exv10w25






Exhibit 10.25




ADS TACTICAL, INC.

2011 INCENTIVE AWARD PLAN




ARTICLE 1.



PURPOSE



     The purpose of the ADS Tactical, Inc. 2011 Incentive Award Plan (as it may be amended and
restated from time to time, the “Plan”) is to promote the success and enhance the value of
ADS Tactical, Inc. (the “Company”) by linking the individual 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 “Administrator” shall mean the entity that conducts the general administration of
the Plan as provided in Article 13. With reference to the duties of the Committee under the Plan
which have been delegated to one or more persons pursuant to Section 13.6, or as to which the Board
has assumed, the term “Administrator” shall refer to such person(s) unless the Committee or the
Board has revoked such delegation or the Board has terminated the assumption of such duties.



     2.2 “Affiliate” shall mean (a) Subsidiary; and (b) any domestic eligible entity that
is disregarded, under Treasury Regulation Section 301.7701-3, as an entity separate from either (i)
the Company or (ii) any Subsidiary.



     2.3 “Applicable Accounting Standards” shall mean Generally Accepted Accounting
Principles in the United States, International Financial Reporting Standards or such other
accounting principles or standards as may apply to the Company’s financial statements under United
States federal securities laws from time to time.



     2.4 “Award” shall mean an Option, a Restricted Stock award, a Restricted Stock Unit
award, a Performance Award, a Performance Stock Unit award, a Dividend Equivalents award, a
Deferred Stock award, a Deferred Stock Unit award, Stock Payment award or a Stock Appreciation
Right, which may be awarded or granted under the Plan (collectively, “Awards”).



     2.5 “Award Agreement” shall mean any written notice, agreement, terms and conditions,
contract or other instrument or document evidencing an Award, including through



 









 




electronic medium, which shall contain such terms and conditions with respect to an Award as
the Administrator shall determine consistent with the Plan.




     2.6 “Award Limit” shall mean with respect to Awards that shall be payable in Shares or
in cash, as the case may be, the respective limit set forth in Section 3.3.



     2.7 “Board” shall mean the Board of Directors of the Company.



     2.8 “Change in Control” shall mean the occurrence of (a) any transaction or series of
transactions which within a 12-month period constitute a change in control where (i) more than 50%
of the then outstanding shares of Common Stock are (for cash, property (including, without limitation,
stock in any corporation), or indebtedness, or any combination thereof) redeemed by the Company or
purchased by any person(s), firm(s) or entity(ies), or exchanged for shares in any other
corporation whether or not affiliated with the Company, or any combination of such redemption,
purchase or exchange, or (ii) more than 50% of the Company’s assets are purchased by any person(s),
firm(s) or entity(ies) whether or not affiliated with the Company for cash, property (including,
without limitation, stock in any corporation) or indebtedness or any combination thereof, or (iii)
the Company is merged or consolidated with another corporation regardless of whether the Company is
the survivor (except any such transaction solely for the purpose of changing the Company’s domicile
or which does not change the ultimate beneficial ownership of the equity interests in the Company),
or (b) any substantial equivalent of any such redemption, purchase, exchange, change, transaction
or series of transactions, acquisition, merger or consolidation constituting such a change in
control; provided, however, that in the event a Change in Control constitutes a
payment event with respect to any Award which provides for the deferral of compensation and is
subject to Section 409A of the Code, the transaction or event described in subsection (a) or (b)
with respect to such Award must also constitute a “change in control event,” as defined in Treasury
Regulation §1.409A-3(i)(5) to the extent required by Section 409A. For purposes hereof, the term
“control” shall have the meaning ascribed thereto under the Exchange Act and the regulations
thereunder. For purposes of clause (a)(ii) above or as appropriate for purposes of clause (b)
above, the Company shall be deemed to include on a consolidated basis all subsidiaries and other
affiliated corporations or other entities with the same effect as if they were divisions.



     2.9 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time,
together with the regulations and official guidance promulgated thereunder.



     2.10 “Committee” shall mean the Compensation Committee of the Board, or another
committee or subcommittee of the Board, appointed as provided in Section 13.1.







     2.11
“Common Stock” shall mean the common stock of the
Company, with par value $0.001 per
share.







     2.12 “Company” shall mean ADS Tactical, Inc., a Delaware corporation.



     2.13 “Consultant” shall mean any consultant or adviser engaged to provide services to
the Company or any Affiliate that qualifies as a consultant under the applicable rules of the
Securities and Exchange Commission for registration of shares on a Form S-8 Registration Statement.



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     2.14 “Covered Employee” shall mean any Employee who is, or could be, a “covered
employee” within the meaning of Section 162(m) of the Code.



     2.15
“Deferred Stock” shall mean a right to receive
Shares awarded under Section 10.4.



     2.16 “Deferred Stock Unit” shall mean a right to receive Shares awarded under Section
10.5.



     2.17 “Director” shall mean a member of the Board, as constituted from time to time.



     2.18 “Dividend Equivalent” shall mean a right to receive the equivalent value (in cash
or Shares) of dividends paid on Shares, awarded under Section 10.2.



     2.19 “DRO” shall mean a domestic relations order as defined by the Code or Title I of
the Employee Retirement Income Security Act of 1974, as amended from time to time, or the rules
thereunder.



     2.20 “Effective Date” shall mean the date the Plan is approved by the Board, subject
to approval of the Plan by the Company’s stockholders.



     2.21 “Eligible Individual” shall mean any person who is an Employee, a Consultant or a
Non-Employee Director, as determined by the Committee.



     2.22 “Employee” shall mean any officer or other employee (as determined in accordance
with Section 3401(c) of the Code and the Treasury Regulations thereunder) of the Company or of any
Affiliate.



     2.23 “Equity Restructuring” shall mean a nonreciprocal transaction between the Company
and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or
recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of
shares of Common Stock (or other securities of the Company) or the share price of Common Stock (or
other securities) and causes a change in the per share value of the Common Stock underlying
outstanding Awards.



     2.24 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from
time to time.



     2.25 “Fair Market Value” shall mean, as of any given date, the value of a Share
determined as follows:



          (a) If the Common Stock is listed on any (i) established securities exchange (such as the New
York Stock Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market), (ii) national
market system or (iii) automated quotation system on which the Shares are listed, quoted or traded,
its Fair Market Value shall be the closing sales price for a share of Common Stock as quoted on
such exchange or system for such date or, if there is no closing sales price for a share of Common
Stock on the date in question, the closing sales price for a share of Common Stock on the last
preceding date for which such quotation exists, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;







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          (b) If the Common Stock is not listed on an established securities exchange, national market
system or automated quotation system, but the Common Stock is regularly quoted by a recognized
securities dealer, its Fair Market Value shall be the mean of the high bid and low asked prices for
such date or, if there are no high bid and low asked prices for a share of Common Stock on such
date, the high bid and low asked prices for a share of Common Stock on the last preceding date for
which such information exists, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or




          (c) If the Common Stock is neither listed on an established securities exchange, national
market system or automated quotation system nor regularly quoted by a recognized securities dealer,
its Fair Market Value shall be established by the Administrator in good faith.




     2.26 “Greater Than 10% Stockholder” shall mean an individual then owning (within the
meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all
classes of stock of the Company or any subsidiary corporation (as defined in Section 424(f) of the
Code) or parent corporation thereof (as defined in Section 424(e) of the Code).



     2.27 “Holder” shall mean a person who has been granted an Award.



     2.28 “Incentive Stock Option” shall mean an Option that is intended to qualify as an
incentive stock option and conforms to the applicable provisions of Section 422 of the Code.



     2.29 “Non-Employee Director” shall mean a Director of the Company who is not an
Employee.




     2.30 “Non-Employee Director Compensation Policy” shall have the meaning set
forth in Section 4.6.



     2.31 “Non-Qualified Stock Option” shall mean an Option that is not an Incentive Stock
Option.



     2.32 “Option” shall mean a right to purchase Shares at a specified exercise price,
granted under Article 6. An Option shall be either a Non-Qualified Stock Option or an Incentive
Stock Option; provided, however, that Options granted to Non-Employee Directors and
Consultants shall only be Non-Qualified Stock Options.



     2.33 “Option Term” shall have the meaning set forth in Section 6.4.



     2.34 “Parent” shall mean any entity (other than the Company), whether domestic or
foreign, in an unbroken chain of entities ending with the Company if each of the entities other
than the Company beneficially owns, at the time of the determination, securities or interests
representing at least fifty percent (50%) of the total combined voting power of all classes of
securities or interests in one of the other entities in such chain.



     2.35 “Performance Award” shall mean a cash bonus award, stock bonus award, performance
award or incentive award that is paid in cash, Shares or a combination of both, awarded under
Section 10.1.



