exv10w90



 





EXHIBIT 10.90






THE 2003 INCENTIVE AWARD PLAN




OF




GEN-PROBE INCORPORATED




Originally Adopted by the Board of Directors on March 3,
2003




Amendment Adopted by Board of Directors on May 13, 2003




Originally Approved by the Stockholders on May 29, 2003




Amendment and Restatement Adopted by Board of Directors on
February 9, 2006




Amendment and Restatement Approved by the Stockholders
on May 17, 2006 


     
Gen-Probe Incorporated, a Delaware corporation, has adopted The
2003 Incentive Award Plan of Gen-Probe Incorporated (the
“Plan”) for the benefit of its eligible Employees,
Consultants and Directors.



     
The purposes of the Plan are as follows:



     
(1) To provide an additional incentive for Directors,
Employees and Consultants (as such terms are defined below) to
further the growth, development and financial success of the
Company by personally benefiting through the ownership of
Company stock and/or rights which recognize such growth,
development and financial success.



     
(2) To enable the Company to obtain and retain the services
of Directors, Employees and Consultants considered essential to
the long range success of the Company by offering them an
opportunity to own stock in the Company and/or rights which will
reflect the growth, development and financial success of the
Company.




ARTICLE I.




DEFINITIONS



     
1.1.     General.
Whenever the following terms are used in the Plan they shall
have the meanings specified below, unless the context clearly
indicates otherwise.



     
1.2.     Administrator.
“Administrator” shall mean the entity that conducts
the general administration of the Plan as provided herein. With
reference to the administration of the Plan with respect to
Options and shares of Restricted Stock granted to Independent
Directors, the term “Administrator” shall refer to the
Board. With reference to the administration of the Plan with
respect to any other Awards, the term “Administrator”
shall refer to the Committee, except to the extent the Board has
assumed the authority for administration of the Plan as provided
in Section 9.2.



     
1.3.     Award.
“Award” shall mean an Option, a Restricted Stock award
or a Stock Appreciation Right which may be awarded or granted
under the Plan (collectively, “Awards”).



     
1.4.     Award Agreement.
“Award Agreement” shall mean a written agreement
executed by an authorized officer of the Company and the Holder,
which shall contain such terms and conditions with respect to an
Award, as the Administrator shall determine, consistent with the
Plan.



     
1.5.     Award Limit.
“Award Limit” shall mean Five Hundred Thousand
(500,000) shares of Common Stock, as adjusted pursuant to
Section 10.3 of the Plan.



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



     
1.7.     Change in
Control. “Change in Control” shall mean a
change in ownership or control of the Company effected through
any of the following transactions:






		
	 	     
    (a) any person or related group of persons (other than the
    Company or a person that, prior to such transaction, directly or
    indirectly controls, is controlled by, or is under common
    control with, the Company) directly or indirectly acquires
    beneficial ownership (within the meaning of
    Rule 13d-3 under



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    the Exchange Act) of securities possessing more than fifty
    percent (50%) of the total combined voting power of the
    Company’s outstanding securities pursuant to a tender or
    exchange offer for securities of the Company;
	 
	 	     
    (b) there is a change in the composition of the Board over
    a period of thirty-six (36) consecutive months (or less)
    such that a majority of the Board members (rounded up to the
    nearest whole number) ceases, by reason of one or more proxy
    contests for the election of Board members, to be comprised of
    individuals who either (i) have been Board members
    continuously since the beginning of such period or
    (ii) have been elected or nominated for election as Board
    members during such period by at least a majority of the Board
    members described in clause (i) who were still in office at
    the time such election or nomination was approved by the Board;
	 
	 	     
    (c) a merger or consolidation of the Company with any other
    corporation (or other entity), other than a merger or
    consolidation which would result in the voting securities of the
    Company outstanding immediately prior thereto continuing to
    represent (either by remaining outstanding or by being converted
    into voting securities of the surviving entity or another
    entity) more than
    662/3%
    of the combined voting power of the voting securities of the
    Company or such surviving entity outstanding immediately after
    such merger or consolidation; provided, however,
    that a merger or consolidation effected to implement a
    recapitalization of the Company (or similar transaction) in
    which no person acquires more than 25% of the combined voting
    power of the Company’s then outstanding voting securities
    shall not constitute a Change in Control; or
	 
	 	     
    (d) a plan of complete liquidation of the Company or an
    agreement for the sale or disposition by the Company of all or
    substantially all of the Company’s assets.




     
1.8.     Code.
“Code” shall mean the Internal Revenue Code of 1986,
as amended from time to time.



     
1.9.     Committee.
“Committee” shall mean the Board, or Compensation
Committee of the Board, or another committee or subcommittee of
the Board, appointed as provided in Section 9.1.



     
1.10.     Common Stock.
“Common Stock” shall mean the Common Stock of the
Company, par value $0.0001 per share.



     
1.11.     Company.
“Company” shall mean Gen-Probe Incorporated, a
Delaware corporation.



     
1.12.     Consultant.
“Consultant” shall mean any consultant or adviser
(other than an Employee) if:






		
	 	     
    (a) the consultant or adviser renders bona fide services to
    the Company;
	 
	 	     
    (b) the services rendered by the consultant or adviser are
    not in connection with the offer or sale of securities in a
    capital-raising transaction and do not directly or indirectly
    promote or maintain a market for the Company’s
    securities; and
	 
	 	     
    (c) the consultant or adviser is a natural person who has
    contracted directly with the Company to render such services.



     
1.13.     Director.
“Director” shall mean a member of the Board, whether
such Director is an Employee or an Independent Director.



     
1.14.     DRO.
“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, or the rules thereunder.



     
1.15.     Employee.
“Employee” shall mean any officer or other employee
(as defined in accordance with Section 3401(c) of the Code)
of the Company, or of any corporation which is a Subsidiary.



     
1.16.     Exchange Act.
“Exchange Act” shall mean the Securities Exchange Act
of 1934, as amended.



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1.17.     Fair Market
Value. “Fair Market Value” shall mean, as of
any date, the value of the Common Stock determined as follows:






		
	 	     
    (a) If the Common Stock is listed on any established stock
    exchange or traded on The Nasdaq National Market or the Nasdaq
    SmallCap Market, the Fair Market Value of a share of Common
    Stock shall be the closing sales price for such stock (or the
    closing bid, if no sales were reported) as quoted on such
    exchange or market (or the exchange or market with the greatest
    volume of trading in the Common Stock) on the last market
    trading day prior to the day of determination, as reported by
    The Nasdaq Stock Market or such other source as the Board deems
    reliable.
	 
	 	     
    (b) In the absence of such markets for the Common Stock,
    the Fair Market Value shall be determined in good faith by the
    Board.



     
1.18.     Holder.
“Holder” shall mean a person who has been granted or
awarded an Award.



     
1.19.     Incentive Stock
Option. “Incentive Stock Option” shall mean an
Option which conforms to the applicable provisions of
Section 422 of the Code and which is designated as an
Incentive Stock Option by the Administrator.



     
1.20.     Independent
Director. “Independent Director” shall mean a
member of the Board who is not an Employee.



     
1.21.     Non-Qualified Stock
Option. “Non-Qualified Stock Option” shall
mean an Option not intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.



