replaced during any twelve (12) month period by Directors whose appointment or election is notendorsed by a majority of the members of the Board prior to the date of the appointment orelection. For purposes of this clause (ii), if any Person is considered to be in effective controlof the Company, the acquisition of additional control of the Company by the same Person will not beconsidered a Change in Control; or               (iii) Change in Ownership of a Substantial Portion of the Company’s Assets. A changein the ownership of a substantial portion of the Company’s assets which occurs on the date that anyPerson acquires (or has acquired during the twelve (12) month period ending on the date of the mostrecent acquisition by such person or persons) assets from the Company that have a total gross fairmarket value equal to or more than 50% of the total gross fair market value of all of the assets ofthe Company immediately prior to such acquisition or acquisitions. For purposes of this subsection(iii), gross fair market value means the value of the assets of the Company, or the value of theassets being disposed of, determined without regard to any liabilities associated with such assets.               For purposes of this Section 2(f), persons will be considered to be acting as a group if theyare owners of a corporation that enters into a merger, consolidation, purchase or acquisition ofstock, or similar business transaction with the Company.               Further and for the avoidance of doubt, a transaction will not constitute a Change in Controlif: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its solepurpose is to create a holding company that will be owned in substantially the same proportions bythe persons who held the Company’s securities immediately before such transaction.          (g) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to asection of the Code herein will be a reference to any successor or amended section of the Code.          (h) “Committee” means a committee of Directors or of other individuals satisfyingApplicable Laws appointed by the Board, or by the compensation committee of the Board, inaccordance with Section 4 hereof.          (i) “Common Stock” means the common stock of the Company.          (j) “Company” means Clovis Oncology, Inc., a Delaware corporation, or any successorthereto.          (k) “Consultant” means any person, including an advisor, engaged by the Company or aParent or Subsidiary to render services to such entity.          (l) “Director” means a member of the Board.          (m) “Disability” means total and permanent disability as defined in Code Section22(e)(3), provided that in the case of Awards other than Incentive Stock Options, the Administratorin its discretion may determine whether a permanent and total disability exists in accordance withuniform and non-discriminatory standards adopted by the Administrator from time to time.
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          (n) “Employee” means any person, including officers and Directors, employed by theCompany or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of adirector’s fee by the Company will be sufficient to constitute “employment” by the Company.          (o) “Exchange Act” means the Securities Exchange Act of 1934, as amended.          (p) “Exchange Program” means a program under which (i) outstanding Awards aresurrendered or cancelled in exchange for Awards of the same type (which may have higher or lowerexercise prices and different terms), Awards of a different type, and/or cash, (ii) Participantswould have the opportunity to transfer any outstanding Awards to a financial institution or otherperson or entity selected by the Administrator, and/or (iii) the exercise price of an outstandingAward is reduced or increased. The Administrator will determine the terms and conditions of anyExchange Program in its sole discretion.          (q) “Fair Market Value” means, as of any date, the value of Common Stock determined asfollows:               (i) If the Common Stock is listed on any established stock exchange or a national marketsystem, including without limitation the Nasdaq Global Select Market, the Nasdaq Global Market orthe Nasdaq Capital Market of The Nasdaq Stock Market, its Fair Market Value will be the closingsales price for such stock (or the closing bid, if no sales were reported) as quoted on suchexchange or system on the day of determination, as reported in *The Wall Street Journal*or suchother source as the Administrator deems reliable;               (ii) If the Common Stock is regularly quoted by a recognized securities dealer but sellingprices are not reported, the Fair Market Value of a Share will be the mean between the high bid andlow asked prices for the Common Stock on the day of determination (or, if no bids and asks werereported on that date, as applicable, on the last trading date such bids and asks 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, the Fair Market Value willbe determined in good faith by the Administrator, calculated in a manner consistent with Section409A of the Code..          (r) “Incentive Stock Option” means an Option that by its terms qualifies and isotherwise intended to qualify as an incentive stock option within the meaning of Code Section 422and the regulations promulgated thereunder.          (s) “Nonstatutory Stock Option” means an Option that by its terms does not qualify oris not intended to qualify as an Incentive Stock Option.          (t) “Option” means a stock option granted pursuant to the Plan.          (u) “Parent” means a “parent corporation,” whether now or hereafter existing, asdefined in Code Section 424(e).