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



     2.37 “Performance Criteria” shall mean the criteria (and adjustments) that the
Committee selects for an Award for purposes of establishing the Performance Goal or Performance
Goals for a Performance Period, determined as follows:



          (a) The Performance Criteria that shall be used to establish Performance Goals are limited to
the following: (i) net earnings or losses (either before or after one or more of the following:
(A) interest, (B) taxes, (C) depreciation and (D) amortization); (ii) gross or net sales or
revenue; (iii) revenue growth or product revenue growth; (iv) net income (either before or after
taxes); (v) adjusted net income; (vi) operating income (either before or after taxes) (vii)
operating earnings or profit; (viii) pre- or after-tax income or loss (before or after allocation
of corporate overhead and bonus); (ix) cash flow (including, but not limited to, operating cash
flow and free cash flow); (x) return on assets or net assets; (xi) return on capital; (xii) return
on stockholders’ equity; (xiii) total stockholder return; (xiv) return on sales; (xv) gross or net
profit or operating margin; (xvi) costs or reduction in costs; (xvii) funds from operations;
(xviii) expenses; (xix) working capital; (xx) earnings or loss per share; (xxi) adjusted earnings
per share; (xxii) price per share of Common Stock; (xxiii) appreciation in and/or maintenance of
the price of the Company’s Common Stock or any other publicly-traded securities; (xiv) economic
value-added models or equivalent metrics; (xxv) comparisons with various stock market indices
(xxvi) regulatory achievements and compliance; (xxvii) implementation or completion of critical
projects; (xxviii) market share; (xxix) customer satisfaction; (xxx) customer growth; (xxxi)
employee satisfaction; (xxxii) recruiting and maintaining personnel; (xxxiii) strategic
partnerships or transactions (including in-licensing and out-licensing of intellectual property;
establishing relationships with commercial entities with respect to the marketing, distribution and
sale of the Company’s products (including with group purchasing organizations, distributors and
other vendors); (xxxiv) supply chain achievements (including establishing relationships with
manufacturers or suppliers of component materials and manufacturers of the Company’s products);
(xxxv) co-development, co-marketing, profit sharing, joint venture or other similar arrangements);
(xxxvi) financial ratios, including those measuring liquidity, activity, profitability or leverage;
(xxxvii) cost of capital or assets under management; financing and other capital raising
transactions (including sales of the Company’s equity or debt securities; factoring transactions;
sales or licenses of the Company’s assets, including its intellectual property, whether in a
particular jurisdiction or territory or globally; or through partnering transactions); (xxxviii)
implementation, completion or attainment of measurable objectives with respect to research,
development, manufacturing, commercialization, products or projects, production volume levels,
acquisitions and divestitures; (xxxix) factoring transactions; and recruiting and maintaining
personnel and (xl) economic value, any of which may be measured either in absolute terms or as
compared to any incremental increase or decrease or as compared to results of a peer group or to
market performance indicators or indices.




          (b) The Administrator may, in its sole discretion, provide that one or more objectively
determinable adjustments shall be made to one or more of the Performance Goals. Such adjustments
may include one or more of the following: (i) items related to a change in accounting principle;
(ii) items relating to financing activities; (iii) expenses for restructuring or






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productivity initiatives; (iv) other non-operating items; (v) items related to acquisitions;
(vi) items attributable to the business operations of any entity acquired by the Company during the
Performance Period; (vii) items related to the disposal of a business or segment of a business;
(viii) items related to discontinued operations that do not qualify as a segment of a business
under Applicable Accounting Standards; (ix) items attributable to any stock dividend, stock split,
combination or exchange of stock occurring during the Performance Period; (x) any other items of
significant income or expense which are determined to be appropriate adjustments; (xi) items
relating to unusual or extraordinary corporate transactions, events or developments, (xii) items
related to amortization of acquired intangible assets; (xiii) items that are outside the scope of
the Company’s core, on-going business activities; (xiv) items related to acquired in-process
research and development; (xv) items relating to changes in tax laws; (xvi) items relating to major
licensing or partnership arrangements; (xvii) items relating to asset impairment charges; (xviii)
items relating to gains or losses for litigation, arbitration and contractual settlements; or (xix)
items relating to any other unusual or nonrecurring events or changes in applicable laws,
accounting principles or business conditions. For all Awards intended to qualify as
Performance-Based Compensation, such determinations shall be made within the time prescribed by,
and otherwise in compliance with, Section 162(m) of the Code.




     2.38 “Performance Goals” shall mean, for a Performance Period, one or more goals
established in writing by the Administrator for the Performance Period based upon one or more
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 Subsidiary, division, business unit, or an individual. The achievement of each
Performance Goal shall be determined, to the extent applicable, with reference to Applicable
Accounting Standards.



     2.39 “Performance Period” shall mean one or more periods of time, which may be of
varying and overlapping durations, as the Administrator may select, over which the attainment of
one or more Performance Goals will be measured for the purpose of determining a Holder’s right to,
and the payment of, an Award.



     2.40 “Performance Stock Unit” shall mean a Performance Award awarded under Section
10.1 which is denominated in units of value including dollar value of shares of Common Stock.



     2.41 “Permitted Transferee” shall mean, with respect to a Holder, any “family member”
of the Holder, as defined under the instructions to use the Form S-8 Registration Statement under
the Securities Act, after taking into account any state, federal, local or foreign tax and
securities laws applicable to transferable Awards.



     2.42 “Plan” shall mean this ADS Tactical, Inc. 2011 Incentive Award Plan, as it may be
amended or restated from time to time.



     2.43 “Program” shall mean any program adopted by the Administrator pursuant to the
Plan containing the terms and conditions intended to govern a specified type of Award granted under
the Plan and pursuant to which such type of Award may be granted under the Plan.



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     2.44 “Public Trading Date” shall mean the first date upon which Common Stock is listed
(or approved for listing) upon notice of issuance on any securities exchange or designated (or
approved for designation) upon notice of issuance as a national market security on an interdealer
quotation system.



     2.45 “Restricted Stock” shall mean Common Stock awarded under Article 8 that is
subject to certain restrictions and may be subject to risk of forfeiture or repurchase.



     2.46 “Restricted Stock Units” shall mean the right to receive Shares awarded under
Article 9.



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



     2.48 “Shares” shall mean shares of Common Stock.



     2.49 “Stock Appreciation Right” shall mean a stock appreciation right granted under
Article 11.



     2.50 “Stock Appreciation Right Term” shall have the meaning set forth in Section 11.4.



     2.51 “Stock Payment” shall mean (a) a payment in the form of Shares, or (b) an option
or other right to purchase Shares, as part of a bonus, deferred compensation or other arrangement,
awarded under Section 10.3.



     2.52 “Subsidiary” shall mean any entity (other than the Company), whether domestic or
foreign, in an unbroken chain of entities beginning with the Company if each of the entities other
than the last entity in the unbroken chain beneficially owns, at the time of the determination,
securities or interests representing at least fifty percent (50%) of the total combined voting
power of all classes of securities or interests in one of the other entities in such chain.



     2.53 “Substitute Award” shall mean an Award granted under the Plan upon the assumption
of, or in substitution for, outstanding equity awards previously granted by a company or other
entity in connection with a corporate transaction, such as a merger, combination, consolidation or
acquisition of property or stock; provided, however, that in no event shall the
term “Substitute Award” be construed to refer to an award made in connection with the cancellation
and repricing of an Option or Stock Appreciation Right.



     2.54 “Termination of Service” shall mean:



          (a) As to a Consultant, the time when the engagement of a Holder as a Consultant to the
Company or an Affiliate is terminated for any reason, with or without cause, including, without
limitation, by resignation, discharge, death or retirement, but excluding terminations where the
Consultant simultaneously commences or remains in employment or service with the Company or any
Affiliate.







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          (b) As to a Non-Employee Director, the time when a Holder who is a Non-Employee Director
ceases to be a Director for any reason, including, without limitation, a termination by
resignation, failure to be elected, death or retirement, but excluding terminations where the
Holder simultaneously commences or remains in employment or service with the Company or any
Affiliate.




          (c) As to an Employee, the time when the employee-employer relationship between a Holder and
the Company or any Affiliate is terminated for any reason, including, without limitation, a
termination by resignation, discharge, death, disability or retirement; but excluding terminations
where the Holder simultaneously commences or remains in employment or service with the Company or
any Affiliate.




     The Administrator, in its sole discretion, shall determine the effect of all matters and
questions relating to Terminations of Service, including, without limitation, the question of
whether a Termination of Service resulted from a discharge for cause and all questions of whether
particular leaves of absence constitute a Termination of Service; provided,
however, that, with respect to Incentive Stock Options, unless the Administrator otherwise
provides in the terms of the Program, the Award Agreement or otherwise, a leave of absence, change
in status from an employee to an independent contractor or other change in the employee-employer
relationship shall constitute a Termination of Service only if, and to the extent that, such leave
of absence, change in status or other change interrupts employment for the purposes of Section
422(a)(2) of the Code and the then applicable regulations and revenue rulings under said Section.
For purposes of the Plan, a Holder’s employee-employer relationship or consultancy relations shall
be deemed to be terminated in the event that the Affiliate employing or contracting with such
Holder ceases to remain an Affiliate following any merger, sale of stock or other corporate
transaction or event (including, without limitation, a spin-off).



ARTICLE 3.




SHARES SUBJECT TO THE PLAN



     3.1 Number of Shares.




          (a) Subject to Section 14.2 and Section 3.1(b), the aggregate number of Shares which may be
issued or transferred pursuant to Awards under the Plan is 9,431,000.





          (b) If any
Shares subject to an Award are forfeited or expire or such Award is
settled in cash (in whole or in part), the Shares subject to such
Award shall, to the extent of such forfeiture, expiration or cash
settlement, again be available for future grants of Awards under the
Plan. Notwithstanding anything to the contrary contained herein, the following Shares shall not
be added to the Shares authorized for grant under Section 3.1(a) and will not be available for
future grants of Awards: (i) Shares tendered by a Holder or withheld by the Company in payment of
the exercise price of an Option; (ii) Shares tendered by the Holder or withheld by the Company to
satisfy any tax withholding obligation with respect to an Award; (iii) Shares subject to a Stock
Appreciation Right that are not issued in connection with the stock settlement of the Stock
Appreciation Right on exercise thereof; and (iv) Shares purchased on the open market with the cash
proceeds from the exercise of Options. Any Shares repurchased by the Company under Section 8.4 at
the same price paid by the Holder so that such Shares are returned to the Company will again be
available for Awards. The payment of Dividend Equivalents in cash in conjunction with any
outstanding Awards shall not be counted against the






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shares available for issuance under the Plan. Notwithstanding the provisions of this Section
3.1(b), no Shares 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.




