Exhibit 10.1

 

NETLIST, INC. 2006 EQUITY INCENTIVE PLAN

 

Re-Approved by the Stockholders on June 8, 2016

 

1.                                      Purpose

 

This Plan is intended to encourage ownership of Stock by employees, consultants,
advisors and directors of the Company and its Affiliates and to provide
additional incentive for them to promote the success of the Company’s business
through the grant of Awards of, or pertaining to, shares of the Company’s Stock.
This Plan is intended to be an incentive stock option plan within the meaning of
Section 422 of the Code, but not all Awards are required to be Incentive
Options. This Plan shall not become effective until the Effective Date.

 

2.                                      Definitions

 

As used in this Plan, the following terms shall have the following meanings:

 

2.1                               Accelerate, Accelerated, and Acceleration,
means: (a) when used with respect to an Option or Stock Appreciation Right, that
as of the time of reference the Option or Stock Appreciation Right will become
exercisable with respect to some or all of the shares of Stock for which it was
not then otherwise exercisable by its terms; (b) when used with respect to
Restricted Stock or Restricted Stock Units, that the Risk of Forfeiture
otherwise applicable to the Stock or Units shall expire with respect to some or
all of the shares of Restricted Stock or Units then still otherwise subject to
the Risk of Forfeiture; and (c) when used with respect to Performance Units,
that the applicable Performance Goals shall be deemed to have been met as to
some or all of the Units.

 

2.2                               Acquisition means (i) a merger or
consolidation of the Company with or into another person, (ii) the sale,
transfer, or other disposition of all or substantially all of the Company’s
assets to one or more other persons in a single transaction or series of related
transactions, or (iii) the acquisition of beneficial ownership (determined
pursuant to Securities and Exchange Commission Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended and in effect from time to time) by
any person of more than 50% of the Company’s outstanding common stock pursuant
to a tender or exchange offer made directly to the Company’s stockholders, other
than an underwriter temporarily holding common stock pursuant to an offering of
such common stock. Notwithstanding the foregoing, a transaction shall not
constitute an “Acquisition” if its sole purpose is to change the state of the
Company’s incorporation or to create a holding company that will be owned in
substantially the same proportions by the persons who held the Company’s
securities immediately prior to such transaction.

 

2.3                               Affiliate means any corporation, partnership,
limited liability company, business trust, or other entity controlling,
controlled by or under common control with the Company.

 

2.4                               Award means any grant or sale pursuant to the
Plan of Options, Stock Appreciation Rights, Performance Units, Restricted Stock,
Restricted Stock Units or Stock Grants.

 

2.5                               Award Agreement means an agreement between the
Company and the recipient of an Award, setting forth the terms and conditions of
the Award.

 

2.6                               Board means the Company’s Board of Directors.

 

2.7                               Code means the Internal Revenue Code of 1986,
as amended from time to time, or any successor statute thereto, and any
regulations issued from time to time thereunder.

 

2.8                               Committee means the Compensation Committee of
the Board, which in general is responsible for the administration of the Plan,
as provided in Section 5 of the Plan. For any period during which no such
committee is in existence “Committee” shall mean the Board and all authority and
responsibility assigned to the Committee under the Plan shall be exercised, if
at all, by the Board.

 

2.9                               Company means Netlist, Inc., a corporation
organized under the laws of the State of Delaware.

 

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2.10                        Covered Employee means an employee who is a “covered
employee” within the meaning of Section 162(m) of the Code.

 

2.11                        Effective Date means the date on which the Company’s
registration statement on Form S-1, initially filed with the Securities and
Exchange Commission on August 18, 2006 in connection with the initial public
offering of its common stock in a firm commitment underwriting, as amended, is
declared effective by the Securities and Exchange Commission.

 

2.12                        Grant Date means the date as of which an Option is
granted, as determined under Section 7.1(a).

 

2.13                        Incentive Option means an Option which by its terms
is to be treated as an “incentive stock option” within the meaning of
Section 422 of the Code.

 

2.14                        Market Value means the value of a share of Stock on
a particular date determined by such methods or procedures as may be established
by the Committee. Unless otherwise determined by the Committee, the Market Value
of Stock as of any date is the closing price for the Stock as quoted on the NCM
(or on any other national securities exchange on which the Stock is then listed)
for that date or, if no closing price is reported for that date, the closing
price on the next preceding date for which a closing price was reported. For
purposes of Awards effective as of the effective date of the Company’s initial
public offering, Market Value of Stock shall be the price at which the Company’s
Stock is offered to the public in its initial public offering.

 

2.15                        NCM means the NASDAQ Capital Market.

 

2.16                        Nonstatutory Option means any Option that is not an
Incentive Option.

 

2.17                        Option means an option to purchase shares of Stock.

 

2.18                        Optionee means a Participant to whom an Option shall
have been granted under the Plan.

 

2.19                        Participant means any holder of an outstanding Award
under the Plan.

 

2.20                        Performance Criteria means the criteria that the
Committee selects for purposes of establishing the Performance Goal or
Performance Goals for a Participant for a Performance Period. The Performance
Criteria used to establish Performance Goals are limited to: (i) cash flow
(before or after dividends), (ii) earnings per share (including, without
limitation, earnings before interest, taxes, depreciation and amortization),
(iii) stock price, (iv) return on equity, (v) stockholder return or total
stockholder return, (vi) return on capital (including, without limitation,
return on total capital or return on invested capital), (vii) return on
investment, (viii) return on assets or net assets, (ix) market capitalization,
(x) economic value added, (xi) debt leverage (debt to capital), (xii) revenue,
(xiii) sales or net sales, (xiv) backlog, (xv) income, pre-tax income or net
income, (xvi) operating income or pre-tax profit, (xvii) operating profit, net
operating profit or economic profit, (xviii) gross margin, operating margin or
profit margin, (xix) return on operating revenue or return on operating assets,
(xx) cash from operations, (xxi) operating ratio, (xxii) operating revenue,
(xxiii) market share improvement, (xxiv) general and administrative expenses or
(xxv) customer service.

