Exhibit 10.4

 

SILICON LABORATORIES INC.

2009 STOCK INCENTIVE PLAN

 

STOCK OPTION GRANT NOTICE AND

STOCK OPTION AWARD AGREEMENT

U.S. PARTICIPANTS

 

Silicon Laboratories Inc., a Delaware corporation (the “Company”), pursuant to
its 2009 Stock Incentive Plan (the “Plan”), hereby grants to the holder listed
below (the “Participant”), an option to purchase the number of shares of the
Company’s Common Stock, par value $0.0001 (“Shares”), set forth below (the
“Option”).  This Option is subject to all of the terms and conditions set forth
herein and in the Stock Option Award Agreement attached hereto (the “Award
Agreement”) and in the Plan, which are incorporated herein by reference.  Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Grant Notice and the Award Agreement.

 

Participant:

 

 

 

 

 

Grant Date:

 

 

 

 

 

Vesting Commencement Date:

 

 

 

 

 

Exercise Price per Share:

 

$

 

 

 

Total Number of Shares Subject to the Option:

 

 

 

 

 

Expiration Date:*

 

 

 

Type of Option:

 

o  Incentive Stock Option

o  Non-Qualified Stock Option

 

 

Vesting Schedule:

Unless otherwise provided in the Award Agreement, the Option shall vest

 

 

 

 

 

.

 

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*Expiration Date:

As an administrative matter, the vested portion of this Option may be exercised
only until the close of the NASDAQ Global Select Market on the Expiration Date
or the termination date set forth under Sections 3 or 7 of the Award Agreement
or, if such date is not a trading day on the NASDAQ Global Select Market, the
last trading day before such date. Any later attempt to exercise this Option
will not be honored.

 

By his or her signature below or by electronic acceptance or authentication in a
form authorized by the Company, the Participant agrees to be bound by the terms
and conditions of the Plan, the Award Agreement and this Grant Notice.  The
Participant has reviewed the Award Agreement, the Plan and this Grant Notice in
their entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Grant Notice and fully understands all provisions of this Grant
Notice, the Award Agreement and the Plan.  The Participant hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Committee upon any questions arising under the Plan or relating to the Option.

 

 

SILICON LABORATORIES INC.

PARTICIPANT

 

 

 

 

By:

 

 

By:

 

Print Name:

 

 

Print Name:

 

Title:

 

 

 

 

Address:

 

 

Address:

 

 

 

 

 

 

 

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SILICON LABORATORIES INC.

2009 STOCK INCENTIVE PLAN

 

STOCK OPTION AWARD AGREEMENT

U.S. PARTICIPANTS

 

Silicon Laboratories Inc. (the “Company”) has granted to the Participant named
in the Stock Option Grant Notice (the “Grant Notice”) to which this Stock Option
Award Agreement (this “Award Agreement”) is attached an Award consisting of
Stock Options subject to the terms and conditions set forth in the Grant Notice
and this Award Agreement.  The Award has been granted pursuant to the Silicon
Laboratories Inc. 2009 Stock Incentive Plan (the “Plan”), as amended to the
Grant Date, the provisions of which are incorporated herein by reference.

 

Unless otherwise defined herein or in the Grant Notice, capitalized terms shall
have the meanings assigned under the Plan.

 

1.                                      THE AWARD.

 

THE COMPANY HEREBY AWARDS TO THE PARTICIPANT, AS OF THE GRANT DATE SET FORTH IN
THE GRANT NOTICE, AN OPTION TO PURCHASE UP TO THE NUMBER OF SHARES SPECIFIED IN
THE GRANT NOTICE AT THE EXERCISE PRICE PER SHARE SET FORTH IN THE GRANT NOTICE
(THE “EXERCISE PRICE”) AND SUBJECT TO THE TERMS AND CONDITIONS OF THE PLAN.

 

IF DESIGNATED IN THE GRANT NOTICE AS AN INCENTIVE STOCK OPTION, THE OPTION IS
INTENDED TO QUALIFY AS AN INCENTIVE STOCK OPTION AS DEFINED IN SECTION 422 OF
THE CODE.  NEVERTHELESS, TO THE EXTENT THAT THE VALUE OF THE OPTION EXCEEDS THE
$100,000 RULE OF CODE SECTION 422(D), THE OPTION SHALL BE TREATED AS A
NON-QUALIFIED STOCK OPTION.  FURTHER, IF FOR ANY OTHER REASON THE OPTION (OR A
PORTION THEREOF) SHALL NOT QUALIFY AS AN INCENTIVE STOCK OPTION, THEN THE OPTION
OR THE DISQUALIFYING PORTION THEREOF SHALL BE REGARDED AS A NON-QUALIFIED STOCK
OPTION UNDER THE PLAN.  IN NO EVENT SHALL THE COMPANY, OR ANY SUBSIDIARY OR
AFFILIATE OF THE COMPANY OR THEIR RESPECTIVE EMPLOYEES OR DIRECTORS HAVE ANY
LIABILITY TO THE PARTICIPANT DUE TO THE FAILURE OF THE OPTION TO QUALIFY AS AN
INCENTIVE STOCK OPTION.

 

2.                                      VESTING OF OPTION.

 

2.1                               DATES OF EXERCISE.  EXCEPT AS OTHERWISE
PROVIDED IN THIS AGREEMENT, THE OPTION SHALL BECOME EXERCISABLE FOR SHARES IN
ONE OR MORE INSTALLMENTS AS SPECIFIED IN THE GRANT NOTICE.  AS THE OPTION
BECOMES EXERCISABLE FOR SUCH INSTALLMENTS, THOSE INSTALLMENTS SHALL ACCUMULATE,
AND THE OPTION SHALL REMAIN EXERCISABLE FOR THE ACCUMULATED INSTALLMENTS UNTIL
THE EXPIRATION DATE OR SOONER TERMINATION OF THE OPTION TERM UNDER SECTIONS 3 OR
7, BELOW.

 

2.2                               LEAVE OF ABSENCE / PART-TIME WORK.  UNLESS
OTHERWISE DETERMINED BY THE COMMITTEE, THE FOLLOWING PROVISIONS SHALL APPLY UPON
THE PARTICIPANT’S COMMENCEMENT OF AN AUTHORIZED LEAVE OF ABSENCE:

 

(A)           AUTHORIZED LEAVE.  THE VESTING SCHEDULE IN EFFECT UNDER THE GRANT
NOTICE SHALL BE FROZEN AS OF THE FIRST FIFTEENTH (15TH) DAY OF A MONTH
IMMEDIATELY FOLLOWING THE COMMENCEMENT OF THE AUTHORIZED LEAVE, AND THE OPTION
SHALL NOT BECOME EXERCISABLE FOR ANY ADDITIONAL INSTALLMENTS DURING THE PERIOD
PARTICIPANT REMAINS ON SUCH LEAVE.  VESTING OF THE OPTION SHALL RESUME UPON THE
FIRST FIFTEENTH (15TH) DAY OF A MONTH IMMEDIATELY FOLLOWING THE PARTICIPANT’S
RESUMPTION OF ACTIVE SERVICE.