          (c) Substitute Awards shall not reduce the Shares authorized for grant under the Plan.
Additionally, in the event that a company acquired by the Company or any Affiliate or with which
the Company or any Affiliate combines has shares available under a pre-existing plan approved by
stockholders and not adopted in contemplation of such acquisition or combination, the shares
available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent
appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in
such acquisition or combination to determine the consideration payable to the holders of common
stock of the entities party to such acquisition or combination) may be used for Awards under the
Plan and shall not reduce the Shares authorized for grant under the Plan; provided that
Awards using such available shares shall not be made after the date awards or grants could have
been made under the terms of the pre-existing plan, absent the acquisition or combination, and
shall only be made to individuals who were not employed by or providing services to the Company or
its Affiliates immediately prior to such acquisition or combination.




     3.2 Stock Distributed. Any Shares distributed pursuant to an Award may consist, in
whole or in part, of authorized and unissued Common Stock, treasury Common Stock or Common 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 Section 14.2, the maximum aggregate number of Shares
with respect to one or more Awards that may be granted to any one person during any calendar year
shall be 3,143,666 and the maximum aggregate amount of cash that may be paid in cash during any
calendar year with respect to one or more Awards payable in cash shall be $2,000,000;
provided, however, that the foregoing limitations shall not apply prior to the
Public Trading Date and, following the Public Trading Date, the foregoing limitations shall not
apply until the earliest of: (a) the first material modification of the Plan (including any
increase in the number of shares reserved for issuance under the Plan in accordance with Section
3.1); (b) the issuance of all of the Shares reserved for issuance under the Plan; (c) the
expiration of the Plan; (d) the first meeting of stockholders at which members of the Board are to
be elected that occurs after the close of the third calendar year following the calendar year in
which occurred the first registration of an equity security of the Company under Section 12 of the
Exchange Act; or (e) such other date required by Section 162(m) of the Code and the rules and
regulations promulgated thereunder. To the extent required by Section 162(m) of the Code, Shares
subject to Awards which are canceled shall continue to be counted against the Award Limit.



ARTICLE 4.




GRANTING OF AWARDS



     4.1 Participation. The Administrator may, from time to time, select from among all
Eligible Individuals, those to whom an Award shall be granted and shall determine the nature



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and amount of each Award, which shall not be inconsistent with the requirements of the Plan.
Except as provided in Section 4.6 regarding the grant of Awards pursuant to the Non-Employee
Director Equity Compensation Policy, no Eligible Individual shall have any right to be granted an
Award pursuant to the Plan.




     4.2 Award Agreement. Each Award shall be evidenced by an Award Agreement that sets
forth the terms, conditions and limitations for such Award, which may include the term of the
Award, the provisions applicable in the event of the Holder’s Termination of Service, and the
Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an
Award. Award Agreements evidencing Awards intended to qualify as Performance-Based Compensation
shall contain such terms and conditions as may be necessary to meet the applicable provisions of
Section 162(m) of the Code. Award Agreements evidencing Incentive Stock Options shall contain such
terms and conditions as may be necessary to meet the applicable provisions of Section 422 of the
Code.



     4.3 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision
of the Plan, the Plan, and any Award granted or awarded to any individual 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 Rule 16b-3 of the
Exchange Act and any amendments thereto) 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.



     4.4 At-Will Employment; Voluntary Participation. Nothing in the Plan or in any
Program or Award Agreement hereunder shall confer upon any Holder any right to continue in the
employ of, or as a Director or Consultant for, the Company or any Affiliate, or shall interfere
with or restrict in any way the rights of the Company and any Affiliate, which rights are hereby
expressly reserved, to discharge any Holder at any time for any reason whatsoever, with or without
cause, and with or without notice, or to terminate or change all other terms and conditions of
employment or engagement, except to the extent expressly provided otherwise in a written agreement
between the Holder and the Company or any Affiliate. Participation by each Holder in the Plan
shall be voluntary and nothing in the Plan shall be construed as mandating that any Eligible
Individual shall participate in the Plan.



     4.5 Foreign Holders. Notwithstanding any provision of the Plan to the contrary, in
order to comply with the laws in countries other than the United States in which the Company and
its Affiliates operate or have Employees, Non-Employee Directors or Consultants, or in order to
comply with the requirements of any foreign securities exchange, the Administrator, in its sole
discretion, shall have the power and authority to: (a) determine which Affiliates shall be covered
by the Plan; (b) determine which Eligible Individuals outside the United States are eligible to
participate in the Plan; (c) modify the terms and conditions of any Award granted to Eligible
Individuals outside the United States to comply with applicable foreign laws or listing
requirements of any such foreign securities exchange; (d) 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 the Plan as appendices);
provided, however, that no such subplans and/or modifications shall increase the
share



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limitations contained in Sections 3.1 and 3.3; and (e) 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 or listing requirements of any such foreign
securities exchange. Notwithstanding the foregoing, the Administrator may not take any actions
hereunder, and no Awards shall be granted, that would violate the Code, the Exchange Act, the
Securities Act, any other securities law or governing statute, the rules of the securities exchange
or automated quotation system on which the Shares are listed, quoted or traded or any other
applicable law. For purposes of the Plan, all references to foreign laws, rules, regulations or
taxes shall be references to the laws, rules, regulations and taxes of any applicable jurisdiction
other than the United States or a political subdivision thereof.




     4.6 Non-Employee Director Awards. The Administrator may, in its discretion, provide
that Awards granted to Non-Employee Directors shall be granted pursuant to a written
non-discretionary formula established by the Administrator (the “Non-Employee Director Compensation Policy”), subject to the limitations of the Plan. The Non-Employee Director
Compensation Policy shall set forth the type of Award(s) to be granted to Non-Employee Directors,
the number of Shares to be subject to Non-Employee 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 the Administrator shall determine in its discretion. The Non-Employee Director
Compensation Policy may be modified by the Administrator from time to time in its discretion.



     4.7 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the
sole discretion of the Administrator, 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.



ARTICLE 5.




PROVISIONS APPLICABLE TO AWARDS INTENDED TO QUALIFY AS

PERFORMANCE-BASED COMPENSATION.



     5.1 Purpose. The Committee, in its sole discretion, may determine at the time an
Award is granted or at any time thereafter whether such Award is intended to qualify as
Performance-Based Compensation. If the Committee, in its sole discretion, decides to grant such an
Award to an Eligible Individual that is intended to qualify as Performance-Based Compensation, then
the provisions of this Article 5 shall control over any contrary provision contained in the Plan.
The Administrator may in its sole discretion grant Awards to other Eligible Individuals that are
based on Performance Criteria or Performance Goals but that do not satisfy the requirements of this
Article 5 and that are not intended to qualify as Performance-Based Compensation. Unless otherwise
specified by the Administrator at the time of grant, the Performance Criteria with respect to an
Award intended to be Performance-Based Compensation payable to a Covered Employee shall be
determined on the basis of Applicable Accounting Standards.



11









 





     5.2 Applicability. The grant of an Award to an Eligible Individual for a particular
Performance Period shall not require the grant of an Award to such Individual in any subsequent
Performance Period and the grant of an Award to any one Eligible Individual shall not require the
grant of an Award to any other Eligible Individual in such period or in any other period.



     5.3 Types of Awards. Notwithstanding anything in the Plan to the contrary, the
Committee may grant any Award to an Eligible Individual intended to qualify as Performance-Based
Compensation, including, without limitation, Restricted Stock the restrictions with respect to
which lapse upon the attainment of specified Performance Goals, Restricted Stock Units that vest
and become payable upon the attainment of specified Performance Goals and any Performance Awards
described in Article 9 that vest or become exercisable or payable upon the attainment of one or
more specified Performance Goals.



     5.4 Procedures with Respect to Performance-Based Awards. To the extent necessary to
comply with the requirements of Section 162(m)(4)(C) of the Code, with respect to any Award granted
to one or more Eligible Individuals which is intended to qualify as Performance-Based Compensation,
no later than 90 days following the commencement of any Performance Period or any designated fiscal
period or period of service (or such earlier time as may be required under Section 162(m) of the
Code), the Committee shall, in writing, (a) designate one or more Eligible Individuals, (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 based on
the Performance Criteria, 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 and the extent to which the applicable Performance Goals
have been achieved for such Performance Period. In determining the amount earned under such
Awards, 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, including the assessment of individual or corporate performance for the
Performance Period.



     5.5 Payment of Performance-Based Awards. Unless otherwise provided in the applicable
Program or Award Agreement and only to the extent otherwise permitted by Section 162(m)(4)(C) of
the Code, as to an Award that is intended to qualify as Performance-Based Compensation, the Holder
must be employed by the Company or an Affiliate throughout the Performance Period. Unless
otherwise provided in the applicable Performance Goals, Program or Award Agreement, a Holder shall
be eligible to receive payment pursuant to such Awards for a Performance Period only if and to the
extent the Performance Goals for such period are achieved.



     5.6 Additional Limitations. Notwithstanding any other provision of the Plan and
except as otherwise determined by the Administrator, any Award which is granted to an Eligible
Individual and is intended to qualify as Performance-Based Compensation shall be subject to any
additional limitations set forth in Section 162(m) of the Code or any regulations or rulings issued
thereunder that are requirements for qualification as Performance-Based Compensation, and the Plan,
the Program and the Award Agreement shall be deemed amended to the extent necessary to conform to
such requirements.



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ARTICLE 6.




GRANTING OF OPTIONS



     6.1 Granting of Options to Eligible Individuals. The Administrator is authorized to
grant Options to Eligible Individuals from time to time, in its sole discretion, on such terms and
conditions as it may determine which shall not be inconsistent with the Plan.



