exv10w1






Exhibit 10.1




OPLINK COMMUNICATIONS, INC.




2009 EQUITY INCENTIVE PLAN




(Effective November 4, 2009)




     1. Purposes of the Plan. The purposes of this Plan are:




	 	•	 	to attract and retain the best available personnel for positions of
substantial responsibility,
	 
	 	•	 	to provide incentives to individuals who perform services to the Company, and
	 
	 	•	 	to promote the success of the Company’s business.





          The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units and Performance
Shares.



     2. Definitions. As used herein, the following definitions will apply:



          (a) “Administrator” means the Board or any of its Committees as will be administering
the Plan, in accordance with Section 4 of the Plan.



          (b) “Affiliate” means any corporation or any other entity (including, but not limited
to, partnerships and joint ventures) controlling, controlled by, or under common control with the
Company.



          (c) “Applicable Laws” means the requirements relating to the administration of
equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under
the Plan.



          (d) “Award” means, individually or collectively, a grant under the Plan of Options,
Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units or
Performance Shares.



          (e) “Award Agreement” means the written or electronic agreement setting forth the
terms and provisions applicable to each Award granted under the Plan. The Award Agreement is
subject to the terms and conditions of the Plan.



          (f) “Award Transfer Program” means any program instituted by the Administrator that
would permit Participants the opportunity to transfer for value any outstanding Awards to a
financial institution or other person or entity approved by the Administrator.



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



          (h) “Change in Control” means the occurrence of any of the following events:



               (i) Change in Ownership of the Company. A change in the ownership of the Company
which occurs on the date that any one person, or more than one person acting as a group
(“Person”), acquires ownership of the stock of the Company that, together with the stock
held by such Person, constitutes more than fifty percent (50%) of the total voting power of the
stock of the Company; provided, however, that for purposes of this subsection (i), the acquisition
of additional stock by any one



 









 







Person, who is considered to own more than fifty percent (50%) of the total voting power of
the stock of the Company will not be considered a Change in Control; or



               (ii) Change in Effective Control of the Company. If the Company has a class of
securities registered pursuant to Section 12 of the Exchange Act, a change in the effective control
of the Company which occurs on the date that a majority of members of the Board is replaced during
any twelve (12) month period by Directors whose appointment or election is not endorsed by a
majority of the members of the Board prior to the date of the appointment or election. For
purposes of this subsection (ii), if any Person is considered to be in effective control of the
Company, the acquisition of additional control of the Company by the same Person will not be
considered a Change in Control; or



               (iii) Change in Ownership of a Substantial Portion of the Company’s Assets. A change
in the ownership of a substantial portion of the Company’s assets which occurs on the date that any
Person acquires (or has acquired during the twelve (12) month period ending on the date of the most
recent acquisition by such person or persons) assets from the Company that have a total gross fair
market value equal to or more than fifty percent (50%) of the total gross fair market value of all
of the assets of the Company immediately prior to such acquisition or acquisitions; provided,
however, that for purposes of this subsection (iii), the following will not constitute a change in
the ownership of a substantial portion of the Company’s assets: (A) a transfer to an entity that is
controlled by the Company’s stockholders immediately after the transfer, or (B) a transfer of
assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer)
in exchange for or with respect to the Company’s stock, (2) an entity, fifty percent (50%) or more
of the total value or voting power of which is owned, directly or indirectly, by the Company, (3) a
Person, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting
power of all the outstanding stock of the Company, or (4) an entity, at least fifty percent (50%)
of the total value or voting power of which is owned, directly or indirectly, by a Person described
in this subsection (iii)(B)(3). For purposes of this subsection (iii), gross fair market value
means the value of the assets of the Company, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets.



          For purposes of this Section 2(h), persons will be considered to be acting as a group if they
are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of
stock, or similar business transaction with the Company.



          Notwithstanding the foregoing, a transaction shall not be deemed a Change in Control unless
the transaction qualifies as a change in control event within the meaning of Section 409A of the
Code, as it has been and may be amended from time to time, and any proposed or final Treasury
Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated
thereunder from time to time.



          Further and for the avoidance of doubt, a transaction shall not constitute a Change in Control
if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole
purpose is to create a holding company that shall be owned in substantially the same proportions by
the persons who held the Company’s securities immediately before such transaction.



          (i) “Code” means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or Treasury Regulation thereunder will include such section or
regulation, any valid regulation or other official applicable guidance promulgated under such
section, and any comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.



          (j) “Committee” means a committee of Directors or of other individuals satisfying
Applicable Laws appointed by the Board in accordance with Section 4 hereof.



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



          (l) “Company” means Oplink Communications, Inc., a Delaware corporation, or any
successor thereto.



          (m) “Consultant” means any person, including an advisor, engaged by the Company or its
Affiliates to render services to such entity other than as an Employee.



          (n) “Determination Date” means the latest possible date that will not jeopardize the
qualification of an Award granted under the Plan as “performance-based compensation” under Section
162(m) of the Code.



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



          (p) “Disability” means total and permanent disability as defined in Section 22(e)(3)
of the Code, provided that in the case of Awards other than Incentive Stock Options, the
Administrator in its discretion may determine whether a permanent and total disability exists in
accordance with uniform and non-discriminatory standards adopted by the Administrator from time to
time.



          (q) “Employee” means any person, including Officers and Directors, employed by the
Company or its Affiliates. Neither service as a Director nor payment of a director’s fee by the
Company will be sufficient to constitute “employment” by the Company.



