EXHIBIT 10.1

1996 EQUITY PARTICIPATION PLAN

OF VIASAT, INC.

(As Amended and Restated Effective September 20, 2012)

ViaSat, Inc., a Delaware corporation, adopted The 1996 Equity Participation Plan
of ViaSat, Inc. (the “Plan”), effective October 24, 1996, for the benefit of its
eligible employees, consultants and directors. The Plan consists of two plans,
one for the benefit of key Employees (as such term is defined below) and
consultants and one for the benefit of Independent Directors (as such term is
defined below). The following is an amendment and restatement of the Plan
effective as of September 20, 2012 (the “Restatement Effective Date”), as
further amended.

The purposes of this Plan are as follows:

(1)  To provide an additional incentive for directors, key Employees and
consultants to further the growth, development and financial success of ViaSat,
Inc. (the “Company”) by personally benefiting through the ownership of Company
stock and/or rights which recognize such growth, development and financial
success.

(2)  To enable the Company to obtain and retain the services of directors, key
Employees and consultants considered essential to the long range success of the
Company by offering them an opportunity to own stock in the Company and/or
rights which will reflect the growth, development and financial success of the
Company.

ARTICLE I.

DEFINITIONS

1.1  General.    Wherever the following terms are used in this Plan they shall
have the meanings specified below, unless the context clearly indicates
otherwise.

1.2  Award Limit.    “Award Limit” shall mean Five Hundred Thousand
(500,000) shares of Common Stock with respect to Options or Stock Appreciation
Rights granted under the Plan and One Hundred Fifty Thousand (150,000) shares of
Common Stock with respect to awards of Restricted Stock, Performance Awards,
Dividend Equivalents, Restricted Stock Units, or Stock Payments granted under
the Plan; provided, however, that in connection with an individual’s initial
service as an Employee, such limit will be Three Hundred Thousand
(300,000) shares of Common Stock with respect to awards of Restricted Stock,
Performance Awards, Dividend Equivalents, Restricted Stock Units or Stock
Payments granted under the Plan. The maximum aggregate amount of cash that may
be paid to an individual in cash during any fiscal year of the Company with
respect to awards designated to be paid in cash shall be $1,000,000.

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

1.4  Change in Control.    “Change in Control” shall mean a change in ownership
or control of the Company effected through either of the following transactions:

(a)  any person or related group of persons (other than the Company or a person
that directly or indirectly controls, is controlled by, or is under common
control with, the Company) directly or indirectly acquires beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) of securities
possessing more than fifty percent (50%) of the total combined voting power of
the Company’s outstanding securities pursuant to a tender or exchange offer made
directly to the Company’s stockholders which the Board does not recommend such
stockholders to accept; or

(b)  there is a change in the composition of the Board over a period of
thirty-six (36) consecutive months (or less) such that a majority of the Board
members (rounded up to the nearest whole number) ceases, by reason of one or
more proxy contests for the election of Board members, to be comprised of

 

1

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

individuals who either (i) have been Board members continuously since the
beginning of such period or (ii) have been elected or nominated for election as
Board members during such period by at least a majority of the Board members
described in clause (i) who were still in office at the time such election or
nomination was approved by the Board.

1.5  Code.    “Code” shall mean the Internal Revenue Code of 1986, as amended.

1.6  Committee.    “Committee” shall mean the Compensation Committee of the
Board, or another committee of the Board, appointed as provided in Section 9.1.

1.7  Common Stock.    “Common Stock” shall mean the common stock of the Company,
par value $0.0001 per share, and any equity security of the Company issued or
authorized to be issued in the future, but excluding any preferred stock and any
warrants, options or other rights to purchase Common Stock. Debt securities of
the Company convertible into Common Stock shall be deemed equity securities of
the Company.

1.8  Company.    “Company” shall mean ViaSat, Inc., a Delaware corporation.

1.9  Corporate Transaction.    “Corporate Transaction” shall mean any of the
following stockholder-approved transactions to which the Company is a party:

(a)  a merger or consolidation in which the Company is not the surviving entity,
except for a transaction the principal purpose of which is to change the State
in which the Company is incorporated, form a holding company or effect a similar
reorganization as to form whereupon this Plan and all Options are assumed by the
successor entity;

(b)  the sale, transfer, exchange or other disposition of all or substantially
all of the assets of the Company, in complete liquidation or dissolution of the
Company in a transaction not covered by the exceptions to clause (a) above; or

(c)  any reverse merger in which the Company is the surviving entity but in
which securities possessing more than fifty percent (50%) of the total combined
voting power of the Company’s outstanding securities are transferred or issued
to a person or persons different from those who held such securities immediately
prior to such merger.

1.10  Director.    “Director” shall mean a member of the Board.

1.11  Dividend Equivalent.    “Dividend Equivalent” shall mean a right to
receive the equivalent value (in cash or Common Stock) of dividends paid on
Common Stock, awarded under Article VII of this Plan.

1.12  Employee.    “Employee” shall mean any officer or other employee (as
defined in accordance with Section 3401(c) of the Code) of the Company, or of
any corporation which is a Subsidiary.

1.13  Equity Restructuring.    “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 of Common
Stock (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 awards.

1.14  Exchange Act.    “Exchange Act” shall mean the Securities Exchange Act of
1934, as amended.

1.15  Fair Market Value.    “Fair Market Value” of a share of Common Stock as of
a given date shall be (i) the closing price of a share of Common Stock on the
principal exchange on which shares of Common Stock are then trading or quoted,
if any (or as reported on any composite index which includes such principal
exchange), on such date, or if shares were not traded on such date, then on the
next following date on which a trade occurs, or (ii) if Common Stock is not
traded on an exchange but is quoted on an automated quotation system, the
closing price of a share of Common Stock on such date as reported by such
quotation system; or (iii) if Common Stock is not publicly traded on an exchange
and not quoted on an automated quotation system, the Fair Market Value of a
share of Common Stock as established by the Committee (or the Board, in the case
of awards granted to Independent Directors) acting in good faith.

 

2

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

1.16  Full Value Award.    “Full Value Award” shall mean any award other than an
Option or a Stock Appreciation Right with a per share purchase price lower than
100% of Fair Market Value on the date of grant and that is settled by the
issuance of shares of Common Stock.

1.17  Grantee.    “Grantee” shall mean an Employee, Director or consultant
granted a Performance Award, Dividend Equivalent, Stock Payment or Stock
Appreciation Right, or an award of Restricted Stock Units, under this Plan.

1.18  Incentive Stock Option.    “Incentive Stock Option” shall mean an option
which conforms to the applicable provisions of Section 422 of the Code and which
is designated as an Incentive Stock Option by the Committee.

1.19  Independent Director.    “Independent Director” shall mean a member of the
Board who is not an Employee of the Company.

1.20  Non-Qualified Stock Option.    “Non-Qualified Stock Option” shall mean an
Option which is not designated as an Incentive Stock Option by the Committee.

1.21  Option.    “Option” shall mean a stock option granted under Article III of
this Plan. An Option granted under this Plan shall, as determined by the
Committee, be either a Non-Qualified Stock Option or an Incentive Stock Option;
provided, however, that Options granted to Independent Directors and consultants
shall be Non-Qualified Stock Options.

1.22  Optionee.    “Optionee” shall mean an Employee, Director or consultant
granted an Option under this Plan.

1.23  Performance Award.    “Performance Award” shall mean a cash bonus, stock
bonus or other performance or incentive award that is paid in cash, Common Stock
or a combination of both, awarded under Article VII of this Plan.

1.24  Plan.    “Plan” shall mean The 1996 Equity Participation Plan of ViaSat,
Inc.

1.25  QDRO.    “QDRO” shall mean a qualified domestic relations order as defined
by the Code or Title I of the Employee Retirement Income Security Act of 1974,
as amended, or the rules thereunder.

1.26  Restricted Stock.    “Restricted Stock” shall mean Common Stock awarded
under Article VI of this Plan.

1.27  Restricted Stock Unit.    “Restricted Stock Unit” shall mean a right to
receive Common Stock awarded under Article VII of this Plan.

1.28  Restricted Stockholder.    “Restricted Stockholder” shall mean an
Employee, Director or consultant granted an award of Restricted Stock under
Article VI of this Plan.

1.29  Rule 16b-3.    “Rule 16b-3” shall mean that certain Rule 16b-3 under the
Exchange Act, as such Rule may be amended from time to time.

1.30  Stock Appreciation Right.    “Stock Appreciation Right” shall mean a stock
appreciation right granted under Article VIII of this Plan.

1.31  Stock Payment.    “Stock Payment” shall mean (i) a payment in the form of
shares of Common Stock, or (ii) an option or other right to purchase shares of
Common Stock, as part of a deferred compensation arrangement, made in lieu of
all or any portion of the compensation, including without limitation, salary,
bonuses and commissions, that would otherwise become payable to a key Employee,
Director or consultant in cash, awarded under Article VII of this Plan.