     6.2 Qualification of Incentive Stock Options. No Incentive Stock Option shall be
granted to any person who is not an Employee of the Company or any
“subsidiary corporation” (as defined in Section 424(f) of
the Code) of the Company. No person who qualifies as a Greater Than 10%
Stockholder may be granted an Incentive Stock Option unless such Incentive Stock Option conforms to
the applicable provisions of Section 422 of the Code. Any Incentive Stock Option granted under the
Plan may be modified by the Administrator, with the consent of the Holder, to disqualify such
Option from treatment as an “incentive stock option” under Section 422 of the Code. To the extent
that the aggregate Fair Market Value of stock with respect to which “incentive stock options”
(within the meaning of Section 422 of the Code, but without regard to Section 422(d) of the Code)
are exercisable for the first time by a Holder during any calendar year under the Plan, and all
other plans of the Company and any subsidiary or parent corporation thereof (each as defined in
Section 424(f) and (e) of the Code, respectively), exceeds $100,000, the Options shall be treated
as Non-Qualified Stock Options to the extent required by Section 422 of the Code. The rule set
forth in the preceding sentence shall be applied by taking Options and other “incentive stock
options” into account in the order in which they were granted and the Fair Market Value of stock
shall be determined as of the time the respective options were granted.



     6.3 Option Exercise Price. The exercise price per Share subject to each Option shall
be set by the Administrator, but shall not be less than 100% of the Fair Market Value of a Share on
the date the Option is granted (or, as to Incentive Stock Options, on the date the Option is
modified, extended or renewed for purposes of Section 424(h) of the Code). In addition, in the
case of Incentive Stock Options granted to a Greater Than 10% Stockholder, such price shall not be
less than 110% of the Fair Market Value of a Share on the date the Option is granted (or the date
the Option is modified, extended or renewed for purposes of Section 424(h) of the Code).



     6.4 Option Term. The term of each Option (the “Option Term”) shall be set by
the Administrator in its sole discretion; provided, however, that the Option Term
shall not be more than ten (10) years from the date the Option is granted, or five (5) years from
the date an Incentive Stock Option is granted to a Greater Than 10% Stockholder. The Administrator
shall determine the time period, including the time period following a Termination of Service,
during which the Holder has the right to exercise the vested Options, which time period may not
extend beyond the last day of the Option Term. Except as limited by the requirements of Section
409A or Section 422 of the Code and regulations and rulings thereunder, the Administrator may
extend the Option Term of any outstanding Option, and may extend the time period during which
vested Options may be exercised, in connection with any Termination of Service of the Holder, and
may amend any other term or condition of such Option relating to such a Termination of Service.



13









 





     6.5 Option Vesting.



          (a) The period during which the right to exercise, in whole or in part, an Option vests in the
Holder shall be set by the Administrator and the Administrator may determine that an Option may not
be exercised in whole or in part for a specified period after it is granted. Such vesting may be
based on service with the Company or any Affiliate, any of the Performance Criteria, or any other
criteria selected by the Administrator.




          (b) No portion of an Option which is unexercisable at a Holder’s Termination of Service shall
thereafter become exercisable, except as may be otherwise provided by the Administrator either in
the Program, the Award Agreement or by action of the Administrator following the grant of the
Option.




     6.6 Substitute Awards. Notwithstanding the foregoing provisions of this Article 6 to
the contrary, in the case of an Option that is a Substitute Award, the price per share of the
shares subject to such Option may be less than the Fair Market Value per share on the date of
grant, provided, that the excess of: (a) the aggregate Fair Market Value (as of the date
such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the
aggregate exercise price thereof does not exceed the excess of: (x) the aggregate fair market
value (as of the time immediately preceding the transaction giving rise to the Substitute Award,
such fair market value to be determined by the Administrator) of the shares of the predecessor
entity that were subject to the grant assumed or substituted for by the Company, over (y) the
aggregate exercise price of such shares.



     6.7 Substitution of Stock Appreciation Rights. The Administrator may provide in the
applicable Program or the Award Agreement evidencing the grant of an Option that the Administrator,
in its sole discretion, shall have the right to substitute a Stock Appreciation Right for such
Option at any time prior to or upon exercise of such Option; provided, that such Stock
Appreciation Right shall be exercisable with respect to the same number of Shares for which such
substituted Option would have been exercisable, and shall also have the same exercise price,
vesting schedule and remaining Option Term as the substituted Option.



ARTICLE 7.




EXERCISE OF OPTIONS



     7.1 Partial Exercise. An exercisable Option may be exercised in whole or in part.
However, an Option shall not be exercisable with respect to fractional shares and the Administrator
may require that, by the terms of the Option, a partial exercise must be with respect to a minimum
number of shares.



     7.2 Expiration of Option Term: Automatic Exercise of In-The-Money Options. Unless
otherwise provided by the Administrator (in an Award Agreement or otherwise) or as otherwise
directed by an Option Holder in writing to the Company, each Option outstanding on the last
business day of the applicable Option Term with an exercise price per share that is less than the
Fair Market Value per share of Common Stock as of such date shall automatically and without further
action by the Option Holder or the Company be exercised on the last business



14









 




day of the Option Term. In the discretion of the Administrator, payment of the exercise price
of any such Option shall be made pursuant to Section 12.1(b) or 12.1(c) and the Company or any
Affiliate shall deduct or withhold an amount sufficient to satisfy all taxes associated with such
exercise in accordance with Section 12.2. For the avoidance of doubt, no Option with an exercise
price per share that is equal to or greater than the Fair Market Value per share of Common Stock on
the last business day of the Option Term shall be exercised pursuant to this Section 7.2.




     7.3 Manner of Exercise. All or a portion of an exercisable Option shall be deemed
exercised upon delivery of all of the following to the Secretary of the Company, or such other
person or entity designated by the Administrator, or his, her or its office, as applicable:



          (a) A written or electronic notice complying with the applicable rules established by the
Administrator stating that the Option, or a portion thereof, is exercised. The notice shall be
signed by the Holder or other person then entitled to exercise the Option or such portion of the
Option;




          (b) Such representations and documents as the Administrator, in its sole discretion, deems
necessary or advisable to effect compliance with all applicable provisions of the Securities Act
and any other federal, state or foreign securities laws or regulations, the rules of any securities
exchange or automated quotation system on which the Shares are listed, quoted or traded or any
other applicable law. The Administrator may, in its sole discretion, also take whatever additional
actions it deems appropriate to effect such compliance including, without limitation, placing
legends on share certificates and issuing stop-transfer notices to agents and registrars;




          (c) In the event that the Option shall be exercised pursuant to Section 12.3 by any person or
persons other than the Holder, appropriate proof of the right of such person or persons to exercise
the Option, as determined in the sole discretion of the Administrator; and




          (d) Full payment of the exercise price and applicable withholding taxes to the stock
administrator of the Company for the shares with respect to which the Option, or portion thereof,
is exercised, in a manner permitted by Section 12.1 and 12.2.




     7.4 Notification Regarding Disposition. The Holder shall give the Company prompt
written or electronic notice of any disposition of shares of Common Stock acquired by exercise of
an Incentive Stock Option which occurs within (a) two years from the date of granting (including
the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code)
such Option to such Holder, or (b) one year after the transfer of such shares to such Holder.



15









 





ARTICLE 8.




AWARD OF RESTRICTED STOCK



     8.1 Award of Restricted Stock.



          (a) The Administrator is authorized to grant Restricted Stock to Eligible Individuals, and
shall determine the terms and conditions, including the restrictions applicable to each award of
Restricted Stock, which terms and conditions shall not be inconsistent with the Plan, and may
impose such conditions on the issuance of such Restricted Stock as it deems appropriate.




          (b) The Administrator shall establish the purchase price, if any, and form of payment for
Restricted Stock; provided, however, that if a purchase price is charged, such
purchase price shall be no less than the par value, if any, of the Shares to be purchased, unless
otherwise permitted by applicable law. In all cases, legal consideration shall be required for
each issuance of Restricted Stock.




     8.2 Rights as Stockholders. Subject to Section 8.4, upon issuance of Restricted
Stock, the Holder shall have, unless otherwise provided by the Administrator, all the rights of a
stockholder with respect to said shares, subject to the restrictions in the applicable Program or
in each individual Award Agreement, including the right to receive all dividends and other
distributions paid or made with respect to the shares; provided, however, that, in
the sole discretion of the Administrator, any extraordinary distributions with respect to the
Shares shall be subject to the restrictions set forth in Section 8.3. In addition, with respect to
a share of Restricted Stock with performance-based vesting, dividends which are paid prior to
vesting shall only be paid out to the Holder to the extent that the performance-based vesting
conditions are subsequently satisfied and the share of Restricted Stock vests.



     8.3 Restrictions. All shares of Restricted Stock (including any shares received by
Holders thereof with respect to shares of Restricted Stock as a result of stock dividends, stock
splits or any other form of recapitalization) shall, in the terms of the applicable Program or in
each individual Award Agreement, be subject to such restrictions and vesting requirements as the
Administrator shall provide. Such restrictions may include, without limitation, restrictions
concerning voting rights and transferability and such restrictions may lapse separately or in
combination at such times and pursuant to such circumstances or based on such criteria as selected
by the Administrator, including, without limitation, criteria based on the Holder’s duration of
employment, directorship or consultancy with the Company, the Performance Criteria, Company
performance, individual performance or other criteria selected by the Administrator. By action
taken after the Restricted Stock is issued, the Administrator may, on such terms and conditions as
it may determine to be appropriate, accelerate the vesting of such Restricted Stock by removing any
or all of the restrictions imposed by the terms of the Program or the Award Agreement. Restricted
Stock may not be sold or encumbered until all restrictions are terminated or expire.



     8.4 Repurchase or Forfeiture of Restricted Stock. Except as otherwise determined by
the Administrator at the time of the grant of the Award or thereafter, if no price was paid by the



16









 




Holder for the Restricted Stock, upon a Termination of Service during the applicable
restriction period, the Holder’s rights in unvested Restricted Stock then subject to restrictions
shall lapse, and such Restricted Stock shall be surrendered to the Company and cancelled without
consideration. If a price was paid by the Holder for the Restricted Stock, upon a Termination of
Service during the applicable restriction period, the Company shall have the right to repurchase
from the Holder the unvested Restricted Stock then subject to restrictions at a cash price per
share equal to the price paid by the Holder for such Restricted Stock or such other amount as may
be specified in the Program or the Award Agreement. Notwithstanding the foregoing, the
Administrator in its sole discretion may provide that in the event of certain events, including a
Change in Control, the Holder’s death, retirement or disability or any other specified Termination
of Service or any other event, the Holder’s rights in unvested Restricted Stock shall not lapse,
such Restricted Stock shall vest and, if applicable, the Company shall not have a right of
repurchase.




