EXHIBIT 10.1

QUANTUM CORPORATION 

2012 LONG-TERM INCENTIVE PLAN


(August 15, 2012 Amendment and
Restatement) 

     1. Background and Purposes of
the Plan. This amended and restated Plan is
effective as of August 15, 2012, subject to approval by an affirmative vote of
the holders of a majority of Shares that are present in person or by proxy and
entitled to vote at the 2012 Annual Meeting of Stockholders of the Company. The
Plan was formerly known as the 1993 Long-Term Incentive Plan. 

    
The purposes of this Plan are:


	to attract and retain the best available
  Employees, Directors and Consultants for
  positions of substantial responsibility,
 
  
	to provide 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, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights,
Performance Units and Performance Shares. 

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

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

         
(b) “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,
Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance
Units or Performance Shares. 

         
(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. 

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          (e) “Award Transfer Program” means any program instituted by the Administrator that would
permit Participants the opportunity to transfer for value any outstanding Awards
to a financial institution or other person or entity approved by the
Administrator. A transfer for “value” shall not be deemed to occur under this
Plan where an Award is transferred by a Participant not for consideration and
for bona fide estate planning purposes to a trust or other entity approved by
the Administrator and for the benefit of the Participant’s family. 

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

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


              
(i) A
change in the ownership of the Company
that occurs on the date that any one person,
or more than one person acting as a group (“Person”), acquires ownership of the
stock of the Company that, together with the stock held by such Person,
constitutes more than fifty percent (50%) of the total voting power of the stock
of the Company; provided, however, that for purposes of this subsection, the
acquisition of additional stock by any one Person, who is considered to own more
than fifty percent (50%) of the total voting power of the stock of the Company
at the time of the acquisition of the additional stock will not be considered a
Change in Control; or

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

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

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

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               Notwithstanding the foregoing, a transaction will not be deemed a Change
in Control unless the transaction qualifies as a change in control event within
the meaning of Section 409A. 

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

         
(h) “Code” means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or regulation thereunder shall include such section
or regulation, any valid regulation promulgated under such section, and any
comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation. 

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

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

         
(k) “Company” means Quantum Corporation, a Delaware corporation, or any successor
thereto. 

         
(l) “Consultant” means any natural person, including an advisor, engaged by the Company
or a Parent or Subsidiary to render services to such entity in a capacity other
than as an Employee or Director. 

         
(m) “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. 

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

         
(o) “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.

         
(p) “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 will be sufficient to
constitute “employment” by the Company. 

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


         
(r) “Exchange Program” means a program under which (i) outstanding awards are
surrendered or cancelled in exchange for awards of the same type (which may have
higher or 

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lower exercise prices and different
terms), awards of a different type, and/or cash, (ii) Participants would have
the opportunity to participate in an Award Transfer Program, and/or (iii) the
exercise price of an outstanding Award is reduced. The Administrator will
determine the terms and conditions of any Exchange Program in its sole
discretion. 

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

               (i) If the Common Stock is listed
on any established stock exchange or a national market system, including without
limitation the New York Stock Exchange, the NASDAQ Global Select Market, the
NASDAQ Global Market or the NASDAQ Capital Market of The NASDAQ Stock Market,
its Fair Market Value will 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 will be the mean between the high bid
and low asked prices for the Common Stock on the day of determination (or, if no
bids and asks were reported on that date, as applicable, on the last trading
date such bids and asks were reported), as reported in The Wall Street Journal or
such other source as the Administrator deems reliable; or 

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

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

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

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

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

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

          (y) “Outside Director” means a Director who
is not an Employee or Consultant. 

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


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

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          (bb) “Performance-Based Award” means any
Award that is subject to the terms and conditions set forth in Section 10 of the
Plan. All Performance-Based Awards are intended to qualify as qualified
performance-based compensation under Section 162(m) of the Code. 

