Exhibit 10.2


 


SYMMETRICOM, INC.


2006 INCENTIVE AWARD PLAN


(As Amended Through October 31, 2008)


 


ARTICLE
1.


 


PURPOSE


 


The purpose of
the Symmetricom, Inc. 2006 Incentive Award Plan (the “Plan”) is to
promote the success and enhance the value of Symmetricom, Inc. (the “Company”)
by linking the personal interests of the members of the Board, Employees, and
Consultants to those of Company stockholders and by providing such individuals
with an incentive for outstanding performance to generate superior returns to
Company stockholders.  The Plan is
further intended to provide flexibility to the Company in its ability to
motivate, attract, and retain the services of members of the Board, Employees,
and Consultants upon whose judgment, interest, and special effort the
successful conduct of the Company’s operation is largely dependent.


 


ARTICLE
2.


 


DEFINITIONS
AND CONSTRUCTION


 


Wherever the
following terms are used in the Plan they shall have the meanings specified
below, unless the context clearly indicates otherwise.  The singular pronoun shall include the plural
where the context so indicates.


 


2.1           “Award”
means an Option, a Restricted Stock award, a Stock Appreciation Right award, a
Performance Share award, a Performance Stock Unit award, a Dividend Equivalents
award, a Stock Payment award, a Deferred Stock award, a Restricted Stock Unit
award, a Performance Bonus Award, or a Performance-Based Award granted to a
Participant pursuant to the Plan.


 


2.2           “Award
Agreement” means any written agreement, contract, or other instrument or
document evidencing an Award, including through electronic medium.


 


2.3           “Board”
means the Board of Directors of the Company.


 


2.4           “Change
of Control” Change of Control means:


 


(a)           the
acquisition, directly or indirectly, by any “person” or “group” (as those terms
are defined in Sections 3(a)(9), 13(d) and 14(d) of the Exchange Act
of “beneficial ownership” (as determined pursuant to Rule 13d-3 under the
Exchange Act of securities entitled to vote generally in the election of
directors (“voting securities”) of the Company that represent fifty percent
(50%) or more of the combined voting power of the Company’s then outstanding
voting securities, other than:


 


(i)            an
acquisition by a trustee or other fiduciary holding securities under any
employee benefit plan (or related trust) sponsored or maintained by the Company
or 


 

















 


any person controlled by the Company or by
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any person controlled by the Company, or


 


(ii)           an
acquisition of voting securities by the Company or a corporation owned,
directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of the stock of the Company.


 


Notwithstanding the foregoing, the following event shall not constitute
an “acquisition” by any person or group for purposes of this Section: an
acquisition of the Company’s securities by the Company that causes the Company’s
voting securities beneficially owned by a person or group to represent fifty
percent (50%) or more of the combined voting power of the Company’s then
outstanding voting securities; provided,
however, that if a person or group shall become the beneficial owner
of fifty percent (50%) or more of the combined voting power of the Company’s
then outstanding voting securities by reason of share acquisitions by the
Company as described above and shall, after such share acquisitions by the
Company, become the beneficial owner of any additional voting securities of the
Company, then such acquisition shall constitute a Change of Control; or


 


(b)           the
consummation by the Company (whether directly involving the Company or
indirectly involving the Company through one or more intermediaries) of (x) a
merger, consolidation, reorganization, or business combination or (y) a
sale or other disposition of all or substantially all of the Company’s assets
or (z) the acquisition of assets or stock of another entity, in each case
other than a transaction which results in the Company’s voting securities
outstanding immediately before the transaction continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
Company or the person that, as a result of the transaction, controls, directly
or indirectly, the Company or owns, directly or indirectly, all or
substantially all of the Company’s assets or otherwise succeeds to the business
of the Company (the Company or such person, the “Successor Entity”)) directly or
indirectly, at least a majority of the combined voting power of the Successor
Entity’s outstanding voting securities immediately after the transaction.


 


2.5           “Code”
means the Internal Revenue Code of 1986, as amended.


 


2.6           “Committee”
means the committee of the Board described in Article 12.


 


2.7           “Consultant”
means any consultant or adviser if: (a) the consultant or adviser renders
bona fide services to the Company; (b) the services rendered by the
consultant or adviser 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 (c) the
consultant or adviser is a natural person who has contracted directly with the
Company to render such services.


 


2.8           “Covered
Employee” means an Employee who is, or could be, a “covered employee”
within the meaning of Section 162(m) of the Code.


 


2.9           “Deferred
Stock” means a right to receive a specified number of shares of Stock
during specified time periods pursuant to Section 8.5.


 


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2.10         “Disability”  means that the Participant qualifies to receive long-term
disability payments under the Company’s long-term disability insurance program,
as it may be amended from time to time.


 


2.11         “Dividend
Equivalents” means a right granted to a Participant pursuant to Section 8.3
to receive the equivalent value (in cash or Stock) of dividends paid on Stock.


 


2.12         “Effective
Date” shall have the meaning set forth in Section 13.1.


 


2.13         “Eligible
Individual” means any person who is an Employee, a Consultant or an
Independent Director, as determined by the Committee.


 


2.14         “Employee”
means any officer or other employee (as defined in accordance with Section 3401(c) of
the Code) of the Company or any Subsidiary.


 


2.15         “Exchange
Act” means the Securities Exchange Act of 1934, as amended.


 


2.16         “Fair
Market Value” means, as of any given date, (a) if Stock is traded on
an exchange, the closing price of a share of Stock as reported in the Wall Street Journal (or such other source as the Company may
deem reliable for such purposes) for such date, or if no sale occurred on such
date, the first trading date immediately prior to such date during which a sale
occurred; or (b) if Stock is not traded on an exchange but is quoted on a
quotation system the mean between the closing representative bid and asked
prices for the Stock on such date, or if no sale occurred on such date, the
first date immediately prior to such date on which sales prices or bid and
asked prices, as applicable, are reported by such quotation system; or (c) if
Stock is not publicly traded, the fair market value established by the
Committee acting in good faith.


 


2.17         “Incentive
Stock Option” means an Option that is intended to meet the requirements of Section 422
of the Code or any successor provision thereto.


 


2.18         “Independent
Director” means a member of the Board who is not an Employee of the
Company.


 


2.19         “Non-Employee
Director” means a member of the Board who qualifies as a “Non-Employee
Director” as defined in Rule 16b-3(b)(3) under the Exchange Act, or
any successor rule.


 


2.20         “Non-Qualified
Stock Option” means an Option that is not intended to be an Incentive Stock
Option.


 


2.21         “Option” means a
right granted to a Participant pursuant to Article 5 of the Plan to
purchase a specified number of shares of Stock at a specified price during
specified time periods.  An Option may be
either an Incentive Stock Option or a Non-Qualified Stock Option.


 


2.22         “Participant”
means any Eligible Individual who, as a member of the Board, Consultant or
Employee, has been granted an Award pursuant to the Plan.


 


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2.23         “Performance-Based
Award” means an Award granted to selected Covered Employees pursuant to Section 8.7,
but which is subject to the terms and conditions set forth in Article 9.


 


2.24         “Performance
Bonus Award” has the meaning set forth in Section 8.7.


