Exhibit 10.25
ZiLOG, INC.
2002 OMNIBUS STOCK INCENTIVE PLAN
Section 1. Purpose of Plan.
          The name of this plan is the ZiLOG, Inc. 2002 Omnibus Stock Incentive
Plan (the “Plan”). The Plan was authorized in accordance with Section 303 of the
Delaware General Corporation Law and thereby made effective on the Effective
Date (as hereinafter defined). The purpose of the Plan is to enable the Company
and its Related Companies (as hereinafter defined) to attract, retain and reward
employees, directors, advisors and consultants and to strengthen the existing
mutuality of interests between such persons and the Company’s stockholders. To
accomplish the foregoing, the Plan provides that the Company may grant Incentive
Stock Options, Nonqualified Stock Options and Restricted Stock (each as
hereinafter defined). At any time from and following the Effective Date, the
Board (as hereinafter defined) may determine that the Plan is intended, to the
extent applicable, to satisfy the requirements of Section 162(m) of the Code (as
hereinafter defined) and shall be interpreted in a manner consistent with the
requirements thereof.
Section 2. Definitions.
          For purposes of the Plan, the following terms shall be defined as set
forth below:
          (a) “Award” means an award of Incentive Stock Options, Nonqualified
Stock Options or Restricted Stock under the Plan.
          (b) “Award Agreement” means, with respect to each Award, the written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award.
          (c) “Board” means the board of directors of the Company.
          (d) “Cause” means, unless otherwise provided in an Award Agreement,
(1) the failure by the Participant to substantially perform his or her duties
and obligations to the Company as the same may, from time to time, be assigned
to the Participant, including without limitation repeated refusal to follow the
reasonable directions of the employer or supervisor, knowing violation of law in
the course of performance of the duties of Participant’s employment or service
with the Company, repeated or excessive absences from work without a reasonable
excuse; (2) fraud, material dishonesty or moral turpitude affecting the Company;
or (3) the commission of acts constituting, the indictment or conviction of, or
plea of guilty or nolo contendere for, the commission of a felony or a crime
involving material dishonesty or moral turpitude. Determination of Cause shall
be made by the Committee in its sole discretion.
          (e) “Change in Capitalization” means any increase, reduction, or
change or exchange of Shares for a different number or kind of shares or other
securities or property by reason of a reclassification, recapitalization,
merger, consolidation, reorganization, issuance of

 

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warrants or rights, stock dividend, stock split or reverse stock split,
combination or exchange of shares, repurchase of shares, change in corporate
structure or otherwise; or any other corporate action, such as declaration of a
special dividend, that affects the capitalization of the Company.
          (f) “Change in Control” means: (i) a dissolution, liquidation or sale
of all or substantially all of the assets of the Company; (ii) the consummation
of a merger or consolidation of the Company or any direct or indirect subsidiary
of the Company with any other corporation or other entity, other than a merger
or consolidation that results in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof), in combination with
the ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any subsidiary of the Company, at least
50% of the combined voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding immediately after such merger
or consolidation; (iii) from and after the Listing Date, the acquisition by any
person, entity or group within the meaning of Section 13(d) or 14(d) of the
Exchange Act, or any comparable successor provisions (excluding any employee
benefit plan, or related trust, sponsored or maintained by the Company or any
affiliate of the Company) of the beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of
securities of the Company representing at least fifty percent (50%) of the
combined voting power entitled to vote in the election of directors.
          (g) “Code” means the Internal Revenue Code of 1986, as amended from
time to time, or any successor thereto.
          (h) “Committee” means the committee established by the Board to
administer the Plan. Prior to the consummation of an Initial Public Offering,
the Committee may be the entire Board. From and after the consummation of an
Initial Public Offering, unless otherwise determined by the Board, the
composition of the Committee shall at all times consist solely of persons who
are (i) “Nonemployee Directors” as defined in Rule 16b-3 issued under the
Exchange Act, and (ii) “outside directors” as defined in Section 162(m) of the
Code.
          (i) “Common Stock” means the common stock, par value $0.01 per share,
of the Company.
          (j) “Company” means ZiLOG, Inc., a Delaware corporation (or any
successor corporation).
          (k) “Comparable Companies” means Cypress Semiconductor Corporation,
Fairchild Semiconductor International, Inc., Microchip Technology Incorporated,
National Semiconductor Corporation and ON Semiconductor Corporation; provided
that if any of such companies shall cease to exist or cease to have a class of
equity securities listed on a national securities exchange or quoted on a
national market quotation system, then such company shall no longer be
considered a Comparable Company and the Committee shall have the power and
authority to select an entity to replace such Comparable Company, as set forth
in Section 3(a)(viii).

 

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          (l) “Disability” means: (1) any physical or mental condition that
would qualify a Participant for a disability benefit under any long-term
disability plan maintained by the Company; (2) when used in connection with the
exercise of an Incentive Stock Option following termination of employment,
disability within the meaning of Section 22(e)(3) of the Code; or (3) such other
condition as may be determined in the sole discretion of the Committee to
constitute Disability.
          (m) “EBITDA” represents: (1) with respect to the Company, earnings
(losses) before interest, income taxes, depreciation, amortization of intangible
assets, non-cash stock compensation expenses, equity in loss of Qualcore, Inc.,
cumulative effect of change in accounting principle and special charges; and
(2) with respect to the Comparable Companies, the definition of EBITDA published
in such company’s periodic reports under the Exchange Act.
          (n) “EBITDA-Linked Options” means the Options granted on the Effective
Date pursuant to Section 8 hereof.
          (o) “Eligible Recipient” means an officer, director, employee,
consultant or advisor of the Company or of any Parent or Related Company.
          (p) “Enterprise Value” means the Fair Market Value of a company’s
outstanding common stock plus the face amount of any debt and preferred stock,
less cash and cash equivalents as listed on the company’s balance sheet
contained in the company’s latest available publicly filed financial statements.
          (q) “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended from time to time.
          (r) “Exercise Price” means the per share price at which a holder of an
Option may purchase the Shares issuable upon exercise of the Option.
          (s) “Fair Market Value” as of a particular date shall mean the fair
market value of a Share as determined by the Committee in its sole discretion;
provided that (i) if the Shares are admitted to trading on a national securities
exchange, fair market value of a Share on any date shall be the closing sale
price reported for such Share on such exchange on the last date preceding such
date on which a sale was reported, (ii) if the Shares are admitted to quotation
on the National Association of Securities Dealers Automated Quotation (“Nasdaq”)
System or other comparable quotation system and has been designated as a
National Market System (“NMS”) security, fair market value of a Share on any
date shall be the closing sale price reported for such Share on such system on
the last date preceding such date on which a sale was reported, or (iii) if the
Shares are admitted to quotation on the Nasdaq System but have not been
designated as an NMS security, fair market value of a Share on any date shall be
the average of the highest bid and lowest asked prices of such Share on such
system on the last date preceding such date on which both bid and ask prices
were reported.
          (t) “Immediate Family” shall mean any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
daughter-in-law, son-in-law, brother-in-law, or sister-in-law, including
adoptive relationships and any person sharing the employee’s household (other
than a tenant or employee).

