exv10w1







Exhibit 10.1




RAMBUS INC.




2006 EQUITY INCENTIVE PLAN




     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,
Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units,
Performance Shares and other stock or cash awards as the Administrator may determine.




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



          (a) “Administrator” means the Committees that will be administering the Plan in
accordance with Section 4 of the Plan.




          (b) “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.




          (c) “Award” means, individually or collectively, a grant under the Plan of Options,
Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units, Performance
Shares and other stock or cash awards as the Administrator may determine.




          (d) “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.




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




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




               (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or more of the total
voting power represented by the Company’s then outstanding voting securities; or



 









 





               (ii) The consummation of the sale or disposition by the Company of all or substantially all of
the Company’s assets;



               (iii) A change in the composition of the Board occurring within a two-year period, as a result
of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors”
means directors who either (A) are Directors as of the effective date of the Plan, or (B) are
elected, or nominated for election, to the Board with the affirmative votes of at least a majority
of the Incumbent Directors at the time of such election or nomination (but will not include an
individual whose election or nomination is in connection with an actual or threatened proxy contest
relating to the election of directors to the Company); or



               (iv) The consummation of a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of the Company or such
surviving entity or its parent outstanding immediately after such merger or consolidation.



          (g) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a
section of the Code herein will be a reference to any successor or amended section of the Code.




          (h) “Committee” means a committee of independent, Outside Directors appointed by the
Board in accordance with Section 4 hereof.




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




          (j) “Company” means Rambus Inc., a Delaware corporation, or any successor thereto.




          (k) “Consultant” means any person, including an advisor, engaged by the Company or a
Parent or Subsidiary to render services to such entity.




          (l) “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.




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




          (n) “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.




          (o) “Employee” means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. Neither service as a Director nor




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payment of a director’s fee by the Company will be sufficient to constitute “employment” by the Company.




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




          (q) “Fair Market Value” means, as of any date, the value of Common Stock as the
Administrator may determine in good faith by reference to the price of such stock on any
established stock exchange or a national market system on the day of determination if the Common
Stock is so listed on any established stock exchange or a national market system. If the Common
Stock is not listed on any established stock exchange or a national market system, the value of the
Common Stock as the Administrator may determine in good faith.




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




          (s) “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.




          (t) “Inside Director” means a Director who is an Employee.




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




          (v) “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.




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




          (x) “Outside Director” means a Director who is not an Employee.




          (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 Period” means any Fiscal Year of the Company or such other period as
determined by the Administrator in its sole discretion.




          (bb) “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.




          (cc) “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.





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          (dd) “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.




          (ee) “Plan” means this 2006 Equity Incentive Plan.




          (ff) “Restricted Stock” means Shares issued pursuant to a Restricted Stock award under
Section 7 of the Plan, or issued pursuant to the early exercise of an Option.




          (gg) “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to
the Fair Market Value of one Share, granted pursuant to Section 8. Each Restricted Stock Unit
represents an unfunded and unsecured obligation of the Company.




          (hh) “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.




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




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




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




          (ll) “Stock Appreciation Right” means an Award, granted alone or in connection with an
Option, that pursuant to Section 9 is designated as a Stock Appreciation Right.




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




          (nn) “Successor Corporation” has the meaning given to such term in Section 15(c) of
the Plan.




     3. Stock Subject to the Plan.



          (a) Stock Subject to the Plan. Subject to the provisions of Section 15 of the Plan,
the maximum aggregate number of Shares that may be awarded and sold under the Plan is 14,900,000
Shares. The Shares may be authorized, but unissued, or reacquired Common Stock.