 


2.25         “Performance Criteria”
means the criteria that the Committee selects for purposes of establishing the
Performance Goal or Performance Goals for a Participant for a Performance
Period.  The Performance Criteria that
will be used to establish Performance Goals are limited to the following: net
earnings (either before or after interest, taxes, depreciation and
amortization), economic value-added, sales or revenue, net income (either
before or after taxes), operating earnings, cash flow (including, but not
limited to, operating cash flow and free cash flow), cash flow return on
capital, return on net assets, return on stockholders’ equity, return on
assets, return on capital, stockholder returns, return on sales, gross or net
profit margin, productivity, expense, margins, operating efficiency, customer
satisfaction, working capital, earnings per share, price per share of Stock,
and market share, any of which may be measured either in absolute terms or as
compared to any incremental increase or as compared to results of a peer
group.  The Committee shall define in an
objective fashion the manner of calculating the Performance Criteria it selects
to use for such Performance Period for such Participant.


 


2.26         “Performance
Goals” means, for a Performance Period, the goals established in writing by
the Committee for the Performance Period based upon the Performance Criteria.  Depending on the Performance Criteria used to
establish such Performance Goals, the Performance Goals may be expressed in
terms of overall Company performance or the performance of a division, business
unit, or an individual.  The Committee,
in its discretion, may, within the time prescribed by Section 162(m) of
the Code, adjust or modify the calculation of Performance Goals for such
Performance Period in order to prevent the dilution or enlargement of the
rights of Participants (a) in the event of, or in anticipation of, any
unusual or extraordinary corporate item, transaction, event, or development, or
(b) in recognition of, or in anticipation of, any other unusual or
nonrecurring events affecting the Company, or the financial statements of the
Company, or in response to, or in anticipation of, changes in applicable laws,
regulations, accounting principles, or business conditions.


 


2.27         “Performance
Period” means the one or more periods of time, which may be of varying and
overlapping durations, as the Committee may select, over which the attainment
of one or more Performance Goals will be measured for the purpose of
determining a Participant’s right to, and the payment of, a Performance-Based
Award.


 


2.28         “Performance
Share” means a right granted to a Participant pursuant to Section 8.1,
to receive Stock, the payment of which is contingent upon achieving certain
Performance Goals or other performance-based targets established by the
Committee.


 


2.29         “Performance
Stock Unit” means a right granted to a Participant pursuant to Section 8.2,
to receive Stock, the payment of which is contingent upon achieving certain
Performance Goals or other performance-based targets established by the
Committee.


 


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2.30         “Prior
Plans” means, collectively, the following plans of the Company: the 1999
Director Stock Option Plan; the 1999 Employee Stock Option Plan and the 2002
Employee Stock Plan in each case as such plan may be amended from time to time.


 


2.31         “Plan”
means this Symmetricom, Inc. 2006 Incentive Award Plan, as it may be
amended from time to time.


 


2.32         “Qualified
Performance-Based Compensation” means any compensation that is intended to
qualify as “qualified performance-based compensation” as described in Section 162(m)(4)(C) of
the Code.


 


2.33         “Restricted
Stock” means Stock awarded to a Participant pursuant to Article 6 that
is subject to certain restrictions and may be subject to risk of forfeiture.


 


2.34         “Restricted
Stock Unit” means an Award granted pursuant to Section 8.6.


 


2.35         “Securities
Act” shall mean the Securities Act of 1933, as amended.


 


2.36         “Stock”
means the common stock of the Company, and such other securities of the Company
that may be substituted for Stock pursuant to Article 11.


 


2.37         “Stock
Appreciation Right” or “SAR” means a right granted pursuant to Article 7
to receive a payment equal to the excess of the Fair Market Value of a
specified number of shares of Stock on the date the SAR is exercised over the
Fair Market Value on the date the SAR was granted as set forth in the
applicable Award Agreement.


 


2.38         “Stock
Payment” means (a) a payment in the form of shares of Stock, or (b) an
option or other right to purchase shares of Stock, as part of any bonus,
deferred compensation or other arrangement, made in lieu of all or any portion
of the compensation, granted pursuant to Section 8.4.


 


2.39         “Subsidiary”
means any “subsidiary corporation” as defined in Section 424(f) of
the Code and any applicable regulations promulgated thereunder or any other
entity of which a majority of the outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Company.


 


ARTICLE
3.


 


SHARES
SUBJECT TO THE PLAN


 


3.1           Number
of Shares.


 


(a)           Subject
to Article 11 and Section 3.1(b), the aggregate number of shares of
Stock which may be issued or transferred pursuant to Awards under the Plan
shall be the sum of: (i) 9,200,000 shares and (ii) any shares of
Stock which as of the Effective Date are available for issuance under any of
the Prior Plans and which following the Effective Date are not issued under the
Prior Plans (including shares of Stock that are subject to stock options and
other equity awards outstanding under the Prior Plans that expire, are
cancelled or otherwise terminate 


 


5

















 


unexercised, or shares of Stock that
otherwise would have reverted to the share reserves of the Prior Plans
following the Effective Date); provided, however, that
the maximum aggregate number of shares of Stock that may be issued or
transferred pursuant to Awards under the Plan during the term of the Plan shall
not exceed 15,021,331 shares, subject to Article 11.  Any
shares of Stock that are subject to Awards of Options or Stock Appreciation
Rights shall be counted against this limit as one (1) share of Stock for
every one (1) share of Stock granted. 
Any shares of Stock that are subject to Awards other than Options or
Stock Appreciation Rights shall be counted against this limit as two (2) shares
of Stock for every one (1) share of Stock granted.  The payment of Dividend Equivalents in
cash in conjunction with any outstanding Awards shall not be counted against
the shares available for issuance under the Plan.


 


(b)           To
the extent that an Award terminates, expires, or lapses for any reason, any
shares of Stock subject to the Award shall again be available for the grant of
an Award pursuant to the Plan.  Any
shares of Stock that again become available for grant pursuant to this Section 3.1
shall be added back as (i) one (1) share of Stock if such shares were
subject to Options or Stock Appreciation Rights, and (ii) as two (2) shares
of Stock if such shares were subject to Awards other than Options or Stock
Appreciation Rights.  Notwithstanding
anything to the contrary contained herein, the following shares of Stock shall
not be added back to the shares authorized for grant under this Section 3.1:  (i) shares of Stock tendered by the
Participant or withheld by the Company in payment of the exercise price of an
Option, (ii) shares of Stock tendered by the Participant or withheld by
the Company to satisfy any tax withholding obligation with respect to an Award,
and (iii) shares of Stock that were subject to a stock-settled SAR and
were not issued upon the net settlement or net exercise of such SAR.  To the extent permitted by applicable law or
any exchange rule, shares of Stock issued in assumption of, or in substitution
for, any outstanding awards of any entity acquired in any form of combination
by the Company or any Subsidiary shall not be counted against shares of Stock
available for grant pursuant to this Plan. 
Notwithstanding the provisions of this Section 3.1(b), no shares of
Stock may again be optioned, granted or awarded if such action would cause an
Incentive Stock Option to fail to qualify as an incentive stock option under Section 422
of the Code.


 


3.2           Stock Distributed.  Any Stock distributed pursuant to an Award
may consist, in whole or in part, of authorized and unissued Stock, treasury
Stock or Stock purchased on the open market.


