Exhibit 10.1
 
MCAFEE, INC.

 
2010 EQUITY INCENTIVE PLAN
 
1. Purposes of the Plan.  The purposes of this Plan are to attract and retain
the best available personnel for positions of substantial responsibility, to
provide incentives to individuals who perform services to the Company, and to
promote the success of the Company’s business.
 
The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock
Options, Stock Appreciation Rights, Restricted Stock, Stock Units, Performance
Units and Performance Shares.
 
2. Definitions.  As used herein, the following definitions will apply:
 
(a) “Administrator” means the Board or any of its Committees as will be
administering the Plan, in accordance with Section 4 of the Plan.
 
(b) “Affiliate” means any corporation or any other entity (including, but not
limited to, partnerships and joint ventures) controlling, controlled by, or
under common control with the Company.
 
(c) “Applicable Laws” means the requirements relating to the administration of
equity-based awards under U.S. state corporate laws, U.S. federal and state
securities laws, the Code, any stock exchange or quotation system on which the
Common Stock is listed or quoted and the applicable laws of any foreign country
or jurisdiction where Awards are, or will be, granted under the Plan.
 
(d) “Award” means, individually or collectively, a grant under the Plan of
Options, Stock Appreciation Rights, Restricted Stock, Stock Units, Performance
Units or Performance Shares.
 
(e) “Award Agreement” means the written or electronic agreement setting forth
the terms and provisions applicable to each Award granted under the Plan. The
Award Agreement is subject to the terms and conditions of the Plan.
 
(f) “Award Transfer Program” means any program instituted by the Administrator
that would permit Participants the opportunity to transfer for value any
outstanding Awards to a financial institution or other person or entity approved
by the Administrator.
 
(g) “Board” means the Board of Directors of the Company.
 
(h) “Change in Control” means the occurrence of any of the following events:
 
(i) Change in Ownership of the Company.  A change in the ownership of the
Company which occurs on the date that any one person, or more than one person
acting as a group (“Person”), acquires ownership of the stock of the Company
that, together with the stock held by such Person, constitutes more than fifty
percent (50%) of the total voting power of the stock of the Company; provided,
however, that for purposes of this subsection (i), the acquisition of additional
stock by any one Person, who is considered to own more than fifty percent (50%)
of the total voting power of the stock of the Company will not be considered a
Change in Control; or
 
(ii) Change in Effective Control of the Company.  If the Company has a class of
securities registered pursuant to Section 12 of the Exchange Act, a change in
the effective control of the Company which occurs on the date that a majority of
members of the Board is replaced during any twelve (12) month period by
Directors whose appointment or election is not endorsed by a majority of the
members of the Board prior to the date of the appointment or election. For
purposes of this subsection (ii), if any Person is considered to be in effective
control of the Company, the acquisition of additional control of the Company by
the same Person will not be considered a Change in Control; or
 
(iii) Change in Ownership of a Substantial Portion of the Company’s Assets.  A
change in the ownership of a substantial portion of the Company’s assets which
occurs on the date that any Person acquires (or has acquired during the twelve
(12) month period ending on the date of the most recent

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acquisition by such person or persons) assets from the Company that have a total
gross fair market value equal to or more than fifty percent (50%) of the total
gross fair market value of all of the assets of the Company immediately prior to
such acquisition or acquisitions; provided, however, that for purposes of this
subsection (iii), the following will not constitute a change in the ownership of
a substantial portion of the Company’s assets: (A) a transfer to an entity that
is controlled by the Company’s stockholders immediately after the transfer, or
(B) a transfer of assets by the Company to: (1) a stockholder of the Company
(immediately before the asset transfer) in exchange for or with respect to the
Company’s stock, (2) an entity, fifty percent (50%) or more of the total value
or voting power of which is owned, directly or indirectly, by the Company, (3) a
Person, that owns, directly or indirectly, fifty percent (50%) or more of the
total value or voting power of all the outstanding stock of the Company, or
(4) an entity, at least fifty percent (50%) of the total value or voting power
of which is owned, directly or indirectly, by a Person described in this
subsection (iii)(B)(3). For purposes of this subsection (iii), gross fair market
value means the value of the assets of the Company, or the value of the assets
being disposed of, determined without regard to any liabilities associated with
such assets.
 
For purposes of this Section 2(h), persons will be considered to be acting as a
group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction
with the Company.
 
Notwithstanding the foregoing, a transaction shall not be deemed a Change in
Control unless the transaction qualifies as a change in control event within the
meaning of Section 409A of the Code, as it has been and may be amended from time
to time, and any proposed or final Treasury Regulations and Internal Revenue
Service guidance that has been promulgated or may be promulgated thereunder from
time to time.
 
Further and for the avoidance of doubt, a transaction shall not constitute a
Change in Control if: (i) its sole purpose is to change the state of the
Company’s incorporation, or (ii) its sole purpose is to create a holding company
that shall be owned in substantially the same proportions by the persons who
held the Company’s securities immediately before such transaction.
 
(i) “Code” means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or Treasury Regulation thereunder will include such
section or regulation, any valid regulation or other official applicable
guidance promulgated under such section, and any comparable provision of any
future legislation or regulation amending, supplementing or superseding such
section or regulation.
 
(j) “Committee” means a committee of Directors or of other individuals
satisfying Applicable Laws appointed by the Board in accordance with Section 4
hereof.
 
(k) “Common Stock” means the common stock of the Company.
 
(l) “Company” means McAfee, Inc., a Delaware corporation, or any successor
thereto.
 
(m) “Consultant” means any person, including an advisor, engaged by the Company
or its Affiliates to render services to such entity other than as an Employee.
 
(n) “Determination Date” means the latest possible date that will not jeopardize
the qualification of an Award granted under the Plan as “performance-based
compensation” under Section 162(m) of the Code.
 
(o) “Director” means a member of the Board.
 
(p) “Disability” means total and permanent disability as defined in
Section 22(e)(3) of the Code, provided that in the case of Awards other than
Incentive Stock Options, the Administrator in its discretion may determine
whether a permanent and total disability exists in accordance with uniform and
non-discriminatory standards adopted by the Administrator from time to time.
 
(q) “Employee” means any person, including Officers and Directors, employed by
the Company or its Affiliates. Neither service as a Director nor payment of a
Director’s fee by the Company will be sufficient to constitute “employment” by
the Company.
 
(r) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

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(s) “Fair Market Value” means, as of any date, the value of Common Stock
determined as follows:
 
(i) If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq Global Market,
the Nasdaq Global Select Market or the Nasdaq Capital Market, its Fair Market
Value shall be the closing sales price for such stock (or, if no closing sales
price was reported on that date, as applicable, on the last trading date such
closing sales price is reported) as quoted on such exchange or system on the day
of determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;
 
(ii) If the Common Stock is regularly quoted by a recognized securities dealer
but selling prices are not reported, its Fair Market Value shall be the mean
between the high bid and low asked prices for the Common Stock on the day of
determination (or, if no bids and asks were reported on that date, as
applicable, on the last trading date such bids and asks are reported); or
 
(iii) In the absence of an established market for the Common Stock, the Fair
Market Value will be determined in good faith by the Administrator.
 
(t) “Fiscal Year” means the fiscal year of the Company.
 
