Exhibit 10.2

NextGen Healthcare, Inc.

2015 Equity Incentive Plan

Adopted by the Board of Directors: May 20, 2015

Approved by the Shareholders: August 11, 2015

Amended by the Board of Directors:  June 13, 2017
Approved by the Shareholders:  August 22, 2017

Amended by the Board of Directors: May 22, 2019

Approved by the Shareholders: August 15, 2019

1.General.

(a)Eligible Award Recipients.  Employees, Directors and Consultants are eligible
to receive Awards.

(b)Available Awards.  The Plan provides for the grant of the following types of
Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii)
Stock Appreciation Rights (iv) Restricted Stock Awards, (v) Restricted Stock
Unit Awards, (vi) Performance Stock Awards, (vii) Performance Cash Awards, and
(viii) Other Stock Awards.

(c)Purpose.  The Plan, through the granting of Awards, is intended to help the
Company secure and retain the services of eligible award recipients, provide
incentives for such persons to exert maximum efforts for the success of the
Company and any Affiliate and provide a means by which the eligible recipients
may benefit from increases in value of the Common Stock.

2.Administration.

(a)Administration by Board.  The Board will administer the Plan.  The Board may
delegate administration of the Plan to a Committee or Committees, as provided in
Section 2(c).

(b)Powers of Board.  The Board will have the power, subject to, and within the
limitations of, the express provisions of the Plan:

(i)To determine (A) who will be granted Awards; (B) when and how each Award will
be granted; (C) what type of Award will be granted; (D) the provisions of each
Award (which need not be identical), including when a person will be permitted
to exercise or otherwise receive cash or Common Stock under the Award; (E) the
number of shares of Common Stock subject to, or the cash value of, an Award; and
(F) the Fair Market Value applicable to a Stock Award.

(ii)To construe and interpret the Plan and Awards granted under it, and to
establish, amend and revoke rules and regulations for administration of the Plan
and Awards.  The Board, in the exercise of these powers, may correct any defect,
omission or inconsistency in the

 

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Plan or in any Award Agreement or in the written terms of a Performance Cash
Award, in a manner and to the extent it will deem necessary or expedient to make
the Plan or Award fully effective.

(iii)To settle all controversies regarding the Plan and Awards granted under it.

(iv)To accelerate, in whole or in part, the time at which an Award may be
exercised or vest (or at which cash or shares of Common Stock may be issued).  

(v)To prohibit the exercise of any Option, SAR or other exercisable Award during
a period of up to thirty days prior to the consummation of any pending stock
dividend, stock split, combination or exchange of shares, merger, consolidation
or other distribution (other than normal cash dividends) of Company assets to
stockholders, or any other change affecting the shares of Common Stock or the
share price of the Common Stock including any Transaction, for reasons of
administrative convenience.

(vi)To suspend or terminate the Plan at any time.  Except as otherwise provided
in the Plan or an Award Agreement, suspension or termination of the Plan will
not impair a Participant’s rights under his or her then-outstanding Award
without his or her written consent except as provided in subsection (ix) below.

(vii)To amend the Plan in any respect the Board deems necessary or advisable,
including, without limitation, by adopting amendments relating to Incentive
Stock Options and certain nonqualified deferred compensation under Section 409A
of the Code and/or to make the Plan or Awards granted under the Plan compliant
with the requirements for Incentive Stock Options or exempt from or compliant
with the requirements for nonqualified deferred compensation under Section 409A
of the Code, subject to the limitations, if any, of applicable law.  However, if
required by applicable law or listing requirements, and except as provided in
Section 9(a) relating to Capitalization Adjustments, the Company will seek
shareholder approval of any amendment of the Plan that (A) materially increases
the number of shares of Common Stock available for issuance under the Plan,
(B) materially expands the class of individuals eligible to receive Awards under
the Plan, (C) materially increases the benefits accruing to Participants under
the Plan, (D) materially reduces the price at which shares of Common Stock may
be issued or purchased under the Plan, (E) materially extends the term of the
Plan, or (F) materially expands the types of Awards available for issuance under
the Plan.  Except as provided in the Plan (including Section 2(b)(ix)) or an
Award Agreement, no amendment of the Plan will impair a Participant’s rights
under an outstanding Award without the Participant’s written consent.

(viii)To submit any amendment to the Plan for shareholder approval, including,
but not limited to, amendments to the Plan intended to satisfy the requirements
of (A) Section 422 of the Code regarding incentive stock options or (B) Rule
16b-3.

(ix)To approve forms of Award Agreements for use under the Plan and to amend the
terms of any one or more Awards, including, but not limited to, amendments to
provide terms more favorable to the Participant than previously provided in the
Award Agreement, subject to any specified limits in the Plan that are not
subject to Board discretion; provided, however, that a Participant’s rights
under any Award will not be impaired by any such amendment unless (A) the
Company requests the consent of the affected Participant, and (B) such
Participant consents in

 

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writing.  Notwithstanding the foregoing, (1) a Participant’s rights will not be
deemed to have been impaired by any such amendment if the Board, in its sole
discretion, determines that the amendment, taken as a whole, does not materially
impair the Participant’s rights, and (2) subject to the limitations of
applicable law, if any, the Board may amend the terms of any one or more Awards
without the affected Participant’s consent (A) to maintain the qualified status
of the Award as an Incentive Stock Option under Section 422 of the Code; (B) to
change the terms of an Incentive Stock Option, if such change results in
impairment of the Award solely because it impairs the qualified status of the
Award as an Incentive Stock Option under Section 422 of the Code; (C) to clarify
the manner of exemption from, or to bring the Award into compliance with,
Section 409A of the Code; or (D) to comply with other applicable laws or listing
requirements.

(x)Generally, to exercise such powers and to perform such acts as the Board
deems necessary or expedient to promote the best interests of the Company and
that are not in conflict with the provisions of the Plan or Awards.

(xi)To adopt such procedures and sub-plans as are necessary or appropriate to
permit participation in the Plan by Employees, Directors or Consultants who are
foreign nationals or employed outside the United States (provided that Board
approval will not be necessary for immaterial modifications to the Plan or any
Award Agreement that are required for compliance with the laws of the relevant
foreign jurisdiction).

(c)Delegation to Committee.

(i)General.  The Board may delegate some or all of the administration of the
Plan to a Committee or Committees.  If administration of the Plan is delegated
to a Committee, the Committee will have, in connection with the administration
of the Plan, the powers theretofore possessed by the Board that have been
delegated to the Committee, including the power to delegate to a subcommittee of
the Committee any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board will thereafter be to the
Committee or subcommittee, as applicable).  Any delegation of administrative
powers will be reflected in resolutions, not inconsistent with the provisions of
the Plan, adopted from time to time by the Board or Committee (as
applicable).  The Committee may, at any time, abolish the subcommittee and/or
revest in the Committee any powers delegated to the subcommittee.  The Board may
retain the authority to concurrently administer the Plan with the Committee and
may, at any time, revest in the Board some or all of the powers previously
delegated.

(ii)Rule 16b-3 Compliance.  The Committee may consist solely of two (2) or more
Non-Employee Directors, in accordance with Rule 16b-3.

(d)Effect of Board’s Decision.  All determinations, interpretations and
constructions made by the Board in good faith will not be subject to review by
any person and will be final, binding and conclusive on all persons.

(e)Cancellation and Re-Grant of Stock Awards.  Except as provided in Section
9(a), neither the Board nor any Committee will have the authority to: (i) reduce
the exercise, purchase or strike price of any outstanding Option or SAR under
the Plan, or (ii) cancel any outstanding Option or SAR that has an exercise
price or strike price greater than the current Fair Market Value

 

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of the Common Stock in exchange for cash or other Stock Awards under the Plan
(except in the event of a Change in Control), unless the shareholders of the
Company have approved such an action within twelve (12) months prior to such an
event.

(f)Dividends and Dividend Equivalents.  Dividends or dividend equivalents may be
paid or credited, as applicable, with respect to any shares of Common Stock
subject to an Award other than an Appreciation Award, as determined by the Board
and contained in the applicable Award Agreement; provided, however, that (i) no
dividends or dividend equivalents may be paid with respect to any such shares
before the date such shares have vested under the terms of such Award Agreement,
(ii) any dividends or dividend equivalents that are credited with respect to any
such shares will be subject to all of the terms and conditions applicable to
such shares under the terms of such Award Agreement (including, but not limited
to, any vesting conditions), and (iii) any dividends or dividend equivalents
that are credited with respect to any such shares will be forfeited to the
Company on the date, if any, such shares are forfeited to or repurchased by the
Company due to a failure to meet any vesting conditions under the terms of such
Award Agreement.

(g)Minimum Vesting Requirements.  Excluding, for this purpose, any (i)
substitute awards, and (ii) awards to Non-Employee Directors that vest on the
earlier of the one year anniversary of the date of grant or the next annual
meeting of stockholders which is at least 50 weeks after the immediately
preceding year’s annual meeting, no Stock Award granted on or after August 15,
2019 may vest (or, if applicable, be exercisable) until at least twelve (12)
months following the date of grant of the Stock Award; provided, however, that
up to 5% of the Share Reserve (as defined in Subsection 3(a)(i) and subject to
adjustment as provided in Section 9(a)) may be subject to Stock Awards granted
on or after August 15, 2019 that do not meet such vesting (and, if applicable,
exercisability) requirements and, provided further, for the avoidance of doubt,
that the foregoing restriction does not apply to the Board’s discretion to
provide for accelerated exercisability or vesting of any Award, including in
cases of retirement, death, disability or a change in control, in the terms of
the Award or otherwise.