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          (v) “Participant” means the holder of an outstanding Award.          (w) “Period of Restriction” means the period during which the transfer of Shares ofRestricted Stock are subject to restrictions and therefore, the Shares are subject to a substantialrisk of forfeiture. Such restrictions may be based on the passage of time, the achievement oftarget levels of performance, or the occurrence of other events as determined by the Administrator.          (x) “Plan” means this 2009 Equity Incentive Plan.          (y) “Restricted Stock” means Shares issued pursuant to an Award of Restricted Stockunder Section 8 of the Plan, or issued pursuant to the early exercise of an Option.          (z) “Restricted Stock Unit” means a bookkeeping entry representing an amount equal tothe Fair Market Value of one Share, granted pursuant to Section 9. Each Restricted Stock Unitrepresents an unfunded and unsecured obligation of the Company.          (aa) “Service Provider” means an Employee, Director or Consultant.          (bb) “Share” means a share of the Common Stock, as adjusted in accordance with Section13 of the Plan.          (cc) “Stock Appreciation Right” means an Award, granted alone or in connection with anOption, that pursuant to Section 7 is designated as a Stock Appreciation Right.          (dd) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing,as defined in Code Section 424(f).     3. Stock Subject to the Plan.          (a) Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan,the maximum aggregate number of Shares that may be subject to Awards and sold under the Plan is1,500,000 Shares. The Shares may be authorized but unissued, or reacquired Common Stock.          (b) Lapsed Awards. If an Award expires or becomes unexercisable without having beenexercised in full, is surrendered pursuant to an Exchange Program, or, with respect to RestrictedStock or Restricted Stock Units, is forfeited to or repurchased by the Company due to the failureto vest, the unpurchased Shares (or for Awards other than Options or Stock Appreciation Rights theforfeited or repurchased Shares) which were subject thereto will become available for future grantor sale under the Plan (unless the Plan has terminated). With respect to Stock AppreciationRights, only Shares actually issued pursuant to a Stock Appreciation Right will cease to beavailable under the Plan; all remaining Shares under Stock Appreciation Rights will remainavailable for future grant or sale under the Plan (unless the Plan has terminated). Shares thathave actually been issued under the Plan under any Award will not be returned to the Plan and willnot become available for future distribution under the Plan; provided, however, that if Sharesissued pursuant to Awards of Restricted Stock or Restricted Stock Units are repurchased by theCompany or are forfeited to the Company due to the failure to vest, such Shares will becomeavailable for future grant under the Plan. Shares used to pay the exercise price of an Award or tosatisfy the tax withholding obligations related to an Award will become available for future grantor sale under the
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Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cashpayment will not result in reducing the number of Shares available for issuance under the Plan.Notwithstanding the foregoing and, subject to adjustment as provided in Section 13, the maximumnumber of Shares that may be issued upon the exercise of Incentive Stock Options will equal theaggregate Share number stated in Section 3(a), plus, to the extent allowable under Code Section 422and the Treasury Regulations promulgated thereunder, any Shares that become available for issuanceunder the Plan pursuant to Section 3(b).          (c) Share Reserve. The Company, during the term of this Plan, will at all timesreserve and keep available such number of Shares as will be sufficient to satisfy the requirementsof the Plan.     4. Administration of the Plan. (a) Procedure.               (i) Multiple Administrative Bodies. Different Committees with respect to differentgroups of Service Providers may administer the Plan.               (ii) Other Administration. Other than as provided above, the Plan will beadministered by (A) the Board or (B) a Committee, which Committee will be constituted to satisfyApplicable Laws.          (b) Powers of the Administrator. Subject to the provisions of the Plan, and in thecase of a Committee, subject to the specific duties delegated by the Board to such Committee, theAdministrator will have the authority, in its discretion:               (i) to determine the Fair Market Value;               (ii) to select the Service Providers to whom Awards may be granted hereunder;               (iii) to determine the number of Shares 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, not inconsistent with the terms of the Plan, of anyAward granted hereunder. Such terms and conditions include, but are not limited to, the exerciseprice, the time or times when Awards may be exercised (which may be based on performance criteria),any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitationregarding any Award or the Shares relating thereto, based in each case on such factors as theAdministrator will determine;               (vi) to institute and determine the terms and conditions of an Exchange Program;