 


3.3           Limitation on Number of Shares Subject to
Awards.  Notwithstanding any
provision in the Plan to the contrary, and subject to Article 11, the
maximum number of shares of Stock with respect to one or more Awards that may
be granted to any one Participant during a calendar year (measured from the
date of any grant) shall be 3,000,000 and the maximum amount that may be paid
in cash during any calendar year with respect to any Performance-Based Award
(including, without limitation, any Performance Bonus Award) shall be
$2,000,000.


 


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ARTICLE
4.


 


ELIGIBILITY
AND PARTICIPATION


 


4.1           Eligibility.  Each Eligible Individual
shall be eligible to be granted one or more Awards pursuant to the Plan;
provided, that Independent Directors shall be eligible to be granted Awards in
accordance with Section 11.1 of the Plan.


 


4.2           Participation.  Subject to the provisions of the Plan, the
Committee may, from time to time, select from among all Eligible Individuals,
those to whom Awards shall be granted and shall determine the nature and amount
of each Award.  No Eligible Individual
shall have any right to be granted an Award pursuant to this Plan.


 


4.3           Foreign
Participants.  Notwithstanding any
provision of the Plan to the contrary, in order to comply with the laws in
other countries in which the Company and its Subsidiaries operate or have
Eligible Individuals, the Committee, in its sole discretion, shall have the
power and authority to: (i) determine which Subsidiaries shall be covered
by the Plan; (ii) determine which Eligible Individuals outside the United
States are eligible to participate in the Plan; (iii) modify the terms and
conditions of any Award granted to Eligible Individuals outside the United States
to comply with applicable foreign laws; (iv) establish subplans and modify
exercise procedures and other terms and procedures, to the extent such actions
may be necessary or advisable (any such subplans and/or modifications shall be
attached to this Plan as appendices); provided,
however, that no such subplans and/or modifications shall increase
the share limitations contained in Sections 3.1 and 3.3 of the Plan; and (v) take
any action, before or after an Award is made, that it deems advisable to obtain
approval or comply with any necessary local governmental regulatory exemptions
or approvals.  Notwithstanding the
foregoing, the Committee may not take any actions hereunder, and no Awards
shall be granted, that would violate the Exchange Act, the Code, any securities
law or governing statute or any other applicable law.


 


ARTICLE
5.


 


STOCK
OPTIONS


 


5.1           General.  The Committee is
authorized to grant Options to Participants on the following terms and
conditions:


 


(a)           Exercise
Price.  The exercise price per share
of Stock subject to an Option shall be determined by the Committee and set
forth in the Award Agreement; provided, that, subject to Section 5.2(d),
the exercise price for any Option shall not be less than 100% of the Fair
Market Value of a share of Stock on the date of grant.


 


(b)           Time
and Conditions of Exercise.  The
Committee shall determine the time or times at which an Option may be exercised
in whole or in part; provided
that the term of any Option granted under the Plan shall not exceed seven years.  The Committee shall also determine the
performance or other conditions, if any, that must be satisfied before all or
part of an Option may be exercised.


 


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(c)           Payment.  The Committee shall determine the methods by
which the exercise price of an Option may be paid, the form of payment,
including, without limitation: (i) cash, (ii) shares of Stock held
for such period of time as may be required by the Committee in order to avoid
adverse accounting consequences and having a Fair Market Value on the date of
delivery equal to the aggregate exercise price of the Option or exercised
portion thereof, or (iii) other property acceptable to the Committee
(including through the delivery of a notice that the Participant has placed a
market sell order with a broker with respect to shares of Stock then issuable
upon exercise of the Option, and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price; provided
that payment of such proceeds is then made to the Company upon settlement of
such sale), and the methods by which shares of Stock shall be delivered or
deemed to be delivered to Participants. 
Notwithstanding any other provision of the Plan to the contrary, after
the Public Trading Date, no Participant shall be permitted to pay the exercise
price of an Option, or continue any extension of credit with respect to the
exercise price of an Option with a loan from the Company or a loan arranged by
the Company in violation of Section 13(k) of the Exchange Act.


 


(d)           Evidence
of Grant.  All Options shall be
evidenced by an Award Agreement between the Company and the Participant.  The Award Agreement shall include such
additional provisions as may be specified by the Committee.


 


5.2           Incentive Stock Options.  Incentive Stock Options shall be granted only
to Employees and the terms of any Incentive Stock Options granted pursuant to
the Plan, in addition to the requirements of Section 5.1, must comply with
the provisions of this Section 5.2.


 


(a)           Expiration.  Subject to Section 5.2(c), an Incentive
Stock Option shall expire and may not be exercised to any extent by anyone
after the first to occur of the following events:


 


(i)            Seven
years from the date it is granted, unless an earlier time is set in the Award
Agreement;


 


(ii)           Three
months after the Participant’s termination of employment as an Employee; and


 


(iii)          One
year after the date of the Participant’s termination of employment or service
on account of Disability or death.  Upon
the Participant’s Disability or death, any Incentive Stock Options exercisable
at the Participant’s Disability or death may be exercised by the Participant’s
legal representative or representatives, by the person or persons entitled to
do so pursuant to the Participant’s last will and testament, or, if the
Participant fails to make testamentary disposition of such Incentive Stock
Option or dies intestate, by the person or persons entitled to receive the Incentive
Stock Option pursuant to the applicable laws of descent and distribution.


 


(b)           Dollar
Limitation.  The aggregate Fair
Market Value (determined as of the time the Option is granted) of all shares of
Stock with respect to which Incentive Stock Options are first exercisable by a
Participant in any calendar year may not exceed $100,000 or such other 


 


8

















 


limitation as imposed by Section 422(d) of
the Code, or any successor provision.  To
the extent that Incentive Stock Options are first exercisable by a Participant
in excess of such limitation, the excess shall be considered Non-Qualified
Stock Options.


 


(c)           Ten
Percent Owners.  An Incentive Stock
Option shall be granted to any individual who, at the date of grant, owns stock
possessing more than ten percent of the total combined voting power of all
classes of Stock of the Company only if such Option is granted at a price that
is not less than 110% of Fair Market Value on the date of grant and the Option
is exercisable for no more than five years from the date of grant.


 


(d)           Notice
of Disposition.  The Participant
shall give the Company prompt notice of any disposition of shares of Stock
acquired by exercise of an Incentive Stock Option within (i) two years from
the date of grant of such Incentive Stock Option or (ii) one year after
the transfer of such shares of Stock to the Participant.


 


(e)           Right
to Exercise.  During a Participant’s
lifetime, an Incentive Stock Option may be exercised only by the Participant.


 


(f)            Failure
to Meet Requirements.  Any Option (or
portion thereof) purported to be an Incentive Stock Option, which, for any
reason, fails to meet the requirements of Section 422 of the Code shall be
considered a Non-Qualified Stock Option.


 


ARTICLE
6.


 


RESTRICTED
STOCK AWARDS


 


6.1           Grant of Restricted Stock.  The Committee is authorized to make Awards of
Restricted Stock to any Participant selected by the Committee in such amounts
and subject to such terms and conditions as determined by the Committee.  All Awards of Restricted Stock shall be
evidenced by an Award Agreement.


 


6.2           Issuance and Restrictions.  Restricted Stock shall be subject to such
restrictions on transferability and other restrictions as the Committee may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted
Stock).  These restrictions may lapse
separately or in combination at such times, pursuant to such circumstances, in
such installments, or otherwise, as the Committee determines at the time of the
grant of the Award or thereafter.


