2004 Stock Incentive Plan



 EXHIBIT 10.4 
  
 INTRALASE CORP. 
  
 2004 STOCK INCENTIVE PLAN 
  
 This 2004 STOCK INCENTIVE PLAN (the “Plan”) is hereby established by INTRALASE CORP., a Delaware corporation (the “Company”), and
adopted by its Board of Directors as of May 27, 2004 (the “Effective Date”). 
  
 ARTICLE 1 
  
 PURPOSES OF
THE PLAN 
  
 1.1 Purposes. The purposes of the
Plan are (a) to enhance the ability of the Company and its Affiliated Companies to attract and retain the services of officers, qualified employees, directors and outside consultants and service providers to the Company, upon whose judgment,
initiative and efforts the successful conduct and development of the Company’s businesses largely depends, and (b) to provide additional incentives to such persons to devote their utmost effort and skill to the advancement and betterment of the
Company, by providing them an opportunity to participate in the ownership of the Company and thereby have an interest in the success and increased value of the Company that coincides with the financial interests of the Company’s stockholders.

  
 ARTICLE 2 
  
 DEFINITIONS 
  
 For purposes of this Plan, the following terms shall have the meanings
indicated: 
  
 2.1 Administrator.
“Administrator” means the Board or, if the Board delegates responsibility for any matter to the Committee, the term Administrator shall mean the Committee. 
  
 2.2 Affiliated Company. “Affiliated Company” means any “parent corporation” or
“subsidiary corporation” of the Company, whether now existing or hereafter created or acquired, as those terms are defined in Sections 424(e) and 424(f) of the Code, respectively. 
  
 2.3 Award. “Award” means an Option, SAR, Restricted
Share, Performance Share or Performance Unit issued to a Participant under the Plan. 
  
 2.4 Award Agreement. “Award Agreement” means an Option Agreement, SAR Agreement, Restricted Shares Issuance Agreement, Stock Purchase Agreement, Performance Share Agreement, or Performance Unit
Agreement issued to a Participant pursuant to the Plan. 
  
 2.5
Board. “Board” means the Board of Directors of the Company. 
  
 2.6 Change in Control. “Change in Control” shall mean the occurrence of any of the following events: 
  
 (a) The approval by stockholders of the Company of a merger or consolidation of the Company with any other corporation, other than
a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent 

  









 
(either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; provided, however, that any such merger or consolidation as a result of a Going Private Transaction
(defined below) pursuant to Rule 13e-3 of the Securities Exchange Act of 1934 (the “Act”) shall not constitute a Change of Control; 
  
 (b) The approval by the stockholders of the Company of a plan of complete liquidation of the Company or an agreement for the sale
or disposition by the Company of all or substantially all of the Company’s assets; 
  
 (c) Any “person” (as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
becoming the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then
outstanding voting securities; provided, however, that any such “person” becoming a “beneficial owner” of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the
Company’s then outstanding voting securities as a result of (A) a financing of the Company, or (B) an all cash tender offer by a private equity firm, venture capital firm or other financial buyer, as reasonably determined by the Company, shall
not constitute a Change in Control; or 
  
 (d)
A change in the composition of the Board, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A) are directors of the Company as of the date hereof
or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of those directors whose election or nomination was not in connection with any transactions described in subsections (i), (ii), or (iii) or
in connection with an actual or threatened proxy contest relating to the election of directors of the Company; provided, however, that any such change in the composition of the Board as a result of a financing of the Company (as reasonably
determined by the Company) shall not constitute a Change in Control. 
  
 2.7 Code. “Code” means the Internal Revenue Code of 1986, as amended from time to time. 
  
 2.8 Committee. “Committee” means a committee of two or more members of the Board appointed to administer the Plan, as set forth in
Section 9.1 hereof. 
  
 2.9 Common Stock.
“Common Stock” means the Common Stock of the Company, $.01 par value, subject to adjustment pursuant to Section 4.3 hereof. 
  