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               (vii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;               (viii) to prescribe, amend and rescind rules and regulations relating to the Plan, includingrules and regulations relating to sub-plans established for the purpose of satisfying applicableforeign laws or for qualifying for favorable tax treatment under applicable foreign laws;               (ix) to modify or amend each Award (subject to Section 18(d) of the Plan), including but notlimited to the discretionary authority to extend the post-termination exercisability period ofAwards and to extend the maximum term of an Option (subject to Section 6(d));               (x) to allow Participants to satisfy withholding tax obligations in a manner prescribed inSection 14;               (xi) to authorize any person to execute on behalf of the Company any instrument required toeffect the grant of an Award previously granted by the Administrator;               (xii) to allow a Participant to defer the receipt of the payment of cash or the delivery ofShares that otherwise would be due to such Participant under an Award; and               (xiii) to make all other determinations deemed necessary or advisable for administering thePlan.          (c) Effect of Administrator’s Decision. The Administrator’s decisions, determinationsand interpretations will be final and binding on all Participants and any other holders of Awards.     5. Eligibility. Nonstatutory Stock Options, Stock Appreciation Rights, RestrictedStock, and Restricted Stock Units may be granted to Service Providers. Incentive Stock Options maybe granted only to Employees.     6. Stock Options.          (a) Grant of Options. Subject to the terms and provisions of the Plan, theAdministrator, at any time and from time to time, may grant Options in such amounts as theAdministrator, in its sole discretion, will determine.          (b) Option Agreement. Each Award of an Option will be evidenced by an Award Agreementthat will specify the exercise price, the term of the Option, the number of Shares subject to theOption, the exercise restrictions, if any, applicable to the Option, and such other terms andconditions as the Administrator, in its sole discretion, will determine.          (c) Limitations. Each Option will be designated in the Award Agreement as either anIncentive Stock Option or a Nonstatutory Stock Option. Notwithstanding such designation, however,to the extent that the aggregate Fair Market Value of the Shares with respect to which IncentiveStock Options are exercisable for the first time by the Participant during any calendar year (underall plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars($100,000), such Options will be treated as Nonstatutory Stock Options. For purposes of this
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Section 6(c), Incentive Stock Options will be taken into account in the order in which theywere granted, the Fair Market Value of the Shares will be determined as of the time the Option withrespect to such Shares is granted, and calculation will be performed in accordance with CodeSection 422 and Treasury Regulations promulgated thereunder.          (d) Term of Option. The term of each Option will be stated in the Award Agreement;provided, however, that the term will be no more than ten (10) years from the date of grantthereof. In the case of an Incentive Stock Option granted to a Participant who, at the time theIncentive Stock Option is granted, owns stock representing more than ten percent (10%) of the totalcombined voting power of all classes of stock of the Company or any Parent or Subsidiary, the termof the Incentive Stock Option will be five (5) years from the date of grant or such shorter term asmay be provided in the Award Agreement.          (e) Option Exercise Price and Consideration.               (i) Exercise Price. The per Share exercise price for the Shares to be issued pursuantto the exercise of an Option will be determined by the Administrator, but will be no less than onehundred percent (100%) of the Fair Market Value per Share on the date of grant. In addition, inthe case of an Incentive Stock Option granted to an Employee who owns stock representing more thanten percent (10%) of the voting power of all classes of stock of the Company or any Parent orSubsidiary, the per Share exercise price will be no less than one hundred ten percent (110%) of theFair Market Value per Share on the date of grant. Notwithstanding the foregoing provisions of thisSection 6(e)(i), Options may be granted with a per Share exercise price of less than one hundredpercent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transactiondescribed in, and in a manner consistent with, Code Section 424(a).               (ii) Waiting Period and Exercise Dates. At the time an Option is granted, theAdministrator will fix the period within which the Option may be exercised and will determine anyconditions that must be satisfied before the Option may be exercised.               (iii) Form of Consideration. The Administrator will determine the acceptable form ofconsideration for exercising an Option, including the method of payment. In the case of anIncentive Stock Option, the Administrator will determine the acceptable form of consideration atthe time of grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) promissorynote, to the extent permitted by Applicable Laws, (4) other Shares, provided that such Shares havea Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares asto which such Option will be exercised and provided further that accepting such Shares will notresult in any adverse accounting consequences to the Company, as the Administrator determines inits sole discretion; (5) consideration received by the Company under cashless exercise program(whether through a broker or otherwise) implemented by the Company in connection with the Plan; (6)by net exercise, (7) such other consideration and method of payment for the issuance of Shares tothe extent permitted by Applicable Laws, or (8) any combination of the foregoing methods ofpayment. In making its determination as to the type of consideration to accept, the Administratorwill consider if acceptance of such consideration may be reasonably expected to benefit theCompany.          (f) Exercise of Option.