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



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



               (i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq Global Market, the Nasdaq Global Select Market or
the Nasdaq Capital Market, its Fair Market Value shall be the closing sales price for such stock
(or, if no closing sales price was reported on that date, as applicable, on the last trading date
such closing sales price is reported) as quoted on such exchange or system on the day of
determination, as reported in The Wall Street Journal or such other source as the Administrator
deems reliable;



               (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked
prices for the Common Stock on the day of determination (or, if no bids and asks were reported on
that date, as applicable, on the last trading date such bids and asks are reported); or



               (iii) In the absence of an established market for the Common Stock, the Fair Market Value will
be determined in good faith by the Administrator.



          (t) “Fiscal Year” means the fiscal year of the Company.



          (u) “Incentive Stock Option” means an Option that by its terms qualifies and is
otherwise intended to qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.



          (v) “Nonstatutory Stock Option” means an Option that by its terms does not qualify or
is not intended to qualify as an Incentive Stock Option.



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



          (x) “Option” means a stock option granted pursuant to the Plan.



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



          (z) “Participant” means the holder of an outstanding Award.



          (aa) “Performance Goals” will have the meaning set forth in Section 11 of the Plan.



          (bb) “Performance Period” means any Fiscal Year of the Company or such longer or
shorter period as determined by the Administrator in its sole discretion.



          (cc) “Performance Share” means an Award denominated in Shares which may be earned in
whole or in part upon attainment of performance goals or other vesting criteria as the
Administrator may determine pursuant to Section 10.



          (dd) “Performance Unit” means an Award which may be earned in whole or in part upon
attainment of performance goals or other vesting criteria as the Administrator may determine and
which may be settled for cash, Shares or other securities or a combination of the foregoing
pursuant to Section 10.



          (ee) “Period of Restriction” means the period during which the transfer of Shares of
Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial
risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of
target levels of performance, or the occurrence of other events as determined by the Administrator.



          (ff) “Plan” means this 2009 Equity Incentive Plan.



          (gg) “Restricted Stock” means Shares issued pursuant to a Restricted Stock award under
Section 8 of the Plan, or issued pursuant to the early exercise of an Option.



          (hh) “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to
the Fair Market Value of one Share, granted pursuant to Section 9. Each Restricted Stock Unit
represents an unfunded and unsecured obligation of the Company.



          (ii) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3,
as in effect when discretion is being exercised with respect to the Plan.



          (jj) “Section 16(b)” means Section 16(b) of the Exchange Act.



          (kk) “Service Provider” means an Employee, Director or Consultant.



          (ll) “Share” means a share of the Common Stock, as adjusted in accordance with Section
15 of the Plan.



          (mm) “Stock Appreciation Right” means an Award, granted alone or in connection with an
Option, that pursuant to Section 7 is designated as a Stock Appreciation Right.



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



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     3. Stock Subject to the Plan.



          (a) Subject to the provisions of Section 15 of the Plan, the maximum aggregate number of
Shares that may be issued under the Plan is 2,500,000 Shares plus any Shares subject to stock
options or similar awards granted under 2000 Equity Incentive Plan (the “2000 Plan”) that
expire or otherwise terminate without having been exercised in full and Shares issued pursuant to
awards granted under the 2000 Plan that are forfeited to or repurchased by the Company (up to a
maximum of 3,795,130 additional Shares from expired, terminated, forfeited or repurchased awards
granted under the 2000 Plan). The Shares may be authorized, but unissued, or reacquired Common
Stock.



          (b) Full Value Awards. Any Shares subject to Awards of Restricted Stock, Restricted
Stock Units, Performance Units, and Performance Shares will be counted against the numerical limits
of this Section 3 as 1.3 Shares for every one Share subject thereto. Further, if Shares acquired
pursuant to any such Award are forfeited or repurchased by the Company and would otherwise return
to the Plan pursuant to Section 3(c), 1.3 times the number of Shares so forfeited or repurchased
will return to the Plan and will again become available for issuance.



          (c) Lapsed Awards. If an Award expires or becomes unexercisable without having been
exercised in full or, with respect to Restricted Stock, Restricted Stock Units, Performance Units
or Performance Shares, is forfeited to or repurchased by the Company due to failure to vest, the
unpurchased Shares (or for Awards other than Options or Stock Appreciation Rights the forfeited,
repurchased, or unissued Shares) which were subject thereto will become available for future grant
or sale under the Plan (unless the Plan has terminated). Upon the exercise of a Stock Appreciation
Right settled in Shares, the gross number of Shares covered by the portion of the Award so
exercised will cease to be available under the Plan. Shares that have actually been issued under
the Plan under any Award will not be returned to the Plan and will not become available for future
distribution under the Plan; provided, however, that if Shares issued pursuant to Awards of
Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units are repurchased
by the Company or are forfeited to the Company due to failure to vest, such Shares will become
available for future grant under the Plan. Shares used to pay the exercise or purchase price of an
Award and/or to satisfy the tax withholding obligations related to an Award will not become
available for future grant or sale under the Plan. To the extent an Award under the Plan is paid
out in cash rather than Shares, such cash payment 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 15, the maximum number of Shares that may be issued upon the exercise of
Incentive Stock Options will equal the aggregate Share number stated in Section 3(a), plus, to the
extent allowable under Section 422 of the Code and the Treasury Regulations promulgated thereunder,
any Shares that become available for issuance under the Plan under this Section 3(c).



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



     4. Administration of the Plan.



          (a) Procedure.



               (i) Multiple Administrative Bodies. Different Committees with respect to different
groups of Service Providers may administer the Plan.



               (ii) Section 162(m). To the extent that the Administrator determines it to be
desirable to qualify Awards granted hereunder as “performance-based compensation” within the
meaning of



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Section 162(m) of the Code, the Plan will be administered by a Committee of two (2) or more
“outside directors” within the meaning of Section 162(m) of the Code.



