ex10_31.htm


    
      

    

    
      Exhibit 10.31

       

      SYMYX TECHNOLOGIES,
INC.

      


      2007 STOCK INCENTIVE
PLAN

      


      1.  
Purposes of the Plan.   The purposes of this Plan
are to attract and retain the best available personnel, to provide additional
incentives to Employees, Directors and Consultants and to promote the success of
the Company’s business.

      


      2.  
Definitions.  
The following definitions shall apply as used herein and in the individual Award
Agreements except as defined otherwise in an individual Award Agreement. In the
event a term is separately defined in an individual Award Agreement, such
definition shall supercede the definition contained in this
Section 2.

      


      (a)    
“Administrator” means the Board or any of the
Committees appointed to administer the Plan.

      


      (b)     “Affiliate” and “Associate” shall have the respective meanings
ascribed to such terms in Rule 12b-2 promulgated under the Exchange
Act.

      


      (c)     
“Applicable
Laws” means the legal
requirements relating to the Plan and the Awards under applicable provisions of
federal securities laws, state corporate and securities laws, the Code, the
rules of any applicable stock exchange or national market system, and the
rules of any non-U.S. jurisdiction applicable to Awards granted to
residents therein.

      


      (d)   
 “Assumed” means that pursuant to a Corporate
Transaction either (i) the Award is expressly affirmed by the Company or
(ii) the contractual obligations represented by the Award are expressly
assumed (and not simply by operation of law) by the successor entity or its
Parent in connection with the Corporate Transaction with appropriate adjustments
to the number and type of securities of the successor entity or its Parent
subject to the Award and the exercise or purchase price thereof which at least
preserves the compensation element of the Award existing at the time of the
Corporate Transaction as determined in accordance with the instruments
evidencing the agreement to assume the Award.

      


      (e)    
 “Award” means the grant of an Option, SAR,
Restricted Stock, Restricted Stock Unit or other right or benefit under the
Plan.

      


      (f)      “Award
Agreement” means the
written agreement evidencing the grant of an Award executed by the Company and
the Grantee, including any amendments thereto.

      


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

      


      (h)    
 “Cause” means, with respect to the termination
by the Company or a Related Entity of the Grantee’s Continuous Service, that
such termination is for “Cause” as such term (or word of like import) is
expressly defined in a then-effective written agreement between the Grantee and
the Company or such Related Entity, or in the absence of such then-effective
written agreement and definition, is based on, in the determination of the
Administrator, the Grantee’s: (i) performance of any act or failure to
perform any act in bad faith and to the detriment of the Company or a Related
Entity; (ii) dishonesty, intentional misconduct or material breach of any
agreement with the Company or a Related Entity; or (iii) commission of a
crime involving dishonesty, breach of trust, or physical or emotional harm to
any person; provided, however, that with regard to any agreement that defines
“Cause” on the occurrence of or in connection with a Corporate Transaction or a
Change in Control, such definition of “Cause” shall not apply until a Corporate
Transaction or a Change in Control actually occurs.

      


      (i)     
 “Change in
Control” means a change in
ownership or control of the Company effected through either of the following
transactions:

      


      (i)  the direct or indirect
acquisition by any person or related group of persons (other than an acquisition
from or by the Company or by a Company-sponsored employee benefit plan or by a
person that directly or indirectly controls, is controlled by, or is under
common control with, the Company) of beneficial ownership (within the meaning of
Rule 13d-3 of the Exchange Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Company’s outstanding
securities pursuant to a tender or exchange offer made directly to the Company’s
stockholders which a majority of the Continuing Directors who are not Affiliates
or Associates of the offeror do not recommend such stockholders accept,
or

      


      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      


      (ii)  a change in the composition
of the Board over a period of twelve (12) months or less such that a majority of
the Board members (rounded up to the next whole number) ceases, by reason of one
or more contested elections for Board membership, to be comprised of individuals
who are Continuing Directors.

      


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

      


      (k)    
 “Committee” means any committee composed of
members of the Board appointed by the Board to administer the
Plan.

      


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

      


      (m)   
 “Company” means Symyx
Technologies, Inc., a Delaware corporation, or any successor entity
that adopts the Plan in connection with a Corporate
Transaction.

      


      (n)    
“Consultant” means any person (other than an
Employee or a Director, solely with respect to rendering services in such
person’s capacity as a Director) who is engaged by the Company or any Related
Entity to render consulting or advisory services to the Company or such Related
Entity.

      


      (o)   
 “Continuing
Directors” means members of
the Board who either (i) have been Board members continuously for a period
of at least twelve (12) months or (ii) have been Board members for less
than twelve (12) months and were elected or nominated for election as Board
members by at least a majority of the Board members described in
clause (i) who were still in office at the time such election or
nomination was approved by the Board.