 

2.21                        Performance Goals means, for a Performance Period,
the written goal or goals established by the Committee for the Performance
Period based upon the Performance Criteria. The Performance Goals may be
expressed in terms of overall Company performance or the performance of a
division, business unit, subsidiary, or an individual. either individually,
alternatively or in any combination, applied to either the Company as a whole or
to a business unit or Affiliate, either individually, alternatively or in any
combination, and measured either quarterly, annually or cumulatively over a
period of years, on an absolute basis or relative to a pre-established target,
to previous years’ results or to a designated comparison group, in each case as
specified by the Committee. The Committee will, in the manner and within the
time prescribed by Section 162(m) of the Code in the case of Qualified
Performance-Based Awards, objectively define the manner of calculating the
Performance Goal or Goals it selects to use for such Performance Period for such
Participant. To the extent consistent with Section 162(m) of the Code, the
Committee may appropriately adjust any evaluation of performance against a
Performance Goal to exclude any of the following events that occurs during a
performance period: (i) asset write-downs, (ii) litigation, claims, judgments or
settlements, (iii) the effect of changes in tax law, accounting principles or
other such laws or provisions affecting reported results, (iv) accruals for
reorganization and restructuring programs and (v) any significant, unusual, or
infrequently occurring items.

 

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2.22                        Performance Period means the one or more periods of
time, which may be of varying and overlapping durations, selected by the
Committee, over which the attainment of one or more Performance Goals will be
measured for purposes of determining a Participant’s right to, and the payment
of, a Performance Unit.

 

2.23                        Performance Unit means a right granted to a
Participant under Section 7.5, to receive cash, Stock or other Awards, the
payment of which is contingent on achieving Performance Goals established by the
Committee.

 

2.24                        Plan means this 2006 Equity Incentive Plan of the
Company, as amended from time to time, and including any attachments or addenda
hereto.

 

2.25                        Qualified Performance-Based Awards means Awards
intended to qualify as “performance-based compensation” under Section 162(m) of
the Code.

 

2.26                        Restricted Stock means a grant or sale of shares of
Stock to a Participant subject to a Risk of Forfeiture.

 

2.27                        Restriction Period means the period of time,
established by the Committee in connection with an Award of Restricted Stock or
Restricted Stock Units, during which the shares of Restricted Stock or
Restricted Stock Units are subject to a Risk of Forfeiture described in the
applicable Award Agreement.

 

2.28                        Risk of Forfeiture means a limitation on the right
of the Participant to retain Restricted Stock or Restricted Stock Units,
including a right in the Company to reacquire shares of Restricted Stock at less
than their then Market Value, arising because of the occurrence or
non-occurrence of specified events or conditions.

 

2.29                        Restricted Stock Units means rights to receive
shares of Stock at the close of a Restriction Period, subject to a Risk of
Forfeiture.

 

2.30                        Stock means common stock, par value $0.001 per
share, of the Company, and such other securities as may be substituted for Stock
pursuant to Section 8.

 

2.31                        Stock Appreciation Right means a right to receive
any excess in the Market Value of shares of Stock (except as otherwise provided
in Section 7.2(c)) over a specified exercise price.

 

2.32                        Stock Grant means the grant of shares of Stock not
subject to restrictions or other forfeiture conditions.

 

2.33                        Ten Percent Owner means a person who owns, or is
deemed within the meaning of Section 422(b)(6) of the Code to own, stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company (or any parent or subsidiary corporations of the Company,
as defined in Sections 424(e) and (f), respectively, of the Code). Whether a
person is a Ten Percent Owner shall be determined with respect to an Option
based on the facts existing immediately prior to the Grant Date of the Option.

 

3.                                      Term of the Plan

 

Unless the Plan shall have been earlier terminated by the Board, Awards may be
granted under this Plan at any time in the period commencing on the date of
approval of the Plan by the Board and ending immediately prior to the tenth
anniversary of the earlier of the amendment of the Plan by the Board or
re-approval of the Plan by the Company’s stockholders in 2016. Awards granted
pursuant to the Plan within that period shall not expire solely by reason of the
termination of the Plan. Awards of Incentive Options granted prior to
stockholder approval of the Plan are expressly conditioned upon such approval,
but in the event of the failure of the stockholders to approve the Plan shall
thereafter and for all purposes be deemed to constitute Nonstatutory Options.

 

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4.                                      Stock Subject to the Plan

 

At no time shall the number of shares of Stock issued pursuant to or subject to
outstanding Awards granted under the Plan (including, without limitation,
pursuant to Incentive Options), nor the number of shares of Common Stock issued
pursuant to Incentive Options, exceed the sum of (a) 500,000 shares of Stock
plus (b) an annual increase to be added on the first day of each calendar year
beginning on or after January 1, 2007 equal to the lesser of (i) 500,000 shares
of Stock, and (ii) such lesser number as the Board may approve for the fiscal
year; provided, however, that beginning on January 1, 2010, the annual increase
to the number of shares of Stock that may be issued pursuant to the Plan shall
be equal to the lesser of (x) 5.0% of the number of shares of Stock that are
issued and outstanding as of the first day of the calendar year, and
(y) 1,200,000 shares of Stock; provided, further, that beginning on January 1,
2017, the annual increase to the number of shares of Stock that may be issued
pursuant to the Plan shall be equal to the lesser of (x) 2.5% of the number of
shares of Stock that are issued and outstanding as of the first day of the
calendar year, and (y) 1,200,000 shares of Stock; subject, however, to the
provisions of Section 8 of the Plan. For purposes of applying the foregoing
limitation, (a) if any Option or Stock Appreciation Right expires, terminates,
or is cancelled for any reason without having been exercised in full, or if any
other Award is forfeited by the recipient or repurchased at less than its Market
Value, the shares not purchased by the Optionee or which are forfeited by the
recipient or repurchased shall again be available for Awards to be granted under
the Plan and (b) if any Option is exercised by delivering previously-owned
shares in payment of the exercise price therefor, including in a “net exercise”,
all shares with request to which the Option is exercised shall be considered to
have been issued pursuant to an Award granted under the Plan. In addition,
settlement of any Award shall not count against the foregoing limitations except
to the extent settled in the form of Stock. Shares of Stock issued pursuant to
the Plan may be either authorized but unissued shares or shares held by the
Company in its treasury.  Following approval of the Plan by the stockholders in
2016, no more than 50% of the shares of Stock reserved for issuance under the
Plan may be issued pursuant to Awards of Restricted Stock, Restricted Stock
Units, Performance Units or Stock Grants.