          (cc) “Performance Goals” means the goal(s)
(or combined goal(s)) determined by the Administrator (in its discretion) to be
applicable to a Participant with respect to an Award. As determined by the
Administrator, 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) cash flow, (b) customer satisfaction, (c) earnings per share, (d)
expense control, (e) margin, (f) market share, (g) operating profit, (h) product
development and/or quality, (i) profit, (j) return on capital, (k) return on
equity, (l) revenue and (m) total shareholder return. Any Performance Goal used
may be measured (1) in absolute terms, (2) in combination with another
Performance Goal or Goals (for example, but not by way of limitation, as a ratio
or matrix), (3) in relative terms (including, but not limited to, as compared to
results for other periods of time, against financial metrics, and/or against
another company, companies or an index or indices), (4) on a per-share or
per-capita basis, (5) against the performance of the Company as a whole or a
specific business unit(s), business segment(s) or product(s) of the Company,
and/or (6) on a pre-tax or after-tax basis. Prior to the Determination Date, the
Committee, in its discretion, will determine whether any significant element(s)
or item(s) will be included in or excluded from the calculation of any
Performance Goal with respect to any Participants (for example, but not by way
of limitation, the effect of mergers and acquisitions). As determined in the
discretion of the Committee prior to the Determination Date, achievement of
Performance Goals for a particular Award may be calculated in accordance with
the Company’s financial statements, prepared in accordance with generally
accepted accounting principles, or as adjusted for certain costs, expenses,
gains and losses to provide non-GAAP measures of operating results. 

          (dd) Performance
Period” means any Fiscal Year (or period of
four (4) consecutive fiscal quarters) or such longer period as determined by the
Administrator in its sole discretion during which the performance objectives
must be met. 

          (ee) “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 of the Plan. 

          (ff) “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 of the Plan. 

          (gg) “Period of Restriction” means the
period during which Restricted Stock Units, Performance Shares, Performance
Units and/or 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, continued
service, the achievement of target levels of performance, the achievement of
Performance Goals, or the occurrence of other events as determined by the
Administrator. Notwithstanding any contrary provision of the Plan (but subject
to the following sentence), the Period of Restriction for such an Award shall
expire in full no earlier than (a) the third (3rd) annual anniversary of the
grant date if the vesting period expires solely as the 

5







result of continued employment or
service, and (b) the first (1st) annual anniversary of the grant date if
expiration of the vesting period is conditioned on achievement of performance
objectives and does not expire solely as the result of continued employment or
service. The preceding minimum vesting periods shall not apply with respect to
Awards to Directors, or to an Award if determined by the Administrator (in its
discretion): (a) due to death, Disability, Retirement, or major capital change,
or (b) with respect to Awards other than Options and SARs covering, in the
aggregate, no more than five percent (5%) of the shares reserved for issuance
under the Plan. 

          (hh) “Plan” means this 2012 Long-Term
Incentive Plan. 

          (ii) “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. 

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

         
(kk) “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.


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

         
(mm) “Section 409A” means Section 409A of the Code, and any proposed, temporary
or final Treasury Regulations and Internal Revenue Service guidance thereunder,
as each may be amended from time to time. 

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

         
(oo) “Share” means a share of the Common Stock, as adjusted in accordance with
Section 13 of the Plan. 

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

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

    
3. Stock
Subject to the Plan.

         
(a) Stock Subject to the Plan. Subject to
the provisions of Section 13 of the Plan, the maximum aggregate number of Shares
that may be issued under the Plan shall equal the sum of (a) 13,200,000, (b) any
Shares (not to exceed 2,500,000) that remain available to be issued under the
Company’s 1993 Long-Term Incentive Plan or the Company’s Nonemployee Director
Equity Incentive Plan as of August 14, 2012, (c) any Shares (not to exceed
5,000,000) that, after August 14, 2012, otherwise would have been returned to
the Company’s 1993 Long-Term Incentive Plan or the Company’s Nonemployee
Director Equity Incentive Plan on account of the expiration, cancellation,
repurchase or forfeiture of awards granted under the Company’s 1993 Long-Term


6







Incentive Plan or Nonemployee Director
Equity Incentive Plan, and (d) any shares (not to exceed 5,000,000 used to pay
the exercise price or purchase of an award or to satisfy the tax withholding
obligations related to an award granted under the Company’s 1993 Long-Term
Incentive Plan or the Company’s Nonemployee Director Equity Incentive Plan on or
before August 14, 2012 that otherwise would have been returned to the Company’s
1993 Long-Term Incentive Plan or the Company’s Nonemployee Director Equity
Incentive Plan after August 14, 2012. The Shares may be authorized, but
unissued, or reacquired Common Stock. 

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

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


    
4. Administration of the Plan.

         
(a) Procedure. 