          (b) Full Value Awards. Any Shares subject to Awards granted with an exercise price
less than the Fair Market Value on the date of grant of such Awards will be counted against the
numerical limits of this Section 3 as 1.5 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), 1.5 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,



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Performance Shares
or Performance Units, is forfeited to or repurchased by the Company, the unpurchased Shares (or for
Awards other than Options and Stock Appreciation Rights, the forfeited or repurchased Shares) which
were subject thereto will become available for future grant or sale under the Plan (unless the Plan
has terminated). With respect to Stock Appreciation Rights, all of the Shares covered by the Award
(that is, Shares actually issued pursuant to a Stock Appreciation Right, as well as the Shares that
represent payment of the exercise price) shall
cease to be available under the Plan. However, 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 unvested Shares of Restricted Stock,
Restricted Stock Units, Performance Shares or Performance Units are repurchased by the Company or
are forfeited to the Company, such Shares will become available for future grant under the Plan.
Shares used to pay the tax and exercise price of 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 provided in
Section 15, the maximum number of Shares that may be issued upon the exercise of Incentive Stock
Options shall equal the aggregate Share number stated in Section 3(a), plus, to the extent
allowable under Section 422 of the Code, 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) General Administration; Multiple Administrative Bodies. The Plan will be
administered by a Committee or Committees as determined by the Board, which will be constituted to
satisfy Applicable Laws. Different Committees with respect to different groups of Service
Providers may administer the Plan.



               (ii) Section 162(m). To the extent desirable to qualify Awards granted hereunder as
“performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan will be
administered by a Committee of two 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.



          (b) Powers of the Administrator. Subject to the provisions of the Plan, 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;



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               (iii) to determine the terms and conditions, not inconsistent with the terms of the Plan, of
any Award granted hereunder;



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



               (v) 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;



               (vi) to modify or amend each Award (subject to Section 20(c) of the Plan);



               (vii) 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;



               (viii) 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



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



          (c) 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.




     5. Eligibility. Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units,
Stock Appreciation Rights, Performance Units, Performance Shares and such other cash or stock
awards as the Administrator determines may be granted to Service Providers. Incentive Stock
Options may be granted only to Employees.



     6. Stock Options.



          (a) Limitations. 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 $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 Options granted to any Participant, provided that during any Fiscal
Year, no Participant will be granted Options covering more than 1,000,000 Shares. Notwithstanding
the foregoing limitation, in connection with a Participant’s initial service as an Employee, an
Employee may be granted Options covering up to an additional 1,000,000 Shares.




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          (c) Term of Option. The Administrator will determine the term of each Option in its
sole discretion; provided, however, that the term will be no more than ten (10) years from the date
of grant thereof. Moreover, 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.




          (d) Option Exercise Price and Consideration.




               (i) Exercise Price. The per share exercise price for the Shares to be issued pursuant
to exercise of an Option will be determined by the Administrator, but will be no less than 100% of
the Fair Market Value per Share on the date of grant. In addition, in the case of an Incentive
Stock Option granted to an Employee who, at the time the Incentive 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 110% of the
Fair Market Value per Share on the date of grant. The exercise price for an Option may not be
reduced without the consent of the Company’s stockholders. This will include, without limitation,
a repricing of the Option as well as an Option exchange program whereby the Participant agrees to
cancel an existing Option in exchange for an Option, Stock Appreciation Right or other Award.



               (ii) Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator will fix the period within which the Option may be exercised and will determine any
conditions that must be satisfied before the Option may be exercised.



               (iii) 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.



          (e) 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 specify 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 an applicable withholding taxes). 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.



               (ii) Termination of Relationship as a Service Provider. If a Participant ceases to be
a Service Provider, other than upon 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




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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 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.



     7. 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.
Notwithstanding the foregoing sentence, during any Fiscal Year no Participant will receive more
than an aggregate of 200,000 Shares of Restricted Stock; provided, however, that in




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connection with a Participant’s initial service as an Employee, an Employee may be granted an
aggregate of up to an additional 300,000 Shares of Restricted Stock. Unless the Administrator
determines otherwise, Shares of Restricted Stock will be held by the Company as escrow agent until
the restrictions on such Shares have lapsed.




