exv4w3






Exhibit 4.3




NUANCE COMMUNICATIONS, INC. (FORMERLY KNOWN AS SCANSOFT, INC.)




2000 STOCK PLAN

(Amended and Restated January 29, 2010)



     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 additional incentive to Employees, Directors and
Consultants, and
	 
	 	•	 	to promote the success of the Company’s business.




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




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




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




     (b) “Affiliated SAR” means an SAR that is granted in connection with a related Option,
and which automatically will be deemed to be exercised at the same time that the related
Option is exercised.




     (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) “Annual Revenue” means the Company’s or a business unit’s net sales for the Fiscal
Year, determined in accordance with generally accepted accounting principles; provided,
however, that prior to the Fiscal Year, the Committee shall determine whether any
significant item(s) shall be excluded or included from the calculation of Annual Revenue
with respect to one or more Participants.




     (e) “Award” means, individually or collectively, a grant under the Plan of Options,
Stock Purchase Rights, Stock Appreciation Rights, and Restricted Stock Units.




     (f) “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.




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




     (h) “Cash Position” means the Company’s level of cash and cash equivalents.




     (i) “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.




     (j) “Committee” means a committee of Directors appointed by the Board in accordance
with Section 4 of the Plan.




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



 









 






     (l) “Company” means Nuance Communications, Inc. (formerly known as ScanSoft, Inc.) a
Delaware corporation. With respect to the definitions of the Performance Goals, the
Committee may determine that “Company” means Nuance Communications, Inc. and its
consolidated subsidiaries.




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




     (n) “Controllable Profits” means as to any Plan Year, a business unit’s Annual Revenue
minus (a) cost of sales, (b) research, development, and engineering expense, (c) marketing
and sales expense, (d) general and administrative expense, (e) extended receivables expense,
and (f) shipping requirement deviation expense.




     (o) “Customer Satisfaction MBOs” means as to any Participant for any Plan Year, the
objective and measurable individual goals set by a “management by objectives” process and
approved by the Committee, which goals relate to the satisfaction of external or internal
customer requirements(p) .




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




     (q) “Disability” means total and permanent disability as defined in Section 22(e)(3) of
the Code.




     (r) “Earnings Per Share” means as to any Fiscal Year, the Company’s or a business
unit’s Net Income, divided by a weighted average number of common shares outstanding and
dilutive common equivalent shares deemed outstanding, determined in accordance with
generally accepted accounting principles.




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




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




     (u) “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 National Market or
The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall
be the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on 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, the Fair Market Value of a Share of Common
Stock shall be the mean between the high bid and low asked prices for the Common
Stock on the last market trading day on the day of determination, as reported in The
Wall Street Journal or such other source as the Administrator deems reliable; or




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




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




     (w) “Freestanding SAR” means an SAR that is granted independent of any Option.



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     (x) “Incentive Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations promulgated
thereunder.




     (y) “Individual Objectives” means as to a Participant, the objective and measurable
goals set by a “management by objectives” process and approved by the Committee (in its
discretion).




     (z) “Net Income” means as to any Fiscal Year, the income after taxes of the Company for
the Fiscal Year determined in accordance with generally accepted accounting principles,
provided that prior to the Fiscal Year, the Committee shall determine whether any
significant item(s) shall be included or excluded from the calculation of Net Income with
respect to one or more Participants.




     (aa) “New Orders” means as to any Plan Year, the firm orders for a system, product,
part, or service that are being recorded for the first time as defined in the Company’s
order Recognition Policy.




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




     (cc) “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.




     (dd) “Operating Cash Flow” means the Company’s or a business unit’s sum of Net Income
plus depreciation and amortization less capital expenditures plus changes in working capital
comprised of accounts receivable, inventories, other current assets, trade accounts payable,
accrued expenses, product warranty, advance payments from customers and long-term accrued
expenses, determined in accordance with generally acceptable accounting principles.




     (ee) “Operating Income” means the Company’s or a business unit’s income from operations
but excluding any unusual items, determined in accordance with generally accepted accounting
principles.