     
1.22.     Option.
“Option” shall mean a stock option granted under
Article IV of the Plan. An Option granted under the Plan
shall, as determined by the Administrator, be either a
Non-Qualified Stock Option or an Incentive Stock Option;
provided, however, that Options granted to
Independent Directors and Consultants shall be Non-Qualified
Stock Options.



     
1.23.     Performance
Criteria. “Performance Criteria” shall mean
the following business criteria with respect to the Company, any
Subsidiary or any division or operating unit: (a) net
income, (b) pre-tax income, (c) operating income,
(d) cash flow, (e) earnings per share, (f) return
on equity, (g) return on invested capital or assets,
(h) cost reductions or savings, (i) funds from
operations, (j) appreciation in the Fair Market Value of
Common Stock and (k) earnings before any one or more of the
following items: interest, taxes, depreciation or amortization.



     
1.24.     Plan.
“Plan” shall mean The 2003 Incentive Award Plan of
Gen-Probe Incorporated.



     
1.25.     Restricted
Stock. “Restricted Stock” shall mean Common
Stock awarded under Article VII of the Plan.



     
1.26.     Rule 16b-3.
“Rule 16b-3”
shall mean that certain
Rule 16b-3 under
the Exchange Act, as such Rule may be amended from time to time.



     
1.27.     Section 162(m)
Employee. “Section 162(m) Employee” shall
mean any Employee designated by the Administrator as an Employee
whose compensation for the fiscal year in which the Employee is
so designated or a future fiscal year may be subject to the
limit on deductible compensation imposed by Section 162(m)
of the Code.



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



     
1.29.     Stock Appreciation
Right. “Stock Appreciation Right” shall mean a
stock appreciation right granted under Article VIII of the
Plan.



     
1.30.     Subsidiary.
“Subsidiary” shall mean any corporation in an unbroken
chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken
chain then owns stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one
of the other corporations in such chain.



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1.31.     Substitute
Award. “Substitute Award” shall mean an Option
granted under the Plan upon the assumption of, or in
substitution for, outstanding equity awards previously granted
by another company or entity in connection with a corporate or
similar 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 option
granted in connection with the cancellation and repricing of an
Option.



     
1.32.     Termination of
Consultancy. “Termination of Consultancy”
shall mean the time when the engagement of a Holder as a
Consultant to the Company or a Subsidiary is terminated for any
reason, with or without cause, including, but not by way of
limitation, by resignation, discharge, death, disability or
retirement; but excluding terminations where there is a
simultaneous engagement by or commencement of employment with
the Company or any Subsidiary or a parent corporation thereof
(within the meaning of Section 422 of the Code). The
Administrator, in its absolute discretion, shall determine the
effect of all matters and questions relating to Termination of
Consultancy, including, but not by way of limitation, the
question of whether a Termination of Consultancy resulted from a
discharge for cause, and all questions of whether a particular
leave of absence constitutes a Termination of Consultancy.
Notwithstanding any other provision of the Plan, the Company or
any Subsidiary has an absolute and unrestricted right to
terminate a Consultant’s service at any time for any reason
whatsoever, with or without cause, except to the extent
expressly provided otherwise in writing.



     
1.33.     Termination of
Directorship. “Termination of Directorship”
shall mean the time when a Holder who is an Independent Director
ceases to be a Director for any reason, including, but not by
way of limitation, a termination by resignation, removal,
failure to be re-elected, death, disability or retirement. The
Board, in its sole and absolute discretion, shall determine the
effect of all matters and questions relating to Termination of
Directorship with respect to Independent Directors.



     
1.34.     Termination of
Employment. “Termination of Employment” shall
mean the time when the employee-employer relationship between a
Holder and the Company or any Subsidiary is terminated for any
reason, with or without cause, including, but not by way of
limitation, a termination by resignation, discharge, death,
disability or retirement; but excluding (a) terminations
where there is a simultaneous reemployment or continuing
employment of a Holder by the Company or any Subsidiary or a
parent corporation thereof (within the meaning of
Section 422 of the Code), (b) at the discretion of the
Administrator, terminations which result in a temporary
severance of the employee-employer relationship, and (c) at
the discretion of the Administrator, terminations which are
followed by the simultaneous establishment of a consulting
relationship by the Company or a Subsidiary with the former
employee. The Administrator, in its absolute discretion, shall
determine the effect of all matters and questions relating to
Termination of Employment, including, but not by way of
limitation, the question of whether a Termination of Employment
resulted from a discharge for cause, and all questions of
whether a particular leave of absence constitutes a Termination
of Employment; provided, however, that, with respect to
Incentive Stock Options, unless otherwise determined by the
Administrator in its discretion, 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 Employment 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.




ARTICLE II.




SHARES SUBJECT TO PLAN



     
2.1.     Shares Subject to
Plan.



     
(a) The shares of stock subject to Awards shall be Common
Stock, subject to Section 10.3 of the Plan. The aggregate
number of such shares which may be issued upon exercise of such
Options or rights or upon any such Awards under the Plan shall
not exceed Eight Million (8,000,000) shares. No additional
shares may be authorized for issuance under the Plan without
stockholder approval (subject to adjustment as set forth in
Section 10.3). The shares of Common Stock issuable upon
exercise of such Options or rights or upon any such Awards may
be either previously authorized but unissued shares or treasury
shares.



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(b) Subject to Section 2.2, the number of shares
available for issuance under the Plan shall be reduced by:
(i) one (1) share for each share of stock issued
pursuant to (A) an Option granted under Article IV,
(B) an award of Restricted Stock under Article VII
granted prior to May 17, 2006 and (C) a Stock
Appreciation Right granted under Article VIII with respect
to which the strike price is at least one hundred percent (100%)
of the Fair Market Value of the underlying Common Stock on the
date of grant; and (ii) two (2.0) shares for each share of
Common Stock issued pursuant to an award of Restricted Stock
under Article VII granted after May 17, 2006.



     
(c) The maximum number of shares of Common Stock which may
be subject to Awards granted under the Plan to any individual in
any calendar year shall not exceed the Award Limit. To the
extent required by Section 162(m) of the Code, shares
subject to Options that are canceled continue to be counted
against the Award Limit.



     
2.2.     Add-Back of Options and
Other Rights. If any Option or other right to acquire
shares of Common Stock under any other Award under the Plan
expires or is canceled without having been fully exercised, or
is exercised in whole or in part for cash as permitted by the
Plan, then the number of shares of Common Stock subject to such
Option or other right but as to which such Option or other right
was not exercised prior to its expiration or cancellation may
again be optioned, granted or awarded hereunder, subject to the
limitations of Section 2.1; provided that to the
extent there is issued a share of Common Stock pursuant to an
Award that counted as two (2.0) shares against the number of
shares available for issuance under the Plan pursuant to
Section 2.1(b) and such share of Common Stock again becomes
available for issuance under the Plan pursuant to this
Section 2.2, then the number of shares of Common Stock
available for issuance under the Plan shall increase by two
(2.0) shares. Furthermore, any shares subject to Awards which
are adjusted pursuant to Section 10.3 and become
exercisable with respect to shares of stock of another
corporation shall be considered cancelled and may again be
optioned, granted or awarded hereunder, subject to the
limitations of Section 2.1. Shares of Common Stock which
are delivered by the Holder or withheld by the Company upon the
exercise of any Award under the Plan, in payment of the exercise
price thereof or tax withholding thereon, may not again be
optioned, granted or awarded hereunder, subject to the
limitations of Section 2.1. If any shares of Restricted
Stock are surrendered by the Holder or repurchased by the
Company pursuant to Section 7.4 or 7.5 hereof, such shares
may again be optioned, granted or awarded hereunder, subject to
the provisions of Section 2.1. Notwithstanding the
provisions of this Section 2.2, no shares of Common Stock
may again be optioned, granted or awarded if such action would
cause an Incentive Stock Option to fail to qualify as an
“incentive stock option” under Section 422 of the
Code.