     8.5 Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan
may be evidenced in such manner as the Administrator shall determine. Certificates or book entries
evidencing shares of Restricted Stock must include an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock. The Company may, in it sole
discretion, (a) retain physical possession of any stock certificate evidencing shares of Restricted
Stock until the restrictions thereon shall have lapsed and/or (b) require that the stock
certificates evidencing shares of Restricted Stock be held in custody by a designated escrow agent
(which may but need not be the Company) until the restrictions thereon shall have lapsed, and that
the Holder deliver a stock power, endorsed in blank, relating to such Restricted Stock.



     8.6 Section 83(b) Election. If a Holder makes an election under Section 83(b) of the
Code to be taxed with respect to the Restricted Stock as of the date of transfer of the Restricted
Stock rather than as of the date or dates upon which the Holder would otherwise be taxable under
Section 83(a) of the Code, the Holder shall be required to deliver a copy of such election to the
Company promptly after filing such election with the Internal Revenue Service.



ARTICLE 9.




AWARD OF RESTRICTED STOCK UNITS



     9.1 Grant of Restricted Stock Units. The Administrator is authorized to grant Awards
of Restricted Stock Units to any Eligible Individual selected by the Administrator in such amounts
and subject to such terms and conditions as determined by the Administrator.



     9.2 Term. Except as otherwise provided herein, the term of a Restricted Stock Unit
award shall be set by the Administrator in its sole discretion.



     9.3 Purchase Price. The Administrator shall specify the purchase price, if any, to be
paid by the Holder to the Company with respect to any Restricted Stock Unit award;
provided, however, that value of the consideration shall not be less than the par
value of a Share, unless otherwise permitted by applicable law.



17









 





     9.4 Vesting of Restricted Stock Units. At the time of grant, the Administrator 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, including,
without limitation, vesting based upon the Holder’s duration of service to the Company or any
Affiliate, one or more Performance Criteria, Company performance, individual performance or other
specific criteria, in each case on a specified date or dates or over any period or periods, as
determined by the Administrator.



     9.5 Maturity and Payment. At the time of grant, the Administrator 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 Holder (if
permitted by the applicable Award Agreement); provided that, except as otherwise determined
by the Administrator, set forth in any applicable Award Agreement, and subject to compliance with
Section 409A of the Code, in no event shall the maturity date relating to each Restricted Stock
Unit occur following the later of (a) the 15th day of the third month following the end
of calendar year in which the Restricted Stock Unit vests; or (b) the 15th day of the
third month following the end of the Company’s fiscal year in which the Restricted Stock Unit
vests. On the maturity date, the Company shall, subject to Section 12.4(e), transfer to the Holder
one unrestricted, fully transferable share of Common Stock for each Restricted Stock Unit scheduled
to be paid out on such date and not previously forfeited, or in the sole discretion of the
Administrator, an amount in cash equal to the Fair Market Value of such shares on the maturity date
or a combination of cash and Common Stock as determined by the Administrator.



     9.6 Payment upon Termination of Service. An Award of Restricted Stock Units shall
only be payable while the Holder is an Employee, a Consultant or a member of the Board, as
applicable; provided, however, that the Administrator, in its sole and absolute
discretion may provide (in an Award Agreement or otherwise) that a Restricted Stock Unit award may
be paid subsequent to a Termination of Service in certain events, including a Change in Control,
the Holder’s death, retirement or disability or any other specified Termination of Service.



     9.7 No Rights as a Stockholder. Unless otherwise determined by the Administrator, a
Holder who is awarded Restricted Stock Units shall possess no incidents of ownership with respect
to the Shares represented by such Restricted Stock Units, unless and until the same are transferred
to the Holder with respect to the Shares represented by such Restricted Stock Units pursuant to the terms of this Plan and the applicable Award Agreement.



     9.8 Dividend Equivalents. Subject to Section 10.2, the Administrator may, in its sole
discretion, provide that Dividend Equivalents shall be earned by a Holder of Restricted Stock Units
based on dividends declared on the Common Stock, to be credited as of dividend payment dates during
the period between the date an Award of Restricted Stock Units is granted to a Holder and the
maturity date of such Award.



18









 





ARTICLE 10.




AWARD OF PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, STOCK

PAYMENTS, DEFERRED STOCK, DEFERRED STOCK UNITS



     10.1 Performance Awards.



          (a) The Administrator is authorized to grant Performance Awards, including Awards of
Performance Stock Units, to any Eligible Individual and to determine whether such Performance
Awards shall be Performance-Based Compensation. The value of Performance Awards, including
Performance Stock Units, may be linked to any one or more of the Performance Criteria or other
specific criteria determined by the Administrator, in each case on a specified date or dates or
over any period or periods determined by the Administrator. Performance Awards, including
Performance Stock Unit awards may be paid in cash, Shares, or a combination of cash and Shares, as
determined by the Administrator.




          (b) Without limiting Section 10.1(a), the Administrator may grant Performance Awards to any
Eligible Individual in the form of a cash bonus payable upon the attainment of objective
Performance Goals, or such other criteria, whether or not objective, which are established by the
Administrator, in each case on a specified date or dates or over any period or periods determined
by the Administrator. Any such bonuses paid to a Holder which are intended to be Performance-Based
Compensation shall be based upon objectively determinable bonus formulas established in accordance
with the provisions of Article 5.




     10.2 Dividend Equivalents.



          (a) Dividend Equivalents may be granted by the Administrator based on dividends declared on
the Common Stock, to be credited as of dividend payment dates during the period between the date an
Award is granted to a Holder and the date such Award vests, is exercised, is distributed or
expires, as determined by the Administrator. Such Dividend Equivalents shall be converted to cash
or additional shares of Common Stock by such formula and at such time and subject to such
limitations as may be determined by the Administrator. In addition, Dividend Equivalents with
respect to an Award with performance-based vesting that are based on dividends paid prior to the
vesting of such Award shall only be paid out to the Holder to the extent that the performance-based
vesting conditions are subsequently satisfied and the Award vests.




          (b) Notwithstanding the foregoing, no Dividend Equivalents shall be payable with respect to
Options or Stock Appreciation Rights.




     10.3 Stock Payments. The Administrator is authorized to make Stock Payments to any
Eligible Individual. The number or value of shares of any Stock Payment shall be determined by the
Administrator and may be based upon one or more Performance Criteria or any other specific
criteria, including service to the Company or any Affiliate, determined by the Administrator.
Shares underlying a Stock Payment which is subject to a vesting schedule or other conditions or
criteria set by the Administrator will not be issued until those conditions have been satisfied.
Unless otherwise provided by the Administrator, a Holder of a Stock Payment shall have no



19









 




rights as a Company stockholder with respect to such Stock Payment until such time as the
Stock Payment has vested and the Shares underlying the Award have been issued to the Holder. Stock
Payments may, but are not required to be made in lieu of base salary, bonus, fees or other cash
compensation otherwise payable to such Eligible Individual.




     10.4 Deferred Stock. The Administrator is authorized to grant Deferred Stock to any
Eligible Individual. The number of shares of Deferred Stock shall be determined by the
Administrator and may (but is not required to) be based on one or more Performance Criteria or
other specific criteria, including service to the Company or any Affiliate, as the Administrator
determines, in each case on a specified date or dates or over any period or periods determined by
the Administrator. Shares underlying a Deferred Stock award which is subject to a vesting schedule
or other conditions or criteria set by the Administrator will be issued on the vesting date(s) or
date(s) that those conditions and criteria have been satisfied, as applicable. Unless otherwise
provided by the Administrator, a Holder of Deferred Stock shall have no rights as a Company
stockholder with respect to such Deferred Stock until such time as the Award has vested and any
other applicable conditions and/or criteria have been satisfied and the Shares underlying the Award
have been issued to the Holder.



     10.5 Deferred Stock Units. The Administrator is authorized to grant Deferred Stock
Units to any Eligible Individual. The number of Deferred Stock Units shall be determined by the
Administrator and may (but is not required to) be based on one or more Performance Criteria or
other specific criteria, including service to the Company or any Affiliate, as the Administrator
determines, in each case on a specified date or dates or over any period or periods determined by
the Administrator. Each Deferred Stock Unit shall entitle the Holder thereof to receive one share
of Common Stock on the date the Deferred Stock Unit becomes vested or upon a specified settlement
date thereafter (which settlement date may (but is not required to) be the date of the Holder’s
Termination of Service). Shares underlying a Deferred Stock Unit award which is subject to a
vesting schedule or other conditions or criteria set by the Administrator will not be issued until
on or following the date that those conditions and criteria have been satisfied. Unless otherwise
provided by the Administrator, a Holder of Deferred Stock Units shall have no rights as a Company
stockholder with respect to such Deferred Stock Units until such time as the Award has vested and
any other applicable conditions and/or criteria have been satisfied and the Shares underlying the
Award have been issued to the Holder.



     10.6 Term. The term of a Performance Award, Dividend Equivalent award, Stock Payment,
Deferred Stock award and/or Deferred Stock Unit award shall be set by the Administrator in its sole
discretion.



     10.7 Purchase Price. The Administrator may establish the purchase price of a
Performance Award, shares distributed as a Stock Payment award, shares of Deferred Stock or shares
distributed pursuant to a Deferred Stock Unit award; provided, however, that value
of the consideration shall not be less than the par value of a Share, unless otherwise permitted by
applicable law.