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




     (gg) “Optionee” means the holder of an outstanding Option or Stock Purchase Right
granted under the Plan.




     (hh) “Optioned Stock” means the Shares subject to an Award.




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




     (jj) “Participant” means the holder of an outstanding Award, which shall include an
Optionee.




     (kk) “Performance Goals” means the goal(s) (or combined goal(s)) determined by the
Committee (in its discretion) to be applicable to a Participant with respect to an Award. As
determined by the Committee, the Performance Goals applicable to an Award may provide for a
targeted level or levels of achievement using one or more of the following measures: (a)
Annual Revenue, (b) Cash Position, (c) Controllable Profits, (d) Customer Satisfaction MBOs,
(e) Earnings Per Share, (f) Individual Objectives, (g) Net Income, (h) New Orders, (i)
Operating Cash Flow, (j) Operating Income, (k) Return on Assets, (l) Return on Equity, (m)
Return on Sales, and (n) Total Shareholder Return. The Performance Goals may differ from
Participant to Participant and from Award to Award.




     (ll) “Plan” means this 2000 Stock Plan, as amended and restated.



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     (mm) “Restricted Stock” means Shares acquired pursuant to a grant of Stock Purchase
Rights under Section 9 of the Plan or pursuant to the early exercise of an Option.




     (nn) “Restricted Stock Purchase Agreement” means a written agreement between the
Company and the Participant evidencing the terms and restrictions applying to stock
purchased under a Stock Purchase Right. The Restricted Stock Purchase Agreement is subject
to the terms and conditions of the Plan and the Notice of Grant.




     (oo) “Restricted Stock Unit” means an Award granted to a Participant pursuant to
Section 11.




     (pp) “Return on Assets” means the percentage equal to the Company’s or a business
unit’s Operating Income before incentive compensation, divided by average net Company or
business unit, as applicable, assets, determined in accordance with generally accepted
accounting principles.




     (qq) “Return on Equity” means the percentage equal to the Company’s Net Income divided
by average stockholder’s equity, determined in accordance with generally accepted accounting
principles.




     (rr) “Return on Sales” means the percentage equal to the Company’s or a business unit’s
Operating Income before incentive compensation, divided by the Company’s or the business
unit’s, as applicable, revenue, determined in accordance with generally accepted accounting
principles.




     (ss) “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.




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




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




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




     (ww) “Stock Appreciation Right” or “SAR” means an Award, granted alone or in connection
with an Option, which pursuant to Section 10 is designated as an SAR.




     (xx) “Stock Purchase Right” means the right to purchase Shares pursuant to Section 9 of
the Plan.




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




     (zz) “Tandem SAR” means an SAR that is granted in connection with a related Option, the
exercise of which will require forfeiture of the right to purchase an equal number of Shares
under the related Option (and when a Share is purchased under the Option, the SAR will be
canceled to the same extent).




     (aaa) “Total Shareholder Return” means the total return (change in share price plus
reinvestment of any dividends) of a Share.



     3. Stock Subject to the Plan. Subject to the provisions of Section 14 of the Plan, the
maximum aggregate number of Shares that may be issued under the Plan is 35,050,000 Shares (the
“Plan Maximum”). If any outstanding Award for any reason expires or is terminated or canceled
without having been exercised or settled in full, or if Shares acquired pursuant to an Award
subject to forfeiture or repurchase are forfeited or repurchased by the Company, the Shares
allocable to the terminated portion of such Award or such forfeited or repurchased Shares shall
again be available for grant under the Plan. Shares shall not be deemed to have been granted
pursuant to the



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Plan (a) with respect to any portion of an Award that is settled in cash or (b) to the extent
such Shares are withheld in satisfaction of tax withholding obligations. Upon payment in Shares
pursuant to the exercise of a Stock Appreciation Right, the number of Shares available for grant
under the Plan shall be reduced only by the number of Shares actually issued in such payment. If
the exercise price of an Option is paid by tender to the Company of Shares underlying the Option,
the number of Shares available for grant under the Plan shall be reduced by the net number of
Shares for which the Option is exercised. The Shares may be authorized, but unissued, or reacquired
Common Stock.