          (c) Transferability. Except as provided in this Section 7, 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 7, 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. The
Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or
be removed; provided, however, Shares of Restricted Stock will not vest more rapidly than one-third
(1/3rd) of the total number of Shares of Restricted Stock subject to an Award each year
from the date of grant, unless the Administrator determines that the Award is to vest upon the
achievement of performance criteria and the period for measuring such performance will cover at
least twelve (12) months; provided, further, that the Administrator may grant Awards of Restricted
Stock, Restricted Stock Units and Performance Units/Shares covering up to 5% of the total number of
Shares reserved for issuance under the Plan that do not satisfy the forgoing vesting requirements.
Notwithstanding the foregoing sentence, the Administrator, in its sole discretion, may provide at
the time of or following the date of grant for accelerated vesting for an Award of Restricted Stock
(provided, however, that the number of Shares subject or issuable pursuant to Awards of Restricted
Stock, Restricted Stock Units and Performance Units/Shares eligible for such accelerated vesting
shall not exceed 5% of the total number of Shares reserved for issuance under the Plan) or for
accelerated vesting upon or in connection with a Change in Control (including any vesting
acceleration provided for in Section 15(c)) or upon or in connection with a Participant’s
termination of service due to death, Disability or retirement.




          (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.




          (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 otherwise provided in the Award Agreement.
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.




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     8. Restricted Stock Units.



          (a) Grant. Restricted Stock Units may be granted at any time and from time to time as
determined by the Administrator. Each Restricted Stock Unit grant will be evidenced by an Award
Agreement that will specify such other terms and conditions as the Administrator, in its sole
discretion, will determine, including all terms, conditions, and restrictions related to the grant,
the number of Restricted Stock Units and the form of payout, which, subject to Section 8(d), may be
left to the discretion of the Administrator. Notwithstanding the anything to the contrary in this
subsection (a), during any fiscal year of the Company, no Participant will receive more than an
aggregate of 200,000 Restricted Stock Units; provided, however, that in connection with a
Participant’s initial service as an Employee, an Employee may be granted an aggregate of up to an
additional 300,000 Restricted Stock Units.




          (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. Each Award of
Restricted Stock Units will be evidenced by an Award Agreement that will specify the vesting
criteria, and such other terms and conditions as the Administrator, in its sole discretion, will
determine; provided, however, that, an Award of Restricted Stock Units will not vest more rapidly
than one-third (1/3rd) of the total number of Restricted Stock Units subject to an Award
each year from the date of grant, unless the Administrator determines that the Award is to vest
upon the achievement of performance criteria and the period for measuring such performance will
cover at least twelve (12) months; provided, further, that the Administrator may grant Awards of
Restricted Stock, Restricted Stock Units and Performance Units/Shares covering up to 5% of the
total number of Shares reserved for issuance under the Plan that do not satisfy the forgoing
vesting requirements. Notwithstanding the foregoing sentence, the Administrator, in its sole
discretion, may provide at the time of or following the date of grant for accelerated vesting for
an Award of Restricted Stock Units (provided, however, that the number of Shares subject or
issuable pursuant to Awards of Restricted Stock, Restricted Stock Units and Performance
Units/Shares eligible for such accelerated vesting shall not exceed 5% of the total number of
Shares reserved for issuance under the Plan) or for accelerated vesting upon or in connection with
a Change in Control (including any vesting acceleration provided for in Section 15(c)) or upon or
in connection with a Participant’s termination of service due to death, Disability or retirement.




          (c) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the
Participant will be entitled to receive a payout as specified in the Award Agreement.
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.




          (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. 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 be
available for grant under the Plan.




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




     9. 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.
Notwithstanding the foregoing limitation, in connection with a Participant’s initial service as an
Employee, an Employee may be granted Stock Appreciation Rights covering up to an additional
1,000,000 Shares.




          (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 be not less than one
hundred percent (100%) of the Fair Market Value of a Share on the date of grant. The exercise
price for a Stock Appreciation Right may not be reduced without the consent of the Company’s
stockholders. This will include, without limitation, a repricing of the Stock Appreciation Right
as well as an exchange program whereby the Participant agrees to cancel an existing Stock
Appreciation Right in exchange for an Option, Stock Appreciation Right or other Award.