 

5.                                      Administration

 

The Plan shall be administered by the Committee; provided, however, that at any
time and on any one or more occasions the Board may itself exercise any of the
powers and responsibilities assigned the Committee under the Plan and when so
acting shall have the benefit of all of the provisions of the Plan pertaining to
the Committee’s exercise of its authorities hereunder; and provided further,
however, that the Committee may delegate to an executive officer or officers the
authority to grant Awards hereunder to employees who are not officers, and to
consultants and advisors, in accordance with such guidelines as the Committee
shall set forth at any time or from time to time. Subject to the provisions of
the Plan, the Committee shall have complete authority, in its discretion, to
make or to select the manner of making all determinations with respect to each
Award to be granted by the Company under the Plan including the employee,
consultant, advisor or director to receive the Award and the form of Award. In
making such determinations, the Committee may take into account the nature of
the services rendered by the respective employees, consultants, advisors and
directors, their present and potential contributions to the success of the
Company and its Affiliates, and such other factors as the Committee in its
discretion shall deem relevant. Subject to the provisions of the Plan, the
Committee shall also have complete authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, to determine
the terms and provisions of the respective Award Agreements (which need not be
identical), and to make all other determinations necessary or advisable for the
administration of the Plan, including, but not limited to, the cancellation,
amendment, reclassification or exchange of outstanding Options and other Awards,
subject to the provisions of Section 14.  Notwithstanding the foregoing, the
Committee may not, without stockholder approval, reduce the exercise price of an
Option or Stock Appreciation Right awarded under the Plan or cancel, in each
case, without stockholder approval, an Option or Stock Appreciation Right at a
time when its exercise price exceeds the Market Value of the underlying shares,
in exchange for another Option, SAR, Restricted Stock, or another Award or for
cash.  The Committee’s determinations made in good faith on matters referred to
in the Plan shall be final, binding and conclusive on all persons having or
claiming any interest under the Plan or an Award made pursuant hereto.

 

6.                                      Authorization of Grants

 

6.1  Eligibility.  The Committee may grant from time to time and at any time
prior to the termination of the Plan one or more Awards, either alone or in
combination with any other Awards, to any employee of, or consultant or advisor
to, one or more of the Company and its Affiliates or to any non-employee member
of the Board or of any board of directors (or similar governing authority) of
any Affiliate. However, only employees of the Company, and of any parent or
subsidiary corporations of the Company, as defined in Sections 424(e) and (f),
respectively, of the Code, shall be eligible for the grant of an Incentive
Option

 

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6.2  General Terms of Awards.  Each grant of an Award shall be subject to all
applicable terms and conditions of the Plan (including but not limited to any
specific terms and conditions applicable to that type of Award set out in the
following Section), and such other terms and conditions, not inconsistent with
the terms of the Plan, as the Committee may prescribe. No prospective
Participant shall have any rights with respect to an Award, unless and until
such Participant shall have complied with the applicable terms and conditions of
such Award (including, if applicable, delivering a fully-executed copy of any
agreement evidencing an Award to the Company).

 

6.3  Effect of Termination of Employment, Etc.  Unless the Committee shall
provide otherwise with respect to any Award, if the Participant’s employment or
other association with the Company and its Affiliates ends for any reason,
including because of the Participant’s employer ceasing to be an Affiliate,
(a) any outstanding Option or Stock Appreciation Right of the Participant shall
cease to be exercisable in any respect not later than 90 days following that
event and, for the period it remains exercisable following that event, shall be
exercisable only to the extent exercisable at the date of that event, and
(b) any other outstanding Award of the Participant shall be forfeited or
otherwise subject to return to, or repurchase by, the Company on the terms
specified in the applicable Award Agreement. Military or sick leave or other
bona fide leave shall not be deemed a termination of employment or other
association, provided that it does not exceed the longer of 90 days or the
period during which the absent Participant’s reemployment rights, if any, are
guaranteed by statute or by contract.

 

6.4  Transferability of Awards.  Except as otherwise provided in this
Section 6.4, Awards shall not be transferable, and no Award or interest therein
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution. The
foregoing sentence shall not limit the transferability of Stock Grants or of
Restricted Stock that is no longer subject to a Risk of Forfeiture. All of a
Participant’s rights in any Award may be exercised during the life of the
Participant only by the Participant or the Participant’s legal representative.
However, the Committee may, at or after the grant of an Award of a Nonstatutory
Option, or shares of Restricted Stock, provide that such Award may be
transferred by the recipient to a family member; provided, however, that any
such transfer is without payment of any consideration whatsoever and that no
transfer shall be valid unless first approved by the Committee, acting in its
sole discretion. For this purpose, “family member” means any child, stepchild,
grandchild, parent, stepparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
employee’s household (other than a tenant or employee), a trust in which the
foregoing persons have more than 50% of the beneficial interests, a foundation
in which the foregoing persons (or the Participant) control the management of
assets, and any other entity in which these persons (or the Participant) own
more than 50% of the voting interests.

 

7.                                      Specific Terms of Awards

 

7.1                               Options.

 

(a)  Date of Grant.  The granting of an Option shall take place at the time
specified in the Award Agreement. Only if expressly so provided in the
applicable Award Agreement shall the Grant Date be the date on which the Award
Agreement shall have been duly executed and delivered by the Company and the
Optionee.

 

(b)  Exercise Price.  The price at which shares of Stock may be acquired under
each Option shall be not less than 100% of the Market Value of Stock on the
Grant Date, or not less than 110% of the Market Value of Stock on the Grant Date
of an Incentive Option if the Optionee is a Ten Percent Owner.

 

(c)  Option Period.  No Option may be exercised on or after the tenth
anniversary of the Grant Date, or on or after the fifth anniversary of the Grant
Date of an Incentive Option if the Optionee is a Ten Percent Owner.

 

(d)  Exercisability.  An Option may be immediately exercisable or become
exercisable in such installments, cumulative or non-cumulative, as the Committee
may determine. In the case of an Option not otherwise immediately exercisable in
full, the Committee may Accelerate such Option in whole or in part at any time;
provided, however, that in the case of an Incentive Option, any such
Acceleration of the Option would not cause the Option to fail to comply with the
provisions of Section 422 of the Code or the Optionee consents to the
Acceleration.