(u) “Incentive Stock Option” means an Option that by its terms qualifies and is
otherwise intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code and the regulations promulgated thereunder.
 
(v) “Nonstatutory Stock Option” means an Option that by its terms does not
qualify or is not intended to qualify as an Incentive Stock Option.
 
(w) “Officer” means a person who is an officer of the Company within the meaning
of Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.
 
(x) “Option” means a stock option granted pursuant to the Plan.
 
(y) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.
 
(z) “Participant” means the holder of an outstanding Award.
 
(aa) “Performance Goals” will have the meaning set forth in Section 11 of the
Plan.
 
(bb) “Performance Period” means any Fiscal Year of the Company or such longer or
shorter period as determined by the Administrator in its sole discretion.
 
(cc) “Performance Share” means an Award denominated in Shares which may be
earned in whole or in part upon attainment of performance goals or other vesting
criteria as the Administrator may determine pursuant to Section 10.
 
(dd) “Performance Unit” means an Award which may be earned in whole or in part
upon attainment of performance goals or other vesting criteria as the
Administrator may determine and which may be settled for cash, Shares or other
securities or a combination of the foregoing pursuant to Section 10.
 
(ee) “Period of Restriction” means the period during which the transfer of
Shares of Restricted Stock are subject to restrictions and therefore, the Shares
are subject to a substantial risk of forfeiture. Such restrictions may be based
on the passage of time, the achievement of target levels of performance, or the
occurrence of other events as determined by the Administrator.
 
(ff) “Plan” means this 2010 Equity Incentive Plan.
 
(gg) “Restricted Stock” means Shares issued pursuant to a Restricted Stock Award
under Section 8 of the Plan, or issued pursuant to the early exercise of an
Option.
 
(hh) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the
Plan.

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(ii) “Section 16(b)” means Section 16(b) of the Exchange Act.
 
(jj) “Service Provider” means an Employee, Director or Consultant.
 
(kk) “Share” means a share of the Common Stock, as adjusted in accordance with
Section 15 of the Plan.
 
(ll) “Stock Appreciation Right” means an Award, granted alone or in connection
with an Option, that pursuant to Section 7 is designated as a Stock Appreciation
Right.
 
(mm) “Stock Unit” means a bookkeeping entry representing an amount equal to the
Fair Market Value of one Share, granted pursuant to Section 9. Each Stock Unit
represents an unfunded and unsecured obligation of the Company.
 
(nn) “Subsidiary” means a “subsidiary corporation”, whether now or hereafter
existing, as defined in Section 424(f) of the Code.
 
3. Stock Subject to the Plan.
 
(a) Subject to the provisions of Section 15 of the Plan, the maximum aggregate
number of Shares that may be issued under the Plan is twelve million six hundred
thousand (12,600,000) Shares plus: (i) the additional Shares described in
Section 3(c), (ii) any Shares available for issuance under the Company 1997
Stock Incentive Plan (the “1997 Plan”) and (iii) any Shares subject to stock
options or similar awards granted under the MX Logic, Inc. 2002 Equity Incentive
Plan, the Secure Computing Corporation 2002 Stock Incentive Plan, the Secure
Computing Corporation (formerly CipherTrust, Inc.) 2000 Stock Option Plan, the
Cyberguard Corporation Third Amended and Restated Employee Stock Option Plan,
the Safeboot Option Plan 2006 and the Foundstone, Inc. 2000 Stock Plan
(collectively, the “Acquisition Plans”) and/or the 1997 Plan that expire or
otherwise terminate without having been exercised in full and Shares issued
pursuant to awards granted under the Acquisition Plans and/or the 1997 Plan that
are forfeited to or repurchased by the Company, with the maximum number of
Shares to be added to the Plan pursuant to this clause (iii) equal to 14,474,986
Shares). The Shares may be authorized, but unissued, or reacquired Common Stock.
 
(b) Full Value Awards.  Any Shares subject to Awards of Restricted Stock, Stock
Units, Performance Units, and Performance Shares will be counted against the
numerical limits of this Section 3 as two and forty-three hundredths (2.43)
Shares for every one Share subject thereto. Further, if Shares acquired pursuant
to any such Award are forfeited or repurchased by the Company and would
otherwise return to the Plan pursuant to Section 3(c), two and forty-three
hundredths (2.43) times the number of Shares so forfeited or repurchased will
return to the Plan and will again become available for issuance.
 
(c) Lapsed Awards.  If an Award expires or becomes unexercisable without having
been exercised in full or, with respect to Restricted Stock, Stock Units,
Performance Units or Performance Shares, is forfeited to or repurchased by the
Company due to failure to vest, the unpurchased Shares (or for Awards other than
Options or Stock Appreciation Rights the forfeited, repurchased, or unissued
Shares) which were subject thereto will become available for future grant or
sale under the Plan (unless the Plan has terminated). Shares purchased by the
Company in the open market with the proceeds from the sale of Shares pursuant to
the exercise of Options will not be available for issuance under the Plan. Upon
the exercise of a Stock Appreciation Right settled in Shares, the gross number
of Shares covered by the portion of the Award so exercised will cease to be
available under the Plan. Shares used to pay the exercise or purchase price of
an Award and/or to satisfy the tax withholding obligations related to an Award
will not become available for future grant or sale under the Plan. To the extent
an Award under the Plan is paid out in cash rather than Shares, such cash
payment will not result in reducing the number of Shares available for issuance
under the Plan. Shares that have actually been issued under the Plan under any
Award will not be returned to the Plan and will not become available for future
distribution under the Plan; provided, however, that if Shares issues pursuant
to Awards of Restricted Stock, Stock Units, Performance Shares or Performance
Units are repurchased by the Company or are forfeited to the Company due to
failure to vest, such Shares will become available for future grant under the
Plan. Notwithstanding the foregoing and, subject to adjustment as provided in
Section 15, the maximum number of Shares that may be issued upon the exercise of
Incentive Stock Options will equal the aggregate Share number stated in
Section 3(a), plus, to the extent allowable under Section 422 of the Code and
the Treasury Regulations promulgated thereunder, any Shares that become
available for issuance under the Plan under this Section 3(c).

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(d) Share Reserve.  The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as will be sufficient to
satisfy the requirements of the Plan.
 
4. Administration of the Plan.
 
(a) Procedure.
 
(i) Multiple Administrative Bodies.  Different Committees with respect to
different groups of Service Providers may administer the Plan.
 
(ii) Section 162(m).  To the extent that the Administrator determines it to be
desirable to qualify Awards granted hereunder as “performance-based
compensation” within the meaning of Section 162(m) of the Code, the Plan will be
administered by a Committee of two (2) or more “outside directors” within the
meaning of Section 162(m) of the Code. For the avoidance of doubt, to the extent
that the Administrator is providing for the grant, and/or the administration of,
Awards that are not intended to qualify as “performance-based compensation”
under Section 162(m) of the Code, the Plan may be administered by a Committee
that consists of other than two (2) or more “outside directors” within the
meaning of Section 162(m) of the Code.
 
(iii) Rule 16b-3.  To the extent desirable to qualify transactions hereunder as
exempt under Rule 16b-3, the transactions contemplated hereunder will be
structured to satisfy the requirements for exemption under Rule 16b-3.
 
(iv) Other Administration.  Other than as provided above, the Plan will be
administered by (A) the Board or (B) a Committee, which committee will be
constituted to satisfy Applicable Laws.
 