 


6.3           Forfeiture.  Except as otherwise determined by the
Committee at the time of the grant of the Award or thereafter, upon termination
of employment or service during the applicable restriction period, Restricted
Stock that is at that time subject to restrictions shall be forfeited; provided, however, that the Committee may (a) provide
in any Restricted Stock Award Agreement that restrictions or forfeiture
conditions relating to Restricted Stock will be waived in whole or in part in
the event of terminations resulting from specified causes, and (b) in
other cases waive in whole or in part restrictions or forfeiture conditions
relating to Restricted Stock.


 


6.4           Certificates for Restricted Stock.  Restricted Stock granted pursuant to the Plan
may be evidenced in such manner as the Committee shall determine.  If certificates representing 


 


9

















 


shares of Restricted Stock are registered in
the name of the Participant, certificates must bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, and the Company may, at its discretion, retain physical
possession of the certificate until such time as all applicable restrictions
lapse.


 


ARTICLE
7.


 


STOCK
APPRECIATION RIGHTS


 


7.1           Grant
of Stock Appreciation Rights.


 


(a)           A
Stock Appreciation Right may be granted to any Participant selected by the
Committee.  A Stock Appreciation Right shall
be subject to such terms and conditions not inconsistent with the Plan as the
Committee shall impose and shall be evidenced by an Award Agreement; provided,
however, that the term of a Stock Appreciation Right shall not exceed seven
years from the date it is granted.


 


(b)           A
Stock Appreciation Right shall entitle the Participant (or other person
entitled to exercise the Stock Appreciation Right pursuant to the Plan) to
exercise all or a specified portion of the Stock Appreciation Right (to the
extent then exercisable pursuant to its terms) and to receive from the Company
an amount equal to the product of (i) the excess of (A) the Fair
Market Value of the Stock on the date the Stock Appreciation Right is exercised
over (B) the Fair Market Value of the Stock on the date the Stock
Appreciation Right was granted and (ii) the number of shares of Stock with
respect to which the Stock Appreciation Right is exercised, subject to any
limitations the Committee may impose.


 


7.2           Payment
and Limitations on Exercise.


 


(a)           Subject
to Section 7.2(b), payment of the amounts determined under Sections 7.1(b) above
shall be in cash, in Stock (based on its Fair Market Value as of the date the
Stock Appreciation Right is exercised) or a combination of both, as determined
by the Committee in the Award Agreement.


 


(b)           To
the extent any payment under Section 7.1(b) is effected in Stock, it
shall be made subject to satisfaction of all provisions of Article 5 above
pertaining to Options.


 


ARTICLE
8.


 


OTHER
TYPES OF AWARDS


 


8.1           Performance
Share Awards.  Any Participant
selected by the Committee may be granted one or more Performance Share awards
which shall be denominated in a number of shares of Stock and which may be
linked to any one or more of the Performance Criteria or other specific
performance criteria determined appropriate by the Committee, in each case on a
specified date or dates or over any period or periods determined by the
Committee.  In making such
determinations, the Committee shall consider (among such other factors as it
deems relevant in light of the specific type of award) the contributions,
responsibilities and other compensation of the particular Participant.


 


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8.2           Performance
Stock Units.  Any Participant selected by the
Committee may be granted one or more Performance Stock Unit awards which shall
be denominated in unit equivalent of shares of Stock and/or units of value
including dollar value of shares of Stock and which may be linked to any one or
more of the Performance Criteria or other specific performance criteria
determined appropriate by the Committee, in each case on a specified date or
dates or over any period or periods determined by the Committee.  In making such determinations, the Committee
shall consider (among such other factors as it deems relevant in light of the
specific type of award) the contributions, responsibilities and other
compensation of the particular Participant.


 


8.3           Dividend
Equivalents.


 


(a)           Any
Participant selected by the Committee may be granted Dividend Equivalents based
on the dividends declared on the shares of Stock that are subject to any Award,
to be credited as of dividend payment dates, during the period between the date
the Award is granted and the date the Award is exercised, vests or expires, as
determined by the Committee.  Such
Dividend Equivalents shall be converted to cash or additional shares of Stock
by such formula and at such time and subject to such limitations as may be determined
by the Committee.


 


(b)           Dividend
Equivalents granted with respect to Options or SARs that are intended to be
Qualified Performance-Based Compensation shall be payable, with respect to
pre-exercise periods, regardless of whether such Option or SAR is subsequently
exercised.


 


8.4           Stock
Payments.  Any Participant selected
by the Committee may receive Stock Payments in the manner determined from time
to time by the Committee.  The number of
shares shall be determined by the Committee and may be based upon the
Performance Criteria or other specific performance criteria determined
appropriate by the Committee, determined on the date such Stock Payment is made
or on any date thereafter.


 


8.5           Deferred
Stock.  Any Participant selected by
the Committee may be granted an award of Deferred Stock in the manner
determined from time to time by the Committee. 
The number of shares of Deferred Stock shall be determined by the
Committee and may be linked to the Performance Criteria or other specific
performance criteria determined to be appropriate by the Committee, in each
case on a specified date or dates or over any period or periods determined by
the Committee.  Stock underlying a
Deferred Stock award will not be issued until the Deferred Stock award has
vested, pursuant to a vesting schedule or performance criteria set by the
Committee.  Unless otherwise provided by
the Committee, a Participant awarded Deferred Stock shall have no rights as a
Company stockholder with respect to such Deferred Stock until such time as the
Deferred Stock Award has vested and the Stock underlying the Deferred Stock
Award has been issued.


 


8.6           Restricted
Stock Units.  The Committee is
authorized to make Awards of Restricted Stock Units to any Participant selected
by the Committee in such amounts and subject to such terms and conditions as
determined by the Committee.  At the time
of grant, the Committee shall specify the date or dates on which the Restricted
Stock Units shall become fully vested and nonforfeitable, and may specify such
conditions to vesting as it deems appropriate. 



 


11

















 


At the time of grant, the Committee shall
specify the maturity date applicable to each grant of Restricted Stock Units
which shall be no earlier than the vesting date or dates of the Award and may be
determined at the election of the grantee. 
On the maturity date, the Company shall, subject to Section 10.5(b),  transfer to the Participant one unrestricted,
fully transferable share of Stock for each Restricted Stock Unit scheduled to
be paid out on such date and not previously forfeited.


 


8.7           Performance
Bonus Awards.  Any Participant
selected by the Committee may be granted one or more Performance-Based Awards
in the form of a cash bonus (a “Performance Bonus Award”) payable upon
the attainment of Performance Goals that are established by the Committee and
relate to one or more of the Performance Criteria, in each case on a specified
date or dates or over any period or periods determined by the Committee.  Any such Performance Bonus Award paid to a Covered
Employee shall be based upon objectively determinable bonus formulas
established in accordance with Article 9.


 


8.8           Term.  Except as otherwise provided herein, the term
of any Award of  Performance Shares,
Performance Stock Units, Dividend Equivalents, Stock Payments, Deferred Stock
or Restricted Stock Units shall be set by the Committee in its discretion.


