Exhibit
10.1


COMBINATORX,
INCORPORATED

AMENDED AND RESTATED

2004 INCENTIVE PLAN


1.             DEFINED
TERMS


Exhibit A,
which is incorporated by reference, defines the terms used in the Plan and sets
forth certain operational rules related to those terms.


2.             PURPOSE


The Plan has been
established to advance the interests of the Company by providing for the grant
to Participants of Stock-based and other incentive Awards.


3.             ADMINISTRATION


The Administrator has discretionary
authority, subject only to the express provisions of the Plan, to interpret the
Plan; determine eligibility for and grant Awards; determine, modify or waive
the terms and conditions of any Award; prescribe forms, rules and
procedures; and otherwise do all things necessary to carry out the purposes of
the Plan. In the case of any Award that is intended to be eligible for the
performance-based compensation exception under Section 162(m), the
Administrator will exercise its discretion consistent with qualifying the Award
for that exception. Determinations of the Administrator made under the Plan
will be conclusive and will bind all parties.


4.             LIMITS
ON AWARDS UNDER THE PLAN


(a)           Number
of Shares. The maximum number of shares of Stock
of the Company that may be delivered in satisfaction of Awards granted under
the Plan shall be: (i) 2,000,000, plus (ii) the number of unused
Prior Plan shares of Stock, plus (iii) as of the first day of each of fiscal 2007 through 2011, inclusive, an
additional number of shares equal to the least of (x) 2,000,000 shares of
Stock, (y) 4% of the number of then outstanding shares of Stock, and (z) such
lesser number as determined by the Administrator. Notwithstanding the
preceding sentence, no more than 10,000,000 shares of Stock may be delivered in
satisfaction of ISOs awarded under the Plan. For purposes of this Section 4(a),
shares of Stock shall be treated as unused Prior Plan shares (i) if they
were available for issuance under the Prior Plan on the Effective Date
(including, without limitation, shares of Stock underlying awards outstanding
under the Prior Plan on the Effective Date to the extent that such shares had
not been delivered prior to the Effective Date), (ii) if they were subject
to awards under the Prior Plan, other than restricted stock awards, that were
outstanding on the day preceding the Effective Date to the extent such Prior
Plan awards are exercised or are satisfied, or terminate or expire, on or after
the Effective Date without the delivery of such shares, or (iii) if they
were outstanding on the day preceding the Effective Date as restricted stock
awards under the Prior Plan and are thereafter forfeited. The number of shares
of Stock delivered in satisfaction of Awards shall, for purposes of the first
sentence of this Section 4(a), be determined net of shares of Stock (a) withheld
by the Company in payment of the exercise price of the Award or in satisfaction
of tax withholding requirements with respect to the Award, or (b) awarded
under the Plan as Restricted Stock but 









 



thereafter forfeited, or (c) made subject to an Award that is
exercised or satisfied, or that terminates or expires, without the delivery of
such shares. The limit set forth in this Section 4(a) shall be
construed to comply with Section 422 of the Code and regulations
thereunder. To the extent consistent with the requirements of Section 422
of the Code and regulations thereunder, and with other applicable legal
requirements (including applicable stock exchange or similar requirements),
Stock issued under awards of an acquired company that are converted, replaced,
or adjusted in connection with the acquisition shall not reduce the number of
shares available for Awards under the Plan.


(b)           Type
of Shares. Stock delivered by the Company under
the Plan may be authorized but unissued Stock or previously issued Stock
acquired by the Company. No fractional shares of Stock will be delivered under
the Plan.


(c)           Additional
Limits. The maximum number of shares of Stock for
which Stock Options may be granted to any person in any calendar year and the
maximum number of shares of Stock subject to SARs granted to any person in any
calendar year will each be 1,657,142. The maximum number of shares of Stock
subject to other Awards granted to any person in any calendar year will be
1,657,142 shares. The maximum amount payable to any person in any year under
Cash Awards will be $5,000,000. The foregoing provisions will be construed in a
manner consistent with Section 162(m).