(b) Powers of the Administrator.  Subject to the provisions of the Plan, and in
the case of a Committee, subject to the specific duties delegated by the Board
to such Committee, the Administrator will have the authority, in its discretion:
 
(i) to determine the Fair Market Value;
 
(ii) to select the Service Providers to whom Awards may be granted hereunder;
 
(iii) to determine the number of Shares to be covered by each Award granted
hereunder;
 
(iv) to approve forms of Award Agreements for use under the Plan and to
expressly delegate to the Officers the authority to approve and modify such
forms of Award Agreement and/or individual Award Agreements;
 
(v) to determine the terms and conditions, not inconsistent with the terms of
the Plan, of any Award granted hereunder. Such terms and conditions include, but
are not limited to, the exercise price, the time or times when Awards may be
exercised (which may be based on performance criteria), any vesting acceleration
or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Award or the Shares relating thereto, based in each case on such
factors as the Administrator will determine;
 
(vi) to construe and interpret the terms of the Plan and Awards granted pursuant
to the Plan;
 
(vii) to prescribe, amend and rescind rules and regulations relating to the
Plan, including rules and regulations relating to sub-plans established for the
purpose of satisfying applicable foreign laws or for qualifying for favorable
tax treatment under applicable foreign laws. Pursuant to subsection 4(b)(iv),
this authority may be expressly delegated to the Officers;
 
(viii) to modify or amend each Award (subject to Section(s) 4(e)(i) and 20(c) of
the Plan), including but not limited to the discretionary authority to extend
the post-termination exercisability period of Awards and to extend the maximum
term of an Option (subject to Section 6(e));
 
(ix) to allow Participants to satisfy withholding tax obligations in such manner
as prescribed in Section 16;
 
(x) to authorize any person to execute on behalf of the Company any instrument
required to effect the grant of an Award previously granted by the
Administrator;

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(xi) to allow a Participant to defer the receipt of the payment of cash or the
delivery of Shares that would otherwise be due to such Participant under an
Award pursuant to such procedures as the Administrator may determine; and
 
(xii) to make all other determinations deemed necessary or advisable for
administering the Plan.
 
(c) Effect of Administrator’s Decision.  The Administrator’s decisions,
determinations and interpretations will be final and binding on all Participants
and any other holders of Awards.
 
(d) No Liability.  Under no circumstances shall the Company, its Affiliates, the
Administrator, or the Board incur liability for any indirect, incidental,
consequential or special damages (including lost profits) of any form incurred
by any person, whether or not foreseeable and regardless of the form of the act
in which such a claim may be brought, with respect to the Plan or the Company’s,
its Affiliates’, the Administrator’s or the Board’s roles in connection with the
Plan.
 
(e) Limitations.
 
(i) Prohibition Against Repricing.  Notwithstanding Section 4(b)(viii), the
Administrator may not modify or amend an Option or Stock Appreciation Right to
reduce the exercise price of such Option or Stock Appreciation Right after it
has been granted (except for adjustments made pursuant to Section 15), and
neither may the Administrator cancel any outstanding Option or Stock
Appreciation Right and immediately replace it with any other Award with a lower
exercise price, unless such action is approved by stockholders prior to such
action being taken.
 
(ii) Buyout Provisions.  The Administrator may at any time offer to buy out for
a payment in cash an Option previously granted based on such terms and
conditions as the Administrator will establish and communicate to the
Participant at the time that such offer is made. Notwithstanding anything
contained in this Section 4(e)(ii) to the contrary, the Administrator shall not
be allowed to authorize the buyout of underwater Options or Stock Appreciation
Rights without the prior consent of the Company’s stockholders.
 
5. Eligibility.  Nonstatutory Stock Options, Restricted Stock, Stock Units,
Stock Appreciation Rights, Performance Units, and Performance Shares may be
granted to Service Providers. Incentive Stock Options may be granted only to
employees of the Company or any Parent or Subsidiary of the Company.
 
6. Stock Options.
 
(a) Grant of Stock Options.  Subject to the terms and conditions of the Plan, an
Option may be granted to Service Providers at any time and from time to time as
will be determined by the Administrator, in its sole discretion. Each Option
will be designated in the Award Agreement as either an Incentive Stock Option or
a Nonstatutory Stock Option. However, notwithstanding such designation, to the
extent that the aggregate Fair Market Value of the Shares with respect to which
Incentive Stock Options are exercisable for the first time by the Participant
during any calendar year (under all plans of the Company and any Parent or
Subsidiary) exceeds one hundred thousand U.S. dollars ($100,000), such Options
will be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options will be taken into account in the order in
which they were granted. The Fair Market Value of the Shares will be determined
as of the time the Option with respect to such Shares is granted.
 
Notwithstanding anything herein to the contrary, the date of grant of an Option
shall, for all purposes, be the date on which the Administrator makes the
determination granting such Option or, in the event that the Administrator’s
meeting takes place during a period in which the trading window is closed, on
such future date as the Administrator specifies at that time (e.g., two (2) days
after the Company’s next public earnings announcement). Notice of the
determination shall be given to each individual to whom an Option is so granted
promptly but in no event more than three (3) weeks after the date of such grant.
Determination shall be defined as including at a minimum, the number of Shares
subject to Options granted to each individual and the terms of such Options.
 
(b) Number of Shares.  The Administrator will have complete discretion to
determine the number of Shares subject to an Option granted to any Participant,
provided that during any Fiscal Year, no Participant will be granted Options
covering more than 1,000,000 Shares. Notwithstanding the limitation in the
previous sentence, in

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connection with his or her initial service as an Employee, an Employee may be
granted Options covering up to an additional 500,000 Shares. The foregoing
limitations will be adjusted proportionately in connection with any change in
the Company’s capitalization as described in Section 15.
 
(c) Exercise Price and Other Terms.  The Administrator, subject to the
provisions of the Plan, will have complete discretion to determine the terms and
conditions of Options granted under the Plan, provided, however, that the
exercise price will not be less than one hundred percent (100%) of the Fair
Market Value of a Share on the date of grant. In addition, in the case of an
Incentive Stock Option granted to an employee of the Company or any Parent or
Subsidiary of the Company who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the per
Share exercise price will be no less than one hundred ten percent (110%) of the
Fair Market Value per Share on the date of grant. Notwithstanding the foregoing
provisions of this Section 6(c), Options may be granted with a per Share
exercise price of less than one hundred percent (100%) of the Fair Market Value
per Share on the date of grant pursuant to a transaction described in, and in a
manner consistent with, Section 424(a) of the Code and the Treasury Regulations
thereunder.
 
(d) Option Agreement.
 
(i) Terms and Conditions.  Each Option grant will be evidenced by an Award
Agreement that will specify the exercise price, the term of the Option, the
acceptable forms of consideration for exercise (which may include any form of
consideration permitted by Section 6(d)(ii)), the conditions of exercise, and
such other terms and conditions as the Administrator, in its sole discretion,
will determine.
 