 2.10 Consultant. “Consultant” means any consultant or advisor if: (i) the consultant or advisor renders bona fide services to the
Company or any Affiliated Company; (ii) the services rendered by the consultant or advisor are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for
the Company’s securities; and (iii) the consultant or advisor is a natural person who has contracted directly with the Company or any Affiliated Company to render such services. 
  
 2.11 Covered Employee. “Covered Employee” means the chief executive officer of the Company (or the
individual acting in such capacity) and the four (4) other individuals that are the 

  

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highest compensated officers of the Company for the relevant taxable year for whom total compensation is required to be reported to stockholders under the
Exchange Act. 
  
 2.12 Disability.
“Disability” means permanent and total disability as defined in Section 22(e)(3) of the Code. The Administrator’s determination of a Disability or the absence thereof shall be conclusive and binding on all interested parties.

  
 2.13 Effective Date. “Effective Date”
means the date on which the Plan is adopted by the Board, as set forth on the first page hereof. 
  
 2.14 Exchange Act. “Exchange Act” means the Securities and Exchange Act of 1934, as amended. 
  
 2.15 Exercise Price. “Exercise Price” means (i) the
purchase price per share of Common Stock payable upon exercise of an Option, or (ii) the value assigned to an SAR as designated by the Administrator at the time such SAR is granted. 
  
 2.16 Fair Market Value. “Fair Market Value” on any given date means the value of one share of Common
Stock, determined as follows: 
  
 (a) If
the Common Stock is then listed or admitted to trading on a Nasdaq market system or a stock exchange which reports closing sale prices, the Fair Market Value shall be the closing sale price on the date of valuation on such Nasdaq market system or
principal stock exchange on which the Common Stock is then listed or admitted to trading, or, if no closing sale price is quoted on such day, then the Fair Market Value shall be the closing sale price of the Common Stock on such Nasdaq market system
or such exchange on the next preceding day for which a closing sale price is reported. 
  
 (b) If the Common Stock is not then listed or admitted to trading on a Nasdaq market system or a stock exchange which reports
closing sale prices, the Fair Market Value shall be the average of the closing bid and asked prices of the Common Stock in the over-the-counter market on the date of valuation. 
  
 (c) If neither (a) nor (b) is applicable as of the date of valuation, then the Fair Market Value
shall be determined by the Administrator in good faith using any reasonable method of evaluation, which determination shall be conclusive and binding on all interested parties. 
  
 2.17 Incentive Option. “Incentive Option” means any Option designated and qualified as an
“incentive stock option” as defined in Section 422 of the Code. 
  
 2.18 Incentive Option Agreement. “Incentive Option Agreement” means an Option Agreement with respect to an Incentive Option. 
  
 2.19 NASD Dealer. “NASD Dealer” means a broker-dealer that is a member of the National Association
of Securities Dealers, Inc. 
  
 2.20 Nonqualified
Option. “Nonqualified Option” means any Option that is not an Incentive Option. To the extent that any Option designated as an Incentive Option fails in whole or in part to qualify as an Incentive Option, including, without limitation,
for failure to meet the 

  

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limitations applicable to a 10% Stockholder or because it exceeds the annual limit provided for in Section 5.6 below, it shall to that extent constitute a
Nonqualified Option. 
  
 2.21 Nonqualified Option
Agreement. “Nonqualified Option Agreement” means an Option Agreement with respect to a Nonqualified Option. 
  
 2.22 Option. “Option” means any option to purchase Common Stock granted pursuant to the Plan. 
  
 2.23 Option Agreement. “Option Agreement” means the
written agreement entered into between the Company and the Optionee with respect to an Option granted under the Plan. 
  
 2.24 Optionee. “Optionee” means a Participant who holds an Option. 
  
 2.25 Non-employee Director. “Non-employee Director” shall have the meaning given in Section 5.10
below. 
  
 2.26 Participant.
“Participant” means an individual or entity who holds an Award under the Plan. 
  
 2.27 Performance Share. A “Performance Share” award is a grant of a right to receive shares of Common Stock which is contingent on the achievement of performance or other objectives during a
specified period. 
  