5.             ELIGIBILITY
AND PARTICIPATION


The Administrator will
select Participants from among those key Employees and directors of, and
consultants and advisors to, the Company or its Affiliates who, in the opinion
of the Administrator, are in a position to make a significant contribution to
the success of the Company and its Affiliates. Eligibility for ISOs is limited
to employees of the Company or of a “parent corporation” or “subsidiary
corporation” of the Company as those terms are defined in Section 424 of
the Code.


6.             RULES
APPLICABLE TO AWARDS


(a)           ALL
AWARDS


(1)  Award Provisions.
The Administrator will determine the terms of all Awards, subject to the
limitations provided herein. By accepting any Award granted hereunder, the
Participant agrees to the terms of the Award and the Plan. Notwithstanding any
provision of this Plan to the contrary, awards of an acquired company that are
converted, replaced or adjusted in connection with the acquisition may contain
terms and conditions that are inconsistent with the terms and conditions
specified herein as determined by the Administrator.


(2)  Term of Plan.
No Awards may be made after May 30, 2016, but previously granted Awards
may continue beyond that date in accordance with their terms.


(3)  Transferability.
Neither ISOs nor, except as the Administrator otherwise expressly provides,
other Awards may be transferred other than by will or by the laws of descent
and distribution, and during a Participant’s lifetime ISOs (and, except 



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as the
Administrator otherwise expressly provides, other non-transferable Awards
requiring exercise) may be exercised only by the Participant.


(4)  Vesting, Etc.  The Administrator may determine the time or
times at which an Award will vest or become exercisable and the terms on which
an Award requiring exercise will remain exercisable. Without limiting the
foregoing, the Administrator may at any time accelerate the vesting or
exercisability of an Award, regardless of any adverse or potentially adverse
tax consequences resulting from such acceleration. Unless the Administrator
expressly provides otherwise, immediately upon the cessation of the Participant’s
Employment an Award requiring exercise will cease to be exercisable and will
terminate, and all other Awards to the extent not already vested will be
forfeited, except that:


(A)  subject to (B) and (C) below, all Stock Options and
SARs held by the Participant or the Participant’s permitted transferee, if any,
immediately prior to the cessation of the Participant’s Employment, to the
extent then exercisable, will remain exercisable for the lesser of (i) a
period of three months or (ii) the period ending on the latest date on
which such Stock Option or SAR could have been exercised without regard to this
Section 6(a)(4), and will thereupon terminate;


(B)  all Stock Options and SARs held by a Participant or the
Participant’s permitted transferee, if any, immediately prior to the
Participant’s death, to the extent then exercisable, will remain exercisable
for the lesser of (i) the one year period ending with the first
anniversary of the Participant’s death or (ii) the period ending on the latest
date on which such Stock Option or SAR could have been exercised without regard
to this Section 6(a)(4), and will thereupon terminate; and


(C)  all Stock Options and SARs held by a Participant or the
Participant’s permitted transferee, if any, immediately prior to the cessation
of the Participant’s Employment will immediately terminate upon such cessation
if the Administrator in its sole discretion determines that such cessation of
Employment has resulted for reasons which cast such discredit on the Participant
as to justify immediate termination of the Award.


(5)  Taxes.
The Administrator will make such provision for the withholding of taxes as it
deems necessary. The Administrator may, but need not, hold back shares of Stock
from an Award or permit a Participant to tender previously owned shares of
Stock in satisfaction of tax withholding requirements (but not in excess of the
minimum withholding required by law).


(6)  Dividend Equivalents, Etc. The
Administrator may provide for the payment of amounts in lieu of cash dividends
or other cash distributions with respect to Stock subject to an Award. Any
entitlement to dividend equivalents or similar entitlements shall be
established and administered consistent either with exemption from, or
compliance with, the requirements of Section 409A to the extent
applicable.



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(7)  Rights Limited.
Nothing in the Plan will be construed as giving any person the right to
continued employment or service with the Company or its Affiliates, or any
rights as a stockholder except as to shares of Stock actually issued under the
Plan. The loss of existing or potential profit in Awards will not constitute an
element of damages in the event of termination of Employment for any reason,
even if the termination is in violation of an obligation of the Company or
Affiliate to the Participant.