 

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(e)  Method of Exercise.  An Option may be exercised by the Optionee giving
written notice, in the manner provided in Section 16, specifying the number of
shares with respect to which the Option is then being exercised. The notice
shall be accompanied by payment in the form of cash or check payable to the
order of the Company in an amount equal to the exercise price of the shares to
be purchased or, subject in each instance to the Committee’s approval, acting in
its sole discretion, and to such conditions, if any, as the Committee may deem
necessary to avoid adverse accounting effects to the Company) by delivery to the
Company of

 

(i)                                     shares of Stock having a Market Value
equal to the exercise price of the shares to be purchased, or

 

(ii)                                  unless prohibited by applicable law, the
Optionee’s executed promissory note in the principal amount equal to the
exercise price of the shares to be purchased and otherwise in such form as the
Committee shall have approved.

 

If the Stock is traded on an established market, payment of any exercise price
may also be made through and under the terms and conditions of any formal
cashless exercise program authorized by the Company entailing the sale of the
Stock subject to an Option in a brokered transaction (other than to the
Company). Receipt by the Company of such notice and payment in any authorized,
or combination of authorized, means shall constitute the exercise of the Option.
Within thirty (30) days thereafter but subject to the remaining provisions of
the Plan, the Company shall deliver, or cause to be delivered, to the Optionee
or his agent a certificate or certificates for the number of shares then being
purchased. Such shares shall be fully paid and nonassessable.

 

(f)  Limit on Incentive Option Characterization.  An Incentive Option shall be
considered to be an Incentive Option only to the extent that the number of
shares of Stock for which the Option first becomes exercisable in a calendar
year do not have an aggregate Market Value (as of the date of the grant of the
Option) in excess of the “current limit”. The current limit for any Optionee for
any calendar year shall be $100,000 minus the aggregate Market Value at the date
of grant of the number of shares of Stock available for purchase for the first
time in the same year under each other Incentive Option previously granted to
the Optionee under the Plan, and under each other incentive stock option
previously granted to the Optionee under any other incentive stock option plan
of the Company and its Affiliates, after December 31, 1986. Any shares of Stock
which would cause the foregoing limit to be violated shall be deemed to have
been granted under a separate Nonstatutory Option, otherwise identical in its
terms to those of the Incentive Option.

 

(g)  Notification of Disposition.  Each person exercising any Incentive Option
granted under the Plan shall be deemed to have covenanted with the Company to
report to the Company any disposition of such shares prior to the expiration of
the holding periods specified by Section 422(a)(1) of the Code (currently the
later of two years from the Grant Date and one year from the date of exercise of
the Incentive Option) and, if and to the extent that the realization of income
in such a disposition imposes upon the Company federal, state, local or other
withholding tax requirements, or any such withholding is required to secure for
the Company an otherwise available tax deduction, to remit to the Company an
amount in cash sufficient to satisfy those requirements.

 

7.2                               Stock Appreciation Rights.

 

(a)  Tandem or Stand-Alone.  Stock Appreciation Rights may be granted in tandem
with an Option (at or, in the case of a Nonstatutory Option, after the award of
the Option), or alone and unrelated to an Option. Stock Appreciation Rights in
tandem with an Option shall terminate to the extent that the related Option is
exercised, and the related Option shall terminate to the extent that the tandem
Stock Appreciation Rights are exercised.

 

(b)  Exercise Price.  Stock Appreciation Rights shall have such exercise price
that is not less than 100% of the Market Value of the stock on the Grant Date. 
In the case of Stock Appreciation Rights in tandem with Options, the exercise
price of the Stock Appreciation Rights shall equal the exercise price of the
related Option.

 

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(c)  Other Terms.  No Stock Appreciation Rights may be exercised on or after the
tenth anniversary of the Grant Date.  Except as the Committee may deem
inappropriate or inapplicable in the circumstances, Stock Appreciation Rights
shall be subject to terms and conditions substantially similar to those
applicable to a Nonstatutory Option. In addition, a Stock Appreciation Right
related to an Option which can only be exercised during limited periods
following a Change in Control may entitle the Participant to receive an amount
based upon the highest price paid or offered for Stock in any transaction
relating to the Change in Control or paid during the thirty (30) day period
immediately preceding the occurrence of the Change in Control in any transaction
reported in the stock market in which the Stock is normally traded.

 

7.3                               Restricted Stock.

 

(a)  Purchase Price.  Shares of Restricted Stock shall be issued under the Plan
for such consideration, in cash, other property or services, or any combination
thereof, as is determined by the Committee.

 

(b)  Issuance of Certificates.  Each Participant receiving a Restricted Stock
Award, subject to subsection (c) below, shall be issued a stock certificate in
respect of such shares of Restricted Stock. Such certificate shall be registered
in the name of such Participant, and, if applicable, shall bear an appropriate
legend referring to the terms, conditions, and restrictions applicable to such
Award substantially in the following form:

 

The transferability of this certificate and the shares represented by this
certificate are subject to the terms and conditions of the Netlist, Inc. 2006
Equity Incentive Plan and an Award Agreement entered into by the registered
owner and Netlist, Inc. Copies of such Plan and Agreement are on file in the
offices of Netlist, Inc.

 

(c)  Escrow of Shares.  The Committee may require that the stock certificates
evidencing shares of Restricted Stock be held in custody by a designated escrow
agent (which may but need not be the Company) until the restrictions thereon
shall have lapsed, and that the Participant deliver a stock power, endorsed in
blank, relating to the Stock covered by such Award.

 

(d)  Restrictions and Restriction Period.  During the Restriction Period
applicable to shares of Restricted Stock, such shares shall be subject to
limitations on transferability and a Risk of Forfeiture arising on the basis of
such conditions related to the performance of services, Company or Affiliate
performance or otherwise as the Committee may determine and provide for in the
applicable Award Agreement. Any such Risk of Forfeiture may be waived or
terminated, or the Restriction Period shortened, at any time by the Committee on
such basis as it deems appropriate.

 

(e)  Rights Pending Lapse of Risk of Forfeiture or Forfeiture of Award.  Except
as otherwise provided in the Plan or the applicable Award Agreement, at all
times prior to lapse of any Risk of Forfeiture applicable to, or forfeiture of,
an Award of Restricted Stock, the Participant shall have all of the rights of a
stockholder of the Company, including the right to vote, and the right to
receive any dividends with respect to, the shares of Restricted Stock. The
Committee, as determined at the time of Award, may permit or require the payment
of cash dividends to be deferred and, if the Committee so determines, reinvested
in additional Restricted Stock to the extent shares are available under
Section 4.

 

(f)  Lapse of Restrictions.  If and when the Restriction Period expires without
a prior forfeiture of the Restricted Stock, the certificates for such shares
shall be delivered to the Participant promptly if not previously delivered.