ARTICLE III.




GRANTING OF AWARDS



     
3.1.     Award Agreement.
Each Award shall be evidenced by an Award Agreement. Award
Agreements evidencing Awards intended to qualify as
performance-based compensation as described in
Section 162(m)(4)(C) of the Code 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.



     
3.2.     Provisions Applicable to
Section 162(m) Employees.



     
(a) The Committee, in its discretion, may determine whether
an Award is to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code.



     
(b) Notwithstanding anything in the Plan to the contrary,
the Committee may grant any Award to a Section 162(m)
Employee that vests or becomes exercisable or payable upon the
attainment of performance goals which are related to one or more
of the Performance Criteria, including Restricted Stock the
restrictions to which lapse upon the obtainment of performance
goals which are related to one or more of the Performance
Criteria.



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(c) To the extent necessary to comply with the
performance-based compensation requirements of
Section 162(m)(4)(C) of the Code, with respect to any Award
granted under Article VII which may be granted to one or
more Section 162(m) Employees, no later than ninety
(90) days following the commencement of any fiscal year in
question or any other designated fiscal period or period of
service (or such other time as may be required or permitted by
Section 162(m) of the Code), the Committee shall, in
writing, (i) designate one or more Section 162(m)
Employees, (ii) select the Performance Criteria applicable
to the fiscal year or other designated fiscal period or period
of service, (iii) establish the various performance
targets, in terms of an objective formula or standard, and
amounts of such Awards, as applicable, which may be earned for
such fiscal year or other designated fiscal period or period of
service, and (iv) specify the relationship between
Performance Criteria and the performance targets and the amounts
of such Awards, as applicable, to be earned by each
Section 162(m) Employee for such fiscal year or other
designated fiscal period or period of service. Following the
completion of each fiscal year or other designated fiscal period
or period of service, the Committee shall certify in writing
whether the applicable performance targets have been achieved
for such fiscal year or other designated fiscal period or period
of service. In determining the amount earned by a
Section 162(m) Employee, the Committee shall have the right
to reduce (but not to increase) the amount payable at a given
level of performance to take into account additional factors
that the Committee may deem relevant to the assessment of
individual or corporate performance for the fiscal year or other
designated fiscal period or period of service.



     
(d) Furthermore, notwithstanding any other provision of the
Plan, any Award that is granted to a Section 162(m)
Employee and is intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the
Code shall be subject to any additional limitations set forth in
Section 162(m) of the Code (including any amendment to
Section 162(m) of the Code) or any regulations or rulings
issued thereunder that are requirements for qualification as
performance-based compensation as described in
Section 162(m)(4)(C) of the Code, and the Plan and such
Awards shall be deemed amended to the extent necessary to
conform to such requirements.



     
3.3.     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 any amendment to
Rule 16b-3 of the
Exchange Act) that are requirements for the application of such
exemptive rule. To the extent permitted by applicable law, the
Plan and Awards granted or awarded hereunder shall be deemed
amended to the extent necessary to conform to such applicable
exemptive rule.



     
3.4.     At-Will
Employment. Nothing in the Plan or in any Award
Agreement hereunder shall confer upon any Holder any right to
continue in the employ of, or as a Consultant for, the Company
or any Subsidiary, or as a Director of the Company, or shall
interfere with or restrict in any way the rights of the Company
and any Subsidiary, which are hereby expressly reserved, to
discharge any Holder at any time for any reason whatsoever, with
or without cause, except to the extent expressly provided
otherwise in a written employment or consulting agreement
between the Holder and the Company and any Subsidiary.




ARTICLE IV.




GRANTING OF OPTIONS TO EMPLOYEES,




CONSULTANTS AND INDEPENDENT DIRECTORS



     
4.1.     Eligibility. Any
Employee or Consultant selected by the Committee pursuant to
Section 4.4(a)(i) shall be eligible to be granted an
Option. Any Independent Director selected by the Board pursuant
to Section 4.5(a)(i) shall be eligible to be granted an
Option. All grants shall be made at the discretion of the
Committee or the Board, as the case may be, and no person shall
be entitled to a grant of an Option as a matter of right.



     
4.2.     Disqualification for
Stock Ownership. No person may be granted an Incentive
Stock Option under the Plan if such person, at the time the
Incentive Stock Option is granted, owns stock possessing more



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than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any then existing Subsidiary
or parent corporation (within the meaning of Section 422 of
the Code) unless such Incentive Stock Option conforms to the
applicable provisions of Section 422 of the Code.



     
4.3.     Qualification of
Incentive Stock Options. No Incentive Stock Option shall
be granted to any person who is not an Employee.



     
4.4.     Granting of Options to
Employees and Consultants.



     
(a) The Committee shall from time to time, in its absolute
discretion, and subject to applicable limitations of the Plan:






		
	 	     
    (i) Select from among the Employees or Consultants
    (including Employees or Consultants who have previously been
    granted Awards under the Plan) such of them as in its opinion
    should be granted Options;
	 
	 	     
    (ii) Subject to the Award Limit, determine the number of
    shares of Common Stock to be subject to such Options granted to
    the selected Employees or Consultants;
	 
	 	     
    (iii) Subject to Section 4.3, determine whether such
    Options are to be Incentive Stock Options or Non-Qualified Stock
    Options and whether such Options are to qualify as
    performance-based compensation as described in
    Section 162(m)(4)(C) of the Code; and
	 
	 	     
    (iv) Determine the terms and conditions of such Options,
    consistent with the Plan; provided, however, that
    the terms and conditions of Options intended to qualify as
    performance-based compensation as described in
    Section 162(m)(4)(C) of the Code shall include, but not be
    limited to, such terms and conditions as may be necessary to
    meet the applicable provisions of Section 162(m) of the
    Code.



     
(b) Upon the selection of an Employee or Consultant to be
granted an Option, the Committee shall instruct the Secretary of
the Company to issue the Option and may impose such conditions
on the grant of the Option as it deems appropriate, and the
Committee shall authorize one or more of the officers of the
Company to prepare, execute and deliver the Award Agreement with
respect to such Option.



     
(c) Any Incentive Stock Option granted under the Plan may
be modified by the Committee, with the consent of the Holder, to
disqualify such Option from treatment as an “incentive
stock option” under Section 422 of the Code.