 2.28 Performance Unit. A
“Performance Unit” award is a grant of a right to receive a designated dollar value amount equal to the Fair Market Value of a designated number of shares of Common Stock which is contingent on the achievement of performance or other
objectives during a specified period. 
  
 2.29 Purchase
Price. “Purchase Price” means the purchase price per Restricted Share. 
  
 2.30 Restricted Shares. “Restricted Shares” means shares of Common Stock issued pursuant to Article 7 hereof, subject to any restrictions and conditions as are established pursuant to such
Article 7. 
  
 2.31 Restricted Shares Issuance
Agreement. “Restricted Shares Issuance Agreement” means the written agreement entered into between the Company and a Participant with respect to the issuance of Restricted Shares under the Plan. 
  
 2.32 Service Provider. “Service Provider” means a
Consultant, employee, non-employee Director of the Company or other natural person the Administrator authorizes to become a Participant in the Plan and who provides services to (i) the Company, (ii) an Affiliated Company, or (iii) any other business
venture designated by the Administrator in which the Company (or any entity that is a successor to the Company) or an Affiliated Company has a significant ownership interest. 
  
 2.33 Stock Appreciation Right. A “Stock Appreciation Right” (also referred to as an “SAR”)
entitles the Participant to receive, in cash or Common Stock, value equal to (or otherwise based on) the excess of: (a) the Fair Market Value of a specified number of shares of Common Stock at the time of exercise; over (b) an Exercise Price
established by the Administrator at the time of grant. 
  

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 2.34 Stock Purchase Agreement. “Stock Purchase Agreement” means the written
agreement entered into between the Company and a Participant with respect to the purchase of Restricted Shares under the Plan. 
  
 2.35 10% Stockholder. “10% Stockholder” means a person who, as of a relevant date, owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of an Affiliated Company. 
  
 ARTICLE 3 
  
 ELIGIBILITY 
  
 3.1 Incentive Options. Only employees of the Company or of an Affiliated Company (including officers of the Company and members of the Board
if they are employees of the Company or of an Affiliated Company) are eligible to receive Incentive Options under the Plan. 
  
 3.2 Nonqualified Options and Restricted Shares. Employees of the Company or of an Affiliated Company, officers of the Company and members of
the Board (whether or not employed by the Company or an Affiliated Company), and Service Providers are eligible to receive Nonqualified Options or acquire Restricted Shares under the Plan. 
  
 3.3 Section 162(m) Limitation. Subject to the provisions of
Section 4.2, no employee of the Company or of an Affiliated Company shall be eligible to be granted Options covering more than 500,000 shares of Common Stock during any calendar year. Notwithstanding the foregoing, in connection with his or her
initial service to the Company, an employee of the Company or of an Affiliated Company shall be eligible to be granted Options covering up to 800,000 shares of Common Stock during the calendar year which includes such individual’s initial
service to the Company. 
  
 3.4 Restrictions.
Notwithstanding Sections 3.1 and 3.2 above or any other provision of this Plan to the contrary, no employee, director, Consultant or officer of the Company or any Affiliated Company shall be eligible to receive an Option or acquire Restricted
Shares, or any right to receive the same, pursuant to this Plan unless and until this Plan has been approved by a majority of the shares present and entitled to vote at a meeting of the Company’s stockholders. 
  