          (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 conditions of exercise, and such other terms and conditions as the
Administrator, in its sole discretion, will determine.




          (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 ten (10) years
from the date of grant thereof. Notwithstanding the foregoing, the rules of Section 6(e) 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.




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     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/Shares granted to each Participant provided that during
any Fiscal Year, (i) no Participant will receive Performance Units having an initial value greater
than $2,000,000, and (ii) no Participant will receive more than 200,000 Performance Shares.
Notwithstanding the foregoing limitation, in connection with a Participant’s initial service as an
Employee, an Employee may be granted up to an additional 300,000 Performance Shares.




          (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 Participant.
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; provided, however, that Performance Units/Shares will not vest more
rapidly than one-third (1/3rd) of the total number of Performance Units/Shares subject
to an Award each year from the date of grant, unless the Administrator determines that the Award is
to vest upon the achievement of performance criteria and the period for measuring such performance
will cover at least twelve (12) months; provided, further, that the Administrator may grant Awards
of Restricted Stock, Restricted Stock Units and Performance Units/Shares covering up to 5% of the
total number of Shares reserved for issuance under the Plan that do not satisfy the forgoing
vesting requirements. Notwithstanding the foregoing sentence, the Administrator, in its sole
discretion, may provide at the time of or following the date of grant for accelerated vesting for
an Award of Performance Units/Shares (provided, however, that the number of Shares subject or
issuable pursuant to Awards of Restricted Stock, Restricted Stock Units and Performance
Units/Shares eligible for such accelerated vesting shall not exceed 5% of the total number of
Shares reserved for issuance under the Plan) or for accelerated vesting upon or in connection with
a Change in Control (including any vesting acceleration provided for in Section 15(c)) or upon or
in connection with a Participant’s termination of service due to death, Disability or retirement.




          (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.




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          (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. 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.




          (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.




     11. 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 cash flow; cash position; earnings
before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings
per Share; economic profit; economic value added; equity or stockholder’s equity; market share; net
income; net profit; net sales; operating earnings; operating income; profit before tax; ratio of
debt to debt plus equity; ratio of operating earnings to capital spending; sales growth; return on
net assets; or total return to stockholders. Any Performance Goals may be used to measure the
performance of the Company as a whole or an business unit of the Company 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.



     12. Leaves of Absence. Unless the Administrator provides otherwise, or except as
otherwise required by Applicable Laws, vesting of Awards granted hereunder on or after July 17,
2007, will be suspended starting on the 30th consecutive day of any unpaid leave of
absence approved by the Company, with such suspension of vesting terminating upon the Participant’s
resumption of service with the Company. A Service Provider 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 ninety (90) days, 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 three (3) months following the 91st 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.



     13. 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. If the Administrator makes an Award
transferable, such Award will contain such additional terms and conditions as the Administrator
deems appropriate.



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     14. Awards to Outside Directors



          (a) General. All grants of Awards to Outside Directors pursuant to this Section 14
will be automatic and nondiscretionary and will be made in accordance with the following
provisions, except as otherwise provided herein.




          (b) Granting of Awards.




               (i) Initial Award. Each Outside Director who becomes an Outside Director after the
effective date of this Plan will be automatically granted a Nonstatutory Stock Option to purchase
40,000 Shares (the “Initial Award”) on the date on which such person first becomes an
Outside Director, whether through election by the stockholders of the Company or appointment by the
Board to fill a vacancy; provided, however, that an Inside Director who ceases to be an Inside
Director but who remains a Director will not receive an Initial Award.



               (ii) Subsequent Awards. Each Outside Director will be automatically granted an Award
of Restricted Stock Units on October 1 of each year; provided that he or she is then an
Outside Director (a “Subsequent Award”). The number of Restricted Stock Units subject to
the Subsequent Award will be determined in the sole discretion of the Board or the Administrator on
or prior to the Award becoming effective on the applicable October 1 grant date.



