Exhibit 10.48

 

CORGENTECH INC.

 

2003 EQUITY INCENTIVE PLAN

 

ADOPTED BY THE BOARD: DECEMBER 5, 2003

 

APPROVED BY STOCKHOLDERS: JANUARY 9, 2004

AMENDED BY THE BOARD: OCTOBER 19, 2005

APPROVED BY STOCKHOLDERS AND AMENDED TO EFFECT THE

ONE-FOR-FOUR REVERSE STOCK SPLIT: DECEMBER 15, 2005

TERMINATION DATE: DECEMBER 4, 2013

 

1. PURPOSES.

 

(a) The Plan initially was established as the Corgentech Inc. 1999 Equity
Incentive Plan, effective as of July 19, 1999 (the “Initial Plan”). The Initial
Plan is amended and restated in its entirety as the “Corgentech Inc. 2003 Equity
Incentive Plan,” effective as of the initial public offering of the Common Stock
pursuant to a registration statement filed under the Securities Act as declared
effective by the U.S. Securities and Exchange Commission. No options shall be
granted under the Initial Plan from and after the effective date of the
amendment and restatement. The terms of the Initial Plan (other than the
aggregate number of shares issuable thereunder) shall remain in effect and apply
to all Stock Awards granted pursuant to the Initial Plan.

 

(b) Eligible Stock Award Recipients. The persons eligible to receive Stock
Awards are the Employees, Directors and Consultants of the Company and its
Affiliates.

 

(c) Available Stock Awards. The purpose of the Plan is to provide a means by
which eligible recipients of Stock Awards may be given an opportunity to benefit
from increases in value of the Common Stock through the granting of the
following Stock Awards: (i) Options, (ii) Restricted Stock Awards, (iii) Stock
Appreciation Rights, (iv) Phantom Stock and (v) Other Stock Awards.

 

(d) General Purpose. The Company, by means of the Plan, seeks to retain the
services of the group of persons eligible to receive Stock Awards, to secure and
retain the services of new members of this group and to provide incentives for
such persons to exert maximum efforts for the success of the Company and its
Affiliates.

 

2. DEFINITIONS.

 

(a) “Affiliate” means any parent corporation or subsidiary corporation of the
Company, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code.

 

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

 

(c) “Capitalization Adjustment” has the meaning ascribed to that term in
Section 11(a).

 

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(d) “Cause” means that, in the reasonable determination of the Company, (i) a
Participant has committed an act that materially injures the business of the
Company; (ii) a Participant has refused or failed to follow lawful and
reasonable directions of the Board or the appropriate individual to whom the
Participant reports; (iii) a Participant has willfully or habitually neglected
the Participant’s duties with the Company; (iv) a Participant has been convicted
of a felony that is likely to inflict or has inflicted material injury on the
business of the Company; or (v) a Participant has committed a material fraud,
misappropriation, embezzlement or other act of gross dishonesty that resulted in
material loss, damage or injury to the Company. Notwithstanding the foregoing,
Cause based on the conduct described in clause (ii) or clause (iii) shall not
exist unless the conduct described in such clause has not been cured within
fifteen (15) days following receipt by the Participant of written notice from
the Company or the Board, as the case may be, specifying the particulars of the
Participant’s conduct constituting Cause.

 

(e) “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:

 

(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 shall not be deemed to occur (A) on account of
the acquisition of securities of the Company by an institutional investor, any
affiliate thereof or any other Exchange Act Person that acquires the Company’s
securities in a transaction or series of related transactions that are primarily
a private financing transaction for the Company or (B) 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 shall 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
stockholders 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;

 

(iii) the stockholders of the Company approve or the Board approves a plan of
complete dissolution or liquidation of the Company, or a complete dissolution or
liquidation of the Company shall otherwise occur;

 

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(iv) there is consummated a sale, lease, 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 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 stockholders of the Company in
substantially the same proportions as their Ownership of the Company immediately
prior to such sale, lease, license or other disposition; or

 

(v) individuals who, on the date this 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 shall, for purposes of this Plan, be
considered as a member of the Incumbent Board.

 

The term Change in Control shall not include a sale of assets, merger or other
transaction effected exclusively for the purpose of changing the domicile of the
Company.

 

Notwithstanding the foregoing or any other provision of this Plan, the
definition of Change in Control (or any analogous term) in an individual written
agreement between the Company or any Affiliate and the Participant shall
supersede the foregoing definition with respect to Stock Awards subject to such
agreement (it being understood, however, that if no definition of Change in
Control or any analogous term is set forth in such an individual written
agreement, the foregoing definition shall apply).

 

(f) “Code” means the Internal Revenue Code of 1986, as amended.

 

(g) “Committee” means a committee of one or more members of the Board appointed
by the Board in accordance with Section 3(c).

 

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

 

(i) “Company” means Corgentech Inc., a Delaware corporation.