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               (i) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunderwill be exercisable according to the terms of the Plan and at such times and under such conditionsas determined by the Administrator and set forth in the Award Agreement. An Option may not beexercised for a fraction of a Share.                    An Option will be deemed exercised when the Company receives: (i) notice of exercise (in suchform as the Administrator may specify from time to time) from the person entitled to exercise theOption, and (ii) full payment for the Shares with respect to which the Option is exercised(together with applicable tax withholding). Full payment may consist of any consideration andmethod of payment authorized by the Administrator and permitted by the Award Agreement and thePlan. Shares issued upon exercise of an Option will be issued in the name of the Participant or,if requested by the Participant, in the name of the Participant and his or her spouse. Until theShares are issued (as evidenced by the appropriate entry on the books of the Company or of a dulyauthorized transfer agent of the Company), no right to vote or receive dividends or any otherrights as a stockholder will exist with respect to the Shares subject to an Option, notwithstandingthe exercise of the Option. The Company will issue (or cause to be issued) such Shares promptlyafter the Option is exercised. No adjustment will be made for a dividend or other right for whichthe record date is prior to the date the Shares are issued, except as provided in Section 13 of thePlan.                    Exercising an Option in any manner will decrease the number of Shares thereafter available,both for purposes of the Plan and for sale under the Option, by the number of Shares as to whichthe Option is exercised.               (ii) Termination of Relationship as a Service Provider. If a Participant ceases to bea Service Provider, other than upon the Participant’s termination as the result of theParticipant’s death or Disability, the Participant may exercise his or her Option within thirty(30) days of termination, or such longer period of time as is specified in the Award Agreement (butin no event later than the expiration of the term of such Option as set forth in the AwardAgreement) to the extent that the Option is vested on the date of termination. Unless otherwiseprovided by the Administrator, if on the date of termination the Participant is not vested as tohis or her entire Option, the Shares covered by the unvested portion of the Option will revert tothe Plan. If after termination the Participant does not exercise his or her Option within the timespecified by the Administrator, the Option will terminate, and the Shares covered by such Optionwill revert to the Plan.               (iii) Disability of Participant. If a Participant ceases to be a Service Provider asa result of the Participant’s Disability, the Participant may exercise his or her Option within six(6) months of termination, or such longer period of time as is specified in the Award Agreement(but in no event later than the expiration of the term of such Option as set forth in the AwardAgreement) to the extent the Option is vested on the date of termination. Unless otherwiseprovided by the Administrator, if on the date of termination the Participant is not vested as tohis or her entire Option, the Shares covered by the unvested portion of the Option will revert tothe Plan. If after termination the Participant does not exercise his or her Option within the timespecified herein, the Option will terminate, and the Shares covered by such Option will revert tothe Plan.               (iv) Death of Participant. If a Participant dies while a Service Provider, the Optionmay be exercised within six (6) months following the Participant’s death, or within such
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longer period of time as is specified in the Award Agreement (but in no event later than theexpiration of the term of such Option as set forth in the Award Agreement) to the extent that theOption is vested on the date of death, by the Participant’s designated beneficiary, provided suchbeneficiary has been designated prior to the Participant’s death in a form acceptable to theAdministrator. If no such beneficiary has been designated by the Participant, then such Option maybe exercised by the personal representative of the Participant’s estate or by the person(s) to whomthe Option is transferred pursuant to the Participant’s will or in accordance with the laws ofdescent and distribution. Unless otherwise provided by the Administrator, if at the time of deathParticipant is not vested as to his or her entire Option, the Shares covered by the unvestedportion of the Option will immediately revert to the Plan. If the Option is not so exercisedwithin the time specified herein, the Option will terminate, and the Shares covered by such Optionwill revert to the Plan.     7. Stock Appreciation Rights.          (a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of thePlan, a Stock Appreciation Right may be granted to Service Providers at any time and from time totime as will be determined by the Administrator, in its sole discretion.          (b) Number of Shares. The Administrator will have complete discretion to determinethe number of Shares subject to any Award of Stock Appreciation Rights.          (c) Exercise Price and Other Terms. The per Share exercise price for the Shares thatwill determine the amount of the payment to be received upon exercise of a Stock Appreciation Rightas set forth in Section 7(f) will be determined by the Administrator and will be no less than onehundred percent (100%) of the Fair Market Value per Share on the date of grant. Otherwise, theAdministrator, subject to the provisions of the Plan, will have complete discretion to determinethe terms and conditions of Stock Appreciation Rights granted under the Plan.          (d) Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will beevidenced by an Award Agreement that will specify the exercise price, the term of the StockAppreciation Right, the conditions of exercise, and such other terms and conditions as theAdministrator, in its sole discretion, will determine.          (e) Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted underthe Plan will expire upon the date determined by the Administrator, in its sole discretion, and setforth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 6(d) relating tothe maximum term and Section 6(f) relating to exercise also will apply to Stock AppreciationRights.          (f) Payment of Stock Appreciation Right Amount. Upon exercise of a Stock AppreciationRight, a Participant will be entitled to receive payment from the Company in an amount determinedby multiplying:               (i) The difference between the Fair Market Value of a Share on the date of exercise over theexercise price; times               (ii) The number of Shares with respect to which the Stock Appreciation Right is exercised.