3.Shares Subject to the Plan.

(a)Share Reserve.  

(i)Subject to adjustment under Section 9(a) relating to Capitalization
Adjustments, the aggregate number of shares of Common Stock that may be issued
pursuant to Stock Awards from and after the Effective Date will not exceed the
sum of (A) 21,075,000 shares (which number is the sum of (i) 11,500,000 shares
originally approved by the Company’s stockholders in August 2015, (ii) 6,000,000
shares approved by the Company’s stockholders at the Company’s Annual Meeting of
Stockholders in August 2017, and (iii) 3,575,000 shares approved by the
Company’s stockholders at the Company’s Annual Meeting of Stockholders in August
2019), plus (B) any shares subject to outstanding stock awards granted under the
Second Amended and Restated 2005 Stock Option and Incentive Plan (the “Prior
Plan”) that from and after 12:01 a.m. Pacific time on May 26, 2015 (i) expire or
terminate for any reason prior to exercise or settlement or are settled in cash;
(ii) are forfeited, cancelled or otherwise returned to the Company because of
the failure to meet a contingency or condition required to vest such shares; or
(iii) are reacquired, withheld (or not issued) to satisfy a tax withholding
obligation in connection with an

 

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award other than a stock option or stock appreciation right (such shares
described in (i), (ii) and (iii), the “Returning Shares”) (such aggregate number
of shares described in (A) and (B) above, the “Share Reserve”).

(ii)For clarity, the Share Reserve in this Section 3(a) is a limitation on the
number of shares of Common Stock that may be issued pursuant to the
Plan.  Accordingly, this Section 3(a) does not limit the granting of Stock
Awards except as provided in Section 7(a).  Shares may be issued in connection
with a merger or acquisition as permitted by NASDAQ Listing Rule 5635(c) or, if
applicable, NYSE Listed Company Manual Section 303A.08, AMEX Company Guide
Section 711 or other applicable rule, and such issuance will not reduce the
number of shares available for issuance under the Plan.

(iii)Subject to Section 3(b), the number of shares available for issuance under
the Plan will be reduced by: (i) one (1) share for each share of Common Stock
issued pursuant to an Appreciation Award, (ii) two and a half (2.5) shares for
each share of Common Stock issued pursuant to a Full Value Award granted before
March 31, 2017; (iii) 3.27 shares for each share of Common Stock issued pursuant
to a Full Value Award granted on or after March 31, 2017 but before May 22,
2019; and (iv) 2.77 shares for each share of Common Stock issued pursuant to a
Full Value Award granted on or after May 22, 2019.

(b)Reversion of Shares to the Share Reserve.  

(i)Shares Available For Subsequent Issuance.  If any shares of Common Stock
issued pursuant to a Stock Award (or award under the Prior Plan) are forfeited
back to the Company because of the failure to meet a contingency or condition
required to vest such shares in the Participant, then the shares that are
forfeited will revert to and again become available for issuance under the
Plan.  Notwithstanding the provisions of this Section 3(b), to the extent there
is issued a share of Common Stock pursuant to a Full Value Award and such share
of Common Stock becomes available for issuance under the Plan pursuant to
Section 3(a) or this Section 3(b) before March 31, 2017, then the number of
shares of Common Stock available for issuance under the Plan will increase by
two and a half (2.5) shares for each such share; if such share of Common Stock
becomes available for issuance under the Plan pursuant to Section 3(a) or this
Section 3(b) on or after March 31, 2017 but before May 22, 2019, then the number
of shares of Common Stock available for issuance under the Plan will increase by
3.27 shares for each such share; and if such share of Common Stock becomes
available for issuance under the Plan pursuant to Section 3(a) or this Section
3(b) on or after May 22, 2019, then the number of shares of Common Stock
available for issuance under the Plan will increase by 2.77 shares for each such
share of Common Stock.

(ii)Shares Not Available For Subsequent Issuance.  If any shares subject to an
Option or SAR are not delivered to a Participant because the Option or SAR is
exercised through a reduction of shares subject to the Stock Award (i.e., “net
exercised”), the number of shares that are not delivered to the Participant will
not remain available for issuance under the Plan. Also, any shares withheld or
reacquired by the Company to cover withholding taxes pursuant to Section 8(h)
with respect to an Option or SAR (but not with respect to any other type of
Stock Award) or as consideration for the exercise of an Option or SAR will not
again become available for issuance under the Plan.  In addition, the gross
number of shares subject to a SAR shall count against the Share Reserve if such
SAR is settled in shares of Common Stock, and shares that are reacquired

 

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by the Company on the open market or otherwise using cash proceeds from the
exercise of Options (or options under any Prior Plan) shall not be added to the
Share Reserve.  In the event that withholding tax liabilities arising from a
Full Value Award (or full value award granted under the Prior Plan) are
satisfied by the tendering of shares (either actually or by attestation) or by
the withholding of shares by the Company, the shares so tendered or withheld
shall be added to the Share Reserve and shall be counted in accordance with the
fungible ratio as set forth in Section 3(b)(i) above; provided that to the
extent such tendered or withheld shares have a value that exceeds the minimum
amount of tax required to be withheld by law, such additional shares shall not
be added to the Share Reserve.  

(c)Incentive Stock Option Limit.  Subject to the Share Reserve and Section 9(a)
relating to Capitalization Adjustments, the aggregate maximum number of shares
of Common Stock that may be issued pursuant to the exercise of Incentive Stock
Options will be twenty-nine million five hundred seventy-five thousand
(29,575,000) shares of Common Stock.

(d)Individual Annual Limitations. Subject to the Share Reserve and Section 9(a)
relating to Capitalization Adjustments, the following limitations apply to
annual employee grants:

(i)A maximum of two million (2,000,000) shares of Common Stock subject to
Appreciation Awards granted under this Plan may be granted to any Participant
during any fiscal year.

(ii)A maximum of two million (2,000,000) shares of Common Stock subject to
Performance Stock Awards may be granted (based on maximum level of achievement)
to any one Participant during any one fiscal year.

(iii)A maximum of two million dollars ($2,000,000) may be granted (based on
maximum level of achievement) as a Performance Cash Award to any one Participant
during any one fiscal year.

(e)Limitation on Grants to Non-Employee Directors.  The maximum number of shares
subject to Stock Awards granted under this Plan or under any other equity plan
maintained by the Company during a single fiscal year to any Non-Employee
Director, taken together with any cash fees paid to such Non-Employee Director
during the fiscal year for services as a Non-Employee Director rendered for such
year, will not exceed Five Hundred Thousand Dollars ($500,000) in total value
(calculating the value of any such Stock Awards based on the grant date fair
value of such Stock Awards for financial reporting purposes and excluding, for
this purpose, the value of any dividend equivalent payments paid pursuant to any
Stock Award granted in a previous fiscal year).  For the avoidance of doubt, any
compensation that is deferred shall be counted towards this limit in the year in
which the compensation is first earned, and not the year of payment in the event
it is deferred.

(f)Source of Shares. The stock issuable under the Plan will be shares of
authorized but unissued or reacquired Common Stock, including shares repurchased
by the Company on the open market or otherwise.

 

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4.Eligibility.

(a)Eligibility for Specific Stock Awards.  Incentive Stock Options may be
granted only to employees of the Company or a “parent corporation” or
“subsidiary corporation” thereof (as such terms are defined in Sections 424(e)
and 424(f) of the Code).  Stock Awards other than Incentive Stock Options may be
granted to Employees, Directors and Consultants; provided, however, that Stock
Awards may not be granted to Employees, Directors and Consultants who are
providing Continuous Service only to any “parent” of the Company, as such term
is defined in Rule 405, unless (i) the stock underlying such Stock Awards is
treated as “service recipient stock” under Section 409A of the Code (for
example, because the Stock Awards are granted pursuant to a corporate
transaction such as a spin off transaction) or (ii) the Company, in consultation
with its legal counsel, has determined that such Stock Awards are otherwise
exempt from or alternatively comply with the distribution requirements of
Section 409A of the Code.

(b)Ten Percent Shareholders.  A Ten Percent Shareholder will not be granted an
Incentive Stock Option unless the exercise price of such Option is at least one
hundred ten percent (110%) of the Fair Market Value on the date of grant and the
Option is not exercisable after the expiration of five (5) years from the date
of grant.

5.Provisions Relating to Options and Stock Appreciation Rights.

Each Option or SAR will be in such form and will contain such terms and
conditions as the Board deems appropriate.  All Options will be separately
designated Incentive Stock Options or Nonstatutory Stock Options at the time of
grant, and, if certificates are issued, a separate certificate or certificates
will be issued for shares of Common Stock purchased on exercise of each type of
Option.  If an Option is not specifically designated as an Incentive Stock
Option, or if an Option is designated as an Incentive Stock Option but some
portion or all of the Option fails to qualify as an Incentive Stock Option under
the applicable rules, then the Option (or portion thereof) will be a
Nonstatutory Stock Option.  The provisions of separate Options or SARs need not
be identical; provided, however, that each Award Agreement will conform to
(through incorporation of provisions hereof by reference in the applicable Award
Agreement or otherwise) the substance of each of the following provisions:

(a)Term.  Subject to the provisions of Section 4(b) regarding Ten Percent
Shareholders, no Option or SAR will be exercisable after the expiration of ten
(10) years from the date of its grant or such shorter period specified in the
Award Agreement.