(ii) Form of Consideration.  The Administrator will determine the acceptable
form(s) of consideration for exercising an Option, including the method of
payment, to the extent permitted by Applicable Laws. In the case of an Incentive
Stock Option, the Administrator will determine the acceptable form of
consideration at the time of grant. Such consideration to the extent permitted
by Applicable Laws may include, but is not limited to:
 
(1) cash;
 
(2) check;
 
(3) other Shares which have a Fair Market Value on the date of surrender equal
to the aggregate exercise price of the Shares as to which said Option will be
exercised and provided that accepting such Shares, in the sole discretion of the
Administrator, will not result in any adverse accounting consequences to the
Company;
 
(4) by net exercise;
 
(5) consideration received by the Company under a cashless exercise program
implemented by the Company in connection with the Plan;
 
(6) a reduction in the amount of any Company liability to the Participant,
including any liability attributable to the Participant’s participation in any
Company-sponsored deferred compensation program or arrangement;
 
(7) such other consideration and method of payment for the issuance of Shares to
the extent permitted by Applicable Laws; or
 
(8) any combination of the foregoing methods of payment.
 
(e) Term of Option.  An Option granted under the Plan will expire upon the date
determined by the Administrator, in its sole discretion, and set forth in the
Award Agreement; provided, however, that the term will be no more than seven
(7) years from the date of grant thereof. In the case of an Incentive Stock
Option granted to a Participant who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Incentive Stock Option will be five (5) years from
the date of grant or such shorter term as may be provided in the Award
Agreement.

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(f) Exercise of Option.
 
(i) Procedure for Exercise; Rights as a Stockholder.  Any Option granted
hereunder will be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Award Agreement. An Option may not be exercised for a fraction of a
Share.
 
An Option will be deemed exercised when the Company receives: (i) notice of
exercise (in such form as the Administrator or its delegate specifies from time
to time, including, but not limited to an electronic process) from the person
entitled to exercise the Option, and (ii) full payment for the Shares with
respect to which the Option is exercised (together with applicable tax
withholdings). Full payment may consist of any consideration and method of
payment authorized by the Administrator or its delegate and permitted by the
Award Agreement and the Plan. Shares issued upon exercise of an Option will be
issued in the name of the Participant. Until the Shares are issued (as evidenced
by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a stockholder will exist with respect to the Shares subject to
an Option, notwithstanding the exercise of the Option. The Company will issue
(or cause to be issued) such Shares promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Shares are issued, except as provided in Section 15 of
the Plan.
 
Exercising an Option in any manner will decrease the number of Shares thereafter
available, both for purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised.
 
(ii) Termination of Relationship as a Service Provider.  If a Participant ceases
to be a Service Provider, other than upon the Participant’s termination as the
result of the Participant’s death or Disability, the Participant may exercise
his or her Option within such period of time as is specified in the Award
Agreement to the extent that the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Award Agreement). In the absence of a specified time in the Award
Agreement, the Option will remain exercisable for three (3) months following the
Participant’s termination. Unless otherwise provided by the Administrator, if on
the date of termination the Participant is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option will revert to
the Plan. If after termination the Participant does not exercise his or her
Option within the time specified by the Administrator, the Option will
terminate, and the Shares covered by such Option will revert to the Plan.
 
(iii) Disability of Participant.  If a Participant ceases to be a Service
Provider as a result of the Participant’s Disability, the Participant may
exercise his or her Option within such period of time as is specified in the
Award Agreement to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Award Agreement). In the absence of a specified time in the Award
Agreement, the Option will remain exercisable for twelve (12) months following
the Participant’s termination. Unless otherwise provided by the Administrator,
if on the date of termination the Participant is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option will
revert to the Plan. If after termination the Participant does not exercise his
or her Option within the time specified herein, the Option will terminate, and
the Shares covered by such Option will revert to the Plan.
 
(iv) Death of Participant.  If a Participant dies while a Service Provider, the
Option may be exercised following the Participant’s death within such period of
time as is specified in the Award Agreement to the extent that the Option is
vested on the date of death (but in no event may the Option be exercised later
than the expiration of the term of such Option as set forth in the Award
Agreement), by the Participant’s designated beneficiary, provided such
beneficiary has been designated prior to Participant’s death in a form
acceptable to the Administrator. If no such beneficiary has been designated by
the Participant, then such Option may be exercised by the personal
representative of the Participant’s estate or by the person(s) to whom the
Option is transferred pursuant to the Participant’s will or in accordance with
the laws of descent and distribution. In the absence of a specified time in the
Award Agreement, the Option will remain exercisable for twelve (12) months
following Participant’s death. Unless otherwise provided by the Administrator,
if at the time of death Participant is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option will
immediately revert to the Plan. If the Option is not so exercised within the
time specified herein, the Option will terminate, and the Shares covered by such
Option will revert to the Plan.

8

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(v) Other Termination.  A Participant’s Award Agreement also may provide that if
the exercise of the Option following the termination of Participant’s status as
a Service Provider (other than upon the Participant’s death or Disability) would
result in liability under Section 16(b), then the Option will terminate on the
earlier of (A) the expiration of the term of the Option set forth in the Award
Agreement, or (B) the tenth (10th) day after the last date on which such
exercise would result in such liability under Section 16(b). Finally, a
Participant’s Award Agreement may also provide that if the exercise of the
Option following the termination of the Participant’s status as a Service
Provider (other than upon the Participant’s death or Disability) would be
prohibited at any time solely because the issuance of Shares would violate the
registration requirements under the Securities Act, then the Option will
terminate on the earlier of (A) the expiration of the term of the Option, or
(B) the expiration of a period of three (3) months after the termination of the
Participant’s status as a Service Provider during which the exercise of the
Option would not be in violation of such registration requirements.
 
7. Stock Appreciation Rights.
 
(a) Grant of Stock Appreciation Rights.  Subject to the terms and conditions of
the Plan, a Stock Appreciation Right may be granted to Service Providers at any
time and from time to time as will be determined by the Administrator, in its
sole discretion.
 
Notwithstanding anything herein to the contrary, the date of grant of a Stock
Appreciation Right shall, for all purposes, be the date on which the
Administrator makes the determination granting such Stock Appreciation Right or,
in the event that the Administrator’s meeting takes place during a period in
which the trading window is closed, on such future date as the Administrator
specifies at that time (e.g., two (2) days after the Company’s next public
earnings announcement). Notice of the determination shall be given to each
individual to whom a Stock Appreciation Right is so granted promptly but in no
event more than three (3) weeks after the date of such grant. Determination
shall be defined as including at a minimum, the number of Shares subject to
Stock Appreciation Rights granted to each individual and the terms of such Stock
Appreciation Rights.
 
(b) Number of Shares.  The Administrator will have complete discretion to
determine the number of Stock Appreciation Rights granted to any Participant,
provided that during any Fiscal Year, no Participant will be granted Stock
Appreciation Rights covering more than 1,000,000 Shares. Notwithstanding the
limitation in the previous sentence, in connection with his or her initial
service as an Employee, an Employee may be granted Stock Appreciation Rights
covering up to an additional 1,000,000 Shares. The foregoing limitations will be
adjusted proportionately in connection with any change in the Company’s
capitalization as described in Section 15.
 