 

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(B)           VESTING CREDIT FOR LEAVE.  SHOULD THE PARTICIPANT RESUME ACTIVE
SERVICE WITHIN SIXTY (60) DAYS AFTER THE START DATE OF THE AUTHORIZED LEAVE, THE
PARTICIPANT SHALL, FOR PURPOSES OF THE VESTING SCHEDULE SET FORTH IN THE GRANT
NOTICE, RECEIVE VESTING CREDIT FOR THE ENTIRE PERIOD OF SUCH LEAVE.  IF THE
PARTICIPANT DOES NOT RESUME ACTIVE SERVICE WITHIN SUCH SIXTY (60)-DAY PERIOD,
THEN NO VESTING CREDIT SHALL BE GIVEN FOR THE PERIOD OF SUCH LEAVE.

 

(C)           CONSEQUENCE OF LEAVE UPON INCENTIVE STOCK OPTION.  IF THE OPTION
IS DESIGNATED AS AN INCENTIVE STOCK OPTION IN THE GRANT NOTICE, AND THE LEAVE OF
ABSENCE CONTINUES FOR MORE THAN NINETY (90) DAYS, THEN THE OPTION SHALL
AUTOMATICALLY CONVERT TO A NON-QUALIFIED STOCK OPTION AT THE END OF THE THREE
(3)-MONTH PERIOD MEASURED FROM THE NINETY-FIRST (91ST) DAY OF SUCH LEAVE, UNLESS
THE PARTICIPANT’S REEMPLOYMENT RIGHTS ARE GUARANTEED BY LAW OR BY A CONTRACT. 
FOLLOWING ANY SUCH CONVERSION OF THE OPTION, ALL SUBSEQUENT EXERCISES OF THE
OPTION, WHETHER EFFECTED BEFORE OR AFTER THE PARTICIPANT’S RETURN TO ACTIVE
EMPLOYEE STATUS, SHALL RESULT IN AN IMMEDIATE TAXABLE EVENT, AND THE COMPANY
SHALL BE REQUIRED TO COLLECT FROM THE PARTICIPANT THE INCOME AND EMPLOYMENT
WITHHOLDING TAXES APPLICABLE TO SUCH EXERCISE.

 

(D)           TERM OF OPTION UPON LEAVE.  IN NO EVENT SHALL THE OPTION BECOME
EXERCISABLE FOR ANY ADDITIONAL SHARES OR OTHERWISE REMAIN OUTSTANDING IF THE
PARTICIPANT DOES NOT RESUME ACTIVE SERVICE PRIOR TO THE EXPIRATION DATE OF THE
OPTION TERM.

 

(E)           PART-TIME WORK.  IF THE PARTICIPANT COMMENCES WORKING ON A
PART-TIME BASIS, THEN THE VESTING SCHEDULE SPECIFIED IN THE GRANT NOTICE MAY BE
ADJUSTED IN ACCORDANCE WITH THE COMPANY’S PART-TIME WORK POLICY OR THE TERMS OF
AN AGREEMENT BETWEEN THE PARTICIPANT AND THE COMPANY PERTAINING TO THE
PARTICIPANT’S PART-TIME SCHEDULE.

 

2.3                               TERM OF OPTION.  THE OPTION SHALL HAVE A
MAXIMUM TERM OF TEN (10) YEARS MEASURED FROM THE GRANT DATE AND SHALL
ACCORDINGLY EXPIRE AT THE CLOSE OF THE NASDAQ GLOBAL SELECT MARKET ON THE
EXPIRATION DATE, UNLESS SOONER TERMINATED IN ACCORDANCE WITH SECTIONS 3 OR 7,
BELOW.

 

3.                                      TERMINATION OF SERVICE.

 

The Option term specified in Section 2.3 shall terminate (and the Option shall
cease to be outstanding) prior to the Expiration Date should any of the
following provisions become applicable:

 

3.1          GENERAL RULE.  SHOULD THE PARTICIPANT CEASE TO PROVIDE SERVICES TO
THE COMPANY (OR ANY SUBSIDIARY OR AFFILIATE) IN THE CAPACITY OF AN EMPLOYEE,
DIRECTOR OR CONSULTANT (COLLECTIVELY REFERRED TO HEREIN AS “SERVICE”) FOR ANY
REASON (OTHER THAN DEATH, DISABILITY OR MISCONDUCT) WHILE THE OPTION IS
OUTSTANDING, THEN THE OPTION SHALL REMAIN EXERCISABLE UNTIL THE EARLIER OF
(I) THE EXPIRATION OF THE THREE (3)-MONTH PERIOD MEASURED FROM THE DATE OF SUCH
CESSATION OF SERVICE OR (II) THE EXPIRATION DATE.

 

3.2          DEATH OF THE PARTICIPANT.  SHOULD THE PARTICIPANT CEASE SERVICE BY
REASON OF HIS OR HER DEATH, THE VESTING OF THE OPTION SHALL AUTOMATICALLY
ACCELERATE SO THAT THE OPTION SHALL BECOME EXERCISABLE FOR ALL OF THE SHARES AT
THE TIME SUBJECT TO THE OPTION AND MAY BE EXERCISED BY THE PERSONAL
REPRESENTATIVE OF THE PARTICIPANT’S ESTATE, THE PERSON OR PERSONS TO WHOM THE
OPTION IS TRANSFERRED PURSUANT TO THE PARTICIPANT’S WILL OR IN ACCORDANCE WITH
THE LAWS OF DESCENT AND DISTRIBUTION UNTIL THE EARLIER OF (I) THE EXPIRATION OF
THE TWELVE (12)-MONTH PERIOD MEASURED FROM THE DATE OF THE PARTICIPANT’S DEATH
OR (II) THE EXPIRATION DATE.

 

3.3          DISABILITY OF THE PARTICIPANT.  SHOULD THE PARTICIPANT CEASE
SERVICE BY REASON OF DISABILITY WHILE THE OPTION IS OUTSTANDING, THEN THE OPTION
SHALL REMAIN EXERCISABLE UNTIL THE EARLIER OF (I) THE EXPIRATION OF THE TWELVE
(12)-MONTH PERIOD MEASURED FROM THE DATE OF SUCH CESSATION OF SERVICE OR
(II) THE EXPIRATION DATE.