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

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

7







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

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

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

              
(v) Delegation of Authority for Day-to-Day Administration. Except to the extent prohibited by Applicable Law, the
Administrator may delegate to one or more individuals the day-to-day
administration of the Plan and any of the functions assigned to it in this Plan.
Such delegation may be revoked at any time. 

         
(b) Powers of the Administrator. Subject
to the provisions of the Plan, and in the case of a Committee, subject to the
specific duties delegated by the Board to such Committee, the Administrator will
have the authority, in its discretion: 

              
(i) to
determine the Fair Market Value; 

              
(ii) to
select the Service Providers to whom Awards may be granted hereunder;


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


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

              
(v) to
determine the terms and conditions, not inconsistent with the terms of the Plan,
of any Award granted hereunder. Such terms and conditions include, but are not
limited to, the exercise price, the time or times when Awards may be exercised
(which may be based on performance criteria), any vesting acceleration or waiver
of forfeiture restrictions, and any restriction, limitation or requirement
regarding any Award or the Shares covered thereby (for example, but not by way
of limitation, any holding period or ownership requirement), based in each case
on such factors as the Administrator (in its discretion) shall determine;


              
(vi) to
determine the terms and conditions of any Exchange Program and/or Award Transfer
Program and with the consent of the Company’s stockholders, to institute an
Exchange Program and/or Award Transfer Program (provided that the Administrator
may not implement an Exchange Program and/or Award Transfer Program without
first receiving the consent of the Company’s stockholders); 

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

8







              
(viii) 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 or facilitating compliance with applicable foreign laws
and/or for qualifying for favorable tax treatment under applicable foreign laws;


              
(ix) to
modify or amend each Award (subject to Section 18 of the Plan), including but
not limited to the discretionary authority to extend the post-termination
exercisability period of Awards and to extend the maximum term of an Option
(subject to Section 6(b) of the Plan regarding Incentive Stock Options);


              
(x) to
allow Participants to satisfy withholding tax obligations in such manner as
prescribed in Section 14 of the Plan; 

              
(xi) 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 pursuant
to such procedures as the Administrator may determine; 

              
(xii) to
allow a Participant, in compliance with all Applicable Laws including, but not
limited to, Section 409A, 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; and 

              
(xiii) to
determine whether Awards will be settled in Shares, cash or in any combination
thereof; 

              
(xiv) to
impose such restrictions, conditions or limitations as it determines appropriate
as to the timing and manner of any resales by a Participant or other subsequent
transfers by the Participant of any Shares issued as a result of or under an
Award, including without limitation, (A) restrictions under an insider trading
policy, and (B) restrictions as to the use of a specified brokerage firm for
such resales or other transfers;

              
(xv) to
require that the Participant’s rights, payments and benefits with respect to an
Award (including amounts received upon the settlement or exercise of an Award)
shall be subject to reduction, cancellation, forfeiture or recoupment upon the
occurrence of certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award, as may be specified in an Award
Agreement at the time of the Award, or later if (A) Applicable Laws require the
Company to adopt a policy requiring such reduction, cancellation, forfeiture or
recoupment, or (B) pursuant to an amendment of an outstanding Award; and


              
(xvi) 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 and shall be
given the maximum deference permitted by law. 

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

9







    
6. Stock
Options. 

         
(a) Limitations.

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

              
(ii) The
Administrator will have complete discretion to determine the number of Shares
subject to an Option granted to any Participant, provided that, subject to the
provisions of Section 13, during any Fiscal Year, the number of Shares covered
by Options granted to any one Service Provider will not exceed more than two
million five hundred thousand (2,500,000) Shares; provided, however, that in
connection with his or her initial service, a Service Provider may be granted
Options covering up to an additional two million five hundred thousand
(2,500,000) Shares in the Fiscal Year in which his or her service as a Service
Provider first commences. 

         
(b) Term
of Option. The term of each Option will be
stated in the Award Agreement; provided, however, that the term will be no more
than seven (7) years from the date of grant hereof. In the case of an Incentive
Stock Option, the term will be ten (10) years from the date of grant or such
shorter term as may be provided in the Award Agreement. 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. 

         
(c) 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, subject to the following: 

                   
(1) In the
case of an Incentive Stock Option 

                        
(A) 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 one hundred ten percent (110%) of the
Fair Market Value per Share on the date of grant. 