          (c) Terms of Initial Award. The terms of the Initial Award will be as follows:




               (i) The term of the Initial Award will be ten (10) years.



               (ii) The exercise price per Share will be 100% of the Fair Market Value per Share on the date
of grant. In the event that the date of grant is not a trading day, the exercise price per Share
will be the Fair Market Value on the next trading day immediately following the date of grant.



               (iii) Subject to the provisions of Section 15, 12.5% of the Shares subject to the Initial
Award will vest six (6) months after the date of grant, and 1/48 of the Shares subject to the
Initial Award will vest each month thereafter so that 100% of the Shares subject to the Initial
Award will be vested four (4) years from the grant date, subject to the Outside Director remaining
a Service Provider through each such vesting date.



          (d) Subsequent Award. The terms of each Subsequent Award will be as follows:




               (i) Subject to the provisions of Section 15, the Subsequent Award will vest and become payable
as to 100% of the Restricted Stock Units subject to the Award on the twelve (12) month anniversary
of the date of grant, subject to the Outside Director remaining a Service Provider through such
vesting date. Notwithstanding the foregoing, at any time after the grant of the Subsequent Award,
the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be
met to receive a payout of the Restricted Stock Units subject to the Subsequent Award.



               (ii) To the extent not in conflict with the terms of this Section 14, the other terms and
conditions of the Plan will apply to any Subsequent Awards.



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          (e) Adjustments. The Administrator in its discretion may change and otherwise revise
the terms of Awards granted under this Section 14, including, without limitation, the number of
Shares and/or the types of Awards to be granted, for Awards granted on or after the date the
Administrator determines to make any such change or revision.




          (f) Other Awards. Nothing in this Section 14 will limit the ability of the
Administrator to grant all types of Awards under the Plan (including Options) to Outside Directors
in addition to the Awards that are granted to them under this Section 14.




     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, may
(in its sole discretion) 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, and the numerical
Share limits set forth in Sections 3, 6, 7, 8, 9, 10 and 14.




          (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 Change in Control, each outstanding Award
will be assumed or an equivalent option or right substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation (the “Successor Corporation”). In the
event that the Successor Corporation refuses to assume or substitute for the Award, the Participant
will fully vest in and have the right to exercise all of his or her outstanding Options and Stock
Appreciation Rights, including Shares as to which such Awards would not otherwise be vested or
exercisable, all restrictions on Restricted Stock will lapse, and, with respect to Restricted Stock
Units, Performance Shares and Performance Units, all Performance Goals or other vesting criteria
will be deemed achieved at 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.




          With respect to Awards granted to Outside Directors that are assumed or substituted for, if on
the date of or following such assumption or substitution the Participant’s status as a Director or
a director of the Successor Corporation, as applicable, is terminated other than upon a voluntary
resignation by the Participant, then the Participant will fully vest in and have the right to
exercise Options and/or Stock Appreciation Rights as to all of the Shares subject thereto,
including Shares as to which such Awards would not otherwise be vested or exercisable, all
restrictions on



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Restricted Stock will lapse, and, with respect to Restricted Stock Units, Performance Shares
and Performance Units, all Performance Goals or other vesting criteria will be deemed achieved at
target levels and all other terms and conditions met.




          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 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, 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 Performance Share or Performance Unit, for each Share subject to such
Award (or in the case of Performance Units, the number of implied shares determined by dividing the
value of the Performance Units 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 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.




     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, or (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. 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




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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. Subject to Section 23 of the Plan, the Plan will become effective
upon its adoption by the Board. It will continue in effect for a term of ten (10) years unless
terminated earlier under Section 20 of the Plan.



     20. Amendment and Termination of the Plan.



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




          (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.




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     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 will be subject to approval by the stockholders of
the Company within twelve (12) months after the date the Plan is adopted. Such stockholder
approval will be obtained in the manner and to the degree required under Applicable Laws.




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