     10.8 Termination of Service. A Performance Award, Stock Payment Award, Dividend
Equivalent award, Deferred Stock award and/or Deferred Stock Unit award is distributable only while
the Holder is an Employee, Director or Consultant, as applicable. The Administrator,



20









 




however, in its sole discretion may provide that the Performance Award, Dividend Equivalent
award, Stock Payment award, Deferred Stock award and/or Deferred Stock Unit award may be
distributed subsequent to a Termination of Service in certain events, including a Change in
Control, the Holder’s death, retirement or disability or any other specified Termination of
Service.




ARTICLE 11.




AWARD OF STOCK APPRECIATION RIGHTS



     11.1 Grant of Stock Appreciation Rights.



          (a) The Administrator is authorized to grant Stock Appreciation Rights to Eligible Individuals
from time to time, in its sole discretion, on such terms and conditions as it may determine
consistent with the Plan.




          (b) A Stock Appreciation Right shall entitle the Holder (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 determined by multiplying the difference obtained by subtracting the exercise
price per share of the Stock Appreciation Right from the Fair Market Value on the date of exercise
of the Stock Appreciation Right by the number of Shares with respect to which the Stock
Appreciation Right shall have been exercised, subject to any limitations the Administrator may
impose. Except as described in (c) below, the exercise price per Share subject to each Stock
Appreciation Right shall be set by the Administrator, but shall not be less than 100% of the Fair
Market Value on the date the Stock Appreciation Right is granted.




          (c) Notwithstanding the foregoing provisions of Section 11.1(b) to the contrary, in the case
of an Stock Appreciation Right that is a Substitute Award, the price per share of the shares
subject to such Stock Appreciation Right may be less than 100% of the Fair Market Value per share
on the date of grant; provided, that the excess of: (i) the aggregate Fair Market Value
(as of the date such Substitute Award is granted) of the shares subject to the Substitute Award,
over (ii) the aggregate exercise price thereof does not exceed the excess of: (x) the aggregate
fair market value (as of the time immediately preceding the transaction giving rise to the
Substitute Award, such fair market value to be determined by the Administrator) of the shares of
the predecessor entity that were subject to the grant assumed or substituted for by the Company,
over (y) the aggregate exercise price of such shares.




     11.2 Stock Appreciation Right Vesting.



          (a) The period during which the right to exercise, in whole or in part, a Stock Appreciation
Right vests in the Holder shall be set by the Administrator and the Administrator may determine
that a Stock Appreciation Right may not be exercised in whole or in part for a specified period
after it is granted. Such vesting may be based on service with the Company or any Affiliate, or
any other criteria selected by the Administrator. At any time after grant of a Stock Appreciation
Right, the Administrator may, in its sole discretion and subject to whatever






21









 







terms and conditions it selects, accelerate the period during which a Stock Appreciation Right
vests.




          (b) No portion of a Stock Appreciation Right which is unexercisable at Termination of Service
shall thereafter become exercisable, except as may be otherwise provided by the Administrator
either in the applicable Program or Award Agreement or by action of the Administrator following the
grant of the Stock Appreciation Right.




     11.3 Manner of Exercise. All or a portion of an exercisable Stock Appreciation Right
shall be deemed exercised upon delivery of all of the following to the stock administrator of the
Company, or such other person or entity designated by the Administrator, or his, her or its office,
as applicable:



          (a) A written or electronic notice complying with the applicable rules established by the
Administrator stating that the Stock Appreciation Right, or a portion thereof, is exercised. The
notice shall be signed by the Holder or other person then entitled to exercise the Stock
Appreciation Right or such portion of the Stock Appreciation Right;




          (b) Such representations and documents as the Administrator, in its sole discretion, deems
necessary or advisable to effect compliance with all applicable provisions of the Securities Act
and any other federal, state or foreign securities laws or regulations. The Administrator may, in
its sole discretion, also take whatever additional actions it deems appropriate to effect such
compliance; and




          (c) In the event that the Stock Appreciation Right shall be exercised pursuant to this Section
11.3 by any person or persons other than the Holder, appropriate proof of the right of such person
or persons to exercise the Stock Appreciation Right.




     11.4 Stock Appreciation Right Term. The term of each Stock Appreciation Right (the
“Stock Appreciation Right Term”) shall be set by the Administrator in its sole discretion;
provided, however, that the term shall not be more than ten (10) years from the
date the Stock Appreciation Right is granted. The Administrator shall determine the time period,
including the time period following a Termination of Service, during which the Holder has the right
to exercise the vested Stock Appreciation Rights, which time period may not extend beyond the
expiration date of the Stock Appreciation Right Term. Except as limited by the requirements of
Section 409A of the Code and regulations and rulings thereunder, the Administrator may extend the
Stock Appreciation Right Term of any outstanding Stock Appreciation Right, and may extend the time
period during which vested Stock Appreciation Rights may be exercised, in connection with any
Termination of Service of the Holder, and may amend any other term or condition of such Stock
Appreciation Right relating to such a Termination of Service.



     11.5 Payment. Payment of the amounts payable with respect to Stock Appreciation
Rights pursuant to this Article 11 shall be in cash, Shares (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 Administrator.



     11.6 Expiration of Stock Appreciation Right Term: Automatic Exercise of In-The-Money Stock
Appreciation Rights. Unless otherwise provided by the Administrator (in an



22









 




Award Agreement or otherwise) or as otherwise directed by a Stock Appreciation Right Holder in
writing to the Company, each Stock Appreciation Right outstanding on the last business day of the
applicable Stock Appreciation Right Term with an exercise price per share that is less than the
Fair Market Value per share of Common Stock as of such date shall automatically and without further
action by the Stock Appreciation Right Holder or the Company be exercised on the last business day
of the Stock Appreciation Right Term. In the discretion of the Administrator, the Company or any
Affiliate shall deduct or withhold an amount sufficient to satisfy all taxes associated with such
exercise in accordance with Section 12.2. For the avoidance of doubt, no Stock Appreciation Right
with an exercise price per share that is equal to or greater than the Fair Market Value per share
of Common Stock on the last business day of the Stock Appreciation Right Term shall be exercised
pursuant to this Section 11.6.




ARTICLE 12.




ADDITIONAL TERMS OF AWARDS



     12.1 Payment. The Administrator shall determine the methods by which payments by any
Holder with respect to any Awards granted under the Plan shall be made, including, without
limitation: (a) cash or check, (b) Shares (including, in the case of payment of the exercise price
of an Award, Shares issuable pursuant to the exercise of the Award) or Shares held for such period
of time as may be required by the Administrator in order to avoid adverse accounting consequences,
in each case, having a Fair Market Value on the date of delivery equal to the aggregate payments
required, (c) delivery of a written or electronic notice that the Holder has placed a market sell
order with a broker with respect to Shares then issuable upon exercise or vesting of an Award, 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 aggregate payments required; provided, that payment of
such proceeds is then made to the Company upon settlement of such sale, or (d) other form of legal
consideration acceptable to the Administrator. The Administrator shall also determine the methods
by which Shares shall be delivered or deemed to be delivered to Holders. Notwithstanding any other
provision of the Plan to the contrary, no Holder who is a Director or an “executive officer” of the
Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to make payment
with respect to any Awards granted under the Plan, or continue any extension of credit with respect
to such payment with a loan from the Company or a loan arranged by the Company in violation of
Section 13(k) of the Exchange Act.



     12.2 Tax Withholding. The Company or any Affiliate shall have the authority and the
right to deduct or withhold, or require a Holder to remit to the Company, an amount sufficient to
satisfy federal, state, local and foreign taxes (including the Holder’s FICA or employment tax
obligation) required by law to be withheld with respect to any taxable event concerning a Holder
arising as a result of the Plan. The Administrator may in its sole discretion and in satisfaction
of the foregoing requirement allow a Holder to elect to have the Company withhold Shares otherwise
issuable under an Award (or allow the surrender of Shares). The number of Shares which may be so
withheld or surrendered 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. The Administrator
shall determine the fair market value of the Shares, consistent with



23









 




applicable provisions of the Code, for tax withholding obligations due in connection with a
broker-assisted cashless Option or Stock Appreciation Right exercise involving the sale of shares
to pay the Option or Stock Appreciation Right exercise price or any tax withholding obligation.




     12.3 Transferability of Awards.



          (a) Except as otherwise provided in Section 12.3(b):




               (i) No Award under the Plan may be sold, pledged, assigned or transferred in any manner other
than by will or the laws of descent and distribution or, subject to the consent of the
Administrator, pursuant to a DRO, unless and until such Award has been exercised, or the shares
underlying such Award have been issued, and all restrictions applicable to such shares have lapsed;



               (ii) No Award or interest or right therein shall be liable for the debts, contracts or
engagements of the Holder or his successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other
means whether such disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect, except to the extent
that such disposition is permitted by the preceding sentence; and



               (iii) During the lifetime of the Holder, only the Holder may exercise an Award (or any portion
thereof) granted to him under the Plan, unless it has been disposed of pursuant to a DRO; after the
death of the Holder, any exercisable portion of an Award may, prior to the time when such portion
becomes unexercisable under the Plan or the applicable Program or Award Agreement, be exercised by
his personal representative or by any person empowered to do so under the deceased Holder’s will or
under the then applicable laws of descent and distribution.



          (b) Notwithstanding Section 12.3(a), the Administrator, in its sole discretion, may determine
to permit a Holder to transfer an Award other than an Incentive Stock Option to any one or more
Permitted Transferees, subject to the following terms and conditions: (i) an Award transferred to
a Permitted Transferee shall not be assignable or transferable by the Permitted Transferee other
than by will or the laws of descent and distribution; (ii) an Award transferred to a Permitted
Transferee shall continue to be subject to all the terms and conditions of the Award as applicable
to the original Holder (other than the ability to further transfer the Award); and (iii) the Holder
and the Permitted Transferee shall execute any and all documents requested by the Administrator,
including, without limitation documents to (A) confirm the status of the transferee as a Permitted
Transferee, (B) satisfy any requirements for an exemption for the transfer under applicable
federal, state and foreign securities laws and (C) evidence the transfer.