10







                        
(B) granted to any Employee other than an Employee described in paragraph
(A) immediately above, the per Share exercise price will be no less than one
hundred percent (100%) of the Fair Market Value per Share on the date of grant.


                   
(2) In the
case of a Nonstatutory Stock Option, the per Share exercise price will be no
less than one hundred percent (100%) of the Fair Market Value per Share on the
date of grant. 

                   
(3) Notwithstanding the foregoing, Options may be granted with a per Share
exercise price of less than one hundred percent (100%) of the Fair Market Value
per Share on the date of grant pursuant to a transaction described in, and in a
manner consistent with, Section 424(a) of the Code. 

              
(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 of consideration for exercising
an Option, including the method of payment. In the case of an Incentive Stock
Option, the Administrator will determine the acceptable form of consideration at
the time of grant. Such consideration may consist entirely of, without
limitation: (1) cash; (2) check; (3) promissory note, to the extent permitted by
Applicable Laws, (4) other Shares, provided that such Shares have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which such Option will be exercised and provided that accepting
such Shares will not result in any adverse accounting consequences to the
Company, as the Administrator determines in its sole discretion; (5)
consideration received by the Company under a cashless exercise program (whether
through a broker, net exercise program or otherwise) implemented by the Company
in connection with the Plan; (6) by reduction in the amount of any Company
liability to the Participant, (7) by net exercise; (8) such other consideration
and method of payment for the issuance of Shares to the extent permitted by
Applicable Laws; or (9) any combination of the foregoing methods of payment.


         
(d) 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) a
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
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 will be issued
in the name of the Participant or, if requested by the Participant, in the name
of the Participant and his or her spouse. Until the Shares are issued (as
evidenced by the appropriate entry on the books of the Company or of 

11







a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
stockholder will exist with respect to the Shares subject to an Option,
notwithstanding the exercise of the Option. The Company will issue (or cause to
be issued) such Shares promptly after the Option is exercised. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Shares are issued, except as provided in Section 13 of the
Plan. 

              
Exercising an Option in any manner will decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised. 

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

12







Shares covered by the unvested portion
of the Option will be forfeited and 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; provided,
that, subject to the provisions of Section 13 of the Plan, during any Fiscal
Year, the number of Shares of Restricted Stock granted to any one Service
Provider will not exceed more than one million (1,000,000) Shares; provided,
however, that in connection with his or her initial service, a Service Provider
may be granted an additional one million (1,000,000) Shares of Restricted Stock
in the Fiscal Year in which his or her service as a Service Provider first
commences.

         
(b) Restricted Stock Agreement. Each Award
of Restricted Stock will be evidenced by an Award Agreement that will specify
the Period of Restriction, the number of Shares granted, and such other terms
and conditions as the Administrator, in its sole discretion, will determine.
Unless the Administrator determines otherwise, the Company as escrow agent will
hold Shares of Restricted Stock until the restrictions on such Shares have
lapsed. 

         
(c) Transferability. Except as provided in
this Section 7 or the Award Agreement, 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. 

              
(i) General Restrictions. The
Administrator may set restrictions based upon continued employment or service,
the achievement of specific performance objectives (Company-wide, departmental,
divisional, business unit, or individual), applicable federal or state
securities laws, or any other basis determined by the Administrator in its
discretion. 

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

         
(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 or at such other
time as the Administrator may determine. The Administrator, in its discretion,
may accelerate the time at which any restrictions will lapse or be
removed.

13








          (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 the Administrator provides otherwise. If any
such dividends or distributions are paid in Shares, the Shares will be subject
to the same restrictions on transferability and forfeitability as the Shares of
Restricted Stock with respect to which they were paid. 

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

     8. Restricted Stock
Units. 

         
(a) Grant. Subject to the terms and
provisions of the Plan, the Administrator, at any time and from time to time,
may grant Restricted Stock Units to Service Providers in such amounts as the
Administrator, in its sole discretion, will determine; provided, that subject to
the provisions of Section 13 of the Plan, during any Fiscal Year, the number of
Restricted Stock Units granted to any one Service Provider will not exceed more
than one million (1,000,000); provided, however, that in connection with his or
her initial service, a Service Provider may be granted an additional one million
(1,000,000) Restricted Stock Units in the Fiscal Year in which his or her
service as a Service Provider first commences. After the Administrator
determines that it will grant Restricted Stock Units under the Plan, it will
advise the Participant in an Award Agreement of the terms, conditions, and
restrictions related to the grant, including the number of Restricted Stock
Units.