      


      (p)     “Continuous
Service” means that the
provision of services to the Company or a Related Entity in any capacity of
Employee, Director or Consultant is not interrupted or terminated. In
jurisdictions requiring notice in advance of an effective termination as an
Employee, Director or Consultant, Continuous Service shall be deemed terminated
upon the actual cessation of providing services to the Company or a Related
Entity notwithstanding any required notice period that must be fulfilled before
a termination as an Employee, Director or Consultant can be effective under
Applicable Laws. A Grantee’s Continuous Service shall be deemed to have
terminated either upon an actual termination of Continuous Service or upon the
entity for which the Grantee provides services ceasing to be a Related Entity.
Continuous Service shall not be considered interrupted in the case of
(i) any approved leave of absence, (ii) transfers among the Company,
any Related Entity, or any successor, in any capacity of Employee, Director or
Consultant, or (iii) any change in status as long as the individual remains
in the service of the Company or a Related Entity in any capacity of Employee,
Director or Consultant (except as otherwise provided in the Award Agreement).
Notwithstanding the foregoing, except as otherwise determined by the
Administrator, in the event of any spin-off of a Related Entity, service as an
Employee, Director or Consultant for such Related Entity following such spin-off
shall be deemed to be Continuous Service for purposes of the Plan and any Award
under the Plan. An approved leave of absence shall include sick leave, military
leave, or any other authorized personal leave. For purposes of each Incentive
Stock Option granted under the Plan, if such leave exceeds three
(3) months, and reemployment upon expiration of such leave is not
guaranteed by statute or contract, then the Incentive Stock Option shall be
treated as a Non-Qualified Stock Option on the day three (3) months and one
(1) day following the expiration of such three (3) month
period.

      


      (q)     “Corporate
Transaction” means any of
the following transactions, provided, however, that the Administrator shall
determine under parts (iv) and (v) whether multiple transactions are
related, and its determination shall be final, binding and
conclusive:

      


      (i)  a merger or consolidation in
which the Company is not the surviving entity, except for a transaction the
principal purpose of which is to change the state in which the Company is
incorporated;

      


      (ii)  the sale, transfer or other
disposition of all or substantially all of the assets of the
Company;

      


      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      


      (iii)  the complete liquidation or
dissolution of the Company;

      


      (iv)  any reverse merger or series
of related transactions culminating in a reverse merger (including, but not
limited to, a tender offer followed by a reverse merger) in which the Company is
the surviving entity but (A) the shares of Common Stock outstanding
immediately prior to such merger are converted or exchanged by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise, or (B) in which securities possessing more than forty percent
(40%) of the total combined voting power of the Company’s outstanding securities
are transferred to a person or persons different from those who held such
securities immediately prior to such merger or the initial transaction
culminating in such merger; or

      


      (v)  acquisition in a single or
series of related transactions by any person or related group of persons (other
than the Company or by a Company-sponsored employee benefit plan) of beneficial
ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than fifty percent (50%) of the total combined voting
power of the Company’s outstanding securities but excluding any such transaction
or series of related transactions that the Administrator determines shall not be
a Corporate Transaction.

      


      (r)    
 “Covered
Employee” means an Employee
who is a “covered employee” under Section 162(m)(3) of the
Code.

      


      (s)    
 “Director” means a member of the Board or the
board of directors of any Related Entity.

      


      (t)     
“Disability” means as defined under the long-term
disability policy of the Company or the Related Entity to which the Grantee
provides services regardless of whether the Grantee is covered by such policy.
If the Company or the Related Entity to which the Grantee provides service does
not have a long-term disability plan in place, “Disability” means that a Grantee
is unable to carry out the responsibilities and functions of the position held
by the Grantee by reason of any medically determinable physical or mental
impairment for a period of not less than ninety (90) consecutive days. A Grantee
will not be considered to have incurred a Disability unless he or she furnishes
proof of such impairment sufficient to satisfy the Administrator in its
discretion.

      


      (u)    
 “Employee” means any person, including an Officer
or Director, who is in the employ of the Company or any Related Entity, subject
to the control and direction of the Company or any Related Entity as to both the
work to be performed and the manner and method of performance. The payment of a
director’s fee by the Company or a Related Entity shall not be sufficient to
constitute “employment” by the Company.

      


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

      


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

      


      (i)  If the Common Stock is listed
on one or more established stock exchanges or national market systems, including
without limitation The NASDAQ Global Select Market, The NASDAQ Global Market or
The NASDAQ Capital Market of The NASDAQ Stock Market LLC, its Fair Market Value
shall be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on the principal exchange or system on which the Common
Stock is listed (as determined by the Administrator) on the date of
determination (or, if no closing sales price or closing bid was reported on that
date, as applicable, on the last trading date such closing sales price or
closing bid was reported), as reported in The Wall Street Journal or such other
source as the Administrator deems reliable;

      


      (ii)  If the Common Stock is
regularly quoted on an automated quotation system (including the OTC Bulletin
Board) or by a recognized securities dealer, its Fair Market Value shall be the
closing sales price for such stock as quoted on such system or by such
securities dealer on the date of determination, but if selling prices are not
reported, the Fair Market Value of a share of Common Stock shall be the mean
between the high bid and low asked prices for the Common Stock on the date of
determination (or, if no such prices were reported on that date, on the last
date such prices were reported), as reported in The Wall Street Journal or such
other source as the Administrator deems reliable; or

      


      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      


      (iii)  In the absence of an
established market for the Common Stock of the type described in (i) and
(ii), above, the Fair Market Value thereof shall be determined by the
Administrator in good faith.

      


      (x)    
 “Grantee” means an Employee, Director or
Consultant who receives an Award under the Plan.

      


      (y)   
 “Incentive Stock
Option” means an Option
intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code

      


      (z)    
 “Non-Qualified Stock
Option” means an Option not
intended to qualify as an Incentive Stock Option.

      


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

      


      (bb)   “Option” means an option to purchase Shares
pursuant to an Award Agreement granted under the Plan.

      


      (cc)    “Parent” means a “parent corporation”, whether
now or hereafter existing, as defined in Section 424(e) of the
Code.