(b)Exercise Price.  Subject to the provisions of Section 4(b) regarding Ten
Percent Shareholders, the exercise or strike price of each Option or SAR will be
not less than one hundred percent (100%) of the Fair Market Value of the Common
Stock subject to the Option or SAR on the date the Award is
granted.  Notwithstanding the foregoing, an Option or SAR may be granted with an
exercise or strike price lower than one hundred percent (100%) of the Fair
Market Value of the Common Stock subject to the Award if such Award is granted
pursuant to an assumption of or substitution for another option or stock
appreciation right pursuant to a Corporate Transaction and in a manner
consistent with the provisions of Section 409A of the Code and, if applicable,
Section 424(a) of the Code.  Each SAR will be denominated in shares of Common
Stock equivalents.

 

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(c)Purchase Price for Options.  The purchase price of Common Stock acquired
pursuant to the exercise of an Option may be paid, to the extent permitted by
applicable law and as determined by the Board in its sole discretion, by any
combination of the methods of payment set forth below.  The Board will have the
authority to grant Options that do not permit all of the following methods of
payment (or that otherwise restrict the ability to use certain methods) and to
grant Options that require the consent of the Company to use a particular method
of payment.  The permitted methods of payment are as follows:

(i)by cash, check, bank draft or money order payable to the Company;

(ii)pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board that, prior to the issuance of the stock subject to the
Option, results in either the receipt of cash (or check) by the Company or the
receipt of irrevocable instructions to pay the aggregate exercise price to the
Company from the sales proceeds;

(iii)by delivery to the Company (either by actual delivery or attestation) of
shares of Common Stock;

(iv)if an Option is a Nonstatutory Stock Option, by a “net exercise” arrangement
pursuant to which the Company will reduce the number of shares of Common Stock
issuable upon exercise by the largest whole number of shares with a Fair Market
Value that does not exceed the aggregate exercise price; provided, however, that
the Company will accept a cash or other payment from the Participant to the
extent of any remaining balance of the aggregate exercise price not satisfied by
such reduction in the number of whole shares to be issued.  Shares of Common
Stock will no longer be subject to an Option and will not be exercisable
thereafter to the extent that (A) shares issuable upon exercise are used to pay
the exercise price pursuant to the “net exercise,” (B) shares are delivered to
the Participant as a result of such exercise, and (C) shares are withheld to
satisfy tax withholding obligations; or

(v)in any other form of legal consideration that may be acceptable to the Board
and specified in the applicable Award Agreement.

(d)Exercise and Payment of a SAR.  To exercise any outstanding SAR, the
Participant must provide written notice of exercise to the Company in compliance
with the provisions of the Award Agreement evidencing such SAR.  The
appreciation distribution payable on the exercise of a SAR will be not greater
than an amount equal to the excess of (A) the aggregate Fair Market Value (on
the date of the exercise of the SAR) of a number of shares of Common Stock equal
to the number of Common Stock equivalents in which the Participant is vested
under such SAR, and with respect to which the Participant is exercising the SAR
on such date, over (B) the aggregate strike price of the number of Common Stock
equivalents with respect to which the Participant is exercising the SAR on such
date.  The appreciation distribution may be paid in Common Stock, in cash, in
any combination of the two or in any other form of consideration, as determined
by the Board and contained in the Award Agreement evidencing such SAR.

(e)Transferability of Options and SARs.  The Board may, in its sole discretion,
impose such limitations on the transferability of Options and SARs as the Board
will determine.  

 

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In the absence of such a determination by the Board to the contrary, the
following restrictions on the transferability of Options and SARs will apply:

(i)Restrictions on Transfer.  An Option or SAR will not be transferable except
by will or by the laws of descent and distribution (and pursuant to Sections
5(e)(ii) and 5(e)(iii)), and will be exercisable during the lifetime of the
Participant only by the Participant.  Subject to Section 8(m) of this Plan, the
Board may permit transfer of the Option or SAR in a manner that is not
prohibited by applicable tax and securities laws.  Except as explicitly provided
in the Plan, neither an Option nor a SAR may be transferred for consideration.

(ii)Domestic Relations Orders.  Subject to the approval of the Board or a duly
authorized Officer, an Option or SAR may be transferred pursuant to the terms of
a domestic relations order, official marital settlement agreement or other
divorce or separation instrument as permitted by Treasury Regulations Section
1.421-1(b)(2).  If an Option is an Incentive Stock Option, such Option may be
deemed to be a Nonstatutory Stock Option as a result of such transfer.

(iii)Beneficiary Designation.  Subject to the approval of the Board or a duly
authorized Officer, a Participant may, by delivering written notice to the
Company, in a form approved by the Company (or the designated broker), designate
a third party who, upon the death of the Participant, will thereafter be
entitled to exercise the Option or SAR and receive the Common Stock or other
consideration resulting from such exercise.  In the absence of such a
designation, upon the death of the Participant, the executor or administrator of
the Participant’s estate will be entitled to exercise the Option or SAR and
receive the Common Stock or other consideration resulting from such
exercise.  However, the Company may prohibit designation of a beneficiary at any
time, including due to any conclusion by the Company that such designation would
be inconsistent with the provisions of applicable laws.

(f)Vesting Generally.  Subject to Section 2(g) of this Plan, the total number of
shares of Common Stock subject to an Option or SAR may vest and become
exercisable in periodic installments that may or may not be equal.  The Option
or SAR may be subject to such other terms and conditions on the time or times
when it may or may not be exercised (which may be based on the satisfaction of
Performance Goals or other criteria) as the Board may deem appropriate.  The
vesting provisions of individual Options or SARs may vary.  The provisions of
this Section 5(f) are subject to any Option or SAR provisions governing the
minimum number of shares of Common Stock as to which an Option or SAR may be
exercised.

(g)Termination of Continuous Service.  Except as otherwise provided in the
applicable Award Agreement or other agreement between the Participant and the
Company, if a Participant’s Continuous Service terminates (other than for Cause
and other than upon the Participant’s death or Disability), the Participant may
exercise his or her Option or SAR (to the extent that the Participant was
entitled to exercise such Award as of the date of termination of Continuous
Service) within the period of time ending on the earlier of (i) the date three
(3) months following the termination of the Participant’s Continuous Service (or
such longer or shorter period specified in the applicable Award Agreement), and
(ii) the expiration of the term of the Option or SAR as set forth in the Award
Agreement.  If, after termination of Continuous Service, the Participant does
not exercise his or her Option or SAR (as applicable) within the applicable time
frame, the Option or SAR will terminate.

 

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(h)Extension of Termination Date.  Except as otherwise provided in the
applicable Award Agreement or other agreement between the Participant and the
Company, if the exercise of an Option or SAR following the termination of the
Participant’s Continuous Service (other than for Cause and other than upon the
Participant’s death or Disability) would be prohibited at any time solely
because the issuance of shares of Common Stock would violate the registration
requirements under the Securities Act, then the Option or SAR will terminate on
the earlier of (i) the expiration of a period of time (that need not be
consecutive) equal to the applicable post-termination exercise period after the
termination of the Participant’s Continuous Service during which the exercise of
the Option or SAR would not be in violation of such registration requirements,
or (ii) the expiration of the term of the Option or SAR as set forth in the
applicable Award Agreement.  In addition, unless otherwise provided in a
Participant’s Award Agreement, if the sale of any Common Stock received upon
exercise of an Option or SAR following the termination of the Participant’s
Continuous Service (other than for Cause) would violate the Company’s insider
trading policy, then the Option or SAR will terminate on the earlier of (i) the
expiration of a period of time (that need not be consecutive) equal to the
applicable post-termination exercise period after the termination of the
Participant’s Continuous Service during which the sale of the Common Stock
received upon exercise of the Option or SAR would not be in violation of the
Company’s insider trading policy, or (ii) the expiration of the term of the
Option or SAR as set forth in the applicable Award Agreement.

(i)Disability of Participant.  Except as otherwise provided in the applicable
Award Agreement or other agreement between the Participant and the Company, if a
Participant’s Continuous Service terminates as a result of the Participant’s
Disability, the Participant may exercise his or her Option or SAR (to the extent
that the Participant was entitled to exercise such Option or SAR as of the date
of termination of Continuous Service), but only within such period of time
ending on the earlier of (i) the date twelve (12) months following such
termination of Continuous Service (or such longer or shorter period specified in
the Award Agreement), and (ii) the expiration of the term of the Option or SAR
as set forth in the Award Agreement.  If, after termination of Continuous
Service, the Participant does not exercise his or her Option or SAR within the
applicable time frame, the Option or SAR (as applicable) will terminate.

