ex101.htm


    
       

      SONICWALL,
INC.

       

      2008
INDUCEMENT EQUITY INCENTIVE PLAN

       

      1. Purposes of the
Plan.  The purposes of this Plan are:

       

      
        	
                ·  

              	
                to
      provide a material inducement for the best available employees to join the
      Company, and

              


      

       

      
        	
                ·  

              	
                to
      promote the success of the Company’s
business.

              


      

       

      The Plan
permits the grant of Nonstatutory Stock Options, Stock Appreciation Rights,
Restricted Stock, Restricted Stock Units and Performance Shares as the
Administrator may determine.

       

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

       

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

       

      (b) “Applicable Laws”
means the requirements relating to the administration of equity-based awards
under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common Stock is listed
or quoted and the applicable laws of any foreign country or jurisdiction where
Awards are, or will be, granted under the Plan.

       

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

       

      (d) “Award Agreement”
means the written or electronic agreement setting forth the terms and provisions
applicable to each Award granted under the Plan.  The Award Agreement
is subject to the terms and conditions of the Plan.

       

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

      For
purposes of this Section 2(f), persons will be considered to be acting as a
group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction
with the Company.

      


      Notwithstanding
the foregoing, a transaction shall not be deemed a Change in Control unless the
transaction qualifies as a change in the ownership of the Company, change in the
effective control of the Company or a change in the ownership of a substantial
portion of the Company’s assets, each within the meaning of Section 409A of the
Code and any proposed or final Treasury Regulations and Internal Revenue Service
guidance that has been promulgated or may be promulgated thereunder from time to
time (“Section
409A”).

       

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

       

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

      (m) “Disability” means
permanent and total disability as determined by the Administrator in its sole
discretion.

       

      (n)  “Employee” means any
person, including Officers and Directors, employed by the Company or any Parent
or Subsidiary of the Company.  Neither service as a Director nor
payment of a director’s fee by the Company will be sufficient to constitute
“employment” by the Company.

       

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

       

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

       

      (q)  “Nonstatutory Stock
Option” means an Option that by its terms does not qualify or is not
intended to qualify as an incentive stock option qualified under Section 422 of
the Code.

       

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

       

      (s) “Option” means a stock
option granted pursuant to Section 6 of the Plan.

       

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

       

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

       

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

       

      (w) “Performance Share”
means an Award denominated in Shares granted to a Participant pursuant to
Section 10.

       

      (x) “Period of
Restriction” means the period during which the transfer of Shares of
Restricted Stock are subject to restrictions and therefore, the Shares are
subject to a substantial risk of forfeiture.  Such restrictions may be
based on the passage of time, the achievement of target levels of performance,
or the occurrence of other events as determined by the
Administrator.

       

      (y) “Plan” means this 2008
Inducement Equity Incentive Plan.

       

      
        
          
          

        

        
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      (z)  “Restricted Stock”
means Shares issued pursuant to an Award of Restricted Stock under
Section 8 of the Plan, or issued pursuant to the early exercise of an
Option.

       

      (aa) “Restricted Stock
Unit” means a bookkeeping entry representing an amount equal to the Fair
Market Value of one Share, granted pursuant to Section 9.  Each
Restricted Stock Unit represents an unfunded and unsecured obligation of the
Company.

       

      (bb)  “Rule 16b-3” means
Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when
discretion is being exercised with respect to the Plan.

       

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

       

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

       

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

       

      (ff) “Stock Appreciation
Right” means an Award, granted alone or in connection with an Option,
that pursuant to Section 7 is designated as a Stock Appreciation
Right.

       

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

       

      3. Stock Subject to the Plan.

       

      (a) Subject
to the provisions of Section 13 of the Plan, the maximum aggregate number
of Shares that may be awarded and sold under the Plan is five hundred thousand
(500,000) Shares.  The Shares may be authorized, but unissued, or
reacquired Common Stock.

       

      (b) Full
Value Awards.  Any Shares subject to
Awards other than Options or Stock Appreciation Rights will be counted against
the numerical limits of this Section 3 as two (2) Shares for every one (1) Share
subject thereto.  Further, if Shares acquired pursuant to any
such Award are forfeited or repurchased by the Company and would otherwise
return to the Plan pursuant to Section 3(c), two (2) times the number of Shares
so forfeited or repurchased will return to the Plan and will again become
available for issuance. 