         
(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.

              
(i) General Restrictions. The
Administrator may set vesting criteria based upon continued employment or
service, the achievement of specific performance objectives (Company-wide,
departmental, divisional, business unit, or individual goals (including, but not
limited to, continued employment or service), applicable federal or state
securities laws or any other basis determined by the Administrator in its
discretion.

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

14







writing whether the applicable
Performance Goals have been achieved after the completion of the applicable
Performance Period). 

         
(c) Earning Restricted Stock Units. Upon
meeting the applicable vesting criteria, the Participant will be entitled to
receive a payout as determined by the Administrator. Notwithstanding the
foregoing, at any time after the grant of Restricted Stock Units, the
Administrator, in its sole discretion, may reduce or waive any vesting criteria
that must be met to receive a payout. 

         
(d) Form
and Timing of Payment. Payment of earned
Restricted Stock Units will be made as soon as practicable after the date(s)
determined by the Administrator and set forth in the Award Agreement; provided,
however, that the timing of payment shall in all cases comply with Section 409A
to the extent applicable to the Award. The Administrator, in its sole
discretion, may only settle earned Restricted Stock Units in cash, Shares, or a
combination of both. 

         
(e) Cancellation. On the date set forth in
the Award Agreement, all unearned Restricted Stock Units will be forfeited to
the Company and, subject to Section 3 of the Plan, again will become available
for grant under the Plan. 

     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 Service Provider, provided that, subject to the provisions
of Section 13 of the Plan, during any Fiscal Year, the number of Shares covered
by Stock Appreciation Rights granted to any one Service Provider will not exceed
more than two million five hundred thousand (2,500,000) Shares; provided,
however, that in connection with his or her initial service, a Service Provider
may be granted SARs covering up to an additional two million five hundred
thousand (2,500,000) Shares in the Fiscal Year in which his or her service as a
Service Provider first commences. 

         
(c) Exercise Price and Other Terms. The
per share exercise price for the Shares to be issued pursuant to exercise of a
Stock Appreciation Right will be determined by the Administrator and will be no
less than one hundred percent (100%) of the Fair Market Value per Share on the
date of grant. Otherwise, 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. 

         
(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 

15







set forth in the Award Agreement.
Notwithstanding the foregoing, the rules of Section 6(b) of the Plan relating to
the maximum term and Section 6(d) of the Plan relating to exercise also will
apply to Stock Appreciation Rights. 

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

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

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

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

    
10. Performance Units and Performance Shares.

         
(a) Grant of Performance Units/Shares.
Subject to the terms and conditions of the Plan, Performance Units and
Performance Shares may be granted to Service Providers at any time and from time
to time, as will be determined by the Administrator, in its sole discretion. The
Administrator will have complete discretion in determining the number of
Performance Units and Performance Shares granted to each Participant; provided,
that subject to the provisions of Section 13 of the Plan, during any Fiscal
Year, (a) the number of Performance Shares granted to any one Service Provider
will not exceed more than one million (1,000,000); provided, however, that in
connection with his or her initial service, a Service Provider may be granted an
additional one million (1,000,000) Performance Shares in the Fiscal Year in
which his or her service as a Service Provider first commences, and (b) no
Service Provider will receive Performance Units having an initial value greater
than ten million dollars ($10,000,000); provided, however, that in connection
with his or her initial service, a Service Provider may be granted additional
Performance Units in the Fiscal Year in which his or her service as a Service
Provider first commences having an initial value no greater than ten million
dollars ($10,000,000). 

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


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

16







              
(i) General Restrictions. The
Administrator may set vesting criteria based upon continued employment or
service, the achievement of specific performance objectives (Company-wide,
departmental, divisional, business unit, or individual goals (including, but not
limited to, continued employment or service), applicable federal or state
securities laws or any other basis determined by the Administrator in its
discretion.