      


      (dd)   “Performance-Based
Compensation” means
compensation qualifying as “performance-based compensation” under
Section 162(m) of the Code.

      


      (ee)   “Plan” means this 2007 Stock Incentive
Plan.

      


      (ff)     “Related
Entity” means any Parent or
Subsidiary of the Company.

      


      (gg)   “Replaced” means that pursuant to a Corporate
Transaction the Award is replaced with a comparable stock award or a cash
incentive program of the Company, the successor entity (if applicable) or Parent
of either of them which preserves the compensation element of such Award
existing at the time of the Corporate Transaction and provides for subsequent
payout in accordance with the same (or a more favorable) vesting schedule
applicable to such Award. The determination of Award comparability shall be made
by the Administrator and its determination shall be final, binding and
conclusive.

      


      (hh)   “Restricted
Stock” means Shares issued
under the Plan to the Grantee for such consideration, if any, and subject to
such restrictions on transfer, rights of first refusal, repurchase provisions,
forfeiture provisions, and other terms and conditions as established by the
Administrator.

      


      (ii)    
 “Restricted Stock
Units” means an Award which
may be earned in whole or in part upon the passage of time or the attainment of
performance criteria established by the Administrator and which may be settled
for cash, Shares or other securities or a combination of cash, Shares or other
securities as established by the Administrator.

      


      (jj)    
 “Rule 16b-3” means Rule 16b-3 promulgated
under the Exchange Act or any successor thereto.

      


      (kk)    “SAR” means a stock appreciation right
entitling the Grantee to Shares or cash compensation, as established by the
Administrator, measured by appreciation in the value of Common
Stock.

      


      (ll)     
“Share” means a share of the Common
Stock.

      


      (mm)  “Subsidiary” means a “subsidiary corporation,”
whether now or hereafter existing, as defined in Section 424(f) of the
Code.

      


      3.   Stock
Subject to the Plan.

      


      (a)     Subject to
the provisions of Section 10, below, the maximum aggregate number of Shares
(including Incentive Stock Options) which may be issued pursuant to all Awards
is seven hundred fifty thousand (750,000) Shares, plus any shares of Common
Stock that would otherwise return to each of the Company’s 1997 Stock Plan (the
“1997 Plan”) and the Company’s 2001 Nonstatutory Stock Option Plan (the “2001
Nonstatutory Plan”) as a result of forfeiture, termination or expiration of
awards previously granted under each of the 1997 Plan and the 2001 Nonstatutory
Plan (ignoring the termination or expiration of such plans for the purpose of
determining the number of shares available under the plan); provided, however,
that the maximum aggregate number of shares that may be issued pursuant to
Incentive Stock Options is five million four hundred and fifty
thousand (5,450,000) shares. Notwithstanding the foregoing, any Shares issued in
connection with Awards other than SARs and Options shall be counted against the
limit set forth herein as one and sixty five hundreths (1.65) Shares
for every one (1) Share issued in connection with such Award (and shall be
counted as one and sixty-five hundredths (1.65) Shares for one
(1) Share returned or deemed not have been issued from the Plan pursuant to
Section 3(b) below in connection with Awards other than Options and
SARs). The Shares to be issued pursuant to Awards may be authorized, but
unissued, or reacquired Common Stock.

      


      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      


      (b)     Any Shares
covered by an Award (or portion of an Award) which is forfeited, canceled or
expires (whether voluntarily or involuntarily), shall be deemed not to have been
issued for purposes of determining the maximum aggregate number of Shares which
may be issued under the Plan. Shares that actually have been issued under the
Plan pursuant to an Award shall not be returned to the Plan and shall not become
available for future issuance under the Plan, except that if unvested Shares are
forfeited, or repurchased by the Company at the lower of their original purchase
price or their Fair Market Value at the time of repurchase, such Shares shall
become available for future grant under the Plan. Notwithstanding anything to
the contrary contained herein: (i) Shares tendered or withheld in payment
of an Option exercise price shall not be returned to the Plan and shall not
become available for future issuance under the Plan; (ii) Shares withheld
by the Company to satisfy any tax withholding obligation shall not be returned
to the Plan and shall not become available for future issuance under the
Plan; (iii) all Shares covered by the portion of an SAR that is
exercised (whether or not Shares are actually issued to the Grantee upon
exercise of the SAR) shall be considered issued pursuant to the Plan; and (iv) Shares covered by the portion of any eligible options
that are surrendered and cancelled under the option exchange program that the
Company proposes to implement subject to obtaining stockholder approval at the annual
meeting of stockholders of the Company in 2008 (the “Exchange Program”) and that
are not replaced by an equal number of replacement options under the
Exchange Program shall not be returned to the Plan and shall not become
available for further issuance under the
Plan.


       

      4.  
Administration of the Plan.

      


      (a)    
Plan Administrator.

      


      (i)  
Administration with Respect to Directors and Officers.   With respect to grants of
Awards to Directors or Employees who are also Officers or Directors of the
Company, the Plan shall be administered by (A) the Board or (B) a
Committee designated by the Board, which Committee shall be constituted in such
a manner as to satisfy the Applicable Laws and to permit such grants and related
transactions under the Plan to be exempt from Section 16(b) of the
Exchange Act in accordance with Rule 16b-3. Once appointed, such Committee
shall continue to serve in its designated capacity until otherwise directed by
the Board.