       

      (c) Lapsed
Awards.  If an Award expires or becomes unexercisable without
having been exercised in full, or, with respect to Restricted Stock, Restricted
Stock Units or Performance Shares, is forfeited to or repurchased by the
Company, the unpurchased Shares (or for Awards other than Options and Stock
Appreciation Rights, the forfeited or repurchased Shares) which were subject
thereto will become available for future grant or sale under the Plan (unless
the Plan has terminated).  Upon exercise of a Stock Appreciation Right
settled in Shares, the gross number of Shares covered by the portion of the
Award so exercised will cease to be available under the Plan.  Shares
that have actually been issued under the Plan under any Award will not be
returned to the Plan and will not become available for future distribution under
the Plan; provided, however, that if unvested Shares of Restricted Stock,
Restricted Stock Units or Performance Shares are repurchased by the Company or
are forfeited to the Company, such Shares will become available for future grant
under the Plan.  Shares used to pay the withholding tax related to an
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the
exercise price of an Award will not become available for future grant or sale
under the Plan.  To the extent an Award under the Plan is paid out in
cash rather than Shares, such cash payment will not result in reducing the
number of Shares available for issuance under the Plan.

      

       

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

       

      4. Administration of the
Plan.

       

      (a) Procedure.

       

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

       

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

       

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

       

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

       

      (i) to
determine the Fair Market Value;

       

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

       

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

       

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

       

      (v) to
prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans established for the
purpose of satisfying applicable foreign laws;

       

      (vi) to modify
or amend each Award (subject to Section 18(c) of the Plan);

       

      (vii) to
authorize any person to execute on behalf of the Company any instrument required
to effect the grant of an Award previously granted by the
Administrator;

       

      
        
          
          

        

        
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      (viii) to allow
a Participant to defer the receipt of the payment of cash or the delivery of
Shares that would otherwise be due to such Participant under an Award pursuant
to such procedures as the Administrator may determine; and

       

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

       

      (c) Effect of
Administrator’s Decision.  The Administrator’s decisions,
determinations, and interpretations will be final and binding on all
Participants and any other holders of Awards.

       

      5. Eligibility.  Awards
may be granted to Employees so long as the following requirements are met: (a)
the Employee was not previously an Employee or Director, or the Employee is
returning to the employment of the Company following a bona-fide period of
non-employment; and (b) the grant of an Award under the Plan is a material
inducement to the Employee’s decision to enter into the employment of the
Company.  Notwithstanding the foregoing, an Employee may be granted an
Award in connection with a merger, acquisition or similar transaction, to the
extent permitted by the NASDAQ rules governing stockholder approval of
inducement equity compensation plans.

       

      6. Stock
Options.

       

      (a) Limitations.  Each
Option granted hereunder shall be a Nonstatutory Stock Option.

       

      (b) Term of
Option.  The Administrator will determine the term of each
Option in its sole discretion; provided, however, that
the term will be no more than seven (7) years from the date of grant
thereof.

       

      (c) Option Exercise Price and
Consideration.

       

      (i) Exercise
Price.  The per share exercise price for the Shares to be
issued pursuant to exercise of an Option will be determined by the
Administrator, but will be no less than 100% of the Fair Market Value per Share
on the date of grant.

       

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

       

      (iii) No
Repricing.  The exercise price for an Option may not be reduced
without the consent of the Company’s stockholders.  This shall
include, without limitation, a repricing of the Option as well as an Option
exchange program whereby the Participant agrees to cancel an existing Option in
exchange for an Option, Stock Appreciation Right or other Award.

       

      (iv) Form of
Consideration.  The Administrator will determine the acceptable
form(s) of consideration for exercising an Option, including the method of
payment, to the extent permitted by Applicable Laws.  Such
consideration may consist of, without limitation, (1) cash, (2) check,
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(4) other
Shares, provided that such Shares have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which such
Option shall be exercised and provided that accepting such Shares, in the sole
discretion of the Administrator, shall not result in any adverse accounting
consequences to the Company, (5) consideration received by the Company
under a cashless exercise program implemented by the Company in connection with
the Plan, (6) such other consideration and method of payment for the issuance of
Shares to the extent permitted by Applicable Laws, or (7) any combination
of the foregoing methods of payment.  In making its determination as
to the type of consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to benefit the
Company.