               (iii) Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt
under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the
requirements for exemption under Rule 16b-3.



               (iv) Other Administration. Other than as provided above, the Plan will be
administered by (A) the Board or (B) a Committee, which committee will be constituted to satisfy
Applicable Laws.



          (b) Powers of the Administrator. Subject to the provisions of the Plan, and in the
case of a Committee, subject to the specific duties delegated by the Board to such Committee, the
Administrator 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 any
Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise
price, 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 limitation
regarding any Award or the Shares relating thereto, based in each case on such factors as the
Administrator will determine;



               (vi) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;



               (vii) to prescribe, amend and rescind rules and regulations relating to the Plan, including
rules and regulations relating to sub-plans established for the purpose of satisfying applicable
foreign laws or for qualifying for favorable tax treatment under applicable foreign laws;



               (viii) to modify or amend each Award (subject to Section 20(c) of the Plan), including but not
limited to the discretionary authority to extend the post-termination exercisability period of
Awards and to extend the maximum term of an Option (subject to Section 6(e) regarding Incentive
Stock Options);



               (ix) to allow Participants to satisfy withholding tax obligations in such manner as prescribed
in Section 16;



               (x) to authorize any person to execute on behalf of the Company any instrument required to
effect the grant of an Award previously granted by the Administrator;



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               (xi) to allow a Participant to defer the receipt of the payment of cash or the delivery of
Shares that would otherwise be due to such Participant under an Award pursuant to such procedures
as the Administrator may determine; and



               (xii) to make all other determinations deemed necessary or advisable for administering the
Plan.



          (c) Prohibition Against Repricing. Subject to adjustments made pursuant to Section 15
and notwithstanding anything to the contrary in the Plan, in no event shall the Administrator have
the right to amend the terms of any Award to reduce the exercise price of such outstanding Award or
cancel an outstanding Award in exchange for cash or other Awards with an exercise price that is
less than the exercise price of the original Award without stockholder approval.



          (d) Effect of Administrator’s Decision. The Administrator’s decisions, determinations
and interpretations will be final and binding on all Participants and any other holders of Awards.



          (e) No Liability. Under no circumstances shall the Company, its Affiliates, the
Administrator, or the Board incur liability for any indirect, incidental, consequential or special
damages (including lost profits) of any form incurred by any person, whether or not foreseeable and
regardless of the form of the act in which such a claim may be brought, with respect to the Plan or
the Company’s, its Affiliates’, the Administrator’s or the Board’s roles in connection with the
Plan.



     5. Eligibility. Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units,
Stock Appreciation Rights, Performance Units, and Performance Shares may be granted to Service
Providers. Incentive Stock Options may be granted only to employees of the Company or any Parent
or Subsidiary of the Company.



     6. Stock Options.



          (a) Grant of Stock Options. Subject to the terms and conditions of the Plan, an
Option may be granted to Service Providers at any time and from time to time as will be determined
by the Administrator, in its sole discretion. Each Option will be designated in the Award
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares
with respect to which Incentive Stock Options are exercisable for the first time by the Participant
during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one
hundred thousand U.S. dollars ($100,000), such Options will be treated as Nonstatutory Stock
Options. For purposes of this Section 6(a), Incentive Stock Options will be taken into account in
the order in which they were granted. The Fair Market Value of the Shares will be determined as of
the time the Option with respect to such Shares is granted.



          (b) Number of Shares. The Administrator will have complete discretion to determine
the number of Shares subject to an Option granted to any Participant, provided that during any
Fiscal Year, no Participant will be granted Options covering more than 1,000,000 Shares. The
foregoing limitation will be adjusted proportionately in connection with any change in the
Company’s capitalization as described in Section 15.



          (c) Exercise Price and Other Terms. The Administrator, subject to the provisions of
the Plan, will have complete discretion to determine the terms and conditions of Options granted
under the Plan, provided, however, that the exercise price will not be less than one hundred
percent (100%) of the Fair Market Value of a Share on the date of grant. In addition, in the case
of an Incentive Stock Option granted to an employee of the Company or any Parent or Subsidiary of
the Company who, at the time the Incentive



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Stock 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, the per Share exercise
price will be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the
date of grant. Notwithstanding the foregoing provisions of this Section 6(c), Options may be
granted with a per Share exercise price of less than one hundred percent (100%) of the Fair Market
Value per Share on the date of grant pursuant to a transaction described in, and in a manner
consistent with, Section 424(a) of the Code and the Treasury Regulations thereunder.



          (d) Option Agreement.



               (i) Terms and Conditions. Each Option grant will be evidenced by an Award Agreement
that will specify the exercise price, the term of the Option, the acceptable forms of consideration
for exercise (which may include any form of consideration permitted by Section 6(d)(ii), the
conditions of exercise, and such other terms and conditions as the Administrator, in its sole
discretion, will determine.



               (ii) Form of Consideration. The Administrator will determine the acceptable form(s)
of consideration for exercising an Option, including the method of payment, to the extent permitted
by Applicable Laws. In the case of an Incentive Stock Option, the Administrator will determine the
acceptable form of consideration at the time of grant. Such consideration to the extent permitted
by Applicable Laws may include, but is not limited to:



                    (1) cash;



                    (2) check;



                    (3) other Shares which have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said Option will be exercised and provided that
accepting such Shares, in the sole discretion of the Administrator, will not result in any adverse
accounting consequences to the Company;



                    (4) by net exercise;



                    (5) consideration received by the Company under a cashless exercise program implemented by the
Company in connection with the Plan;



                    (6) a reduction in the amount of any Company liability to the Participant, including any
liability attributable to the Participant’s participation in any Company-sponsored deferred
compensation program or arrangement;



                    (7) such other consideration and method of payment for the issuance of Shares to the extent
permitted by Applicable Laws; or



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



          (e) Term of Option. An Option granted under the Plan will expire upon the date
determined by the Administrator, in its sole discretion, and set forth in the Award Agreement;
provided, however, that the term will be no more than seven (7) years from the date of grant
thereof. In the case of an Incentive Stock Option granted to a Participant who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term
of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as
may be provided in the Award Agreement.