(j)Death of Participant.  Except as otherwise provided in the applicable Award
Agreement or other agreement between the Participant and the Company, if (i) a
Participant’s Continuous Service terminates as a result of the Participant’s
death, or (ii) the Participant dies within the period (if any) specified in the
Award Agreement for exercisability after the termination of the Participant’s
Continuous Service (for a reason other than death), then the Option or SAR may
be exercised (to the extent the Participant was entitled to exercise such Option
or SAR as of the date of death) by the Participant’s estate, by a person who
acquired the right to exercise the Option or SAR by bequest or inheritance or by
a person designated to exercise the Option or SAR upon the Participant’s death,
but only within the period ending on the earlier of (i) the date eighteen (18)
months following the date of death (or such longer or shorter period specified
in the Award Agreement), and (ii) the expiration of the term of such Option or
SAR as set forth in the Award Agreement.  If, after the Participant’s death, the
Option or SAR is not exercised within the applicable time frame, the Option or
SAR (as applicable) will terminate.

(k)Termination for Cause.  Except as explicitly provided otherwise in a
Participant’s Award Agreement or other individual written agreement between the
Company or any Affiliate

 

10.

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and the Participant, if a Participant’s Continuous Service is terminated for
Cause, the Option or SAR will terminate immediately upon such Participant’s
termination of Continuous Service, and the Participant will be prohibited from
exercising his or her Option or SAR from and after the time of such termination
of Continuous Service.

(l)Non-Exempt Employees.  If an Option or SAR is granted to an Employee who is a
non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as
amended, the Option or SAR will not be first exercisable for any shares of
Common Stock until at least six (6) months following the date of grant of the
Option or SAR (although the Award may vest prior to such date). Consistent with
the provisions of the Worker Economic Opportunity Act, (i) if such non-exempt
employee dies or suffers a Disability, (ii) upon a Corporate Transaction in
which such Option or SAR is not assumed, continued, or substituted, (iii) upon a
Change in Control, or (iv) upon the Participant’s retirement (as such term may
be defined in the Participant’s Award Agreement, in another agreement between
the Participant and the Company, or, if no such definition, in accordance with
the Company's then current employment policies and guidelines), the vested
portion of any Options and SARs may be exercised earlier than six (6) months
following the date of grant.  The foregoing provision is intended to operate so
that any income derived by a non-exempt employee in connection with the exercise
or vesting of an Option or SAR will be exempt from his or her regular rate of
pay.  To the extent permitted and/or required for compliance with the Worker
Economic Opportunity Act to ensure that any income derived by a non-exempt
employee in connection with the exercise, vesting or issuance of any shares
under any other Stock Award will be exempt from the employee’s regular rate of
pay, the provisions of this Section 5(l) will apply to all Stock Awards and are
hereby incorporated by reference into such Stock Award Agreements.

6.Provisions of Stock Awards Other than Options and SARs.

(a)Restricted Stock Awards.  Each Restricted Stock Award Agreement will be in
such form and will contain such terms and conditions as the Board deems
appropriate.  To the extent consistent with the Company’s bylaws, at the Board’s
election, shares of Common Stock underlying a Restricted Stock Award may be (i)
held in book entry form subject to the Company’s instructions until any
restrictions relating to the Restricted Stock Award lapse; or (ii) evidenced by
a certificate, which certificate will be held in such form and manner as
determined by the Board.  The terms and conditions of Restricted Stock Award
Agreements may change from time to time, and the terms and conditions of
separate Restricted Stock Award Agreements need not be identical. Each
Restricted Stock Award Agreement will conform to (through incorporation of the
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:

(i)Consideration.  A Restricted Stock Award may be awarded in consideration for
(A) cash, check, bank draft or money order payable to the Company, (B) past
services to the Company or an Affiliate, or (C) any other form of legal
consideration that may be acceptable to the Board, in its sole discretion, and
permissible under applicable law.

(ii)Vesting.  Subject to Section 2(g) of this Plan, shares of Common Stock
awarded under the Restricted Stock Award Agreement may be subject to forfeiture
to the Company in accordance with a vesting schedule to be determined by the
Board.

 

11.

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(iii)Termination of Participant’s Continuous Service.  If a Participant’s
Continuous Service terminates, the Company may receive through a forfeiture
condition or a repurchase right any or all of the shares of Common Stock held by
the Participant that have not vested as of the date of termination of Continuous
Service under the terms of the Restricted Stock Award Agreement.

(iv)Transferability.  Subject to Section 8(m) of this Plan, rights to acquire
shares of Common Stock under the Restricted Stock Award Agreement will be
transferable by the Participant only upon such terms and conditions as are set
forth in the Restricted Stock Award Agreement, as the Board will determine in
its sole discretion, so long as Common Stock awarded under the Restricted Stock
Award Agreement remains subject to the terms of the Restricted Stock Award
Agreement.

(v)Dividends.  A Restricted Stock Award Agreement shall provide that any
dividends paid on Restricted Stock will be subject to the same vesting and
forfeiture restrictions as apply to the shares subject to the Restricted Stock
Award to which they relate.

(b)Restricted Stock Unit Awards.  Each Restricted Stock Unit Award Agreement
will be in such form and will contain such terms and conditions as the Board
deems appropriate.  The terms and conditions of Restricted Stock Unit Award
Agreements may change from time to time, and the terms and conditions of
separate Restricted Stock Unit Award Agreements need not be identical.  Each
Restricted Stock Unit Award Agreement will conform to (through incorporation of
the provisions hereof by reference in the Agreement or otherwise) the substance
of each of the following provisions:

(i)Consideration.  At the time of grant of a Restricted Stock Unit Award, the
Board will determine the consideration, if any, to be paid by the Participant
upon delivery of each share of Common Stock subject to the Restricted Stock Unit
Award.  The consideration to be paid (if any) by the Participant for each share
of Common Stock subject to a Restricted Stock Unit Award may be paid in any form
of legal consideration that may be acceptable to the Board, in its sole
discretion, and permissible under applicable law.

(ii)Vesting.  Subject to Section 2(g) of this Plan, at the time of the grant of
a Restricted Stock Unit Award, the Board may impose such restrictions on or
conditions to the vesting of the Restricted Stock Unit Award as it, in its sole
discretion, deems appropriate.

(iii)Payment.  A Restricted Stock Unit Award may be settled by the delivery of
shares of Common Stock, their cash equivalent, any combination thereof or in any
other form of consideration, as determined by the Board and contained in the
Restricted Stock Unit Award Agreement.

(iv)Additional Restrictions.  At the time of the grant of a Restricted Stock
Unit Award, the Board, as it deems appropriate, may impose such restrictions or
conditions that delay the delivery of the shares of Common Stock (or their cash
equivalent) subject to a Restricted Stock Unit Award to a time after the vesting
of such Restricted Stock Unit Award.

(v)Dividend Equivalents.  Dividend equivalents may be credited in respect of
shares of Common Stock covered by a Restricted Stock Unit Award, as determined
by the Board

 

12.

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and contained in the Restricted Stock Unit Award Agreement.  At the sole
discretion of the Board, such dividend equivalents may be converted into
additional shares of Common Stock covered by the Restricted Stock Unit Award in
such manner as determined by the Board.  Any dividend equivalents (whether
credited or accumulated or reinvested in any form), and any additional shares
covered by the Restricted Stock Unit Award credited by reason of such dividend
equivalents, will be subject to all of the same terms and conditions and risk of
forfeiture of the underlying Restricted Stock Unit Award Agreement to which they
relate.

(vi)Termination of Participant’s Continuous Service.  Except as otherwise
provided in the applicable Restricted Stock Unit Award Agreement or other
agreement with the Company, such portion of the Restricted Stock Unit Award that
has not vested will be forfeited upon the Participant’s termination of
Continuous Service.

(c)Performance Awards.

(i)Performance Stock Awards.  A Performance Stock Award is a Stock Award that is
payable (including that may be granted, vest or be exercised) contingent upon
the attainment during a Performance Period of certain Performance Goals.  A
Performance Stock Award may, but need not, require the Participant’s completion
of a specified period of Continuous Service.  Subject to Section 2(g) of this
Plan, the length of any Performance Period, the Performance Goals to be achieved
during the Performance Period, and the measure of whether and to what degree
such Performance Goals have been attained will be conclusively determined by the
Committee, in its sole discretion.  In addition, to the extent permitted by
applicable law and the applicable Award Agreement, the Board may determine that
cash may be used in payment of Performance Stock Awards.

(ii)Performance Cash Awards.  A Performance Cash Award is a cash award that is
payable contingent upon the attainment during a Performance Period of certain
Performance Goals.  A Performance Cash Award may also require the Participant’s
completion of a specified period of Continuous Service.  At the time of grant of
a Performance Cash Award, the length of any Performance Period, the Performance
Goals to be achieved during the Performance Period, and the measure of whether
and to what degree such Performance Goals have been attained will be
conclusively determined by the Committee, in its sole discretion.  The Board may
specify the form of payment of Performance Cash Awards, which may be cash or
other property, or may provide for a Participant to have the option for his or
her Performance Cash Award, or such portion thereof as the Board may specify, to
be paid in whole or in part in cash or other property.

(iii)Board Discretion.  The Board retains the discretion to increase (provided
that such discretion does not impair the Company’s ability to deduct the amount
of compensation payable under the Award), reduce or eliminate the compensation
or economic benefit due upon attainment of Performance Goals and to define the
manner of calculating the Performance Criteria it selects to use for a
Performance Period.  