      

       

      (d) Exercise of
Option.

       

      (i) Procedure for Exercise;
Rights as a Stockholder.  Any Option granted hereunder will be
exercisable according to the terms of the Plan and at such times and under such
conditions as determined by the Administrator and set forth in the Award
Agreement.  An Option may not be exercised for a fraction of a
Share.

       

      An Option
will be deemed exercised when the Company receives: (i) notice of exercise
(in such form as the Administrator specifies from time to time) from the person
entitled to exercise the Option, and (ii) full payment for the Shares with
respect to which the Option is exercised (together with any applicable
withholding taxes).  No adjustment will be made for a dividend or
other right for which the record date is prior to the date the Shares are
issued, except as provided in Section 13 of the Plan.

       

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

       

      (iii) Disability of
Participant.  If a Participant ceases to be a Service Provider
as a result of the Participant’s Disability, the Participant may exercise his or
her Option within such period of time as is specified in the Award Agreement to
the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Award
Agreement).  In the absence of a specified time in the Award
Agreement, the Option will remain exercisable for twelve (12) months following
the Participant’s termination.  Unless otherwise provided by the
Administrator, if on the date of termination the Participant is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option will revert to the Plan.  If after termination the Participant
does not exercise his or her Option within the time specified herein, the Option
will terminate, and the Shares covered by such Option will revert to the
Plan.

      
        
          
          

        

        
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      (iv) Death of
Participant.  If a Participant dies while a Service Provider,
the Option may be exercised following the Participant’s death within such period
of time as is specified in the Award Agreement to the extent that the Option is
vested on the date of death (but in no event may the option be exercised later
than the expiration of the term of such Option as set forth in the Award
Agreement), by the Participant’s designated beneficiary, provided such
beneficiary has been designated prior to Participant’s death in a form
acceptable to the Administrator.  If no such beneficiary has been
designated by the Participant, then such Option may be exercised by the personal
representative of the Participant’s estate or by the person(s) to whom the
Option is transferred pursuant to the Participant’s will or in accordance with
the laws of descent and distribution.  In the absence of a specified
time in the Award Agreement, the Option will remain exercisable for twelve (12)
months following Participant’s death.  Unless otherwise provided by
the Administrator, if at the time of death Participant is not vested as to his
or her entire Option, the Shares covered by the unvested portion of the Option
will immediately revert to the Plan.  If the Option is not so
exercised within the time specified herein, the Option will terminate, and the
Shares covered by such Option will revert to the Plan.

       

      (v) Other
Termination.  A Participant’s Award Agreement may also provide
that if the exercise of the Option following the termination of Participant’s
status as a Service Provider (other than upon the Participant’s death or
Disability) would result in liability under Section 16(b), then the Option will
terminate on the earlier of (A) the expiration of the term of the Option set
forth in the Award Agreement, or (B) the 10th day after the last date on which
such exercise would result in such liability under Section 16(b), but in no
event later than the original full term of the Option.  Finally, a
Participant’s Award Agreement may also provide that if the exercise of the
Option following the termination of the Participant’s status as a Service
Provider (other than upon the Participant’s death or Disability) would be
prohibited at any time solely because the issuance of Shares would violate the
registration requirements under the Securities Act, then the Option will
terminate on the earlier of (A) the expiration of the term of the Option, or (B)
the expiration of a period of three (3) months after the termination of the
Participant’s status as a Service Provider during which the exercise of the
Option would not be in violation of such registration requirements.

       

      7. Stock Appreciation
Rights.

       

      (a) Grant of Stock Appreciation
Rights.  Subject to the terms and conditions of the Plan, a
Stock Appreciation Right may be granted to Employees at any time and from time
to time as will be determined by the Administrator, in its sole
discretion.

       

      (b) Number of
Shares.  The Administrator will have complete discretion to
determine the number of Stock Appreciation Rights granted to any
Employee.

       

      (c) Exercise Price and Other
Terms.  The Administrator, subject to the provisions of the
Plan, will have complete discretion to determine the terms and conditions of
Stock Appreciation Rights granted under the Plan, provided, however, that the
exercise price will be not less than 100% of the Fair Market Value of a Share on
the date of grant.