 

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          (u) “Incentive Stock Option” shall mean an Option that is an
“incentive stock option” within the meaning of Section 422 of the Code, or any
successor provision, and that is designated by the Committee as an Incentive
Stock Option.
          (v) “Informal Committee Designee” shall mean the member of the Board
appointed by the informal committee of the holders of the Company’s 9 1/2%
Senior Secured Notes due 2005 pursuant to the Company’s Certificate of
Incorporation, as amended.
          (w) “Initial Public Offering” means the first underwritten public
offering of Shares of the Company after the Effective Date.
          (x) “Listing Date” means the first date upon which any security of the
Company is listed (or approved for listing) upon notice of issuance on any
securities exchange, or designated (or approved for designation) upon notice of
issuance as a national market security on an interdealer quotation system if
such securities exchange or interdealer quotation system has been certified in
accordance with the provisions of Section 25100(o) of the California Corporate
Securities Law of 1968.
          (y) “Non-EBITDA-Linked Options” means all Options other than
EBITDA-Linked Options.
          (z) “Nonqualified Stock Option” means any Option that is not an
Incentive Stock Option, including any Option that provides (as of the time such
Option is granted) that it will not be treated as an Incentive Stock Option.
          (aa) “Option” means an Incentive Stock Option, a Nonqualified Stock
Option, whether an EBITDA-Linked Option or a Non-EBITDA-Linked Option, or any of
them, as the context requires.
          (bb) “Option Shares” means Shares issued upon the exercise of Options.
          (cc) “Parent” means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations in the chain (other than the Company) owns stock possessing 50% or
more of the combined voting power of all classes of stock in one of the other
corporations in the chain.
          (dd) “Participant” means any Eligible Recipient selected by the
Committee, pursuant to the Committee’s authority in Section 3 hereof, to receive
Awards. A Participant who receives the grant of an Option is sometimes referred
to herein as an “Optionee.”
          (ee) “Person” shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) the Company or any of its Subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its affiliates, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.

 

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          (ff) “Plan Shares” means (i) Option Shares and (ii) shares of
Restricted Stock granted pursuant to Section 9 of the Plan, whether or not the
applicable restrictions remain effective or have lapsed.
          (gg) “Related Company” means any corporation, partnership, joint
venture or other entity in which the Company owns, directly or indirectly, at
least a 20% beneficial ownership interest.
          (hh) “Restricted Stock” means Shares subject to certain restrictions
granted pursuant to Section 9 hereof, including Option Shares subject to certain
restrictions granted to a Participant upon such Participant’s early exercise of
an Option pursuant to Section 9(h).
          (ii) “Securities Act” means the Securities Act of 1933, as amended
from time to time.
          (jj) “Shares” means shares of Common Stock.
          (kk) “Subsidiary” means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations (other than the last corporation) in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.
          (ll) “Ten Percent Owner” means an Eligible Recipient who owns stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company or its Parent or Subsidiary corporations.
Section 3. Administration.
          (a) The Plan shall be administered by the Committee, which shall serve
at the pleasure of the Board. Pursuant to the terms of the Plan, the Committee
shall have the power and authority, without limitation:
          (i) to select those Eligible Recipients who shall be Participants;
          (ii) to determine whether and to what extent Options or awards of
Restricted Stock are to be granted hereunder to Participants;
          (iii) to determine the number of Shares to be covered by each Award
granted hereunder;
          (iv) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of each Award granted hereunder;
          (v) to determine the terms and conditions, not inconsistent with the
terms of the Plan, which shall govern all written instruments evidencing Options
or awards of Restricted Stock granted hereunder;
          (vi) to adopt, alter and repeal such administrative rules, guidelines
and practices governing the Plan as it shall from time to time deem advisable;

 

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          (vii) to interpret the terms and provisions of the Plan and any Award
issued under the Plan (and any Award Agreement relating thereto) in its sole
discretion and to otherwise supervise the administration of the Plan; and
          (viii) to select one or more corporations to replace one or more of
the Comparable Companies on the terms set forth in Section 2(k).
          (b) All decisions made by the Committee pursuant to the provisions of
the Plan shall be final, conclusive and binding on all persons, including the
Company and the Participants. No member of the Board or the Committee, nor any
officer or employee of the Company acting on behalf of the Board or the
Committee, shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Board or the Committee and each and any officer or employee of
the Company acting on their behalf shall, to the extent permitted by law, be
fully indemnified and protected by the Company in respect of any such action,
determination or interpretation.
Section 4. Shares Reserved for Issuance Under the Plan.
          (a) The total number of Shares reserved and available for issuance
under the Plan shall be 4,558,140 of which 2,116,279 shall be reserved for
issuance of Options and 2,441,861 shall be reserved for issuance of grants as
Restricted Stock. Such Shares may consist, in whole or in part, of authorized
and unissued Shares or treasury Shares.
          (b) To the extent that (i) an Option expires or is otherwise cancelled
or terminated without being exercised, or (ii) any Shares subject to any award
of Restricted Stock are forfeited, such Shares shall again be available for
issuance in connection with future Awards granted under the Plan. If any Shares
have been pledged as collateral for indebtedness incurred by a Participant in
connection with the exercise of an Option and such Shares are returned to the
Company in satisfaction of such indebtedness, such Shares shall again be
available for issuance in connection with future Awards granted under the Plan.
          (c) From and after the date that the Plan is intended to comply with
the requirements of Section 162(m) of the Code, the aggregate number of Shares
with respect to which Awards may be granted to any individual Optionee during
any fiscal year shall not exceed 4,000,000.
Section 5. Equitable Adjustments; Change in Control
          (a) In the event of any Change in Capitalization, an equitable
substitution or adjustment may be made in (i) the aggregate number and/or kind
of Shares reserved for issuance under the Plan (including the aggregate number
and/or kind of Shares reserved for issuance as Options and as Restricted Stock
and the maximum aggregate number of Shares with respect to Awards that may be
granted to any individual Optionee during any fiscal year), (ii) the kind,
number and/or Exercise Price of Shares or other property subject to outstanding
Options granted under the Plan, and (iii) the kind, number and/or purchase price
of Shares or other property subject to outstanding awards of Restricted Stock
granted under the Plan, in each case as may be determined by the Committee, in
its sole discretion. Such