1.32  Subsidiary.    “Subsidiary” shall mean any corporation in an unbroken
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain then owns stock possessing
50 percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

 

3

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

1.33  Termination of Consultancy.    “Termination of Consultancy” shall mean the
time when the engagement of an Optionee, Grantee or Restricted Stockholder as a
consultant to the Company or a Subsidiary is terminated for any reason, with or
without cause, including, but not by way of limitation, by resignation,
discharge, death or retirement; but excluding terminations where there is a
simultaneous commencement of employment with the Company or any Subsidiary. The
Committee, in its absolute discretion, shall determine the effect of all matters
and questions relating to Termination of Consultancy, including, but not by way
of limitation, the question of whether a Termination of Consultancy resulted
from a discharge for good cause, and all questions of whether particular leaves
of absence constitute Terminations of Consultancy. Notwithstanding any other
provision of this Plan, the Company or any Subsidiary has an absolute and
unrestricted right to terminate a consultant’s service at any time for any
reason whatsoever, with or without cause, except to the extent expressly
provided otherwise in writing.

1.34  Termination of Directorship.    “Termination of Directorship” shall mean
the time when an Optionee or Grantee who is an Independent Director ceases to be
a Director for any reason, including, but not by way of limitation, a
termination by resignation, failure to be elected, death or retirement. The
Board, in its sole and absolute discretion, shall determine the effect of all
matters and questions relating to Termination of Directorship with respect to
Independent Directors.

1.35  Termination of Employment.    “Termination of Employment” shall mean the
time when the employee-employer relationship between an Optionee, Grantee or
Restricted Stockholder and the Company or any Subsidiary is terminated for any
reason, with or without cause, including, but not by way of limitation, a
termination by resignation, discharge, death, disability or retirement; but
excluding (i) terminations where there is a simultaneous reemployment or
continuing employment of an Optionee, Grantee or Restricted Stockholder by the
Company or any Subsidiary, (ii) at the discretion of the Committee, terminations
which result in a temporary severance of the employee-employer relationship, and
(iii) terminations which are followed by the simultaneous establishment of a
consulting relationship by the Company or a Subsidiary with the former employee.
The Committee, in its absolute discretion, shall determine the effect of all
matters and questions relating to Termination of Employment, including, but not
by way of limitation, the question of whether a Termination of Employment
resulted from a discharge for good cause, and all questions of whether
particular leaves of absence constitute Terminations of Employment.
Notwithstanding any other provision of this Plan, the Company or any Subsidiary
has an absolute and unrestricted right to terminate an Employee’s employment at
any time for any reason whatsoever, with or without cause, except to the extent
expressly provided otherwise in writing.

ARTICLE II.

SHARES SUBJECT TO PLAN

2.1  Shares Subject to Plan.

(a)  The shares of stock subject to Options, awards of Restricted Stock,
Performance Awards, Dividend Equivalents, awards of Restricted Stock Units,
Stock Payments or Stock Appreciation Rights shall be Common Stock, initially
shares of the Company’s Common Stock, par value $0.0001 per share. The aggregate
number of such shares which may be issued upon exercise of such options or
rights or upon any such awards under the Plan shall not exceed 21,400,000. The
shares of Common Stock issuable upon exercise of such options or rights or upon
any such awards may be either previously authorized but unissued shares or
treasury shares.

(b)  Any shares subject to Options or Stock Appreciation Rights shall be counted
against the numerical limit of Section 2.1(a) as one share for every share
subject thereto. Any shares subject to Full Value Awards granted prior to the
Restatement Effective Date will be counted against the numerical limit of
Section 2.1(a) as 2.65 shares for every one share subject thereto. Any shares
subject to Full Value Awards granted on or after the Restatement Effective Date
will be counted against the numerical limit of Section 2.1(a) as 2 shares for
every one share subject thereto. To the extent that a share that was subject to
a Full Value Award is recycled back into the Plan under Section 2.2, the Plan
will be credited with a number of shares corresponding to the reduction in the
share reserve previously made with respect to such Full Value Award in
accordance with this Section 2.1(b).

 

 

4

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

(c)  The maximum number of shares which may be subject to awards granted under
the Plan to any individual in any fiscal year, and the maximum aggregate amount
of cash that may be paid in cash during any fiscal year with respect to awards
designated to be paid in cash, shall not exceed the applicable Award Limit. To
the extent required by Section 162(m) of the Code, shares subject to Options
which are canceled continue to be counted against the Award Limit and if, after
grant of an Option, the Company stockholders approve an option exchange program
whereby the price of shares subject to such Option is reduced, the transaction
is treated as a cancellation of the Option and a grant of a new Option and both
the Option deemed to be canceled and the Option deemed to be granted are counted
against the Award Limit. Furthermore, to the extent required by Section 162(m)
of the Code, if, after grant of a Stock Appreciation Right, the base amount on
which stock appreciation is calculated is reduced to reflect a reduction in the
Fair Market Value of the Company’s Common Stock, the transaction is treated as a
cancellation of the Stock Appreciation Right and a grant of a new Stock
Appreciation Right and both the Stock Appreciation Right deemed to be canceled
and the Stock Appreciation Right deemed to be granted are counted against the
Award Limit.

2.2  Add-Back of Shares.    If any award under this Plan expires or is canceled
without having been fully exercised or paid, or an award is settled in cash
without the delivery of shares of Common Stock to the award holder, the number
of shares subject to such award shall, to the extent of such expiration,
cancellation or cash settlement, again be available for future grants of awards
and added back to the shares of Common Stock authorized for grant under
Section 2.1(a) in an amount corresponding to the reduction in the share reserve
previously made in accordance with Section 2.1(b) above with respect to such
award, subject to the limitations of Section 2.1. Furthermore, any shares
subject to awards which are adjusted pursuant to Section 10.3 and become
exercisable with respect to shares of stock of another corporation shall be
considered canceled and may again be optioned, granted or awarded hereunder,
subject to the limitations of Section 2.1. Notwithstanding anything to the
contrary contained herein, the following shares shall not be added back to the
shares of Common Stock authorized for grant under Section 2.1(a) and will not be
available for future grants of awards: (i) shares of Common Stock tendered by an
Optionee or withheld by the Company in payment of the exercise price of an
Option; (ii) shares of Common Stock tendered by an Optionee or Grantee or
withheld by the Company to satisfy any tax withholding obligation with respect
to an Option or a Stock Appreciation Right; (iii) shares of Common Stock subject
to a Stock Appreciation Right not issued in connection with the stock settlement
of the Stock Appreciation Right on exercise thereof; and (iv) shares of Common
Stock purchased on the open market with the cash proceeds from the exercise of
Options. Shares tendered by a Grantee or a Restricted Stockholder or withheld by
the Company to satisfy any tax withholding obligation with respect to a Full
Value Award shall be available for future grants of awards under the Plan in an
amount corresponding to the reduction in the share reserve previously made in
accordance with Section 2.1(b) above. Any shares of Common Stock forfeited by a
Grantee or a Restricted Stockholder or repurchased by the Company under
Section 6.6 or Article VII will again be available for awards in an amount
corresponding to the reduction in the share reserve previously made in
accordance with Section 2.1(b) above. 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. Notwithstanding the provisions of
this Section 2.2, no shares of Common Stock may again be optioned, granted or
awarded if such action would cause an Incentive Stock Option to fail to qualify
as an incentive stock option under Section 422 of the Code.

ARTICLE III.

GRANTING OF OPTIONS

3.1  Eligibility.    Any Employee or consultant selected by the Committee
pursuant to Section 3.4(a)(i) shall be eligible to be granted an Option. Each
Independent Director of the Company shall be eligible to be granted Options at
the times and in the manner set forth in Section 3.4(d).

3.2  Disqualification for Stock Ownership.    No person may be granted an
Incentive Stock Option under this Plan if such person, at the time the Incentive
Stock Option is granted, owns stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or any
then existing Subsidiary or parent corporation (within the meaning of
Section 422 of the Code) unless such Incentive Stock Option conforms to the
applicable provisions of Section 422 of the Code.

 

5

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

3.3  Qualification of Incentive Stock Options.    No Incentive Stock Option
shall be granted to any person who is not an Employee.

3.4  Granting of Options.

(a)  The Committee shall from time to time, in its absolute discretion, and
subject to applicable limitations of this Plan:

(i)  Determine which Employees are key Employees and select from among the key
Employees or consultants (including Employees or consultants who have previously
received Options or other awards under this Plan) such of them as in its opinion
should be granted Options;

(ii)  Subject to the Award Limit, determine the number of shares to be subject
to such Options granted to the selected key Employees or consultants;

(iii)  Subject to Section 3.3, determine whether such Options are to be
Incentive Stock Options or Non-Qualified Stock Options and whether such Options
are to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code; and

(iv)  Determine the terms and conditions of such Options, consistent with this
Plan; provided, however, that the terms and conditions of Options intended to
qualify as performance-based compensation as described in Section 162(m)(4)(C)
of the Code shall include, but not be limited to, such terms and conditions as
may be necessary to meet the applicable provisions of Section 162(m) of the
Code.