(d)Other Stock Awards.  Subject to Section 2(g) of this Plan, other forms of
Stock Awards valued in whole or in part by reference to, or otherwise based on,
Common Stock may be granted either alone or in addition to Stock Awards granted
under Section 5 and this Section 6.  Subject to the provisions of the Plan, the
Board will have sole and complete authority to determine

 

13.

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the persons to whom and the time or times at which such Other Stock Awards will
be granted, the number of shares of Common Stock (or the cash equivalent
thereof) to be granted pursuant to such Other Stock Awards and all other terms
and conditions of such Other Stock Awards.

7.Covenants of the Company.

(a)Availability of Shares.  The Company will keep available at all times the
number of shares of Common Stock reasonably required to satisfy then-outstanding
Stock Awards.

(b)Securities Law Compliance.  The Company will seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan the authority
required to grant Stock Awards and to issue and sell shares of Common Stock upon
exercise of the Stock Awards; provided, however, that this undertaking will not
require the Company to register under the Securities Act the Plan, any Stock
Award or any Common Stock issued or issuable pursuant to any such Stock
Award.  If, after reasonable efforts and at a reasonable cost, the Company is
unable to obtain from any such regulatory commission or agency the authority
that counsel for the Company deems necessary for the lawful issuance and sale of
Common Stock under the Plan, the Company will be relieved from any liability for
failure to issue and sell Common Stock upon exercise of such Stock Awards unless
and until such authority is obtained.  A Participant will not be eligible for
the grant of an Award or the subsequent issuance of cash or Common Stock
pursuant to the Award if such grant or issuance would be in violation of any
applicable securities law.

(c)No Obligation to Notify or Minimize Taxes.  The Company will have no duty or
obligation to any Participant to advise such holder as to the time or manner of
exercising such Stock Award.  Furthermore, the Company will have no duty or
obligation to warn or otherwise advise such holder of a pending termination or
expiration of an Award or a possible period in which the Award may not be
exercised.  The Company has no duty or obligation to minimize the tax
consequences of an Award to the holder of such Award.

8.Miscellaneous.

(a)Use of Proceeds from Sales of Common Stock.  Proceeds from the sale of shares
of Common Stock issued pursuant to Stock Awards will constitute general funds of
the Company.

(b)Corporate Action Constituting Grant of Awards.  Corporate action constituting
a grant by the Company of an Award to any Participant will be deemed completed
as of the date of such corporate action, unless otherwise determined by the
Board, regardless of when the instrument, certificate, or letter evidencing the
Award is communicated to, or actually received or accepted by, the
Participant.  In the event that the corporate records (e.g., Board consents,
resolutions or minutes) documenting the corporate action constituting the grant
contain terms (e.g., exercise price, vesting schedule or number of shares) that
are inconsistent with those in the Award Agreement or related grant documents as
a result of a clerical error in the papering of the Award Agreement or related
grant documents, the corporate records will control and the Participant will
have no legally binding right to the incorrect term in the Award Agreement or
related grant documents.  

(c)Shareholder Rights.  No Participant will be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares of Common Stock
subject to an Award

 

14.

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unless and until (i) such Participant has satisfied all requirements for
exercise of, or the issuance of shares of Common Stock under, the Award pursuant
to its terms, and (ii) the issuance of the Common Stock subject to such Award
has been entered into the books and records of the Company.

(d)No Employment or Other Service Rights.  Nothing in the Plan, any Award
Agreement or any other instrument executed thereunder or in connection with any
Award granted pursuant thereto will confer upon any Participant any right to
continue to serve the Company or an Affiliate in the capacity in effect at the
time the Award was granted or will affect the right of the Company or an
Affiliate to terminate (i) the employment of an Employee with or without notice
and with or without cause, (ii) the service of a Consultant pursuant to the
terms of such Consultant’s agreement with the Company or an Affiliate, or (iii)
the service of a Director pursuant to the bylaws of the Company or an Affiliate,
and any applicable provisions of the corporate law of the state in which the
Company or the Affiliate is incorporated, as the case may be.

(e)Change in Time Commitment.  In the event a Participant’s regular level of
time commitment in the performance of his or her services for the Company and
any Affiliates is reduced (for example, and without limitation, if the
Participant is an Employee of the Company and the Employee has a change in
status from a full-time Employee to a part-time Employee) after the date of
grant of any Award to the Participant, the Board has the right in its sole
discretion to (x) make a corresponding reduction in the number of shares or cash
amount subject to any portion of such Award that is scheduled to vest or become
payable after the date of such change in time commitment, and (y) in lieu of or
in combination with such a reduction, extend the vesting or payment schedule
applicable to such Award.  In the event of any such reduction, the Participant
will have no right with respect to any portion of the Award that is so reduced
or extended.

(f)Incentive Stock Option Limitations.  To the extent that the aggregate Fair
Market Value (determined at the time of grant) of Common Stock with respect to
which Incentive Stock Options are exercisable for the first time by any
Optionholder during any calendar year (under all plans of the Company and any
Affiliates) exceeds one hundred thousand dollars ($100,000) (or such other limit
established in the Code) or otherwise does not comply with the rules governing
Incentive Stock Options, the Options or portions thereof that exceed such limit
(according to the order in which they were granted) or otherwise do not comply
with such rules will be treated as Nonstatutory Stock Options, notwithstanding
any contrary provision of the applicable Option Agreement(s).

(g)Investment Assurances.  The Company may require a Participant, as a condition
of exercising or acquiring Common Stock under any Award, (i) to give written
assurances satisfactory to the Company as to the Participant’s knowledge and
experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Award; and (ii) to give written assurances satisfactory
to the Company stating that the Participant is acquiring Common Stock subject to
the Award for the Participant’s own account and not with any present intention
of selling or otherwise distributing the Common Stock.  The foregoing
requirements, and any assurances given pursuant to such requirements, will be
inoperative if (A) the issuance of the shares upon the exercise or acquisition
of Common Stock

 

15.

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under the Stock Award has been registered under a then currently effective
registration statement under the Securities Act, or (B) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws.  The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the Common
Stock.

(h)Withholding Obligations.  Unless prohibited by the terms of an Award
Agreement, the Company may, in its sole discretion, satisfy any federal, state
or local tax withholding obligation relating to an Award by any of the following
means or by a combination of such means: (i) causing the Participant to tender a
cash payment; (ii) withholding shares of Common Stock from the shares of Common
Stock issued or otherwise issuable to the Participant in connection with the
Stock Award; (iii) withholding cash from an Award settled in cash;
(iv) withholding payment from any amounts otherwise payable to the Participant;
or (v) by such other method as may be set forth in the Award
Agreement.  Notwithstanding the foregoing, if the Company elects to withhold
shares of Common Stock from the shares of Common Stock issued or otherwise
issuable to the Participant in connection with the Stock Award, then (a) any
such shares withheld by the Company may not have a value that exceeds the
maximum individual statutory tax rate in the applicable jurisdiction, and (b)
any such withheld shares that have a value in excess of the minimum amount of
tax required to be withheld by law shall not be added to the Share Reserve as
provided in Section 3(b)(ii) above.  

(i)Electronic Delivery.  Any reference herein or in an Award Agreement to a
“written” agreement or document will include any agreement or document delivered
electronically, filed publicly at www.sec.gov (or any successor website thereto)
or posted on the Company’s intranet (or other shared electronic medium
controlled by the Company to which the Participant has access).  By accepting
any Award, the Participant consents to receive documents by electronic delivery
and to participate in the Plan through any on-line electronic system established
and maintained by the Board or another third party selected by the Board.  The
form of delivery of any Common Stock (e.g., a stock certificate or electronic
entry evidencing such shares) shall be determined by the Company.

(j)Deferrals.  To the extent permitted by applicable law, the Board, in its sole
discretion, may determine that the delivery of Common Stock or the payment of
cash, upon the exercise, vesting or settlement of all or a portion of any Award
may be deferred and may establish programs and procedures for deferral elections
to be made by Participants.  Deferrals by Participants will be made in
accordance with Section 409A of the Code. Consistent with Section 409A of the
Code, the Board may provide for distributions while a Participant is still an
employee or otherwise providing services to the Company.  The Board is
authorized to make deferrals of Awards and determine when, and in what annual
percentages, Participants may receive payments, including lump sum payments,
following the Participant’s termination of Continuous Service, and implement
such other terms and conditions consistent with the provisions of the Plan and
in accordance with applicable law.

(k)Compliance with Section 409A.  To the extent that the Board determines that
any Award granted hereunder is subject to Section 409A of the Code, the Award
Agreement

 

16.

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evidencing such Award shall incorporate the terms and conditions necessary to
avoid the consequences specified in Section 409A(a)(1) of the Code.  To the
extent applicable, the Plan and Award Agreements shall be interpreted in
accordance with Section 409A of the Code.  Notwithstanding anything to the
contrary in this Plan (and unless the Award Agreement specifically provides
otherwise), if the shares of Common Stock are publicly traded and a Participant
holding an Award that constitutes “deferred compensation” under Section 409A of
the Code is a “specified employee” for purposes of Section 409A of the Code, no
distribution or payment of any amount shall be made upon a “separation from
service” before a date that is six (6) months following the date of such
Participant’s “separation from service” (as defined in Section 409A of the Code
without regard to alternative definitions thereunder) or, if earlier, the date
of the Participant’s death, to the extent necessary in order to avoid the
imposition of taxes thereunder.

