or exchange of
shares, merger, consolidation or other distribution (other than normal cash
dividends) of Company assets to stockholders, or any other change affecting the
shares of the Company’s stock or the share price of the Company’s stock other
than an Equity Restructuring, the

25

 

--------------------------------------------------------------------------------

 

Administrator may make equitable adjustments, if any, to reflect such change
with respect to (i) the aggregate number and kind of shares that may be issued
under the Plan (including, but not limited to, adjustments of the limitations in
Section 3.1 hereof on the maximum number and kind of shares which may be issued
under the Plan); (ii) the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding Awards; (iii) the terms and
conditions of any outstanding Awards (including, without limitation, any
applicable performance targets or criteria with respect thereto); and (iv) the
grant or exercise price per share for any outstanding Awards under the Plan.

(b)In the event of any transaction or event described in Section 13.2(a) hereof
or any unusual or nonrecurring transactions or events affecting the Company, any
Affiliate of the Company, or the financial statements of the Company or any
Affiliate, or of changes in Applicable Law, the Administrator, in its sole
discretion, and on such terms and conditions as it deems appropriate, either by
the terms of the Award or by action taken prior to the occurrence of such
transaction or event and either automatically or upon the Holder’s request, is
hereby authorized to take any one or more of the following actions whenever the
Administrator determines that such action is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan or with respect to any Award under the Plan, to
facilitate such transactions or events or to give effect to such changes in
laws, regulations or principles:

(i)To provide for either (A) termination of any such Award in exchange for an
amount of cash and/or other property, if any, equal to the amount that would
have been attained upon the exercise of such Award or realization of the
Holder’s rights (and, for the avoidance of doubt, if, as of the date of the
occurrence of the transaction or event described in this Section 13.2, the
Administrator determines in good faith that no amount would have been attained
upon the exercise of such Award or realization of the Holder’s rights, then such
Award may be terminated by the Company without payment) or (B) the replacement
of such Award with other rights or property selected by the Administrator in its
sole discretion having an aggregate value not exceeding the amount that could
have been attained upon the exercise of such Award or realization of the
Holder’s rights had such Award been currently exercisable or payable or fully
vested;

(ii)To provide that such Award be assumed by the successor or survivor
corporation, or a parent or subsidiary thereof, or shall be substituted for by
similar options, rights or awards covering the stock of the successor or
survivor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices;

(iii)To make adjustments in the number and type of shares of the Company’s stock
(or other securities or property) subject to outstanding Awards, and in the
number and kind of outstanding Restricted Stock or Deferred Stock and/or in the
terms and conditions of (including the grant or exercise price), and the
criteria included in, outstanding Awards and Awards which may be granted in the
future;

26

 

--------------------------------------------------------------------------------

 

(iv)To provide that such Award shall be exercisable or payable or fully vested
with respect to all shares covered thereby, notwithstanding anything to the
contrary in the Plan or the applicable Program or Award Agreement; and

(v)To provide that the Award cannot vest, be exercised or become payable after
such event.

(c)In connection with the occurrence of any Equity Restructuring, and
notwithstanding anything to the contrary in Sections 13.2(a) and 13.2(b) hereof:

(i)The number and type of securities subject to each outstanding Award and the
exercise price or grant price thereof, if applicable, shall be equitably
adjusted; and/or

(ii)The Administrator shall make such equitable adjustments, if any, as the
Administrator in its discretion may deem appropriate to reflect such Equity
Restructuring with respect to the aggregate number and kind of shares that may
be issued under the Plan (including, but not limited to, adjustments of the
limitations in Section 3.1 hereof on the maximum number and kind of shares which
may be issued under the Plan).  The adjustments provided under this Section
13.2(c) shall be nondiscretionary and shall be final and binding on the affected
Holder and the Company.

(d)Change in Control.

(i)Notwithstanding any other provision of the Plan, in the event of a Change in
Control, each outstanding Award shall be assumed or an equivalent Award
substituted by the successor corporation or a parent or subsidiary of the
successor corporation, in each case, as determined by the Administrator.