(b)  Upon the selection of a key Employee or consultant to be granted an Option,
the Committee shall instruct the Secretary of the Company to issue the Option
and may impose such conditions on the grant of the Option as it deems
appropriate. Without limiting the generality of the preceding sentence, the
Committee may, in its discretion and on such terms as it deems appropriate,
require as a condition on the grant of an Option to an Employee or consultant
that the Employee or consultant surrender for cancellation some or all of the
unexercised Options, awards of Restricted Stock or Restricted Stock Units,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments or other rights which have been previously granted to him under this
Plan or otherwise. An Option, the grant of which is conditioned upon such
surrender, may have an option price lower (or higher) than the exercise price of
such surrendered Option or other award, may cover the same (or a lesser or
greater) number of shares as such surrendered Option or other award, may contain
such other terms as the Committee deems appropriate, and shall be exercisable in
accordance with its terms, without regard to the number of shares, price,
exercise period or any other term or condition of such surrendered Option or
other award; provided, however, except as permitted under Section 10.3 of the
Plan, no Option or Stock Appreciation Right shall, without stockholder approval,
be (i) repriced, exchanged for an Option or Stock Appreciation Right with a
lower price or otherwise modified where the effect would be to reduce the
exercise price of the Option or Stock Appreciation Right; or (ii) exchanged for
cash or an alternate award under the Plan.

(c)  Any Incentive Stock Option granted under this Plan may be modified by the
Committee to disqualify such option from treatment as an “incentive stock
option” under Section 422 of the Code.

(d)  During the term of the Plan, each person who is initially elected or
appointed to the Board and who is an Independent Director at the time of such
initial election or appointment shall automatically be granted an Option to
purchase Nine Thousand (9,000) shares of Common Stock (subject to adjustment as
provided in Section 10.3) on the date of such initial election or appointment,
which Option will vest in three equal installments on each of the first three
anniversaries of the date of grant, subject to the Independent Director’s
continued service as a Director on each such vesting date. In addition, during
the term of the Plan, each Independent Director shall automatically be granted
an Option to purchase Five Thousand (5,000) shares of Common Stock (subject to
adjustment as provided in Section 10.3) on the date of each annual meeting of
stockholders after his or her initial election or appointment to the Board at
which directors are elected to the Board, which Option will vest on the first
anniversary of the date of grant, subject to the Independent Director’s
continued service as a Director on such vesting date; provided, however, that a
person who is initially elected to the Board at an annual meeting of
stockholders and who is an Independent Director at the time of such initial
election shall receive only an initial Option grant on the date of such election
pursuant to the preceding sentence and shall not receive an Option grant

 

6

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

pursuant to this sentence until the date of the next annual meeting of
stockholders following such initial election. Members of the Board who are
employees of the Company who subsequently retire from the Company and remain on
the Board will not receive an initial Option grant pursuant to the first
sentence of this Section 3.4(d), but to the extent that they are otherwise
eligible, will receive, after retirement from employment with the Company,
Options as described in the second sentence of this Section 3.4(d).

ARTICLE IV.

TERMS OF OPTIONS

4.1  Option Agreement.    Each Option shall be evidenced by a written Stock
Option Agreement, which shall be executed by the Optionee and an authorized
officer of the Company and which shall contain such terms and conditions as the
Committee (or the Board, in the case of Options granted to Independent
Directors) shall determine, consistent with this Plan. Stock Option Agreements
evidencing Options intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code shall contain such terms and
conditions as may be necessary to meet the applicable provisions of
Section 162(m) of the Code. Stock Option Agreements evidencing Incentive Stock
Options shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 422 of the Code.

4.2  Option Price.    The price per share of the shares subject to each Option
shall be set by the Committee; provided, however, that such price shall not be
less than 100% of the Fair Market Value of a share of Common Stock on the date
the Option is granted and in the case of Incentive Stock Options granted to an
individual then owning (within the meaning of Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary or parent corporation thereof (within the meaning of
Section 422 of the Code) such price shall not be less than 110% of the Fair
Market Value of a share of Common Stock on the date the Option is granted.

4.3  Option Term.    The term of an Option shall be set by the Committee in its
discretion; provided, however, that no Option shall have a term longer than six
(6) years from the date the Option is granted and in the case of Incentive Stock
Options granted to an individual then owning (within the meaning of
Section 424(d) of the Code) more than 10% of the total combined voting power of
all classes of stock of the Company or any Subsidiary or parent corporation
thereof (within the meaning of Section 422 of the Code) the term may not exceed
five (5) years from the date the Option is granted. Except as limited by
requirements of Section 422 of the Code and regulations and rulings thereunder
applicable to Incentive Stock Options, the Committee may extend the term of any
outstanding Option in connection with any Termination of Employment or
Termination of Consultancy of the Optionee, or amend any other term or condition
of such Option relating to such a termination.

4.4  Option Vesting.

(a)  The period during which the right to exercise an Option in whole or in part
vests in the Optionee shall be set by the Committee and the Committee may
determine that an Option may not be exercised in whole or in part for a
specified period after it is granted. At any time after grant of an Option, the
Committee may, in its sole and absolute discretion and subject to whatever terms
and conditions it selects, accelerate the period during which an Option (except
an Option granted to an Independent Director) vests. The Committee may also
provide that the vesting of an Option granted under the Plan which is intended
to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code shall occur upon the satisfaction of one or
more performance goals based on the performance criteria set forth in
Section 7.1.

(b)  No portion of an Option which is unexercisable at Termination of
Employment, Termination of Directorship or Termination of Consultancy, as
applicable, shall thereafter become exercisable, except as may be otherwise
provided by the Committee (or the Board, in the case of Options granted to
Independent Directors) in the case of Options granted to Employees or
consultants either in the Stock Option Agreement or by action of the Committee
(or the Board, in the case of Options granted to Independent Directors)
following the grant of the Option.

 

7

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

(c)  To the extent that the aggregate Fair Market Value of stock with respect to
which “incentive stock options” (within the meaning of Section 422 of the Code,
but without regard to Section 422(d) of the Code) are exercisable for the first
time by an Optionee during any calendar year (under the Plan and all other
incentive stock option plans of the Company and any Subsidiary) exceeds
$100,000, such Options shall be treated as Non-Qualified Options to the extent
required by Section 422 of the Code. The rule set forth in the preceding
sentence shall be applied by taking Options into account in the order in which
they were granted. For purposes of this Section 4.4(c), the Fair Market Value of
stock shall be determined as of the time the Option with respect to such stock
is granted.

4.5  Consideration.    In consideration of the granting of an Option, the
Optionee shall agree, in the written Stock Option Agreement, to remain in the
employ of (or to consult for or to serve as an Independent Director of, as
applicable) the Company or any Subsidiary for a period of at least one year (or
such shorter period as may be fixed in the Stock Option Agreement or by action
of the Committee following grant of the Option) after the Option is granted (or,
in the case of an Independent Director, until the next annual meeting of
stockholders of the Company). Nothing in this Plan or in any Stock Option
Agreement hereunder shall confer upon any Optionee any right to continue in the
employ of, or as a consultant for, the Company or any Subsidiary, or as a
director of the Company, or shall interfere with or restrict in any way the
rights of the Company and any Subsidiary, which are hereby expressly reserved,
to discharge any Optionee at any time for any reason whatsoever, with or without
good cause.

ARTICLE V.

EXERCISE OF OPTIONS

5.1  Partial 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 Committee (or the Board, in the case of Options granted to
Independent Directors) may require that, by the terms of the Option, a partial
exercise be with respect to a minimum number of shares.

5.2  Manner 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 his office:

(a)  A written notice complying with the applicable rules established by the
Committee (or the Board, in the case of Options granted to Independent
Directors) stating that the Option, or a portion thereof, is exercised. The
notice shall be signed by the Optionee or other person then entitled to exercise
the Option or such portion;

(b)  Such representations and documents as the Committee (or the Board, in the
case of Options granted to Independent Directors), in its absolute discretion,
deems necessary or advisable to effect compliance with all applicable provisions
of the Securities Act of 1933, as amended, and any other federal or state
securities laws or regulations. The Committee or Board may, in its absolute
discretion, also take whatever additional actions it deems appropriate to effect
such compliance including, without limitation, placing legends on share
certificates and book entries and issuing stop-transfer notices to agents and
registrars;

(c)  In the event that the Option shall be exercised pursuant to Section 10.1 by
any person or persons other than the Optionee, appropriate proof of the right of
such person or persons to exercise the Option; and

(d)  Full cash payment to the Secretary of the Company for the shares with
respect to which the Option, or portion thereof, is exercised. However, the
Committee (or the Board, in the case of Options granted to Independent
Directors), may in its discretion, (i) allow a delay in payment up to thirty
(30) days from the date the Option, or portion thereof, is exercised; (ii) allow
payment, in whole or in part, through the delivery of shares of Common Stock
owned by the Optionee, duly endorsed for transfer to the Company with a Fair
Market Value on the date of delivery equal to the aggregate exercise price of
the Option or exercised portion thereof; (iii) allow payment, in whole or in
part, through the surrender of shares of Common Stock then issuable upon
exercise of the Option having a Fair Market Value on the date of Option exercise
equal to the aggregate exercise price of the Option or exercised portion
thereof; (iv) allow payment, in whole or in part,

 

8

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

through the delivery of property of any kind which constitutes good and valuable
consideration; (v) allow payment, in whole or in part, through the delivery of a
full recourse promissory note bearing interest (at no less than such rate as
shall then preclude the imputation of interest under the Code) and payable upon
such terms as may be prescribed by the Committee or the Board; (vi) allow
payment, in whole or in part, through the delivery of a notice that the Optionee
has placed a market sell order with a broker with respect to shares of Common
Stock then issuable upon exercise of the Option, 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 Option exercise price; or (vii) allow payment
through any combination of the consideration provided in the foregoing
subparagraphs (ii), (iii), (iv), (v) and (vi). In the case of a promissory note,
the Committee (or the Board, in the case of Options granted to Independent
Directors) may also prescribe the form of such note and the security to be given
for such note. The Option may not be exercised, however, by delivery of a
promissory note or by a loan or other extension of credit from the Company when
or where such loan or other extension of credit is prohibited by law.