 

(j) “Constructive Termination” means that a Participant voluntarily terminates
employment within twelve (12) months following a Change in Control after any of
the following are undertaken without the Participant’s express written consent:

 

(i) the assignment to the Participant’of any duties or responsibilities which
results in a significant diminution in the Participant’s function as in effect
immediately prior to the effective date of the Change in Control; provided,
however, that a mere change in the Participant’s title or reporting
relationships shall not constitute a Constructive Termination;

 

(ii) a five percent (5%) or greater reduction by the Company in a Participant’s
annual base salary, as in effect on the effective date of the Change in Control;

 

(iii) any failure by the Company to continue in effect any benefit plan or
program, including fringe benefits, incentive plans and plans with respect to
the receipt of

 

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securities of the Company, in which a Participant is participating immediately
prior to the effective date of the Change in Control (hereinafter referred to as
“Benefit Plans”); or the taking of any action by the Company that would
adversely affect a Participant’s participation in or reduce the Participant’s
benefits under the Benefit Plans; provided, however, that a “Constructive
Termination” shall not exist under this paragraph following a Change in Control
if the Company offers a range of benefit plans and programs which, taken as a
whole, are comparable to the Benefit Plans;

 

(iv) a relocation of a Participant’s business office to a location more than
thirty-five (35) miles from the location at which the Participant performs
duties as of the effective date of the Change in Control, except for required
travel by the Participant on the Company’s business to an extent substantially
consistent with the Participant’s business travel obligations prior to the
Change in Control; or

 

(v) a material breach by the Company of any provision of the Participant’s
Option Agreement.

 

(k) “Consultant” means any person, including an advisor, (i) engaged by the
Company or an Affiliate to render consulting or advisory services and who is
compensated for such services or (ii) serving as a member of the Board of
Directors of an Affiliate and who is compensated for such services. However, the
term “Consultant” shall not include Directors who are not compensated by the
Company for their services as Directors, and the payment of a director’s fee by
the Company for services as a Director shall not cause a Director to be
considered a “Consultant” for purposes of the Plan.

 

(l) “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, Consultant or
Director 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, shall not terminate a
Participant’s Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate or a Director shall not
constitute an interruption of Continuous Service. The Board or the chief
executive officer of the Company, in that party’s sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military leave or
any other personal leave. Notwithstanding the foregoing, a leave of absence
shall 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
or in the written terms of the Participant’s leave of absence.

 

(m) “Corporate Transaction” means the occurrence, in a single transaction or in
a series of related transactions, of any one or more of the following events:

 

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

 

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(ii) a sale or other disposition of at least ninety percent (90%) 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.

 

(n) “Covered Employee” means the chief executive officer and the four (4) other
highest compensated officers of the Company for whom total compensation is
required to be reported to stockholders under the Exchange Act, as determined
for purposes of Section 162(m) of the Code.

 

(o) “Director” means a member of the Board of Directors of the Company.

 

(p) “Disability” means the permanent and total disability of a person within the
meaning of Section 22(e)(3) of the Code.

 

(q) “Employee” means any person employed by the Company or an Affiliate. Service
as a Director or payment of a director’s fee by the Company for such service or
for service as a member of the Board of Directors of an Affiliate shall not be
sufficient to constitute “employment” by the Company or an Affiliate.

 

(r) “Entity” means a corporation, partnership or other entity.

 

(s) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(t) “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” shall not include (A) the Company or any Subsidiary of the
Company, (B) 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, (C) an underwriter
temporarily holding securities pursuant to an offering of such securities, or
(D) an Entity Owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their Ownership of stock of the
Company.

 

(u) “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
the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value
of a share of Common Stock shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such exchange or market
(or the exchange or market with the greatest volume of trading in the Common
Stock) on the last market trading day prior to the day of determination, as
reported in The Wall Street Journal or such other source as the Board deems
reliable.

 

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(ii) In the absence of such markets for the Common Stock, the Fair Market Value
shall be determined in good faith by the Board.

 

(v) “Incentive Stock Option” means an Option intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.

 

(w) “Non-Employee Director” means a Director who either (i) is not a current
Employee or Officer of the Company or its parent or a subsidiary, does not
receive compensation (directly or indirectly) from the Company or its parent or
a subsidiary 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 as to
which disclosure would be required under Item 404(a) of Regulation S-K and is
not engaged in a business relationship as to which disclosure would be required
under Item 404(b) of Regulation S-K; or (ii) is otherwise considered a
“non-employee director” for purposes of Rule 16b-3.

 

(x) “Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.

 

(y) “Officer” means a person who is an officer of the Company within the meaning
of Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.

 

(z) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option
granted pursuant to the Plan.

 

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

 

(bb) “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.

 

(cc) “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 7(d).

 

(dd) “Outside Director” means a Director who either (i) is not a current
employee of the Company or an “affiliated corporation” (within the meaning of
Treasury Regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an “affiliated corporation” receiving
compensation for prior services (other than benefits under a tax-qualified
pension plan), was not an officer of the Company or an “affiliated corporation”
at any time and is not currently receiving direct or indirect remuneration from
the Company or an “affiliated corporation” for services in any capacity other
than as a Director; or (ii) is otherwise considered an “outside director” for
purposes of Section 162(m) of the Code.

 

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(ee) “Own,” “Owned,” “Owner,” “Ownership” A person or Entity shall 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.