     
4.5.     Granting of Options to
Independent Directors.



     
(a) Subject to Section 4.5(b), the Board shall from
time to time, in its absolute discretion, and subject to
applicable limitations of the Plan:






		
	 	     
    (i) Determine whether to grant Options to Independent
    Directors, and, in the event Options are so granted, select from
    among the Independent Directors (including Independent Directors
    who have previously been granted Awards under the Plan) such of
    them as in its opinion should be granted Options;
	 
	 	     
    (ii) Subject to the Award Limit, determine the number of
    shares of Common Stock to be subject to such Options granted to
    the selected Independent Directors; and
	 
	 	     
    (iii) Determine the terms and conditions of such Options,
    consistent with the Plan.



     
(b) Upon the selection of an Independent Director to be
granted an Option, and the grant of an Option to an Independent
Director, the Board shall instruct the Secretary of the Company
to issue the Option and may impose such conditions on the grant
of the Option as it deems appropriate, and the Board shall
authorize one or more officers of the Company to prepare,
execute and deliver the Award Agreement with respect to such
Option.



     
4.6.     Options in Lieu of Cash
Compensation. Options may be granted under the Plan to
Employees and Consultants in lieu of cash bonuses that would
otherwise be payable to such Employees and Consultants and



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to Independent Directors in lieu of directors’ fees that
would otherwise be payable to such Independent Directors,
pursuant to such policies that may be adopted by the
Administrator from time to time.




ARTICLE V.




TERMS OF OPTIONS



     
5.1.     Option Price.
The price per share of the shares of Common Stock subject to
each Option granted to Employees and Consultants shall be set by
the Committee; provided, however, that such price
shall be no less than 100% of the Fair Market Value of a share
of Common Stock on the date the Option is granted, and:






		
	 	     
    (a) in the case of Incentive Stock Options, such price
    shall not be less than 100% of the Fair Market Value of a share
    of Common Stock on the date the Option is modified, extended or
    renewed for purposes of Section 424(h) of the Code; and
	 
	 	     
    (b) in the case of Incentive Stock Options granted to 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 or parent corporation thereof (within the meaning
    of Section 422 of the Code), such price shall not be less
    than 110% of the Fair Market Value of a share of Common Stock 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).



     
5.2.     Option Term. The
term of an Option granted to an Employee or Consultant shall be
set by the Committee in its absolute discretion;
provided, however, that the term shall not be more
than ten (10) years from the date the Option is granted;
provided, further, however, that the term
of any Option granted after May 17, 2006 shall not be more than
seven (7) years from the date the Option is granted; and,
provided, further, that, in the case of Incentive
Stock Options, the term shall not be more than five
(5) years from the date the Incentive Stock Option is
granted if the Incentive Stock Option is granted to 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 or parent corporation thereof (within the meaning
of Section 422 of the Code). Except as limited by
requirements of Section 422 of the Code and regulations and
rulings thereunder applicable to Incentive Stock Options, the
Committee may extend the term of any outstanding Option in
connection with any Termination of Employment or Termination of
Consultancy of the Holder, or amend any other term or condition
of such Option relating to such a termination; provided,
however, that any extended term shall not be more than
seven (7) years from the date the Option is granted.



     
5.3.     Option Vesting



     
(a) The period during which the right to exercise, in whole
or in part, an Option granted to an Employee or a Consultant
vests in the Holder shall be set by the Committee and the
Committee may determine that an Option may not be exercised in
whole or in part for a specified period after it is granted;
provided, however, that except for Options that
vest based upon the satisfaction of performance targets, which
shall vest over a period of not less than one (1) year, and
except as provided in Sections 10.3 and 10.4, no Option
granted to an Employee or a Consultant shall vest at a rate more
favorable to the Holder than on a monthly pro-rata basis over a
three (3)-year period measured from the date of grant. Subject
to the provisions of the prior sentence, at any time after grant
of an Option, the Committee may, in its absolute discretion and
subject to whatever terms and conditions it selects, accelerate
the period during which an Option granted to an Employee or
Consultant vests and becomes exercisable.



     
(b) No portion of an Option granted to an Employee or
Consultant which is unexercisable at Termination of Employment
or Termination of Consultancy, as applicable, shall thereafter
become exercisable, except as may be otherwise provided by the
Committee either in the Award Agreement or by action of the
Committee following the grant of the Option.



     
(c) 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 incentive



8







 




stock option plans of the Company and any parent or subsidiary
corporation (within the meaning of Section 422 of the Code)
of the Company), exceeds $100,000, such Options or other 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 or
other options into account in the order in which they were
granted. For purposes of this Section 5.3(c), the Fair
Market Value of stock shall be determined as of the time the
Option or other options with respect to such stock is granted.



     
5.4.     Terms of Options Granted
to Independent Directors. The price per share of the
shares subject to each Option granted to an Independent Director
shall equal 100% of the Fair Market Value of a share of Common
Stock on the date the Option is granted. The period during which
the right to exercise, in whole or in part, an Option granted to
an Independent Director 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. The term of each Option granted to an
Independent Director shall be determined by the Administrator
and shall be no greater than ten(10) years from the date
the Option is granted; provided, however, that the term of any
Option granted after May 17, 2006 shall not be more than seven
(7) years from the date the Option is granted. No portion of an
Option which is unexercisable at Termination of Directorship
shall thereafter become exercisable. Options granted to
Independent Directors under Section 4.5 shall be subject to
such other terms and conditions as are determined by the
Administrator.



     
5.5.     Substitute
Awards. Notwithstanding the foregoing provisions of this
Article V 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;
	 
	 	     
    (c) 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
	 
	 	     
    (d) the aggregate exercise price of such shares.



     
5.6.     Restrictions on Common
Stock.



     
The Administrator may, in its sole discretion, provide under the
terms of an Option that shares of Common Stock purchased upon
exercise of such Option shall be subject to repurchase from the
Holder by the Company, or shall be subject to such restrictions
as the Administrator shall provide, which restrictions may
include, without limitation, restrictions concerning voting
rights and transferability and restrictions based on duration of
employment with the Company and the Subsidiaries, Company
performance and individual performance; provided,
however, that with respect to Employees or Consultants,
except for Common Stock issued upon the exercise of Options that
vest based upon the satisfaction of performance targets, under
which such repurchase right shall lapse over a period of not
less than one (1) year, and except as provided in
Sections 10.3 and 10.4, such repurchase right shall lapse
at a rate no more favorable to the Holder than on a monthly
pro-rata basis over a three (3)-year period measured from the
date of grant; provided further, however, that, by
action taken before or after the Common Stock is purchased upon
exercise of the Option, the Administrator may, on such terms and
conditions as it may determine to be appropriate, terminate the
Company’s repurchase right or remove any or all of the
restrictions imposed by the terms of the Award Agreement. The
Company’s right to repurchase the Common Stock from the
Holder then subject to the right shall provide that immediately
upon a Termination of Employment, a Termination of Consultancy,
or a Termination of Directorship, as applicable, and for such
period as the Administrator shall determine, the Company shall
have the right to purchase the Common Stock at a price per share
equal to the price paid by the Holder for such Common Stock, or
such other price as is determined by the Administrator;
provided, however, that, in the event of a Change
in Control, such right of repurchase shall terminate immediately
prior to the effective date of such Change in Control. Shares of
Common Stock purchased upon the exercise of an Option may not be
sold, transferred or encumbered until any repurchase right and
any and all restrictions are



9







 




terminated or expire. The Secretary of the Company or such other
escrow holder as the Administrator may appoint shall retain
physical custody of each certificate representing such shares of
Common Stock until the repurchase right and any and all of the
restrictions imposed under the Award Agreement with respect to
the shares evidenced by such certificate terminate, expire or
shall have been removed. In order to enforce the restrictions
imposed upon shares of Common Stock hereunder, the Administrator
shall cause a legend or legends to be placed on certificates
representing all shares of Common Stock that are still subject
to any repurchase right or restrictions under Award Agreements,
which legend or legends shall make appropriate reference to the
conditions imposed thereby. If a Holder makes an election under
Section 83(b) of the Code, or any successor section
thereto, to be taxed with respect to the Common Stock as of the
date of transfer of the Common 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 deliver a copy
of such election to the Company immediately after filing such
election with the Internal Revenue Service.