 

7.4                               Restricted Stock Units.

 

(a)  Character.  Each Restricted Stock Unit shall entitle the recipient to a
share of Stock at a close of such Restriction Period as the Committee may
establish and be subject to a Risk of Forfeiture arising on the basis of such
conditions relating to the performance of services, Company or Affiliate
performance or otherwise as the Committee may determine and provide for in the
applicable Award Agreement. Any such Risk of Forfeiture may be waived or
terminated, or the Restriction Period shortened, at any time by the Committee on
such basis as it deems appropriate.

 

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(b)  Form and Timing of Payment.  Payment of earned Restricted Stock Units shall
be made in a single lump sum following the close of the applicable Restriction
Period. At the discretion of the Committee, Participants may be entitled to
receive payments equivalent to any dividends declared with respect to Stock
referenced in grants of Restricted Stock Units but only following the close of
the applicable Restriction Period and then only if the underlying Stock shall
have been earned. Unless the Committee shall provide otherwise, any such
dividend equivalents shall be paid, if at all, without interest or other
earnings.

 

7.5                               Performance Units.

 

(a)  Character.  Each Performance Unit shall entitle the recipient to the value
of a specified number of shares of Stock, over the initial value for such number
of shares, if any, established by the Committee at the time of grant, at the
close of a specified Performance Period to the extent specified Performance
Goals shall have been achieved.

 

(b)  Earning of Performance Units.  The Committee shall set Performance Goals in
its discretion which, depending on the extent to which they are met within the
applicable Performance Period, will determine the number and value of
Performance Units that will be paid out to the Participant. After the applicable
Performance Period has ended, the holder of Performance Units shall be entitled
to receive payout on the number and value of Performance Units earned by the
Participant over the Performance Period, to be determined as a function of the
extent to which the corresponding Performance Goals have been achieved.

 

(c)  Form and Timing of Payment.  Payment of earned Performance Units shall be
made in a single lump sum following the close of the applicable Performance
Period. At the discretion of the Committee, Participants may be entitled to
receive any dividends declared with respect to Stock which have been earned in
connection with grants of Performance Units, subject to the vesting of the
underlying Performance Units which have been earned, but not yet distributed to
Participants. The Committee may permit or, if it so provides at grant, require a
Participant to defer such Participant’s receipt of the payment of cash or the
delivery of Stock that would otherwise be due to such Participant by virtue of
the satisfaction of any requirements or goals with respect to Performance Units.
If any such deferral election is permitted or required, the Committee shall
establish rules and procedures for such payment deferrals.

 

7.6  Stock Grants.  Stock Grants shall be awarded solely in recognition of
significant contributions to the success of the Company or its Affiliates, in
lieu of compensation otherwise already due and in such other limited
circumstances as the Committee deems appropriate. Stock Grants shall be made
without forfeiture conditions of any kind.

 

7.7                               Qualified Performance-Based Awards.

 

(a)  Purpose.  The purpose of this Section 7.7 is to provide the Committee the
ability to qualify Awards as “performance-based compensation” under
Section 162(m) of the Code. If the Committee, in its discretion, decides to
grant an Award as a Qualified Performance-Based Award, the provisions of this
Section 7.7 will control over any contrary provision contained in the Plan. In
the course of granting any Award, the Committee may specifically designate the
Award as intended to qualify as a Qualified Performance-Based Award. However, no
Award shall be considered to have failed to qualify as a Qualified
Performance-Based Award solely because the Award is not expressly designated as
a Qualified Performance-Based Award if the Award otherwise satisfies the
provisions of this Section 7.7 and the requirements of Section 162(m) of the
Code and the regulations thereunder applicable to “performance-based
compensation.”

 

(b)  Authority.  All grants of Awards intended to qualify as Qualified
Performance-Based Awards and determination of terms applicable thereto shall be
made by the Committee or, if not all of the members thereof qualify as “outside
directors” within the meaning of applicable IRS regulations under Section 162 of
the Code, a subcommittee of the Committee consisting of such of the members of
the Committee as do so qualify. Any action by such a subcommittee shall be
considered the action of the Committee for purposes of the Plan.

 

(c)  Applicability.  This Section 7.7 will apply only to those Covered
Employees, or to those persons who the Committee determines are reasonably
likely to become Covered Employees in the period covered by an Award, selected
by the Committee to receive Qualified Performance-Based Awards. The Committee
may, in its discretion, grant Awards to Covered Employees that do not satisfy
the requirements of this Section 7.7.

 

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(d)  Discretion of Committee with Respect to Qualified Performance-Based
Awards.  Options may be granted as Qualified Performance-Based Awards in
accordance with Section 7.1, except that the exercise price of any Option
intended to qualify as a Qualified Performance-Based Award shall in no event be
less that the Market Value of the Stock on the date of grant. With regard to
other Awards intended to qualify as Qualified Performance-Based Awards, such as
Restricted Stock, Restricted Stock Units, or Performance Units, the Committee
will have full discretion to select the length of any applicable Restriction
Period or Performance Period, the kind and/or level of the applicable
Performance Goal, and whether the Performance Goal is to apply to the Company, a
Subsidiary or any division or business unit or to the individual. Any
Performance Goal or Goals applicable to Qualified Performance-Based Awards shall
be objective, shall be established not later than ninety (90) days after the
beginning of any applicable Performance Period (or at such other date as may be
required or permitted for “performance-based compensation” under
Section 162(m) of the Code) and shall otherwise meet the requirements of
Section 162(m) of the Code, including the requirement that the outcome of the
Performance Goal or Goals be substantially uncertain (as defined in the
regulations under Section 162(m) of the Code) at the time established.

 

(e)  Payment of Qualified Performance-Based Awards.  A Participant will be
eligible to receive payment under a Qualified Performance-Based Award which is
subject to achievement of a Performance Goal or Goals only if the applicable
Performance Goal or Goals period are achieved within the applicable Performance
Period, as determined by the Committee. In determining the actual size of an
individual Qualified Performance-Based Award, the Committee may reduce or
eliminate the amount of the Qualified Performance-Based Award earned for the
Performance Period, if in its sole and absolute discretion, such reduction or
elimination is appropriate.