 

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other equitable substitutions or adjustments shall be made as may be determined
by the Committee, in its sole discretion. Without limiting the generality of the
foregoing, in connection with a Change in Capitalization, the Committee may
provide, in its sole discretion, for the cancellation of any outstanding Awards
in exchange for payment in cash or other property of the Fair Market Value of
the Shares covered by such Awards, reduced, in the case of Options, by the
exercise price thereof.
          (b) Unless otherwise determined by the Committee, in the event of a
Change in Control:
          (i) with respect to the Non-EBITDA-Linked Options, unless such Options
are assumed or equivalent awards or rights are substituted therefor, the
unvested Non-EBITDA-Linked Options shall become fully vested and exercisable and
all restrictions on the vesting or exercisability of such Non-EBITDA-Linked
Options shall lapse as of the date of the Change in Control; and with respect to
Restricted Stock Awards acquired upon early exercise of Non-EBITDA-Linked
Options, unless such Awards are assumed and the Company’s repurchase rights are
assigned to the successor (or parent thereof), or equivalent awards or rights
are substituted therefor, all restrictions on such Awards shall lapse as of the
date of the Change in Control;
          (ii) with respect to the EBITDA-Linked Options:
          (1) if the aggregate sale price realized upon the Change in Control
divided by the median Enterprise Value to EBITDA ratio of the Comparable
Companies exceeds $17.2 million, one-third of the unvested EBITDA-Linked Options
shall become fully vested and exercisable and all restrictions on the vesting or
exercisability of such EBITDA-Linked Options shall lapse as of the date of such
Change in Control;
          (2) if the aggregate sale price realized upon the Change in Control
divided by the median Enterprise Value to EBITDA ratio of the Comparable
Companies exceeds $25.7 million, two-thirds of the unvested EBITDA-Linked
Options shall become fully vested and exercisable and all restrictions on the
vesting or exercisability of such EBITDA-Linked Options shall lapse as of the
date of such Change in Control;
          (3) if the aggregate sale price realized upon the Change in Control
divided by the median Enterprise Value to EBITDA ratio of the Comparable
Companies exceeds $30.0 million, all of the unvested EBITDA-Linked Options shall
become fully vested and exercisable and all restrictions on the vesting or
exercisability of such EBITDA-Linked Options shall lapse as of the date of such
Change in Control;

  (iii)   with respect to Restricted Stock, if such Change in Control occurs
prior to the third anniversary of the Effective Date, then all restrictions
under Section 9(d) hereof on the Restricted Stock granted under Section 9(a) of
this Plan shall lapse; and

 

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  (iv)   with respect to Options other than Options that are continued or
assumed, or have equivalent awards or rights substituted therefor, such Options
that are not exercised as of the occurrence of the Change in Control shall
expire and be of no force or effect immediately upon the occurrence of the
Change in Control.

Section 6. Eligibility.
          The Participants under the Plan shall be selected from time to time by
the Committee, in its sole discretion, from among Eligible Recipients. The
Committee shall have the authority to grant to any Eligible Recipient Incentive
Stock Options, Nonqualified Stock Options or Restricted Stock; provided that
directors of the Company or any Parent or Related Company who are not employees
of the Company or of any Parent or Related Company, and consultants or advisors
to the Company or to any Parent or Related Company may not be granted Incentive
Stock Options; provided further that Incentive Stock Options may not be granted
to an employee of a Related Company if such Related Company is not a Subsidiary.
Section 7. Non-EBITDA-Linked Options.
          (a) Use of Term. As used in this Section 7, “Options” shall mean
Non-EBITDA-Linked Options.
          (b) General. Options may be granted alone or in addition to other
Awards granted under the Plan. Any Option granted under the Plan shall be
evidenced by an Award Agreement in such form as the Committee may from time to
time approve. The provisions of each Option need not be the same with respect to
each Participant. Participants who are granted Options shall enter into an Award
Agreement with the Company, in such form as the Committee shall determine, which
Award Agreement shall set forth, among other things, the Exercise Price of the
Option, the term of the Option and provisions regarding exercisability and
vesting of the Option granted thereunder. The Options granted under the Plan may
be of two types: (i) Incentive Stock Options and (ii) Nonqualified Stock
Options. To the extent that any Option does not qualify as an Incentive Stock
Option, it shall constitute a separate Nonqualified Stock Option. More than one
Option may be granted to the same Participant and be outstanding concurrently
hereunder. Options granted under the Plan shall be subject to the terms and
conditions set forth in paragraphs (b)-(k) of this Section 7 and the Award
Agreement shall contain such additional terms and conditions, not inconsistent
with the terms of the Plan, as the Committee shall deem desirable.
          (c) Exercise Price. The per share Exercise Price of Shares purchasable
under an Option shall be determined by the Committee at the time of grant, but
shall not, (i) in the case of Incentive Stock Options, be less than 100% of the
Fair Market Value per Share on such date (110% of the Fair Market Value per
Share on such date if, on such date, the Eligible Recipient is a Ten Percent
Owner), and (ii) in the case of Nonqualified Stock Options (to the extent
required at the time of grant by California “blue sky” laws), be less than 85%
of the Fair Market Value per Share on such date. Notwithstanding the foregoing,
to the extent required at the time of grant, by California “blue sky” laws, the
Exercise Price of an Option granted to a Ten Percent Owner shall not be less
than 110% of the