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          (f) Exercise of Option.



               (i) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder
will be exercisable according to the terms of the Plan and at such times and under such conditions
as determined by the Administrator and set forth in the Award Agreement. An Option may not be
exercised for a fraction of a Share.



                    An Option will be deemed exercised when the Company receives: (i) notice of exercise (in such
form as the Administrator specifies from time to time) from the person entitled to exercise the
Option, and (ii) full payment for the Shares with respect to which the Option is exercised
(together with applicable tax withholdings). Full payment may consist of any consideration and
method of payment authorized by the Administrator and permitted by the Award Agreement and the
Plan. 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 the
Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends or any other
rights as a stockholder will exist with respect to the Shares subject to an Option, notwithstanding
the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly
after the Option is exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided in Section 15 of the
Plan.




     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 which
the Option is exercised.



               (ii) Termination of Relationship as a Service Provider. If a Participant ceases to be
a Service Provider, other than upon the Participant’s termination as the result of the
Participant’s death or Disability, the Participant may exercise his or her Option within such
period of time as is specified in the Award Agreement to the extent that the Option is vested on
the date of termination (but in no event later than the expiration of the term of such Option as
set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the
Option will remain exercisable for three (3) months following the Participant’s termination.
Unless otherwise provided by the Administrator, if on the date of termination the Participant is
not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
will revert to the Plan. If after termination the Participant does not exercise his or her Option
within the time specified by the Administrator, the Option will terminate, and the Shares covered
by such Option will revert to the Plan.



               (iii) Disability of Participant. If a Participant ceases to be a Service Provider as
a result of the Participant’s Disability, the Participant may exercise his or her Option within
such period of time as is specified in the Award Agreement to the extent the Option is vested on
the date of termination (but in no event later than the expiration of the term of such Option as
set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the
Option will remain exercisable for twelve (12) months following the Participant’s termination.
Unless otherwise provided by the Administrator, if on the date of termination the Participant is
not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
will revert to the Plan. If after termination the Participant does not exercise his or her Option
within the time specified herein, the Option will terminate, and the Shares covered by such Option
will revert to the Plan.



               (iv) Death of Participant. If a Participant dies while a Service Provider, the Option
may be exercised following the Participant’s death within such period of time as is specified in
the Award Agreement to the extent that the Option is vested on the date of death (but in no event
may the Option be exercised later than the expiration of the term of such Option as set forth in
the Award Agreement), by the



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Participant’s designated beneficiary, provided such beneficiary has been designated prior to
Participant’s death in a form acceptable to the Administrator. If no such beneficiary has been
designated by the Participant, then such Option may be exercised by the personal representative of
the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the
Participant’s will or in accordance with the laws of descent and distribution. In the absence of a
specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months
following Participant’s death. Unless otherwise provided by the Administrator, if at the time of
death Participant is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option will immediately revert to the Plan. If the Option is not so exercised
within the time specified herein, the Option will terminate, and the Shares covered by such Option
will revert to the Plan.



               (v) Other Termination. A Participant’s Award Agreement also may provide that if the
exercise of the Option following the termination of Participant’s status as a Service Provider
(other than upon the Participant’s death or Disability) would result in liability under Section
16(b), then the Option will terminate on the earlier of (A) the expiration of the term of the
Option set forth in the Award Agreement, or (B) the tenth (10th) day after the last date on which
such exercise would result in such liability under Section 16(b). Finally, a Participant’s Award
Agreement may also provide that if the exercise of the Option following the termination of the
Participant’s status as a Service Provider (other than upon the Participant’s death or Disability)
would be prohibited at any time solely because the issuance of Shares would violate the
registration requirements under the Securities Act, then the Option will terminate on the earlier
of (A) the expiration of the term of the Option, or (B) the expiration of a period of three (3)
months after the termination of the Participant’s status as a Service Provider during which the
exercise of the Option would not be in violation of such registration requirements.



     7. Stock Appreciation Rights.



          (a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of the
Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to
time as will be determined by the Administrator, in its sole discretion.



          (b) Number of Shares. The Administrator will have complete discretion to determine
the number of Stock Appreciation Rights granted to any Participant, provided that during any Fiscal
Year, no Participant will be granted Stock Appreciation Rights covering more than 1,000,000 Shares.
The foregoing limitation will be adjusted proportionately in connection with any change in the
Company’s capitalization as described in Section 15.



          (c) Exercise Price and Other Terms. The Administrator, subject to the provisions of
the Plan, will have complete discretion to determine the terms and conditions of Stock Appreciation
Rights granted under the Plan, provided, however, that the exercise price will not be less than one
hundred percent (100%) of the Fair Market Value of a Share on the date of grant. Notwithstanding
the foregoing provisions of this Section 7(c), Stock Appreciation Rights may be granted with a per
Share exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on
the date of grant pursuant to a transaction described in, and in a manner consistent with, Section
424(a) of the Code and the Treasury Regulations thereunder.



          (d) Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be
evidenced by an Award Agreement that will specify the exercise price, the term of the Stock
Appreciation Right, the acceptable forms of consideration for exercise (which may include any form
of consideration permitted by Section 6(d)(ii), the conditions of exercise, and such other terms
and conditions as the Administrator, in its sole discretion, will determine.