 

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

 

(gg) “Phantom Stock” means a right to receive shares of Common Stock which is
granted pursuant to the terms and conditions of Section 7(b).

 

(hh) “Restricted Stock Award” means an award of shares of Common Stock which is
granted pursuant to the terms and conditions of Section 7(a).

 

(ii) “Plan” means this Corgentech Inc. 2003 Equity Incentive Plan.

 

(jj) “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.

 

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

 

(ll) “Stock Appreciation Right” means a right to receive the appreciation of
Common Stock that is granted pursuant to the terms and conditions of
Section 7(c).

 

(mm) “Stock Award” means any right granted under the Plan, including an Option,
a Restricted Stock Award, Phantom Stock, a Stock Appreciation Right and an Other
Stock Award.

 

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

 

(oo) “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 shall 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 in which the Company 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%).

 

(pp) “Ten Percent Stockholder” 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 of any of its Affiliates.

 

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3. ADMINISTRATION.

 

(a) Administration by Board. The Board shall administer the Plan unless and
until the Board delegates administration to a Committee, as provided in
Section 3(c).

 

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

 

(i) To determine from time to time which of the persons eligible under the Plan
shall be granted Stock Awards; when and how each Stock Award shall be granted;
what type or combination of types of Stock Award shall be granted; the
provisions of each Stock Award granted (which need not be identical), including
the time or times when a person shall be permitted to receive Common Stock
pursuant to a Stock Award; and the number of shares of Common Stock with respect
to which a Stock Award shall be granted to each such person.

 

(ii) To construe and interpret the Plan and Stock Awards granted under it, and
to establish, amend and revoke rules and regulations for its administration. The
Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Stock Award Agreement, in a manner and to
the extent it shall deem necessary or expedient to make the Plan fully
effective.

 

(iii) To effect, at any time and from time to time, with the consent of any
adversely affected Optionholder, (1) the reduction of the exercise price of any
outstanding Option under the Plan, (2) the cancellation of any outstanding
Option under the Plan and the grant in substitution therefor of (A) a new Option
under the Plan or another equity plan of the Company covering the same or a
different number of shares of Common Stock, (B) a Restricted Stock Award
(including a stock bonus), (C) a Stock Appreciation Right, (D) Phantom Stock,
(E) an Other Stock Award, (F) cash and/or (G) other valuable consideration (as
determined by the Board, in its sole discretion), or (3) any other action that
is treated as a repricing under generally accepted accounting principles.

 

(iv) To amend the Plan or a Stock Award as provided in Section 12.

 

(v) To terminate or suspend the Plan as provided in Section 13.

 

(vi) 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.

 

(c) Delegation to Committee.

 

(i) General. The Board may delegate administration of the Plan to a Committee or
Committees of one (1) or more members of the Board, and the term “Committee”
shall apply to any person or persons to whom such authority has been delegated.
If administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, including the power to delegate to a subcommittee any of the
administrative powers the Committee is authorized to exercise (and references in
this Plan to the Board shall thereafter be to the Committee or

 

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subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.

 

(ii) Section 162(m) and Rule 16b-3 Compliance. In the discretion of the Board,
the Committee may consist solely of two or more Outside Directors, in accordance
with Section 162(m) of the Code, and/or solely of two or more Non-Employee
Directors, in accordance with Rule 16b-3. Within the scope of such authority,
the Board or the Committee may (1) delegate to a committee of one or more
members of the Board who are not Outside Directors the authority to grant Stock
Awards to eligible persons who are either (a) not then Covered Employees and are
not expected to be Covered Employees at the time of recognition of income
resulting from such Stock Award or (b) not persons with respect to whom the
Company wishes to comply with Section 162(m) of the Code and/or (2) delegate to
a committee of one or more members of the Board who are not Non-Employee
Directors the authority to grant Stock Awards to eligible persons who are not
then subject to Section 16 of the Exchange Act.

 

(d) Delegation to an Officer. The Board may delegate to one or more Officers of
the Company the authority to do one or both of the following (i) designate
Officers and Employees of the Company or any of its Subsidiaries to be
recipients of Stock Awards and (ii) determine the number of shares of Common
Stock to be subject to such Stock Awards granted to such Officers and Employees
of the Company; provided, however, that the Board resolutions regarding such
delegation shall specify the total number of shares of Common Stock that may be
subject to the Stock Awards granted by such Officer and that such Officer may
not grant a Stock Award to himself or herself. Notwithstanding the foregoing,
the Board may not delegate authority to an Officer to determine the Fair Market
Value of the Common Stock

 

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

 

4. SHARES SUBJECT TO THE PLAN.

 