ARTICLE VI.




EXERCISE OF OPTIONS



     
6.1.     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 be
with respect to a minimum number of shares.



     
6.2.     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 his office:






		
	 	     
    (a) A written 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 absolute discretion, deems necessary or
    advisable to effect compliance with all applicable provisions of
    the Securities Act and any other federal or state securities
    laws or regulations. The Administrator may, in its absolute
    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 10.1 by any person or persons other
    than the Holder, appropriate proof of the right of such person
    or persons to exercise the Option; and
	 
	 	     
    (d) Full cash payment to the Secretary of the Company for
    the shares with respect to which the Option, or portion thereof,
    is exercised. However, the Administrator, may in its sole and
    absolute discretion (i) allow a delay in payment up to
    thirty (30) days from the date the Option, or portion
    thereof, is exercised; (ii) allow payment, in whole or in
    part, through the delivery of shares of Common Stock which have
    been owned by the Holder for at least six months, duly endorsed
    for transfer to the Company with a Fair Market Value on the date
    of delivery equal to the aggregate exercise price of the Option
    or exercised portion thereof; (iii) allow payment, in whole
    or in part, through the surrender of shares of Common Stock then
    issuable upon exercise of the Option having a Fair Market Value
    on the date of Option exercise equal to the aggregate exercise
    price of the Option or exercised portion thereof;
    (iv) allow payment, in whole or in part, through the
    delivery of a notice that the Holder has placed a market sell
    order with a broker with respect to shares of Common Stock then
    issuable upon exercise of the Option, and that the broker has
    been directed to pay a sufficient portion of the net proceeds of
    the sale to the Company in satisfaction of the Option exercise
    price, provided that payment of such proceeds is then
    made to the Company upon settlement of such sale; or
    (v) allow payment through any combination of the
    consideration provided in the foregoing subparagraphs (ii),
    (iii) and (iv).



10







 



     
6.3.     Conditions to Issuance
of Stock Certificates. The Company shall not be required
to issue or deliver any certificate or certificates for shares
of stock purchased upon the exercise of any Option or portion
thereof prior to fulfillment of all of the following conditions:






		
	 	     
    (a) The admission of such shares to listing on all stock
    exchanges on which such class of stock is then listed;
	 
	 	     
    (b) The completion of any registration or other
    qualification of such shares under any state or federal law, or
    under the rulings or regulations of the Securities and Exchange
    Commission or any other governmental regulatory body which the
    Administrator shall, in its absolute discretion, deem necessary
    or advisable;
	 
	 	     
    (c) The obtaining of any approval or other clearance from
    any state or federal governmental agency which the Administrator
    shall, in its absolute discretion, determine to be necessary or
    advisable;
	 
	 	     
    (d) The lapse of such reasonable period of time following
    the exercise of the Option as the Administrator may establish
    from time to time for reasons of administrative
    convenience; and
	 
	 	     
    (e) The receipt by the Company of full payment for such
    shares, including payment of any applicable withholding tax,
    which in the discretion of the Administrator may be in the form
    of consideration used by the Holder to pay for such shares under
    Section 6.2(d).



     
6.4.     Rights as
Stockholders. Holders shall not be, nor have any of the
rights or privileges of, stockholders of the Company in respect
of any shares purchasable upon the exercise of any part of an
Option unless and until certificates representing such shares
have been issued by the Company to such Holders.



     
6.5.     Ownership and Transfer
Restrictions. The Administrator, in its absolute
discretion, may impose such restrictions on the ownership and
transferability of the shares purchasable upon the exercise of
an Option as it deems appropriate. Any such restriction shall be
set forth in the respective Award Agreement and may be referred
to on the certificates evidencing such shares. The Holder shall
give the Company prompt notice of any disposition of shares of
Common Stock acquired by exercise of an Incentive Stock Option
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.



     
6.6.     Limitations on Exercise
of Options Granted to Independent Directors. No Option
granted to an Independent Director may be exercised to any
extent by anyone after the first to occur of the following
events:






		
	 	     
    (a) The expiration of 12 months from the date of the
    Holder’s death;
	 
	 	     
    (b) The expiration of 12 months from the date of the
    Holder’s Termination of Directorship by reason of his or
    her permanent and total disability (within the meaning of
    Section 22(e)(3) of the Code); or
	 
	 	     
    (c) Except as otherwise provided in any Award Agreement,
    the expiration of three months from the date of the
    Holder’s Termination of Directorship for any reason other
    than such Holder’s death or his or her permanent and total
    disability, unless the Holder dies within said three-month
    period.



     
6.7.     Additional Limitations
on Exercise of Options. Holders may be required to
comply with any timing or other restrictions with respect to the
settlement or exercise of an Option, including a window-period
limitation, as may be imposed in the discretion of the
Administrator.




ARTICLE VII.




AWARD OF RESTRICTED STOCK



     
7.1.     Eligibility.
Subject to the Award Limit, Restricted Stock may be awarded to
any Employee or Consultant who the Committee determines should
receive such an Award.



     
7.2.     Award of Restricted
Stock.



11







 



     
(a) The Committee may from time to time, in its absolute
discretion:






		
	 	     
    (i) Select from among the Employees or Consultants
    (including Employees or Consultants who have previously been
    granted other Awards under the Plan) such of them as in its
    opinion should be awarded Restricted Stock; and
	 
	 	     
    (ii) Determine the purchase price, if any, and other terms
    and conditions applicable to such Restricted Stock, consistent
    with the Plan.



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



     
(c) Upon the selection of an Employee or Consultant to be
awarded Restricted Stock, the Committee shall instruct the
Secretary of the Company to issue such Restricted Stock and may
impose such conditions on the issuance of such Restricted Stock
as it deems appropriate, and the Committee shall authorize one
or more officers of the Company to prepare, execute and deliver
the Award Agreement with respect to such Restricted Stock.



     
7.3.     Rights as
Stockholders. Subject to Section 7.4, upon delivery
of the shares of Restricted Stock to the escrow holder pursuant
to Section 7.6, the Holder shall have, unless otherwise
provided by the Committee, all the rights of a stockholder with
respect to said shares, subject to the restrictions in his 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 discretion of the
Committee, any extraordinary distributions with respect to the
Common Stock shall be subject to the restrictions set forth in
Section 7.4.