 

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Fair Market Value per Share on the date of grant of such Option.
          (d) Option Term. The term of each Option shall be fixed by the
Committee, but no Option shall be exercisable more than ten years after the date
such Option is granted. If the Eligible Recipient is a Ten Percent Owner, an
Incentive Stock Option may not be exercisable after the expiration of five years
from the date such Incentive Stock Option is granted.
          (e) Vesting and Exercisability. Options shall vest and be exercisable
at such time or times and subject to such terms and conditions, including the
attainment of pre-established corporate performance goals, as shall be
determined by the Committee in the Award Agreement or after the time of grant;
provided that no action under this Section 7(e) following the time of grant
shall adversely affect any outstanding Option without the consent of the holder
thereof; provided further, that, to the extent required by California “blue sky”
laws, Options granted to Eligible Recipients other than officers, directors or
consultants of the Company shall be exercisable at the rate of at least 20% per
year over five years from the date of grant. The Committee may also provide that
any Option shall be exercisable only in installments, and the Committee may
waive such installment exercise provisions at any time, in whole or in part,
based on such factors as the Committee may determine in its sole discretion.
          The Committee may provide at the time of grant or anytime thereafter,
in its sole discretion, that any Option shall be exercisable with respect to
Shares that are not vested, subject to such other terms and conditions as the
Committee determines, including the requirement that the Optionee execute a
Restricted Stock Award Agreement.
          (f) Method of Exercise. Options may be exercised in whole or in part
by giving written notice of exercise to the Company specifying the number of
Shares to be purchased, accompanied by payment in full of the aggregate Exercise
Price of the Shares so purchased in cash or its equivalent, and any taxes due
thereon in accordance with Section 12 hereof, as determined by the Committee. As
determined by the Committee, in its sole discretion, payment in whole or in part
may also be made (i) by means of any cashless exercise procedure approved by the
Committee, (ii) in the form of unrestricted Shares or Restricted Stock already
owned by the Optionee which, (x) in the case of unrestricted Shares acquired
upon exercise of an Option, have been owned by the Optionee for more than six
months on the date of surrender, and (y) has a Fair Market Value on the date of
surrender equal to the aggregate Exercise Price of the Shares as to which such
Option shall be exercised, (iii) any other form of consideration approved by the
Committee and permitted by applicable law or (iv) any combination of the
foregoing.
          (g) Rights as Stockholder. An Optionee shall have no right to receive
Shares or rights to dividends or any other rights of a stockholder with respect
to the Shares subject to the Option until the Optionee has given written notice
of exercise, has paid in full for such Shares, has satisfied the requirements of
Section 12 hereof and, if requested, has given the representation described in
paragraph (b) of Section 15 hereof.
          (h) Nontransferability of Options. The Optionee shall not be permitted
to sell, transfer, pledge or assign any Option other than by will or the laws of
descent and distribution (including, with respect to a Nonqualified Stock Option
only, by instrument to an inter vivos or testamentary

 

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trust in which the Options are to be passed to beneficiaries upon the death of
the Participant) and all Options shall be exercisable during the Participant’s
lifetime only by the Participant, in each case, except as set forth in the
following two sentences. During an Optionee’s lifetime, the Committee may, in
its discretion, permit the transfer, assignment or other encumbrance of an
outstanding Option if such Option is a Nonqualified Stock Option or an Incentive
Stock Option that the Committee and the Participant intend to change to a
Nonqualified Stock Option. Subject to the approval of the Committee and to any
conditions that the Committee may prescribe, an Optionee may, upon providing
written notice to the Company, elect to transfer any or all Options described in
the preceding sentence to members of his or her Immediate Family or to a trust,
all of the beneficiaries of which are members of the Optionee’s Immediate
Family; provided that no such transfer by any Participant may be made in
exchange for consideration.
          (i) Termination of Employment or Service. Unless otherwise determined
by the Committee, if an Optionee’s employment with, or service as a director,
consultant or advisor to, the Company or to any Parent or Related Company
terminates for any reason other than Cause, (i) Options granted to such
Participant, to the extent that they are vested and exercisable at the time of
such termination, shall remain exercisable until the date set forth in the Award
Agreement, or such later date as is otherwise determined by the Committee, but
in no event shall such exercise period be less than 30 days after such
termination (six months in the case of termination by reason of death or
Disability), on which date they shall expire, and (ii) Options granted to such
Optionee, to the extent that they were not vested and exercisable at the time of
such termination, shall expire on the date of such termination. The 30-day
period described in the preceding sentence (i) shall be extended to six months
from the date of such termination in the event of the Optionee’s death or
Disability prior to or during such 30-day period. Notwithstanding the foregoing,
no Option shall be exercisable after the expiration of its term. Unless provided
in an Award Agreement or in the Committee’s discretion any time thereafter, in
the event of the termination of an Optionee’s employment for Cause, all
outstanding Options granted to such Participant shall expire on the date of such
termination.
          (j) Limitation on Incentive Stock Options. To the extent that the
aggregate Fair Market Value of Shares with respect to which Incentive Stock
Options are exercisable for the first time by an Optionee during any calendar
year under the Plan and any other stock option plan of the Company shall exceed
$100,000, such Options shall be treated as Nonqualified Stock Options. Such Fair
Market Value shall be determined as of the date on which each such Incentive
Stock Option is granted.
          (k) Stockholders’ Agreement. The Committee may require, as a condition
to exercise of an Option prior to an Initial Public Offering, that the Optionee
sign a stockholder agreement.
Section 8. EBITDA-Linked Options.
          (a) Use of Terms. As used in this Section 8, “Options” shall mean
EBITDA-Linked Options.
          (b) General. Options granted under this Section 8 may be granted alone
or in addition to other Awards granted under the Plan. Participants who are
granted Options shall enter into an Award Agreement with the Company, in such
form as the Committee shall determine, consistent with

 