     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 Section 162(m) of the Code, the Plan shall be administered by
a Committee of two or more “outside directors” within the meaning of Section 162(m)
of the Code. For purposes of qualifying grants of Awards as “performance-based
compensation” under Section 162(m) of the Code, the Committee, in its discretion,
may set restrictions based upon the achievement of Performance Goals. The
Performance Goals shall be set by the Committee on or before the latest date
permissible to enable the Awards to qualify as “performance-based compensation”
under Section 162(m) of the Code. In granting Awards which are intended to qualify
under Section 162(m) of the Code, the Committee shall follow any procedures
determined by it from time to time to be necessary or appropriate to ensure
qualification of the Awards under Section 162(m) of the Code (e.g., in determining
the Performance Goals).




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




     (iv) Other Administration. Other than as provided above, the Plan shall be
administered by (A) the Board or (B) a Committee, which committee shall 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 shall 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 agreement 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 in connection with the termination of a Participant’s status
as a Service Provider, and any restriction or



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limitation regarding any Award or the Shares relating thereto, based in each
case on such factors as the Administrator, in its sole discretion, shall 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 qualifying for preferred tax treatment under foreign tax laws;




     (viii) to modify or amend each Award (subject to Section 17(c) of the Plan),
including the discretionary authority to extend the post-termination exercisability
period of Awards longer than is otherwise provided for in the Plan;




     (ix) to allow Participants to satisfy withholding tax obligations by electing
to have the Company withhold from the Shares to be issued upon exercise of an Award
that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld. The Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be determined.
All elections by a Participant to have Shares withheld for this purpose shall be
made in such form and under such conditions as the Administrator may deem necessary
or advisable;




     (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;




     (xi) to allow a Participant to defer the receipt of payment of cash or the
delivery of Shares that would otherwise be due to such Participant under an Award;
or




     (xii) 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 shall be final and binding on all Participants and any other holders of
Awards.



     5. Eligibility. Nonstatutory Stock Options, Stock Purchase Rights, Stock Appreciation Rights,
and Restricted Stock Units may be granted to Service Providers. Incentive Stock Options may be
granted only to Employees.



     6. Limitations.




     (a) Each Option shall 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
shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive
Stock Options shall be taken into account in the order in which they were granted. The Fair
Market Value of the Shares shall be determined as of the time the Option with respect to
such Shares is granted.




     (b) The following limitations shall apply to grants of Options and Stock Appreciation
Rights:




     (i) No Service Provider shall be granted, in any Fiscal Year, Options or Stock
Appreciation Rights covering more than 1,000,000 Shares.



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     (ii) In connection with his or her initial service, a Service Provider may be
granted Options or Stock Appreciation Rights covering up to an additional 1,000,000
Shares, which shall not count against the limit set forth in subsection (i) above.




     (iii) The foregoing limitations shall be adjusted proportionately in connection
with any change in the Company’s capitalization as described in Section 14.




     (iv) If an Option or Stock Appreciation Right is cancelled in the same fiscal
year of the Company in which it was granted (other than in connection with a
transaction described in Section 14), the cancelled Option or Stock Appreciation
Right will be counted against the limits set forth in subsections (i) and (ii)
above. For this purpose, if the exercise price of an Option or Stock Appreciation
Right is reduced, the transaction will be treated as a cancellation of the Option or
Stock Appreciation Right and the grant of a new Option or Stock Appreciation Right.




     (c) The exercise price of any Option or SAR outstanding or to be granted in the future
under the Plan shall not be reduced or cancelled and re-granted at a lower exercise price
(including pursuant to any “6 month and 1 day” cancellation and re-grant scheme), regardless
of whether or not the Shares subject to the cancelled Options or SARs are put back into the
available pool for grant. In addition, the Administrator shall not replace underwater
Options or SARs with restricted stock in an exchange, buy-back or other scheme. Moreover,
the Administrator shall not replace any Options or SARs with new options or stock
appreciation rights having a lower exercise price or accelerated vesting schedule in an
exchange, buy-back or other scheme.