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     At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise maybe in cash, in Shares of equivalent value, or in some combination thereof.     8. Restricted Stock.          (a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, theAdministrator, at any time and from time to time, may grant Shares of Restricted Stock to ServiceProviders in such amounts as the Administrator, in its sole discretion, will determine.          (b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced byan Award Agreement that will specify the Period of Restriction, the number of Shares granted, andsuch other terms and conditions as the Administrator, in its sole discretion, will determine.Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares ofRestricted Stock until the restrictions on such Shares have lapsed.          (c) Transferability. Except as provided in this Section 8 or as the Administratordetermines, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, orotherwise alienated or hypothecated until the end of the applicable Period of Restriction.          (d) Other Restrictions. The Administrator, in its sole discretion, may impose suchother restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.          (e) Removal of Restrictions. Except as otherwise provided in this Section 8, Sharesof Restricted Stock covered by each Restricted Stock grant made under the Plan will be releasedfrom escrow as soon as practicable after the last day of the Period of Restriction or at such othertime as the Administrator may determine. The Administrator, in its discretion, may accelerate thetime at which any restrictions will lapse or be removed.          (f) Voting Rights. During the Period of Restriction, Service Providers holding Sharesof Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares,unless the Administrator determines otherwise.          (g) Dividends and Other Distributions. During the Period of Restriction, ServiceProviders holding Shares of Restricted Stock will be entitled to receive all dividends and otherdistributions paid with respect to such Shares, unless the Administrator provides otherwise. Ifany such dividends or distributions are paid in Shares, the Shares will be subject to the samerestrictions on transferability and forfeitability as the Shares of Restricted Stock with respectto which they were paid.          (h) Return of Restricted Stock to Company. On the date set forth in the AwardAgreement, the Restricted Stock for which restrictions have not lapsed will revert to the Companyand again will become available for grant under the Plan.     9. Restricted Stock Units.          (a) Grant. Restricted Stock Units may be granted at any time and from time to time asdetermined by the Administrator. After the Administrator determines that it will grant
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Restricted Stock Units, it will advise the Participant in an Award Agreement of the terms,conditions, and restrictions related to the grant, including the number of Restricted Stock Units.          (b) Vesting Criteria and Other Terms. The Administrator will set vesting criteria inits discretion, which, depending on the extent to which the criteria are met, will determine thenumber of Restricted Stock Units that will be paid out to the Participant. The Administrator mayset vesting criteria based upon the achievement of Company-wide, business unit, or individual goals(including, but not limited to, continued employment or service), or any other basis determined bythe Administrator in its discretion.          (c) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, theParticipant will be entitled to receive a payout as determined by the Administrator.Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, theAdministrator, in its sole discretion, may reduce or waive any vesting criteria that must be met toreceive a payout.          (d) Form and Timing of Payment. Payment of earned Restricted Stock Units will be madeas soon as practicable after the date(s) determined by the Administrator and set forth in the AwardAgreement. The Administrator, in its sole discretion, may settle earned Restricted Stock Units incash, Shares, or a combination of both.          (e) Cancellation. On the date set forth in the Award Agreement, all unearnedRestricted Stock Units will be forfeited to the Company.     10. Compliance With Code Section 409A. Awards will be designed and operated in such amanner that they are either exempt from the application of, or comply with, the requirements ofCode Section 409A, except as otherwise determined in the sole discretion of the Administrator. ThePlan and each Award Agreement under the Plan is intended to meet the requirements of Code Section409A and will be construed and interpreted in accordance with such intent, except as otherwisedetermined in the sole discretion of the Administrator. To the extent that an Award or payment, orthe settlement or deferral thereof, is subject to Code Section 409A the Award will be granted,paid, settled or deferred in a manner that will meet the requirements of Code Section 409A, suchthat the grant, payment, settlement or deferral will not be subject to the additional tax orinterest applicable under Code Section 409A.     11. Leaves of Absence/Transfer Between Locations. Unless the Administrator providesotherwise, vesting of Awards granted hereunder will be suspended during any unpaid leave ofabsence. A Participant will not cease to be an Employee in the case of (i) any leave of absenceapproved by the Company or (ii) transfers between locations of the Company or between the Company,its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceedthree (3) months, unless reemployment upon expiration of such leave is guaranteed by statute orcontract. If reemployment upon expiration of a leave of absence approved by the Company is not soguaranteed, then six (6) months following the first (1st) day of such leave, anyIncentive Stock Option held by the Participant will cease to be treated as an Incentive StockOption and will be treated for tax purposes as a Nonstatutory Stock Option.     12. Limited Transferability of Awards.