 ARTICLE 4 
  
 PLAN SHARES 
  
 4.1 Shares Subject to the Plan. A total of 5,000,000 shares of Common Stock may be issued under the Plan, subject to adjustment as to the
number and kind of shares pursuant to Section 4.3 hereof. For purposes of this limitation, in the event that (a) all or any portion of any Award granted or offered under the Plan can no longer under any circumstances be exercised or purchased, or
(b) any shares of Common Stock are reacquired by the Company which were initially the subject of an Incentive Option Agreement, Nonqualified Option Agreement, Restricted Shares Issuance Agreement or Stock Purchase Agreement, the shares of Common
Stock allocable to the unexercised portion of such Option, Stock Purchase Agreement, or such Restricted Shares Issuance Agreement, or the shares so reacquired, shall again be available for grant or issuance under the Plan. Shares of 

  

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Common Stock which are withheld in order to satisfy federal, state or local tax liability (to the extent permitted by the Administrator) shall not count
against the above limit and shall again become available for grant or issuance under the Plan. Additionally, only the number of shares of Common Stock actually issued upon exercise of a Stock Appreciation Right shall count against the above limit,
and any shares which were designated to be used for such purposes and were not in fact so used shall again become available for grant or issuance under the Plan. 
  
 4.2 Additional Limitations. Subject to Section 4.3 hereof, the following additional maximums are imposed under
the Plan: 
  
 (a) The maximum number of
shares of Common Stock that may be issued pursuant to Options intended to be Incentive Stock Options shall be 500,000 shares. 
  
 (b) The maximum number of shares of Common Stock that may be issued as Restricted Shares shall be 500,000 shares. 
  
 4.3 Changes in Capital Structure. In the event that the
outstanding shares of Common Stock are hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of a recapitalization, stock split, reverse stock split,
combination of shares, reclassification, stock dividend, or other similar change in the capital structure of the Company, then appropriate adjustments shall be made by the Administrator to the aggregate number and kind of shares issuable thereafter
under this Plan, the number and kind of shares and the price per share subject to outstanding Award Agreements and the limit on the number of shares under Section 3.3 above, all in order to preserve, as nearly as practical, but not to increase, the
benefits to Participants. 
  
 ARTICLE 5 
  
 OPTIONS 
  
 5.1 Option Agreement. Each Option granted pursuant to this Plan shall be evidenced by an Option Agreement that
shall specify the number of shares subject thereto, the Exercise Price per share, and whether the Option is an Incentive Option or Nonqualified Option. As soon as is practical following the grant of an Option, an Option Agreement shall be duly
executed and delivered by or on behalf of the Company to the Optionee to whom such Option was granted. Each Option Agreement shall be in such form and contain such additional terms and conditions, not inconsistent with the provisions of this Plan,
as the Administrator shall, from time to time, deem desirable, including, without limitation, the imposition of any rights of first refusal and resale obligations upon any shares of Common Stock acquired pursuant to an Option Agreement. Each Option
Agreement may be different from each other Option Agreement. 
  
 5.2 Exercise Price. The Exercise Price per share of Common Stock covered by each Option shall be determined by the Administrator, subject to the following: (a) the Exercise Price of an Incentive Option shall not be less than
100% of Fair Market Value on the date the Incentive Option is granted, (b) the Exercise Price for Nonqualified Options granted to Covered Employees shall not be less than 100% of Fair Market Value on such date, and (c) if the person to whom an
Incentive Option is granted is a 10% Stockholder on the date of grant, the Exercise Price shall not be less than 110% of Fair Market Value on the date the Option is granted. However, an Option may be granted with an exercise price lower than that
set forth in the preceding sentence if such Option is 

  

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granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424 of the Code. 
  
 5.3 Payment of Exercise Price. Payment of the Exercise Price
shall be made upon exercise of an Option and may be made, in the discretion of the Administrator, subject to any legal restrictions, by: (a) cash; (b) check; (c) the surrender of shares of Common Stock acquired pursuant to the exercise of an Option
(provided that shares acquired pursuant to the exercise of options granted by the Company must have been held by the Optionee for the requisite period necessary to avoid a charge to the Company’s earnings for financial reporting purposes),
which surrendered shares shall be valued at Fair Market Value as of the date of such exercise; (d) the waiver of compensation due or accrued to the Optionee for services rendered; (e) a “same day sale” commitment from the Optionee and an
NASD Dealer whereby the Optionee irrevocably elects to exercise the Option and to sell a portion of the shares so purchased to pay for the Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt of such shares to forward the
Exercise Price directly to the Company; or (f) any combination of the foregoing methods of payment or any other consideration or method of payment as shall be permitted by applicable law, including the Sarbanes-Oxley Act of 2002, as amended.