(ii)In the event that the successor corporation in a Change in Control and its
parents and subsidiaries refuse to assume or substitute for any Award in
accordance with Section 13.2(d)(i) hereof, each such non-assumed/substituted
Award shall become fully vested and, as applicable, exercisable and shall be
deemed exercised, immediately prior to the consummation of such transaction, and
all forfeiture restrictions on any or all such Awards shall lapse at such time.
If an Award vests and, as applicable, is exercised in lieu of assumption or
substitution in connection with a Change in Control, the Administrator shall
notify the Holder of such vesting and any applicable exercise period, and the
Award shall terminate upon the Change in Control.  For the avoidance of doubt,
if the value of an Award that is terminated in connection with this Section
13.2(d)(ii) is zero or negative at the time of such Change in Control, such
Award shall be terminated upon the Change in Control without payment of
consideration therefor.

(iii)Notwithstanding anything to the contrary, in the event that, within the
twelve (12) month period immediately following a Change in Control, a
Participant experiences a Termination of Service by the Company for other than
Cause or by a Participant for Good Reason, then the vesting and, if applicable,
exercisability of that number of Shares equal to one hundred percent (100%) of
the then-unvested Shares subject to the outstanding Awards held by such
Participant shall accelerate upon the date of such Termination of Service.

27

 

--------------------------------------------------------------------------------

 

(e)The Administrator may, in its sole discretion, include such further
provisions and limitations in any Award, agreement or certificate, as it may
deem equitable and in the best interests of the Company that are not
inconsistent with the provisions of the Plan.

(f)No such adjustment or action shall be authorized to the extent such
adjustment or action would result in short-swing profits liability under Section
16 of the Exchange Act or violate the exemptive conditions of Rule 16b-3 of the
Exchange Act unless the Administrator determines that the Award is not to comply
with such exemptive conditions.

(g)The existence of the Plan, the Program, the Award Agreement and the Awards
granted hereunder shall not affect or restrict in any way the right or power of
the Company or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company’s
capital structure or its business, any merger or consolidation of the Company,
any issue of stock or of options, warrants or rights to purchase stock or of
bonds, debentures, preferred or prior preference stocks whose rights are
superior to or affect the Common Stock or the rights thereof or which are
convertible into or exchangeable for Common Stock, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

(h)In the event of any pending stock dividend, stock split, combination or
exchange of shares, merger, consolidation or other distribution (other than
normal cash dividends) of Company assets to stockholders, or any other change
affecting the Shares or the share price of the Common Stock including any Equity
Restructuring, for reasons of administrative convenience, the Company in its
sole discretion may refuse to permit the exercise of any Award during a period
of thirty (30) days prior to the consummation of any such transaction.

13.3Stockholder Approval of the Plan not Required.  It is expressly intended
that approval of the Company’s stockholders not be required as a condition of
the effectiveness of the Plan, and the Plan’s provisions shall be interpreted in
a manner consistent with such intent for all purposes.  Specifically, Nasdaq
Stock Market Rule 5635(c) generally requires stockholder approval for stock
option plans or other equity compensation arrangements adopted by companies
whose securities are listed on the Nasdaq Stock Market pursuant to which stock
awards or stock may be acquired by officers, directors, employees, or
consultants of such companies.  Nasdaq Stock Market Rule 5635(c)(4) provides an
exception to this requirement for issuances of securities to a person not
previously an employee or director of the issuer, or following a bona fide
period of non-employment, as an inducement material to the individual’s entering
into employment with the issuer; provided, such issuances are approved by either
the issuer’s compensation committee comprised of a majority of independent
directors or a majority of the issuer’s independent directors. Notwithstanding
anything to the contrary herein, Awards under the Plan may only be made to
Employees who have not previously been an Employee or Director of the Company or
a Subsidiary, or following a bona fide period of non-employment by the Company
or a Subsidiary, as an inducement material to the Employee’s entering into
employment with the Company or a Subsidiary.  Awards under the Plan will be
approved by (i) the Company’s Compensation Committee comprised of a majority of
the Company’s Non-Employee Directors or (ii) a

28

 

--------------------------------------------------------------------------------

 

majority of the Company’s Non-Employee Directors. Accordingly, pursuant to
Nasdaq Stock Market Rule 5635(c)(4), the issuance of Awards and the Shares
issuable upon exercise or vesting of such Awards pursuant to the Plan are not
subject to the approval of the Company’s stockholders.

13.4No Stockholders Rights.  Except as otherwise provided herein, a Holder shall
have none of the rights of a stockholder with respect to Shares covered by any
Award until the Holder becomes the record owner of such Shares.

13.5Paperless Administration.  In the event that the Company establishes, for
itself or using the services of a third party, an automated system for the
documentation, granting or exercise of Awards, such as a system using an
internet website or interactive voice response, then the paperless
documentation, granting or exercise of Awards by a Holder may be permitted
through the use of such an automated system.