(c) Exercise Price and Other Terms.  The Administrator, subject to the
provisions of the Plan, will have complete discretion to determine the terms and
conditions of Stock Appreciation Rights granted under the Plan, provided,
however, that the exercise price will not be less than one hundred percent
(100%) of the Fair Market Value of a Share on the date of grant. Notwithstanding
the foregoing provisions of this Section 7(c), Stock Appreciation Rights may be
granted with a per Share exercise price of less than one hundred percent (100%)
of the Fair Market Value per Share on the date of grant pursuant to a
transaction described in, and in a manner consistent with, Section 424(a) of the
Code and the Treasury Regulations thereunder.
 
(d) Stock Appreciation Right Agreement.  Each Stock Appreciation Right grant
will be evidenced by an Award Agreement that will specify the exercise price,
the term of the Stock Appreciation Right, the acceptable forms of consideration
for exercise (which may include any form of consideration permitted by
Section 6(d)(ii)), the conditions of exercise, and such other terms and
conditions as the Administrator, in its sole discretion, will determine.
 
(e) Expiration of Stock Appreciation Rights.  A Stock Appreciation Right granted
under the Plan will expire upon the date determined by the Administrator, in its
sole discretion, and set forth in the Award Agreement; provided, however, that
the term will be no more than seven (7) years from the date of grant thereof.
Notwithstanding the foregoing, the rules of Section 6(f) relating to exercise
also will apply to Stock Appreciation Rights.

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(f) Payment of Stock Appreciation Right Amount.  Upon exercise of a Stock
Appreciation Right, a Participant will be entitled to receive payment from the
Company in an amount determined by multiplying:
 
(i) The difference between the Fair Market Value of a Share on the date of
exercise over the exercise price; times
 
(ii) The number of Shares with respect to which the Stock Appreciation Right is
exercised.
 
At the discretion of the Administrator, the payment upon Stock Appreciation
Right exercise may be in cash, in Shares of equivalent value, or in some
combination thereof.
 
(g) Modification or Assumption of Stock Appreciation Rights.  Subject to
Section 4(b)(viii) and the provisions of the Plan, the Administrator may modify,
extend or assume outstanding Stock Appreciation Rights or may accept the
cancellation of outstanding Stock Appreciation Rights (whether granted by the
Company or by another issuer) in return for the grant of new Stock Appreciation
Rights for the same or a different number of Shares and at the same or a
different exercise price. The foregoing notwithstanding, no modification of a
Stock Appreciation Right shall, without the consent of the Participant, alter or
impair his or her rights or obligations under such Stock Appreciation Right.
 
8. Restricted Stock.
 
(a) Grant of Restricted Stock.  Subject to the terms and provisions of the Plan,
the Administrator, at any time and from time to time, may grant Shares of
Restricted Stock to Service Providers in such amounts as the Administrator, in
its sole discretion, will determine.
 
(b) Restricted Stock Agreement.  Each Award of Restricted Stock will be
evidenced by an Award Agreement that will specify the Period of Restriction, the
number of Shares granted, and such other terms and conditions as the
Administrator, in its sole discretion, will determine. Unless the Administrator
determines otherwise, the Company as escrow agent will hold Shares of Restricted
Stock until the restrictions on such Shares have lapsed. Notwithstanding the
foregoing sentence, for restricted stock intended to qualify as
“performance-based compensation” within the meaning of Section 162(m) of the
Code, during any Fiscal Year no Participant will receive more than an aggregate
of 500,000 Shares of Restricted Stock. Notwithstanding the limitation in the
previous sentence, in connection with his or her initial service as an Employee,
an Employee may be granted Shares of Restricted Stock covering up to an
additional 500,000 Shares. The foregoing limitations will be adjusted
proportionately in connection with any change in the Company’s capitalization as
described in Section 15.
 
(c) Transferability.  Except as provided in this Section 8, Shares of Restricted
Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated until the end of the applicable Period of Restriction.
 
(d) Other Restrictions.  The Administrator, in its sole discretion, may impose
such other restrictions on Shares of Restricted Stock as it may deem advisable
or appropriate.
 
(e) Removal of Restrictions.  Except as otherwise provided in this Section 8,
Shares of Restricted Stock covered by each Restricted Stock grant made under the
Plan will be released from escrow as soon as practicable after the last day of
the Period of Restriction or at such other time as the Administrator may
determine. The Administrator, in its sole discretion, may reduce or waive any
restrictions for such Award and may accelerate the time at which any
restrictions will lapse or be removed.
 
(f) Voting Rights.  During the Period of Restriction, Service Providers holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares, unless the Administrator determines otherwise.
 
(g) Dividends and Other Distributions.  During the Period of Restriction,
Service Providers holding Shares of Restricted Stock will be entitled to receive
all dividends and other distributions paid with respect to such Shares, unless
the Administrator provides otherwise. If any such dividends or distributions are
paid in Shares, the Shares will be subject to the same restrictions on
transferability and forfeitability as the Shares of Restricted Stock with
respect to which they were paid.

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(h) Return of Restricted Stock to Company.  On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed will
revert to the Company and again will become available for grant under the Plan.
 
(i) Section 162(m) Performance Restrictions.  For purposes of qualifying grants
of Restricted Stock as “performance-based compensation” under Section 162(m) of
the Code, the Administrator, in its discretion, may set restrictions based upon
the achievement of Performance Goals. The Performance Goals will be set by the
Administrator on or before the Determination Date. In granting Restricted Stock
which is intended to qualify under Section 162(m) of the Code, the Administrator
will follow any procedures determined by it from time to time to be necessary or
appropriate to ensure qualification of the Award under Section 162(m) of the
Code (e.g., in determining the Performance Goals).
 
9. Stock Units.
 
(a) Grant.  Stock Units may be granted at any time and from time to time as
determined by the Administrator. After the Administrator determines that it will
grant Stock Units under the Plan, it will advise the Participant in an Award
Agreement of the terms, conditions, and restrictions related to the grant,
including the number of Stock Units. Notwithstanding anything to the contrary in
this subsection (a), for Stock Units intended to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Code, during any
Fiscal Year of the Company, no Participant will receive more than an aggregate
of 500,000 Stock Units. Notwithstanding the limitation in the previous sentence,
in connection with his or her initial service as an Employee, an Employee may be
granted Stock Units covering up to an additional 500,000 Shares. The foregoing
limitations will be adjusted proportionately in connection with any change in
the Company’s capitalization as described in Section 15.
 
(b) Vesting Criteria and Other Terms.  The Administrator will set vesting
criteria in its discretion, which, depending on the extent to which the criteria
are met, will determine the number of Stock Units that will be paid out to the
Participant. The Administrator may set vesting criteria based upon the
achievement of Company-wide, business unit, or individual goals (including, but
not limited to, continued employment), applicable federal or state securities
laws, or any other basis determined by the Administrator in its discretion.
 
(c) Earning Stock Units.  Upon meeting the applicable vesting criteria, the
Participant will be entitled to receive a payout as determined by the
Administrator. Notwithstanding the foregoing, at any time after the grant of
Stock Units, the Administrator, in its sole discretion, may reduce or waive any
vesting criteria that must be met to receive a payout and may accelerate the
time at which any restrictions will lapse or be removed.
 
(d) Form and Timing of Payment.  Payment of earned Stock Units will be made as
soon as practicable after the date(s) set forth in the Award Agreement or as
otherwise provided in the applicable Award Agreement or as required by
Applicable Laws. The Administrator, in its sole discretion, may pay earned Stock
Units in cash, Shares, or a combination thereof. Shares represented by Stock
Units that are fully paid in cash again will not reduce the number of Shares
available for grant under the Plan.
 