  
 5.4 Term and Termination of Options. The term
and provisions for termination of each Option shall be as fixed by the Administrator, but no Option may be exercisable more than ten (10) years after the date it is granted. An Incentive Option granted to a person who is a 10% Stockholder on the
date of grant shall not be exercisable more than five (5) years after the date it is granted. 
  
 5.5 Vesting and Exercise of Options. Each Option shall vest and become exercisable in one or more installments at such time or times and subject to such conditions, including without limitation the
achievement of specified performance goals or objectives, as shall be determined by the Administrator. 
  
 5.6 Annual Limit on Incentive Options. To the extent required for “incentive stock option” treatment under Section 422 of the
Code, the aggregate Fair Market Value (determined as of the time of grant) of the Common Stock, with respect to which Incentive Options granted under this Plan and any other plan of the Company or any Affiliated Company become exercisable for the
first time by an Optionee during any calendar year, shall not exceed $100,000. 
  
 5.7 Nontransferability of Options. Except as otherwise provided by the Administrator in an Option Agreement and as permissible under applicable law, no Option shall be assignable or transferable except
by will or the laws of descent and distribution, and during the life of the Optionee shall be exercisable only by such Optionee. 
  
 5.8 Rights as Stockholder. An Optionee or permitted transferee of an Option shall have no rights or privileges as a stockholder with respect
to any shares covered by an Option until such Option has been duly exercised and certificates representing shares purchased upon such exercise have been issued to such person. 
  
 5.9 Unvested Shares. The Administrator shall have the discretion to grant Options which are exercisable for
unvested shares of Common Stock. Should the Optionee cease being an employee, a Service Provider, an officer, director or Consultant of the Company while owning such unvested shares, the Company shall have the right to repurchase, at the exercise
price paid per share, 

  

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any or all of those unvested shares. The terms upon which such repurchase right shall be exercisable (including the period and procedure for exercise and the
appropriate vesting schedule for the purchased shares) shall be established by the Administrator and set forth in the document evidencing such repurchase right. 
  

ARTICLE 6 
  
 STOCK APPRECIATION RIGHTS (“SARs”) 
  
 6.1 Issuance of SARs. The Administrator shall have the right to issue SARs, subject to such terms, restrictions and conditions as the
Administrator may determine at the time of grant. Such conditions may include, but are not limited to, continued employment. 
  
 6.2 SAR Agreements. Each SAR shall be issued pursuant to an SAR Agreement. Each SAR Agreement may be different from each other SAR
Agreement. 
  
 6.3 Exercise Price. The Exercise
Price of each SAR shall be established by the Administrator or shall be determined by a method established by the Administrator at the time the SAR is granted; except that the Exercise Price shall not be less than 100% of the Fair Market Value of a
share of Common Stock on the date of grant. 
  
 6.4
Restrictions on Awards. Each SAR Award shall be subject to such conditions, restrictions and contingencies as the Administrator shall determine. 
  
 6.5 Exercise. SARs shall be exercisable in accordance with such terms and conditions and during such periods as may be established by the
Administrator, pursuant to the SAR Agreement. 
  
 ARTICLE 7

  
 RESTRICTED SHARES 
  
 7.1 Issuance and Sale of Restricted Shares. The Administrator
shall have the right to issue, at a Purchase Price determined by the Administrator (provided that such Purchase Price shall not be less than Fair Market Value for shares issued to a Covered Employee), shares of Common Stock subject to such terms,
restrictions and conditions as the Administrator may determine at the time of grant (“Restricted Shares”). Such conditions may include, but are not limited to, continued employment or the achievement of specified performance goals or
objectives. Notwithstanding the foregoing, the Administrator, in its discretion, may issue Restricted Shares to Participants with no Purchase Price. 
  