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this Section 8. The Options granted under the Plan may be of two types:
(i) Incentive Stock Options and (ii) Nonqualified Stock Options. To the extent
that any Option does not qualify as an Incentive Stock Option, it shall
constitute a separate Nonqualified Stock Option. More than one Option may be
granted to the same Participant and be outstanding concurrently hereunder.
Options granted under the Plan shall be subject to the terms and conditions set
forth in paragraphs (b)-(k) of this Section 8 and the Award Agreement shall
contain such additional terms and conditions, not inconsistent with the terms of
the Plan, as the Committee shall deem desirable.
          (c) Exercise Price. The per share Exercise Price of Shares purchasable
under an Option shall be equal to $2.76.
          (d) Option Term. Each Option shall be exercisable for ten years after
the date such Option is granted, subject to paragraph (i) of this Section 8 and
paragraph (b)(iv) of Section 5 hereof.
          (e) Vesting and Exercisability. Each Option shall be immediately
exercisable as of the date such Option is granted, but shall vest based on the
EBITDA reported by the Company for the immediately preceding 12 months (the
“Twelve-Month EBITDA”) as follows: (i) one-third if the Company reports
Twelve-Month EBITDA in excess of $17.2 million; (ii) two-thirds if the Company
reports Twelve-Month EBITDA in excess of $25.7 million; and (iii) 100% if the
Company reports Twelve-Month EBITDA in excess of $30.0 million; provided
however, that all Options will vest no later than the date that is six years
after the Effective Date, even if the above EBITDA thresholds have not been
satisfied.
          (f) Method of Exercise. Options may be exercised in whole or in part
by giving written notice of exercise to the Company specifying the number of
Shares to be purchased, accompanied by payment in full of the aggregate Exercise
Price of the Shares so purchased in cash or its equivalent, and any taxes due
thereon in accordance with Section 12 hereof, as determined by the Committee. As
determined by the Committee, in its sole discretion, payment in whole or in part
may also be made (i) by means of any cashless exercise procedure approved by the
Committee, (ii) in the form of unrestricted Shares already owned by the Optionee
which, (x) in the case of unrestricted Shares acquired upon exercise of an
Option, have been owned by the Optionee for more than six months on the date of
surrender, and (y) has a Fair Market Value on the date of surrender equal to the
aggregate Exercise Price of the Shares as to which such Option shall be
exercised, (iii) any other form of consideration approved by the Committee and
permitted by applicable law or (iv) any combination of the foregoing.
          (g) Rights as Stockholder. An Optionee shall have no right to receive
Shares or rights to dividends or any other rights of a stockholder with respect
to the Shares subject to the Option until the Optionee has given written notice
of exercise, has paid in full for such Shares, has satisfied the requirements of
Section 12 hereof and, if requested, has given the representation described in
paragraph (b) of Section 15 hereof.
          (h) Nontransferability of Options. The Optionee shall not be permitted
to sell, transfer, pledge or assign any Option other than by will or the laws of
descent and distribution (including, with respect to a Nonqualified Stock Option
only, by instrument to an inter vivos or testamentary trust in which the Options
are to be passed to beneficiaries upon the death of the Participant) and all
Options shall be exercisable during the Participant’s

 

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lifetime only by the Participant, in each case, except as set forth in the
following two sentences. During an Optionee’s lifetime, the Committee may, in
its discretion, permit the transfer, assignment or other encumbrance of an
outstanding Option if such Option is a Nonqualified Stock Option or an Incentive
Stock Option that the Committee and the Participant intend to change to a
Nonqualified Stock Option. Subject to the approval of the Committee and to any
conditions that the Committee may prescribe, an Optionee may, upon providing
written notice to the Company, elect to transfer any or all Options described in
the preceding sentence to members of his or her Immediate Family or to a trust,
all of the beneficiaries of which are members of the Optionee’s Immediate
Family; provided that no such transfer by any Participant may be made in
exchange for consideration.
          (i) Termination of Employment or Service. Unless otherwise determined
by the Committee, if an Optionee’s employment with, or service as a director,
consultant or advisor to, the Company or to any Parent or Related Company
terminates for any reason other than Cause, (i) Options granted to such
Participant, to the extent that they are vested and exercisable at the time of
such termination, shall remain exercisable until the date set forth in the Award
Agreement, or such later date as is otherwise determined by the Committee, but
in no event shall such exercise period be less than 30 days after such
termination (six months in the case of termination by reason of death or
Disability), on which date they shall expire, and (ii) Options granted to such
Optionee, to the extent that they were not vested and exercisable at the time of
such termination, shall expire on the date of such termination. The 30-day
period described in the preceding sentence (i) shall be extended to six months
from the date of such termination in the event of the Optionee’s death or
Disability prior to or during such 30-day period. Notwithstanding the foregoing,
no Option shall be exercisable after the expiration of its term. Unless provided
in an Award Agreement or in the Committee’s discretion any time thereafter, in
the event of the termination of an Optionee’s employment for Cause, all
outstanding Options granted to such Participant shall expire on the date of such
termination.
          (j) Limitation on Incentive Stock Options. To the extent that the
aggregate Fair Market Value of Shares with respect to which Incentive Stock
Options are exercisable for the first time by an Optionee during any calendar
year under the Plan and any other stock option plan of the Company shall exceed
$100,000, such Options shall be treated as Nonqualified Stock Options. Such Fair
Market Value shall be determined as of the date on which each such Incentive
Stock Option is granted.
          (k) Stockholders’ Agreement. The Committee may require, as a condition
to exercise of an Option prior to a Public Offering, that the Optionee sign a
stockholder agreement.
Section 9. Restricted Stock.
          (a) General. Awards of Restricted Stock may be issued either alone or
in addition to other Awards granted under the Plan and shall be evidenced by an
Award Agreement. The Committee shall determine the Eligible Recipients to whom,
and the time or times at which, Awards of Restricted Stock shall be made and the
number of Shares to be awarded.
          (b) Purchase Price. The price per Share that a Participant must pay
for Shares purchasable under an award of Restricted Stock shall equal $0.01.