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          (e) Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under
the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set
forth in the Award Agreement; provided, however, that the term will be no more than seven (7) years
from the date of grant thereof. Notwithstanding the foregoing, the rules of Section 6(f) relating
to exercise also will apply to Stock Appreciation Rights.



          (f) Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation
Right, a Participant will be entitled to receive payment from the Company in an amount determined
by multiplying:



               (i) The difference between the Fair Market Value of a Share on the date of exercise over the
exercise price; times



               (ii) The number of Shares with respect to which the Stock Appreciation Right is exercised.



     At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may
be 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, the
Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service
Providers in such amounts as the Administrator, in its sole discretion, will determine.



          (b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by
an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and
such 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 of
Restricted Stock until the restrictions on such Shares have lapsed. Notwithstanding the foregoing
sentence, for restricted stock intended to qualify as “performance-based compensation” within the
meaning of Section 162(m) of the Code, during any Fiscal Year no Participant will receive more than
an aggregate of 300,000 Shares of Restricted Stock. The foregoing limitation will be adjusted
proportionately in connection with any change in the Company’s capitalization as described in
Section 15.



          (c) Transferability. Except as provided in this Section 8, Shares of Restricted Stock
may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction.



          (d) Other Restrictions. The Administrator, in its sole discretion, may impose such
other 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, Shares
of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released
from escrow as soon as practicable after the last day of the Period of Restriction or at such other
time as the Administrator may determine. The Administrator, in its sole discretion, may reduce or
waive any restrictions for such Award and may accelerate the time at which any restrictions will
lapse or be removed.



          (f) Voting Rights. During the Period of Restriction, Service Providers holding Shares
of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares,
unless the Administrator determines otherwise.



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          (g) Dividends and Other Distributions. During the Period of Restriction, Service
Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other
distributions paid with respect to such Shares, unless the Administrator provides otherwise. If
any such dividends or distributions are paid in Shares, the Shares will be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect
to which they were paid.



          (h) Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company
and again will become available for grant under the Plan.



          (i) Section 162(m) Performance Restrictions. For purposes of qualifying grants of
Restricted Stock as “performance-based compensation” under Section 162(m) of the Code, the
Administrator, in its discretion, may set restrictions based upon the achievement of Performance
Goals. The Performance Goals will be set by the Administrator on or before the Determination Date.
In granting Restricted Stock which is intended to qualify under Section 162(m) of the Code, the
Administrator will follow any procedures determined by it from time to time to be necessary or
appropriate to ensure qualification of the Award under Section 162(m) of the Code (e.g., in
determining the Performance Goals).



     9. Restricted Stock Units.



          (a) Grant. Restricted Stock Units may be granted at any time and from time to time as
determined by the Administrator. After the Administrator determines that it will grant Restricted
Stock Units under the Plan, 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.
Notwithstanding anything to the contrary in this subsection (a), for Restricted Stock Units
intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the
Code, during any Fiscal Year of the Company, no Participant will receive more than an aggregate of
300,000 Restricted Stock Units. The foregoing limitation will be adjusted proportionately in
connection with any change in the Company’s capitalization as described in Section 15.



          (b) Vesting Criteria and Other Terms. The Administrator will set vesting criteria in
its discretion, which, depending on the extent to which the criteria are met, will determine the
number of Restricted Stock Units that will be paid out to the Participant. The Administrator may
set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals
(including, but not limited to, continued employment), or any other basis determined by the
Administrator in its discretion.



          (c) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the
Participant 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, the
Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to
receive a payout and may accelerate the time at which any restrictions will lapse or be removed.



          (d) Form and Timing of Payment. Payment of earned Restricted Stock Units will be made
as soon as practicable after the date(s) set forth in the Award Agreement or as otherwise provided
in the applicable Award Agreement or as required by Applicable Laws. The Administrator, in its
sole discretion, may pay earned Restricted Stock Units in cash, Shares, or a combination thereof.
Shares represented by Restricted Stock Units that are fully paid in cash again will not reduce the
number of Shares available for grant under the Plan.



          (e) Cancellation. On the date set forth in the Award Agreement, all unearned
Restricted Stock Units will be forfeited to the Company.



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          (f) Section 162(m) Performance Restrictions. For purposes of qualifying grants of
Restricted Stock Units as “performance-based compensation” under Section 162(m) of the Code, the
Administrator, in its discretion, may set restrictions based upon the achievement of Performance
Goals. The Performance Goals will be set by the Administrator on or before the Determination Date.
In granting Restricted Stock Units which are intended to qualify under Section 162(m) of the Code,
the Administrator will follow any procedures determined by it from time to time to be necessary or
appropriate to ensure qualification of the Award under Section 162(m) of the Code (e.g., in
determining the Performance Goals).



     10. Performance Units and Performance Shares.



          (a) Grant of Performance Units/Shares. Performance Units and Performance Shares may
be granted to Service Providers at any time and from time to time, as will be determined by the
Administrator, in its sole discretion. The Administrator will have complete discretion in
determining the number of Performance Units and Performance Shares granted to each Participant
provided that during any Fiscal Year, for Performance Units or Performance Shares intended to
qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, (i)
no Participant will receive Performance Units having an initial value greater than $3,000,000, and
(ii) no Participant will receive more than 300,000 Performance Shares. The foregoing limitations
will be adjusted proportionately in connection with any change in the Company’s capitalization as
described in Section 15.



          (b) Value of Performance Units/Shares. Each Performance Unit will have an initial
value that is established by the Administrator on or before the date of grant. Each Performance
Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.