(e) Cancellation.  On the date set forth in the Award Agreement, all unearned
Stock Units will be forfeited to the Company.
 
(f) Section 162(m) Performance Restrictions.  For purposes of qualifying grants
of Stock Units as “performance-based compensation” under Section 162(m) of the
Code, the Administrator, in its discretion, may set restrictions based upon the
achievement of Performance Goals. The Performance Goals will be set by the
Administrator on or before the Determination Date. In granting Stock Units which
are intended to qualify under Section 162(m) of the Code, the Administrator will
follow any procedures determined by it from time to time to be necessary or
appropriate to ensure qualification of the Award under Section 162(m) of the
Code (e.g., in determining the Performance Goals).
 
10. Performance Units and Performance Shares.
 
(a) Grant of Performance Units/Shares.  Performance Units and Performance Shares
may be granted to Service Providers at any time and from time to time, as will
be determined by the Administrator, in its sole discretion. The Administrator
will have complete discretion in determining the number of Performance Units and
Performance Shares granted to each Participant provided that during any Fiscal
Year, for Performance Units or

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Performance Shares intended to qualify as “performance-based compensation”
within the meaning of Section 162(m) of the Code, (i) no Participant will
receive Performance Units having an initial value greater than $5,000,000, and
(ii) no Participant will receive more than 500,000 Performance Shares.
Notwithstanding the foregoing limitation, in connection with his or her initial
service as an Employee, an Employee may be granted: (i) additional Performance
Units having an initial value up to $5,000,000 and (ii) up to an additional
500,000 Performance Shares. The foregoing limitations will be adjusted
proportionately in connection with any change in the Company’s capitalization as
described in Section 15.
 
(b) Value of Performance Units/Shares.  Each Performance Unit will have an
initial value that is established by the Administrator on or before the date of
grant. Each Performance Share will have an initial value equal to the Fair
Market Value of a Share on the date of grant.
 
(c) Performance Objectives and Other Terms.  The Administrator will set
performance objectives or other vesting provisions (including, without
limitation, continued status as a Service Provider) in its discretion which,
depending on the extent to which they are met, will determine the number or
value of Performance Units/Shares that will be paid out to the Service
Providers. The time period during which the performance objectives or other
vesting provisions must be met will be called the “Performance Period.” Each
Award of Performance Units/Shares will be evidenced by an Award Agreement that
will specify the Performance Period, and such other terms and conditions as the
Administrator, in its sole discretion, will determine. The Administrator may set
performance objectives based upon the achievement of Company-wide, divisional,
or individual goals, applicable federal or state securities laws, or any other
basis determined by the Administrator in its discretion.
 
(d) Earning of Performance Units/Shares.  After the applicable Performance
Period has ended, the holder of Performance Units/Shares will be entitled to
receive a payout of the number of Performance Units/Shares earned by the
Participant over the Performance Period, to be determined as a function of the
extent to which the corresponding performance objectives or other vesting
provisions have been achieved. Notwithstanding the foregoing, the Administrator
will have the right to reduce or eliminate (but not to increase) the amount
payable at a given level of performance to take into account additional factors
that the Administrator may deem relevant to the assessment of individual or
corporate performance for the Performance Period. After the grant of a
Performance Unit/Share, the Administrator, in its sole discretion, may reduce or
waive any performance objectives or other vesting provisions for such
Performance Unit/Share and may accelerate the time at which any restrictions
will lapse or be removed.
 
(e) Form and Timing of Payment of Performance Units/Shares.  Payment of earned
Performance Units/Shares will be made as soon as practicable after the
expiration of the applicable Performance Period, or as otherwise provided in the
applicable Award Agreement or as required by Applicable Laws. The Administrator,
in its sole discretion, may pay earned Performance Units/Shares in the form of
cash, in Shares (which have an aggregate Fair Market Value equal to the value of
the earned Performance Units/Shares at the close of the applicable Performance
Period) or in a combination thereof.
 
(f) Cancellation of Performance Units/Shares.  On the date set forth in the
Award Agreement, all unearned or unvested Performance Units/Shares will be
forfeited to the Company, and again will be available for grant under the Plan.
 
(g) Section 162(m) Performance Restrictions.  For purposes of qualifying grants
of Performance Units/Shares as “performance-based compensation” under
Section 162(m) of the Code, the Administrator, in its discretion, may set
restrictions based upon the achievement of Performance Goals. The Performance
Goals will be set by the Administrator on or before the Determination Date. In
granting Performance Units/Shares which are intended to qualify under
Section 162(m) of the Code, the Administrator will follow any procedures
determined by it from time to time to be necessary or appropriate to ensure
qualification of the Award under Section 162(m) of the Code (e.g., in
determining the Performance Goals).
 
11. Performance-Based Compensation Under Code Section 162(m).
 
(a) General.  If the Administrator, in its discretion, decides to grant an Award
intended to qualify as “performance-based compensation” under Section 162(m) of
the Code, the provisions of this Section 11 will control over any contrary
provision in the Plan; provided, however, that the Administrator may in its
discretion grant Awards that are not intended to qualify as “performance-based
compensation” under Section 162(m) of the Code to

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such Participants that are based on Performance Goals or other specific criteria
or goals but that do not satisfy the requirements of this Section 11.
 
(b) Performance Goals.  The granting and/or vesting of Awards of Restricted
Stock, Stock Units, Performance Shares and Performance Units and other
incentives under the Plan may be made subject to the attainment of performance
goals relating to one or more business criteria within the meaning of
Section 162(m) of the Code and may provide for a targeted level or levels of
achievement (“Performance Goals”) including: attainment of research and
development milestones, bookings, business divestitures and acquisitions, cash
flow, cash position, contract awards or backlog, customer renewals, customer
retention rates from an acquired company, business unit or division, earnings
(which may include earnings before interest and taxes, earnings before taxes and
net earnings), earnings per Share, expense reduction, gross margin, growth with
respect to any of the foregoing measures, growth in bookings, growth in
revenues, growth in stockholder value relative to the moving average of the S&P
500 Index or another index, internal rate of return, market share, net income,
net profit, net sales, new product development, new product invention or
innovation, number of customers, operating cash flow, operating expenses,
operating income, operating margin, pre-tax profit, product defect measures,
product release timelines, productivity, profit, return on assets, return on
capital, return on stockholder equity, return on investment, return on sales,
revenue, revenue growth, sales results, sales growth, stock price increase, time
to market, total stockholder return, working capital. Any criteria used may be
(A) measured in absolute terms, (B) measured in terms of growth, (C) compared to
another company or companies, (D) measured against the market as a whole and/or
according to applicable market indices, (E) measured against the performance of
the Company as a whole or a segment of the Company and/or (F) measured on a
pre-tax or post-tax basis (if applicable). Further, any Performance Goals may be
used to measure the performance of the Company as a whole or a business unit or
other segment of the Company, or one or more product lines or specific markets
and may be measured relative to a peer group or index. The Performance Goals may
differ from Participant to Participant and from Award to Award. Prior to the
Determination Date, the Administrator will determine whether any significant
element(s) will be included in or excluded from the calculation of any
Performance Goal with respect to any Participant. In all other respects,
Performance Goals will be calculated in accordance with the Company’s financial
statements, generally accepted accounting principles, or under a methodology
established by the Administrator prior to or at the time the issuance of an
Award and which is consistently applied with respect to a Performance Goal in
the relevant Performance Period. The Administrator will appropriately adjust any
evaluation of performance under a Performance Goal to exclude (i) any
extraordinary non-recurring items as described in Accounting Principles Board
Opinion No. 30 and/or in management’s discussion and analysis of financial
conditions and results of operations appearing in the Company’s annual report to
stockholders for the applicable year, or (ii) the effect of any changes in
accounting principles affecting the Company’s or a business units’ reported
results. In addition, the Administrator will adjust any performance criteria,
Performance Goal or other feature of an Award that relates to or is wholly or
partially based on the number of, or the value of, any stock of the Company, to
reflect any stock dividend or split, repurchase, recapitalization, combination,
or exchange of shares or other similar changes in such stock.
 