      


      (ii)  
Administration With Respect to Consultants and Other Employees.   With respect to grants of
Awards to Employees or Consultants who are neither Directors nor Officers of the
Company, the Plan shall be administered by (A) the Board or (B) a
Committee designated by the Board, which Committee shall be constituted in such
a manner as to satisfy the Applicable Laws. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. The Board may authorize one or more Officers to grant such Awards and may
limit such authority as the Board determines from time to
time.

      


      (iii)  
Administration With Respect to Covered Employees.   Notwithstanding the
foregoing, grants of Awards to any Covered Employee intended to qualify as
Performance-Based Compensation shall be made only by a Committee (or
subcommittee of a Committee) which is comprised solely of two or more Directors
eligible to serve on a committee making Awards qualifying as Performance-Based
Compensation. In the case of such Awards granted to Covered Employees,
references to the “Administrator” or to a “Committee” shall be deemed to be
references to such Committee or subcommittee.

      


      (iv)  
Administration Errors.   In the event an Award is
granted in a manner inconsistent with the provisions of this
subsection (a), such Award shall be presumptively valid as of its grant
date to the extent permitted by the Applicable Laws.

      


      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      


      (b)    
Powers of the Administrator.   Subject to Applicable Laws
and the provisions of the Plan (including any other powers given to the
Administrator  hereunder ), and except as otherwise provided by
the Board, the Administrator shall have the authority, in its
discretion:

      


      (i)         
to select the Employees, Directors and Consultants to whom Awards may be granted
from time to time hereunder;

      


      (ii)        
to determine whether and to what extent Awards are granted
hereunder;

      


      (iii)       
to determine the number of Shares or the amount of other consideration to be
covered by each Award granted hereunder;

      


      (iv)      
to approve forms of Award Agreements for use under the Plan;

      


      (v)       
to determine the terms and conditions of any Award granted
hereunder;

      


      (vi)      
to amend the terms of any outstanding Award granted under the Plan, provided
that (A) any amendment that would adversely affect the Grantee’s rights
under an outstanding Award shall not be made without the Grantee’s written
consent, provided, however, that an amendment or modification that may cause an
Incentive Stock Option to become a Non-Qualified Stock Option shall not be
treated as adversely affecting the rights of the Grantee, (B) the reduction
of the exercise price of any Option awarded under the Plan and the base
appreciation amount of any SAR awarded under the Plan shall be subject to
stockholder approval and (C) canceling an Option or SAR at a time when its
exercise price or base appreciation amount (as applicable) exceeds the Fair
Market Value of the underlying Shares, in exchange for another Option, SAR,
Restricted Stock, or other Award shall be subject to stockholder approval,
unless the cancellation and exchange occurs in connection with a Corporate
Transaction. Notwithstanding the foregoing, canceling an Option or SAR in
exchange for another Option, SAR, Restricted Stock, or other Award with an
exercise price, purchase price or base appreciation amount (as applicable) that
is equal to or greater than the exercise price or base appreciation amount (as
applicable) of the original Option or SAR shall not be subject to shareholder
approval;

      


      (vii)      to
construe and interpret the terms of the Plan and Awards, including without
limitation, any notice of award or Award Agreement, granted pursuant to the
Plan;

      


      (viii)     to grant
Awards to Employees, Directors and Consultants employed outside the United
States on such terms and conditions different from those specified in the Plan
as may, in the judgment of the Administrator, be necessary or desirable to
further the purpose of the Plan; and

      


      (ix)       
to take such other action, not inconsistent with the terms of the Plan, as the
Administrator deems appropriate.

      


      The express grant in the Plan of any
specific power to the Administrator shall not be construed as limiting any power
or authority of the Administrator; provided that the Administrator may not
exercise any right or power reserved to the Board. Any decision made, or action
taken, by the Administrator or in connection with the administration of this
Plan shall be final, conclusive and binding on all persons having an interest in
the Plan.

      


      (c)     
Indemnification.   In addition to such other
rights of indemnification as they may have as members of the Board or as
Officers or Employees of the Company or a Related Entity, members of the Board
and any Officers or Employees of the Company or a Related Entity to whom
authority to act for the Board, the Administrator or the Company is delegated
shall be defended and indemnified by the Company to the extent permitted by law
on an after-tax basis against all reasonable expenses, including attorneys’
fees, actually and necessarily incurred in connection with the defense of any
claim, investigation, action, suit or proceeding, or in connection with any
appeal therein, to which they or any of them may be a party by reason of any
action taken or failure to act under or in connection with the Plan, or any
Award granted hereunder, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by the Company) or paid by them in
satisfaction of a judgment in any such claim, investigation, action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in
such claim, investigation, action, suit or proceeding that such person is liable
for gross negligence, bad faith or intentional misconduct; provided, however,
that within thirty (30) days after the institution of such claim, investigation,
action, suit or proceeding, such person shall offer to the Company, in writing,
the opportunity at the Company’s expense to defend the same.

      


      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      


      5.  
Eligibility.  
Awards other than Incentive Stock Options may be granted to Employees, Directors
and Consultants. Incentive Stock Options may be granted only to Employees of the
Company or a Parent or a Subsidiary of the Company. An Employee, Director or
Consultant who has been granted an Award may, if otherwise eligible, be granted
additional Awards. Awards may be granted to such Employees, Directors or
Consultants who are residing in non-U.S. jurisdictions as the Administrator may
determine from time to time.