          (c) Performance Objectives and Other Terms. The Administrator will set performance
objectives or other vesting provisions (including, without limitation, continued status as a
Service Provider) in its discretion which, depending on the extent to which they are met, will
determine the number or value of Performance Units/Shares that will be paid out to the Service
Providers. The time period during which the performance objectives or other vesting provisions
must be met will be called the “Performance Period.” Each Award of Performance Units/Shares will
be evidenced by an Award Agreement that will specify the Performance Period, and such other terms
and conditions as the Administrator, in its sole discretion, will determine. The Administrator may
set performance objectives based upon the achievement of Company-wide, divisional, or individual
goals, applicable federal or state securities laws, or any other basis determined by the
Administrator in its discretion.



          (d) Earning of Performance Units/Shares. After the applicable Performance Period has
ended, the holder of Performance Units/Shares will be entitled to receive a payout of the number of
Performance Units/Shares earned by the Participant over the Performance Period, to be determined as
a function of the extent to which the corresponding performance objectives or other vesting
provisions have been achieved. After the grant of a Performance Unit/Share, the Administrator, in
its sole discretion, may reduce or waive any performance objectives or other vesting provisions for
such Performance Unit/Share and may accelerate the time at which any restrictions will lapse or be
removed.



          (e) Form and Timing of Payment of Performance Units/Shares. Payment of earned
Performance Units/Shares will be made as soon as practicable after the expiration of the applicable
Performance Period, or as otherwise provided in the applicable Award Agreement or as required by
Applicable Laws. The Administrator, in its sole discretion, may pay earned Performance
Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the
value of the earned Performance Units/Shares at the close of the applicable Performance Period) or
in a combination thereof.




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          (f) Cancellation of Performance Units/Shares. On the date set forth in the Award
Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and
again will be available for grant under the Plan.




          (g) Section 162(m) Performance Restrictions. For purposes of qualifying grants of
Performance Units/Shares as “performance-based compensation” under Section 162(m) of the Code, the
Administrator, in its discretion, may set restrictions based upon the achievement of Performance
Goals. The Performance Goals will be set by the Administrator on or before the Determination Date.
In granting Performance Units/Shares which are intended to qualify under Section 162(m) of the
Code, the Administrator will follow any procedures determined by it from time to time to be
necessary or appropriate to ensure qualification of the Award under Section 162(m) of the Code
(e.g., in determining the Performance Goals).




     11. Performance-Based Compensation Under Code Section 162(m).



          (a) General. If the Administrator, in its discretion, decides to grant an Award
intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the
provisions of this Section 11 will control over any contrary provision in the Plan; provided,
however, that the Administrator may in its discretion grant Awards that are not intended to qualify
as “performance-based compensation” under Section 162(m) of the Code to such Participants that are
based on Performance Goals or other specific criteria or goals but that do not satisfy the
requirements of this Section 11.




          (b) Performance Goals. The granting and/or vesting of Awards of Restricted Stock,
Restricted Stock Units, Performance Shares and Performance Units and other incentives under the
Plan may be made subject to the attainment of performance goals relating to one or more business
criteria within the meaning of Section 162(m) of the Code and may provide for a targeted level or
levels of achievement (“Performance Goals”) including: attainment of research and
development milestones; business divestitures and acquisitions; cash flow; cash position; contract
awards or backlog; customer renewals; customer retention rates from an acquired company, business
unit or division; earnings (which may include earnings before interest and taxes, earnings before
taxes and net earnings); earnings per Share; expenses; gross margin; growth in stockholder value
relative to the moving average of the S&P 500 Index or another index; market share; net income; net
profit; net sales; new product development; new product invention or innovation; operating cash
flow; operating expenses; operating income; operating margin; overhead or other expense reduction;
product defect measures; product release timelines; productivity; profit; return on assets; return
on capital; return on equity; return on investment; return on sales; revenue; revenue growth; sales
results; sales growth; stock price; time to market; total stockholder return; or working capital.
Any criteria used may be (A) measured in absolute terms, (B) measured in terms of growth, (C)
compared to another company or companies, (D) measured against the market as a whole and/or
according to applicable market indices, (E) measured against the performance of the Company as a
whole or a segment of the Company and/or (F) measured on a pre-tax or post-tax basis (if
applicable). Further, any Performance Goals may be used to measure the performance of the Company
as a whole or a business unit or other segment of the Company, or one or more product lines or
specific markets and may be measured relative to a peer group or index. The Performance Goals may
differ from Participant to Participant and from Award to Award. Prior to the Determination Date,
the Administrator will determine whether any significant element(s) will be included in or excluded
from the calculation of any Performance Goal with respect to any Participant. In all other
respects, Performance Goals will be calculated in accordance with the Company’s financial
statements, generally accepted accounting principles, or under a methodology established by the
Administrator prior to the issuance of an Award and which is consistently applied with respect to a
Performance Goal in the relevant Performance Period. The Administrator will appropriately adjust
any evaluation of performance under a Performance Goal to exclude (i) any extraordinary
non-recurring items as described in Accounting
Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial
conditions and



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results of operations appearing in the Company’s annual report to stockholders for
the applicable year, or (ii) the effect of any changes in accounting principles affecting the
Company’s or a business units’ reported results. In addition, the Administrator will adjust any
performance criteria, Performance Goal or other feature of an Award that relates to or is wholly or
partially based on the number of, or the value of, any stock of the Company, to reflect any stock
dividend or split, repurchase, recapitalization, combination, or exchange of shares or other
similar changes in such stock.