 

(f)  Individual Limitations on Awards.  Individual Limit for Options and Stock
Appreciation Rights.  The maximum number of shares with respect to which Options
and Stock Appreciation Rights may be granted to any Participant in any calendar
year shall be 1,000,000 Shares.  In connection with a Participant’s commencement
of Continuous Service, a Participant may be granted Options and Stock
Appreciation Rights for up to an additional 1,000,000  Shares which shall not
count against the limit set forth in the previous sentence.  The foregoing
limitations shall be adjusted proportionately in connection with any change in
the Company’s capitalization pursuant to Section 8, below.  To the extent
required by Section 162(m) of the Code or the regulations thereunder, in
applying the foregoing limitations with respect to a Participant, if any Option
or Stock Appreciation Right is canceled, the canceled Option or Stock
Appreciation Right shall continue to count against the maximum number of Shares
with respect to which Options and Stock Appreciation Rights may be granted to
the Participant.  For this purpose, the repricing of an Option (or in the case
of a Stock Appreciation Right, the base amount on which the stock appreciation
is calculated is reduced to reflect a reduction in the Fair Market Value of the
Common Stock) shall be treated as the cancellation of the existing Option or
Stock Appreciation Right and the grant of a new Option or Stock Appreciation
Right.

 

(i)                                     Individual Limit for Restricted Stock,
Performance Units and Restricted Stock Units.  For awards of Restricted Stock,
Performance Units and Restricted Stock Units that are intended to be Qualified
Performance-Based Awards, the maximum number of shares with respect to which
such Awards may be granted to any Participant in any calendar year shall be
1,000,000 shares.  The foregoing limitation shall be adjusted proportionately in
connection with any change in the Company’s capitalization pursuant to
Section 8, below.

 

(g)  Limitation on Adjustments for Certain Events.  No adjustment of any
Qualified Performance-Based Award pursuant to Section 8 shall be made except on
such basis, if any, as will not cause such Award to provide other than
“performance-based compensation” within the meaning of Section 162(m) of the
Code.

 

7.8  Awards to Participants Outside the United States.  The Committee may modify
the terms of any Award under the Plan granted to a Participant who is, at the
time of grant or during the term of the Award, resident or primarily employed
outside of the United States in any manner deemed by the Committee to be
necessary or appropriate to conform that Award to laws, regulations, and customs
of the country in which the Participant is then resident or primarily employed,
or so that the value and other benefits of the Award to the Participant, as
affected by foreign tax laws and other restrictions applicable as a result of
the Participant’s residence or employment abroad, shall be comparable to the
value of such an Award to a Participant who is resident or primarily employed in
the United States. The Committee may establish supplements to, or amendments,
restatements, or alternative versions of, the Plan for the purpose of granting
and administrating any such modified Award. No such modification, supplement,
amendment, restatement or alternative version may increase the share limit of
Section 4.

 

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8.                                      Adjustment Provisions

 

8.1  Adjustment for Corporate Actions.  All of the share numbers set forth in
the Plan reflect the capital structure of the Company as of the Effective Date.
Subject to Section 8.2, if subsequent to that date the outstanding shares of
Stock (or any other securities covered by the Plan by reason of the prior
application of this Section) are increased, decreased, or exchanged for a
different number or kind of shares or other securities, or if additional shares
or new or different shares or other securities are distributed with respect to
shares of Stock, through a merger, consolidation, sale of all or substantially
all the property of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split, or other
similar distribution with respect to such shares of Stock, an appropriate and
proportionate adjustment will be made in (i) the maximum numbers and kinds of
shares provided in Section 4, (ii) the numbers and kinds of shares or other
securities subject to the then outstanding Awards, (iii) the exercise price for
each share or other unit of any other securities subject to then outstanding
Options and Stock Appreciation Rights (without change in the aggregate purchase
price as to which such Options or Rights remain exercisable), and (iv) the
repurchase price of each share of Restricted Stock then subject to a Risk of
Forfeiture in the form of a Company repurchase right.

 

8.2                               Treatment in Certain Acquisitions.

 

(a)                                 Subject to any provisions of then
outstanding Awards granting greater rights to the holders thereof, in the event
of an Acquisition, the Committee may, either in advance of the Acquisition or at
the time thereof and upon such terms as it may deem appropriate, provide for the
Acceleration of any then outstanding Awards in full if, and only if, such Awards
are not assumed or replaced by comparable Awards referencing shares of the
capital stock of the successor or acquiring entity or parent thereof, and after
a reasonable period following such Acceleration, as determined by the Committee,
such Accelerated Awards and all other then outstanding Awards not assumed or
replaced by comparable Awards shall terminate. As to any one or more outstanding
Awards which are not otherwise Accelerated in full by reason of such
Acquisition, the Committee may also, either in advance of an Acquisition or at
the time thereof and upon such terms as it may deem appropriate, provide for the
Acceleration of such outstanding Awards in the event that the employment of the
Participants should subsequently terminate following the Acquisition. Each
outstanding Award that is assumed in connection with an Acquisition, or is
otherwise to continue in effect subsequent to the Acquisition, will be
appropriately adjusted, immediately after the Acquisition, as to the number and
class of securities and other relevant terms in accordance with Section 8.1.

 

(b)                                 For the purposes of this Section 8.2, an
Award shall be considered assumed or replaced by a comparable Award if,
following the Acquisition, the Award confers the right to purchase, for each
share of Stock subject to the Award immediately prior to the Acquisition, the
consideration (whether stock, cash or other securities or property) received in
the Acquisition by holders of Stock on the effective date of the Acquisition
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares of
Stock); provided, however, that if such consideration received in the
Acquisition was not solely common stock of the successor corporation or its
parent or subsidiary, the Committee may, with the consent of the successor
corporation, provide for the consideration to be received upon the exercise of
the Award for each share of Stock subject to the Award to be solely common stock
of the successor corporation or its parent or subsidiary equal in fair market
value to the per share consideration received by holders of Stock in the
Acquisition, or any combination of cash and common stock, (including the payment
of cash equal to the net of Market Value over the exercise price of the shares
of Stock subject to the Award) so approved by the Committee with the consent of
the successor corporation; and provided further that such Award may continue to
be subject to the same vesting requirements or Risks of Forfeiture after the
Acquisition.

 

8.3  Dissolution or Liquidation.  Upon the dissolution or liquidation of the
Company, other than as part of an Acquisition or similar transaction, each
outstanding Option and Stock Appreciation Right shall terminate, but the
Optionee or Stock Appreciation Right holder shall have the right, immediately
prior to the dissolution or liquidation, to exercise the Option or Stock
Appreciation Right to the extent exercisable on the date of the dissolution or
liquidation.