      


      6.   Terms
and Conditions of Awards.

      


      (a)   
 Types of Awards.   The Administrator is
authorized under the Plan to award any type of arrangement to an Employee,
Director or Consultant that is not inconsistent with the provisions of the Plan
and that by its terms involves or might involve the issuance of (i) Shares,
(ii) cash or (iii) an Option, a SAR, or similar right with a fixed or
variable price related to the Fair Market Value of the Shares and with an
exercise or conversion privilege related to the passage of time, the occurrence
of one or more events, or the satisfaction of performance criteria or other
conditions. Such awards include, without limitation, Options, SARs, sales or
bonuses of Restricted Stock or Restricted Stock Units, and an Award may consist
of one such security or benefit, or two (2) or more of them in any
combination or alternative.

      


      (b)    
Designation of Award.   Each Award shall be
designated in the Award Agreement. In the case of an Option, the Option shall be
designated as either an Incentive Stock Option or a Non-Qualified Stock Option.
However, notwithstanding such designation, an Option will qualify as an
Incentive Stock Option under the Code only to the extent the $100,000 dollar
limitation of Section 422(d) of the Code is not exceeded. The $100,000
limitation of Section 422(d) of the Code is calculated based on the
aggregate Fair Market Value of the Shares subject to Options designated as
Incentive Stock Options which become exercisable for the first time by a Grantee
during any calendar year (under all plans of the Company or any Parent or
Subsidiary of the Company). For purposes of this calculation, Incentive Stock
Options shall be taken into account in the order in which they were granted, and
the Fair Market Value of the Shares shall be determined as of the grant date of
the relevant Option.

      


      (c)   
 Conditions of Award.   Subject to the terms of the
Plan, the Administrator shall determine the provisions, terms, and conditions of
each Award including, but not limited to, the Award vesting schedule, repurchase
provisions, rights of first refusal, forfeiture provisions, form of payment
(cash, Shares, or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria. The performance
criteria established by the Administrator may be based on any one of, or
combination of, the following: (i) increase in share price,
(ii) earnings per share, (iii) total stockholder return,
(iv) operating margin, (v) gross margin, (vi) return on equity,
(vii) return on assets, (viii) return on investment,
(ix) operating income, (x) net operating income, (xi) pre-tax
profit, (xii) cash flow, (xiii) revenue, (xiv) expenses,
(xv) earnings before interest, taxes and depreciation, (xvi) economic
value added, (xvii) market share, (xviii) relative or absolute share
price and (xix) proforma net income. The performance criteria may be
applicable to the Company, Related Entities and/or any individual business units
of the Company or any Related Entity. Partial achievement of the specified
criteria may result in a payment or vesting corresponding to the degree of
achievement as specified in the Award Agreement.

      


      (d)   
 Acquisitions and Other Transactions.   The Administrator may issue
Awards under the Plan in settlement, assumption or substitution for, outstanding
awards or obligations to grant future awards in connection with the Company or a
Related Entity acquiring another entity, an interest in another entity or an
additional interest in a Related Entity whether by merger, stock purchase, asset
purchase or other form of transaction.

      


      (e)   
 Deferral of Award Payment.   The Administrator may
establish one or more programs under the Plan to permit selected Grantees the
opportunity to elect to defer receipt of consideration upon exercise of an
Award, satisfaction of performance criteria, or other event that absent the
election would entitle the Grantee to payment or receipt of Shares or other
consideration under an Award. The Administrator may establish the election
procedures, the timing of such elections, the mechanisms for payments of, and
accrual of interest or other earnings, if any, on amounts, Shares or other
consideration so deferred, and such other terms, conditions, rules and
procedures that the Administrator deems advisable for the administration of any
such deferral program.

      


      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      


      (f)    
 Separate Programs.   The Administrator may
establish one or more separate programs under the Plan for the purpose of
issuing particular forms of Awards to one or more classes of Grantees on such
terms and conditions as determined by the Administrator from time to
time.

      


      (g)    
Individual Limitations on Awards.

      


      (i)          Individual Limit
for Options and SARs.   The maximum number of
Shares with respect to which Options and SARs may be granted to any Grantee in
any calendar year shall be 750,000 Shares. The foregoing limitations shall be
adjusted proportionately in connection with any change in the Company’s
capitalization pursuant to Section 10, 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 Grantee, if any Option or SAR is
canceled, the canceled Option or SAR shall continue to count against the maximum
number of Shares with respect to which Options and SARs may be granted to the
Grantee. For this purpose, the repricing of an Option (or in the case of a SAR,
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 SAR and the grant of a new
Option or SAR.

      


      (ii)         Individual Limit
for Restricted Stock and Restricted Stock Units.   For awards of Restricted
Stock and Restricted Stock Units that are intended to be Performance-Based
Compensation, the maximum number of Shares with respect to which such Awards may
be granted to any Grantee in any calendar year shall be 750,000 Shares. The
foregoing limitation shall be adjusted proportionately in connection with any
change in the Company’s capitalization pursuant to Section 10,
below.

      


      (iii)       
Deferral.   If
the vesting or receipt of Shares under an Award is deferred to a later date, any
amount (whether denominated in Shares or cash) paid in addition to the original
number of Shares subject to such Award will not be treated as an increase in the
number of Shares subject to the Award if the additional amount is based either
on a reasonable rate of interest or on one or more predetermined actual
investments such that the amount payable by the Company at the later date will
be based on the actual rate of return of a specific investment (including any
decrease as well as any increase in the value of an
investment).