     
7.4.     Restriction. All
shares of Restricted Stock issued under the Plan (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 each
individual Award Agreement, be subject to such restrictions as
the Committee shall provide, if any, which restrictions may
include, without limitation, restrictions concerning voting
rights and transferability and restrictions based on duration of
employment with the Company, Company performance and individual
performance; provided, however, that with respect
to shares of Restricted Stock granted to Employees or
Consultants, except for shares of Restricted Stock that vest
based upon the satisfaction of performance targets, under which
such restrictions shall lapse over a period of not less than one
(1) year, and except in the event of the Holder’s
death or disability and except as provided in Sections 10.3
and 10.4, such restrictions shall lapse at a rate no more
favorable to the Holder than on a monthly pro-rata basis over a
three (3)-year period measured from the date of grant;
provided further, however, that, except with
respect to shares of Restricted Stock granted to
Section 162(m) Employees, by action taken after the
Restricted Stock is issued, the Committee may, on such terms and
conditions as it may determine to be appropriate, remove any or
all of the restrictions imposed by the terms of the Award
Agreement subject to the limitations contained herein.
Restricted Stock may not be sold or encumbered until all
restrictions are terminated or expire. If no consideration was
paid by the Holder upon issuance, a Holder’s rights in
unvested Restricted Stock shall lapse, and such Restricted Stock
shall be surrendered to the Company without consideration, upon
Termination of Employment or, if applicable, upon Termination of
Consultancy with the Company; provided, however,
that the Committee in its sole and absolute discretion may
provide that such rights shall not lapse in the event of a
Termination of Employment because of the Holder’s death or
disability.



     
7.5.     Repurchase of Restricted
Stock. The Committee shall provide in the terms of each
individual Award Agreement that the Company shall have the right
to repurchase from the Holder the Restricted Stock then subject
to restrictions under the Award Agreement immediately upon a
Termination of Employment or, if applicable, upon a Termination
of Consultancy between the Holder and the Company, at a cash
price per share equal to the price paid by the Holder for such
Restricted Stock; provided, however, that the
Committee in its sole and absolute discretion may provide that
no such right of repurchase shall exist in the event of a
Termination of Employment following a “change of ownership
or control” (within the meaning of Treasury



12







 




Regulation Section 1.162-27(e)(2)(v) or any successor
regulation thereto) of the Company or because of the
Holder’s death or disability; provided,
further, that, except with respect to shares of
Restricted Stock granted to Section 162(m) Employees, the
Committee in its sole and absolute discretion may provide that
no such right of repurchase shall exist in the event of a
Termination of Employment or a Termination of Consultancy
without cause or following any Change in Control of the Company
or because of the Holder’s retirement, or otherwise.



     
7.6.     Escrow. The
Secretary of the Company or such other escrow holder as the
Committee may appoint shall retain physical custody of each
certificate representing Restricted Stock until all of the
restrictions imposed under the Award Agreement with respect to
the shares evidenced by such certificate expire or shall have
been removed.



     
7.7.     Legend. In order
to enforce the restrictions imposed upon shares of Restricted
Stock hereunder, the Committee shall cause a legend or legends
to be placed on certificates representing all shares of
Restricted Stock that are still subject to restrictions under
Award Agreements, which legend or legends shall make appropriate
reference to the conditions imposed thereby.



     
7.8.     Section 83(b)
Election. If a Holder makes an election under
Section 83(b) of the Code, or any successor section
thereto, 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
deliver a copy of such election to the Company immediately after
filing such election with the Internal Revenue Service.



     
7.9.     Restricted Stock in Lieu
of Cash Compensation. Notwithstanding anything herein to
the contrary, shares of Restricted Stock may be granted to
Independent Directors in lieu of directors’ fees which
would otherwise be payable to such Independent Directors
pursuant to such policies as may be adopted by the Administrator
from time to time.




ARTICLE VIII.




STOCK APPRECIATION RIGHTS



     
8.1.     Grant of Stock
Appreciation Rights. A Stock Appreciation Right may be
granted to any Employee or Consultant selected by the Committee.
A Stock Appreciation Right may be granted (a) in connection
and simultaneously with the grant of an Option, (b) with
respect to a previously granted Option, or (c) independent
of an Option. A Stock Appreciation Right shall be subject to
such terms and conditions not inconsistent with the Plan as the
Committee shall impose and shall be evidenced by an Award
Agreement.



     
8.2.     Coupled Stock
Appreciation Rights.



     
(a) A Coupled Stock Appreciation Right (“CSAR”)
shall be related to a particular Option and shall be exercisable
only when and to the extent the related Option is exercisable.



     
(b) A CSAR may be granted to the Holder for no more than
the number of shares subject to the simultaneously or previously
granted Option to which it is coupled.



     
(c) A CSAR shall entitle the Holder (or other person
entitled to exercise the Option pursuant to the Plan) to
surrender to the Company unexercised a portion of the Option to
which the CSAR relates (to the extent then exercisable pursuant
to its terms) and to receive from the Company in exchange
therefor an amount determined by multiplying the difference
obtained by subtracting the Option exercise price from the Fair
Market Value of a share of Common Stock on the date of exercise
of the CSAR by the number of shares of Common Stock with respect
to which the CSAR shall have been exercised, subject to any
limitations the Committee may impose.



     
8.3.     Independent Stock
Appreciation Rights.



     
(a) An Independent Stock Appreciation Right
(“ISAR”) shall be unrelated to any Option and shall
have a term set by the Committee; provided,
however, that the term shall not be more than seven
(7) years



13







 




from the date the ISAR is granted. An ISAR shall be exercisable
in such installments as the Committee may determine;
provided, however, that except for ISARs that vest
based upon the satisfaction of performance targets, which shall
vest over a period of not less than one (1) year, and
except as provided in Sections 10.3 and 10.4, no ISAR shall
become exercisable at a rate more favorable to the Holder than
on a monthly pro-rata basis over a three (3)-year period
measured from the date of grant. Subject to the provisions of
the prior sentence, at any time after grant of an ISAR, the
Committee may, in its absolute discretion and subject to
whatever terms and conditions it selects, accelerate the period
during which an Option granted to an Employee or Consultant
vests and becomes exercisable. An ISAR shall cover such number
of shares of Common Stock as the Committee may determine. The
exercise price per share of Common Stock subject to each ISAR
shall be set by the Committee. An ISAR is exercisable only while
the Holder is an Employee or Consultant; provided that
the Committee may determine that the ISAR may be exercised
subsequent to Termination of Employment or Termination of
Consultancy without cause, or following a Change in Control of
the Company, or because of the Holder’s retirement, death
or disability, or otherwise.



     
(b) An ISAR shall entitle the Holder (or other person
entitled to exercise the ISAR pursuant to the Plan) to exercise
all or a specified portion of the ISAR (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 ISAR
from the Fair Market Value of a share of Common Stock on the
date of exercise of the ISAR by the number of shares of Common
Stock with respect to which the ISAR shall have been exercised,
subject to any limitations the Committee may impose.