 

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          (c) Awards and Certificates. The prospective recipient of an Award of
Restricted Stock shall not have any rights with respect to any such Award,
unless and until such recipient has executed an Award Agreement evidencing the
Award and delivered a fully executed copy thereof to the Company, within such
period as the Committee may specify after the award date. Each Participant who
is granted an Award of Restricted Stock shall be issued a stock certificate in
respect of such Shares of Restricted Stock, which certificate shall be
registered in the name of the Participant and shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to any such
Award; provided that the Company may require that the stock certificates
evidencing Restricted Stock granted hereunder be held in the custody of the
Company until the restrictions thereon shall have lapsed, and that, as a
condition of any Award of Restricted Stock, the Participant shall have delivered
a stock power, endorsed in blank, relating to the Shares covered by such Award.
          (d) Nontransferability. The Awards of Restricted Stock granted
pursuant to this Section 9(a) shall vest and no longer be subject to the
restrictions on transferability set forth in this paragraph (d). During such
period as may be set by the Committee in the Award Agreement, or as otherwise
set forth in this paragraph (d) (the “Restricted Period”), the Participant shall
not be permitted to sell, transfer, pledge, hypothecate or assign Shares of
Restricted Stock awarded under the Plan except by will or the laws of descent
and distribution. The restrictions with respect to 25% of the Restricted Stock
shall lapse on the Effective Date and on each of the first, second and third
anniversaries of such Effective Date; provided that in no event shall the
Restricted Period end with respect to a Restricted Stock Award prior to the
satisfaction by the Participant of any liability arising under Section 12
hereof. Any attempt to dispose of any Shares of Restricted Stock in
contravention of any such restrictions shall be null and void and without
effect.
          (e) Rights as a Stockholder. Except as provided in Section 9(c) or as
otherwise provided in an Award Agreement, the Participant shall possess all
incidents of ownership with respect to Shares of Restricted Stock during the
Restricted Period, including the right to receive or reinvest dividends with
respect to such Shares and to vote such Shares. Certificates for unrestricted
Shares shall be delivered to the Participant promptly after, and only after, the
Restricted Period shall expire without forfeiture in respect of such Awards of
Restricted Stock except as the Committee, in its sole discretion, shall
otherwise determine.
          (f) Loans. The Company or any Parent or Related Company may make loans
available to Participants with respect to a Restricted Stock Award granted as of
the Effective Date, other than a Restricted Stock Award granted upon early
exercise of an Option, for the payment of any Federal or state income tax
attributable to the Restricted Stock subject to such Award. Such loans may be
made available at such time or times as the Company or any Parent or Related
Company deems appropriate, including at such time as any portion of the
Restricted Stock Award vests and/or when a Participant makes an election
pursuant to Section 83(b) of the Code with respect to such Participant’s
Restricted Stock Award (“Section 83(b) Election”). Such loans shall (i) be
evidenced by promissory notes entered into by the Participants in favor of the
Company or any Parent or Related Company, (ii) bear interest at a fair interest
rate as determined by the Committee (but not less than the applicable Federal
rate), which interest shall be paid no

 

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less frequently than annually, (iii) have a term of no more than five years,
(iv) to the extent applicable and required by the Committee, be conditioned on
the receipt, by the Committee, of a copy of the Participant’s timely filed
Section 83(b) Election with respect to such Restricted Stock Award (whether
vested or unvested), (v) be subject to such other terms and conditions, not
inconsistent with the Plan, as the Committee shall determine, and (vi) be
subject to Committee approval. Unless the Committee determines otherwise, when a
loan is made, all Shares subject to that Restricted Stock Award shall be pledged
by the Participant to the Company as security for payment of the unpaid balance
of the loan, and such pledge shall be evidenced by a pledge agreement, the terms
of which shall be determined by the Committee, in its sole discretion; provided
that each loan shall comply with all applicable laws, regulations and rules of
the Board of Governors of the Federal Reserve System and any other governmental
agency having jurisdiction.
          (g) Termination of Employment.
          (i) Upon termination of a Participant’s employment or service as a
director, consultant or advisor to the Company or to any Parent or Related
Company during the Restricted Period, for any reason, such Participant’s
Restricted Stock may be repurchased by the Company upon the terms set forth in
Section 13(d).
          (ii)Upon termination of a Participant’s employment or service as a
director, consultant or advisor to the Company or to any Parent or Related
Company during the Restricted Period, by the Company for any reason other than
for Cause, any outstanding loans made to such Participant pursuant to
Section 9(f)that relate to unvested Shares shall be forgiven.
(h) Early Exercise Options. The Committee shall award Restricted Stock to a
Participant upon the Participant’s early exercise of an Option. Unless otherwise
determined by the Committee, the lapse of restrictions with respect to such
Restricted Stock shall occur on the same schedule as the Option for which the
Restricted Stock was exercised.
Section 10. Amendment and Termination.
          The Board, with the approval of the Informal Committee Designee, may
amend, alter or discontinue the Plan, but no amendment, alteration, or
discontinuation shall be made that would impair the rights of a Participant
under any Award previously granted without such Participant’s consent; provided,
however, that the total number of Shares reserved and available for issuance as
set forth in Section 4(a) of the Plan shall not be increased without the prior
approval by two-thirds vote of the Board, and, to the extent described below,
approval of the Company’s stockholders. Unless the Board determines otherwise,
the Board shall obtain approval of the Company’s stockholders for any amendment
that would require such approval in order to satisfy the requirements of
Sections 162(m) and 422 of the Code, stock exchange rules or other applicable
law. The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, with the approval of the Informal Committee
Designee, but, subject to Section 5 of the Plan, no such amendment shall impair
the rights of any Participant without his or her consent.