 7.2 Restricted Shares Purchase Agreements. A Participant shall have no rights with respect to the Restricted Shares covered by a Stock
Purchase Agreement until the Participant has paid the full Purchase Price (if applicable) to the Company in the manner set forth in Section 7.3 hereof and has executed and delivered to the Company the Stock Purchase Agreement. Each Stock Purchase
Agreement shall be in such form, and shall set forth the Purchase Price and such other terms, conditions and restrictions of the Restricted Shares, not inconsistent with the provisions of this Plan, as the Administrator shall, from time to time,
deem desirable. Each Stock Purchase Agreement may be different from each other Stock Purchase Agreement. 
  

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 7.3 Payment of Purchase Price. Subject to any legal restrictions, payment of the Purchase
Price may be made, in the discretion of the Administrator, by: (a) cash; (b) check; (c) the surrender of shares of Common Stock owned by the Participant that have been held by the Participant for the requisite period necessary to avoid a charge to
the Company’s earnings for financial reporting purposes, which surrendered shares shall be valued at Fair Market Value as of the date of such acceptance; (d) the waiver of compensation due or accrued to the Participant for services rendered; or
(e) any combination of the foregoing methods of payment or any other consideration or method of payment as shall be permitted by applicable corporate law, including the Sarbanes-Oxley Act of 2002, as amended. 
  
 7.4 Rights as a Stockholder. Upon complying with the provisions
of Section 7.2 hereof, a Participant shall have the rights of a stockholder with respect to the Restricted Shares purchased pursuant to a Stock Purchase Agreement, including voting and dividend rights, subject to the terms, restrictions and
conditions as are set forth in such Stock Purchase Agreement. Unless the Administrator shall determine otherwise, certificates evidencing Restricted Shares shall remain in the possession of the Company until such shares have vested in accordance
with the terms of the Stock Purchase Agreement. 
  
 7.5
Restrictions. Restricted Shares may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as specifically provided in the Stock Purchase Agreement. In the event of termination of a Participant’s
employment, service as a director of the Company or Service Provider status for any reason whatsoever (including death or disability), the Stock Purchase Agreement may provide, in the discretion of the Administrator, that the Company shall have the
right, exercisable at the discretion of the Administrator, to repurchase, at the original Purchase Price, any Restricted Shares which have not vested as of the date of termination. 
  
 7.6 Vesting of Restricted Shares. Subject to Section 7.5 above, the Stock Purchase Agreement shall specify the
date or dates, the performance goals or objectives which must be achieved, and any other conditions on which the Restricted Shares may vest. 
  
 ARTICLE 8 
  
 PERFORMANCE SHARES AND PERFORMANCE UNITS 
  
 8.1 Issuance of Performance Shares and Performance Units. The Administrator shall have the right to issue Performance Shares and Performance
Units, subject to such terms, restrictions and conditions as the Administrator may determine at the time of grant. Such conditions may include, but are not limited to, continued employment or the achievement of specified performance goals or
objectives. 
  
 8.2 Performance Share and Performance
Unit Agreements. Performance Shares shall be issued pursuant to Performance Share Issuance Agreements, and Performance Units shall be issued pursuant to Performance Unit Issuance Agreements. Each Performance Share or Performance Unit Agreement
may be different from each other Performance Share or Performance Unit Agreement. 
  
 8.3 Terms of Performance Units and Performance Shares. Performance Shares and Performance Units shall be subject to such conditions, restrictions and contingencies as the Administrator shall determine.