(c) Procedures.  To the extent necessary to comply with the performance-based
compensation provisions of Section 162(m) of the Code, with respect to any Award
granted subject to Performance Goals and intended to qualify as
“performance-based compensation” under Section 162(m) of the Code, within the
first twenty-five percent (25%) of the Performance Period, but in no event more
than ninety (90) days following the commencement of any Performance Period (or
such other time as may be required or permitted by Section 162(m) of the Code),
the Administrator will, in writing, (i) designate one or more Participants to
whom an Award will be made, (ii) select the Performance Goals applicable to the
Performance Period, (iii) establish the Performance Goals, and amounts of such
Awards, as applicable, which may be earned for such Performance Period, and
(iv) specify the relationship between Performance Goals and the amounts of such
Awards, as applicable, to be earned by each Participant for such Performance
Period.
 
(d) Additional Limitations.  Notwithstanding any other provision of the Plan,
any Award which is granted to a Participant and is intended to constitute
qualified performance-based compensation under Section 162(m) of the Code will
be subject to any additional limitations set forth in the Code (including any
amendment to Section 162(m)) or any regulations and ruling issued thereunder
that are requirements for qualification as qualified performance-

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based compensation as described in Section 162(m) of the Code, and the Plan will
be deemed amended to the extent necessary to conform to such requirements.
 
(e) Determination of Amounts Earned.  Following the completion of each
Performance Period, the Administrator will certify in writing whether the
applicable Performance Goals have been achieved for such Performance Period. A
Participant will be eligible to receive payment pursuant to an Award intended to
qualify as “performance-based compensation” under Section 162(m) of the Code for
a Performance Period only if the Performance Goals for such period are achieved.
In determining the amounts earned by a Participant pursuant to an Award intended
to qualified as “performance-based compensation” under Section 162(m) of the
Code, the Administrator will have the right to (a) reduce or eliminate (but not
to increase) the amount payable at a given level of performance to take into
account additional factors that the Administrator may deem relevant to the
assessment of individual or corporate performance for the Performance Period,
(b) determine what actual Award, if any, will be paid in the event of a
termination of employment as the result of a Participant’s death or disability
or upon a Change in Control or in the event of a termination of employment
following a Change in Control prior to the end of the Performance Period, and
(c) determine what actual Award, if any, will be paid in the event of a
termination of employment other than as the result of a Participant’s death or
disability prior to a Change of Control and prior to the end of the Performance
Period to the extent an actual Award would have otherwise been achieved had the
Participant remained employed through the end of the Performance Period.
 
12. Compliance With Code Section 409A.  Awards will be designed and operated in
such a manner that they are either exempt from the application of, or comply
with, the requirements of Code Section 409A such that the grant, payment,
settlement or deferral will not be subject to the additional tax or interest
applicable under Code Section 409A, except as otherwise determined in the sole
discretion of the Administrator. The Plan and each Award Agreement under the
Plan is intended to meet the requirements of Code Section 409A and will be
construed and interpreted in accordance with such intent, except as otherwise
determined in the sole discretion of the Administrator. To the extent that an
Award or payment, or the settlement or deferral thereof, is subject to Code
Section 409A the Award will be granted, paid, settled or deferred in a manner
that will meet the requirements of Code Section 409A, such that the grant,
payment, settlement or deferral will not be subject to the additional tax or
interest applicable under Code Section 409A.
 
13. Leaves of Absence/Transfer Between Locations.  Unless the Administrator
provides otherwise and except as required by Applicable Laws, vesting of Awards
granted hereunder will be suspended during any unpaid leave of absence. A
Participant will not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, or any Subsidiary. For purposes of
Incentive Stock Options, no such leave may exceed three (3) months, unless
reemployment upon expiration of such leave is guaranteed by statute or contract.
If reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, then six (6) months following the first (1st) day of such
leave, any Incentive Stock Option held by the Participant will cease to be
treated as an Incentive Stock Option and will be treated for tax purposes as a
Nonstatutory Stock Option.
 
14. Transferability of Awards.
 
(a) Non-Transferability of Awards.  Unless determined otherwise by the
Administrator, an Award may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Participant, only by the Participant.
 
(b) Prohibition Against an Award Transfer Program.  Notwithstanding anything to
the contrary in the Plan, in no event will the Administrator have the right to
determine and implement the terms and conditions of any Award Transfer Program
without stockholder approval.
 
15. Adjustments; Dissolution or Liquidation; Merger or Change in Control.
 
(a) Adjustments.  In the event that any dividend or other distribution (whether
in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, or other change in the corporate
structure of the Company affecting the Shares occurs, the Administrator,

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in order to prevent diminution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, will make such
adjustments as it, in its sole discretion, deems appropriate in one or more of:
 
(i) the number and class of Shares that may be delivered under the Plan;
 
(ii) the number, class, and price of Shares covered by each outstanding
Award; or
 
(iii) the numerical Share limits set forth in Sections 3, 6, 7, 8, 9 and 10 of
the Plan.
 
(b) Dissolution or Liquidation.  In the event of the proposed dissolution or
liquidation of the Company, the Administrator will notify each Participant as
soon as practicable prior to the effective date of such proposed transaction. To
the extent it has not been previously exercised, an Award will terminate
immediately prior to the consummation of such proposed action.
 
(c) Change in Control.  In the event of a merger or Change in Control, each
outstanding Award will be treated as the Administrator determines without a
Participant’s consent, including, without limitation, that:
 
(i) Awards will be assumed, or substantially equivalent Awards will be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof) with appropriate adjustments as to the number and kind of shares and
prices;
 
(ii) upon written notice to a Participant, that the Participant’s Awards will
terminate upon or immediately prior to the consummation of such merger or Change
in Control (for the avoidance of doubt, if Awards (or portion thereof) are not
assumed or substituted by the successor corporation, a Participant’s Awards will
not be terminate before fully vesting as provided for in this Section 15(c));
 
(iii) outstanding Awards will vest and become exercisable, realizable, or
payable, or restrictions applicable to an Award will lapse, in whole or in part
prior to or upon consummation of such merger or Change in Control, and, to the
extent the Administrator determines, terminate upon or immediately prior to the
effectiveness of such merger of Change in Control;
 
(iv) (A) the termination of an Award in exchange for an amount of cash and/or
property, if any, equal to the amount that would have been attained upon the
exercise of such Award or realization of the Participant’s rights as of the date
of the occurrence of the transaction (and, for the avoidance of doubt, if as of
the date of the occurrence of the transaction the Administrator determines in
good faith that no amount would have been attained upon the exercise of such
Award or realization of the Participant’s rights, then such Award may be
terminated by the Company without payment), or (B) the replacement of such Award
with other rights or property selected by the Administrator in its sole
discretion; or
 
(v) any combination of the foregoing.
 