      


      (h)     Early
Exercise.   The
Award Agreement may, but need not, include a provision whereby the Grantee may
elect at any time while an Employee, Director or Consultant to exercise any part
or all of the Award prior to full vesting of the Award. Any unvested Shares
received pursuant to such exercise may be subject to a repurchase right in favor
of the Company or a Related Entity or to any other restriction the Administrator
determines to be appropriate.

      


      (i)   
  Term of Award.   The term of each Award
shall be no more than seven (7) years from the date of grant thereof. However,
in the case of an Incentive Stock Option granted to a Grantee who, at the time
the Option is granted, owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any Parent or
Subsidiary of the Company, the term of the Incentive Stock Option shall be
five (5) years from the date of grant thereof or such shorter term as
may be provided in the Award Agreement. Notwithstanding the foregoing, the
specified term of any Award shall not include any period for which the Grantee
has elected to defer the receipt of the Shares or cash issuable pursuant to the
Award.

      


      (j)   
  Transferability of Awards.   Incentive Stock Options may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised during the lifetime of the Grantee only by the Grantee. Other Awards
shall be transferable by will and by the laws of descent and distribution and
during the lifetime of the Grantee, to the extent and in the manner authorized
by the Administrator, but only to the extent such transfers are made to family
members, to family trusts, to family-controlled entities, to charitable
organizations, and pursuant to domestic relations orders or agreements, in all
cases without payment for such transfers to the Grantee. Notwithstanding the
foregoing, the Grantee may designate one or more beneficiaries of the Grantee’s
Award in the event of the Grantee’s death on a beneficiary designation form
provided by the Administrator.

      


      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      


      (k)     Time
of Granting Awards.   The date of grant of an
Award shall for all purposes be the date on which the Administrator makes the
determination to grant such Award, or such other date as is determined by the
Administrator.

      


      7.   Award
Exercise or Purchase Price, Consideration and Taxes.

      


      (a)    
Exercise or Purchase Price.   The exercise or purchase
price, if any, for an Award shall be as follows:

      


      (i)        
In the case of an Incentive Stock Option:

      


      (A)         
granted to an Employee who, at the time of the grant of such Incentive Stock
Option owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary of the
Company, the per Share exercise price shall be not less than one hundred ten
percent (110%) of the Fair Market Value per Share on the date of grant;
or

      


      (B)          
granted to any Employee other than an Employee described in the preceding
paragraph, the per Share exercise price shall be not less than one hundred
percent (100%) of the Fair Market Value per Share on the date of
grant.

      


      (ii)       
In the case of a Non-Qualified Stock Option, the per Share exercise price shall
be not less than one hundred percent (100%) of the Fair Market Value per Share
on the date of grant.

      


      (iii)      
In the case of Awards intended to qualify as Performance-Based Compensation, the
exercise or purchase price, if any, shall be not less than one hundred percent
(100%) of the Fair Market Value per Share on the date of
grant.

      


      (iv)      In
the case of SARs, the base appreciation amount shall not be less than one
hundred percent (100%) of the Fair Market Value per Share on the date of
grant.

      


      (v)      
In the case of other Awards, such price as is determined by the
Administrator.

      


      (vi)     
Notwithstanding the foregoing provisions of this Section 7(a), in the case
of an Award issued pursuant to Section 6(d), above, the exercise or
purchase price for the Award shall be determined in accordance with the
provisions of the relevant instrument evidencing the agreement to issue such
Award.

      


      (b)    
Consideration.  
Subject to Applicable Laws, the consideration to be paid for the Shares to be
issued upon exercise or purchase of an Award including the method of payment,
shall be determined by the Administrator. In addition to any other types of
consideration the Administrator may determine, the Administrator is authorized
to accept as consideration for Shares issued under the Plan the
following ,  provided that the portion of
the consideration equal to the par value of the Shares must be paid in cash or
other legal consideration permitted by the Delaware General Corporation
Law:

      


      (i)        
cash;

      


      (ii)       
check;

       

      (iii)      
surrender of Shares or delivery of a properly executed form of attestation of
ownership of Shares as the Administrator may require which have a Fair Market
Value on the date of surrender or attestation equal to the aggregate exercise
price of the Shares as to which said Award shall be
exercised;

      


      (iv)      with
respect to Options, payment through a broker-dealer sale and remittance
procedure pursuant to which the Grantee (A) shall provide written
instructions to a Company designated brokerage firm to effect the immediate sale
of some or all of the purchased Shares and remit to the Company sufficient funds
to cover the aggregate exercise price payable for the purchased Shares and
(B) shall provide written directives to the Company to deliver the
certificates for the purchased Shares directly to such brokerage firm in order
to complete the sale transaction; or

      


      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      


      (v)       
with respect to Options, payment through a “net exercise” such that, without the
payment of any funds, the Grantee may exercise the Option and receive the net
number of Shares equal to (i) the number of Shares as to which the Option
is being exercised, multiplied by (ii) a fraction, the numerator of which
is the Fair Market Value per Share (on such date as is determined by the
Administrator) less the Exercise Price per Share, and the denominator of which
is such Fair Market Value per Share (the number of net Shares to be received
shall be rounded down to the nearest whole number of
Shares);

      


      (vi)      
any combination of the foregoing methods of payment.

      


      The Administrator may at any time or
from time to time, by adoption of or by amendment to the standard forms of Award
Agreement described in Section 4(b)(iv), or by other means, grant Awards
which do not permit all of the foregoing forms of consideration to be used in
payment for the Shares or which otherwise restrict one or more forms of
consideration.