(8)  Certain Performance Awards.
This Section 6(a)(8) applies to any Performance Award that is
intended to qualify as performance-based for the purposes of Section 162(m),
other than a Stock Option or SAR. In the case of any Performance Award to which
this Section 6(a)(8) applies, the Plan and such Award will be
construed to the maximum extent permitted by law in a manner consistent with
qualifying the Award for such exception. With respect to such Performance
Awards, the Administrator will preestablish, in writing, one or more specific
Performance Criteria no later than 90 days after the commencement of the period
of service to which the performance relates (or at such earlier time as is
required to qualify the Award as performance-based under Section 162(m)). Prior
to grant, vesting or payment of the Performance Award, as the case may be, the
Administrator will certify whether the applicable Performance Criteria have
been attained and such determination will be final and conclusive.


(b)           AWARDS
REQUIRING EXERCISE


(1)  Time And Manner Of Exercise.
Unless the Administrator expressly provides otherwise, an Award requiring
exercise by the holder will not be deemed to have been exercised until the
Administrator receives a notice of exercise (in form acceptable to the
Administrator) signed by the appropriate person and accompanied by any payment
required under the Award. If the Award is exercised by any person other than
the Participant, the Administrator may require satisfactory evidence that the
person exercising the Award has the right to do so.


(2)  Exercise Price.
The Administrator will determine the exercise price (or the base value from
which appreciation is to be measured, in the case of a SAR) of each Award
requiring exercise. However, the exercise price or base value, as the case may
be, may not be less than the fair market value of the Stock subject to the
Award, determined as of the date of grant. Fair market value shall be
determined by the Administrator consistent with the requirements of Section 422,
where applicable, and Section 409A. No such Award, once granted, may be
repriced other than in accordance with the applicable Nasdaq stockholder
approval requirements.


(3)  Payment Of Exercise Price.
Where the exercise of an Award is to be accompanied by payment, the
Administrator may determine the required or permitted forms of payment, subject
to the following:  all payments will be
by cash or check acceptable to the Administrator, or, if so permitted by the
Administrator and if legally permissible, (i) through the delivery of
shares of Stock that have been outstanding for at least six months (unless the
Administrator approves a shorter period) and that have a fair market value
equal to the exercise price, (ii) by delivery to the Company of a
promissory note of the person exercising the Award, payable on such terms as
are specified by the 



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Administrator,
(iii) through a broker-assisted exercise program acceptable to the
Administrator, (iv) by other means acceptable to the Administrator, or (v) by
any combination of the foregoing permissible forms of payment. The delivery of
shares in payment of the exercise price under clause (a)(i) above may be
accomplished either by actual delivery or by constructive delivery through
attestation of ownership, subject to such rules as the Administrator may
prescribe.


(4)  Section 409A Exemption.
Except as the Administrator otherwise determines, no Award requiring exercise
shall have deferral features, or shall be administered in a manner, that would
cause such Award to fail to qualify for exemption from Section 409A.


(c)           AWARDS
NOT REQUIRING EXERCISE


Restricted Stock
and Unrestricted Stock, whether delivered outright or under Awards of Stock
Units or other Awards that do not require exercise, may be made in exchange for
such lawful consideration, including services, as the Administrator determines.
Any Award resulting in a deferral of compensation subject to Section 409A
shall be construed to the maximum extent possible, as determined by the
Administrator, consistent with the requirements of Section 409A.


7.             EFFECT OF CERTAIN TRANSACTIONS


(a)           MERGERS,
ETC.