(l)Clawback/Recovery.  All Awards granted under the Plan will be subject to
recoupment in accordance with any clawback policy maintained by the Company,
including any such policy that the Company is required to adopt pursuant to the
listing standards of any national securities exchange or association on which
the Company’s securities are listed or as is otherwise required by the
Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable
law.  In addition, the Board may impose such other clawback, recovery or
recoupment provisions in an Award Agreement as the Board determines necessary or
appropriate, including but not limited to a reacquisition right in respect of
previously acquired shares of Common Stock or other cash or property upon the
occurrence of Cause.  No recovery of compensation under such a clawback policy
will be an event giving rise to a right to resign for “good reason” or
“constructive termination” (or similar term) under any agreement with the
Company.

(m)Transferability of Stock Awards.  No Stock Awards granted under this Plan may
be transferred for value to any third-party financial institution without prior
shareholder approval.  

9.Adjustments upon Changes in Common Stock; Other Corporate Events.

(a)Capitalization Adjustments.  In the event of a Capitalization Adjustment, the
Board will appropriately and proportionately adjust: (i) the class(es) and
maximum number of securities subject to the Plan pursuant to Section 3(a)(i),
(ii) the class(es) and maximum number of securities that may be issued pursuant
to the exercise of Incentive Stock Options pursuant to Section 3(c), (iii) the
class(es) and maximum number of securities that may be awarded to any person
pursuant to Section 3(d), (iv) the class(es) and maximum number of securities
that may be awarded to any Non-Employee Director pursuant to Section 3(e) and
(v) the class(es) and number of securities and price per share of stock subject
to outstanding Stock Awards.  The Board will make such adjustments, and its
determination will be final, binding and conclusive.

(b)Dissolution.  Except as otherwise provided in the Stock Award Agreement, in
the event of a Dissolution of the Company, all outstanding Stock Awards (other
than Stock Awards consisting of vested and outstanding shares of Common Stock
not subject to a forfeiture condition or the Company’s right of repurchase) will
terminate immediately prior to the completion of such Dissolution, and the
shares of Common Stock subject to the Company’s repurchase rights or subject to
a forfeiture condition may be repurchased or reacquired by the Company
notwithstanding the fact that the holder of such Stock Award is providing
Continuous Service; provided, however, that the Board may, in its sole
discretion, cause some or all Stock Awards to

 

17.

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become fully vested, exercisable and/or no longer subject to repurchase or
forfeiture (to the extent such Stock Awards have not previously expired or
terminated) before the Dissolution is completed but contingent on its
completion.

(c)Transactions.  The following provisions will apply to Stock Awards in the
event of a Transaction unless otherwise provided in the Stock Award Agreement or
any other written agreement between the Company or any Affiliate and the
Participant or unless otherwise expressly provided by the Board at the time of
grant of a Stock Award.  In the event of a Transaction, then, notwithstanding
any other provision of the Plan, the Board may take one or more of the following
actions with respect to Stock Awards, contingent upon the closing or completion
of the Transaction:

(i)arrange for the surviving corporation or acquiring corporation (or the
surviving or acquiring corporation’s parent company) to assume or continue the
Stock Award or to substitute a similar stock award for the Stock Award
(including, but not limited to, an award to acquire the same consideration paid
to the shareholders of the Company pursuant to the Transaction);

(ii)arrange for the assignment of any reacquisition or repurchase rights held by
the Company in respect of Common Stock issued pursuant to the Stock Award to the
surviving corporation or acquiring corporation (or the surviving or acquiring
corporation’s parent company);

(iii)accelerate the vesting, in whole or in part, of the Stock Award (and, if
applicable, the time at which the Stock Award may be exercised) to a date prior
to the effective time of such Transaction as the Board determines (or, if the
Board does not determine such a date, to the date that is five (5) days prior to
the effective date of the Transaction), with such Stock Award terminating if not
exercised (if applicable) at or prior to the effective time of the Transaction;
provided, however, that the Board may require Participants to complete and
deliver to the Company a notice of exercise before the effective date of a
Transaction, which exercise is contingent upon the effectiveness of such
Transaction;

(iv)arrange for the lapse, in whole or in part, of any reacquisition or
repurchase rights held by the Company with respect to the Stock Award;

(v)cancel or arrange for the cancellation of the Stock Award, to the extent not
vested or not exercised prior to the effective time of the Transaction, in
exchange for such cash consideration or no consideration, as the Board, in its
sole discretion, may consider appropriate; and

(vi)make a payment, in such form as may be determined by the Board equal to the
excess, if any, of (A) the value of the property the Participant would have
received upon the exercise of the Stock Award immediately prior to the effective
time of the Transaction, over (B) any exercise price payable by such holder in
connection with such exercise.  For clarity, this payment may be zero ($0) if
the value of the property is equal to or less than the exercise price. Payments
under this provision may be delayed to the same extent that payment of
consideration to the holders of the Common Stock in connection with the
Transaction is delayed as a result of escrows, earn outs, holdbacks or any other
contingencies.

 

18.

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The Board need not take the same action or actions with respect to all Stock
Awards or portions thereof or with respect to all Participants.  The Board may
take different actions with respect to the vested and unvested portions of a
Stock Award.  

(d)Appointment of Stockholder Representative.  As a condition to the receipt of
a Stock Award under this Plan, a Participant will be deemed to have agreed that
the Stock Award will be subject to the terms of any provision in the agreement
governing a Transaction involving the Company for the appointment of a
stockholder representative that is authorized to act on the Participant’s behalf
with respect to any escrow, indemnities and any contingent consideration.

(e)No Restriction on Right to Undertake Transactions.  The grant of any Stock
Award under the Plan and the issuance of shares pursuant to any Stock Award does
not affect or restrict in any way the right or power of the Company or the
stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any issue
of stock or of options, rights or options to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.

(f)Change in Control.  A Stock Award may be subject to additional acceleration
of vesting and exercisability upon or after a qualifying termination that occurs
in connection with a Change in Control as may be provided in the Stock Award
Agreement for such Stock Award or as may be provided in any other written
agreement between the Company or any Affiliate and the Participant, but in the
absence of such provision, no such acceleration will occur.

10.Plan Term; Earlier Termination or Suspension of the Plan.

(a)The Board may suspend or terminate the Plan at any time.  No Incentive Stock
Option will be granted after the tenth (10th) anniversary of the earlier of (i)
the date the Plan is most recently adopted by the Board, or (ii) the date the
Plan is most recently approved by the shareholders of the Company.  No Awards
may be granted under the Plan while the Plan is suspended or after it is
terminated.

(b)No Impairment of Rights.  Suspension or termination of the Plan will not
impair rights and obligations under any Award granted while the Plan is in
effect except with the written consent of the affected Participant or as
otherwise permitted in the Plan.

11.Effective Date of Plan.

This Plan will become effective on the Effective Date.

12.Choice of Law.

The laws of the State of California will govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to that
state’s conflict of laws rules.

 

19.

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13.Definitions.  As used in the Plan, the following definitions will apply to
the capitalized terms indicated below:

(a)“Affiliate” means, at the time of determination, any “parent” or “subsidiary”
of the Company as such terms are defined in Rule 405.  The Board will have the
authority to determine the time or times at which “parent” or “subsidiary”
status is determined within the foregoing definition.

(b)“Appreciation Award” means (i) a stock option or stock appreciation right
granted under the Prior Plan or (ii) an Option or Stock Appreciation Right, or
Other Stock Award, in each case with respect to which the exercise or strike
price is at least one hundred percent (100%) of the Fair Market Value of the
Common Stock subject to the stock option or stock appreciation right, or Option,
Stock Appreciation Right, or Other Stock Award, as applicable, on the date of
grant.

(c)“Award” means a Stock Award or a Performance Cash Award.

(d)“Award Agreement” means a written agreement between the Company and a
Participant evidencing the terms and conditions of an Award.

(e)“Board” means the Board of Directors of the Company.

(f)“Capitalization Adjustment” means any change that is made in, or other events
that occur with respect to, the Common Stock subject to the Plan or subject to
any Stock Award after the Effective Date without the receipt of consideration by
the Company through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, large
nonrecurring cash dividend, stock split, reverse stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or any similar equity restructuring transaction, as that term is used
in Statement of Financial Accounting Standards Board Accounting Standards
Codification Topic 718 (or any successor thereto).  Notwithstanding the
foregoing, the conversion of any convertible securities of the Company will not
be treated as a Capitalization Adjustment.