 

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3.4          NUMBER OF EXERCISABLE SHARES POST-SERVICE.  EXCEPT IN THE EVENT OF
THE PARTICIPANT’S CESSATION OF SERVICE BY REASON OF HIS OR HER DEATH, DURING THE
APPLICABLE POST-SERVICE EXERCISE PERIOD, THE OPTION MAY NOT BE EXERCISED IN THE
AGGREGATE FOR MORE THAN THE NUMBER OF VESTED SHARES FOR WHICH THE OPTION IS
EXERCISABLE ON THE DATE OF THE PARTICIPANT’S CESSATION OF SERVICE.  UPON THE
EXPIRATION OF THE APPLICABLE EXERCISE PERIOD OR (IF EARLIER) UPON THE EXPIRATION
DATE, THE OPTION SHALL TERMINATE AND CEASE TO BE OUTSTANDING FOR ANY VESTED
SHARES FOR WHICH THE OPTION HAS NOT BEEN EXERCISED.  HOWEVER, THE OPTION SHALL,
IMMEDIATELY UPON THE PARTICIPANT’S CESSATION OF SERVICE FOR ANY REASON OTHER
THAN THE PARTICIPANT’S DEATH, TERMINATE AND CEASE TO BE OUTSTANDING TO THE
EXTENT THE OPTION IS NOT OTHERWISE AT THAT TIME EXERCISABLE FOR VESTED SHARES.

 

3.5          TERMINATION FOR MISCONDUCT.  SHOULD THE PARTICIPANT’S SERVICE BE
TERMINATED FOR MISCONDUCT OR SHOULD THE PARTICIPANT ENGAGE IN MISCONDUCT WHILE
THE OPTION IS OUTSTANDING, THEN THE OPTION SHALL TERMINATE IMMEDIATELY AND CEASE
TO BE OUTSTANDING.  IN THE EVENT THE PARTICIPANT’S SERVICE IS SUSPENDED PENDING
AN INVESTIGATION OF WHETHER THE PARTICIPANT’S SERVICE WILL BE TERMINATED FOR
MISCONDUCT, ALL OF THE PARTICIPANT’S RIGHTS UNDER THE OPTION, INCLUDING THE
RIGHT TO EXERCISE THE OPTION, SHALL BE SUSPENDED DURING THE INVESTIGATION
PERIOD.

 

3.6          CESSATION OF SERVICE.  FOR PURPOSES OF THIS AWARD AGREEMENT, THE
PARTICIPANT’S PERIOD OF SERVICE SHALL NOT INCLUDE ANY PERIOD OF NOTICE OF
TERMINATION, (WHETHER EXPRESS OR IMPLIED).  THE PARTICIPANT’S DATE OF CESSATION
OF SERVICE SHALL MEAN THE DATE UPON WHICH THE PARTICIPANT CEASES ACTIVE
PERFORMANCE OF SERVICES FOR THE COMPANY, A SUBSIDIARY OR AFFILIATE, AS
DETERMINED BY THE COMPANY FOLLOWING THE PROVISION OF SUCH NOTIFICATION OF
TERMINATION OR RESIGNATION FROM SERVICE AND SHALL BE DETERMINED SOLELY BY THIS
AWARD AGREEMENT AND WITHOUT REFERENCE TO ANY OTHER AGREEMENT, WRITTEN OR ORAL,
INCLUDING THE PARTICIPANT’S CONTRACT OF EMPLOYMENT (IF ANY).

 

4.                                      EXERCISE OF OPTION.

 

4.1          METHOD OF EXERCISE.  IN ORDER TO EXERCISE THE OPTION WITH RESPECT
TO ALL OR ANY PART OF THE SHARES FOR WHICH THE OPTION IS AT THE TIME
EXERCISABLE, THE PARTICIPANT (OR ANY OTHER PERSON OR PERSONS EXERCISING THE
OPTION) MUST TAKE THE FOLLOWING ACTIONS:

 

(A)           EXECUTE AND DELIVER TO THE COMPANY A NOTICE OF EXERCISE (THE
“NOTICE OF EXERCISE”) IN THE FORM AUTHORIZED BY THE COMPANY, WHICH MAY BE
ELECTRONIC OR WRITTEN.  AN ELECTRONIC NOTICE OF EXERCISE MUST BE DIGITALLY
SIGNED OR AUTHENTICATED BY THE PARTICIPANT IN SUCH MANNER AS REQUIRED BY THE
NOTICE AND TRANSMITTED TO THE APPLICABLE AUTHORIZED REPRESENTATIVE OF THE
COMPANY (INCLUDING A COMPANY-DESIGNATED BROKERAGE FIRM).  IN THE EVENT THAT THE
PARTICIPANT IS NOT AUTHORIZED OR IS UNABLE TO PROVIDE AN ELECTRONIC NOTICE OF
EXERCISE, THE OPTION SHALL BE EXERCISED BY A WRITTEN NOTICE OF EXERCISE
ADDRESSED TO THE COMPANY, WHICH SHALL BE SIGNED BY THE PARTICIPANT AND DELIVERED
IN PERSON, BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, BY
CONFIRMED FACSIMILE TRANSMISSION, OR BY SUCH OTHER MEANS AS THE COMPANY MAY
PERMIT, TO THE APPLICABLE AUTHORIZED REPRESENTATIVE OF THE COMPANY (INCLUDING A
COMPANY-DESIGNATED BROKERAGE FIRM).  EACH NOTICE OF EXERCISE, WHETHER ELECTRONIC
OR WRITTEN, MUST STATE THE PARTICIPANT’S ELECTION TO EXERCISE THE OPTION, THE
NUMBER OF WHOLE SHARES FOR WHICH THE OPTION IS BEING EXERCISED AND SUCH OTHER
REPRESENTATIONS AND AGREEMENTS AS TO THE PARTICIPANT’S INVESTMENT INTENT WITH
RESPECT TO SUCH SHARES AS MAY BE REQUIRED PURSUANT TO THE PROVISIONS OF THIS
AWARD AGREEMENT.  FURTHER, EACH NOTICE OF EXERCISE MUST BE RECEIVED BY THE
COMPANY PRIOR TO THE TERMINATION OF THE OPTION AS SET FORTH IN SECTION 3 OR 7.

 

(B)                                 PAY THE AGGREGATE EXERCISE PRICE FOR THE
PURCHASED SHARES IN ONE OR MORE OF THE FOLLOWING FORMS:

 

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(i)            cash or check which, in the Company’s sole discretion, shall be
made payable to a Company-designated brokerage firm or the Company; or

 

(ii)           with the consent of the Committee, surrender Shares issuable upon
the exercise of the Option having a Fair Market Value on the date of exercise
equal to the aggregate Exercise Price of the Shares plus all applicable tax
withholding obligations of the Company (or a Subsidiary or Affiliate) with
respect to which the Option or portion thereof is being exercised; or

 

(iii)          as permitted by applicable law, through a special sale and
remittance procedure pursuant to which the Participant (or any other person or
persons exercising the Option) shall concurrently provide irrevocable
instructions (A) to a Company-designated brokerage firm to effect the immediate
sale of the purchased Shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Exercise Price payable for the purchased Shares plus all applicable tax
withholding obligations of the Company (or a Subsidiary or Affiliate) by reason
of such exercise and (B) to the Company to deliver the certificates for the
purchased Shares directly to such brokerage firm in order to complete the sale.

 

Except to the extent the sale and remittance procedure is utilized in connection
with the exercise of the Option, payment of the Exercise Price must accompany
the Notice of Exercise delivered to the Company (or a Company-designated
brokerage firm) in connection with the Option exercise.