(a) Share Reserve. Subject to the provisions of Section 11(a) relating to
Capitalization Adjustments, the shares of Common Stock that may be issued
pursuant to Stock Awards shall not exceed in the aggregate three million one
hundred fifty-four thousand four hundred eighteen (3,154,418) shares of Common
Stock. Such share reserve consists of (i) the 1,004,987 shares initially
reserved for issuance under the Plan, (ii) an additional 349,431 shares added
pursuant to the automatic increase provision of this Section 4(a) on January 1,
2005, plus (iii) an additional 1,800,000 shares authorized by the Board on
October 19, 2005 and subject to the stockholders’ approval of both the share
increase under the Plan and the issuance of Common Stock in the contemplated
merger between the Company and AlgoRx Pharmaceuticals, Inc. The number of shares
available for issuance under the Plan shall automatically increase on
January 1st of each year, from January 1, 2006 through January 1, 2013 (each
such day, a “Calculation Date”), equal to the lesser of (i) five percent (5%) of
the shares of Common Stock outstanding on each such Calculation Date (rounded
down to the nearest whole share), or (ii) two million five hundred thousand
(2,500,000) shares. Notwithstanding the foregoing, the Board may act, prior to
the first day of any fiscal year of the Company, to increase the share reserve
by such number of shares of Common Stock as the Board shall determine, which
number shall be less than the amount described in the foregoing sentence.

 

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(b) Reversion of Shares to the Share Reserve. If any Stock Award shall for any
reason expire or otherwise terminate, in whole or in part, without having been
exercised in full, or if any shares of Common Stock issued to a Participant
pursuant to a Stock Award are forfeited back to or repurchased by the Company,
including, but not limited to, any repurchase or forfeiture caused by the
failure to meet a contingency or condition required for the vesting of such
shares, then the shares of Common Stock not acquired under such Stock Award
shall revert to and again become available for issuance under the Plan. If any
shares subject to a Stock Award are not delivered to a Participant because such
shares are withheld for the payment of taxes or the Stock Award is exercised
through a reduction of shares subject to the Stock Award (i.e., “net
exercised”), the number of shares that are not delivered shall revert to and
again become available for issuance under the Plan. If the exercise price of any
Stock Award is satisfied by tendering shares of Common Stock held by the
Participant (either by actual delivery or attestation), then the number of such
tendered shares shall revert to and again become available for issuance under
the Plan.

 

(c) Source of Shares. The shares of Common Stock subject to the Plan may be
unissued shares or reacquired shares, bought on the market or otherwise.

 

5. ELIGIBILITY.

 

(a) Eligibility for Specific Stock Awards. Incentive Stock Options may be
granted only to Employees. Stock Awards other than Incentive Stock Options may
be granted to Employees, Directors and Consultants.

 

(b) Ten Percent Stockholders. A Ten Percent Stockholder shall 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 of the Common Stock on the
date of grant and the Option is not exercisable after the expiration of five
(5) years from the date of grant.

 

(c) Consultants. A Consultant shall not be eligible for the grant of a Stock
Award if, at the time of grant, a Form S-8 Registration Statement under the
Securities Act (“Form S-8”) is not available to register either the offer or the
sale of the Company’s securities to such Consultant because of the nature of the
services that the Consultant is providing to the Company, because the Consultant
is not a natural person, or because of any other rule governing the use of Form
S-8.

 

6. OPTION PROVISIONS.

 

Each Option shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate. All Options shall 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 shall be
issued for shares of Common Stock purchased on exercise of each type of Option.
The provisions of separate Options need not be identical, but each Option shall
include (through incorporation of provisions hereof by reference in the Option
or otherwise) the substance of each of the following provisions:

 

(a) Term. Subject to the provisions of Section 5(b) regarding Ten Percent
Stockholders, no Incentive Stock Option shall be exercisable after the
expiration of ten (10) years from the date on which it was granted.

 

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(b) Exercise Price of an Incentive Stock Option. Subject to the provisions of
Section 5(b) regarding Ten Percent Stockholders, the exercise price of each
Incentive Stock Option shall be not less than one hundred percent (100%) of the
Fair Market Value of the Common Stock subject to the Option on the date the
Option is granted. Notwithstanding the foregoing, an Incentive Stock Option may
be granted with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section 424(a) of the
Code.

 

(c) Exercise Price of a Nonstatutory Stock Option. The exercise price of each
Nonstatutory Stock Option shall be not less than fifty percent (50%) of the Fair
Market Value of the Common Stock subject to the Option on the date the Option is
granted. Notwithstanding the foregoing, a Nonstatutory Stock Option may be
granted with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section 424(a) of the
Code.

 

(d) Consideration. The purchase price of Common Stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Option is exercised or (ii) at
the discretion of the Board (1) by delivery to the Company of other Common
Stock, (2) according to a deferred payment or other similar arrangement with the
Optionholder, (3) by a “net exercise” of the Option (as further described
below), (4) pursuant to a program developed under Regulation T as promulgated by
the Federal Reserve Board that, prior to the issuance of Common Stock, 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 or (5) in any other form of legal consideration that may be
acceptable to the Board. Unless otherwise specifically provided in the Option,
the purchase price of Common Stock acquired pursuant to an Option that is paid
by delivery to the Company of other Common Stock acquired, directly or
indirectly, from the Company, shall be paid only by shares of the Common Stock
of the Company that have been held for more than six (6) months (or such longer
or shorter period of time required to avoid a charge to earnings for financial
accounting purposes). At any time that the Company is incorporated in Delaware,
payment of the Common Stock’s “par value,” as defined in the Delaware General
Corporation Law, shall not be made by deferred payment.