      
        
          
          

        

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

       

      (e) Expiration of Stock
Appreciation Rights.  A Stock Appreciation Right granted under
the Plan will expire upon the date determined by the Administrator, in its sole
discretion, and set forth in the Award Agreement; provided, however, that the
term will be no more than seven (7) years from the date of grant
thereof.  Notwithstanding the foregoing, the rules of
Section 6(d) also will apply to Stock Appreciation Rights.

       

      (f) No
Repricing.  The exercise price for a Stock Appreciation Right
may not be reduced without the consent of the Company’s
stockholders.  This shall include, without limitation, a repricing of
the Stock Appreciation Right as well as a Stock Appreciation Right exchange
program whereby the Participant agrees to cancel an existing Stock Appreciation
Right in exchange for an Option, Stock Appreciation Right or other
Award.

       

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

       

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

       

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

       

      (iii) At the
discretion of the Administrator, the payment upon Stock Appreciation Right
exercise may be in cash, in Shares of equivalent value, or in some combination
thereof, as specified in the Award Agreement.

       

      8. Restricted
Stock.

       

      (a) Grant of Restricted
Stock.  Subject to the terms and provisions of the Plan, the
Administrator, at any time and from time to time, may grant Shares of Restricted
Stock to Employees in such amounts as the Administrator, in its sole discretion,
will determine.

       

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

       

      (c) Transferability.  Except
as provided in this Section 8, Shares of Restricted Stock may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction.

      
        
          
          

        

        
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      (d) Other
Restrictions.  The Administrator, in its sole discretion, may
impose such other restrictions on Shares of Restricted Stock as it may deem
advisable or appropriate.

       

      (e) Removal of
Restrictions.  Except as otherwise provided in this Section 8,
Shares of Restricted Stock covered by each Restricted Stock grant made under the
Plan will be released from escrow as soon as practicable after the last day of
the Period of Restriction.  The Administrator, in its discretion, may
accelerate the time at which any restrictions will lapse or be
removed.

       

      (f) Voting
Rights.  During the Period of Restriction, Service Providers
holding Shares of Restricted Stock granted hereunder may exercise full voting
rights with respect to those Shares, unless the Administrator determines
otherwise.

       

      (g) Dividends and Other
Distributions.  During the Period of Restriction, Service
Providers holding Shares of Restricted Stock will be entitled to receive all
dividends and other distributions paid with respect to such Shares unless
otherwise provided in the Award Agreement.  If any such dividends or
distributions are paid in Shares, the Shares will be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.

       

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

       

      9. Restricted Stock
Units.

       

      (a) Grant.  Restricted
Stock Units may be granted at any time and from time to time as determined by
the Administrator.  Each Restricted Stock Unit grant will be evidenced
by an Award Agreement that will specify such other terms and conditions as the
Administrator, in its sole discretion, will determine, including all terms,
conditions, and restrictions related to the grant, the number of Restricted
Stock Units and the form of payout, which, subject to Section 9(d), may be
left to the discretion of the Administrator.

       

      (b) Vesting Criteria and Other
Terms.  The Administrator will set vesting criteria in its
discretion, which, depending on the extent to which the criteria are met, will
determine the number of Restricted Stock Units that will be paid out to the
Participant.  The Administrator may set vesting criteria based upon
the achievement of Company-wide, business unit, or individual goals (including,
but not limited to, continued employment or status as a Service Provider), or
any other basis determined by the Administrator in its
discretion.  After the grant of Restricted Stock Units, the
Administrator, in its sole discretion, may reduce or waive any restrictions for
such Restricted Stock Units.  Each Award of Restricted Stock Units
will be evidenced by an Award Agreement that will specify the vesting criteria,
and such other terms and conditions as the Administrator, in its sole discretion
will determine.  The Administrator, in its discretion, may accelerate
the time at which any restrictions will lapse or be removed.

       

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

      
        
          
          

        

        
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      (d) Form and Timing of
Payment.  Payment of earned Restricted Stock Units will be made
as soon as practicable after the date(s) set forth in the Award
Agreement.  The Administrator, in its sole discretion, may pay earned
Restricted Stock Units in cash, Shares, or a combination
thereof.  Shares represented by Restricted Stock Units that are fully
paid in cash again will be available for grant under the Plan.