Except as
otherwise provided in an Award, the following provisions shall apply in the
event of a Covered Transaction. In the event of a Covered Transaction in which
there is an acquiring or surviving entity, the Administrator may provide for
the assumption of some or all outstanding Awards, or for the grant of new
awards in substitution therefor, by the acquiror or survivor or an affiliate of
the acquiror or survivor, in each case on such terms and subject to such
conditions as the Administrator determines. In the event of a Covered
Transaction (whether or not there is an acquiring or surviving entity) where
there is no such assumption or substitution, each Stock Option, SAR and other
Award requiring exercise will become fully exercisable, and the delivery of
shares of Stock issuable under each outstanding Award of Stock Units (including
Restricted Stock Units) will be accelerated and such shares will be issued,
prior to the Covered Transaction, in each case on a basis that gives the holder
of the Award a reasonable opportunity, as determined by the Administrator,
following exercise of the Award or the issuance of the shares, as the case may
be, to participate as a stockholder in the Covered Transaction, and the Award
will terminate upon consummation of the Covered Transaction. Any shares of
Stock issued pursuant to the preceding sentence in satisfaction of an Award
may, in the discretion of the Administrator, contain such restrictions, if any,
as the Administrator deems appropriate to reflect any performance or other
vesting conditions to which the Award was subject. In the case of Restricted
Stock, the Administrator may require that any amounts delivered, exchanged or
otherwise paid in respect of such Stock in connection with the Covered
Transaction be placed in escrow or otherwise made subject to such restrictions
as the Administrator deems appropriate to carry out the intent of the Plan.



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(b)           CHANGES
IN AND DISTRIBUTIONS WITH RESPECT TO THE STOCK


(1)  Basic Adjustment Provisions.
In the event of a stock dividend, stock split or combination of shares
(including a reverse stock split), recapitalization or other change in the
Company’s capital structure, the Administrator will make appropriate
adjustments to the maximum number of shares specified in Section 4(a) that
may be delivered under the Plan, to the maximum number of shares specified in Section 4(a) that
may be issued upon the exercise of ISOs, and to the maximum share limits
described in Section 4(c), and will also make appropriate adjustments to
the number and kind of shares of stock or securities subject to Awards then
outstanding or subsequently granted, any exercise prices relating to Awards and
any other provision of Awards affected by such change.


(2)  Certain Other Adjustments.
The Administrator may also make adjustments of the type described in Section 7(b)(1) above
to take into account distributions to stockholders other than those provided
for in Section 7(a) and 7(b)(1), or any other event, if the
Administrator determines that adjustments are appropriate to avoid distortion
in the operation of the Plan and to preserve the value of Awards made
hereunder, having due regard for the qualification of ISOs under Section 422,
the requirements of Section 409A, and the performance-based compensation rules of
Section 162(m), where applicable.


(3)  Continuing Application of Plan
Terms. References in the Plan to shares of Stock
will be construed to include any stock or securities resulting from an
adjustment pursuant to this Section 7.


8.             LEGAL CONDITIONS ON DELIVERY OF STOCK


The Company will
not be obligated to deliver any shares of Stock pursuant to the Plan or to
remove any restriction from shares of Stock previously delivered under the Plan
until: (i) the Company is satisfied that all legal matters in connection
with the issuance and delivery of such shares have been addressed and resolved;
(ii) if the outstanding Stock is at the time of delivery listed on any
stock exchange or national market system, the shares to be delivered have been
listed or authorized to be listed on such exchange or system upon official
notice of issuance; and (iii) all conditions of the Award have been
satisfied or waived. If the sale of Stock has not been registered under the
Securities Act of 1933, as amended, the Company may require, as a condition to
exercise of the Award, such representations or agreements as counsel for the
Company may consider appropriate to avoid violation of such Act. The Company
may require that certificates evidencing Stock issued under the Plan bear an
appropriate legend reflecting any restriction on transfer applicable to such
Stock, and the Company may hold the certificates pending lapse of the
applicable restrictions.


9.             AMENDMENT AND TERMINATION


The Administrator
may at any time or times amend the Plan or any outstanding Award for any
purpose which may at the time be permitted by law, and may at any time
terminate the 



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Plan as to any future
grants of Awards; provided, that except as
otherwise expressly provided in the Plan the Administrator may not, without the
Participant’s consent, alter the terms of an Award so as to affect adversely
the Participant’s rights under the Award, unless the Administrator expressly
reserved the right to do so at the time of the Award. Amendment to the Plan
shall be conditioned upon stockholder approval only to the extent, if any, such
approval is required by law (including the Code and applicable stock exchange
requirements), as determined by the Administrator.