              
(ii) Section 162(m) Performance Restrictions. For purposes of qualifying grants of Performance Shares and/or
Performance Units as “performance-based compensation” under Section 162(m) of
the Code, the Administrator, in its discretion, may set restrictions based upon
the achievement of Performance Goals. The Performance Goals shall be set by the
Administrator on or before the Determination Date. In granting Performance
Shares and/or Performance Units that are intended to qualify under Section
162(m) of the Code, the Administrator shall follow any procedures determined by
it from time to time to be necessary or appropriate to ensure qualification of
the Performance Shares and/or Performance Units under Section 162(m) of the Code
(e.g., in determining the Performance Goals and certifying in writing whether
the applicable Performance Goals have been achieved after the completion of the
applicable Performance Period). 

          (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.


          (e) Form and Timing of Payment
of Performance Units/Shares. Payment of
earned Performance Units/Shares will be made as soon as practicable after the
expiration of the applicable Performance Period or as otherwise determined by
the Administrator; provided, however, that the timing of payment shall in all
cases comply with Section 409A to the extent applicable to the Award. 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, subject to Section 3 of the Plan, again will be
available for grant under the Plan. 

     11.
Leaves of Absence/Transfer Between
Locations. If determined by the Administrator
(in its discretion and on a case-by-case basis) or as otherwise required by
Applicable Law, vesting of Awards granted hereunder will be suspended during any
unpaid leave of absence, such that vesting shall cease on the first day of any
unpaid leave of absence and shall only recommence upon return to active service.
A Participant will not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, or any Subsidiary. For purposes of
Incentive Stock Options, no such leave may exceed three (3) months, unless
reemployment upon expiration of such leave is guaranteed by 

17







statute or contract. If reemployment
upon expiration of a leave of absence approved by the Company is not so
guaranteed, then six (6) months following the first (1st) day of such
leave any Incentive Stock Option held by the Participant will cease to be
treated as an Incentive Stock Option and will be treated for tax purposes as a
Nonstatutory Stock Option. 

     12.
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.
Notwithstanding anything to the contrary in the Plan, in no event will the
Administrator have the right to determine and implement the terms and conditions
of any Award Transfer Program without stockholder approval. 

     13.
Adjustments; Dissolution or Liquidation;
Merger or Change in Control. 

          (a) Adjustments. In the event that any dividend or other distribution
(whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, or other change in the corporate
structure of the Company affecting the Shares occurs, the Administrator, in
order to prevent diminution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, will adjust the number and class
of Shares that may be delivered under the Plan and/or the number, class, and
price of Shares covered by each outstanding Award, the numerical Share limits in
Section 3 of the Plan and the per person numerical Share limits in Sections
6(a), 7(a), 8(a), 9(b) and 10(a) of the Plan. Notwithstanding the preceding, the
number of Shares subject to any Award always shall be a whole number.

          (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 (with respect to
an Option or SAR) or vested (with respect to an Award other than an Option or
SAR), an Award will terminate immediately prior to the consummation of such
proposed action. 

          (c) Change in
Control. In the event of a merger of the
Company with or into another corporation or other entity or a Change in Control,
each outstanding Award will be treated as the Administrator determines,
including, without limitation, that each Award be assumed or an equivalent
option or right substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. The Administrator will not be required
to treat all Awards similarly in the transaction. 

          In the
event that the successor corporation does not 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 and Restricted Stock Units will lapse, and,
with respect to Awards with performance-based vesting, all performance goals or


18







other vesting criteria will be deemed
achieved at one hundred percent (100%) of target levels and all other terms and
conditions met. In addition, if an Option or Stock Appreciation Right is not
assumed or substituted 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 exercisable for a period of time determined by
the Administrator in its sole discretion, and the Option or Stock Appreciation
Right will terminate upon the expiration of such period. 

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

          Notwithstanding
anything in this Section 13(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.

          (d) Outside Director
Awards. With respect to Awards granted to an
Outside Director 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 (unless such resignation is
at the request of the acquirer), 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 underlying such Award, including those Shares which would not
otherwise be vested or exercisable, all restrictions on Restricted Stock and
Restricted Stock Units will lapse, and, with respect to Awards with
performance-based vesting, all performance goals or other vesting criteria will
be deemed achieved at one hundred percent (100%) of target levels and all other
terms and conditions met. 

     14.
Tax.


          (a) Withholding
Requirements. Prior to the delivery of any
Shares or cash pursuant to an Award (or exercise thereof) or such earlier time
as any tax withholding obligations are due, 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).