      


      (c)    
Taxes.   No
Shares shall be delivered under the Plan to any Grantee or other person until
such Grantee or other person has made arrangements acceptable to the
Administrator for the satisfaction of any non-U.S., federal, state, or local
income and employment tax withholding obligations, including, without
limitation, obligations incident to the receipt of Shares. Upon exercise or
vesting of an Award the Company shall withhold or collect from the Grantee an
amount sufficient to satisfy such tax obligations, including, but not limited
to, by surrender of the whole number of Shares covered by the Award sufficient
to satisfy the minimum applicable tax withholding obligations incident to the
exercise or vesting of an Award.

      


      8.  
Exercise of Award.

      


      (a)     Procedure for Exercise; Rights as
a Stockholder.

      


      (i)         
Any Award granted hereunder shall be exercisable at such times and under such
conditions as determined by the Administrator under the terms of the Plan and
specified in the Award Agreement.

      


      (ii)        
An Award shall be deemed to be exercised when written notice of such exercise
has been given to the Company in accordance with the terms of the Award by the
person entitled to exercise the Award and full payment for the Shares with
respect to which the Award is exercised has been made, including, to the extent
selected, use of the broker-dealer sale and remittance procedure to pay the
purchase price as provided in Section 7(b)(iv).

      


      (b)   
 Exercise of Award Following Termination of Continuous
Service.

      


      (i)         
An Award may not be exercised after the termination date of such Award set forth
in the Award Agreement and may be exercised following the termination of a
Grantee’s Continuous Service only to the extent provided in the Award
Agreement.

      


      (ii)        
Where the Award Agreement permits a Grantee to exercise an Award following the
termination of the Grantee’s Continuous Service for a specified period, the
Award shall terminate to the extent not exercised on the last day of the
specified period or the last day of the original term of the Award, whichever
occurs first.

      


      (iii)       
Any Award designated as an Incentive Stock Option to the extent not exercised
within the time permitted by law for the exercise of Incentive Stock Options
following the termination of a Grantee’s Continuous Service shall convert
automatically to a Non-Qualified Stock Option and thereafter shall be
exercisable as such to the extent exercisable by its terms for the period
specified in the Award Agreement.

      


      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      


      9.  
Conditions Upon Issuance of Shares.

      


      (a)     If at any
time the Administrator determines that the delivery of Shares pursuant to the
exercise, vesting or any other provision of an Award is or may be unlawful under
Applicable Laws, the vesting or right to exercise an Award or to otherwise
receive Shares pursuant to the terms of an Award shall be suspended until the
Administrator determines that such delivery is lawful and shall be further
subject to the approval of counsel for the Company with respect to such
compliance. The Company shall have no obligation to effect any registration or
qualification of the Shares under federal or state laws.

      


      (b)     As a condition to
the exercise of an Award, the Company may require the person exercising such
Award to represent and warrant at the time of any such exercise that the Shares
are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required by any Applicable Laws.

      


      10.  
Adjustments Upon Changes in Capitalization.   Subject to any required
action by the stockholders of the Company, the number of Shares covered by each
outstanding Award, and the number of Shares which have been authorized for
issuance under the Plan  but  as to which no Awards have
yet been granted or which have been returned to the Plan, the exercise or
purchase price of each such outstanding Award, the maximum number of Shares with
respect to which Awards may be granted to any Grantee in any calendar year, as
well as any other terms that the Administrator determines require adjustment
shall be proportionately adjusted for (i) any increase or decrease in the
number of issued Shares resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Shares, or similar transaction
affecting the Shares, (ii) any other increase or decrease in the number of
issued Shares effected without receipt of consideration by the Company, or
(iii) any other transaction with respect to Common Stock including a
corporate merger, consolidation, acquisition of property or stock, separation
(including a spin-off or other distribution of stock or property),
reorganization, liquidation (whether partial or complete) or any similar
transaction; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been “effected without receipt of
consideration.” Any such adjustments to outstanding Awards will be effected in a
manner that precludes the material enlargement of rights and benefits under such
Awards. Adjustments and any determinations or interpretations shall be made by
the Administrator and its determination shall be final, binding and conclusive.
In connection with the foregoing adjustments, the Administrator may, in its
discretion, prohibit the exercise of Awards or other issuance of Shares, cash or
other consideration pursuant to Awards during certain periods of time. Except as
the Administrator determines, no issuance by the Company of shares of any class,
or securities convertible into shares of any class, shall affect, and no
adjustment by reason hereof shall be made with respect to, the number or price
of Shares subject to an Award.

      


      11.  
Corporate Transactions and Changes in Control.

      


      (a)   
 Termination of Award to Extent Not Assumed in Corporate
Transaction.  
Effective upon the consummation of a Corporate Transaction, all outstanding
Awards under the Plan shall terminate. However, all such Awards shall not
terminate to the extent they are Assumed in connection with the Corporate
Transaction.

      


      (b)    
Acceleration of Award Upon Corporate Transaction or Change in
Control.

      


      (i)  
Corporate Transaction.   Except as provided
otherwise in an individual Award Agreement, in the event of a Corporate
Transaction, for the portion of each Award that is neither Assumed nor Replaced,
such portion of the Award shall automatically become fully vested and
exercisable and be released from any repurchase or forfeiture rights (other than
repurchase rights exercisable at Fair Market Value) for all of the Shares (or
other consideration) at the time represented by such portion of the Award,
immediately prior to the specified effective date of such Corporate
Transaction.