 

(C)                                  FURNISH TO THE COMPANY APPROPRIATE
DOCUMENTATION THAT THE PERSON OR PERSONS EXERCISING THE OPTION (IF OTHER THAN
THE PARTICIPANT) HAVE THE RIGHT TO EXERCISE THE OPTION.

 

(D)                                 MAKE APPROPRIATE ARRANGEMENTS WITH THE
COMPANY (OR SUBSIDIARY OR AFFILIATE EMPLOYING OR RETAINING THE PARTICIPANT) FOR
THE SATISFACTION OF ALL APPLICABLE TAX WITHHOLDING REQUIREMENTS APPLICABLE TO
THE OPTION EXERCISE.

 

(E)                                  AS SOON AS PRACTICAL AFTER THE EXERCISE
DATE, THE COMPANY SHALL ISSUE TO OR ON BEHALF OF THE PARTICIPANT (OR ANY OTHER
PERSON OR PERSONS EXERCISING THE OPTION) THE PURCHASED SHARES (AS EVIDENCED BY
AN APPROPRIATE ENTRY ON THE BOOKS OF THE COMPANY OR A DULY AUTHORIZED TRANSFER
AGENT OF THE COMPANY), SUBJECT TO THE APPROPRIATE LEGENDS AND/OR STOP TRANSFER
INSTRUCTIONS.

 

(F)                                    NOTWITHSTANDING ANY OTHER PROVISIONS OF
THE PLAN, THIS AWARD AGREEMENT OR ANY OTHER AGREEMENT TO THE CONTRARY, IF AT THE
TIME THIS OPTION IS EXERCISED, PARTICIPANT IS INDEBTED TO THE COMPANY (OR ANY
SUBSIDIARY OR AFFILIATE) FOR ANY REASON, THE FOLLOWING ACTIONS SHALL BE TAKEN,
AS DEEMED APPROPRIATE BY THE COMMITTEE:

 

(I)            ANY SHARES TO BE ISSUED UPON SUCH EXERCISE SHALL AUTOMATICALLY BE
PLEDGED AGAINST PARTICIPANT’S OUTSTANDING INDEBTEDNESS; AND

 

(ii)           if this Option is exercised in accordance with subsection
4.1(b)(iii) above, the after-tax proceeds of the sale of Participant’s Shares
shall automatically be applied to the outstanding balance of Participant’s
indebtedness.

 

4.2                               RESTRICTIONS ON EXERCISE OF THE OPTION AND
ISSUANCE OF SHARES.  THE EXERCISE OF THE OPTION AND ISSUANCE OF SHARES OF COMMON
STOCK UPON SUCH EXERCISE SHALL BE SUBJECT TO COMPLIANCE WITH ALL APPLICABLE
REQUIREMENTS OF U.S. FEDERAL, STATE OR FOREIGN LAW WITH RESPECT TO SUCH
SECURITIES.  NO SHARES MAY BE ISSUED HEREUNDER IF THE ISSUANCE OF SUCH SHARES
WOULD CONSTITUTE A VIOLATION OF ANY APPLICABLE U.S. FEDERAL, STATE OR FOREIGN
SECURITIES LAWS OR OTHER LAWS OR REGULATIONS OR THE REQUIREMENTS OF ANY STOCK
EXCHANGE OR MARKET SYSTEM UPON WHICH THE COMMON STOCK MAY THEN BE LISTED.  THE
INABILITY OF

 

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THE COMPANY TO OBTAIN FROM ANY REGULATORY BODY HAVING JURISDICTION THE
AUTHORITY, IF ANY, DEEMED BY THE COMPANY’S LEGAL COUNSEL TO BE NECESSARY TO THE
LAWFUL ISSUANCE OF ANY SHARES SUBJECT TO THE OPTION SHALL RELIEVE THE COMPANY OF
ANY LIABILITY IN RESPECT OF THE FAILURE TO ISSUE SUCH SHARES AS TO WHICH SUCH
REQUISITE AUTHORITY SHALL NOT HAVE BEEN OBTAINED.  AS A CONDITION TO THE
EXERCISE OF THE OPTION, THE COMPANY MAY REQUIRE THE PARTICIPANT TO SATISFY ANY
QUALIFICATIONS THAT MAY BE NECESSARY OR APPROPRIATE, TO EVIDENCE COMPLIANCE WITH
ANY APPLICABLE LAW OR REGULATION AND TO MAKE ANY REPRESENTATION OR WARRANTY WITH
RESPECT THERETO AS MAY BE REQUESTED BY THE COMPANY.  FURTHER, REGARDLESS OF
WHETHER THE TRANSFER OR ISSUANCE OF THE SHARES TO BE ISSUED PURSUANT TO THE
OPTION HAS BEEN REGISTERED UNDER THE SECURITIES ACT OR HAS BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE, THE COMPANY MAY IMPOSE
ADDITIONAL RESTRICTIONS UPON THE SALE, PLEDGE, OR OTHER TRANSFER OF THE SHARES
(INCLUDING THE PLACEMENT OF APPROPRIATE LEGENDS ON STOCK CERTIFICATES AND THE
ISSUANCE OF STOP-TRANSFER INSTRUCTIONS TO THE COMPANY’S TRANSFER AGENT) IF, IN
THE JUDGMENT OF THE COMPANY AND THE COMPANY’S COUNSEL, SUCH RESTRICTIONS ARE
NECESSARY IN ORDER TO ACHIEVE COMPLIANCE WITH THE PROVISIONS OF THE SECURITIES
ACT, THE SECURITIES LAWS OF ANY STATE, OR ANY OTHER LAW.

 

4.3                               FRACTIONAL SHARES.  IN NO EVENT MAY THE OPTION
BE EXERCISED FOR ANY FRACTIONAL SHARES.

 

4.4                               EXCESS SHARES.  IF THE SHARES COVERED BY THIS
AWARD AGREEMENT EXCEED, AS OF THE GRANT DATE, THE NUMBER OF SHARES WHICH MAY
WITHOUT STOCKHOLDER APPROVAL BE ISSUED UNDER THE PLAN, THEN THE OPTION SHALL BE
VOID WITH RESPECT TO THOSE EXCESS SHARES, UNLESS STOCKHOLDER APPROVAL OF AN
AMENDMENT SUFFICIENTLY INCREASING THE NUMBER OF SHARES ISSUABLE UNDER THE PLAN
IS OBTAINED IN ACCORDANCE WITH THE PROVISIONS OF THE PLAN.

 

4.5                               FINANCING.  THE COMMITTEE MAY, IN ITS ABSOLUTE
DISCRETION AND WITHOUT ANY OBLIGATION TO DO SO, PERMIT THE PARTICIPANT TO PAY
THE EXERCISE PRICE FOR THE PURCHASED SHARES BY DELIVERING A FULL-RECOURSE
PROMISSORY NOTE PAYABLE TO THE COMPANY.  THE TERMS OF ANY SUCH PROMISSORY NOTE
(INCLUDING THE INTEREST RATE, THE REQUIREMENTS FOR COLLATERAL AND THE TERMS OF
REPAYMENT) SHALL BE ESTABLISHED BY THE COMMITTEE IN ITS SOLE DISCRETION.