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          (a) Unless determined otherwise by the Administrator, Awards may not be sold, pledged,assigned, hypothecated, or otherwise transferred in any manner other than by will or by the laws ofdescent and distribution, and may be exercised, during the lifetime of the Participant, only by theParticipant. If the Administrator makes an Award transferable, such Award may only be transferred(i) by will, (ii) by the laws of descent and distribution, or (iii) as permitted by Rule 701 of theSecurities Act of 1933, as amended (the “Securities Act”).          (b) Further, until the Company becomes subject to the reporting requirements of Section 13 or15(d) of the Exchange Act, or after the Administrator determines that it is, will, or may no longerbe relying upon the exemption from registration under the Exchange Act as set forth in Rule12h-1(f) promulgated under the Exchange Act, an Option, or prior to exercise, the Shares subject tothe Option, may not be pledged, hypothecated or otherwise transferred or disposed of, in anymanner, including by entering into any short position, any “put equivalent position” or any “callequivalent position” (as defined in Rule 16a-1(h) and Rule 16a-1(b) of the Exchange Act,respectively), other than to (i) persons who are “family members” (as defined in Rule 701(c)(3) ofthe Securities Act) through gifts or domestic relations orders, or (ii) to an executor or guardianof the Participant upon the death or disability of the Participant. Notwithstanding the foregoingsentence, the Administrator, in its sole discretion, may determine to permit transfers to theCompany or in connection with a Change in Control or other acquisition transactions involving theCompany to the extent permitted by Rule 12h-1(f).     13. Adjustments; Dissolution or Liquidation; Merger or Change in Control.          (a) Adjustments. In the event that any dividend or other distribution (whether in theform of cash, Shares, other securities, or other property), recapitalization, stock split, reversestock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, orexchange of Shares or other securities of the Company, or other change in the corporate structureof the Company affecting the Shares occurs, the Administrator, in order to prevent diminution orenlargement of the benefits or potential benefits intended to be made available under the Plan,will adjust the number and class of Shares that may be delivered under the Plan and/or the number,class, and price of Shares covered by each outstanding Award; provided, however, that theAdministrator will make such adjustments to an Award required by Section 25102(o) of the CaliforniaCorporations Code to the extent the Company is relying upon the exemption afforded thereby withrespect to the Award.          (b) Dissolution or Liquidation. In the event of the proposed dissolution orliquidation of the Company, the Administrator will notify each Participant as soon as practicableprior to the effective date of such proposed transaction. To the extent it has not been previouslyexercised, an Award will terminate immediately prior to the consummation of such proposed action.          (c) Merger or Change in Control. In the event of a merger or Change in Control, eachoutstanding Award will be treated as the Administrator determines without a Participant’s consent,including, without limitation, that (i) Awards will be assumed, or substantially equivalent Awardswill be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) withappropriate adjustments as to the number and kind of shares and prices; (ii) upon written notice toa Participant, that the Participant’s Awards will terminate upon or immediately prior to theconsummation of such merger or Change in Control (subject to the provisions of the proceeding
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paragraph); (iii) outstanding Awards will vest and become exercisable, realizable, or payable,or restrictions applicable to an Award will lapse, in whole or in part prior to or uponconsummation of such merger or Change in Control, and, to the extent the Administrator determines,terminate upon or immediately prior to the effectiveness of such merger of Change in Control; (iv)(A) the termination of an Award in exchange for an amount of cash and/or property, if any, equal tothe amount that would have been attained upon the exercise of such Award or realization of theParticipant’s rights as of the date of the occurrence of the transaction (and, for the avoidance ofdoubt, if as of the date of the occurrence of the transaction the Administrator determines in goodfaith that no amount would have been attained upon the exercise of such Award or realization of theParticipant’s rights, then such Award may be terminated by the Company without payment), or (B) thereplacement of such Award with other rights or property selected by the Administrator in its solediscretion; or (v) any combination of the foregoing. In taking any of the actions permitted underthis subsection 13(c), the Administrator will not be obligated to treat all Awards, all Awards heldby a Participant, or all Awards of the same type, similarly.          