     
8.4.     Payment and Limitations
on Exercise.



     
(a) Payment of the amounts determined under
Section 8.2(c) and 8.3(b) above shall be in cash, in Common
Stock (based on its Fair Market Value as of the date the Stock
Appreciation Right is exercised) or a combination of both, as
determined by the Committee. To the extent such payment is
effected in Common Stock it shall be made subject to
satisfaction of all provisions of Section 6.3 above
pertaining to Options.



     
(b) Holders of Stock Appreciation Rights may be required to
comply with any timing or other restrictions with respect to the
settlement or exercise of a Stock Appreciation Right, including
a window-period limitation, as may be imposed in the discretion
of the Committee.




ARTICLE IX.




ADMINISTRATION



     
9.1.     Committee. The
Committee shall be the Compensation Committee of the Board,
unless the Board specifically assumes the functions of the
Committee or appoints another committee to assume such functions.



     
9.2.     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 and the Award Agreements, and to adopt such
rules for the administration, interpretation, and application of
the Plan as are consistent therewith, to interpret, amend or
revoke any such rules and to amend any Award Agreement provided
that the rights or obligations of the Holder of the Award that
is the subject of any such Award Agreement are not affected
adversely. 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 absolute discretion, the
Board may at any time and from time to time assume any and all
rights and duties of the Committee under the Plan, except with
respect to matters which under
Rule 16b-3 or
Section 162(m) of the Code, or any regulations or rules
issued thereunder, are required to be determined in the sole
discretion of the Committee. Notwithstanding the foregoing, the
full Board, acting by a majority of its members in office, shall
conduct the general administration of the Plan with respect to
Options granted to Independent Directors.



     
9.3.     Majority Rule; Unanimous
Written Consent. The Committee shall act by a majority
of its members in attendance at a meeting at which a quorum is
present or by a memorandum or other written instrument signed by
all members of the Committee.



14







 



     
9.4.     Compensation;
Professional Assistance; Good Faith Actions. Members of
the Committee shall receive such compensation, if any, for their
services as members as may be determined by the Board. All
expenses and liabilities which members of the Committee incur in
connection with the administration of the Plan shall be borne by
the Company. The Committee may, with the approval of the Board,
employ attorneys, consultants, accountants, appraisers, brokers,
or other persons. The Committee, the Company and the
Company’s officers and Directors shall be entitled to rely
upon the advice, opinions or valuations of any such persons. All
actions taken and all interpretations and determinations made by
the Committee or the Board in good faith shall be final and
binding upon all Holders, the Company and all other interested
persons. No members of the Committee or Board shall be
personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or
Awards, and all members of the Committee and the Board shall be
fully protected by the Company in respect of any such action,
determination or interpretation.




ARTICLE X.




MISCELLANEOUS PROVISIONS



     
10.1.     Not
Transferable. 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. 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,
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.



     
During the lifetime of the Holder, only he may exercise an
Option or other Award (or any portion thereof) granted to him
under the Plan, unless it has been disposed of with the consent
of the Administrator pursuant to a DRO. After the death of the
Holder, any exercisable portion of an Option or other Award may,
prior to the time when such portion becomes unexercisable under
the Plan or the applicable 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.



     
Notwithstanding the foregoing provisions of this
Section 10.1, the Administrator, in its sole discretion,
may determine to grant a Non-Qualified Stock Option which, by
its terms as set forth in the applicable Award Agreement, may be
transferred by the Holder, in writing and with prior written
notice to the Administrator, to any one or more Permitted
Transferees (as defined below), subject to the following terms
and conditions: (a) a Non-Qualified Stock Option
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; (b) any Non-Qualified
Stock Option which is transferred to a Permitted Transferee
shall continue to be subject to all the terms and conditions of
the Non-Qualified Stock Option as applicable to the original
Holder (other than the ability to further transfer the
Non-Qualified Stock Option); and (c) the Holder and the
Permitted Transferee shall execute any and all documents
requested by the Administrator, including, without limitation,
documents to: (i) confirm the status of the transferee as a
Permitted Transferee, (ii) satisfy any requirements for an
exemption for the transfer under applicable federal and state
securities laws and (iii) evidence the transfer. For
purposes of this Section, “Permitted Transferee” shall
mean, with respect to a Holder, any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew,
mother-in-law,
father-in-law,
daughter-in-law,
brother-in-law, or
sister-in-law,
including adoptive relationships, any person sharing the
Holder’s household (other than a tenant or employee), a
trust in which these persons (or the Holder) control the
management of assets, and any other entity in which these
persons (or the Holder) owns more than fifty percent (50%) of
the voting interests, or any other transferee specifically
approved by the Administrator after taking into account any
state or federal tax or securities laws applicable to
transferable Non-Qualified Stock Options.



15







 



     
10.2.     Amendment, Suspension
or Termination of the Plan.



     
(a) Except as otherwise provided in this Section 10.2,
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. However, without approval of the
Company’s stockholders given within twelve months before or
after the action by the Board, no action of the Board may,
except as provided in Section 10.3, increase the limits
imposed in Section 2.1 on the maximum number of shares that
may be issued under the Plan.



     
(b) No amendment, suspension or termination of the Plan
shall, without the consent of the Holder alter or impair any
rights or obligations under any Award theretofore granted or
awarded, unless the Award itself otherwise expressly so provides.



     
(c) No Awards may be granted or awarded during any period
of suspension or after termination of the Plan, and in no event
may any Option be granted under the Plan after the first to
occur of the following events:






		
	 	     
    (i) The expiration of ten years from the date the Plan is
    adopted by the Board; or
	 
	 	     
    (ii) The expiration of ten years from the date the Plan is
    approved by the Company’s stockholders under
    Section 10.5.



     
(d) To the extent required by applicable law or listing
requirements, stockholder approval shall be required for any
amendment of the Plan that either (i) materially expands
the class of individuals eligible to receive Awards under the
Plan, (ii) materially increases the benefits accruing to
Employees and Consultants under the Plan or materially reduces
the price at which shares may be issued or purchased under the
Plan, (iii) materially extends the term of the Plan, or
(iv) expands the types of Awards available for issuance
under the Plan.



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



     
(a) Subject to Section 10.3(d), in the event that the
Administrator determines that any dividend or other distribution
(whether in the form of cash, Common Stock, other securities, or
other property), recapitalization, reclassification, stock
split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase,
liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the
Company, or exchange of Common Stock or other securities of the
Company, issuance of warrants or other rights to purchase Common
Stock or other securities of the Company, or other similar
corporate transaction or event, in the Administrator’s sole
discretion, affects the Common Stock such that an adjustment is
determined by the Administrator to be 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 an Award, then the Administrator shall, in such
manner as it may deem equitable, adjust any or all of:






		
	 	     
    (i) the number and kind of shares of Common Stock (or other
    securities or property) with respect to which Awards may be
    granted or awarded (including, but not limited to, adjustments
    of the limitations in Section 2.1 on the maximum number and
    kind of shares which may be issued 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; and
	 
	 	     
    (iii) the grant or the exercise price with respect to any
    Award.