 

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Section 11. Unfunded Status of Plan.
          The Plan is intended to constitute an “unfunded” plan for incentive
compensation. With respect to any payments not yet made to a Participant by the
Company, nothing contained herein shall give any such Participant any rights
that are greater than those of a general creditor of the Company.
Section 12. Withholding Taxes.
          Whenever the Company has a withholding obligation with respect to an
Award, the Company shall have the right to deduct therefrom an amount sufficient
to satisfy any federal, state, local and other withholding tax requirements
related thereto to the extent sufficient cash is paid pursuant to the Award, or
to require the Participant to remit to the Company in cash an amount sufficient
to satisfy any federal, state, local or other withholding tax requirements
related thereto. With the approval of the Committee, a Participant may satisfy
the foregoing requirement by electing to have the Company withhold from delivery
Shares or by delivering already owned unrestricted Shares, in each case, having
a value equal to the minimum amount of tax required to be withheld. Such Shares
shall be valued at their Fair Market Value on the date as of which the amount of
tax to be withheld is determined. Fractional share amounts shall be settled in
cash. Such an election may be made with respect to all or any portion of the
Shares to be delivered pursuant to an Award.
Section 13. Additional Provisions.
          (a) Market Stand-Off.
          (i) In connection with any underwritten public offering by the Company
or its stockholders of its or their equity securities pursuant to an effective
registration statement filed under the Securities Act, including an Initial
Public Offering, Participant shall not sell, make any short sale of, loan,
hypothecate, pledge, grant any option for the purchase of, or otherwise dispose
or transfer for value or otherwise agree to engage in any of the foregoing
transactions with respect to any Plan Shares without the prior written consent
of the Company or its underwriters, for such period of time from and after the
effective date of such registration statement as may be requested by the Company
or such underwriters.
          (ii) In the event of any stock dividend, stock split,
recapitalization, or other change affecting the Company’s outstanding Common
Stock effected without receipt of consideration, then any new, substituted, or
additional securities distributed with respect to the Plan Shares shall be
immediately subject to the provisions of this Section 13(a), to the same extent
the Plan Shares are at such time covered by such provisions.
          (iii) In order to enforce the provisions of Section 13(a), the Company
may impose stop-transfer instructions with respect to the Plan Shares until the
end of the applicable

 

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stand-off period.
          (b) Drag-Along Rights.
          (i) Until the earliest of a Change in Control, an Initial Public
Offering or the third anniversary of the Effective Date, if the holders
representing at least a majority of the outstanding Common Stock execute a
binding agreement to transfer all of their shares of Common Stock to a Person
making an irrevocable and unconditional bona fide offer (a“Bona Fide Offer”),
then the Participant shall transfer all of the Participant’s Plan Shares to such
Person, subject to the terms and conditions set forth below, at the sole
election of a majority of such holders, which election shall be exercisable by
delivery to the Participant of a written notice that shall include a copy of
such binding agreement, at least 20 days prior to the closing date specified in
such notice; provided that (A) the Participant shall receive from such Person
the highest per Share consideration to be paid to any holder of Common Stock in
such transaction; and (B) the closing of any transaction effected pursuant to
this Section 13(b) shall be conditioned on the simultaneous purchase of not less
than a majority of outstanding shares of Common Stock.
          (c) Option Share Repurchase Rights.
          (i) Until the earliest of a Change in Control, an Initial Public ing
or the third anniversary of the Effective Date, the Company shall have a
repurchase right with respect to Option Shares that may be exercised upon the
voluntary or involuntary termination of the Participant’s employment or service
with the Company, the Parent or a Related Company for any reason.
          (ii) The repurchase right must be exercised, if at all, by the Company
within 90 days following the termination of a Participant’s employment or
service with the Company, except in the case of termination due to the death or
Disability which exercise period will then be extended to 210 days after the
date of such termination.
          (iii) The purchase price of any Option Shares to be repurchased by the
Company pursuant to subsections (i) and (ii) above shall be the Fair Market
Value of the Option Shares as of the date on which the Participant’s employment
terminated; provided that that such price shall be no less than the price paid
by the Participant; provided further, that, at the Company’s discretion, the
purchase price may be paid by cancellation of an equal amount of indebtedness of
the Participant to the Company.
          (iv) The closing of a purchase and sale of Option Shares pursuant to
this Section 13(c) shall take place at the principal office of the Company at
such time and date as shall be mutually agreed between the Company and the
Participant; provided that if the parties cannot reach such agreement,
settlement shall be ninety (90) days (which may be extended in the event such
termination was due to death or Disability) after the date of

 

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termination of the Participant’s employment with the Company (or if such day is
a holiday, the first business day thereafter). At the closing, the Participant
shall deliver to the Company (A) the certificate or certificates representing
the Option Shares held by such Participant, duly endorsed for transfer, or
(B) if such certificate or certificates are already in the Company’s possession,
such duly endorsed stock powers as the Company may request to permit it to
record the repurchase by the Company on the records of the Company.
          (d) Restricted Stock Repurchase Rights.
          (i) Until the earliest of a Change in Control, an Initial Public
Offering or the third anniversary of the Effective Date, the Company shall have
a repurchase right with respect to Restricted Stock that may be exercised during
the Restricted Period upon the voluntary or involuntary termination of the
Participant’s employment or service with the Company, the Parent or a Related
Company for any reason (subject to the lapse of such repurchase rights as
described in clause (ii) below); provided that with respect to unvested Shares
of Restricted Stock acquired upon early exercise of an Option, the Company’s
repurchase rights shall expire no earlier than the date such Shares vest
pursuant to the terms of the applicable Restricted Stock Agreement and Stock
Option Agreement; and provided further that in the event that the restrictions
on Shares of Restricted Stock acquired upon early exercise of an EBITDA-Linked
Option do not lapse prior to the expiration, termination or forfeiture of such
Award, then the Company may repurchase such Shares as of such expiration,
termination or forfeiture date and to the extent not so repurchased, the
restrictions on such Shares shall lapse as of that date.
          (ii) The repurchase price of any Restricted Stock to be repurchased by
the Company pursuant to subsection (i) above shall be (a) with respect to
unvested Shares of Restricted Stock as of the date of the repurchase, $0.01 per
share, and (b) with respect to vested Shares of Restricted Stock as of the date
of the repurchase, the Fair Market Value of the Shares, as determined by the
Committee; provided that the repurchase price with respect to unvested Shares of
Restricted Stock acquired upon early exercise of an Option shall be equal to the
per Share exercise price of the Option Shares for each repurchased unvested
Share subject to the Restricted Stock Award; provided further that, (I) with
respect to Shares of Restricted Stock other than Shares acquired upon early
exercise of an Option, the purchase price shall not be less than the amount of
indebtedness of the Participant to the Company with respect to the tax
attributable to such Shares, and (II) at the Company’s sole discretion, the
purchase price may be paid by cancellation of an equal amount of indebtedness of
the Participant to the Company, or if applicable and greater, the amount
determined under clause (I) above, which cancellation shall first be applied
against indebtedness referred to in clause (I) above and thereafter against
other indebtedness of the Participant to the Company.
          (iii)The repurchase right must be exercised, if at all, by the Company
within 90 days following the termination of a Participant’s employment or
service with the Company, except in the case of termination due to the death or
Disability which exercise