          (c) Procedures. To the extent necessary to comply with the performance-based
compensation provisions of Section 162(m) of the Code, with respect to any Award granted subject to
Performance Goals and intended to qualify as “performance-based compensation” under Section 162(m)
of the Code, within the first twenty-five percent (25%) of the Performance Period, but in no event
more than ninety (90) days following the commencement of any Performance Period (or such other time
as may be required or permitted by Section 162(m) of the Code), the Administrator will, in writing,
(i) designate one or more Participants to whom an Award will be made, (ii) select the Performance
Goals applicable to the Performance Period, (iii) establish the Performance Goals, and amounts of
such Awards, as applicable, which may be earned for such Performance Period, and (iv) specify the
relationship between Performance Goals and the amounts of such Awards, as applicable, to be earned
by each Participant for such Performance Period.




          (d) Additional Limitations. Notwithstanding any other provision of the Plan, any
Award which is granted to a Participant and is intended to constitute qualified performance-based
compensation under Section 162(m) of the Code will be subject to any additional limitations set
forth in the Code (including any amendment to Section 162(m)) or any regulations and ruling issued
thereunder that are requirements for qualification as qualified performance-based compensation as
described in Section 162(m) of the Code, and the Plan will be deemed amended to the extent
necessary to conform to such requirements.




          (e) Determination of Amounts Earned. Following the completion of each Performance
Period, the Administrator will certify in writing whether the applicable Performance Goals have
been achieved for such Performance Period. A Participant will be eligible to receive payment
pursuant to an Award intended to qualify as “performance-based compensation” under Section 162(m)
of the Code for a Performance Period only if the Performance Goals for such period are achieved.
In determining the amounts earned by a Participant pursuant to an Award intended to qualified as
“performance-based compensation” under Section 162(m) of the Code, the Committee will have the
right to (a) reduce or eliminate (but not to increase) the amount payable at a given level of
performance to take into account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the Performance Period, (b) determine what
actual Award, if any, will be paid in the event of a termination of employment as the result of a
Participant’s death or disability or upon a Change in Control or in the event of a termination of
employment following a Change in Control prior to the end of the Performance Period, and (c)
determine what actual Award, if any, will be paid in the event of a termination of employment other
than as the result of a Participant’s death or disability prior to a Change of Control and prior to
the end of the Performance Period to the extent an actual Award would have otherwise been achieved
had the Participant remained employed through the end of the Performance Period. A Participant
will be eligible to receive payment pursuant to an Award intended to qualify as “performance-based
compensation” under Section 162(m) of the Code for a Performance Period only if the Performance
Goals for such period are achieved.




     12. Compliance With Code Section 409A. Awards will be designed and operated in such a
manner that they are either exempt from the application of, or comply with, the requirements of
Code Section 409A such that the grant, payment, settlement or deferral will not be subject to the
additional tax or interest applicable under Code Section 409A, except as otherwise determined in
the sole discretion of the Administrator. The Plan and each Award Agreement under the Plan is
intended to meet the requirements of
Code Section 409A and will be construed and interpreted in accordance with such intent, except
as otherwise



-15-









 







determined in the sole discretion of the Administrator. To the extent that an Award
or payment, or the 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, such that the grant, payment, settlement or deferral will not be subject to the additional
tax or interest applicable under Code Section 409A.



     13. Leaves of Absence/Transfer Between Locations. Unless the Administrator provides
otherwise and except as required by Applicable Laws, vesting of Awards granted hereunder will be
suspended during any unpaid leave of absence. A Participant will not cease to be an Employee in
the case of (i) any leave of absence approved 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 exceed three (3) months, unless reemployment upon expiration of such
leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, then six (6) months following the first
(1st) day of such leave, any Incentive Stock Option held by the Participant will cease
to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory
Stock Option.



     14. Transferability.



          (a) Non-Transferability of Awards. Unless determined otherwise by the Administrator,
an Award 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 Participant, only by the Participant.




          (b) Prohibition Against an Award Transfer Program. Notwithstanding anything to the
contrary in the Plan, in no event will the Administrator have the right to determine and implement
the terms and conditions of any Award Transfer Program without stockholder approval.




     15. Adjustments; Dissolution or Liquidation; Merger or Change in Control.



          (a) Adjustments. In the event that any dividend or other distribution (whether in the
form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or
exchange of Shares or other securities of the Company, or other change in the corporate structure
of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or
enlargement 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, the numerical Share limits set forth
in Sections 3, 6, 7, 8, 9 and 10 of the Plan.




          (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator will notify each Participant as soon as practicable
prior to the effective date of such proposed transaction. To the extent it has not been previously
exercised, an Award will terminate immediately prior to the consummation of such proposed action.




          (c) Change in Control. In the event of a merger or Change in Control, each
outstanding 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 Awards
will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with
appropriate adjustments as to the number and kind of shares and prices; (ii) upon written notice to
a Participant, that the Participant’s Awards will terminate upon or immediately prior to the
consummation of such merger or Change in Control; (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 upon consummation of such merger or Change
in




-16-









 







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 to the amount that would have been
attained upon the exercise of such Award or realization of the Participant’s rights as of the date
of the occurrence of the transaction (and, for the avoidance of doubt, if as of the date of the
occurrence of the transaction the Administrator determines in good faith that no amount would have
been attained upon the exercise of such Award or realization of the Participant’s rights, then such
Award may be terminated by the Company without payment), or (B) the replacement of such Award with
other rights or property selected by the Administrator in its sole discretion; or (v) any
combination of the foregoing. In taking any of the actions permitted under this subsection 15(c),
the Administrator will not be obligated to treat all Awards, all Awards held by 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 (or
portion thereof), the Participant will fully vest in and have the right to exercise all of his or
her outstanding Options and Stock Appreciation Rights that are not assumed or substituted for,
including Shares as to which such Awards would not otherwise be vested or exercisable, all
restrictions on Restricted Stock, Restricted Stock Units, and Performance Shares/Units not assumed
or substituted for will lapse, and, with respect to Awards with performance-based vesting not
assumed or substituted for, all performance goals or other vesting criteria will be deemed achieved
at one hundred percent (100%) of target levels and all other terms and conditions met. In
addition, if an Option or Stock Appreciation Right is not assumed or substituted for in the event
of a Change in Control, the Administrator will notify the Participant in writing or electronically
that the Option or Stock Appreciation Right will be fully vested and exercisable for a period of
time determined by the Administrator in its sole discretion, and the Option or Stock Appreciation
Right will terminate upon the expiration of such period.