  

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 ARTICLE 9 
  

ADMINISTRATION OF THE PLAN 
  
 9.1 Administrator. Authority to control and manage the operation and administration of the Plan shall be vested in the Board, which may
delegate such responsibilities in whole or in part to a committee consisting of two (2) or more members of the Board (the “Committee”). Members of the Committee may be appointed from time to time by, and shall serve at the pleasure of, the
Board. The Board may limit the composition of the Committee to those persons necessary to comply with the requirements of Section 162(m) of the Code and Section 16 of the Exchange Act. As used herein, the term “Administrator” means the
Board or, with respect to any matter as to which responsibility has been delegated to the Committee, the term Administrator shall mean the Committee. Notwithstanding the foregoing, the Administrator may delegate, to one or more officers of the
Company, its powers under Section 9.2 of the Plan below, to the extent permitted by Section 157(c) of the Delaware General Corporation Law and any other applicable law. 
  
 9.2 Powers of the Administrator. In addition to any other powers or authority conferred upon the Administrator
elsewhere in the Plan or by law, the Administrator shall have full power and authority: (a) to determine the persons to whom, and the time or times at which, Awards shall be granted, the number of shares to be represented by each Option, SAR and
Performance Unit, the number of Restricted Shares to be offered, the number of shares offered as Performance Shares, and the consideration to be received by the Company upon the exercise of such Options or sale of such Restricted Shares; (b) to
interpret the Plan; (c) to create, amend or rescind rules and regulations relating to the Plan; (d) to determine the terms, conditions and restrictions contained in, and the form of, Award Agreements; (e) to determine the identity or capacity of any
persons who may be entitled to exercise a Participant’s rights under any Award Agreement under the Plan; (f) to correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award Agreement; (g) to accelerate
the vesting of any Option or release or waive any repurchase rights of the Company with respect to Restricted Shares; (h) to extend the exercise date of any Option or acceptance date of any Restricted Shares; (i) to provide for rights of first
refusal and/or repurchase rights; (j) to amend outstanding Award Agreements to provide for, among other things, any change or modification which the Administrator could have included in the original Award Agreement or in furtherance of the powers
provided for herein; and (k) to make all other determinations necessary or advisable for the administration of the Plan, but only to the extent not contrary to the express provisions of the Plan. Any action, decision, interpretation or determination
made in good faith by the Administrator in the exercise of its authority conferred upon it under the Plan shall be final and binding on the Company and all Participants. In making any determination or in taking or not taking any action under the
Plan, the Administrator may obtain and rely upon the advice of experts, including advisors to the Company. 
  
 9.3 Limitation on Liability. No employee of the Company or member of the Board or Committee shall be subject to any liability with respect
to duties under the Plan unless the person acts fraudulently or in bad faith. To the extent permitted by law, the Company shall indemnify each member of the Board or Committee, and any employee of the Company with duties under the Plan, who was or
is a party, or is threatened to be made a party, to any threatened, pending or completed proceeding, whether civil, criminal, administrative or investigative, by reason of such person’s conduct in the performance of duties under the Plan.

  

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 ARTICLE 10 
  

CHANGE IN CONTROL 
  
 10.1 Change in Control. In order to preserve a Participant’s rights in the event of a Change in Control of the Company: 
  
 (a) The Administrator shall have the discretion to
provide in each Award Agreement the terms and conditions that relate to (i) vesting of such Award in the event of a Change in Control, and (ii) assumption of such Awards or issuance of comparable securities under an incentive program in the event of
a Change in Control. The aforementioned terms and conditions may vary in each Award Agreement. 
  
 (b) If the terms of an outstanding Option Agreement provide for accelerated vesting in the event of a Change in Control, or to the
extent that an Option is vested and not yet exercised, the Administrator in its discretion may provide, in connection with the Change in Control transaction, for the purchase or exchange of each Option for an amount of cash or other property having
a value equal to the difference (or “spread”) between: (x) the value of the cash or other property that the Participant would have received pursuant to the Change in Control transaction in exchange for the shares issuable upon exercise of
the Option had the Option been exercised immediately prior to the Change in Control, and (y) the Exercise Price of the Option. 
  
 (c) Outstanding Options shall terminate and cease to be exercisable upon consummation of a Change in Control except to the extent
that the Options are assumed by the successor entity (or parent thereof) pursuant to the terms of the Change in Control transaction. 
  