 

5.                                      TAX WITHHOLDING AND ADVICE.

 

5.1          IN GENERAL.  SUBJECT TO SECTION 5.2, AT THE TIME THE GRANT NOTICE
IS EXECUTED, OR AT ANY TIME THEREAFTER AS REQUESTED BY THE COMPANY, THE
PARTICIPANT HEREBY AUTHORIZES WITHHOLDING FROM PAYROLL AND ANY OTHER AMOUNTS
PAYABLE TO THE PARTICIPANT, AND OTHERWISE AGREES TO MAKE ADEQUATE PROVISION FOR,
ANY SUMS REQUIRED TO SATISFY THE U.S. FEDERAL, STATE, AND LOCAL TAXES AND (IF
APPLICABLE) TAXES IMPOSED BY JURISDICTIONS OUTSIDE OF THE UNITED STATES
(INCLUDING INCOME TAX, SOCIAL INSURANCE CONTRIBUTIONS, PAYMENT ON ACCOUNT AND
ANY OTHER TAXES) AND REQUIRED BY LAW TO BE WITHHELD WITH RESPECT TO ANY TAXABLE
EVENT ARISING AS A RESULT OF THE PARTICIPANT’S PARTICIPATION IN THE PLAN
(REFERRED TO HEREIN AS “TAX-RELATED ITEMS”).

 

5.2          WITHHOLDING OF TAXES.  THE COMPANY OR ANY SUBSIDIARY OR AFFILIATE,
AS APPROPRIATE, SHALL HAVE THE AUTHORITY AND THE RIGHT TO DEDUCT OR WITHHOLD, OR
REQUIRE THE PARTICIPANT TO REMIT TO THE COMPANY (OR TO THE APPLICABLE SUBSIDIARY
OR AFFILIATE), AN AMOUNT SUFFICIENT TO SATISFY APPLICABLE TAX-RELATED ITEMS OR
TO TAKE SUCH OTHER ACTION AS MAY BE NECESSARY IN THE OPINION OF THE COMPANY OR A
SUBSIDIARY OR AFFILIATE, AS APPROPRIATE, TO SATISFY SUCH TAX-RELATED ITEMS
(INCLUDING HYPOTHETICAL WITHHOLDING TAX AMOUNTS IF THE PARTICIPANT IS COVERED
UNDER A COMPANY TAX EQUALIZATION POLICY).

 

THE COMMITTEE MAY IN ITS DISCRETION AND IN SATISFACTION OF THE FOREGOING
REQUIREMENT ALLOW A PARTICIPANT TO ELECT TO HAVE THE COMPANY WITHHOLD SHARES
OTHERWISE ISSUABLE UNDER THE OPTION (OR ALLOW THE RETURN OF SHARES) HAVING A
FAIR MARKET VALUE EQUAL TO THE SUMS REQUIRED TO BE WITHHELD.  FURTHER, TO

 

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THE EXTENT DETERMINED APPROPRIATE BY THE COMPANY IN ITS DISCRETION, THE COMPANY
(OR SUBSIDIARY OR AFFILIATE, AS APPLICABLE) WILL HAVE THE RIGHT (BUT NOT THE
OBLIGATION) TO SATISFY ANY TAX WITHHOLDING OBLIGATIONS BY ONE OR A COMBINATION
OF THE FOLLOWING:

 

(a)           withholding from the Participant’s wages or other cash
compensation paid to the Participant by the Company and/or a Subsidiary or
Affiliate; or

 

(b)           withholding a number of whole Shares otherwise deliverable to the
Participant upon exercise of the Option having a Fair Market Value equal to the
Tax-Related Items obligations, as determined by the Company as of the date on
which the Tax-Related Items obligations arise; or

 

(c)           withholding from the proceeds from the sale of Shares otherwise
deliverable to the Participant having a Fair Market Value equal to the
Tax-Related Items obligations, provided the sale does not violate Company policy
or applicable laws; any such sale is on the Participant’s behalf and at the
Participant’s direction pursuant to this authorization; or

 

(d)           direct payment from the Participant.

 

To avoid negative accounting treatment, the Company may withhold or account for
Tax-Related Items by considering applicable minimum statutory withholding
amounts or other applicable withholding rates.  If the Participant is covered by
a Company tax equalization policy, the Participant agrees to pay to the Company
any additional hypothetical tax obligation calculated and paid under the terms
and conditions of such tax equalization policy.  No Shares shall be delivered
hereunder to any Participant or other person until the Participant or such other
person has made arrangements acceptable to the Committee for the satisfaction of
these tax obligations with respect to any taxable event concerning the
Participant or such other person arising as a result of the Participant’s
participation in the Plan.

 

5.3                               TAX ADVICE.  THE PARTICIPANT REPRESENTS,
WARRANTS AND ACKNOWLEDGES THAT THE COMPANY HAS MADE NO WARRANTIES OR
REPRESENTATIONS TO THE PARTICIPANT WITH RESPECT TO THE INCOME TAX CONSEQUENCES
OF THE TRANSACTIONS CONTEMPLATED BY THIS AWARD AGREEMENT, AND THE PARTICIPANT IS
IN NO MANNER RELYING ON THE COMPANY OR THE COMPANY’S REPRESENTATIVES FOR AN
ASSESSMENT OF SUCH TAX CONSEQUENCES.  THE PARTICIPANT UNDERSTANDS THAT THE TAX
LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.  THE PARTICIPANT SHOULD CONSULT HIS
OR HER OWN TAX ADVISOR REGARDING ANY OPTION.  NOTHING STATED HEREIN IS INTENDED
OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING TAXPAYER
PENALTIES.

 

6.                                      AUTHORIZATION TO RELEASE NECESSARY
PERSONAL INFORMATION.

 

THE PARTICIPANT HEREBY AUTHORIZES AND DIRECTS THE PARTICIPANT’S EMPLOYER TO
COLLECT, USE AND TRANSFER IN ELECTRONIC OR OTHER FORM, ANY PERSONAL INFORMATION
(THE “DATA”) REGARDING THE PARTICIPANT’S SERVICE, THE NATURE AND AMOUNT OF THE
PARTICIPANT’S COMPENSATION AND THE FACT AND CONDITIONS OF THE PARTICIPANT’S
PARTICIPATION IN THE PLAN (INCLUDING, BUT NOT LIMITED TO, THE PARTICIPANT’S
NAME, HOME ADDRESS, TELEPHONE NUMBER, DATE OF BIRTH, SOCIAL SECURITY NUMBER (OR
ANY OTHER SOCIAL OR NATIONAL IDENTIFICATION NUMBER), SALARY, NATIONALITY, JOB
TITLE, NUMBER OF SHARES HELD AND THE DETAILS OF ALL OPTIONS OR ANY OTHER
ENTITLEMENT TO SHARES AWARDED, CANCELLED, EXERCISED, VESTED, UNVESTED OR
OUTSTANDING) FOR THE PURPOSE OF IMPLEMENTING, ADMINISTERING AND MANAGING THE
PARTICIPANT’S PARTICIPATION IN THE PLAN.  THE PARTICIPANT UNDERSTANDS THAT THE
DATA MAY BE TRANSFERRED TO THE COMPANY OR ANY OF ITS SUBSIDIARIES OR AFFILIATES,
OR TO ANY THIRD PARTIES ASSISTING IN THE IMPLEMENTATION, ADMINISTRATION AND
MANAGEMENT OF THE PLAN, INCLUDING ANY REQUISITE TRANSFER TO A BROKERAGE FIRM OR
OTHER THIRD PARTY ASSISTING WITH THE EXERCISE OF OPTIONS UNDER