(g)“Cause” will have the meaning ascribed to such term in any written agreement
between the Participant and the Company defining such term and, in the absence
of such agreement, such term means, with respect to a Participant, the
occurrence of any of the following events: (i) such Participant’s failure to
substantially perform his or her duties with the Company or an Affiliate; (ii)
such Participant’s failure to substantially follow and comply with the specific
and lawful directives of the Board or any officer of the Company or an Affiliate
to whom such Participant directly or indirectly reports; (iii) such
Participant’s commission of an act of fraud or dishonesty resulting in actual
economic, financial or reputational injury to the Company or an Affiliate; (iv)
such Participant’s engagement in illegal conduct, gross misconduct or an act of
moral turpitude, involving economic, financial or reputational injury to the
Company or an Affiliate; (v) such Participant’s material violation of any
material written policy, guideline, code, handbook or similar document governing
the conduct of directors, officers or employees of the Company or its Affiliates
resulting in actual economic, financial or reputational injury to the Company or
an Affiliate; (vi) such Participant’s intentional, material violation of any
contract or agreement between the Participant and the Company or of any
statutory duty owed to the Company; or (vii)

 

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such Participant’s unauthorized use or disclosure of the Company’s confidential
information or trade secrets.  Notwithstanding the foregoing, neither this
provision nor any other provision of the Plan is intended to, and they shall not
be interpreted in a manner that limits or restricts a Participant from
exercising any legally protected whistleblower rights (including pursuant to
Rule 21F under the Exchange Act).  The determination that a termination of the
Participant’s Continuous Service is either for Cause or without Cause will be
made by the Company, in its sole discretion.  Any determination by the Company
that the Continuous Service of a Participant was terminated with or without
Cause for the purposes of outstanding Awards held by such Participant will have
no effect upon any determination of the rights or obligations of the Company or
such Participant for any other purpose.

(h)“Change in Control” means the occurrence, in a single transaction or in a
series of related transactions, of any one or more of the following events
(unless otherwise provided in an Award Agreement):

(i)any Exchange Act Person becomes the Owner, directly or indirectly, of
securities of the Company representing more than fifty percent (50%) of the
combined voting power of the Company’s then outstanding securities other than by
virtue of a merger, consolidation or similar transaction.  Notwithstanding the
foregoing, a Change in Control will not be deemed to occur (A) on account of the
acquisition of securities of the Company directly from the Company, (B) on
account of the acquisition of securities of the Company by an investor, any
affiliate thereof or any other Exchange Act Person that acquires the Company’s
securities in a transaction or series of related transactions the primary
purpose of which is to obtain financing for the Company through the issuance of
equity securities, or (C) solely because the level of Ownership held by any
Exchange Act Person (the “Subject Person”) exceeds the designated percentage
threshold of the outstanding voting securities as a result of a repurchase or
other acquisition of voting securities by the Company reducing the number of
shares outstanding, provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of voting
securities by the Company, and after such share acquisition, the Subject Person
becomes the Owner of any additional voting securities that, assuming the
repurchase or other acquisition had not occurred, increases the percentage of
the then outstanding voting securities Owned by the Subject Person over the
designated percentage threshold, then a Change in Control will be deemed to
occur;

(ii)there is consummated a merger, consolidation or similar transaction
involving (directly or indirectly) the Company and, immediately after the
consummation of such merger, consolidation or similar transaction, the
shareholders of the Company immediately prior thereto do not Own, directly or
indirectly, either (A) outstanding voting securities representing more than
fifty percent (50%) of the combined outstanding voting power of the surviving
Entity in such merger, consolidation or similar transaction or (B) more than
fifty percent (50%) of the combined outstanding voting power of the parent of
the surviving Entity in such merger, consolidation or similar transaction, in
each case in substantially the same proportions as their Ownership of the
outstanding voting securities of the Company immediately prior to such
transaction;

(iii)there is consummated a sale, lease, exclusive license or other disposition
of all or substantially all of the consolidated assets of the Company and its
Subsidiaries, other than a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the

 

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Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the
combined voting power of the voting securities of which are Owned by
shareholders of the Company in substantially the same proportions as their
Ownership of the outstanding voting securities of the Company immediately prior
to such sale, lease, license or other disposition; or

(iv)individuals who, on the date the Plan is adopted by the Board, are members
of the Board (the “Incumbent Board”) cease for any reason to constitute at least
a majority of the members of the Board; provided, however, that if the
appointment or election (or nomination for election) of any new Board member was
approved or recommended by a majority vote of the members of the Incumbent Board
then still in office, such new member will, for purposes of this Plan, be
considered as a member of the Incumbent Board.

Notwithstanding the foregoing definition or any other provision of this Plan,
the term Change in Control will not include a sale of assets, merger or other
transaction effected exclusively for the purpose of changing the domicile of the
Company.  

(i)“Code” means the Internal Revenue Code of 1986, as amended, including any
applicable regulations and guidance thereunder.

(j)“Committee” means a committee of two (2) or more Directors to whom authority
has been delegated by the Board in accordance with Section 2(c).

(k)“Common Stock” means the common stock of the Company.

(l)“Company” means NextGen Healthcare, Inc. (formerly known as Quality Systems,
Inc.), a California corporation.

(m)“Consultant” means any person, including an advisor, who is (i) engaged by
the Company or an Affiliate to render consulting or advisory services and is
compensated for such services, or (ii) serving as a member of the board of
directors of an Affiliate and is compensated for such services.  However,
service solely as a Director, or payment of a fee for such service, will not
cause a Director to be considered a “Consultant” for purposes of the
Plan.  Notwithstanding the foregoing, a person is treated as a Consultant under
this Plan only if a Form S-8 Registration Statement under the Securities Act is
available to register either the offer or the sale of the Company’s securities
to such person.

(n)“Continuous Service” means that the Participant’s service with the Company or
an Affiliate, whether as an Employee, Director or Consultant, is not interrupted
or terminated.  A change in the capacity in which the Participant renders
service to the Company or an Affiliate as an Employee, Director or Consultant or
a change in the Entity for which the Participant renders such service, provided
that there is no interruption or termination of the Participant’s service with
the Company or an Affiliate, will not terminate a Participant’s Continuous
Service; provided, however, that if the Entity for which a Participant is
rendering services ceases to qualify as an Affiliate, as determined by the
Board, in its sole discretion, such Participant’s Continuous Service will be
considered to have terminated on the date such Entity ceases to qualify as an
Affiliate.  For example, a change in status from an Employee of the Company to a
Consultant of an Affiliate or to a Director will not constitute an interruption
of Continuous Service.  To the extent permitted by law, the Board or the chief
executive officer of the Company, in that party’s sole discretion, may

 

22.

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determine whether Continuous Service will be considered interrupted in the case
of (i) any leave of absence approved by the Board or chief executive officer,
including sick leave, military leave or any other personal leave, or (ii)
transfers between the Company, an Affiliate, or their
successors.  Notwithstanding the foregoing, a leave of absence will be treated
as Continuous Service for purposes of vesting in a Stock Award only to such
extent as may be provided in the Company’s leave of absence policy, in the
written terms of any leave of absence agreement or policy applicable to the
Participant, or as otherwise required by law.

(o)“Corporate Transaction” means the consummation, in a single transaction or in
a series of related transactions, of any one or more of the following events
(unless otherwise provided in an Award Agreement):

(i)a sale or other disposition of all or substantially all, as determined by the
Board, in its sole discretion, of the consolidated assets of the Company and its
Subsidiaries;

(ii)a sale or other disposition of more than fifty percent (50%) of the
outstanding securities of the Company;

(iii)a merger, consolidation or similar transaction following which the Company
is not the surviving corporation; or

(iv)a merger, consolidation or similar transaction following which the Company
is the surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger, consolidation or similar transaction are
converted or exchanged by virtue of the merger, consolidation or similar
transaction into other property, whether in the form of securities, cash or
otherwise.

(p)“Director” means a member of the Board.

(q)“Disability” means, with respect to a Participant,  the inability of such
Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or that has lasted or can be expected to last for a continuous
period of not less than twelve (12) months, as provided in Sections 22(e)(3) and
409A(a)(2)(c)(i) of the Code, and will be determined by the Board on the basis
of such medical evidence as the Board deems warranted under the circumstances.

(r)“Dissolution” means when the Company, after having executed a certificate of
dissolution with the State of California, has completely wound up its
affairs.  Conversion of the Company into a Limited Liability Company (or any
other pass- through entity) will not be considered a “Dissolution” for purposes
of the Plan.

(s)“Effective Date” means the effective date of this Plan document, which is the
date of the annual meeting of shareholders of the Company held in 2015, provided
this Plan is approved by the Company’s shareholders at such meeting.

(t)“Employee” means any person employed by the Company or an
Affiliate.  However, service solely as a Director, or payment of a fee for such
services, will not cause a Director to be considered an “Employee” for purposes
of the Plan.

 

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(u)“Entity” means a corporation, partnership, limited liability company or other
entity.

(v)“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

(w)“Exchange Act Person” means any natural person, Entity or “group” (within the
meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange
Act Person” will not include (i) the Company or any Subsidiary of the Company,
(ii) any employee benefit plan of the Company or any Subsidiary of the Company
or any trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any Subsidiary of the Company, (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities, (iv)
an Entity Owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their Ownership of stock of the Company;
or (v) any natural person, Entity or “group” (within the meaning of Section
13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the
Owner, directly or indirectly, of securities of the Company representing more
than fifty percent (50%) of the combined voting power of the Company’s then
outstanding securities.

(x)“Fair Market Value” means, as of any date, the value of the Common Stock
determined as follows:

(i)If the Common Stock is listed on any established stock exchange or traded on
any established market, the Fair Market Value of a share of Common Stock will
be, unless otherwise determined by the Board, the closing sales price for such
stock as quoted on such exchange or market (or the exchange or market with the
greatest volume of trading in the Common Stock) on the date of determination, as
reported in a source the Board deems reliable.