     
(b) Subject to Sections 10.3(d) and 10.4, in the event
of any transaction or event described in Section 10.3(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 and absolute discretion, and on such
terms and conditions as it deems appropriate, either by the
terms of the Award or by action taken prior to the occurrence of
such transaction or event (any such action applied to Employees
and former Employees to be applied uniformly) and either
automatically or upon the Holder’s request, is hereby
authorized to take any one



16







 




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 the cancellation of any such
    Award for an amount of cash equal to 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, or the replacement of
    such Award with other rights or property selected by the
    Administrator in its sole discretion;
	 
	 	     
    (ii) to provide that the Award cannot vest, be exercised or
    become payable after such event;
	 
	 	     
    (iii) to provide that such Award shall be exercisable as to
    all shares covered thereby, notwithstanding anything to the
    contrary in Section 5.3 or 5.4 or the provisions of such
    Award;
	 
	 	     
    (iv) 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;
	 
	 	     
    (v) to make adjustments in the number and type of shares of
    Common Stock (or other securities or property) subject to
    outstanding Awards, and in the number and kind of outstanding
    Restricted 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; and
	 
	 	     
    (vi) to provide that, for a specified period of time prior
    to such event, the restrictions imposed under an Award Agreement
    upon some or all shares of Restricted Stock or Common Stock may
    be terminated and some or all shares of such Restricted Stock or
    Common Stock may cease to be subject to repurchase after such
    event.



     
(c) Subject to Sections 10.3(d), 3.2 and 3.3, the
Administrator may, in its discretion, include such further
provisions and limitations in any Award, Award Agreement or
certificate, as it may deem equitable and in the best interests
of the Company.



     
(d) With respect to Awards that are granted to
Section 162(m) Employees and are intended to qualify as
performance-based compensation under Section 162(m)(4)(C),
no adjustment or action described in this Section 10.3 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 under Section 162(m)(4)(C) or any
successor provisions thereto. No adjustment or action described
in this Section 10.3 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. The number of shares of Common
Stock subject to any Award shall always be rounded to the next
whole number.



     
(e) The existence of the Plan, any 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.



     
10.4.     Change in
Control. Notwithstanding any other provision of the
Plan, in the event of a Change in Control, each outstanding
Award shall, immediately prior to the effective date of the
Change in Control,



17







 




automatically become fully exercisable for all of the shares of
Common Stock at the time subject to such Award and may be
exercised for any or all of those shares as fully-vested shares
of Common Stock.



     
10.5.     Approval of Plan by
Stockholders. The Plan shall be submitted for the
approval of the Company’s stockholders within twelve months
after the date of the Board’s initial adoption of the Plan.
Awards may be granted or awarded prior to such stockholder
approval; provided, however, that such Awards
shall not be exercisable nor shall such Awards vest prior to the
time when the Plan is approved by the stockholders; and
provided, further, that if such approval has not
been obtained at the end of said twelve-month period, all Awards
previously granted or awarded under the Plan shall thereupon be
canceled and become null and void. In addition, if the Board
determines that Awards other than Options or Stock Appreciation
Rights which may be granted to Section 162(m) Employees
should continue to be eligible to qualify as performance-based
compensation under Section 162(m)(4)(C) of the Code, the
Performance Criteria must be disclosed to and approved by the
Company’s stockholders no later than the first stockholder
meeting that occurs in the fifth year following the year in
which the Company’s stockholders previously approved the
Performance Criteria.



     
10.6.     Tax
Withholding. The Company shall be entitled to require
payment in cash or deduction from other compensation payable to
each Holder of any sums required by federal, state or local tax
law to be withheld with respect to the issuance, vesting,
exercise or payment of any Award. The Administrator may in its
discretion and in satisfaction of the foregoing requirement
allow such Holder to elect to have the Company withhold shares
of Common Stock otherwise issuable under such Award (or allow
the return of shares of Common Stock) having a Fair Market Value
equal to the sums required to be withheld. Notwithstanding any
other provision of the Plan, the number of shares of Common
Stock which may be withheld with respect to the issuance,
vesting, exercise or payment of any Award (or which may be
repurchased from the Holder of such Award within six months
after such shares of Common Stock were acquired by the Holder
from the Company) in order to satisfy the Holder’s federal
and state income and payroll tax liabilities with respect to the
issuance, vesting, exercise or payment of the Award shall be
limited to the number of shares which have a Fair Market Value
on the date of withholding or repurchase equal to the aggregate
amount of such liabilities based on the minimum statutory
withholding rates for federal and state tax income and payroll
tax purposes that are applicable to such supplemental taxable
income.



     
10.7.     Forfeiture
Provisions. Subject to the limitations of applicable
law, 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 the terms of
Awards made under the Plan, or to require a Holder to agree by
separate written instrument, that if (a)(i) 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 (ii) the Holder incurs a
Termination of Employment, Termination of Consultancy or
Termination of Directorship for cause, then
(b) (i) any proceeds, gains or other economic benefit
actually or constructively received by the Holder upon any
exercise of the Award, or upon the receipt or resale of any
Common Stock underlying any 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.



     
10.8.     Effect of Plan upon
Options and Compensation Plans. The adoption of the Plan
shall not affect any other compensation or incentive plans in
effect for the Company or any Subsidiary. Nothing in the Plan
shall be construed to limit the right of the Company (a) to
establish any other forms of incentives or compensation for
Employees, Directors or Consultants of the Company or any
Subsidiary 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 but not by way of
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.



     
10.9.     Compliance with
Laws. The Plan, the granting and vesting of Awards under
the Plan and the issuance and delivery of shares of Common Stock
and the payment of money under the Plan or under Awards granted
or awarded hereunder are subject to compliance with all
applicable federal and state laws, rules and



18







 




regulations (including but not limited to state and federal
securities law and federal margin requirements) 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.



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



     
10.11.     Reservation of
Shares. The Company, during the term of this Plan, shall
at all times reserve and keep available such number of shares of
Common Stock as shall be sufficient to satisfy the requirements
of the Plan.



     
10.12.     Titles. Titles
are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of the Plan.



     
10.13.     Governing Law.
The Plan and any agreements hereunder shall be administered,
interpreted and enforced under the internal laws of the State of
California without regard to conflicts of laws thereof.



     
10.14.     Cancellation and
Re-Grant of Awards. Neither the Administrator, the Board
nor the Committee shall have the authority to: (i) reprice
any outstanding Awards under the Plan, or (ii) cancel and
re-grant any outstanding Awards under the Plan, unless the
stockholders of the Company have approved such an action.




* * *



     
I hereby certify that the foregoing Plan was duly adopted by the
Board of Directors of Gen-Probe Incorporated on March 3rd,
2003, and adopted as amended and restated on February 9,
2006.



     
Executed on this 1st day of March, 2006.






		
	 	
    /s/ R. William Bowen
	 	
     

	 	
    R. William Bowen
	 	
    Secretary




* * *



     
I hereby certify that the foregoing Plan was duly approved by
the stockholders of Gen-Probe Incorporated on May 29, 2003
and approved as amended and restated
on May 17, 2006.



     
Executed on this 17th day
of May,
2006.






		
	 	
    /s/ R. William Bowen 

	 	
    R. William Bowen
	 	
    Secretary



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