 

In the case of any deferred payment arrangement, interest shall be compounded at
least annually and shall be charged at the minimum rate of interest necessary to
avoid (1) the treatment as interest, under any applicable provisions of the
Code, of any amounts other than amounts stated to be interest under the deferred
payment arrangement and (2) the treatment of the Option as a variable award for
financial accounting purposes.

 

In the case of a “net exercise” of an Option, the Company will not require a
payment of the exercise price of the Option from the Participant but will reduce
the number of shares of

 

11.

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Common Stock issued upon the exercise by the largest number of whole shares that
has a Fair Market Value that does not exceed the aggregate exercise price. With
respect to any remaining balance of the aggregate exercise price, the Company
shall accept a cash payment from the Participant. The shares of Common Stock so
used to pay the exercise price of an Option under a “net exercise” will be
considered to have resulted from the exercise of the Option, and accordingly,
the Option will not again be exercisable with respect to such shares, the shares
actually delivered to the Participant, and any shares withheld for purposes of
tax withholding.

 

(e) Transferability of an Incentive Stock Option. An Incentive Stock Option
shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder. Notwithstanding the foregoing, the Optionholder may,
by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the Option.

 

(f) Transferability of a Nonstatutory Stock Option. A Nonstatutory Stock Option
shall be transferable to the extent provided in the Option Agreement. If the
Nonstatutory Stock Option does not provide for transferability, then the
Nonstatutory Stock Option shall not be transferable except by will or by the
laws of descent and distribution and shall be exercisable during the lifetime of
the Optionholder only by the Optionholder. Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the Option.

 

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

 

(h) Termination of Continuous Service. In the event that an Optionholder’s
Continuous Service terminates (other than upon the Optionholder’s death or
Disability), the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise such Option as of the date of
termination) but only within such period of time ending on the earlier of
(i) the date three (3) months following the termination of the Optionholder’s
Continuous Service (or such longer or shorter period specified in the Option
Agreement) or (ii) the expiration of the term of the Option as set forth in the
Option Agreement. If, after termination, the Optionholder does not exercise his
or her Option within the time specified in the Option Agreement, the Option
shall terminate.

 

(i) Extension of Termination Date. An Optionholder’s Option Agreement may also
provide that if the exercise of the Option following the termination of the
Optionholder’s Continuous Service (other than upon the Optionholder’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 shall terminate on the earlier

 

12.

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of (i) the expiration of the term of the Option set forth in the Option
Agreement or (ii) the expiration of a period of three (3) months after the
termination of the Optionholder’s Continuous Service during which the exercise
of the Option would not be in violation of such registration requirements.

 

(j) Disability of Optionholder. In the event that an Optionholder’s Continuous
Service terminates as a result of the Optionholder’s Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination), but only
within such period of time ending on the earlier of (i) the date twelve
(12) months following such termination (or such longer or shorter period
specified in the Option Agreement or (ii) the expiration of the term of the
Option as set forth in the Option Agreement. If, after termination, the
Optionholder does not exercise his or her Option within the time specified
herein, the Option shall terminate.

 

(k) Death of Optionholder. In the event that (i) an Optionholder’s Continuous
Service terminates as a result of the Optionholder’s death or (ii) the
Optionholder dies within the period (if any) specified in the Option Agreement
after the termination of the Optionholder’s Continuous Service for a reason
other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by
the Optionholder’s estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
option upon the Optionholder’s death pursuant to Sections 6(e) or 6(f), but only
within the period ending on the earlier of (1) the date eighteen (18) months
following the date of death (or such longer or shorter period specified in the
Option Agreement, or (2) the expiration of the term of such Option as set forth
in the Option Agreement. If, after death, the Option is not exercised within the
time specified herein, the Option shall terminate.

 

(l) Early Exercise. The Option may, but need not, include a provision whereby
the Optionholder may elect at any time before the Optionholder’s Continuous
Service terminates to exercise the Option as to any part or all of the shares of
Common Stock subject to the Option prior to the full vesting of the Option. Any
unvested shares of Common Stock so purchased may be subject to a repurchase
option in favor of the Company or to any other restriction the Board determines
to be appropriate. The Company will not exercise its repurchase option until at
least six (6) months (or such longer or shorter period of time required to avoid
a charge to earnings for financial accounting purposes) have elapsed following
exercise of the Option unless the Board otherwise specifically provides in the
Option.

 

7. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.

 

(a) Restricted Stock Awards. Each Restricted Stock Award agreement shall be in
such form and shall contain such terms and conditions as the Board shall deem
appropriate. 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; provided, however, that each
Restricted Stock Award agreement shall include (through incorporation of the
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:

 

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(i) Purchase Price. At the time of the grant of a Restricted Stock Award, the
Board will determine the price to be paid by the Participant for each share
subject to the Restricted Stock Award. To the extent required by applicable law,
the price to be paid by the Participant for each share of the Restricted Stock
Award will not be less than the par value of a share of Common Stock. A
Restricted Stock Award may be awarded as a stock bonus (i.e., with no cash
purchase price to be paid) to the extent permissible under applicable law.