 

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THE PLAN OR WITH WHOM SHARES ACQUIRED UPON EXERCISE OF THIS OPTION OR CASH FROM
THE SALE OF SUCH SHARES MAY BE DEPOSITED.  THE PARTICIPANT ACKNOWLEDGES THAT
RECIPIENTS OF THE DATA MAY BE LOCATED IN DIFFERENT COUNTRIES, AND THOSE
COUNTRIES MAY HAVE DATA PRIVACY LAWS AND PROTECTIONS DIFFERENT FROM THOSE IN THE
COUNTRY OF THE PARTICIPANT’S RESIDENCE. FURTHERMORE, THE PARTICIPANT
ACKNOWLEDGES AND UNDERSTANDS THAT THE TRANSFER OF THE DATA TO THE COMPANY OR ANY
OF ITS SUBSIDIARIES OR AFFILIATES, OR TO ANY THIRD PARTIES IS NECESSARY FOR
PARTICIPANT’S PARTICIPATION IN THE PLAN.

 

The Participant may at any time withdraw the consents herein, by contacting the
Company’s stock administration department in writing. The Participant further
acknowledges that withdrawal of consent may affect the Participant’s ability to
exercise or realize benefits from the Option, and the Participant’s ability to
participate in the Plan.

 

7.                                      EFFECT OF CHANGE IN CONTROL ON AWARD.

 

This Award Agreement shall not in any way affect the right of the Company to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.

 

7.1          Acceleration of Vesting.  In the event of a Change in Control, the
Option, to the extent outstanding at that time but not otherwise fully
exercisable, shall automatically accelerate so that the Option shall,
immediately prior to the effective date of the Change in Control, become
exercisable for all of the Shares at the time subject to the Option and may be
exercised for any or all of those Shares as fully-vested Shares.  No such
acceleration of the Option, however, shall occur if and to the extent: (i) the
Option is, in connection with the Change in Control, assumed or otherwise
continued in full force and effect by the successor corporation (or parent
thereof) or replaced with a comparable option to purchase shares of the capital
stock of the successor corporation (or parent thereof) pursuant to the terms of
the Change in Control or (ii) the Option is replaced with a cash incentive
program of the successor corporation which preserves the spread existing at the
time of the Change in Control on the Shares for which the Option is not
otherwise at that time exercisable (the excess of the Fair Market Value of those
Shares over the aggregate Exercise Price payable for such Shares) and provides
for subsequent pay-out in accordance with the same vesting schedule set forth in
the Grant Notice.  The determination of option comparability under clause
(i) shall be made by the Committee, and such determination shall be final,
binding and conclusive.

 

7.2          Termination of the Option Upon Change in Control.  Immediately
following the consummation of the Change in Control, the Option shall terminate
and cease to be outstanding, except to the extent assumed by the successor
corporation (or parent thereof) or otherwise expressly continued in full force
and effect pursuant to the terms of the Change in Control.

 

7.3          Assumption of the Option.  If the Option is assumed in connection
with a Change in Control, then the Option shall be appropriately adjusted,
immediately after such Change in Control, to apply to the number and class of
securities which would have been issuable to the Participant in consummation of
such Change in Control had the Option been exercised immediately prior to such
Change in Control, and appropriate adjustments shall also be made to the
Exercise Price, provided the aggregate Exercise Price shall remain the same.

 

7.4          Involuntary Termination After Change in Control.  In the event that
the Option is, in connection with the Change in Control, either assumed by the
successor corporation (or parent thereof) or replaced with a comparable option
of the successor corporation (or parent thereof) and, within eighteen (18)
months of the effective date of the Change in Control, the Participant’s Service
terminates due to Involuntary Termination, the Option, to the extent outstanding
at that time but not

 

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otherwise fully exercisable, shall automatically accelerate so that the Option
shall, immediately upon the effective date of the Involuntary Termination,
become exercisable for all of the Shares at the time subject to the Option and
may be exercised for any or all of those Shares as fully-vested Shares for a
period of three (3) months.

 

8.                                      ADJUSTMENTS FOR CHANGES IN CAPITAL
STRUCTURE.

 

The Participant acknowledges that the Option is subject to modification and
termination in certain events as provided in this Award Agreement and Article 11
of the Plan.

 

9.                                      NO ENTITLEMENT OR CLAIMS FOR
COMPENSATION.

 

9.1          THE PARTICIPANT’S RIGHTS, IF ANY, IN RESPECT OF OR IN CONNECTION
WITH THIS OPTION ARE DERIVED SOLELY FROM THE DISCRETIONARY DECISION OF THE
COMPANY TO PERMIT THE PARTICIPANT TO PARTICIPATE IN THE PLAN AND TO BENEFIT FROM
A DISCRETIONARY AWARD.  BY ACCEPTING THIS OPTION, THE PARTICIPANT EXPRESSLY
ACKNOWLEDGES THAT THERE IS NO OBLIGATION ON THE PART OF THE COMPANY TO CONTINUE
THE PLAN AND/OR GRANT ANY ADDITIONAL OPTIONS OR OTHER AWARDS TO THE
PARTICIPANT.  THIS OPTION IS NOT INTENDED TO BE COMPENSATION OF A CONTINUING OR
RECURRING NATURE, OR PART OF THE PARTICIPANT’S NORMAL OR EXPECTED COMPENSATION,
AND IN NO WAY REPRESENTS ANY PORTION OF THE PARTICIPANT’S SALARY, COMPENSATION,
OR OTHER REMUNERATION FOR PURPOSES OF PENSION BENEFITS, SEVERANCE, REDUNDANCY,
RESIGNATION OR ANY OTHER PURPOSE.