13.6Effect of Plan upon Other Compensation Plans.  The adoption of the Plan
shall not affect any other compensation or incentive plans in effect for the
Company or any Affiliate.  Nothing in the Plan shall be construed to limit the
right of the Company or any Affiliate:  (a) to establish any other forms of
incentives or compensation for Employees or other service providers of the
Company or any Affiliate, or (b) to grant or assume options or other rights or
awards otherwise than under the Plan in connection with any proper corporate
purpose including without limitation, the grant or assumption of options in
connection with the acquisition by purchase, lease, merger, consolidation or
otherwise, of the business, stock or assets of any corporation, partnership,
limited liability company, firm or association.

13.7Compliance with Laws.  The Plan, the granting and vesting of Awards under
the Plan and the issuance and delivery of Shares and the payment of money under
the Plan or under Awards granted or awarded hereunder are subject to compliance
with all Applicable Law, and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith.  Any securities delivered under
the Plan shall be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary or desirable to
assure compliance with all Applicable Law.  To the extent permitted by
Applicable Law, the Plan and Awards granted or awarded hereunder shall be deemed
amended to the extent necessary to conform to such Applicable Law.

13.8Titles and Headings, References to Sections of the Code or Exchange
Act.  The titles and headings of the Sections in the Plan are for convenience of
reference only and, in the event of any conflict, the text of the Plan, rather
than such titles or headings, shall control. References to sections of the Code
or the Exchange Act shall include any amendment or successor thereto.

13.9Governing Law.  The Plan and any agreements hereunder shall be administered,
interpreted and enforced under the internal laws of the State of Delaware
without regard to conflicts of laws thereof or of any other jurisdiction.

29

 

--------------------------------------------------------------------------------

 

13.10Section 409A.  To the extent that the Administrator determines that any
Award granted under the Plan is subject to Section 409A of the Code, the Program
pursuant to which such Award is granted and the Award Agreement evidencing such
Award shall incorporate the terms and conditions required by Section 409A of the
Code.  To the extent applicable, the Plan, the Program and any Award Agreements
shall be interpreted in accordance with Section 409A of the Code and Department
of Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be
issued after the Effective Date.  Notwithstanding any provision of the Plan to
the contrary, in the event that following the Effective Date the Administrator
determines that any Award may be subject to Section 409A of the Code and related
Department of Treasury guidance (including such Department of Treasury guidance
as may be issued after the Effective Date), the Administrator may adopt such
amendments to the Plan and the applicable Program and Award Agreement or adopt
other policies and procedures (including amendments, policies and procedures
with retroactive effect), or take any other actions, that the Administrator
determines are necessary or appropriate to (a) exempt the Award from Section
409A of the Code and/or preserve the intended tax treatment of the benefits
provided with respect to the Award, or (b) comply with the requirements of
Section 409A of the Code and related Department of Treasury guidance and thereby
avoid the application of any penalty taxes under such Section.  

13.11No Rights to Awards.  No Eligible Participant or other person shall have
any claim to be granted any Award pursuant to the Plan, and neither the Company
nor the Administrator is obligated to treat Eligible Participants, Holders or
any other persons uniformly.

13.12Unfunded Status of Awards.  The Plan is intended to be an “unfunded” plan
for incentive compensation.  With respect to any payments not yet made to a
Holder pursuant to an Award, nothing contained in the Plan or any Program or
Award Agreement shall give the Holder any rights that are greater than those of
a general creditor of the Company or any Affiliate.

13.13Indemnification.  To the extent allowable pursuant to Applicable Law, each
member of the Committee or of the Board and any officer or other employee to
whom authority to administer any component of the Plan is delegated shall be
indemnified and held harmless by the Company from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by such member in
connection with or resulting from any claim, action, suit, or proceeding to
which he or she may be a party or in which he or she may be involved by reason
of any action or failure to act pursuant to the Plan and against and from any
and all amounts paid by him or her in satisfaction of judgment in such action,
suit, or proceeding against him or her; provided he or she gives the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf.  The foregoing
right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled pursuant to the Company’s
Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.

13.14Relationship to other Benefits.  No payment pursuant to the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing,

30

 

--------------------------------------------------------------------------------

 

group insurance, welfare or other benefit plan of the Company or any Affiliate
except to the extent otherwise expressly provided in writing in such other plan
or an agreement thereunder.

13.15Expenses.  The expenses of administering the Plan shall be borne by the
Company and its Affiliates.

 

31