 

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period will then be extended to 210 days after the date of such termination.
               (iv) The closing of a purchase and sale of Restricted Stock
pursuant to this Section 13(d) shall take place at the principal office of the
Company at such time and date as shall be mutually agreed between the Company
and the Participant; provided that if the parties cannot reach such agreement,
settlement shall be ninety (90) days (which may be extended in the even such
termination was due to death or Disability) after the date of termination of the
Participant’s employment with the Company (or if such day is a holiday, the
first business day thereafter). At the closing, the Participant shall deliver to
the Company (A) the certificate or certificates representing the Restricted
Stock held by such Participant, duly endorsed for transfer, or (B) if such
certificate or certificates are already in the Company’s possession, such duly
endorsed stock powers as the Company may request to permit it to record the
repurchase by the Company on the records of the Company.
          (e) First Refusal Rights.
          (i) Until the earliest of a Change in Control, an Initial Public
Offering or the third anniversary of the Effective Date, except as otherwise
provided herein, if the Participant or the Participant’s successor in interest
desires to sell all or any part of the Plan Shares, and an offeror (the
“Offeror”) has made an offer therefor, which offer the Participant desires to
accept, the Participant shall: (i) obtain in writing a Bona Fide Offer for the
purchase thereof from the Offeror; and (ii) give written notice (the “Option
Notice”) to an officer of the Company setting forth the Participant’s desire to
sell such Plan Shares, which Option Notice shall be accompanied by a photocopy
of the original executed Bona Fide Offer and shall set forth at least the name
and address of the Offeror and the price and terms of the Bona Fide Offer. Upon
receipt of the Option Notice, the Company shall have an option to purchase any
or all of the Shares specified in the Option Notice, such option to be
exercisable by giving, within thirty (30) days after receipt of the Option
Notice, a written counter-notice to the Participant. If the Company elects to
purchase, the Participant shall be obligated to sell to the Company such shares
at the price and terms indicated in the Bona Fide Offer within sixty (60) days
from the date of receipt by the Company of the Option Notice. The Company’s
purchase rights under this Section 13(e) are assignable by the Company.
          (ii) Subject to Section 13(a) above, the Participant may sell,
pursuant to the terms of the Bona Fide Offer, any or all of such Plan Shares not
purchased by the Company or which the Company does not elect to purchase in the
manner set forth hereinabove after the expiration of the 30-day period during
which the Company may give the aforesaid counter-notice. All Plan Shares shall
remain subject to the terms of the Plan, whether or not they are not sold
pursuant to a Bona Fide Offer.
Section 14. Rule 12g Consideration.
          Notwithstanding anything in the Plan to the contrary, during such time
as the Company is not subject to the periodic reporting requirements of

 

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the Exchange Act by virtue of having a class of equity securities held of record
by 500 or more persons or a securities registered on a national security
exchange, the Committee shall have the option to prohibit the exercise of any
Options to the extent that such exercise would be reasonably likely to subject
the Company to such periodic reporting requirements.
Section 15. General Provisions.
          (a) Shares shall not be issued pursuant to the exercise of any Award
granted hereunder unless the exercise of such Award and the issuance and
delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act, the
Exchange Act and the requirements of any stock exchange upon which the Common
Stock may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
          (b) The Committee may require each person acquiring Shares to
represent to and agree with the Company in writing that such person is acquiring
the Shares without a view to distribution thereof. The certificates for such
Shares may include any legend that the Committee deems appropriate to reflect
any restrictions on transfer.
          (c) All certificates for Shares delivered under the Plan shall be
subject to such stock-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Common
Stock may then be listed, and any applicable federal or state securities law.
The Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions.
          (d) Nothing contained in the Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to stockholder
approval, if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases. Neither the adoption
of the Plan nor the granting of any Award to an Eligible Recipient shall confer
upon any Eligible Recipient any right to continued employment or service with
the Company or any Parent or Related Company, as the case may be, nor shall it
interfere in any way with the right of the Company or any Parent or Related
Company to terminate the employment or service of any of its Eligible Recipients
at any time. The granting of one Award to an Eligible Recipient shall not
entitle the Eligible Recipient to any additional grants of Awards thereafter.
          (e) To the extent applicable, pursuant to the provisions of
Section 260.140.46 of Title 10 of the California Code of Regulations, the
Company shall provide to each Participant and to each individual who acquires
Shares pursuant to the Plan, not less frequently than annually during the period
such Participant or purchaser has one or more awards granted under the Plan
outstanding, and, in the case of an individual who acquires Shares pursuant to
the Plan, during the period such individual owns such Shares, copies of the
Company’s annual financial statements. The Company shall not be required to
provide such statements to key employees of the Company whose duties in
connection with the Company assure their access to equivalent information.
          (f) To the extent applicable, the provisions of Sections

 

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260.160.41, 260.140.42 and 260.140.45 of Title 10 of the California Code of
Regulations are incorporated herein by reference.
          (g) The definitions set forth in this Plan are solely for the purposes
of the operation of this Plan, and such definitions including, without
limitation, the definition of “Cause” shall not be used for any other purposes
including, without limitation, whether or not an Eligible Recipient is
terminated with or without cause for purposes unrelated to this Plan.
Section 16. Approval; Effective Date of Plan.
          This Plan was authorized in accordance with Section 303 of the
Delaware General Corporation Law and thereby made effective on May ___, 2002
(the “Effective Date”).
Section 17. Term of Plan.
          No Award shall be granted pursuant to the Plan on or after the tenth
anniversary of the Effective Date, but Awards theretofore granted may extend
beyond that date.
Section 18. Governing Law.
          The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of Delaware, without giving effect to
the conflict of laws principles thereof.