 

(ii) Consideration. At the time of the grant of a Restricted Stock Award, the
Board will determine the consideration permissible for the payment of the
purchase price of the Restricted Stock Award. The purchase price of Common Stock
acquired pursuant to the Restricted Stock Award shall be paid in one of the
following ways: (i) in cash at the time of purchase; (ii) at the discretion of
the Board, according to a deferred payment or other similar arrangement with the
Participant; (iii) by services rendered or to be rendered to the Company; or
(iv) in any other form of legal consideration that may be acceptable to the
Board; provided, however, that at any time that the Company is incorporated in
Delaware, the Common Stock’s “par value,” as defined in the Delaware General
Corporation Law, shall not be paid by deferred payment and must be paid in a
form of consideration that is permissible under the Delaware Corporation Law.

 

(iii) Vesting. Shares of Common Stock acquired under a Restricted Stock Award
may, but need not, be subject to a share repurchase option in favor of the
Company in accordance with a vesting schedule to be determined by the Board.

 

(iv) Termination of Participant’s Continuous Service. In the event that a
Participant’s Continuous Service terminates, the Company may repurchase or
otherwise reacquire any or all of the shares of Common Stock held by the
Participant that have not vested as of the date of termination under the terms
of the Restricted Stock Award agreement. The Company will not exercise its
repurchase option until at least six (6) months (or such longer or shorter
period of time required to avoid a charge to earnings for financial accounting
purposes) have elapsed following the purchase of the restricted stock unless
otherwise determined by the Board or provided in the Restricted Stock Award
agreement.

 

(v) Transferability. Rights to purchase or receive shares of Common Stock
granted under a Restricted Stock Award shall be transferable by the Participant
only upon such terms and conditions as are set forth in the Restricted Stock
Award agreement, as the Board shall determine in its discretion, and so long as
Common Stock awarded under the Restricted Stock Award remains subject to the
terms of the Restricted Stock Award agreement.

 

(b) Phantom Stock. Each Phantom Stock agreement shall be in such form and shall
contain such terms and conditions as the Board shall determine. The terms and
conditions of Phantom Stock agreements may change from time to time, and the
terms and conditions of separate Phantom Stock agreements need not be identical;
provided, however, that each Phantom Stock agreement shall include (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 Phantom Stock award, the Board will
determine the consideration, if any, to be paid by the Participant upon delivery
of each share

 

14.

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of Common Stock subject to the Phantom Stock award. To the extent required by
applicable law, the consideration to be paid by the Participant for each share
of Common Stock subject to a Phantom Stock award will not be less than the par
value of a share of Common Stock. Such consideration may be paid in any form
permitted under applicable law.

 

(ii) Vesting. At the time of the grant of a Phantom Stock award, the Board may
impose such restrictions or conditions to the vesting of the shares Phantom
Stock as it deems appropriate.

 

(iii) Payment. A Phantom Stock award may be settled by the delivery of shares of
Common Stock, their cash equivalent, or any combination of the two, as the Board
deems appropriate.

 

(iv) Additional Restrictions. At the time of the grant of a Phantom Stock 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 Phantom Stock award after the vesting of such Award.

 

(v) Dividend Equivalents. Dividend equivalents may be credited in respect of
shares of Phantom Stock, as the Board deems appropriate. Such dividend
equivalents may be converted into additional shares of Phantom Stock by dividing
(1) the aggregate amount or value of the dividends paid with respect to that
number of shares of Common Stock equal to the number of shares of Phantom Stock
then credited by (2) the Fair Market Value per share of Common Stock on the
payment date for such dividend. The additional shares of Phantom Stock credited
by reason of such dividend equivalents will be subject to all the terms and
conditions of the underlying Phantom Stock award to which they relate.

 

(vi) Termination of Participant’s Continuous Service. Except as otherwise
provided in the applicable Stock Award Agreement, shares of Phantom Stock that
have not vested will be forfeited upon the Participant’s termination of
Continuous Service for any reason.

 

(c) Stock Appreciation Rights. Each Stock Appreciation Rights agreement shall be
in such form and shall contain such terms and conditions as the Board shall deem
appropriate. The terms and conditions of Stock Appreciation Rights agreements
may change from time to time, and the terms and conditions of separate Stock
Appreciation Rights agreements need not be identical, but each Stock
Appreciation Rights agreement shall include (through incorporation of the
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:

 

(i) Strike Price and Calculation of Appreciation. Each Stock Appreciation Right
will be denominated in share of Common Stock equivalents. The appreciation
distribution payable on the exercise of a Stock Appreciation Right 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 Stock Appreciation Right) of a number
of shares of Common Stock equal to the number of share of Common Stock
equivalents in which the Participant is vested under such Stock Appreciation
Right and with respect to which the Participant is exercising the Stock
Appreciation Right on such date, over (B) an amount that will be determined by
the Committee at the time of grant of the Stock Appreciation Right.

 

15.