19







          (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 minimum statutory amount required to be withheld or such other
amount as will not result in any adverse accounting consequences to the Company,
as the Administrator determines in its sole discretion, or (c) delivering to the
Company already-owned Shares having a Fair Market Value equal to the minimum
statutory amount required to be withheld or such other amount as will not result
in any adverse accounting consequences to the Company, as the Administrator
determines in its sole discretion. 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. 

          (c) Compliance With Section
409A. Awards will be designed and operated in
such a manner that they are either exempt from the application of, or comply
with, the requirements of Section 409A such that the grant, payment, settlement
or deferral will not be subject to the additional tax or interest applicable
under Section 409A, except as otherwise determined in the sole discretion of the
Administrator. Each payment or benefit under this Plan and under each Award
Agreement is intended to constitute a separate payment for purposes of Section
1.409A-2(b)(2) of the Treasury Regulations. The Plan, each Award and each Award
Agreement under the Plan is intended to be exempt from or otherwise meet the
requirements of Section 409A and will be construed and interpreted, including
but not limited with respect to ambiguities and/or ambiguous terms, in
accordance with such intent, except as otherwise specifically determined in the
sole discretion of the Administrator. To the extent that an Award or payment, or
the settlement or deferral thereof, is subject to Section 409A the Award will be
granted, paid, settled or deferred in a manner that will meet the requirements
of Section 409A, such that the grant, payment, settlement or deferral will not
be subject to the additional tax or interest applicable under Section 409A.


     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 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. 

     17.
Term of Plan. Subject to Section 23
of the Plan, the Plan will become effective
upon its approval by the Company’s stockholders. It will continue in effect for
a term of ten (10) years from the date of the initial Board action to adopt the
Plan unless terminated earlier under Section 18 of the Plan. 

     18.
Amendment and Termination of the
Plan. 

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

20







          (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. 

     19.
Compliance with Applicable
Laws. The terms of the Plan are subject to
Applicable Laws and shall be interpreted in such a manner as to comply with
Applicable Laws.

     20.
Conditions Upon Issuance of
Shares. 

          (a) Legal
Compliance. The granting of Awards and the
issuance and delivery of Shares under the Plan shall be subject to all
Applicable Laws, rule and regulations, and to such approvals by any governmental
agencies or national securities exchanges as may be required. Shares will not be
issued pursuant to the exercise or vesting of an Award and the Company may not
permit the exercise or vesting of an Award unless the exercise or vesting of
such Award and the issuance and delivery of such Shares will comply with
Applicable Laws, rules and regulations 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. 

     21.
Inability to Obtain Authority. The inability of the Company to obtain authority from any
regulatory body having jurisdiction or to complete or comply with the
requirements of any registration or other qualification of the Awards and/or
Shares under any state, federal or foreign law or under the rules and
regulations of the Securities and Exchange Commission, the stock exchange on
which Shares of the same class are then listed, or any other governmental or
regulatory body, which authority, registration, qualification or rule compliance
is deemed by the Company’s counsel to be necessary or advisable for the grant,
exercise or vesting of Awards or the issuance and sale of any Shares hereunder,
will relieve the Company of any liability in respect of the failure to grant
Awards, to allow exercise or vesting of Awards or to issue or sell such Shares
as to which such requisite authority, registration, qualification or rule
compliance will not have been obtained. 

     22.
Forfeiture Events. The Administrator may specify in an Award Agreement that the
Participant’s rights, payments, and benefits with respect to an Award shall be
subject to reduction, cancellation, forfeiture, or recoupment upon the
occurrence of certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award. Such events may include, but
shall not be limited to, fraud, breach of a fiduciary duty, restatement of
financial statements as a result of fraud or willful errors or omissions,
termination of employment for cause, violation of material Company and/or
Subsidiary policies, breach of non-competition, confidentiality, or other


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restrictive covenants that may apply to
the Participant, or other conduct by the Participant that is detrimental to the
business or reputation of the Company and/or its Subsidiaries. The Administrator
may also require the application of this Section with respect to any Award
previously granted to a Participant even without any specified terms being
included in any applicable Award Agreement to the extent required under
Applicable Laws. 

     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 by the
Board. Such stockholder approval will be obtained in the manner and to the
degree required under Applicable Laws. 

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