          (c) Notwithstanding Section 12.3(a), a Holder may, in the manner determined by the
Administrator, designate a beneficiary to exercise the rights of the Holder and to receive any
distribution with respect to any Award upon the Holder’s death. A beneficiary, legal guardian,
legal representative, or other person claiming any rights pursuant to the Plan is subject






24









 







to all terms and conditions of the Plan and any Program or Award Agreement applicable to the
Holder, except to the extent the Plan, the Program and the Award Agreement otherwise provide, and
to any additional restrictions deemed necessary or appropriate by the Administrator. If the Holder
is married and resides in a community property state, a designation of a person other than the
Holder’s spouse as his or her beneficiary with respect to more than 50% of the Holder’s interest in
the Award shall not be effective without the prior written or electronic consent of the Holder’s
spouse. If no beneficiary has been designated or survives the Holder, payment shall be made to the
person entitled thereto pursuant to the Holder’s will or the laws of descent and distribution.
Subject to the foregoing, a beneficiary designation may be changed or revoked by a Holder at any
time; provided that the change or revocation is filed with the Administrator prior to the
Holder’s death.




     12.4 Conditions to Issuance of Shares.



          (a) Notwithstanding anything herein to the contrary, the Company shall not be required to
issue or deliver any certificates or make any book entries evidencing Shares pursuant to the
exercise of any Award, unless and until the Board or the Committee has determined, with advice of
counsel, that the issuance of such shares is in compliance with all applicable laws, regulations of
governmental authorities and, if applicable, the requirements of any exchange on which the Shares
are listed or traded, and the Shares are covered by an effective registration statement or
applicable exemption from registration. In addition to the terms and conditions provided herein,
the Board or the Committee may require that a Holder make such reasonable covenants, agreements,
and representations as the Board or the Committee, in its discretion, deems advisable in order to
comply with any such laws, regulations, or requirements.




          (b) All Share certificates delivered pursuant to the Plan and all shares issued pursuant to
book entry procedures are subject to any stop-transfer orders and other restrictions as the
Administrator deems necessary or advisable to comply with federal, state, or foreign securities or
other laws, rules and regulations and the rules of any securities exchange or automated quotation
system on which the Shares are listed, quoted, or traded. The Administrator may place legends on
any Share certificate or book entry to reference restrictions applicable to the Shares.




          (c) The Administrator shall have the right to require any Holder to comply with any timing or
other restrictions with respect to the settlement, distribution or exercise of any Award, including
a window-period limitation, as may be imposed in the sole discretion of the Administrator.




          (d) No fractional Shares shall be issued and the Administrator shall determine, in its sole
discretion, whether cash shall be given in lieu of fractional shares or whether such fractional
shares shall be eliminated by rounding down.




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







25









 








     12.5 Forfeiture and Claw-Back Provisions. Pursuant to its general authority to
determine the terms and conditions applicable to Awards under the Plan, the Administrator shall
have the right to provide, in an Award Agreement or otherwise, or to require a Holder to agree by
separate written or electronic instrument, that:



          (a) (i) Any proceeds, gains or other economic benefit actually or constructively received by
the Holder upon any receipt or exercise of the Award, or upon the receipt or resale of any Shares
underlying the Award, must be paid to the Company, and (ii) the Award shall terminate and any
unexercised portion of the Award (whether or not vested) shall be
forfeited, if (x) a
Termination of Service occurs prior to a specified date, or within a specified time period
following receipt or exercise of the Award, or (y) the Holder at any time, or during a specified
time period, engages in any activity in competition with the Company, or which is inimical,
contrary or harmful to the interests of the Company, as further defined by the Administrator or (z)
the Holder incurs a Termination of Service for “cause” (as such term is defined in the sole
discretion of the Administrator, or as set forth in a written agreement relating to such Award
between the Company and the Holder); and




          (b) All Awards (including any proceeds, gains or other economic benefit actually or
constructively received by the Holder upon any receipt or exercise of any Award or upon the receipt
or resale of any Shares underlying the Award) shall be subject to the provisions of any claw-back
policy implemented by the Company, including, without limitation, any claw-back policy adopted to
comply with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act and
any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy
and/or in the applicable Award Agreement.




     12.6 Prohibition on Repricing. Subject to Section 14.2, the Administrator shall not,
without the approval of the stockholders of the Company, (i) authorize the amendment of any
outstanding Option or Stock Appreciation Right to reduce its price per share, or (ii) cancel any
Option or Stock Appreciation Right in exchange for cash or another Award when the Option or Stock
Appreciation Right price per share exceeds the Fair Market Value of the underlying Shares. Subject
to Section 14.2, the Administrator shall have the authority, without the approval of the
stockholders of the Company, to amend any outstanding Award to increase the price per share or to
cancel and replace an Award with the grant of an Award having a price per share that is greater
than or equal to the price per share of the original Award.



ARTICLE 13.




ADMINISTRATION



     13.1 Administrator. The Committee (or another committee or a subcommittee of the
Board assuming the functions of the Committee under the Plan) shall administer the Plan (except as
otherwise permitted herein) and, unless otherwise determined by the Board, shall consist solely of
two or more Non-Employee Directors appointed by and holding office at the pleasure of the Board,
each of whom is intended to qualify as both a “non-employee director” as defined by Rule 16b-3 of
the Exchange Act or any successor rule, an “outside director” for purposes of Section 162(m) of the
Code and an “independent director” under the rules of any securities exchange or automated
quotation system on which the Shares are listed, quoted or traded;



26









 




provided, that any action taken by the Committee shall be valid and effective, whether
or not members of the Committee at the time of such action are later determined not to have
satisfied the requirements for membership set forth in this Section 13.l or otherwise provided in
any charter of the Committee. Except as may otherwise be provided in any charter of the Committee,
appointment of Committee members shall be effective upon acceptance of appointment. Committee
members may resign at any time by delivering written or electronic notice to the Board. Vacancies
in the Committee may only be filled by the Board. 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 Awards granted to Non-Employee Directors and, with respect to such Awards,
the terms “Administrator” and “Committee” as used in the Plan shall be deemed to refer to the
Board and (b) the Board or Committee may delegate its authority hereunder to the extent permitted
by Section 13.6.




     13.2 Duties and Powers of Committee. It shall be the duty of the Committee to conduct
the general administration of the Plan in accordance with its provisions. The Committee shall have
the power to interpret the Plan, the Program and the Award Agreement, and to adopt such rules for
the administration, interpretation and application of the Plan as are not inconsistent therewith,
to interpret, amend or revoke any such rules and to amend any Program or Award Agreement;
provided that the rights or obligations of the Holder of the Award that is the subject of
any such Program or Award Agreement are not affected adversely by such amendment, unless the
consent of the Holder is obtained or such amendment is otherwise permitted under Section 14.10.
Any such grant or award under the Plan need not be the same with respect to each Holder. Any such
interpretations and rules with respect to Incentive Stock Options shall be consistent with the
provisions of Section 422 of the Code. 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 any successor rule, or Section
162(m) of the Code, or any regulations or rules issued thereunder, or the rules of any securities
exchange or automated quotation system on which the Shares are listed, quoted or traded are
required to be determined in the sole discretion of the Committee.



     13.3 Action by the Committee. Unless otherwise established by the Board or in any
charter of the Committee, a majority of the Committee shall constitute a quorum and the acts of a
majority of the members present at any meeting at which a quorum is present, and acts approved in
writing by all members 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 Affiliate, 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.



     13.4 Authority of Administrator. Subject to the Company’s Bylaws, the Committee’s
Charter and any specific designation in the Plan, the Administrator has the exclusive power,
authority and sole discretion to:



          (a) Designate Eligible Individuals to receive Awards;







27









 








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




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




          (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 performance criteria,
any reload provision, any restrictions or limitations on the Award, any schedule for vesting, lapse
of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or
waivers thereof, and any provisions related to non-competition and recapture of gain on an Award,
based in each case on such considerations as the Administrator 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, Shares, 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 Holder;




          (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, any Program or any
Award Agreement;




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




          (k) Accelerate wholly or partially the vesting or lapse of restrictions of any Award or
portion thereof at any time after the grant of an Award, subject to whatever terms and conditions
it selects and Section 14.2(d).




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



     13.6 Delegation of Authority. To the extent permitted by applicable law or the rules
of any securities exchange or automated quotation system on which the Shares are listed, quoted or
traded, the Board or 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 or to
take other administrative actions pursuant to Article 13; provided, however, that
in no event shall an officer of the Company be delegated the authority to grant awards to, or amend



28









 




awards held by, the following individuals: (a) individuals who are subject to Section 16 of
the Exchange Act, (b) Covered Employees, or (c) officers of the Company (or Directors) to whom
authority to grant or amend Awards has been delegated hereunder; provided, further,
that any delegation of administrative authority shall only be permitted to the extent it is
permissible under Section 162(m) of the Code and applicable securities laws or the rules of any
securities exchange or automated quotation system on which the Shares are listed, quoted or traded.
Any delegation hereunder shall be subject to the restrictions and limits that the Board or
Committee specifies at the time of such delegation, and the Board may at any time rescind the
authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under
this Section 13.6 shall serve in such capacity at the pleasure of the Board and the Committee.




ARTICLE 14.




MISCELLANEOUS PROVISIONS



     14.1 Amendment, Suspension or Termination of the Plan. Except as otherwise provided
in this Section 14.1, the Plan may be wholly or partially amended or otherwise modified, suspended
or terminated at any time or from time to time by the Board or the Committee. However, without
approval of the Company’s stockholders given within twelve (12) months before or after the action
by the Administrator, no action of the Administrator may, except as provided in Section 14.2, (a)
increase the limits imposed in Section 3.1 on the maximum number of shares which may be issued
under the Plan, or (b) reduce the price per share of any outstanding Option or Stock Appreciation
Right granted under the Plan, or (c) cancel any Option or Stock Appreciation Right in exchange for
cash or another Award when the Option or Stock Appreciation Right price per share exceeds the Fair
Market Value of the underlying Shares. Except as provided in Section 14.10, no amendment,
suspension or termination of the Plan shall, without the consent of the Holder, impair any rights
or obligations under any Award theretofore granted or awarded, unless the Award itself otherwise
expressly so provides. No Awards may be granted or awarded during any period of suspension or
after termination of the Plan, and in no event may any Award be granted under the Plan after the
tenth (10th) anniversary of the Effective Date.