5.3  Conditions to Issuance of Shares.    The Company shall not be required to
issue or deliver any certificate or certificates, or make any book entries, for
shares of stock purchased upon the exercise of any Option or portion thereof
prior to fulfillment of all of the following conditions:

(a)  The admission of such shares to listing on all stock exchanges on which
such class of stock is then listed;

(b)  The completion of any registration or other qualification of such shares
under any state or federal law, or under the rulings or regulations of the
Securities and Exchange Commission or any other governmental regulatory body
which the Committee or Board shall, in its absolute discretion, deem necessary
or advisable;

(c)  The obtaining of any approval or other clearance from any state or federal
governmental agency which the Committee (or Board, in the case of Options
granted to Independent Directors) shall, in its absolute discretion, determine
to be necessary or advisable;

(d)  The lapse of such reasonable period of time following the exercise of the
Option as the Committee (or Board, in the case of Options granted to Independent
Directors) may establish from time to time for reasons of administrative
convenience; and

(e)  The receipt by the Company of full payment for such shares, including
payment of any applicable withholding tax.

Notwithstanding any other provision of the Plan, unless otherwise determined by
the Committee (or the Board, in the case of Options granted to Independent
Directors) or required by any applicable law, rule or regulation, the Company
shall not deliver to any Optionee certificates evidencing shares of Common Stock
issued in connection with any Option and instead such shares of Common Stock
shall be recorded in the books of the Company (or, as applicable, its transfer
agent or stock plan administrator).

5.4  Rights as Stockholders.    The holders of Options shall not be, nor have
any of the rights or privileges of, stockholders of the Company in respect of
any shares purchasable upon the exercise of any part of an Option unless and
until certificates representing such shares have been issued by the Company to
such holders or book entries evidencing such shares have been made by the
Company.

5.5  Ownership and Transfer Restrictions.    The Committee (or Board, in the
case of Options granted to Independent Directors), in its absolute discretion,
may impose such restrictions on the ownership and transferability of the shares
purchasable upon the exercise of an Option as it deems appropriate. Any such
restriction shall be set forth in the respective Stock Option Agreement and may
be referred to on the certificates or book entries evidencing such shares. The
Committee may require an Employee to give the Company prompt notice of any
disposition of shares of Common Stock acquired by exercise of an Incentive Stock
Option within (i) two years from the date of granting such Option to such
Employee or (ii) one year after the transfer of such shares to such Employee.
The Committee may direct that the certificates or book entries evidencing shares
acquired by exercise of an Option refer to such requirement to give prompt
notice of disposition.

 

 

9

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

5.6  Limitations on Exercise of Options Granted to Independent Directors.    No
Option granted to an Independent Director may be exercised to any extent by
anyone after the first to occur of the following events:

(a)  The expiration of twelve (12) months from the date of the Optionee’s death;

(b)  The expiration of twelve (12) months from the date of the Optionee’s
Termination of Directorship, Termination of Consultancy or Termination of
Employment by reason of his permanent and total disability (within the meaning
of Section 22(e)(3) of the Code);

(c)  The expiration of three (3) months from the last to occur of the Optionee’s
Termination of Directorship, Termination of Consultancy or Termination of
Employment, unless the Optionee dies within said three-month period; or

(d)  The expiration of six (6) years from the date the Option was granted.

ARTICLE VI.

AWARD OF RESTRICTED STOCK

6.1  Award of Restricted Stock.

(a)  The Committee (or the Board, in the case of Restricted Stock awarded to
Independent Directors) may from time to time, in its absolute discretion:

(i)  Select from among the key Employees, consultants or Independent Directors
(including Employees, consultants or Independent Directors who have previously
received other awards under this Plan) such of them as in its opinion should be
awarded Restricted Stock; and

(ii)  Determine the purchase price, if any, and other terms and conditions
applicable to such Restricted Stock, consistent with this Plan.

(b)  The Committee (or the Board, in the case of Restricted Stock awarded to
Independent Directors) shall establish the purchase price, if any, and form of
payment for Restricted Stock; provided, however, that such purchase price shall
be no less than the par value of the Common Stock to be purchased, unless
otherwise permitted by applicable state law. In all cases, legal consideration
shall be required for each issuance of Restricted Stock.

(c)  Upon the selection of a key Employee, consultant or Independent Director to
be awarded Restricted Stock, the Committee (or the Board, in the case of
Restricted Stock awarded to Independent Directors) shall instruct the Secretary
of the Company to issue such Restricted Stock and may impose such conditions on
the issuance of such Restricted Stock as it deems appropriate.

6.2  Restricted Stock Agreement.    Restricted Stock shall be issued only
pursuant to a written Restricted Stock Agreement, which shall be executed by the
selected key Employee, consultant or Independent Director and an authorized
officer of the Company and which shall contain such terms and conditions as the
Committee (or the Board, in the case of Restricted Stock granted to an
Independent Director) shall determine, consistent with this Plan. The issuance
of any shares of Restricted Stock shall be made subject to satisfaction of all
provisions of Section 5.3.

6.3  Consideration.    As consideration for the issuance of Restricted Stock, in
addition to payment of any purchase price, the Restricted Stockholder shall
agree, in the written Restricted Stock Agreement, to remain in the employ of, to
consult for, or to remain as an Independent Director of, as applicable, the
Company or any Subsidiary for a period of at least one year after the Restricted
Stock is issued (or such shorter period as may be fixed in the Restricted Stock
Agreement or by action of the Committee (or the Board, in the case of Restricted
Stock granted to an Independent Director) following grant of the Restricted
Stock or, in the case of an Independent Director, until the next annual meeting
of stockholders of the Company). Nothing in this Plan or in any Restricted Stock
Agreement hereunder shall confer on any Restricted Stockholder any right to
continue in the employ of, as a consultant for or as an Independent Director of
the Company or any Subsidiary or shall interfere with or restrict in any way the
rights of the Company and any Subsidiary, which are hereby expressly

 

10

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

reserved, to discharge any Restricted Stockholder at any time for any reason
whatsoever, with or without good cause.

6.4  Rights as Stockholders.    Upon delivery of the shares of Restricted Stock
to the escrow holder pursuant to Section 6.7, the Restricted Stockholder shall
have, unless otherwise provided by the Committee (or the Board, in the case of
Restricted Stock granted to an Independent Director), all the rights of a
stockholder with respect to said shares, subject to the restrictions in his
Restricted Stock Agreement, including the right to receive all dividends and
other distributions paid or made with respect to the shares; provided, however,
that in the discretion of the Committee (or the Board, in the case of Restricted
Stock granted to an Independent Director), any extraordinary distributions with
respect to the Common Stock shall be subject to the restrictions set forth in
Section 6.5.

6.5  Restriction.    All shares of Restricted Stock issued under this Plan
(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 each individual Restricted Stock
Agreement, be subject to such restrictions as the Committee (or the Board, in
the case of Restricted Stock granted to an Independent Director) shall provide,
which restrictions may include, without limitation, restrictions concerning
voting rights and transferability and vesting restrictions based on duration of
employment with the Company, Company performance and individual performance;
provided, further, that by action taken after the Restricted Stock is issued,
the Committee (or the Board, in the case of Restricted Stock granted to an
Independent Director) may, on such terms and conditions as it may determine to
be appropriate, remove any or all of the restrictions imposed by the terms of
the Restricted Stock Agreement. The Committee may also provide that the vesting
of Restricted Stock granted under the Plan which is intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall occur upon the satisfaction of one or more performance goals based on the
performance criteria set forth in Section 7.1. Notwithstanding the foregoing,
except as permitted under Section 10.3 of the Plan, shares of Restricted Stock
will vest no more rapidly than ratably over a three (3) year period from the
date of grant, unless the Committee (or the Board, in the case of Restricted
Stock granted to an Independent Director) determines that the Restricted Stock
award is to vest upon the achievement of one or more performance goals, in which
case the period for measuring performance will be at least twelve (12) months.
Restricted Stock may not be sold or encumbered until all restrictions are
terminated or expire.