     7. Term of Plan. Subject to Section 20 of the Plan, the Plan shall become effective upon its
adoption by the Board. It shall continue in effect for a term of ten (10) years unless terminated
earlier under Section 17 of the Plan.



     8. Stock Options




     (a) Term of Option. The term of each Option shall be stated in the Award Agreement,
but in no event shall the term of an Option be more than seven (7) years from the date of
grant. 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 shall be five (5) years
from the date of grant or such shorter term as may be provided in the Award Agreement.




     (b) Option Exercise Price and Consideration.




     (i) Exercise Price. The per Share exercise price for the Shares to be issued
pursuant to the exercise of an Option shall be no less than 100% of the Fair Market
Value per Share on the date of grant. 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 shall
be no less than 110% of the Fair Market Value per Share on the date of grant.




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




     (iii) Form of Consideration. The Administrator shall determine the acceptable
form of consideration for exercising an Option, including the method of payment. In
the case of an Incentive Stock Option, the Administrator shall determine the
acceptable form of consideration at the time of grant. Such consideration may
consist entirely of:



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     (1) cash;




     (2) check;




     (3) other Shares which (A) in the case of Shares acquired upon exercise
of an option, have been owned by the Participant for more than six months on
the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which
said Option shall be exercised;




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




     (5) 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;




     (6) any combination of the foregoing methods of payment; or




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




     (c) Exercise of Option.




     (i) Procedure for Exercise; Rights as a Stockholder. Any Option granted
hereunder shall 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.




     (1) An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in such form as the Administrator
may 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 any applicable withholding taxes). 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 shall 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 shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Company shall 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 14 of the Plan.




     (2) Exercising an Option in any manner shall 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 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



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specified time in the Award Agreement, the Option shall remain exercisable for
three (3) months following the Participant’s termination. 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 shall 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 shall terminate, and the Shares
covered by such Option shall 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 shall remain
exercisable for twelve (12) months following the Participant’s termination. 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 shall revert to the
Plan. If, after termination, the Participant does not exercise his or her Option
within the time specified herein, the Option shall terminate, and the Shares covered
by such Option shall 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 (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 estate or by a person who acquires the right to
exercise the Option by bequest or inheritance, but only to the extent that the
Option is vested on the date of death. In the absence of a specified time in the
Award Agreement, the Option shall remain exercisable for twelve (12) months
following the Participant’s termination. If, at the time of death, the Participant
is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall immediately revert to the Plan. The Option may be
exercised by the executor or administrator of the Participant’s estate or, if none,
by the person(s) entitled to exercise the Option under the Participant’s will or the
laws of descent or distribution. If the Option is not so exercised within the time
specified herein, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.




     (v) Buyout Provisions. The Administrator may at any time offer to buy out for
a payment in cash or Shares an Option previously granted based on such terms and
conditions as the Administrator shall establish and communicate to the Participant
at the time that such offer is made.



     9. Stock Purchase Rights.




     (a) Rights to Purchase. Stock Purchase Rights may be issued either alone, in addition
to, or in tandem with other Awards granted under the Plan and/or cash awards made outside of
the Plan. After the Administrator determines that it will offer Stock Purchase Rights under
the Plan, it shall advise the offeree in writing or electronically, of the terms, conditions
and restrictions related to the offer, including the number of Shares that the offeree shall
be entitled to purchase (subject to the limits set forth in Section 3), the price to be
paid, and the time within which the offeree must accept such offer. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the
Administrator. The following limitations shall apply to grants of Stock Purchase Rights:




     (i) No Service Provider shall be granted, in any Fiscal Year, Stock Purchase
Rights covering more than 750,000 Shares.




     (ii) The foregoing limitation shall be adjusted proportionately in connection
with any change in the Company’s capitalization as described in Section 14.