     14.2 Changes in Common Stock or Assets of the Company, Acquisition or Liquidation of the
Company and Other Corporate Events.



          (a) In the event of any stock dividend, stock split, combination or exchange of shares,
merger, consolidation or other distribution (other than normal cash dividends) of Company assets to
stockholders, or any other change affecting the shares of the Company’s stock or the share price of
the Company’s stock other than an Equity Restructuring, the Administrator shall make equitable
adjustments, if any, to reflect such change with respect to (i) the aggregate number and kind of
shares that may be issued under the Plan (including, but not limited to, adjustments of the
limitations in Section 3.1 on the maximum number and kind of shares which may be issued under the
Plan, and adjustments of the Award Limit); (ii) the number and kind of shares of Common Stock (or
other securities or property) subject to outstanding Awards; (iii) the number and kind of shares of
Common Stock (or other securities or property) for which automatic grants are subsequently to be
made to new and continuing Non-Employee Directors pursuant to Section 4.6; (iv) the terms and
conditions of any outstanding Awards






29









 







(including, without limitation, any applicable performance targets or criteria with respect
thereto); and (v) the grant or exercise price per share for any outstanding Awards under the Plan.
Any adjustment affecting an Award intended as 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 14.2(a) 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 Administrator, in its sole 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 Holder’s request,
is hereby authorized to take any one or more of the following actions whenever the Administrator
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 Holder’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 14.2 the Administrator determines
in good faith that no amount would have been attained upon the exercise of such Award or
realization of the Holder’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
Administrator in its sole discretion having an aggregate value not exceeding the amount that could
have been attained upon the exercise of such Award or realization of the Holder’s rights had such
Award been currently exercisable or payable or fully vested;



               (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 the Company’s 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 Awards 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 Program or Award Agreement; and



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



30









 





          (c) In connection with the occurrence of any Equity Restructuring, and notwithstanding
anything to the contrary in Sections 14.2(a) and 14.2(b):




               (i) The number and type of securities subject to each outstanding Award and the exercise price
or grant price thereof, if applicable, shall be equitably adjusted; and/or



               (ii) The Administrator shall make such equitable adjustments, if any, as the Administrator in
its discretion may deem appropriate to reflect such Equity Restructuring with respect to the
aggregate number and kind of shares that may be issued under the Plan (including, but not limited
to, adjustments of the limitations in Section 3.1 on the maximum number and kind of shares which
may be issued under the Plan, and adjustments of the Award Limit). The adjustments provided under
this Section 14.2(c) shall be nondiscretionary and shall be final and binding on the affected
Holder and the Company.



          (d) Notwithstanding any other provision of the Plan, in the event of a Change in Control, each
outstanding Award shall continue in effect or be assumed or an equivalent Award substituted by the
successor corporation or a parent or subsidiary of the successor corporation. In the event an
Award continues in effect or is assumed or an equivalent Award substituted, and a Holder has a
Termination of Service upon or within twelve (12) months following the Change in Control, then such
Holder shall be fully vested in such continued, assumed or substituted Award.




          (e) In the event that the successor corporation in a Change in Control refuses to assume or
substitute for the Award, the Administrator may cause any or all of such Awards to become fully
exercisable immediately prior to the consummation of such transaction and all forfeiture
restrictions on any or all of such Awards to lapse. If an Award is exercisable in lieu of
assumption or substitution in the event of a Change in Control, the Administrator shall notify the
Holder that the Award shall be fully exercisable for a period of fifteen (15) days from the date of
such notice, contingent upon the occurrence of the Change in Control, and the Award shall terminate
upon the expiration of such period.




          (f) For the purposes of this Section 14.2, an Award shall be considered assumed if, following
the Change in Control, the Award confers the right to purchase or receive, for each share of Common
Stock subject to the Award immediately prior to the Change in Control, the consideration (whether
stock, cash, or other securities or property) received in the Change in Control by holders of
Common Stock for each share held on the effective date of the transaction (and if holders were
offered a choice of consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares); provided, however, that if such consideration received in
the Change in Control was not solely common stock of the successor corporation or its parent, the
Administrator may, with the consent of the successor corporation, provide for the consideration to
be received upon the exercise of the Award, for each share of Common Stock subject to an Award, to
be solely common stock of the successor corporation or its parent equal in fair market value to the
per share consideration received by holders of Common Stock in the Change in Control.







31









 








          (g) The Administrator may, in its sole discretion, include such further provisions and
limitations in any Award, agreement or certificate, as it may deem equitable and in the best
interests of the Company that are not inconsistent with the provisions of the Plan.




          (h) With respect to Awards which are granted to Covered Employees and are intended to qualify
as Performance-Based Compensation, no adjustment or action described in this Section 14.2 or in any
other provision of the Plan shall be authorized to the extent that such adjustment or action would
cause such Award to fail to so qualify as Performance-Based Compensation, unless the Administrator
determines that the Award should not so qualify. No adjustment or action described in this Section
14.2 or in any other provision of the Plan shall be authorized to the extent that such adjustment
or action would cause the Plan to violate Section 422(b)(1) of the Code. Furthermore, no such
adjustment or action shall be authorized to the extent such adjustment or action would result in
short-swing profits liability under Section 16 or violate the exemptive conditions of Rule 16b-3
unless the Administrator determines that the Award is not to comply with such exemptive conditions.




          (i) The existence of the Plan, the Program, the Award Agreement and the Awards granted
hereunder shall not affect or restrict in any way the right or power of the Company or the
stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization
or other change in the Company’s capital structure or its business, any merger or consolidation of
the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or affect the Common
Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets
or business, or any other corporate act or proceeding, whether of a similar character or otherwise.




          (j) No action shall be taken under this Section 14.2 which shall cause an Award to fail to
comply with Section 409A of the Code or the Treasury Regulations thereunder, to the extent
applicable to such Award.




          (k) In the event of any pending stock dividend, stock split, combination or exchange of
shares, merger, consolidation or other distribution (other than normal cash dividends) of Company
assets to stockholders, or any other change affecting the shares of Common Stock or the share price
of the Common Stock including any Equity Restructuring, for reasons of administrative convenience,
the Company in its sole discretion may refuse to permit the exercise of any Award during a period
of thirty (30) days prior to the consummation of any such transaction.




     14.3 Approval of Plan by Stockholders. The Plan will be submitted for the approval of
the Company’s stockholders upon the date of the Board’s initial adoption of the Plan.



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



32









 





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



     14.6 Effect of Plan upon Other Compensation Plans. The adoption of the Plan shall not
affect any other compensation or incentive plans in effect for the Company or any Affiliate.
Nothing in the Plan shall be construed to limit the right of the Company or any Affiliate: (a) to
establish any other forms of incentives or compensation for Employees, Directors or Consultants of
the Company or any Affiliate, or (b) to grant or assume options or other rights or awards otherwise
than under the Plan in connection with any proper corporate purpose including without limitation,
the grant or assumption of options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation, partnership,
limited liability company, firm or association.



     14.7 Compliance with Laws. The Plan, the granting and vesting of Awards under the
Plan and the issuance and delivery of Shares and the payment of money under the Plan or under
Awards granted or awarded hereunder are subject to compliance with all applicable federal, state,
local and foreign laws, rules and regulations (including but not limited to state, federal and
foreign securities law and margin requirements), the rules of any securities exchange or automated
quotation system on which the Shares are listed, quoted or traded, and to such approvals by any
listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities delivered under the Plan shall be
subject to such restrictions, and the person acquiring such securities shall, if requested by the
Company, provide such assurances and representations to the Company as the Company may deem
necessary or desirable to assure compliance with all applicable legal requirements. 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 laws, rules and regulations.



     14.8 Titles and Headings, References to Sections of the Code or Exchange Act. 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.
References to sections of the Code or the Exchange Act shall include any amendment or successor
thereto.



     14.9 Governing Law. The Plan and any agreements hereunder shall be administered,
interpreted and enforced under the internal laws of the State of Delaware without regard to
conflicts of laws thereof or of any other jurisdiction.



     14.10 Section 409A. To the extent that the Administrator determines that any Award
granted under the Plan is subject to Section 409A of the Code, the Program pursuant to which such
Award is granted and 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, the Program
and any Award Agreements shall be interpreted in accordance with Section 409A of the Code and
Department of Treasury regulations and other interpretive guidance issued



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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 Administrator determines that any 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 Administrator may adopt such
amendments to the Plan and the applicable Program and Award Agreement or adopt other policies and
procedures (including amendments, policies and procedures with retroactive effect), or take any
other actions, that the Administrator 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 and thereby avoid the application of any penalty taxes
under such Section.




     14.11 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 Administrator
is obligated to treat Eligible Individuals, Holders or any other persons uniformly.



     14.12 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 Holder pursuant to an
Award, nothing contained in the Plan or any Program or Award Agreement shall give the Holder any
rights that are greater than those of a general creditor of the Company or any Affiliate.



     14.13 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.



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



     14.15 Expenses. The expenses of administering the Plan shall be borne by the Company
and its Affiliates.



* * * * *






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I hereby certify that the foregoing Plan was duly adopted by the Board of Directors of ADS
Tactical, Inc. on July 5, 2011.




* * * * *



I hereby certify that the foregoing Plan was approved by the stockholders of ADS Tactical, Inc. on
July 5, 2011.



Executed on this 5th day of July, 2011.




	 	 	 

	 
	 	/s/
Daniel J. Clarkson
	 

	 	Corporate Secretary







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