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(ii) Vesting. At the time of the grant of a Stock Appreciation Right, the Board
may impose such restrictions or conditions to the vesting of such Right as it
deems appropriate.

 

(iii) Exercise. To exercise any outstanding Stock Appreciation Right, the
Participant must provide written notice of exercise to the Company in compliance
with the provisions of the Stock Appreciation Rights agreement evidencing such
Right.

 

(iv) Payment. The appreciation distribution in respect of a Stock Appreciation
Right may be paid in Common Stock, in cash, or any combination of the two, as
the Board deems appropriate.

 

(v) Termination of Continuous Service. In the event that a Participant’s
Continuous Service terminates, the Participant may exercise his or her Stock
Appreciation Right (to the extent that the Participant was entitled to exercise
such Stock Appreciation Right as of the date of termination) but only within
such 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 Stock Appreciation Rights agreement)
or (ii) the expiration of the term of the Stock Appreciation Right as set forth
in the Stock Appreciation Rights agreement. If, after such termination, the
Participant does not exercise his or her Stock Appreciation Right within the
time specified in the Stock Appreciation Rights agreement, the Stock
Appreciation Right shall terminate.

 

(d) Other Stock Awards. 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 provided for under Section 6 and the preceding
provisions of this Section 7. Subject to the provisions of the Plan, the Board
shall have sole and complete authority to determine 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 Awards and all other terms and conditions of such Awards.

 

8. SECURITIES LAW COMPLIANCE.

 

The Company shall seek to obtain from each regulatory commission or agency
having jurisdiction over the Plan such authority as may be 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 shall 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, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems necessary
for the lawful issuance and sale of Common Stock under the Plan, the Company
shall 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.

 

16.

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9. USE OF PROCEEDS FROM STOCK.

 

Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute
general funds of the Company.

 

10. MISCELLANEOUS.

 

(a) Acceleration of Exercisability and Vesting. The Board shall have the power
to accelerate the time at which a Stock Award may first be exercised or the time
during which a Stock Award or any part thereof will vest in accordance with the
Plan, notwithstanding the provisions in the Stock Award stating the time at
which it may first be exercised or the time during which it will vest.

 

(b) Stockholder Rights. Subject to the further limitations of Section 7(b)(iv)
hereof, no Participant shall 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
such Stock Award unless and until such Participant has satisfied all
requirements for exercise of the Stock Award pursuant to its terms.

 

(c) No Employment or other Service Rights. Nothing in the Plan or any instrument
executed or Stock Award granted pursuant thereto shall confer upon any
Participant any right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Stock Award was granted or shall 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.

 

(d) Investment Assurances. The Company may require a Participant, as a condition
of exercising or acquiring Common Stock under any Stock 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 Stock Award; and (ii) to give written assurances
satisfactory to the Company stating that the Participant is acquiring Common
Stock subject to the Stock 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,
shall be inoperative if (1) the issuance of the shares of Common Stock upon the
exercise or acquisition of Common Stock under the Stock Award has been
registered under a then currently effective registration statement under the
Securities Act or (2) 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.

 

17.

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(e) Withholding Obligations. To the extent provided by the terms of a Stock
Award Agreement, the Participant may satisfy any federal, state or local tax
withholding obligation relating to the exercise or acquisition of Common Stock
under a Stock Award by any of the following means (in addition to the Company’s
right to withhold from any compensation paid to the Participant by the Company)
or by a combination of such means: (i) tendering a cash payment;
(ii) authorizing the Company to withhold shares of Common Stock from the shares
of Common Stock otherwise issuable to the Participant as a result of the
exercise or acquisition of Common Stock under the Stock Award; provided,
however, that no shares of Common Stock are withheld with a value exceeding the
minimum amount of tax required to be withheld by law (or such lesser amount as
may be necessary to avoid variable award accounting); or (iii) delivering to the
Company owned and unencumbered shares of Common Stock.

 

(f) Incentive Stock Option $100,000 Limitation. 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 its
Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or
portions thereof that exceed such limit (according to the order in which they
were granted) shall be treated as Nonstatutory Stock Options, notwithstanding
any contrary provision of a Stock Award Agreement.

 

11. ADJUSTMENTS UPON CHANGES IN STOCK.

 

(a) Capitalization Adjustments. If any change is made in, or other event occurs
with respect to, the Common Stock subject to the Plan or subject to any Stock
Award without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company (each a “Capitalization Adjustment”), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities subject to the Plan
pursuant to Sections 4(a) and 4(b) and the maximum number of securities subject
to award to any person pursuant to Section 5(c), and the outstanding Stock
Awards will be appropriately adjusted in the class(es) and number of securities
and price per share of Common Stock subject to such outstanding Stock Awards.
The Board shall make such adjustments, and its determination shall be final,
binding and conclusive. (The conversion of any convertible securities of the
Company shall not be treated as a transaction “without receipt of consideration”
by the Company.)

 

(b) Dissolution or Liquidation. In the event of a dissolution or liquidation of
the Company, then all outstanding Stock Awards shall terminate immediately prior
to the completion of such dissolution or liquidation.