10.          OTHER COMPENSATION ARRANGEMENTS


The
existence of the Plan or the grant of any Award will not in any way affect the
Company’s right to Award a person bonuses or other compensation in addition to
Awards under the Plan.


11.          MISCELLANEOUS


(a)           Waiver
of Jury Trial.  By accepting an Award under the Plan, each
Participant waives any right to a trial by jury in any action, proceeding or
counterclaim concerning any rights under the Plan and any Award, or under any
amendment, waiver, consent, instrument, document or other agreement delivered
or which in the future may be delivered in connection therewith, and agrees
that any such action, proceedings or counterclaim shall be tried before a court
and not before a jury. By accepting an Award under the Plan, each Participant
certifies that no officer, representative, or attorney of the Company has
represented, expressly or otherwise, that the Company would not, in the event
of any action, proceeding or counterclaim, seek to enforce the foregoing
waivers.


(b)           Limitation
of Liability. Notwithstanding anything to the contrary in
the Plan, neither the Company nor the Administrator, nor any person acting on
behalf of the Company or the Administrator, shall be liable to any Participant
or to the estate or beneficiary of any Participant by reason of any
acceleration of income, or any additional tax, asserted by reason of the
failure of an Award to satisfy the requirements of Section 422 or Section 409A
or by reason of Section 4999 of the Code; provided,
that nothing in this Section 11(b) shall limit the ability of the
Administrator or the Company to provide by express agreement with a Participant
for a gross-up payment or other payment in connection with any such tax or
additional tax.



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EXHIBIT A


Definition
of Terms


The following
terms, when used in the Plan, will have the meanings and be subject to the
provisions set forth below:


“Administrator”:  The Compensation Committee, except that the
Compensation Committee may delegate (i) to one or more of its members such
of its duties, powers and responsibilities as it may determine; (ii) to
one or more officers of the Company the power to grant rights or options to the
extent permitted by Section 157(c) of the Delaware General
Corporation Law; (iii) to one or more officers of the Company the
authority to allocate other Awards among such persons (other than officers of
the Company) eligible to receive Awards under the Plan as such delegated
officer or officers determine consistent with such delegation; provided, that with respect to any delegation described in
this clause (iii) the Compensation Committee (or a properly delegated
member or members of such Committee) shall have authorized the issuance of a
specified number of shares of Stock under such Awards and shall have specified
the consideration, if any, to be paid therefor; and (iv) to such Employees
or other persons as it determines such ministerial tasks as it deems
appropriate. In the event of any delegation described in the preceding
sentence, the term “Administrator” shall include the person or persons so
delegated to the extent of such delegation.


“Affiliate”:  Any corporation or other entity owning,
directly or indirectly, 50% or more of the outstanding Stock of the Company, or
in which the Company or any such corporation or other entity owns, directly or
indirectly, 50% of the outstanding capital stock (determined by aggregate
voting rights) or other voting interests. Notwithstanding the preceding, for purposes
of determining eligibility for the grant of an Stock Option or SAR by reason of
service with an Affiliate, the term “Affiliate” shall be limited to persons
that stand in a relationship to the Company that would result in the Company
and such person being treated as an employer under Section 414(b) or Section 414(c) of
the Code except that “at least 50%” shall be substituted for “at least 80%”
under Section 1563(a)(1), (2), and (3) of the Code and Treas. Reg. Section 1.414(c)-2,
all in accordance with the definition of “service recipient” under Section 409A
of the Code.


“Award”:  Any or a combination of the following:


(i) Stock Options.


(ii) SARs.


(iii) Restricted Stock.


(iv) Unrestricted
Stock.


(v)  Stock Units, including Restricted Stock
Units.



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(vi) Performance Awards.


(vii) Cash Awards.


(viii)  Awards (other than Awards described in (i) through
(vii) above) that are convertible into or otherwise based on Stock.