 

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8.4  Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events.  In the event of any corporate action not specifically covered by the
preceding Sections, including but not limited to an extraordinary cash
distribution on Stock, a corporate separation or other reorganization or
liquidation, the Committee may make such adjustment of outstanding Awards and
their terms, if any, as it, in its sole discretion, may deem equitable and
appropriate in the circumstances. The Committee may make adjustments in the
terms and conditions of, and the criteria included in, Awards in recognition of
unusual or nonrecurring events (including, without limitation, the events
described in this Section) affecting the Company or the financial statements of
the Company or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent the dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.

 

8.5  Related Matters.  Any adjustment in Awards made pursuant to this Section 8
shall be determined and made, if at all, by the Committee and shall include any
correlative modification of terms, including of Option exercise prices, rates of
vesting or exercisability, Risks of Forfeiture, applicable repurchase prices for
Restricted Stock, and Performance Goals and other financial objectives which the
Committee may deem necessary or appropriate so as to ensure the rights of the
Participants in their respective Awards are not substantially diminished nor
enlarged as a result of the adjustment and corporate action other than as
expressly contemplated in this Section 8. No fraction of a share shall be
purchasable or deliverable upon exercise, but in the event any adjustment
hereunder of the number of shares covered by an Award shall cause such number to
include a fraction of a share, such number of shares shall be adjusted to the
nearest smaller whole number of shares. No adjustment of an Option exercise
price per share pursuant to this Section 8 shall result in an exercise price
which is less than the par value of the Stock.

 

9.                                      Settlement of Awards

 

9.1  In General.  Options and Restricted Stock shall be settled in accordance
with their terms. All other Awards may be settled in cash, Stock, or other
Awards, or a combination thereof, as determined by the Committee at or after
grant and subject to any contrary Award Agreement. The Committee may not require
settlement of any Award in Stock pursuant to the immediately preceding sentence
to the extent issuance of such Stock would be prohibited or unreasonably delayed
by reason of any other provision of the Plan.

 

9.2  Violation of Law.  Notwithstanding any other provision of the Plan or the
relevant Award Agreement, if, at any time, in the reasonable opinion of the
Company, the issuance of shares of Stock covered by an Award may constitute a
violation of law, then the Company may delay such issuance and the delivery of a
certificate for such shares until (i) approval shall have been obtained from
such governmental agencies, other than the Securities and Exchange Commission,
as may be required under any applicable law, rule, or regulation and (ii) in the
case where such issuance would constitute a violation of a law administered by,
or a regulation of, the Securities and Exchange Commission, one of the following
conditions shall have been satisfied:

 

(a)                                 the shares are at the time of the issue of
such shares effectively registered under the Securities Act of 1933, as amended;
or

 

(b)                                 the Company shall have determined, on such
basis as it deems appropriate (including an opinion of counsel in form and
substance satisfactory to the Company) that the sale, transfer, assignment,
pledge, encumbrance or other disposition of such shares or such beneficial
interest, as the case may be, does not require registration under the Securities
Act of 1933, as amended, or any applicable State securities laws.

 

The Company shall make all reasonable efforts to bring about the occurrence of
said events.

 

9.3  Corporate Restrictions on Rights in Stock.  Any Stock to be issued pursuant
to Awards granted under the Plan shall be subject to all restrictions upon the
transfer thereof which may be now or hereafter imposed by the certificate of
incorporation and by-laws (or similar charter documents) of the Company.

 

9.4  Investment Representations.  The Company shall be under no obligation to
issue any shares covered by any Award unless the shares to be issued pursuant to
Awards granted under the Plan have been effectively registered under the
Securities Act of 1933, as amended, or the Participant shall have made such
written representations to the Company (upon which the Company believes it may
reasonably rely) as the Company may deem necessary or appropriate for purposes
of confirming that the issuance of such shares will be exempt from the
registration requirements of that Act and any applicable state securities laws
and otherwise in compliance with all applicable laws, rules and regulations,
including but not limited to that the Participant is acquiring the shares for
his or her own account for the purpose of investment and not with a view to, or
for sale in connection with, the distribution of any such shares.

 

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9.5  Registration.  If the Company shall deem it necessary or desirable to
register under the Securities Act of 1933, as amended or other applicable
statutes any shares of Stock issued or to be issued pursuant to Awards granted
under the Plan, or to qualify any such shares of Stock for exemption from the
Securities Act of 1933, as amended, or other applicable statutes, then the
Company shall take such action at its own expense. The Company may require from
each recipient of an Award, or each holder of shares of Stock acquired pursuant
to the Plan, such information in writing for use in any registration statement,
prospectus, preliminary prospectus or offering circular as is reasonably
necessary for that purpose and may require reasonable indemnity to the Company
and its officers and directors from that holder against all losses, claims,
damage and liabilities arising from use of the information so furnished and
caused by any untrue statement of any material fact therein or caused by the
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
under which they were made. In addition, the Company may require of any such
person that he or she agree that, without the prior written consent of the
Company or the managing underwriter in any public offering of shares of Stock,
he or she will not sell, make any short sale of, loan, grant any option for the
purchase of, pledge or otherwise encumber, or otherwise dispose of, any shares
of Stock during the 180 day period commencing on the effective date of the
registration statement relating to the underwritten public offering of
securities. Without limiting the generality of the foregoing provisions of this
Section 9.5, if in connection with any underwritten public offering of
securities of the Company the managing underwriter of such offering requires
that the Company’s directors and officers enter into a lock-up agreement
containing provisions that are more restrictive than the provisions set forth in
the preceding sentence, then (a) each holder of shares of Stock acquired
pursuant to the Plan (regardless of whether such person has complied or complies
with the provisions of clause (b) below) shall be bound by, and shall be deemed
to have agreed to, the same lock-up terms as those to which the Company’s
directors and officers are required to adhere; and (b) at the request of the
Company or such managing underwriter, each such person shall execute and deliver
a lock-up agreement in form and substance equivalent to that which is required
to be executed by the Company’s directors and officers.