In the event that the successor corporation does not assume or substitute for the Award (orportion thereof), the Participant will fully vest in and have the right to exercise all of his orher outstanding Options and Stock Appreciation Rights, including Shares as to which such Awardswould not otherwise be vested or exercisable, all restrictions on Restricted Stock and RestrictedStock Units will lapse, and, with respect to Awards with performance-based vesting, all performancegoals or other vesting criteria will be deemed achieved at one hundred percent (100%) of targetlevels and all other terms and conditions met. In addition, if an Option or Stock AppreciationRight is not assumed or substituted in the event of a merger or Change in Control, theAdministrator will notify the Participant in writing or electronically that the Option or StockAppreciation Right will be exercisable for a period of time determined by the Administrator in itssole discretion, and the Option or Stock Appreciation Right will terminate upon the expiration ofsuch period.          For the purposes of this subsection 13(c), an Award will be considered assumed if, followingthe merger or Change in Control, the Award confers the right to purchase or receive, for each Sharesubject to the Award immediately prior to the merger or Change in Control, the consideration(whether stock, cash, or other securities or property) received in the merger or Change in Controlby holders of Common Stock for each Share held on the effective date of the transaction (and ifholders were offered a choice of consideration, the type of consideration chosen by the holders ofa majority of the outstanding Shares); provided, however, that if such consideration received inthe merger or Change in Control is not solely common stock of the successor corporation or itsParent, the Administrator may, with the consent of the successor corporation, provide for theconsideration to be received upon the exercise of an Option or Stock Appreciation Right or upon thepayout of a Restricted Stock Unit, for each Share subject to such Award, to be solely common stockof the successor corporation or its Parent equal in fair market value to the per shareconsideration received by holders of Common Stock in the merger or Change in Control.          Notwithstanding anything in this Section 13(c) to the contrary, an Award that vests, is earnedor paid-out upon the satisfaction of one or more performance goals will not be considered assumedif the Company or its successor modifies any of such performance goals without the Participant’sconsent; provided, however, a modification to such performance goals only to reflect
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the successor corporation’s post-Change in Control corporate structure will not be deemed toinvalidate an otherwise valid Award assumption.          Notwithstanding anything in this Section 13(c) to the contrary, if a payment under an AwardAgreement is subject to Code Section 409A and if the change in control definition contained in theAward Agreement does not comply with the definition of “change of control” for purposes of adistribution under Code Section 409A, then any payment of an amount that is otherwise acceleratedunder this Section will be delayed until the earliest time that such payment would be permissibleunder Code Section 409A without triggering any penalties applicable under Code Section 409A.     14. Tax Withholding.          (a) Withholding Requirements. Prior to the delivery of any Shares or cash pursuant toan Award (or exercise thereof), the Company will have the power and the right to deduct orwithhold, or require a Participant to remit to the Company, an amount sufficient to satisfyfederal, state, local, foreign or other taxes (including the Participant’s FICA obligation)required to be withheld with respect to such Award (or exercise thereof).          (b) Withholding Arrangements. The Administrator, in its sole discretion and pursuantto such procedures as it may specify from time to time, may permit a Participant to satisfy suchtax withholding obligation, in whole or in part by (without limitation) (i) paying cash, (ii)electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equalto the minimum statutory amount required to be withheld, (iii) delivering to the Companyalready-owned Shares having a Fair Market Value equal to the statutory amount required to bewithheld, provided the delivery of such Shares will not result in any adverse accountingconsequences, as the Administrator determines in its sole discretion, or (iv) selling a sufficientnumber of Shares otherwise deliverable to the Participant through such means as the Administratormay determine in its sole discretion (whether through a broker or otherwise) equal to the amountrequired to be withheld. The amount of the withholding requirement will be deemed to include anyamount which the Administrator agrees may be withheld at the time the election is made, not toexceed the amount determined by using the maximum federal, state or local marginal income tax ratesapplicable to the Participant with respect to the Award on the date that the amount of tax to bewithheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered willbe determined as of the date that the taxes are required to be withheld.     15. No Effect on Employment or Service. Neither the Plan nor any Award will conferupon a Participant any right with respect to continuing the Participant’s relationship as a ServiceProvider with the Company, nor will they interfere in any way with the Participant’s right or theCompany’s right to terminate such relationship at any time, with or without cause, to the extentpermitted by Applicable Laws.     16. Date of Grant. The date of grant of an Award will be, for all purposes, the dateon which the Administrator makes the determination granting such Award, or such other later date asis determined by the Administrator. Notice of the determination will be provided to eachParticipant within a reasonable time after the date of such grant.