 


8.9           Exercise
or Purchase Price.  The Committee may
establish the exercise or purchase price, if any, of any Award of Performance
Shares, Performance Stock Units, Deferred Stock, Stock Payments or Restricted
Stock Units; provided, however,
that such price shall not be less than the par value of a share of Stock on the
date of grant, unless otherwise permitted by applicable state law.


 


8.10         Exercise upon Termination of Employment or
Service.  An Award of
Performance Shares, Performance Stock Units, Dividend Equivalents, Deferred
Stock, Stock Payments and Restricted Stock Units shall only be exercisable or
payable while the Participant is an Employee, Consultant or a member of the
Board, as applicable; provided, however,
that the Committee in its sole and absolute discretion may provide that an
Award of Performance Shares, Performance Stock Units, Dividend Equivalents,
Stock Payments, Deferred Stock or Restricted Stock Units may be exercised or
paid subsequent to a termination of employment or service, as applicable, or
following a Change in Control of the Company, or because of the Participant’s
retirement, death or disability, or otherwise; provided,
however, that any such provision with respect to Performance Shares
or Performance Stock Units shall be subject to the requirements of Section 162(m) of
the Code that apply to Qualified Performance-Based Compensation.


 


8.11         Form of
Payment.  Payments with respect to
any Awards granted under this Article 8 shall be made in cash, in Stock or
a combination of both, as determined by the Committee.


 


8.12         Award
Agreement.  All Awards under this Article 8
shall be subject to such additional terms and conditions as determined by the
Committee and shall be evidenced by an Award Agreement.


 


12
















 


ARTICLE
9.


 


PERFORMANCE-BASED
AWARDS


 


9.1           Purpose.  The purpose of this Article 9 is to
provide the Committee the ability to qualify Awards other than Options and SARs
and that are granted pursuant to Articles 6 
and 8 as Qualified Performance-Based Compensation.  If the Committee, in its discretion, decides
to grant a Performance-Based Award to a Covered Employee, the provisions of
this Article 9 shall control over any contrary provision contained in
Articles 6 or 8; provided, however,
that the Committee may in its discretion grant Awards to Covered Employees that
are based on Performance Criteria or Performance Goals but that do not satisfy
the requirements of this Article 9.


 


9.2           Applicability.  This Article 9 shall apply only to those
Covered Employees selected by the Committee to receive Performance-Based
Awards.  The designation of a Covered
Employee as a Participant for a Performance Period shall not in any manner
entitle the Participant to receive an Award for the period.  Moreover, designation of a Covered Employee
as a Participant for a particular Performance Period shall not require
designation of such Covered Employee as a Participant in any subsequent
Performance Period and designation of one Covered Employee as a Participant
shall not require designation of any other Covered Employees as a Participant
in such period or in any other period.


 


9.3           Procedures with Respect to Performance-Based
Awards.  To the extent
necessary to comply with the Qualified Performance-Based Compensation
requirements of Section 162(m)(4)(C) of the Code, with respect to any
Award granted under Articles 6 or 8 which may be granted to one or more Covered
Employees, no later than ninety (90) days following the commencement of any
fiscal year in question or any other designated fiscal period or period of
service (or such other time as may be required or permitted by Section 162(m) of
the Code), the Committee shall, in writing, (a) designate one or more
Covered Employees, (b) select the Performance Criteria applicable to the
Performance Period, (c) establish the Performance Goals, and amounts of
such Awards, as applicable, which may be earned for such Performance Period,
and (d) specify the relationship between Performance Criteria and the
Performance Goals and the amounts of such Awards, as applicable, to be earned
by each Covered Employee for such Performance Period.  Following the completion of each Performance
Period, the Committee shall certify in writing whether the applicable Performance
Goals have been achieved for such Performance Period.  In determining the amount earned by a Covered
Employee, the Committee shall have the right to reduce or eliminate (but not to
increase) the amount payable at a given level of performance to take into
account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the Performance Period.


 


9.4           Payment of Performance-Based Awards.  Unless otherwise provided in the applicable
Award Agreement, a Participant must be employed by the Company or a Subsidiary
on the day a Performance-Based Award for such Performance Period is paid to the
Participant.  Furthermore, a Participant
shall be eligible to receive payment pursuant to a Performance-Based Award for
a Performance Period only if the Performance Goals for such period are
achieved.  In determining the amount
earned under a Performance-Based Award, the Committee may reduce 


 


13

















 


or eliminate the amount of the
Performance-Based Award earned for the Performance Period, if in its sole and
absolute discretion, such reduction or elimination is appropriate.


 


9.5           Additional
Limitations.  Notwithstanding any
other provision of the Plan, any Award which is granted to a Covered Employee
and is intended to constitute Qualified Performance-Based Compensation shall be
subject to any additional limitations set forth in Section 162(m) of
the Code (including any amendment to Section 162(m) of the Code) or
any regulations or rulings issued thereunder that are requirements for
qualification as qualified performance-based compensation as described in Section 162(m)(4)(C) of
the Code, and the Plan shall be deemed amended to the extent necessary to
conform to such requirements.


 


ARTICLE
10.


 


PROVISIONS
APPLICABLE TO AWARDS


 


10.1         Stand-Alone and Tandem Awards.  Awards granted pursuant to the Plan may, in
the discretion of the Committee, be granted either alone, in addition to, or in
tandem with, any other Award granted pursuant to the Plan. Awards granted in
addition to or in tandem with other Awards may be granted either at the same
time as or at a different time from the grant of such other Awards.


 


10.2         Award Agreement.  Awards under the Plan shall be evidenced by
Award Agreements that set forth the terms, conditions and limitations for each
Award which may include the term of an Award, the provisions applicable in the
event the Participant’s employment or service terminates, and the Company’s
authority to unilaterally or bilaterally amend, modify, suspend, cancel or
rescind an Award.


 


10.3         Limits on Transfer.  No right or interest of a Participant in any
Award may be pledged, encumbered, or hypothecated to or in favor of any party
other than the Company or a Subsidiary, or shall be subject to any lien,
obligation, or liability of such Participant to any other party other than the
Company or a Subsidiary.  Except as
otherwise provided by the Committee, no Award shall be assigned, transferred,
or otherwise disposed of by a Participant other than by will or the laws of
descent and distribution.  The Committee
by express provision in the Award or an amendment thereto may permit an Award
(other than an Incentive Stock Option) to be transferred to, exercised by and
paid to certain persons or entities related to the Participant, including but
not limited to members of the Participant’s family, charitable institutions, or
trusts or other entities whose beneficiaries or beneficial owners are members
of the Participant’s family and/or charitable institutions, or to such other
persons or entities as may be expressly approved by the Committee, pursuant to
such conditions and procedures as the Committee may establish.  Any permitted transfer shall be subject to
the condition that the Committee receive evidence satisfactory to it that the
transfer is being made for estate and/or tax planning purposes (or to a “blind
trust” in connection with the Participant’s termination of employment or
service with the Company or a Subsidiary to assume a position with a
governmental, charitable, educational or similar non-profit institution) and on
a basis consistent with the Company’s lawful issue of securities.