6.6  Repurchase or Forfeiture of Restricted Stock.    The Committee (or the
Board, in the case of Restricted Stock granted to an Independent Director) shall
provide in the terms of each individual Restricted Stock Agreement that the
Company shall have the right to repurchase from the Restricted Stockholder the
Restricted Stock then subject to restrictions under the Restricted Stock
Agreement immediately upon a Termination of Employment, Termination of
Consultancy or Termination of Directorship between the Restricted Stockholder
and the Company, at a cash price per share equal to the price paid by the
Restricted Stockholder for such Restricted Stock; provided, however, that
provision may be made that no such right of repurchase shall exist in the event
of a Termination of Employment, Termination of Consultancy or Termination of
Directorship without cause, or following a change in control of the Company or
because of the Restricted Stockholder’s retirement, death or disability, or
otherwise. Unless provided otherwise by the Committee (or the Board, in the case
of Restricted Stock granted to an Independent Director), if no cash
consideration was paid by the Restricted Stockholder upon issuance, a Restricted
Stockholder’s rights in unvested Restricted Stock shall lapse upon the last to
occur of Termination of Employment, Termination of Consultancy or Termination of
Directorship with the Company.

6.7  Escrow.    The Secretary of the Company or such other escrow holder as the
Committee (or the Board, in the case of Restricted Stock granted to an
Independent Director) may appoint shall retain physical custody of each
certificate representing Restricted Stock until all of the restrictions imposed
under the Restricted Stock Agreement with respect to the shares evidenced by
such certificate expire or shall have been removed.

6.8  Legend.    In order to enforce the restrictions imposed upon shares of
Restricted Stock hereunder, the Committee (or the Board, in the case of
Restricted Stock granted to an Independent Director) shall cause a legend or
legends to be placed on certificates or book entries representing all shares of
Restricted Stock that are still subject to restrictions under Restricted Stock
Agreements, which legend or legends shall make appropriate reference to the
conditions imposed thereby.

 

11

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

ARTICLE VII.

PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, RESTRICTED STOCK UNITS, STOCK PAYMENTS

7.1  Performance Awards.    Any key Employee, consultant or Independent Director
selected by the Committee (or the Board, in the case of an award to an
Independent Director) may be granted one or more Performance Awards. The
Committee shall select the performance criteria (and any permissible
adjustments) for each Performance Award for purposes of establishing the
performance goal or performance goals applicable to such Performance Award for
the designated performance period. The performance criteria that shall be used
to establish such performance goals shall be limited to the following: (a) net
earnings (either before or after one or more of the following: (i) interest,
(ii) taxes, (iii) depreciation and (iv) amortization), (b) gross or net sales or
revenue, (c) net income (either before or after taxes), (d) operating earnings
or profit, (e) cash flow (including, but not limited to, operating cash flow and
free cash flow), (f) return on assets, (g) return on capital, (h) return on
stockholders’ equity, (i) return on sales, (j) gross or net profit or operating
margin, (k) costs, (l) funds from operations, (m) expenses, (n) working capital,
or (o) earnings per share, any of which may be measured either in absolute terms
or as compared to any incremental increase or decrease or as compared to results
of a peer group or to market performance indicators. The performance goals for a
performance period shall be established in writing by the Committee (or the
Board, in the case of an award to an Independent Director) based on one or more
of the foregoing performance criteria, which goals may be expressed in terms of
overall Company performance or the performance of a division, business unit or
an individual. In making such determinations, the Committee (or the Board, in
the case of an award to an Independent Director) shall consider (among such
other factors as it deems relevant in light of the specific type of award) the
contributions, responsibilities and other compensation of the particular key
Employee, consultant or Independent Director.

7.2  Dividend Equivalents.    Any key Employee, consultant or Independent
Director selected by the Committee (or the Board, in the case of an award to an
Independent Director) may be granted Dividend Equivalents based on the dividends
declared on Common Stock, to be credited as of dividend payment dates, during
the period between the date an Option, Stock Appreciation Right, Restricted
Stock Unit or Performance Award is granted, and the date such Option, Stock
Appreciation Right, Restricted Stock Unit or Performance Award is exercised,
vests or expires, as determined by the Committee (or the Board, in the case of
an award to an Independent Director). Such Dividend 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 Committee
(or the Board, in the case of an award to an Independent Director).
Notwithstanding the foregoing, no Dividend Equivalents shall be payable with
respect to Options or Stock Appreciation Rights.

7.3  Stock Payments.    Any key Employee, consultant or Independent Director
selected by the Committee (or the Board, in the case of an award to an
Independent Director) may receive Stock Payments in the manner determined from
time to time by the Committee. The number of shares shall be determined by the
Committee (or the Board, in the case of an award to an Independent Director) and
may be based upon the Fair Market Value, book value, net profits or other
measure of the value of Common Stock or other specific performance criteria
determined appropriate by the Committee (or the Board, in the case of an award
to an Independent Director), determined on the date such Stock Payment is made
or on any date thereafter. The Committee may provide that the vesting of Stock
Payments granted under the Plan which are intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall occur upon the satisfaction of one or more performance goals based on the
performance criteria set forth in Section 7.1.

7.4  Restricted Stock Units.

(a)  Any key Employee, consultant or Independent Director selected by the
Committee (or the Board, in the case of an award to an Independent Director) may
be granted an award of Restricted Stock Units in the manner determined from time
to time by the Committee. The number of shares subject to a Restricted Stock
Unit award shall be determined by the Committee (or the Board, in the case of an
award to an Independent Director). The Committee may provide that the vesting of
Restricted Stock Units granted under the Plan which are intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall occur upon

 

12

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

the satisfaction of one or more performance goals based on the performance
criteria set forth in Section 7.1. Common Stock underlying a Restricted Stock
Unit award will not be issued until the Restricted Stock Unit award has vested.
Unless otherwise provided by the Committee (or the Board, in the case of an
award to an Independent Director), a Grantee of Restricted Stock Units shall
have no rights as a Company stockholder with respect to the shares of Common
Stock underlying such Restricted Stock Units until such time as the award has
vested and such Common Stock underlying the award has been issued.

(b)  During the term of the Plan thereafter, each person who is initially
elected or appointed to the Board and who is an Independent Director at the time
of such initial election or appointment shall automatically be granted an award
of Three Thousand (3,000) Restricted Stock Units (subject to adjustment as
provided in Section 10.3) on the date of such initial election or appointment,
which Restricted Stock Unit award will vest in three equal installments on each
of the first three anniversaries of the date of grant, subject to the
Independent Director’s continued service as a Director on each such vesting
date. In addition, during the term of the Plan thereafter, each Independent
Director shall automatically be granted an award of One Thousand Six Hundred
(1,600) Restricted Stock Units (subject to adjustment as provided in
Section 10.3) on the date of each annual meeting of stockholders after his or
her initial election or appointment to the Board at which directors are elected
to the Board, which Restricted Stock Unit award will vest on the first
anniversary of the date of grant, subject to the Independent Director’s
continued service as a Director on such vesting date; provided, however, that a
person who is initially elected to the Board at an annual meeting of
stockholders and who is an Independent Director at the time of such initial
election shall receive only an initial Restricted Stock Unit award on the date
of such election pursuant to the preceding sentence and shall not receive a
Restricted Stock Unit award pursuant to this sentence until the date of the next
annual meeting of stockholders following such initial election. Members of the
Board who are employees of the Company who subsequently retire from the Company
and remain on the Board will not receive an initial Restricted Stock Unit award
pursuant to the first sentence of this Section 7.4(b), but to the extent that
they are otherwise eligible, will receive, after retirement from employment with
the Company, Restricted Stock Unit awards as described in the second sentence of
this Section 7.4(b).

7.5  Performance Award Agreement, Dividend Equivalent Agreement, Restricted
Stock Unit Agreement, Stock Payment Agreement.    Each Performance Award,
Dividend Equivalent, award of Restricted Stock Units and/or Stock Payment shall
be evidenced by a written agreement, which shall be executed by the Grantee and
an authorized Officer of the Company and which shall contain such terms and
conditions as the Committee (or the Board, in the case of an award to an
Independent Director) shall determine, consistent with this Plan.

7.6  Term.    The term of a Performance Award, Dividend Equivalent, award of
Restricted Stock Unit and/or Stock Payment shall be set by the Committee (or the
Board, in the case of an award to an Independent Director) in its discretion.

7.7  Exercise Upon Termination of Employment.    A Performance Award, Dividend
Equivalent, award of Restricted Stock Unit and/or Stock Payment is exercisable
or payable only while the Grantee is an Employee, consultant or Independent
Director; provided that the Committee may (or the Board, in the case of an award
to an Independent Director) determine that the Performance Award, Dividend
Equivalent, award of Restricted Stock Unit and/or Stock Payment may be exercised
or paid subsequent to Termination of Employment, Termination of Consultancy or
Termination of Directorship without cause, or following a change in control of
the Company, or because of the Grantee’s retirement, death or disability, or
otherwise.

7.8  Payment on Exercise.    Payment of the amount determined under Section 7.1
or 7.2 above shall be in cash, in Common Stock or a combination of both, as
determined by the Committee (or the Board, in the case of an award to an
Independent Director). To the extent any payment under this Article VII is
effected in Common Stock, it shall be made subject to satisfaction of all
provisions of Section 5.3.