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     17. Term of Plan. Subject to Section 21 of the Plan, the Plan will become effectiveupon its adoption by the Board. Unless sooner terminated under Section 18, it will continue ineffect for a term of ten (10) years from the later of (a) the effective date of the Plan, or (b)the earlier of the most recent Board or stockholder approval of an increase in the number of Sharesreserved for issuance under the Plan.     18. Amendment and Termination of the Plan; Amendment of Awards.          (a) Amendment and Termination. The Board may at any time amend, alter, suspend orterminate the Plan.          (b) Stockholder Approval. The Company will obtain stockholder approval of any Planamendment to the extent necessary and desirable to comply with Applicable Laws. The repricing orexchange of any Award pursuant to an Exchange Program shall be expressly permitted under the Planwithout the requirement of additional stockholder approval.          (c) Effect of Amendment or Termination. No amendment, alteration, suspension ortermination of the Plan will impair the rights of any Participant, unless mutually agreed otherwisebetween the Participant and the Administrator, which agreement must be in writing and signed by theParticipant and the Company. Termination of the Plan will not affect the Administrator’s abilityto exercise the powers granted to it hereunder with respect to Awards granted under the Plan priorto the date of such termination.          (d) Amendment of Awards. The Board, at any time, and from time to time, may amend theterms of any one or more Awards; *provided*, *however*, that no such amendment will impair the rightsof any Participant, unless mutually agreed otherwise between the Participant and the Administrator,which agreement must be in writing and signed by the Participant and the Company (it beingunderstood that no action taken by the Board that is expressly permitted under the Plan, including,without limitation, any actions described in Section 13 hereof, shall constitute an amendment of anAward for such purpose). Notwithstanding the foregoing, subject to the limitations of applicablelaw, if any, and without an affected Participant’s consent, the Board may amend the terms of anyone or more Awards if necessary to bring the Award into compliance with Section 409A of the Codeand Department of Treasury regulations and other interpretive guidance issued thereunder.     19. Conditions Upon Issuance of Shares.          (a) Legal Compliance. Shares will not be issued pursuant to the exercise of an Awardunless the exercise of such Award and the issuance and delivery of such Shares will comply withApplicable Laws and will be further subject to the approval of counsel for the Company with respectto such compliance.          (b) Investment Representations. As a condition to the exercise of an Award, theCompany may require the person exercising such Award to represent and warrant at the time of anysuch exercise that the Shares are being purchased only for investment and without any presentintention to sell or distribute such Shares if, in the opinion of counsel for the Company, such arepresentation is required.
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     20. Inability to Obtain Authority. The inability of the Company to obtain authorityfrom any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel tobe necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company ofany liability in respect of the failure to issue or sell such Shares as to which such requisiteauthority will not have been obtained.     21. Stockholder Approval. The Plan will be subject to approval by the stockholders ofthe Company within twelve (12) months after the date the Plan is adopted by the Board. Suchstockholder approval will be obtained in the manner and to the degree required under ApplicableLaws.     22. Information to Participants. Beginning on the earlier of (i) the date that theaggregate number of Participants under this Plan is five hundred (500) or more and the Company isrelying on the exemption provided by Rule 12h-1(f)(1) under the Exchange Act and (ii) the date thatthe Company is required to deliver information to Participants pursuant to Rule 701 under theSecurities Act, and until such time as the Company becomes subject to the reporting requirements ofSection 13 or 15(d) of the Exchange Act, is no longer relying on the exemption provided by Rule12h-1(f)(1) under the Exchange Act or is no longer required to deliver information to Participantspursuant to Rule 701 under the Securities Act, the Company shall provide to each Participant theinformation described in paragraphs (e)(3), (4), and (5) of Rule 701 under the Securities Act notless frequently than every six (6) months with the financial statements being not more than 180days old and with such information provided either by physical or electronic delivery to theParticipants or by written notice to the Participants of the availability of the information on anInternet site that may be password-protected and of any password needed to access the information.The Company may request that Participants agree to keep the information to be provided pursuant tothis section confidential. If a Participant does not agree to keep the information to be providedpursuant to this section confidential, then the Company will not be required to provide theinformation unless otherwise required pursuant to Rule 12h-1(f)(1) under the Exchange Act or Rule701 of the Securities Act.
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