       

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

       

      10. Performance
Shares.

       

      (a) Grant of Performance
Shares.  Performance Shares may be granted to Employees at any
time and from time to time, as will be determined by the Administrator, in its
sole discretion.  The Administrator will have complete discretion in
determining the number of Performance Shares granted to each
Participant.

       

      (b) Value of Performance
Shares.  Each Performance Share will have an initial value
equal to the Fair Market Value of a Share on the date of grant.

       

      (c) Performance Objectives and
Other Terms.  The Administrator will set performance objectives
or other vesting provisions.  The Administrator may set vesting
criteria based upon the achievement of Company-wide, business unit, or
individual goals (including, but not limited to, continued employment or status
as a Service Provider), or any other basis determined by the Administrator in
its discretion.

       

      (d) Earning of Performance
Shares.  After the applicable performance period has ended, the
holder of Performance Shares will be entitled to receive a payout of the number
of Performance Shares earned by the Participant over the performance period, to
be determined as a function of the extent to which the corresponding performance
objectives or other vesting provisions have been achieved.  After the
grant of a Performance Share, the Administrator, in its sole discretion, may
reduce or waive any performance objectives or other vesting provisions for such
Performance Share.

       

      (e) Form and Timing of Payment
of Performance Shares.  Payment of earned Performance Shares
will be made as soon as practicable after the expiration of the applicable
performance period in Shares (which have an aggregate Fair Market Value equal to
the value of the earned Performance Shares at the close of the applicable
performance period).

       

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

       

      11. Leaves of Absence; Transfer
Between Locations.  Unless the Administrator provides
otherwise, vesting of Awards granted hereunder will be suspended during any
unpaid leave of absence.  A Service Provider will not cease to be an
Employee in the case of (i) any leave of absence approved by the Company,
or (ii) transfers between locations of the Company or between the Company,
its Parent, or any Subsidiary.

      
        
          
          

        

        
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      12. Transferability of
Awards.  Unless determined otherwise by the Administrator, an
Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by will or by the laws of descent or distribution
and may be exercised, during the lifetime of the Participant, only by the
Participant.  If the Administrator makes an Award transferable, such
Award will contain such additional terms and conditions as the Administrator
deems appropriate; provided, however, that in no event may an Award be
transferred to a third party for value.

       

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

       

      (a) Adjustments.  In
the event that any dividend or other distribution (whether in the form of cash,
Shares, other securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Shares or other securities of the
Company, or other change in the corporate structure of the Company affecting the
Shares occurs, the Administrator, in order to prevent diminution or enlargement
of the benefits or potential benefits intended to be made available under the
Plan, will adjust the number and class of Shares that may be delivered under the
Plan and/or the number, class, and price of Shares covered by each outstanding
Award.

       

      (b) Dissolution or
Liquidation.  In the event of the proposed dissolution or
liquidation of the Company, the Administrator will notify each Participant as
soon as practicable prior to the effective date of such proposed
transaction.  To the extent it has not been previously exercised, an
Award will terminate immediately prior to the consummation of such proposed
action.

       

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

       

      In the
event that the Successor Corporation does not assume or substitute for the
Award, the Participant will fully vest in and have the right to exercise all of
his or her outstanding Options and Stock Appreciation Rights, including Shares
as to which such Awards would not otherwise be vested or exercisable, all
restrictions on Restricted Stock will lapse, and, with respect to Restricted
Stock Units and Performance Shares, all performance objectives or other vesting
criteria will be deemed achieved at target levels and all other terms and
conditions met.  In addition, if an Option or Stock Appreciation Right
is not assumed or substituted for in the event of a Change in Control, the
Administrator will notify the Participant in writing or electronically that the
Option or Stock Appreciation Right will be fully vested and exercisable for a
period of time determined by the Administrator in its sole discretion (but in no
event longer than the original full term), and the Option or Stock Appreciation
Right will terminate upon the expiration of such period.