7.9  Consideration.    As consideration for the issuance of a Performance Award,
Dividend Equivalent, award of Restricted Stock Unit and/or Stock Payment, the
Grantee shall agree, in a written agreement, to remain in the employ of, to
consult for, or to remain as an Independent Director of, as applicable, the
Company or any Subsidiary for a period of at least one year after such
Performance Award, Dividend Equivalent, award of Restricted Stock Unit and/or
Stock Payment is granted (or such shorter period as may be fixed in such
agreement or by action of the Committee (or the Board, in the case of an award
to an Independent Director) following such

 

13

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

grant or, in the case of an Independent Director, until the next annual meeting
of stockholders of the Company). Nothing in this Plan or in any agreement
hereunder shall confer on any Grantee any right to continue in the employ of, as
a consultant for or as an Independent Director of the Company or any Subsidiary
or shall interfere with or restrict in any way the rights of the Company and any
Subsidiary, which are hereby expressly reserved, to discharge any Grantee at any
time for any reason whatsoever, with or without good cause.

ARTICLE VIII.

STOCK APPRECIATION RIGHTS

8.1  Grant of Stock Appreciation Rights.    A Stock Appreciation Right may be
granted to any key Employee, consultant or Independent Director selected by the
Committee (or the Board, in the case of an award to an Independent Director). A
Stock Appreciation Right may be granted (i) in connection and simultaneously
with the grant of an Option, (ii) with respect to a previously granted Option,
or (iii) independent of an Option. A Stock Appreciation Right shall be subject
to such terms and conditions not inconsistent with this Plan as the Committee
(or the Board, in the case of an award to an Independent Director) shall impose
and shall be evidenced by a written Stock Appreciation Right Agreement, which
shall be executed by the Grantee and an authorized officer of the Company;
provided, however, that no Stock Appreciation Right shall have a term longer
than six (6) years from the date the Stock Appreciation Right is granted. The
Committee, in its discretion, may determine whether a Stock Appreciation Right
is to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code and Stock Appreciation Right Agreements
evidencing Stock Appreciation Rights intended to so qualify shall contain such
terms and conditions as may be necessary to meet the applicable provisions of
Section 162(m) of the Code, including providing that the vesting of such Stock
Appreciation Rights shall occur upon the satisfaction of one or more performance
goals based on the performance criteria set forth in Section 7.1. Without
limiting the generality of the foregoing, the Committee may, in its discretion
and on such terms as it deems appropriate, require as a condition of the grant
of a Stock Appreciation Right to an Employee, consultant or Independent Director
that the Employee, consultant or Independent Director surrender for cancellation
some or all of the unexercised Options, awards of Restricted Stock or Restricted
Stock Units, Performance Awards, Stock Appreciation Rights, Dividend Equivalents
or Stock Payments, or other rights which have been previously granted to him
under this Plan or otherwise. Subject to Section 3.4(b), a Stock Appreciation
Right, the grant of which is conditioned upon such surrender, may have an
exercise price lower (or higher) than the exercise price of the surrendered
Option or other award, may cover the same (or a lesser or greater) number of
shares as such surrendered Option or other award, may contain such other terms
as the Committee deems appropriate, and shall be exercisable in accordance with
its terms, without regard to the number of shares, price, exercise period or any
other term or condition of such surrendered Option or other award.

8.2  Coupled Stock Appreciation Rights.

(a)  A Coupled Stock Appreciation Right (“CSAR”) shall be related to a
particular Option and shall be exercisable only when and to the extent the
related Option is exercisable.

(b)  A CSAR may be granted to the Grantee for no more than the number of shares
subject to the simultaneously or previously granted Option to which it is
coupled.

(c)  A CSAR shall entitle the Grantee (or other person entitled to exercise the
Option pursuant to this Plan) to surrender to the Company unexercised a portion
of the Option to which the CSAR relates (to the extent then exercisable pursuant
to its terms) and to receive from the Company in exchange therefor an amount
determined by multiplying the difference obtained by subtracting the Option
exercise price from the Fair Market Value of a share of Common Stock on the date
of exercise of the CSAR by the number of shares of Common Stock with respect to
which the CSAR shall have been exercised, subject to any limitations the
Committee may impose.

8.3  Independent Stock Appreciation Rights.

(a)  An Independent Stock Appreciation Right (“ISAR”) shall be unrelated to any
Option and shall have a term set by the Committee. An ISAR shall be exercisable
in such installments as the Committee may determine. An ISAR shall cover such
number of shares of Common Stock as the Committee may determine; provided,

 

14

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

however, that unless the Committee otherwise provides in the terms of the ISAR
or otherwise, no ISAR granted to a person subject to Section 16 of the Exchange
Act shall be exercisable until at least six months have elapsed from (but
excluding) the date on which the Option was granted. The exercise price per
share of Common Stock subject to each ISAR shall be set by the Committee;
provided, however, that such price shall not be less than 100% of the Fair
Market Value of a share of Common Stock on the date the ISAR is granted. An ISAR
is exercisable only while the Grantee is an Employee, consultant or Independent
Director; provided that the Committee may determine that the ISAR may be
exercised subsequent to Termination of Employment, Termination of Consultancy or
Termination of Directorship without cause, or following a change in control of
the Company, or because of the Grantee’s retirement, death or disability, or
otherwise.

(b)  An ISAR shall entitle the Grantee (or other person entitled to exercise the
ISAR pursuant to this Plan) to exercise all or a specified portion of the ISAR
(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 ISAR from the Fair Market Value
of a share of Common Stock on the date of exercise of the ISAR by the number of
shares of Common Stock with respect to which the ISAR shall have been exercised,
subject to any limitations the Committee may impose.

8.4  Payment and Limitations on Exercise.

(a)  Payment of the amount determined under Sections 8.2(c) and 8.3(b) above
shall be in cash, in Common Stock (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 Committee. To the extent such payment is effected in Common
Stock it shall be made subject to satisfaction of all provisions of Section 5.3
above pertaining to Options.

(b)  Grantees of Stock Appreciation Rights may be required to comply with any
timing or other restrictions with respect to the settlement or exercise of a
Stock Appreciation Right, including a window-period limitation, as may be
imposed in the discretion of the Board or Committee.

8.5  Consideration.    As consideration for the granting of a Stock Appreciation
Right, the Grantee shall agree, in the written Stock Appreciation Right
Agreement, to remain in the employ of, to consult for or to remain as an
Independent Director of, as applicable, the Company or any Subsidiary for a
period of at least one year after the Stock Appreciation Right is granted (or
such shorter period as may be fixed in the Stock Appreciation Right Agreement or
by action of the Committee (or the Board, in the case of an award to an
Independent Director) following grant of the Stock Appreciation Right or, in the
case of an Independent Director, until the next annual meeting of stockholders
of the Company). Nothing in this Plan or in any Stock Appreciation Right
Agreement hereunder shall confer on any Grantee any right to continue in the
employ of, as a consultant for or as an Independent Director of the Company or
any Subsidiary or shall interfere with or restrict in any way the rights of the
Company and any Subsidiary, which are hereby expressly reserved, to discharge
any Grantee at any time for any reason whatsoever, with or without good cause.

ARTICLE IX.

ADMINISTRATION

9.1  Compensation Committee.    The Compensation Committee (or another committee
or a subcommittee of the Board assuming the functions of the Committee under
this Plan) shall consist solely of two or more Independent Directors appointed
by and holding office at the pleasure of the Board, each of whom is both a
“non-employee director” as defined by Rule 16b-3 and an “outside director” for
purposes of Section 162(m) of the Code. Appointment of Committee members shall
be effective upon acceptance of appointment. Committee members may resign at any
time by delivering written notice to the Board. Vacancies in the Committee may
be filled by the Board.

9.2  Duties and Powers of Committee.    It shall be the duty of the Committee to
conduct the general administration of this Plan in accordance with its
provisions. The Committee shall have the power to interpret this Plan and the
agreements pursuant to which Options, awards of Restricted Stock or Restricted
Stock Units, Performance Awards, Stock Appreciation Rights, Dividend Equivalents
or Stock Payments are granted or

 

15

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

awarded, and to adopt such rules for the administration, interpretation, and
application of this Plan as are consistent therewith and to interpret, amend or
revoke any such rules. Notwithstanding the foregoing, the full Board, acting by
a majority of its members in office, shall conduct the general administration of
the Plan with respect to awards granted to Independent Directors. Any such grant
or award under this Plan need not be the same with respect to each Optionee,
Grantee or Restricted Stockholder. Any such interpretations and rules with
respect to Incentive Stock Options shall be consistent with the provisions of
Section 422 of the Code. In its absolute discretion, the Board may at any time
and from time to time exercise any and all rights and duties of the Committee
under this Plan except with respect to matters which under Rule 16b-3 or
Section 162(m) of the Code, or any regulations or rules issued thereunder, are
required to be determined in the sole discretion of the Committee. To the extent
permitted by applicable law, the Committee may from time to time delegate to a
committee of one or more members of the Board or one or more officers of the
Company the authority to grant or amend awards to Participants other than
(a) senior executives of the Company who are subject to Section 16 of the
Exchange Act, (b) any Employee who is, or could be, a “covered employee” within
the meaning of Section 162(m) of the Code, or (c) officers of the Company (or
members of the Board) to whom authority to grant or amend awards has been
delegated hereunder. Any delegation hereunder shall be subject to the
restrictions and limits that the Committee specifies at the time of such
delegation, and the Committee may at any time rescind the authority so delegated
or appoint a new delegatee. At all times, the delegatee appointed under this
Section shall serve in such capacity at the pleasure of the Committee.