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     (iii) If a Stock Purchase Right is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 14), the cancelled Stock Purchase Right will be counted against
the limit set forth in subsection (i) above.




     (b) Repurchase Option. Unless the Administrator determines otherwise, the Restricted
Stock Purchase Agreement shall grant the Company a repurchase option exercisable upon the
voluntary or involuntary termination of the purchaser’s service with the Company for any
reason (including death or Disability). The purchase price for Shares repurchased pursuant
to the Restricted Stock Purchase Agreement shall be the original price paid by the purchaser
and may be paid by cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at a rate determined by the Administrator.




     (c) Other Provisions. The Restricted Stock Purchase Agreement shall contain such other
terms, provisions and conditions not inconsistent with the Plan as may be determined by the
Administrator in its sole discretion.




     (d) Rights as a Stockholder. Once the Stock Purchase Right is exercised, the purchaser
shall have the rights equivalent to those of a stockholder, and shall be a stockholder when
his or her purchase is entered upon the records of the duly authorized transfer agent of the
Company. No adjustment will be made for a dividend or other right for which the record date
is prior to the date the Stock Purchase Right is exercised, except as provided in Section 14
of the Plan.



     10. Stock Appreciation Rights




     (a) Grant of SARs. Subject to the terms and conditions of the Plan, an SAR 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 may grant Affiliated SARs,
Freestanding SARs, Tandem SARs, or any combination thereof.




     (b) Number of Shares. The Administrator will have complete discretion to determine the
number of SARs granted to any Service Provider.




     (c) Exercise Price and Other Terms. The Administrator, subject to the provisions of
the Plan, will determine the terms and conditions of SARs granted under the Plan; provided,
that, the exercise price of an SAR is at least 100% of the Fair Market Value of the Shares
subject to the SAR; provided, further, the exercise price of Tandem or Affiliated SARs will
equal the exercise price of the related Option.




     (d) Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of the
Shares subject to the related Option upon the surrender of the right to exercise the
equivalent portion of the related Option. A Tandem SAR may be exercised only with respect to
the Shares for which its related Option is then exercisable. With respect to a Tandem SAR
granted in connection with an Incentive Stock Option: (i) the Tandem SAR will expire no
later than the expiration of the underlying Incentive Stock Option; (ii) the value of the
payout with respect to the Tandem SAR will be for no more than one hundred percent (100%) of
the difference between the exercise price of the underlying Incentive Stock Option and the
Fair Market Value of the Shares subject to the underlying Incentive Stock Option at the time
the Tandem SAR is exercised; and (iii) the Tandem SAR will be exercisable only when the Fair
Market Value of the Shares subject to the Incentive Stock Option exceeds the Exercise Price
of the Incentive Stock Option.




     (e) Exercise of Affiliated SARs. An Affiliated SAR will be deemed to be exercised upon
the exercise of the related Option. The deemed exercise of an Affiliated SAR will not
necessitate a reduction in the number of Shares subject to the related Option.




     (f) Exercise of Freestanding SARs. Freestanding SARs will be exercisable on such terms
and conditions as the Administrator, in its sole discretion, will determine.



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     (g) SAR Agreement. Each SAR grant will be evidenced by an Award Agreement that will
specify the exercise price, the term of the SAR, the conditions of exercise, and such other
terms and conditions as the Administrator, in its sole discretion, will determine.




     (h) Expiration of SARs. An SAR granted under the Plan will expire upon the date
determined by the Administrator, in its sole discretion, and set forth in the Award
Agreement. Notwithstanding the foregoing, the rules of Section 8(c) also will apply to SARs.




     (i) Payment of SAR Amount. Upon exercise of an SAR, 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 SAR is exercised.




At the discretion of the Administrator, the payment upon SAR exercise may be in cash, in
Shares of equivalent value, or in some combination thereof.