          For the purposes of this subsection (c), an Award will be considered assumed if, following the
Change in Control, the Award confers the right to purchase or receive, for each Share subject to
the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or
other securities or property) or, in the case of a Stock Appreciation Right upon the exercise of
which the Administrator determines to pay cash or a Restricted Stock Unit, Performance Share or
Performance Unit which the Administrator can determine to pay in cash, the fair market value of the
consideration received in the merger or Change in Control by holders of Common Stock for each Share
held on the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the Change in Control is not
solely common stock of the successor corporation or its Parent, the Administrator may, with the
consent of the successor corporation, provide for the consideration to be received upon the
exercise of an Option or Stock Appreciation Right or upon the payout of a Restricted Stock Unit,
Performance Unit or Performance Share, for each Share subject to such Award (or in the case of an
Award settled in cash, the number of implied shares determined by dividing the value of the Award
by the per share consideration received by holders of Common Stock in the Change in Control), to be
solely common stock of the successor corporation or its Parent equal in fair market value to the
per share consideration received by holders of Common Stock in the Change in Control.




          Notwithstanding anything in this Section 15(c) to the contrary, an Award that vests, is earned
or paid-out upon the satisfaction of one or more Performance Goals will not be considered assumed
if the Company or its successor modifies any of such Performance Goals without the Participant’s
consent; provided, however, a modification to such Performance Goals only to reflect the successor
corporation’s post-Change in Control corporate structure will not be deemed to invalidate an
otherwise valid Award assumption.




          Notwithstanding anything in this Section 15(c) to the contrary, if a payment under an Award
Agreement is subject to Section 409A of the Code and if the change in control definition contained in the




-17-









 







Award Agreement or other agreement related to the Award does not comply with the definition
of “change in control” for purposes of a distribution under Section 409A of the Code, then any
payment of an amount that is otherwise accelerated under this Section will be delayed until the
earliest time that such payment would be permissible under Section 409A of the Code without
triggering any penalties applicable under Section 409A of the Code.




     16. Tax Withholding.



          (a) Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to
an Award (or exercise thereof), the Company will have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy
federal, 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 pursuant
to such procedures as it may specify from time to time, may permit a Participant to satisfy such
tax withholding obligation, in whole or in part by (without limitation) (a) paying cash, (b)
electing to have the Company withhold otherwise deliverable cash or Shares having a Fair Market
Value equal to the amount required to be withheld, (c) delivering to the Company already-owned
Shares having a Fair Market Value equal to the amount required to be withheld, provided the
delivery of such Shares will not result in any adverse accounting consequences as the Administrator
determines in its sole discretion, (d) selling a sufficient number of Shares otherwise deliverable
to the Participant through such means as the Administrator may determine in its sole discretion
(whether through a broker or otherwise) equal to the amount required to be withheld, or (e)
retaining from salary or other amounts payable to the Participant cash having a sufficient value to
satisfy the amount required to be withheld. The amount of the withholding requirement will be
deemed to include any amount which the Administrator agrees may be withheld at the time the
election is made, not to exceed the amount determined by using the maximum federal, state or local
marginal income tax rates applicable to the Participant with respect to the Award on the date that
the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be
withheld or delivered will be determined as of the date that the taxes are required to be withheld.




     17. No Effect on Employment or Service. Neither the Plan nor any Award will confer
upon a Participant any right with respect to continuing the Participant’s relationship as a Service
Provider with the Company, nor will they interfere in any way with the Participant’s right or the
Company’s right to terminate such relationship at any time, with or without cause, to the extent
permitted by Applicable Laws.



     18. Date of Grant. The date of grant of an Award will be, for all purposes, the date
on which the Administrator makes the determination granting such Award, or such other later date as
is determined by the Administrator. Notice of the determination will be provided to each
Participant within a reasonable time after the date of such grant.



     19. Term of Plan. The Plan will become effective upon its approval by the
stockholders of the Company. It will continue in effect for a term of ten (10) years from the date
the Plan was adopted by the Board, unless terminated earlier under Section 20 of the Plan.



     20. Amendment and Termination of the Plan.



          (a) Amendment and Termination. The Administrator may at any time amend, alter,
suspend or terminate the Plan.




-18-









 








          (b) Stockholder Approval. The Company will obtain stockholder approval of any Plan
amendment to the extent necessary and desirable to comply with Applicable Laws.




          (c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan will impair the rights of 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. Termination of the Plan will not affect the Administrator’s ability
to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior
to the date of such termination.




     21. Conditions Upon Issuance of Shares.



          (a) Legal Compliance. Shares will not be issued pursuant to the exercise of an Award
unless the exercise of such Award and the issuance and delivery of such Shares will comply with
Applicable Laws and will be further subject to the approval of counsel for the Company with respect
to such compliance.




          (b) Investment Representations. 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.




     22. Inability to Obtain Authority. 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, will relieve the Company of
any liability in respect of the failure to issue or sell such Shares as to which such requisite
authority will not have been obtained.



     23. Stockholder Approval. The Plan was adopted by the Board on September 23, 2009 and
was approved by the stockholders of the Company, and became effective, on November 4, 2009.



-19-