9.3  Majority Rule; Unanimous Written Consent.    The Committee shall act by a
majority of its members in attendance at a meeting at which a quorum is present
or by a memorandum or other written instrument signed by all members of the
Committee.

9.4  Compensation; Professional Assistance; Good Faith Actions.    Members of
the Committee shall receive such compensation for their services as members as
may be determined by the Board. All expenses and liabilities which members of
the Committee incur in connection with the administration of this Plan shall be
borne by the Company. The Committee may, with the approval of the Board, employ
attorneys, consultants, accountants, appraisers, brokers, or other persons. The
Committee, the Company and the Company’s officers and Directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee or the Board in good faith shall be final and binding upon all
Optionees, Grantees, Restricted Stockholders, the Company and all other
interested persons. No members of the Committee or Board shall be personally
liable for any action, determination or interpretation made in good faith with
respect to this Plan, Options, awards of Restricted Stock or Restricted Stock
Units, Performance Awards, Stock Appreciation Rights, Dividend Equivalents or
Stock Payments, and all members of the Committee and the Board shall be fully
protected by the Company in respect of any such action, determination or
interpretation.

ARTICLE X.

MISCELLANEOUS PROVISIONS

10.1  Not Transferable.    Options, Restricted Stock awards, Restricted Stock
Unit awards, Performance Awards, Stock Appreciation Rights, Dividend Equivalents
or Stock Payments under this Plan may not be sold, pledged, assigned, or
transferred in any manner other than by will or the laws of descent and
distribution or pursuant to a QDRO, unless and until such rights or awards have
been exercised, or the shares underlying such rights or awards have been issued,
and all restrictions applicable to such shares have lapsed. No Option,
Restricted Stock award, Restricted Stock Unit award, Performance Award, Stock
Appreciation Right, Dividend Equivalent or Stock Payment or interest or right
therein shall be liable for the debts, contracts or engagements of the Optionee,
Grantee or Restricted Stockholder or his successors in interest or shall be
subject to disposition by transfer, alienation, anticipation, pledge,
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), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.

 

16

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

During the lifetime of the Optionee or Grantee, only he may exercise an Option
or other right or award (or any portion thereof) granted to him under the Plan,
unless it has been disposed of pursuant to a QDRO. After the death of the
Optionee or Grantee, any exercisable portion of an Option or other right or
award may, prior to the time when such portion becomes unexercisable under the
Plan or the applicable Stock Option Agreement or other agreement, be exercised
by his personal representative or by any person empowered to do so under the
deceased Optionee’s or Grantee’s will or under the then applicable laws of
descent and distribution.

10.2  Amendment, Suspension or Termination of this Plan.    Except as otherwise
provided in this Section 10.2, this 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 months before or after the action by the Board
or the Committee, no action of the Board or the Committee may, except as
provided in Section 10.3, increase the limits imposed in Section 2.1 on the
maximum number of shares which may be issued under this Plan or modify the Award
Limit, and no action of the Board or the Committee may be taken that would
otherwise require stockholder approval as a matter of applicable law, or the
rules and regulations of any stock exchange or national market system on which
the Common Stock is then listed. No amendment, suspension or termination of this
Plan shall, without the consent of the holder of Options, Restricted Stock
awards, Restricted Stock Unit awards, Performance Awards, Stock Appreciation
Rights, Dividend Equivalents or Stock Payments, alter or impair any rights or
obligations under any Options, Restricted Stock awards, Restricted Stock Unit
awards, Performance Awards, Stock Appreciation Rights, Dividend Equivalents or
Stock Payments theretofore granted or awarded, unless the award itself otherwise
expressly so provides. No Options, Restricted Stock, Restricted Stock Units,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments may be granted or awarded during any period of suspension or after
termination of this Plan, and in no event may any Incentive Stock Option be
granted under this Plan after June 21, 2020.

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

(a)  Subject to Section 10.3(d), in the event that the Committee (or the Board,
in the case of awards granted to Independent Directors) determines that any
dividend or other distribution (whether in the form of cash, Common Stock, other
securities, or other property) (other than normal cash dividends),
recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company (including,
but not limited to, a Corporate Transaction), or exchange of Common Stock or
other securities of the Company, issuance of warrants or other rights to
purchase Common Stock or other securities of the Company, or other similar
corporate transaction or event (other than an Equity Restructuring), in the
Committee’s sole discretion (or in the case of awards granted to Independent
Directors, the Board’s sole discretion), affects the Common Stock such that an
adjustment is determined by the Committee to be 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 an Option, Restricted Stock
award, Performance Award, Stock Appreciation Right, Dividend Equivalent,
Restricted Stock Unit award or Stock Payment, then the Committee (or the Board,
in the case of awards granted to Independent Directors) shall, in such manner as
it may deem equitable, adjust any or all of:

(i)  the number and kind of shares of Common Stock (or other securities or
property) with respect to which Options, Restricted Stock Units, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents or Stock Payments may be
granted under the Plan, or which may be granted as Restricted Stock (including,
but not limited to, adjustments of the limitations in Section 2.1 on the maximum
number and kind of shares which may be issued, adjustments of the Award Limit
and adjustments of the manner in which shares subject to Full Value Awards will
be counted),

(ii)  the number and kind of shares of Common Stock (or other securities or
property) subject to outstanding Options, Restricted Stock Units, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents, or Stock Payments, and
in the number and kind of shares of outstanding Restricted Stock, and

 

17

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

(iii)  the grant or exercise price with respect to any Option, Restricted Stock
Unit, Performance Award, Stock Appreciation Right, Dividend Equivalent or Stock
Payment, and

(iv)  the number and kind of shares of Common Stock (or other securities or
property) for which automatic grants of Options and Restricted Stock Units are
subsequently to be made to new and continuing Independent Directors pursuant to
Section 3.4(d) and Section 7.4(b), respectively.

(b)  Subject to Sections 10.3(b)(vii), 10.3(d) and 10.3(e) in the event of any
Corporate Transaction or other transaction or event described in Section 10.3(a)
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 laws, regulations, or accounting
principles, the Committee (or the Board, in the case of awards granted to
Independent Directors) in its discretion is hereby authorized to take any one or
more of the following actions whenever the Committee (or the Board, in the case
of awards granted to Independent Directors) 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 option, right or other award under this Plan, to facilitate such
transactions or events or to give effect to such changes in laws, regulations or
principles:

(i)  In its sole and absolute discretion, and on such terms and conditions as it
deems appropriate, the Committee (or the Board, in the case of awards granted to
Independent Directors) may provide, either by the terms of the agreement or by
action taken prior to the occurrence of such transaction or event and either
automatically or upon the optionee’s request, for either the purchase of any
such Option, Performance Award, Stock Appreciation Right, Dividend Equivalent,
or Stock Payment, or any Restricted Stock or Restricted Stock Unit for an amount
of cash equal to the amount that could have been attained upon the exercise of
such option, right or award or realization of the optionee’s rights had such
option, right or award been currently exercisable or payable or fully vested or
the replacement of such option, right or award with other rights or property
selected by the Committee (or the Board, in the case of awards granted to
Independent Directors) in its sole discretion;

(ii)  In its sole and absolute discretion, the Committee (or the Board, in the
case of awards granted to Independent Directors) may provide, either by the
terms of such Option, Performance Award, Stock Appreciation Right, Dividend
Equivalent, or Stock Payment, or Restricted Stock or Restricted Stock Unit award
or by action taken prior to the occurrence of such transaction or event that it
cannot be exercised after such event;

(iii)  In its sole and absolute discretion, and on such terms and conditions as
it deems appropriate, the Committee (or the Board, in the case of awards granted
to Independent Directors) may provide, either by the terms of such Option,
Performance Award, Stock Appreciation Right, Dividend Equivalent, or Stock
Payment, or Restricted Stock or Restricted Stock Unit award or by action taken
prior to the occurrence of such transaction or event, that for a specified
period of time prior to such transaction or event, such option, right or award
shall be vested and/or exercisable as to all shares covered thereby,
notwithstanding anything to the contrary in (i) Section 4.4 or (ii) the
provisions of such Option, Performance Award, Stock Appreciation Right, Dividend
Equivalent, or Stock Payment, or Restricted Stock or Restricted Stock Unit
award;

(iv)  In its sole and absolute discretion, and on such terms and conditions as
it deems appropriate, the Committee (or the Board, in the case of awards granted
to Independent Directors) may provide, either by the terms of such Option,
Performance Award, Stock Appreciation Right, Dividend Equivalent, or Stock
Payment, or Restricted Stock or Restricted Stock Unit award or by action taken
prior to the occurrence of such transaction or event, that upon such event, such
option, right or 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;

(v)  In its sole and absolute discretion, and on such terms and conditions as it
deems appropriate, the Committee (or the Board, in the case of awards granted to
Independent Directors) may make adjustments in

 