 


14

















 


10.4         Beneficiaries.  Notwithstanding Section 10.3, a
Participant may, in the manner determined by the Committee, designate a
beneficiary to exercise the rights of the Participant and to receive any
distribution with respect to any Award upon the Participant’s death.  A beneficiary, legal guardian, legal
representative, or other person claiming any rights pursuant to the Plan is
subject to all terms and conditions of the Plan and any Award Agreement
applicable to the Participant, except to the extent the Plan and Award
Agreement otherwise provide, and to any additional restrictions deemed
necessary or appropriate by the Committee. 
If the Participant is married and resides in a community property state,
a designation of a person other than the Participant’s spouse as his or her
beneficiary with respect to more than 50% of the Participant’s interest in the
Award shall not be effective without the prior written consent of the
Participant’s spouse.  If no beneficiary
has been designated or survives the Participant, payment shall be made to the
person entitled thereto pursuant to the Participant’s will or the laws of
descent and distribution.  Subject to the
foregoing, a beneficiary designation may be changed or revoked by a Participant
at any time provided the change or revocation is filed with the Committee.


 


10.5         Stock Certificates;
Book Entry Procedures.


 


(a)           Notwithstanding
anything herein to the contrary, the Company shall not be required to issue or
deliver any certificates evidencing shares of Stock pursuant to the exercise of
any Award, unless and until the Board has determined, with advice of counsel,
that the issuance and delivery of such certificates is in compliance with all
applicable laws, regulations of governmental authorities and, if applicable,
the requirements of any exchange on which the shares of Stock are listed or
traded.  All Stock certificates delivered
pursuant to the Plan are subject to any stop-transfer orders and other
restrictions as the Committee deems necessary or advisable to comply with
federal, state, or foreign jurisdiction, securities or other laws, rules and
regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded.  The Committee may place legends on any Stock
certificate to reference restrictions applicable to the Stock.  In addition to the terms and conditions
provided herein, the Board may require that a Participant make such reasonable
covenants, agreements, and representations as the Board, in its discretion,
deems advisable in order to comply with any such laws, regulations, or
requirements. The Committee shall have the right to require any Participant to comply with any timing or
other restrictions with respect to the settlement or exercise of any Award,
including a window-period limitation, as may be imposed in the discretion of
the Committee.


 


(b)           Notwithstanding
any other provision of the Plan, unless otherwise determined by the Committee
or required by any applicable law, rule or regulation, the Company shall
not deliver to any Participant certificates evidencing shares of Stock issued
in connection with any Award and instead such shares of Stock shall be recorded
in the books of the Company (or, as applicable, its transfer agent or stock
plan administrator).


 


10.6         Paperless
Exercise.  In the event that the
Company establishes, for itself or using the services of a third party, an
automated system for the exercise of Awards, such as a system using an internet
website or interactive voice response, then the paperless exercise of Awards by
a Participant may be permitted through the use of such an automated system.


 


15

















 


ARTICLE
11.


 


CHANGES
IN CAPITAL STRUCTURE


 


11.1         Grants
of Awards to Independent Directors. 
Notwithstanding anything herein to the contrary, the grant of any Award
to an Independent Director shall be made by the Board pursuant to a written
policy or program recommended by the Compensation Committee of the Board (or
any other committee of the Board assuming such responsibilities) and approved
by the Board (the “Independent Director Equity Compensation Policy”) in
its discretion.  The Independent Director
Equity Compensation Policy shall set forth the type of Award(s) to be
granted to Independent Directors, the number of shares of Stock to be subject
to Independent Director Awards, the conditions on which such Awards shall be
granted, become exercisable and/or payable and expire, and such other terms and
conditions as may be set forth in the Independent Director Equity Compensation
Policy and determined by the Compensation Committee of the Board (or such other
committee) in its discretion.


 


11.2         Adjustments.


 


(a)           In
the event of any stock dividend, stock split, combination or exchange of
shares, merger, consolidation, spin-off, recapitalization or other distribution
(other than normal cash dividends) of Company assets to stockholders, or any
other change affecting the shares of Stock or the share price of the Stock, the
Committee shall make such proportionate adjustments, if any, as the Committee
in its discretion may deem appropriate to reflect such change with respect to (a) the
aggregate number and kind of shares that may be issued under the Plan
(including, but not limited to, adjustments of the limitations in Sections 3.1
and 3.3); (b) the terms and conditions of any outstanding Awards
(including, without limitation, any applicable performance targets or criteria
with respect thereto); and (c) the grant or exercise price per share for
any outstanding Awards under the Plan. 
Any adjustment affecting an Award intended as Qualified
Performance-Based Compensation shall be made consistent with the requirements
of Section 162(m) of the Code.


 


(b)           In
the event of any transaction or event described in Section 11.2
or any unusual or nonrecurring transactions or events affecting the
Company, any affiliate of the Company, or the financial statements of the
Company or any affiliate, or of changes in applicable laws, regulations or
accounting principles, the Committee, in its sole and absolute discretion, and
on such terms and conditions as it deems appropriate, either by the terms of
the Award or by action taken prior to the occurrence of such transaction or
event and either automatically or upon the Participant’s request, is hereby
authorized to take any one or more of the following actions whenever the
Committee determines that such action is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan or with respect to any Award under the Plan, to
facilitate such transactions or events or to give effect to such changes in
laws, regulations or principles:


 


(i)            To
provide for either (A) termination of any such Award in exchange for an
amount of cash, if any, equal to the amount that would have been attained upon
the exercise of such Award or realization of the Participant’s rights (and, for
the avoidance of doubt, if as of the date of the occurrence of the transaction
or event described in this Section 11.3 


 


16

















 


the Committee determines in good faith that
no amount would have been attained upon the exercise of such Award or
realization of the Participant’s rights, then such Award may be terminated by
the Company without payment) or (B) the replacement of such Award with
other rights or property selected by the Committee in its sole discretion;


 


(ii)           To
provide that such Award be assumed by the successor or survivor corporation, or
a parent or subsidiary thereof, or shall be substituted for by similar options,
rights or awards covering the stock of the successor or survivor corporation,
or a parent or subsidiary thereof, with appropriate adjustments as to the
number and kind of shares and prices;


 


(iii)          To
make adjustments in the number and type of shares of Stock (or other securities
or property) subject to outstanding Awards, and in the number and kind of
outstanding Restricted Stock or Deferred Stock and/or in the terms and
conditions of (including the grant or exercise price), and the criteria
included in, outstanding options, rights and awards and options, rights and
awards which may be granted in the future;


 


(iv)          To
provide that such Award shall be exercisable or payable or fully vested with
respect to all shares covered thereby, notwithstanding anything to the contrary
in the Plan or the applicable Award Agreement; and


 


(v)           To provide that the
Award cannot vest, be exercised or become payable after such event.


 


11.3         Acceleration
Upon a Change in Control. 
Notwithstanding Section 11.2,
and except as may otherwise be provided in any applicable Award Agreement or
other written agreement entered into between the Company and a Participant, if
a Change in Control occurs and a Participant’s Awards are not converted,
assumed, or replaced by a successor entity, then immediately prior to the
Change in Control such Awards shall become fully exercisable and all forfeiture
restrictions on such Awards shall lapse. 
Upon, or in anticipation of, a Change in Control, the Committee may cause
any and all Awards outstanding hereunder to terminate at a specific time in the
future, including but not limited to the date of such Change in Control, and
shall give each Participant the right to exercise such Awards during a period
of time as the Committee, in its sole and absolute discretion, shall
determine.  In the event that the terms
of any agreement between the Company or any Company subsidiary or affiliate and
a Participant contains provisions that conflict with and are more restrictive
than the provisions of this Section 11.3, this Section 11.3 shall
prevail and control and the more restrictive terms of such agreement (and only
such terms) shall be of no force or effect.