     11. Restricted Stock Units.




     (a) Grant of Restricted Stock Units. Restricted Stock Units 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 Restricted Stock Units granted to each Participant, subject to the limits set
forth in Section 3 of the Plan. The following limitations shall apply to grants of
Restricted Stock Units:




     (i) No Service Provider shall be granted, in any Fiscal Year, Restricted Stock
Units covering more than 750,000 Shares.




     (ii) The foregoing limitation shall be adjusted proportionately in connection
with any change in the Company’s capitalization as described in Section 14.




     (iii) If a Restricted Stock Unit is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 14), the cancelled Restricted Stock Unit will be counted
against the limit set forth in subsection (i) above.




     (b) Value of Restricted Stock Units. Each Restricted Stock Unit will have an initial
value that is established by the Administrator on or before 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 Restricted Stock Units 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 Restricted
Stock Units 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 Restricted Stock Units. After the applicable Performance Period has
ended, the holder of Restricted Stock Units will be entitled to receive a payout of the
number of Restricted Stock



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Units 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 Restricted Stock Units, the
Administrator, in its sole discretion, may reduce or waive any performance objectives or
other vesting provisions for such Restricted Stock Unit.




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




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



     12. Leaves of Absence. Unless the Administrator provides otherwise, vesting of Awards granted
hereunder will be suspended during any unpaid leave of absence. 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 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. 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. If the Administrator makes an Award transferable, such
Award shall contain such additional terms and conditions as the Administrator deems appropriate.



     14. .Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale.




     (a) Changes in Capitalization. Subject to any required action by the stockholders of
the Company, 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 in Sections 3, 6, 9 and 11 of the Plan, shall be proportionately adjusted for
any increase or decrease in the number of issued Shares resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the Shares, or any
other increase or decrease in the number of issued Shares effected without receipt of
consideration by the Company; provided, however, that conversion of any convertible
securities of the Company shall not be deemed to have been “effected without receipt of
consideration.” Such adjustment shall be made by the Board, whose determination in that
respect shall be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of Shares subject to an Award.




     (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Participant as soon as
practicable prior to the effective date of such proposed transaction. The Administrator in
its discretion may provide for a Participant to have the right to exercise his or her Award
until ten (10) days prior to such transaction as to all of the Optioned Stock covered
thereby, including Shares as to which the Award would not otherwise be exercisable. In
addition, the Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Award shall lapse as to all such Shares, provided the
proposed dissolution or liquidation takes place at the time and in the manner contemplated.
To the extent it has not been previously exercised, an Award will terminate immediately
prior to the consummation of such proposed action.



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     (c) Merger or Asset Sale. In the event of a merger of the Company with or into another
corporation, or the sale of substantially all of the assets of the Company, each outstanding
Award shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of 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, 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 becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, 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 15 days from the date of such notice, and the
Option or Stock Appreciation Right will terminate upon the expiration of such period.




     For the purposes of this paragraph, the Award shall be considered assumed if, following
the merger or sale of assets, the Award confers the right to purchase or receive, for each
Share subject to the Award immediately prior to the merger or sale of assets, 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 which the Administrator can determine to pay in cash, the fair
market value of the consideration received in the merger or sale of assets 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 merger or sale of assets 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, for each Share subject to such Award
(or in the case of Restricted Stock Units, the number of implied shares determined by
dividing the value of the Restricted Stock Units by the per Share consideration received by
holders of Common Stock in the merger or sale of assets), 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 merger or sale of assets.




     Notwithstanding anything in this Section 14(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 corporate structure post-merger or
post-sale of assets will not be deemed to invalidate an otherwise valid Award assumption.



     15. 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.



     16. Date of Grant. The date of grant of an Award shall 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 shall be provided to each Participant
within a reasonable time after the date of such grant.



     17. Amendment and Termination of the Plan.




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



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     (b) Stockholder Approval. The Company shall 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 shall 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 shall 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.



     18. Conditions Upon Issuance of Shares.




     (a) Legal Compliance. Shares shall not be issued pursuant to the exercise of an Award
unless the exercise of such Award and the issuance and delivery of such Shares shall comply
with Applicable Laws and shall 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.



     19. 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, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.



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




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