      


      (ii)   Change
in Control.  
Except as provided otherwise in an individual Award Agreement, in the event of a
Change in Control (other than a Change in Control which also is a Corporate
Transaction), each Award which is at the time outstanding under the Plan
automatically shall become fully vested and exercisable and be released from any
repurchase or forfeiture rights (other than repurchase rights exercisable at
Fair Market Value), immediately prior to the specified effective date of such
Change in Control, for all of the Shares (or other consideration) at the time
represented by such Award.

      


      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      


      (c)   
 Effect of Acceleration on Incentive Stock Options.   Any Incentive Stock Option
accelerated under this Section 11 in connection with a Corporate
Transaction or Change in Control shall remain exercisable as an Incentive Stock
Option under the Code only to the extent the $100,000 dollar limitation of
Section 422(d) of the Code is not exceeded.

      


      12.  
Effective Date and Term of Plan.   The Plan shall become
effective upon its approval by the stockholders of the Company. It shall
continue in effect for a term of ten (10) years indefinitely unless sooner
terminated. Subject to Section 17 below and Applicable Laws,  Awards  may be granted under the
Plan upon its becoming effective.

      


      13.  
Amendment,
Suspension or Termination of
the Plan.

      


      (a)     The Board
may at any time amend, suspend or terminate the Plan; provided, however, that no
such amendment shall be made without the approval of the Company’s stockholders
to the extent such approval is required by Applicable Laws ,  or if such amendment would
lessen the stockholder approval requirements of Section 4(b)(vi) or
this Section 13(a).

      


      (b)     No Award may be
granted during any suspension of the Plan or after termination of the
Plan.

      


      (c)     No suspension or
termination of the Plan (including termination of the Plan under
Section 11, above) shall adversely affect any rights under Awards already
granted to a Grantee.

      


      14.  
Reservation of Shares.

      


      (a)     The Company,
during the term of the Plan, will at all times reserve and keep available such
number of Shares as shall be sufficient to satisfy the requirements of the
Plan.

      


      (b)     The
inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be necessary
to the lawful issuance and sale of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue or sell such Shares
as to which such requisite authority shall not have been
obtained.

      


      15.   No
Effect on Terms of Employment/Consulting Relationship.   The Plan shall not confer
upon any Grantee any right with respect to the Grantee’s Continuous Service, nor
shall it interfere in any way with his or her right or the right of the Company
or any Related Entity to terminate the Grantee’s Continuous Service at any time,
with or without Cause, and with or without notice. The ability of the Company or
any Related Entity to terminate the employment of a Grantee who is employed at
will is in no way affected by its determination that the Grantee’s Continuous
Service has been terminated for Cause for the purposes of this
Plan.

      


      16.   No
Effect on Retirement and Other Benefit Plans.   Except as specifically
provided in a retirement or other benefit plan of the Company or a Related
Entity, Awards shall not be deemed compensation for purposes of computing
benefits or contributions under any retirement plan of the Company or a Related
Entity, and shall not affect any benefits under any other benefit plan of any
kind or any benefit plan subsequently instituted under which the availability or
amount of benefits is related to level of compensation. The Plan is not a
“Retirement Plan” or “Welfare Plan” under the Employee Retirement Income
Security Act of 1974, as amended.

      


      17.  
Stockholder Approval.   The grant of Incentive
Stock Options under the Plan shall be subject to approval by the stockholders of
the Company within twelve (12) months before or after the date the Plan is
adopted excluding Incentive Stock Options issued in substitution for outstanding
Incentive Stock Options pursuant to Section 424(a) of the Code. Such
stockholder approval shall be obtained in the degree and manner required under
Applicable Laws. The Administrator may grant Incentive Stock Options under the
Plan prior to approval by the stockholders, but until such approval is obtained,
no such Incentive Stock Option  shall be exercisable. In the
event that stockholder approval is not obtained within the twelve (12) month
period provided above, all Incentive Stock Options previously granted under the
Plan shall be exercisable as Non-Qualified Stock Options.

      


      18.  
Unfunded Obligation.   Grantees shall have the
status of general unsecured creditors of the Company. Any amounts payable to
Grantees pursuant to the Plan shall be unfunded and unsecured obligations for
all purposes, including, without limitation, Title I of the Employee
Retirement Income Security Act of 1974, as amended. Neither the Company nor any
Related Entity shall be required to segregate any monies from its general funds,
or to create any trusts, or establish any special accounts with respect to such
obligations. The Company shall retain at all times beneficial ownership of any
investments, including trust investments, which the Company may make to fulfill
its payment obligations hereunder. Any investments or the creation or
maintenance of any trust or any Grantee account shall not create or constitute a
trust or fiduciary relationship between the Administrator, the Company or any
Related Entity and a Grantee, or otherwise create any vested or beneficial
interest in any Grantee or the Grantee’s creditors in any assets of the Company
or a Related Entity. The Grantees shall have no claim against the Company or any
Related Entity for any changes in the value of any assets that may be invested
or reinvested by the Company with respect to the Plan.

      


      19.  
Construction.  
Captions and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of the Plan. Except when
otherwise indicated by the context, the singular shall include the plural and
the plural shall include the singular. Use of the term “or” is not intended to
be exclusive, unless the context clearly requires otherwise.