(ii)Unless otherwise provided by the Board, if there is no closing sales price
for the Common Stock on the date of determination, then the Fair Market Value
will be the closing selling price on the last preceding date for which such
quotation exists.

(iii)In the absence of such markets for the Common Stock, the Fair Market Value
will be determined by the Board in good faith and in a manner that complies with
Sections 409A and 422 of the Code.

(y)“Full Value Award” means (i) a stock award granted under the Prior Plan or
(ii) a Stock Award, in each case, that is not an Appreciation Award.

(z)“Incentive Stock Option” means an option granted pursuant to Section 5 that
is intended to be, and that qualifies as, an “incentive stock option” within the
meaning of Section 422 of the Code.

(aa)“Non-Employee Director” means a Director who either (i) is not a current
employee or officer of the Company or an Affiliate, does not receive
compensation, either directly or indirectly, from the Company or an Affiliate
for services rendered as a consultant or in any capacity other than as a
Director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(“Regulation S-K”)), does not possess an interest in any other transaction for
which disclosure

 

24.

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would be required under Item 404(a) of Regulation S-K, and is not engaged in a
business relationship for which disclosure would be required pursuant to
Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee
director” for purposes of Rule 16b-3.

(bb)“Nonstatutory Stock Option” means any option granted pursuant to Section 5
that does not qualify as an Incentive Stock Option.

(cc)“Officer” means a person who is an officer of the Company within the meaning
of Section 16 of the Exchange Act.

(dd)“Option” means an Incentive Stock Option or a Nonstatutory Stock Option to
purchase shares of Common Stock granted pursuant to the Plan.

(ee)“Option Agreement” means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an Option grant.  Each
Option Agreement will be subject to the terms and conditions of the Plan.

(ff)“Optionholder” means a person to whom an Option is granted pursuant to the
Plan or, if applicable, such other person who holds an outstanding Option.

(gg)“Other Stock Award” means an award based in whole or in part by reference to
the Common Stock which is granted pursuant to the terms and conditions of
Section 6(d).

(hh)“Other Stock Award Agreement” means a written agreement between the Company
and a holder of an Other Stock Award evidencing the terms and conditions of an
Other Stock Award grant.  Each Other Stock Award Agreement will be subject to
the terms and conditions of the Plan.

(ii)“Own,” “Owned,” “Owner,” “Ownership.”  A person or Entity will be deemed to
“Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of
securities if such person or Entity, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise, has or shares
voting power, which includes the power to vote or to direct the voting, with
respect to such securities.

(jj)“Participant” means a person to whom an Award is granted pursuant to the
Plan or, if applicable, such other person who holds an outstanding Stock Award.

(kk)“Performance Cash Award” means an award of cash granted pursuant to the
terms and conditions of Section 6(c)(ii).

(ll)“Performance Criteria” means the one or more criteria that the Committee
will select for purposes of establishing the Performance Goals for a Performance
Period.  The Performance Criteria that will be used to establish such
Performance Goals may be based on any one of, or combination of, the following
as determined by the Board: (i) earnings (including earnings per share and net
earnings); (ii) earnings before interest, taxes and depreciation; (iii) earnings
before interest, taxes, depreciation and amortization; (iv) total shareholder
return; (v) return on equity or average shareholder’s equity; (vi) return on
assets, investment, or capital employed; (vii) stock price; (viii) margin
(including gross margin); (ix) income (before or after

 

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taxes); (x) operating income; (xi) operating income after taxes; (xii) pre-tax
profit; (xiii) operating cash flow; (xiv) sales or revenue targets; (xv)
increases in revenue or product revenue; (xvi) expenses and cost reduction
goals; (xvii) improvement in or attainment of working capital levels; (xiii)
economic value added (or an equivalent metric); (xix) market share; (xx) cash
flow; (xxi) cash flow per share; (xxii) share price performance; (xxiii) debt
reduction; (xxiv) implementation or completion of projects or processes; (xxv)
customer satisfaction; (xxvi) shareholders’ equity; (xxvii) capital
expenditures; (xxviii) debt levels; (xxix) operating profit or net operating
profit; (xxx) workforce diversity; (xxxi) growth of net income or operating
income; (xxxii) billings; and (xxxiii) other measures of performance selected by
the Board.

(mm)“Performance Goals” means, for a Performance Period, the one or more goals
established by the Board for the Performance Period based upon the Performance
Criteria.  Performance Goals may be based on a Company-wide basis, with respect
to one or more business units, divisions, Affiliates, or business segments, and
in either absolute terms or relative to the performance of one or more
comparable companies or the performance of one or more relevant indices.  Unless
specified otherwise by the Board (i) in the Award Agreement at the time the
Award is granted or (ii) in such other document setting forth the Performance
Goals at the time the Performance Goals are established, the Board will
appropriately make adjustments in the method of calculating the attainment of
Performance Goals for a Performance Period as follows: (1) to exclude
restructuring and/or other nonrecurring charges; (2) to exclude exchange rate
effects; (3) to exclude the effects of changes to generally accepted accounting
principles; (4) to exclude the effects of any statutory adjustments to corporate
tax rates; (5) to exclude the effects of items that are “unusual” in nature or
occur “infrequently” as determined under generally accepted accounting
principles; (6) to exclude the dilutive effects of acquisitions or joint
ventures; (7) to assume that any business divested by the Company achieved
performance objectives at targeted levels during the balance of a Performance
Period following such divestiture; (8) to exclude the effect of any change in
the outstanding shares of common stock of the Company by reason of any stock
dividend or split, stock repurchase, reorganization, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares or other similar
corporate change, or any distributions to common shareholders other than regular
cash dividends; (9) to exclude the effects of stock based compensation and the
award of bonuses under the Company’s bonus plans; (10) to exclude costs incurred
in connection with potential acquisitions or divestitures that are required to
be expensed under generally accepted accounting principles; and (11) to exclude
the goodwill and intangible asset impairment charges that are required to be
recorded under generally accepted accounting principles.

(nn)“Performance Period” means the period of time selected by the Board over
which the attainment of one or more Performance Goals will be measured for the
purpose of determining a Participant’s right to and the payment of a Stock Award
or a Performance Cash Award.  Performance Periods may be of varying and
overlapping duration, at the sole discretion of the Board.

(oo)“Performance Stock Award” means a Stock Award granted under the terms and
conditions of Section 6(c)(i).

(pp)“Plan” means this NextGen Healthcare, Inc. 2015 Equity Incentive Plan
(formerly known as the Quality Systems, Inc. 2015 Equity Incentive Plan).

 

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(qq)“Restricted Stock Award” means an award of shares of Common Stock which is
granted pursuant to the terms and conditions of Section 6(a).

(rr)“Restricted Stock Award Agreement” means a written agreement between the
Company and a holder of a Restricted Stock Award evidencing the terms and
conditions of a Restricted Stock Award grant.  Each Restricted Stock Award
Agreement will be subject to the terms and conditions of the Plan.

(ss)“Restricted Stock Unit Award” means a right to receive shares of Common
Stock which is granted pursuant to the terms and conditions of Section 6(b).

(tt)“Restricted Stock Unit Award Agreement” means a written agreement between
the Company and a holder of a Restricted Stock Unit Award evidencing the terms
and conditions of a Restricted Stock Unit Award grant.  Each Restricted Stock
Unit Award Agreement will be subject to the terms and conditions of the Plan.

(uu)“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time.

(vv)“Rule 405” means Rule 405 promulgated under the Securities Act.  

(ww)“Rule 701” means Rule 701 promulgated under the Securities Act.  

(xx)“Securities Act” means the Securities Act of 1933, as amended.

(yy)“Stock Appreciation Right” or “SAR” means a right to receive the
appreciation on Common Stock that is granted pursuant to the terms and
conditions of Section 5.

(zz)“Stock Appreciation Right Agreement” means a written agreement between the
Company and a holder of a Stock Appreciation Right evidencing the terms and
conditions of a Stock Appreciation Right grant.  Each Stock Appreciation Right
Agreement will be subject to the terms and conditions of the Plan.

(aaa)“Stock Award” means any right to receive Common Stock granted under the
Plan, including an Incentive Stock Option, a Nonstatutory Stock Option, a
Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation
Right, a Performance Stock Award or any Other Stock Award.

(bbb)“Stock Award Agreement” means a written agreement between the Company and a
Participant evidencing the terms and conditions of a Stock Award grant.  Each
Stock Award Agreement will be subject to the terms and conditions of the Plan.

(ccc)“Subsidiary” means, with respect to the Company, (i) any corporation of
which more than fifty percent (50%) of the outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, stock of any other class or
classes of such corporation will have or might have voting power by reason of
the happening of any contingency) is at the time, directly or indirectly, Owned
by the Company, and (ii) any partnership, limited liability company or other
entity in which the Company

 

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has a direct or indirect interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%).

(ddd)“Ten Percent Shareholder” means a person who Owns (or is deemed to Own
pursuant to Section 424(d) of the Code) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or any Affiliate.

(eee)“Transaction” means a Corporate Transaction or a Change in Control.

 

 

 

 

 

28.