 

9.2          NEITHER THE PLAN NOR THIS OPTION SHALL BE DEEMED TO GIVE THE
PARTICIPANT A RIGHT TO REMAIN AN EMPLOYEE, DIRECTOR OR CONSULTANT OF THE
COMPANY, A SUBSIDIARY OR AN AFFILIATE.  THE COMPANY AND ITS SUBSIDIARIES AND
AFFILIATES RESERVE THE RIGHT TO TERMINATE THE SERVICE OF THE PARTICIPANT AT ANY
TIME, WITH OR WITHOUT CAUSE, AND FOR ANY REASON, SUBJECT TO APPLICABLE LAWS, THE
COMPANY’S CERTIFICATE OF INCORPORATION AND BYLAWS AND A WRITTEN EMPLOYMENT
AGREEMENT (IF ANY), AND THE PARTICIPANT SHALL BE DEEMED IRREVOCABLY TO HAVE
WAIVED ANY CLAIM TO DAMAGES OR SPECIFIC PERFORMANCE FOR BREACH OF CONTRACT OR
DISMISSAL, COMPENSATION FOR LOSS OF OFFICE, TORT OR OTHERWISE WITH RESPECT TO
THE PLAN, THIS OPTION OR ANY OTHER OUTSTANDING AWARD THAT IS FORFEITED AND/OR IS
TERMINATED BY ITS TERMS OR TO ANY FUTURE AWARD.

 

10.                               RIGHTS AS A STOCKHOLDER.

 

The Participant shall not have any stockholder rights with respect to the Shares
until the Participant exercises the Option, pays the Exercise Price and becomes
a holder of record of the purchased Shares or the purchased Shares are deposited
in a Company-designated brokerage account.

 

11.                               MISCELLANEOUS PROVISIONS.

 

11.1                        AMENDMENT.  THE COMMITTEE MAY AMEND THIS AWARD
AGREEMENT AT ANY TIME; PROVIDED, HOWEVER, THAT NO SUCH AMENDMENT MAY ADVERSELY
AFFECT THE PARTICIPANT’S RIGHTS UNDER THIS AWARD AGREEMENT WITHOUT THE CONSENT
OF THE PARTICIPANT, EXCEPT TO THE EXTENT SUCH AMENDMENT IS NECESSARY TO COMPLY
WITH APPLICABLE LAW, INCLUDING, BUT NOT LIMITED TO, CODE SECTION 409A.  NO
AMENDMENT OR ADDITION TO THIS AWARD AGREEMENT SHALL BE EFFECTIVE UNLESS IN
WRITING.

 

11.2                        NONTRANSFERABILITY OF THE OPTION.  PRIOR TO THE
ISSUANCE OF SHARES UPON EXERCISE, NO RIGHT OR INTEREST OF THE PARTICIPANT IN THE
OPTION NOR ANY SHARES SUBJECT TO THE OPTION SHALL BE IN ANY MANNER PLEDGED,
ENCUMBERED, OR HYPOTHECATED TO OR IN FAVOR OF ANY PARTY OTHER THAN THE COMPANY
OR A SUBSIDIARY OR AFFILIATE OR SHALL BECOME SUBJECT TO ANY LIEN, OBLIGATION, OR
LIABILITY OF SUCH PARTICIPANT TO ANY OTHER PARTY OTHER THAN THE COMPANY, OR A
SUBSIDIARY OR AFFILIATE.  EXCEPT AS OTHERWISE PROVIDED BY THE COMMITTEE, NO
OPTION SHALL BE ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF OTHER THAN BY
WILL OR THE

 

8

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LAWS OF DESCENT AND DISTRIBUTION.  ALL RIGHTS WITH RESPECT TO THE OPTION SHALL
BE EXERCISABLE DURING THE PARTICIPANT’S LIFETIME ONLY BY THE PARTICIPANT OR THE
PARTICIPANT’S GUARDIAN OR LEGAL REPRESENTATIVE.

 

11.3                        FURTHER INSTRUMENTS.  THE PARTIES HERETO AGREE TO
EXECUTE SUCH FURTHER INSTRUMENTS AND TO TAKE SUCH FURTHER ACTION AS MAY
REASONABLY BE NECESSARY TO CARRY OUT THE INTENT OF THIS AWARD AGREEMENT.

 

11.4                        BINDING EFFECT.  THIS AWARD AGREEMENT SHALL INURE TO
THE BENEFIT OF THE SUCCESSORS AND ASSIGNS OF THE COMPANY AND, SUBJECT TO THE
RESTRICTIONS ON TRANSFER SET FORTH HEREIN, BE BINDING UPON THE PARTICIPANT AND
THE PARTICIPANT’S HEIRS, EXECUTORS, ADMINISTRATORS, SUCCESSORS AND ASSIGNS.

 

11.5                        NOTICES.  ANY NOTICE REQUIRED TO BE GIVEN OR
DELIVERED TO THE COMPANY UNDER THE TERMS OF THIS AWARD AGREEMENT SHALL BE IN
WRITING AND ADDRESSED TO THE COMPANY AT ITS PRINCIPAL CORPORATE OFFICES.  ANY
NOTICE REQUIRED TO BE GIVEN OR DELIVERED TO THE PARTICIPANT SHALL BE IN WRITING
AND ADDRESSED TO THE PARTICIPANT AT THE ADDRESS MAINTAINED FOR THE PARTICIPANT
IN THE COMPANY’S RECORDS OR AT THE ADDRESS OF THE LOCAL OFFICE OF THE COMPANY OR
OF A SUBSIDIARY OR AFFILIATE AT WHICH THE PARTICIPANT WORKS.

 

11.6                        CONSTRUCTION OF AWARD AGREEMENT.  THE GRANT NOTICE,
THIS AWARD AGREEMENT, AND THE OPTION EVIDENCED HEREBY (I) ARE MADE AND GRANTED
PURSUANT TO THE PLAN AND ARE IN ALL RESPECTS LIMITED BY AND SUBJECT TO THE TERMS
OF THE PLAN, AND (II) CONSTITUTE THE ENTIRE AGREEMENT BETWEEN THE PARTICIPANT
AND THE COMPANY ON THE SUBJECT MATTER HEREOF AND SUPERSEDE ALL PROPOSALS,
WRITTEN OR ORAL, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATED TO THE
SUBJECT MATTER.  ALL DECISIONS OF THE COMMITTEE WITH RESPECT TO ANY QUESTION OR
ISSUE ARISING UNDER THE GRANT NOTICE, THIS AWARD AGREEMENT OR THE PLAN SHALL BE
CONCLUSIVE AND BINDING ON ALL PERSONS HAVING AN INTEREST IN THIS OPTION.

 

11.7                        GOVERNING LAW.  THE INTERPRETATION, PERFORMANCE AND
ENFORCEMENT OF THIS AWARD AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF TEXAS, U.S.A. WITHOUT REGARD TO THE CONFLICT-OF-LAWS RULES THEREOF OR OF ANY
OTHER JURISDICTION.

 

11.8                        COMPLIANCE.

 

(A)           CONFORMITY TO SECURITIES LAWS.  THE PARTICIPANT ACKNOWLEDGES THAT
THE PLAN AND THIS AGREEMENT ARE INTENDED TO CONFORM TO THE EXTENT NECESSARY WITH
ALL PROVISIONS OF THE SECURITIES ACT AND THE EXCHANGE ACT AND ANY AND ALL
REGULATIONS AND RULES PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION
THEREUNDER, AND STATE SECURITIES LAWS AND REGULATIONS.  NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, THE PLAN SHALL BE ADMINISTERED, AND THE OPTION IS
GRANTED AND MAY BE EXERCISED, ONLY IN SUCH A MANNER AS TO CONFORM TO SUCH LAWS,
RULES AND REGULATIONS.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PLAN AND
THIS AWARD AGREEMENT SHALL BE DEEMED AMENDED TO THE EXTENT NECESSARY TO CONFORM
TO SUCH LAWS, RULES AND REGULATIONS.