 (d) The Administrator shall cause written notice of a proposed Change in Control transaction to be given to Participants not less
than fifteen (15) days prior to the anticipated effective date of the proposed transaction. 
  
 ARTICLE 11 
  
 AMENDMENT
AND TERMINATION OF THE PLAN 
  
 11.1 Amendments.
Subject to applicable law, including NASD stockholder approval requirements, the Board may from time to time alter, amend, suspend or terminate the Plan in such respects as the Board may deem advisable. No such alteration, amendment, suspension or
termination shall be made which shall substantially affect or impair the rights of any Participant under an outstanding Award Agreement without such Participant’s consent. The Board may alter or amend the Plan to comply with requirements under
the Code relating to Incentive Options or other types of options which give Optionees more favorable tax treatment than that applicable to Options granted under this Plan as of the date of its adoption. Upon any such alteration or amendment, any
outstanding Option granted hereunder may, if the Administrator so determines and if permitted by applicable law, be subject to the more favorable tax treatment afforded to an Optionee pursuant to such terms and conditions. 
  
 11.2 Plan Termination. Unless the Plan shall theretofore have
been terminated, the Plan shall terminate on the tenth (10th) anniversary of the Effective Date and no Awards may be granted 

  

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under the Plan thereafter, but Award Agreements then outstanding shall continue in effect in accordance with their respective terms. 
  
 ARTICLE 12 
  
 TAX WITHHOLDING 
  
 12.1 Withholding. The Company shall have the power to withhold,
or require a Participant to remit to the Company in cash, an amount sufficient to satisfy any applicable Federal, state, and local tax withholding requirements with respect to any Options exercised, any Restricted Shares issued, or any other Award
issued under the Plan. To the extent permissible under applicable tax, securities and other laws, the Administrator may, in its sole discretion and upon such terms and conditions as it may deem appropriate, permit a Participant to satisfy his or her
obligation to pay any such tax, in whole or in part, up to an amount determined on the basis of the highest marginal tax rate applicable to such Participant, by (a) directing the Company to apply shares of Common Stock to which the Participant is
entitled as a result of the exercise of an Option or as a result of the purchase of or lapse of restrictions on Restricted Shares, or (b) delivering to the Company shares of Common Stock owned by the Participant. The shares of Common Stock so
applied or delivered in satisfaction of the Participant’s tax withholding obligation shall be valued at their Fair Market Value as of the date of measurement of the amount of income subject to withholding. 
  
 ARTICLE 13 
  
 MISCELLANEOUS 
  
 13.1 Repricings Not Permitted. Notwithstanding anything herein
to the contrary, the Administrator shall not have the authority to cause an adjustment to the Exercise Price of any outstanding Options or SARs (a “Repricing”), unless such Repricing is approved by a majority of the Company’s
stockholders entitled to vote on such matter. 
  
 13.2
Benefits Not Alienable. Other than as provided above, benefits under the Plan may not be assigned or alienated, whether voluntarily or involuntarily. Any unauthorized attempt at assignment, transfer, pledge or other disposition shall be
without effect. 
  
 13.3 No Enlargement of Employee
Rights. This Plan is strictly a voluntary undertaking on the part of the Company and shall not be deemed to constitute a contract between the Company and any Participant to be consideration for, or an inducement to, or a condition of, the
employment of any Participant. Nothing contained in the Plan shall be deemed to give the right to any Participant to be retained as an employee of the Company or any Affiliated Company or to interfere with the right of the Company or any Affiliated
Company to discharge any Participant at any time. 
  
 13.4
Application of Funds. The proceeds received by the Company from the sale of Common Stock pursuant to Option Agreements and Stock Purchase Agreements, except as otherwise provided herein, will be used for general corporate purposes.

  
 13.5 Annual Reports. During the term of this
Plan, the Company will furnish to each Optionee who does not otherwise receive such materials, copies of all reports, proxy statements and other communications that the Company distributes generally to its stockholders. 
  

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