 


11.4         No Other Rights.  Except as expressly provided in the Plan, no
Participant shall have any rights by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any dividend, any increase or
decrease in the number of shares of stock of any class or any dissolution,
liquidation, merger, or consolidation of the Company or any other corporation.  Except as expressly provided in the Plan or
pursuant to action of the Committee under the Plan, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof 


 


17

















 


shall be made with respect to, the number of
shares of Stock subject to an Award or the grant or exercise price of any
Award.


 


ARTICLE
12.


 


ADMINISTRATION


 


12.1         Committee.  Unless and until the Board delegates
administration of the Plan to a Committee as set forth below, the Plan shall be
administered by the full Board, and for such purposes the term “Committee” as
used in this Plan shall be deemed to refer to the Board.  The Board, at its discretion or as otherwise
necessary to comply with the requirements of Section 162(m) of the
Code, Rule 16b-3 promulgated under the Exchange Act or to the extent
required by any other applicable rule or regulation, shall delegate
administration of the Plan to a Committee. 
Unless otherwise determined by the Board, the Committee shall consist
solely of two or more members of the Board each of whom is an “outside
director,” within the meaning of Section 162(m) of the Code, a
Non-Employee Director and an “independent director” under the rules of the
principal securities market on which shares of Stock are traded).  Notwithstanding the foregoing: (a) the
full Board, acting by a majority of its members in office, shall conduct the
general administration of the Plan with respect to all Awards granted to
Independent Directors and for purposes of such Awards the term “Committee” as
used in this Plan shall be deemed to refer to the Board and (b) the
Committee may delegate its authority hereunder to the extent permitted by Section 12.5.  Appointment of Committee members shall be
effective upon acceptance of appointment. 
In its sole discretion, the Board may at any time and from time to time
exercise any and all rights and duties of the Committee under the Plan except
with respect to matters which under Rule 16b-3 under the Exchange Act or Section 162(m) of
the Code, or any regulations or rules issued thereunder, are required to
be determined in the sole discretion of the Committee.  Committee members may resign at any time by
delivering written notice to the Board. 
Vacancies in the Committee may only be filled by the Board.


 


12.2         Action by the Committee.  A majority of the Committee shall constitute
a quorum.  The acts of a majority of the
members present at any meeting at which a quorum is present, and acts approved
in writing by a majority of the Committee in lieu of a meeting, shall be deemed
the acts of the Committee.  Each member
of the Committee is entitled to, in good faith, rely or act upon any report or
other information furnished to that member by any officer or other employee of
the Company or any Subsidiary, the Company’s independent certified public
accountants, or any executive compensation consultant or other professional
retained by the Company to assist in the administration of the Plan.


 


12.3         Authority of Committee.  Subject to any specific designation in the
Plan, the Committee has the exclusive power, authority and discretion to:


 


(a)           Designate
Participants to receive Awards;


 


(b)           Determine
the type or types of Awards to be granted to each Participant;


 


(c)           Determine
the number of Awards to be granted and the number of shares of Stock to which
an Award will relate;


 


18

















 


(d)           Determine
the terms and conditions of any Award granted pursuant to the Plan, including,
but not limited to, the exercise price, grant price, or purchase price, any
reload provision, any restrictions or limitations on the Award, any schedule
for lapse of forfeiture restrictions or restrictions on the exercisability of
an Award, and accelerations or waivers thereof, any provisions related to
non-competition and recapture of gain on an Award, based in each case on such
considerations as the Committee in its sole discretion determines;


 


(e)           Determine
whether, to what extent, and pursuant to what circumstances an Award may be
settled in, or the exercise price of an Award may be paid in, cash, Stock,
other Awards, or other property, or an Award may be canceled, forfeited, or
surrendered;


 


(f)            Prescribe
the form of each Award Agreement, which need not be identical for each
Participant;


 


(g)           Decide
all other matters that must be determined in connection with an Award;


 


(h)           Establish,
adopt, or revise any rules and regulations as it may deem necessary or
advisable to administer the Plan;


 


(i)            Interpret
the terms of, and any matter arising pursuant to, the Plan or any Award
Agreement; and


 


(j)            Make
all other decisions and determinations that may be required pursuant to the
Plan or as the Committee deems necessary or advisable to administer the Plan.


 


12.4         Decisions Binding.  The Committee’s interpretation of the Plan,
any Awards granted pursuant to the Plan, any Award Agreement and all decisions
and determinations by the Committee with respect to the Plan are final,
binding, and conclusive on all parties.


 


12.5         Delegation
of Authority.  To the extent
permitted by applicable law, the Committee may from time to time delegate to a
committee of one or more members of the Board or one or more officers of the
Company the authority to grant or amend Awards to Participants other than (a) senior
executives of the Company who are subject to Section 16 of the Exchange
Act, (b) Covered Employees, or (c) officers of the Company (or
members of the Board) to whom authority to grant or amend Awards has been
delegated hereunder.  Any delegation
hereunder shall be subject to the restrictions and limits that the Committee
specifies at the time of such delegation, and the Committee may at any time
rescind the authority so delegated or appoint a new delegatee.  At all times, the delegatee appointed under
this Section 12.5 shall serve in such capacity at the pleasure of the
Committee.


 


ARTICLE
13.


 


EFFECTIVE
AND EXPIRATION DATE


 


13.1         Effective Date.  The Plan is effective as of the date the Plan
is approved by the Company’s stockholders (the “Effective Date”).  The Plan will be deemed to be approved by the
stockholders if it receives the affirmative vote of the holders of a majority
of the shares of stock 


 


19

















 


of the Company present or represented and
entitled to vote at a meeting duly held in accordance with the applicable
provisions of the Company’s Bylaws.


 


13.2         Expiration Date.  The Plan will expire on, and no Award may be
granted pursuant to the Plan after the tenth anniversary of the Effective Date,
except that no Incentive Stock Options may be granted under the Plan after the
earlier of the tenth anniversary of (i) the date the Plan is approved by
the Board or (ii) the Effective Date. 
Any Awards that are outstanding on the tenth anniversary of the
Effective Date shall remain in force according to the terms of the Plan and the
applicable Award Agreement.


 


ARTICLE
14.


 


AMENDMENT,
MODIFICATION, AND TERMINATION


 


14.1         Amendment, Modification, and Termination.  Subject to Section 15.14, with the
approval of the Board, at any time and from time to time, the Committee may
terminate, amend or modify the Plan; provided,
however, that (a) to the extent necessary and desirable to
comply with any applicable law, regulation, or stock exchange rule, the Company
shall obtain stockholder approval of any Plan amendment in such a manner and to
such a degree as required, and (b) stockholder approval is required for
any amendment to the Plan that (i) increases the number of shares
available under the Plan (other than any adjustment as provided by Article 11),
(ii) permits the Committee to grant Options with an exercise price that is
below Fair Market Value on the date of grant, or (iii) permits the
Committee to extend the exercise period for an Option beyond ten years from the
date of grant or (iv) results in a material increase in benefits or a
change in eligibility requirements.