       

      For the
purposes of this subsection (c), an Award will be considered assumed if,
following the Change in Control, the Award confers the right to purchase or
receive, for each Share subject to the Award immediately prior to the Change in
Control, the consideration (whether stock, cash, or other securities or
property) or, in the case of a Stock Appreciation Right upon the exercise of
which the Administrator determines to pay cash or a Performance Share which the
Administrator can determine to pay in cash, the fair market value of the
consideration received in the merger or 

      
        
          
          

        

        
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Change in
Control by holders of Common Stock for each Share held on the effective date of
the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the Change in Control
is not solely common stock of the Successor Corporation, the Administrator may,
with the consent of the Successor Corporation, provide for the consideration to
be received upon the exercise of an Option or Stock Appreciation Right or upon
the payout of a Restricted Stock Unit or Performance Share, for each Share
subject to such Award, to be solely common stock of the Successor Corporation
equal in fair market value to the per share consideration received by holders of
Common Stock in the Change in Control.

      

       

      Notwithstanding
anything in this Section 13(c) to the contrary, an Award that vests, is earned
or paid-out upon the satisfaction of certain performance criteria will not be
considered assumed if the Company or its successor modifies any of such
performance criteria without the Participant’s consent; provided, however, a
modification to such performance criteria only to reflect the Successor
Corporation’s post-Change in Control corporate structure will not be deemed to
invalidate an otherwise valid Award assumption.

       

      14. Tax
Withholding

       

      (a) Withholding
Requirements.  Prior to the delivery of any Shares or cash
pursuant to an Award (or exercise thereof), the Company will have the power and
the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state, local, foreign or other
taxes (including the Participant’s FICA obligation) required to be withheld with
respect to such Award (or exercise thereof).

       

      (b) Withholding
Arrangements.  The Administrator, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit a
Participant to satisfy such tax withholding obligation, in whole or in part by
(without limitation) (i) paying cash, (ii) electing to have the Company
withhold otherwise deliverable cash or Shares having a Fair Market Value equal
to the minimum amount required to be withheld, (iii) delivering to the Company
already-owned Shares having a Fair Market Value equal to the amount required to
be withheld, or (iv) selling a sufficient number of Shares otherwise
deliverable to the Participant through such means as the Administrator may
determine in its sole discretion (whether through a broker or otherwise) equal
to the amount required to be withheld.  The amount of the withholding
requirement will be deemed to include any amount which the Administrator agrees
may be withheld at the time the election is made, not to exceed the amount
determined by using the maximum federal, state or local marginal income tax
rates applicable to the Participant with respect to the Award on the date that
the amount of tax to be withheld is to be determined.  The Fair Market
Value of the Shares to be withheld or delivered will be determined as of the
date that the taxes are required to be withheld.

       

      15. No Employment
Rights.  Neither the Plan nor any Award will confer upon a
Participant any right with respect to continuing the Participant’s relationship
as an Employee or other Service Provider with the Company or its Subsidiaries,
nor will they interfere in any way with the Participant’s right or the Company’s
or Subsidiary’s right to terminate such relationship at any time, with or
without cause, to the extent permitted by Applicable Laws.

      
        
          
          

        

        
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      16. Date of
Grant.  The date of grant of an Award will be, for all
purposes, the date on which the Administrator makes the determination granting
such Award, or such other later date as is determined by the
Administrator.  Notice of the determination will be provided to each
Participant within a reasonable time after the date of such grant.

       

      17. Term of
Plan.  The Plan will become effective upon its adoption by the
Board.  It will continue in effect for a term of ten (10) years unless
terminated earlier under Section 18 of the
Plan.

       

      18. Amendment and Termination of
the Plan.

       

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

       

      (b) Effect of Amendment or
Termination.  No amendment, alteration, suspension, or
termination of the Plan will impair the rights of any Participant, unless
mutually agreed otherwise between the Participant and the Administrator, which
agreement must be in writing and signed by the Participant and the
Company.  Termination of the Plan will not affect the Administrator’s
ability to exercise the powers granted to it hereunder with respect to Awards
granted under the Plan prior to the date of such termination.

       

      19. Conditions Upon Issuance of
Shares.

       

      (a) Legal
Compliance.  Shares will not be issued pursuant to the exercise
of an Award unless the exercise of such Award and the issuance and delivery of
such Shares will comply with Applicable Laws and will be further subject to the
approval of counsel for the Company with respect to such
compliance.

       

      (b) Investment
Representations.  As a condition to the exercise of an Award,
the Company may require the person exercising such Award to represent and
warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.

       

      20. Inability to Obtain
Authority.  The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, will relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority will not have
been obtained.


       

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