 

9.6  Placement of Legends; Stop Orders; etc.  Each share of Stock to be issued
pursuant to Awards granted under the Plan may bear a reference to the investment
representation made in accordance with Section 9.4 in addition to any other
applicable restriction under the Plan, the terms of the Award and if applicable
under the Stockholders’ Agreement and to the fact that no registration statement
has been filed with the Securities and Exchange Commission in respect to such
shares of Stock. All certificates for shares of Stock or other securities
delivered under the Plan shall be subject to such stock transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of any stock exchange upon which the Stock
is then listed, and any applicable federal or state securities law, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.

 

9.7  Tax Withholding.  Whenever shares of Stock are issued or to be issued
pursuant to Awards granted under the Plan, the Company shall have the right to
require the recipient to remit to the Company an amount sufficient to satisfy
federal, state, local or other withholding tax requirements if, when, and to the
extent required by law (whether so required to secure for the Company an
otherwise available tax deduction or otherwise) prior to the delivery of any
certificate or certificates for such shares. The obligations of the Company
under the Plan shall be conditional on satisfaction of all such withholding
obligations and the Company shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
recipient of an Award. However, in such cases Participants may elect, subject to
the approval of the Committee, to satisfy an applicable withholding requirement,
in whole or in part, by having the Company withhold shares to satisfy their tax
obligations. Participants may only elect to have Shares withheld having a Market
Value on the date the tax is to be determined equal to the minimum statutory
total tax which could be imposed on the transaction. All elections shall be
irrevocable, made in writing, signed by the Participant, and shall be subject to
any restrictions or limitations that the Committee deems appropriate.

 

10.                               Reservation of Stock

 

The Company shall at all times during the term of the Plan and any outstanding
Awards granted hereunder reserve or otherwise keep available such number of
shares of Stock as will be sufficient to satisfy the requirements of the Plan
(if then in effect) and the Awards and shall pay all fees and expenses
necessarily incurred by the Company in connection therewith.

 

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11.                               Limitation of Rights in Stock; No Special
Service Rights

 

A Participant shall not be deemed for any purpose to be a stockholder of the
Company with respect to any of the shares of Stock subject to an Award, unless
and until a certificate shall have been issued therefor and delivered to the
Participant or his agent. Nothing contained in the Plan or in any Award
Agreement shall confer upon any recipient of an Award any right with respect to
the continuation of his or her employment or other association with the Company
(or any Affiliate), or interfere in any way with the right of the Company (or
any Affiliate), subject to the terms of any separate employment or consulting
agreement or provision of law or corporate articles, by-laws or similar charter
documents to the contrary, at any time to terminate such employment or
consulting agreement or to increase or decrease, or otherwise adjust, the other
terms and conditions of the recipient’s employment or other association with the
Company and its Affiliates.

 

12.                               Unfunded Status of Plan

 

The Plan is intended to constitute an “unfunded” plan for incentive
compensation, and the Plan is not intended to constitute a plan subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended.
With respect to any payments not yet made to a Participant by the Company,
nothing contained herein shall give any such Participant any rights that are
greater than those of a general creditor of the Company. In its sole discretion,
the Committee may authorize the creation of trusts or other arrangements to meet
the obligations created under the Plan to deliver Stock or payments with respect
to Options, Stock Appreciation Rights and other Awards hereunder, provided,
however, that the existence of such trusts or other arrangements is consistent
with the unfunded status of the Plan.

 

13.                               Nonexclusivity of the Plan

 

Neither the adoption of the Plan by the Board nor the submission of the Plan to
the stockholders of the Company shall be construed as creating any limitations
on the power of the Board to adopt such other incentive arrangements as it may
deem desirable, including without limitation, the granting of stock options and
restricted stock other than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.

 

14.                               Termination and Amendment of the Plan

 

The Board may at any time terminate the Plan or make such modifications of the
Plan as it shall deem advisable. Unless the Board otherwise expressly provides,
no amendment of the Plan shall affect the terms of any Award outstanding on the
date of such amendment.

 

The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, provided that the Award as amended is consistent
with the terms of the Plan. Also within the limitations of the Plan, the
Committee may modify, extend or assume outstanding Awards or may accept the
cancellation of outstanding Awards or of outstanding stock options or other
equity-based compensation awards granted by another issuer in return for the
grant of new Awards for the same or a different number of shares and on the same
or different terms and conditions (including but not limited to the exercise
price of any Option). Furthermore, the Committee may at any time (a) offer to
buy out for a payment in cash or cash equivalents an Award previously granted,
subject to the stockholder approval requirements of Section 5, or (b) authorize
the recipient of an Award to elect to cash out an Award previously granted, in
either case at such time and based upon such terms and conditions as the
Committee shall establish.

 

No amendment or modification of the Plan by the Board, or of an outstanding
Award by the Committee, shall impair the rights of the recipient of any Award
outstanding on the date of such amendment or modification or such Award, as the
case may be, without the Participant’s consent; provided, however, that no such
consent shall be required if (i) the Board or Committee, as the case may be,
determines in its sole discretion and prior to the date of any Acquisition that
such amendment or alteration either is required or advisable in order for the
Company, the Plan or the Award to satisfy any law or regulation, including
without limitation the provisions of Section 409A of the Code or to meet the
requirements of or avoid adverse financial accounting consequences under any
accounting standard, or (ii) the Board or Committee, as the case may be,
determines in its sole discretion that such amendment or alteration is not
reasonably likely to significantly diminish the benefits provided under the
Award, or that any such diminution has been adequately compensated.

 

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15.                               Notices and Other Communications

 

Any notice, demand, request or other communication hereunder to any party shall
be deemed to be sufficient if contained in a written instrument delivered in
person or duly sent by first class registered, certified or overnight mail,
postage prepaid, or telecopied with a confirmation copy by regular, certified or
overnight mail, addressed or telecopied, as the case may be, (i) if to the
recipient of an Award, at his or her residence address last filed with the
Company and (ii) if to the Company, at its principal place of business,
addressed to the attention of its Treasurer, or to such other address or
telecopier number, as the case may be, as the addressee may have designated by
notice to the addressor. All such notices, requests, demands and other
communications shall be deemed to have been received: (i) in the case of
personal delivery, on the date of such delivery; (ii) in the case of mailing,
when received by the addressee; and (iii) in the case of facsimile transmission,
when confirmed by facsimile machine report.

 

16.                               Governing Law

 

The Plan and all Award Agreements and actions taken thereunder shall be
governed, interpreted and enforced in accordance with the laws of the State of
Delaware, without regard to the conflict of laws principles thereof.

 

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