 

(B)           SECTION 409A.  NOTWITHSTANDING ANY OTHER PROVISION OF THE PLAN,
THIS AWARD AGREEMENT OR THE GRANT NOTICE, THE PLAN, THIS AGREEMENT AND THE GRANT
NOTICE SHALL BE INTERPRETED IN ACCORDANCE WITH, AND INCORPORATE THE TERMS AND
CONDITIONS REQUIRED BY, CODE SECTION 409A (TOGETHER WITH ANY DEPARTMENT OF
TREASURY REGULATIONS AND OTHER INTERPRETIVE GUIDANCE ISSUED THEREUNDER,
INCLUDING WITHOUT LIMITATION ANY SUCH REGULATIONS OR OTHER GUIDANCE THAT MAY BE
ISSUED AFTER THE DATE HEREOF, “SECTION 409A”).  THE COMPANY RESERVES THE RIGHT,
TO THE EXTENT THE COMPANY DEEMS NECESSARY OR ADVISABLE IN ITS SOLE DISCRETION,
TO UNILATERALLY AMEND OR MODIFY THE PLAN, THIS AWARD AGREEMENT OR THE GRANT
NOTICE OR ADOPT OTHER POLICIES AND PROCEDURES (INCLUDING AMENDMENTS, POLICIES
AND PROCEDURES WITH RETROACTIVE EFFECT), OR TAKE ANY OTHER ACTIONS, AS THE
COMMITTEE DETERMINES ARE NECESSARY OR APPROPRIATE TO ENSURE THAT THIS OPTION
QUALIFIES FOR EXEMPTION FROM, OR COMPLIES WITH THE REQUIREMENTS OF,
SECTION 409A;

 

9

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PROVIDED, HOWEVER, THAT THE COMPANY MAKES NO REPRESENTATION THAT THE OPTION WILL
BE EXEMPT FROM, OR WILL COMPLY WITH, SECTION 409A, AND MAKES NO UNDERTAKINGS TO
PRECLUDE SECTION 409A OF THE CODE FROM APPLYING TO THE OPTION OR TO ENSURE THAT
IT COMPLIES WITH SECTION 409A.

 

(C)           LIMITATIONS APPLICABLE TO SECTION 16 PERSONS.  NOTWITHSTANDING ANY
OTHER PROVISION OF THE PLAN OR THIS AWARD AGREEMENT, IF THE PARTICIPANT IS
SUBJECT TO SECTION 16 OF THE EXCHANGE ACT, THE PLAN, THE OPTION AND THIS AWARD
AGREEMENT SHALL BE SUBJECT TO ANY ADDITIONAL LIMITATIONS SET FORTH IN ANY
APPLICABLE EXEMPTIVE RULE UNDER SECTION 16 OF THE EXCHANGE ACT (INCLUDING ANY
AMENDMENT TO RULE 16B-3 OF THE EXCHANGE ACT) THAT ARE REQUIREMENTS FOR THE
APPLICATION OF SUCH EXEMPTIVE RULE.  TO THE EXTENT PERMITTED BY APPLICABLE LAW,
THIS AWARD AGREEMENT SHALL BE DEEMED AMENDED TO THE EXTENT NECESSARY TO CONFORM
TO SUCH APPLICABLE EXEMPTIVE RULE.

 

11.9                        NOTICE OF DISQUALIFYING DISPOSITION OF INCENTIVE
STOCK OPTION SHARES.  IF THE OPTION GRANTED HEREIN IS AN INCENTIVE STOCK OPTION
AND IF THE PARTICIPANT SELLS OR OTHERWISE DISPOSES OF SHARES ACQUIRED PURSUANT
TO THE INCENTIVE STOCK OPTION ON OR BEFORE (I) THE DATE THAT IS TWO (2) YEARS
AFTER THE GRANT DATE OR (II) THE DATE THAT IS ONE (1) YEAR AFTER THE EXERCISE
DATE, THE PARTICIPANT SHALL IMMEDIATELY NOTIFY THE COMPANY IN WRITING OF SUCH
DISPOSITION.  THE PARTICIPANT AGREES THAT THE PARTICIPANT MAY BE SUBJECT TO
FURTHER INCOME TAX WITHHOLDING BY THE COMPANY ON THE INCOME RECEIVED BY THE
PARTICIPANT.

 

11.10                 ADMINISTRATION.  THE COMMITTEE SHALL HAVE THE POWER TO
INTERPRET THE PLAN AND THIS AWARD AGREEMENT AND TO ADOPT SUCH RULES FOR THE
ADMINISTRATION, INTERPRETATION AND APPLICATION OF THE PLAN AS ARE CONSISTENT
THEREWITH AND TO INTERPRET, AMEND OR REVOKE ANY SUCH RULES.  ALL ACTIONS TAKEN
AND ALL INTERPRETATIONS AND DETERMINATIONS MADE BY THE COMMITTEE IN GOOD FAITH
SHALL BE FINAL AND BINDING UPON THE PARTICIPANT, THE COMPANY AND ALL OTHER
INTERESTED PERSONS.  NO MEMBER OF THE COMMITTEE OR THE BOARD SHALL BE PERSONALLY
LIABLE FOR ANY ACTION, DETERMINATION OR INTERPRETATION MADE IN GOOD FAITH WITH
RESPECT TO THE PLAN, THIS AWARD AGREEMENT OR THE OPTION.

 

11.11                 COUNTERPARTS.  THE GRANT NOTICE MAY BE EXECUTED IN
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH
TOGETHER SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT.

 

11.12                 SEVERABILITY.  IF ANY PROVISION OF THIS AWARD AGREEMENT IS
HELD TO BE UNENFORCEABLE FOR ANY REASON, IT SHALL BE ADJUSTED RATHER THAN
VOIDED, IF POSSIBLE, IN ORDER TO ACHIEVE THE INTENT OF THE PARTIES TO THE EXTENT
POSSIBLE.  IN ANY EVENT, ALL OTHER PROVISIONS OF THIS AWARD AGREEMENT SHALL BE
DEEMED VALID AND ENFORCEABLE TO THE FULL EXTENT POSSIBLE.

 

11.13                 Relocation Outside the United States.  If the Participant
relocates to a country outside the United States, the Company reserves the right
to impose other requirements on the Participant’s participation in the Plan, on
the Option and on any Shares acquired under the Plan, to the extent the Company
determines necessary or advisable in order to comply with local law or
facilitate the administration of the Plan, and to require the Participant to
sign any additional agreements or undertakings that may be necessary to
accomplish the foregoing.

 

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