In taking any of the actions permitted under this subsection 15(c), the
Administrator will not be obligated to treat all Awards, all Awards held by a
Participant, or all Awards of the same type, similarly.
 
In the event that the successor corporation does not assume or substitute for
the Award (or portion thereof), the Participant will fully vest in and have the
right to exercise all of his or her outstanding Options and Stock Appreciation
Rights that are not assumed or substituted for, including Shares as to which
such Awards would not otherwise be vested or exercisable, all restrictions on
Restricted Stock, Stock Units, and Performance Shares/Units not assumed or
substituted for will lapse, and, with respect to Awards with performance-based
vesting not assumed or substituted for, all performance goals or other vesting
criteria will be deemed achieved at one hundred percent (100%) of target levels
and all other terms and conditions met. In addition, if an Option or Stock
Appreciation Right is not assumed or substituted for in the event of a Change in
Control, the Company will notify the Participant in writing or electronically
that the Option or Stock Appreciation Right will be fully vested and exercisable
for a period of time determined by the Administrator in its sole discretion, and
the Option or Stock Appreciation Right will terminate upon the expiration of
such period.
 
For the purposes of this subsection (c), an Award will be considered assumed if,
following the Change in Control, the Award confers the right to purchase or
receive, for each Share subject to the Award immediately prior to the Change in
Control, the consideration (whether stock, cash, or other securities or
property) or, in the case of a

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Stock Appreciation Right upon the exercise of which the Administrator determines
to pay cash or a Stock Unit, Performance Share or Performance Unit which the
Administrator can determine to pay in cash, the fair market value of the
consideration received in the merger or Change in Control by holders of Common
Stock for each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding Shares); provided, however, that
if such consideration received in the Change in Control is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of an Option or Stock Appreciation Right or upon the
payout of a Stock Unit, Performance Unit or Performance Share, for each Share
subject to such Award (or in the case of an Award settled in cash, the number of
implied shares determined by dividing the value of the Award by the per share
consideration received by holders of Common Stock in the Change in Control), to
be solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the Change in Control.
 
Notwithstanding anything in this Section 15(c) to the contrary, an Award that
vests, is earned or paid-out upon the satisfaction of one or more Performance
Goals will not be considered assumed if the Company or its successor modifies
any of such Performance Goals without the Participant’s consent; provided,
however, a modification to such Performance Goals only to reflect the successor
corporation’s post-Change in Control corporate structure will not be deemed to
invalidate an otherwise valid Award assumption.
 
Notwithstanding anything in this Section 15(c) to the contrary, if a payment
under an Award Agreement is subject to Section 409A of the Code and if the
change in control definition contained in the Award Agreement or other agreement
related to the Award does not comply with the definition of “change in control”
for purposes of a distribution under Section 409A of the Code, then any payment
of an amount that is otherwise accelerated under this Section will be delayed
until the earliest time that such payment would be permissible under
Section 409A of the Code without triggering any penalties applicable under
Section 409A of the Code.
 
16. Tax Withholding.
 
(a) Withholding Requirements.  Prior to the delivery of any Shares or cash
pursuant to an Award (or exercise thereof), the Company will have the power and
the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state, local, foreign or other
taxes (including the Participant’s FICA obligation) required to be withheld with
respect to such Award (or exercise thereof).
 
(b) Withholding Arrangements.  The Administrator, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit a
Participant to satisfy such tax withholding obligation, in whole or in part by
(without limitation) (a) paying cash, (b) electing to have the Company withhold
otherwise deliverable cash or Shares having a Fair Market Value equal to the
amount required to be withheld, (c) delivering to the Company already-owned
Shares having a Fair Market Value equal to the amount required to be withheld,
provided the delivery of such Shares will not result in any adverse accounting
consequences as the Administrator determines in its sole discretion, (d) selling
a sufficient number of Shares otherwise deliverable to the Participant through
such means as the Administrator may determine in its sole discretion (whether
through a broker or otherwise) equal to the amount required to be withheld, or
(e) retaining from salary or other amounts payable to the Participant cash
having a sufficient value to satisfy the amount required to be withheld. The
amount of the withholding requirement will be deemed to include any amount which
the Administrator agrees may be withheld at the time the election is made, not
to exceed the amount determined by using the maximum federal, state or local
marginal income tax rates applicable to the Participant with respect to the
Award on the date that the amount of tax to be withheld is to be determined. The
Fair Market Value of the Shares to be withheld or delivered will be determined
as of the date that the taxes are required to be withheld.
 
17. No Effect on Employment or Service.  Neither the Plan nor any Award will
confer upon a Participant any right with respect to continuing the Participant’s
relationship as a Service Provider with the Company, nor will they interfere in
any way with the Participant’s right or the Company’s right to terminate such
relationship at any time, with or without cause, to the extent permitted by
Applicable Laws.

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18. Date of Grant.  The date of grant of an Award will be, for all purposes, the
date on which the Administrator makes the determination granting such Award, or
such other later date as is determined by the Administrator. Notice of the
determination will be provided to each Participant within a reasonable time
after the date of such grant.
 
19. Term of Plan.  The Plan is effective as of its approval by the stockholders
of the Company at the Company’s 2010 annual meeting of stockholders as described
in Section 23 of the Plan. It will continue in effect for a term of ten
(10) years from the Plan’s initial effectiveness, unless terminated earlier
under Section 20 of the Plan.
 
20. Amendment and Termination of the Plan.
 
(a) Amendment and Termination.  The Administrator may at any time amend, alter,
suspend or terminate the Plan.
 
(b) Stockholder Approval.  The Company will obtain stockholder approval of any
Plan amendment to the extent necessary and desirable to comply with Applicable
Laws.
 
(c) Effect of Amendment or Termination.  No amendment, alteration, suspension or
termination of the Plan will impair the rights of any Participant, unless
mutually agreed otherwise between the Participant and the Administrator, which
agreement must be in writing and signed by the Participant and the Company.
Termination of the Plan will not affect the Administrator’s ability to exercise
the powers granted to it hereunder with respect to Awards granted under the Plan
prior to the date of such termination.
 
21. Conditions upon Issuance of Shares.
 
(a) Legal Compliance.  Shares will not be issued pursuant to the exercise of an
Award unless the exercise of such Award and the issuance and delivery of such
Shares will comply with Applicable Laws and will be further subject to the
approval of counsel for the Company with respect to such compliance.
 
(b) Investment Representations.  As a condition to the exercise of an Award, the
Company may require the person exercising such Award to represent and warrant at
the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required.
 
22. Inability to Obtain Authority.  The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, will relieve the Company of any liability in respect of
the failure to issue or sell such Shares as to which such requisite authority
will not have been obtained.
 
23. Stockholder Approval.  The Plan will be subject to approval by the
stockholders of the Company at the Company’s 2010 annual meeting of
stockholders. Such stockholder approval will be obtained in the manner and to
the degree required under Applicable Laws.

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