18

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

the number and type of shares of Common Stock (or other securities or property)
subject to outstanding Options, Restricted Stock Units, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents, or Stock Payments, and in the
number and kind of outstanding Restricted Stock and/or in the terms and
conditions of (including the grant or exercise price), and the criteria included
in, outstanding options, rights and awards and options, rights and awards which
may be granted in the future;

(vi)  In its sole and absolute discretion, and on such terms and conditions as
it deems appropriate, the Committee may provide either by the terms of a
Restricted Stock award or by action taken prior to the occurrence of such event
that, for a specified period of time prior to such event, the restrictions
imposed under a Restricted Stock Agreement upon some or all shares of Restricted
Stock may be terminated, and, some or all shares of such Restricted Stock may
cease to be subject to repurchase under Section 6.6 or forfeiture under
Section 6.5 after such event; and

(vii)  None of the foregoing discretionary actions taken under this
Section 10.3(b) shall be permitted with respect to awards granted to Independent
Directors to the extent that such discretion would be inconsistent with the
applicable exemptive conditions of Rule 16b-3. In the event of a Change in
Control or a Corporate Transaction, to the extent that the Board does not have
the ability under Rule 16b-3 to take or to refrain from taking the discretionary
actions set forth in Section 10.3(b)(iii) above, each award granted to an
Independent Director shall be vested and/or exercisable as to all shares covered
thereby upon such Change in Control or during the five days immediately
preceding the consummation of such Corporate Transaction and subject to such
consummation, notwithstanding anything to the contrary in Section 4.4 or the
vesting schedule of such awards. In the event of a Corporate Transaction, to the
extent that the Board does not have the ability under Rule 16b-3 to take or to
refrain from taking the discretionary actions set forth in Section 10.3(b)(ii)
above, no Option granted to an Independent Director may be exercised following
such Corporate Transaction unless such Option is, in connection with such
Corporate Transaction, either assumed by the successor or survivor corporation
(or parent or subsidiary thereof) or replaced with a comparable right with
respect to shares of the capital stock of the successor or survivor corporation
(or parent or subsidiary thereof).

(c)  Subject to Sections 10.3(d) and 10.7, the Committee (or the Board, in the
case of awards granted to Independent Directors) may, in its discretion, include
such further provisions and limitations in any Option, Performance Award, Stock
Appreciation Right, Dividend Equivalent, or Stock Payment, or Restricted Stock
or Restricted Stock Unit agreement or certificate, as it may deem equitable and
in the best interests of the Company.

(d)  With respect to Incentive Stock Options and awards intended to qualify as
performance-based compensation under Section 162(m), no adjustment or action
described in this Section 10.3 or in any other provision of the Plan shall be
authorized to the extent that such adjustment or action would cause the Plan to
violate Section 422(b)(1) of the Code or would cause such award to fail to so
qualify under Section 162(m), as the case may be, or any successor provisions
thereto. Furthermore, 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 or violate the exemptive conditions of Rule 16b-3 unless the
Committee (or the Board, in the case of awards granted to Independent Directors)
determines that the option or other award is not to comply with such exemptive
conditions. The number of shares of Common Stock subject to any option, right or
award shall always be rounded to the next whole number.

(e)  In connection with the occurrence of any Equity Restructuring, and
notwithstanding anything to the contrary in Sections 10.3(a) and 10.3(b):

(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. The adjustments provided under this Section 10(e) shall be
nondiscretionary and shall be final and binding on the affected holder and the
Company.

(ii)  The Committee (or the Board, in the case of awards granted to Independent
Directors) shall make such equitable adjustments, if any, as the Committee 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 2.1 on
the maximum number and

 

19

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

kind of shares which may be issued under the Plan or the Award Limit and
adjustments of the manner in which shares subject to Full Value Awards will be
counted).

10.4  Tax Withholding.    The Company shall be entitled to require payment in
cash or deduction from other compensation payable to each Optionee, Grantee or
Restricted Stockholder of any sums required by federal, state or local tax law
to be withheld with respect to the issuance, vesting or exercise of any Option,
Restricted Stock, Restricted Stock Unit, Performance Award, Stock Appreciation
Right, Dividend Equivalent or Stock Payment. The Committee (or the Board, in the
case of awards granted to Independent Directors) may in its discretion and in
satisfaction of the foregoing requirement allow such Optionee, Grantee or
Restricted Stockholder to elect to have the Company withhold shares of Common
Stock otherwise issuable under such Option or other award (or allow the return
of shares of Common Stock) having a Fair Market Value equal to the minimum
amounts required to be withheld.

10.5  Loans.    The Committee may, in its discretion, and to the extent
permitted by law extend one or more loans to key Employees in connection with
the exercise or receipt of an Option, Performance Award, Stock Appreciation
Right, Dividend Equivalent or Stock Payment granted under this Plan, or the
issuance, vesting or distribution of Restricted Stock or Restricted Stock Units
awarded under this Plan. The terms and conditions of any such loan shall be set
by the Committee (or the Board, in the case of awards granted to Independent
Directors). No loans will be made to key Employees if such loans would be
prohibited by Section 402 of the Sarbanes-Oxley Act of 2002.

10.6  Forfeiture Provisions.    Pursuant to its general authority to determine
the terms and conditions applicable to awards under the Plan, the Committee (or
the Board, in the case of awards granted to Independent Directors) shall have
the right (to the extent consistent with the applicable exemptive conditions of
Rule 16b-3) to provide, in the terms of Options or other awards made under the
Plan, or to require the recipient to agree by separate written instrument, that
(i) any proceeds, gains or other economic benefit actually or constructively
received by the recipient upon any receipt or exercise of the award, or upon the
receipt or resale of any Common Stock underlying such award, must be paid to the
Company, and (ii) the award shall terminate and any unexercised portion of such
award (whether or not vested) shall be forfeited, if (a) a Termination of
Employment, Termination of Consultancy or Termination of Directorship occurs
prior to a specified date, or within a specified time period following receipt
or exercise of the award, or (b) the recipient 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 Committee (or the Board, as applicable).

10.7  Limitations Applicable to Section 16 Persons and Performance-Based
Compensation.    Notwithstanding any other provision of this Plan, this Plan,
and any Option, Performance Award, Stock Appreciation Right, Dividend Equivalent
or Stock Payment granted, or Restricted Stock or Restricted Stock Unit 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 any amendment to Rule 16b-3
of the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan, Options, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents, Stock Payments,
Restricted Stock and Restricted Stock Units granted or awarded hereunder shall
be deemed amended to the extent necessary to conform to such applicable
exemptive rule. Furthermore, notwithstanding any other provision of this Plan,
any Option, Performance Award, Stock Appreciation Right, Dividend Equivalent,
Stock Payment, Restricted Stock or Restricted Stock Unit intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall be subject to any additional limitations set forth in Section 162(m) of
the Code (including any amendment to Section 162(m) of the Code) or any
regulations or rulings issued thereunder that are requirements for qualification
as performance-based compensation as described in Section 162(m)(4)(C) of the
Code, and this Plan shall be deemed amended to the extent necessary to conform
to such requirements.

10.8  Effect of Plan Upon Options and Compensation Plans.    The adoption of
this Plan shall not affect any other compensation or incentive plans in effect
for the Company or any Subsidiary. Nothing in this Plan shall be construed to
limit the right of the Company (i) to establish any other forms of incentives or
compensation for Employees, Directors or Consultants of the Company or any
Subsidiary or (ii) to grant or assume options or other

 

20

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

rights otherwise than under this Plan in connection with any proper corporate
purpose including but not by way of 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.

10.9  Compliance with Laws.    This Plan, the granting and vesting of Options,
Restricted Stock awards, Restricted Stock Unit awards, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents or Stock Payments under this Plan and
the issuance and delivery of shares of Common Stock and the payment of money
under this Plan or under Options, Performance Awards, Stock Appreciation Rights,
Dividend Equivalents or Stock Payments granted or Restricted Stock or Restricted
Stock Units awarded hereunder are subject to compliance with all applicable
federal and state laws, rules and regulations (including but not limited to
state and federal securities law and federal margin requirements) 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 this 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
legal requirements. To the extent permitted by applicable law, the Plan,
Options, Restricted Stock awards, Restricted Stock Unit awards, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents or Stock Payments
granted or awarded hereunder shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.

10.10  Titles.    Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Plan.

10.11  Governing Law.    This Plan and any agreements hereunder shall be
administered, interpreted and enforced under the internal laws of the State of
California without regard to conflicts of laws thereof.

10.12  Section 409A.    To the extent that the Committee (or the Board, in the
case of awards granted to Independent Directors) determines that any award
granted under the Plan is subject to Section 409A of the Code, 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 and
award agreements shall be interpreted in accordance with Section 409A of the
Code and Department of Treasury regulations and other interpretive guidance
issued thereunder. Notwithstanding any provision of the Plan to the contrary, in
the event that the Committee (or the Board, in the case of awards granted to
Independent Directors) determines that any award may be subject to Section 409A
of the Code and related Department of Treasury guidance (including Department of
Treasury guidance), the Committee (or the Board, in the case of awards granted
to Independent Directors) may adopt such amendments to the Plan and the
applicable award agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other
actions, that the Committee (or the Board, in the case of awards granted to
Independent Directors) 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.

 

21