 


14.2         Repricing
Prohibited.  Notwithstanding any
provision in this Plan to the contrary, absent approval of the stockholders of
the Company, except as permitted by Article 11, (a) no Option or
Stock Appreciation Right may be amended to reduce the exercise price per share
of the Stock subject to such Award, (b) no Option or Stock Appreciation
Right shall be cancelled and replaced with the grant of an Option or Stock
Appreciation Right having a lesser price per share (or another Award), and (c) the
Committee shall not offer to buyout an outstanding Option or Stock Appreciation
Right for a payment in cash.


 


14.3         Awards Previously Granted.  Except with respect to amendments made  pursuant to Section 15.14, no
termination, amendment, or modification of the Plan shall adversely affect in
any material way any Award previously granted pursuant to the Plan without the
prior written consent of the Participant.


 


ARTICLE
15.


 


GENERAL
PROVISIONS


 


15.1         No Rights to Awards.  No Eligible Individual or other person shall
have any claim to be granted any Award pursuant to the Plan, and neither the
Company nor the Committee is obligated to treat Eligible Individuals,
Participants or any other persons uniformly.


 


20

















 


15.2         No Stockholders Rights.  Except as otherwise provided herein, a Participant
shall have none of the rights of a stockholder with respect to shares of Stock
covered by any Award until the Participant becomes the record owner of such
shares of Stock.


 


15.3         Withholding.  The Company or any Subsidiary shall have the
authority and the right to deduct or withhold, or require a Participant to
remit to the Company, an amount sufficient to satisfy federal, state, local and
foreign taxes (including the Participant’s employment tax obligations) required
by law to be withheld with respect to any taxable event concerning a
Participant arising as a result of this Plan. 
The Committee may in its discretion and in satisfaction of the foregoing
requirement allow a Participant to elect to have the Company withhold shares of
Stock otherwise issuable under an Award (or allow the return of shares of
Stock) having a Fair Market Value equal to the sums required to be
withheld.  Notwithstanding any other
provision of the Plan, the number of shares of Stock which may be withheld with
respect to the issuance, vesting, exercise or payment of any Award (or which
may be repurchased from the Participant of such Award within six months (or
such other period as may be determined by the Committee) after such shares of
Stock were acquired by the Participant from the Company) in order to satisfy
the Participant’s federal, state, local and foreign income and payroll tax
liabilities with respect to the issuance, vesting, exercise or payment of the
Award shall be limited to the number of shares which have a Fair Market Value
on the date of withholding or repurchase equal to the aggregate amount of such
liabilities based on the minimum statutory withholding rates for federal,
state, local and foreign income tax and payroll tax purposes that are
applicable to such supplemental taxable income.


 


15.4         No Right to Employment or Services.  Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Company or any
Subsidiary to terminate any Participant’s employment or services at any time,
nor confer upon any Participant any right to continue in the employ or service
of the Company or any Subsidiary.


 


15.5         Unfunded Status of Awards.  The Plan is intended to be an “unfunded” plan
for incentive compensation.  With respect
to any payments not yet made to a Participant pursuant to an Award, nothing
contained in the Plan or any Award Agreement shall give the Participant any
rights that are greater than those of a general creditor of the Company or any
Subsidiary.


 


15.6         Indemnification.  To the extent allowable pursuant to
applicable law, each member of the Committee or of the Board shall be
indemnified and held harmless by the Company from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by such member in connection
with or resulting from any claim, action, suit, or proceeding to which he or
she may be a party or in which he or she may be involved by reason of any
action or failure to act pursuant to the Plan and against and from any and all
amounts paid by him or her in satisfaction of judgment in such action, suit, or
proceeding against him or her; provided
he or she gives the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or
her own behalf.  The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled pursuant to the Company’s Certificate of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that
the Company may have to indemnify them or hold them harmless.


 


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15.7         Relationship to other Benefits.  No payment pursuant to the Plan shall be
taken into account in determining any benefits pursuant to any pension,
retirement, savings, profit sharing, group insurance, welfare or other benefit
plan of the Company or any Subsidiary except to the extent otherwise expressly
provided in writing in such other plan or an agreement thereunder.


 


15.8         Expenses.  The expenses of administering the Plan shall
be borne by the Company and its Subsidiaries.


 


15.9         Titles and Headings.  The titles and headings of the Sections in
the Plan are for convenience of reference only and, in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.


 


15.10       Fractional Shares.  No fractional shares of Stock shall be issued
and the Committee shall determine, in its discretion, whether cash shall be
given in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up or down as appropriate.


 


15.11       Limitations
Applicable to Section 16 Persons. 
Notwithstanding any other provision of the Plan, the Plan, and any Award
granted or awarded to any Participant who is then subject to Section 16 of
the Exchange Act, shall be subject to any additional limitations set forth in
any applicable exemptive rule under Section 16 of the Exchange Act
(including any amendment to Rule 16b-3 under the Exchange Act) that are
requirements for the application of such exemptive rule.  To the extent permitted by applicable law,
the Plan and Awards granted or awarded hereunder shall be deemed amended to the
extent necessary to conform to such applicable exemptive rule.


 


15.12       Government and Other Regulations.  The obligation of the Company to make payment
of awards in Stock or otherwise shall be subject to all applicable laws, rules,
and regulations, and to such approvals by government agencies as may be
required.  The Company shall be under no
obligation to register pursuant to the Securities Act, as amended, any of the
shares of Stock paid pursuant to the Plan. 
If the shares paid pursuant to the Plan may in certain circumstances be
exempt from registration pursuant to the Securities Act, as amended, the
Company may restrict the transfer of such shares in such manner as it deems
advisable to ensure the availability of any such exemption.


 


15.13       Governing Law.  The Plan and all Award Agreements shall be
construed in accordance with and governed by the laws of the State of Delaware.


 


15.14       Section 409A.  To the extent that the Committee determines
that any Award granted under the Plan is subject to Section 409A of the
Code, the Award Agreement evidencing such Award shall incorporate the terms and
conditions required by Section 409A of the Code.  To the extent applicable, the Plan and Award Agreements shall be
interpreted in accordance with Section 409A of the Code and Department of
Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be
issued after the Effective Date. 
Notwithstanding any provision of the Plan to the contrary, in the event
that following the Effective Date the Committee determines that any 


 


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Award may be
subject to Section 409A of the Code and related Department of Treasury
guidance (including such Department of Treasury guidance as may be issued after
the Effective Date), the Committee may adopt such amendments to the Plan and
the applicable Award Agreement or adopt other policies and procedures
(including amendments, policies and procedures with retroactive effect), or
take any other actions, that the Committee determines are necessary or
appropriate to (a) exempt the Award from Section 409A of the Code
and/or preserve the intended tax treatment of the benefits provided with
respect to the Award, or (b) comply with the requirements of Section 409A
of the Code and related Department of Treasury guidance.


 


*   *   *   *   *


 


I hereby
certify that the foregoing Plan, as amended, was duly approved by the Board of
Directors of Symmetricom, Inc. on September 10, 2008.


 


*   *   *   *   *


I hereby
certify that the foregoing Plan, as amended, was approved by the stockholders
of Symmetricom, Inc. on October 31, 2008.


 


Executed on
this               
day of                                    ,
2008.


 




	
   

  	
   

  
	
   

  	
  Corporate
  Secretary

  






 


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