 

(c) Corporate Transaction. In the event of a Corporate Transaction, any
surviving corporation or acquiring corporation may assume or continue any or all
Stock Awards outstanding under the Plan or may substitute similar stock awards
for Stock Awards outstanding under the Plan (it being understood that similar
stock awards include, but are not limited to, awards to acquire the same
consideration paid to the stockholders or the Company, as the case may be,
pursuant to the Corporate Transaction), and any reacquisition or repurchase
rights held

 

18.

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by the Company in respect of Common Stock issued pursuant to Stock Awards may be
assigned by the Company to the successor of the Company (or the successor’s
parent company), if any, in connection with such Corporate Transaction. In the
event that any surviving corporation or acquiring corporation does not assume or
continue any or all such outstanding Stock Awards or substitute similar stock
awards for such outstanding Stock Awards, then with respect to Stock Awards that
have been not assumed, continued or substituted and that are held by
Participants whose Continuous Service has not terminated prior to the effective
time of the Corporate Transaction, the vesting of such Stock Awards (and, if
applicable, the time at which such Stock Awards may be exercised) shall
(contingent upon the effectiveness of the Corporate Transaction) be accelerated
in full to a date prior to the effective time of such Corporate Transaction as
the Board shall determine (or, if the Board shall not determine such a date, to
the date that is five (5) days prior to the effective time of the Corporate
Transaction), the Stock Awards shall terminate if not exercised (if applicable)
at or prior to such effective time, and any reacquisition or repurchase rights
held by the Company with respect to such Stock Awards held by Participants whose
Continuous Service has not terminated shall (contingent upon the effectiveness
of the Corporate Transaction) lapse. With respect to any other Stock Awards
outstanding under the Plan that have not been assumed, continued or substituted,
the vesting of such Stock Awards (and, if applicable, the time at which such
Stock Award may be exercised) shall not be accelerated, unless otherwise
provided in a written agreement between the Company or any Affiliate and the
holder of such Stock Award, and such Stock Awards shall terminate if not
exercised (if applicable) prior to the effective time of the Corporate
Transaction.

 

(d) Change in Control.

 

(i) Double Trigger Acceleration. If a Change in Control occurs and either (i) a
Participant’s Continuous Service with the Company or its successor or the
successor’s parent (together, the “Successor Company”) is terminated by the
Successor Company without Cause or (ii) a Participant’s Continuous Service with
the Successor Company is terminated as a result of a Constructive Termination,
in either case, within twelve months after the effective time of the Change in
Control, then, immediately prior to such termination, the Participant’s Stock
Award shall become fully vested and, if applicable, exercisable. In the event
that a Participant is required to resign his or her position with the Company as
a condition of a Change in Control, (for example, if an officer of the Company
must resign his or her position as a condition of the Change of Control
transaction), then the outstanding Stock Awards of such Participant shall become
fully vested and exercisable immediately prior to the effectiveness of such
resignation.

 

(ii) Additional Acceleration. A Stock Award held by any Participant whose
Continuous Service has not terminated prior to the effective time of a Change in
Control may be subject to additional acceleration of vesting and exercisability
upon or after such event 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. In the absence of such
provision, no additional vesting acceleration shall occur.

 

12. AMENDMENT OF THE PLAN AND STOCK AWARDS.

 

(a) Amendment of Plan. The Board at any time, and from time to time, may amend
the Plan. However, except as provided in Section 11(a) relating to
Capitalization Adjustments,

 

19.

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no amendment shall be effective unless approved by the stockholders of the
Company to the extent stockholder approval is necessary to satisfy applicable
law including the requirements of Section 422 of the Code.

 

(b) Stockholder Approval. The Board, in its sole discretion, may submit any
other amendment to the Plan for stockholder approval, including, but not limited
to, amendments to the Plan intended to satisfy the requirements of
Section 162(m) of the Code and the regulations thereunder regarding the
exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to Covered Employees.

 

(c) No Impairment of Rights. Rights under any Stock Award granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the Participant and (ii) the Participant
consents in writing.

 

(d) Amendment of Stock Awards. The Board at any time, and from time to time, may
amend the terms of any one or more Stock Awards; provided, however, that the
rights under any Stock Award shall not be impaired by any such amendment unless
(i) the Company requests the consent of the Participant and (ii) the Participant
consents in writing.

 

13. TERMINATION OR SUSPENSION OF THE PLAN.

 

(a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on the day before the tenth
(10th) anniversary of the date this amended and restated Plan is adopted by the
Board or approved by the stockholders of the Company, whichever is earlier. No
Stock 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 shall not
impair rights and obligations under any Stock Award granted while the Plan is in
effect except with the written consent of the Participant.

 

14. EFFECTIVE DATE OF PLAN.

 

The Plan shall become effective as determined by the Board, but no Stock Award
shall be exercised (or, in the case of a stock bonus, shall be granted) unless
and until the Plan has been approved by the stockholders of the Company, which
approval shall be within twelve (12) months before or after the date the Plan is
adopted by the Board.

 

15. CHOICE OF LAW.

 

The law of the State of Delaware shall govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to such
state’s conflict of laws rules.

 

20.