“Board”:  The Board of Directors of the Company.


“Cash
Award”:  An Award
denominated in cash.


“Code”:  The U.S. Internal Revenue Code of 1986 as
from time to time amended and in effect, or any successor statute as from time
to time in effect.


“Compensation
Committee”:  The
Compensation Committee of the Board; provided, that
until a Compensation Committee shall have been appointed, the Board shall
discharge the duties and shall exercise the authority of the Compensation
Committee hereunder and all references herein to the Compensation Committee
shall be deemed to refer to the Board.


“Company”:  Combinatorx, Incorporated.


“Covered
Transaction”:  Any of (i) a
consolidation, merger, or similar transaction or series of related
transactions, including a sale or other disposition of stock, in which the
Company is not the surviving corporation or which results in the acquisition of
all or substantially all of the Company’s then outstanding common stock by a
single person or entity or by a group of persons and/or entities acting in
concert, (ii) a sale or transfer of all or substantially all the Company’s
assets, or (iii) a dissolution or liquidation of the Company. Where a
Covered Transaction involves a tender offer that is reasonably expected to be
followed by a merger described in clause (i) (as determined by the
Administrator), the Covered Transaction shall be deemed to have occurred upon
consummation of the tender offer.


“Effective
Date”:  The date on
which the stockholders of the Company approve the Plan.


“Employee”:  Any person who is employed by the Company or
an Affiliate.


“Employment”:  A Participant’s employment
or other service relationship with the Company and its Affiliates. Employment
will be deemed to continue, unless the Administrator expressly provides
otherwise, so long as the Participant is employed by, or otherwise is providing
services in a capacity described in Section 5 to the Company or its
Affiliates. If a Participant’s employment or other service relationship is with
an Affiliate and that entity ceases to be an Affiliate, the Participant’s
Employment will be deemed to have terminated when the entity ceases to be an
Affiliate unless the Participant transfers Employment to the Company or its
remaining Affiliates.



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“ISO”:  A Stock Option intended to be an “incentive
stock option” within the meaning of Section 422 of the Code. Each option
granted pursuant to the Plan will be treated as providing by its terms that it
is to be a non-incentive option unless, as of the date of grant, it is
expressly designated as an ISO.


“Participant”:  A person who is granted an Award under the
Plan.


“Performance
Award”:  An Award
subject to Performance Criteria. The Committee in its discretion may grant
Performance Awards that are intended to qualify for the performance-based
compensation exception under Section 162(m) and Performance Awards
that are not intended so to qualify.


“Performance
Criteria”:  Specified
criteria, other than the mere continuation of Employment or the mere passage of
time, the satisfaction of which is a condition for the grant, exercisability,
vesting or full enjoyment of an Award. For purposes of Awards that are intended
to qualify for the performance-based compensation exception under Section 162(m),
a Performance Criterion will mean an objectively determinable measure of
performance relating to any or any combination of the following (measured
either absolutely or by reference to an index or indices and determined either
on a consolidated basis or, as the context permits, on a divisional,
subsidiary, line of business, project or geographical basis or in combinations
thereof): sales; revenues; assets; expenses; earnings before or after deduction
for all or any portion of interest, taxes, depreciation, or amortization,
whether or not on a continuing operations or an aggregate or per share basis;
return on equity, investment, capital or assets; one or more operating ratios;
borrowing levels, leverage ratios or credit rating; economic value created or
added; market share; capital expenditures; cash flow; stock price; stockholder
return; successful hiring of key individuals; introduction or development of
new technologies; product introduction or development, any clinical trial
accomplishments, regulatory or other filings or approvals, other product
development milestones; geographic business expansion; cost targets; employee
satisfaction; information technology development or acquisition; manufacturing
or process development; resolution of significant litigation; legal compliance
or risk reduction; patent application or patent issuances; sales of particular
products or services; customer acquisition or retention; acquisitions and
divestitures (in whole or in part); corporate development, including without
limitation, joint ventures, collaborations and strategic alliances; spin-offs,
split-ups and the like; reorganizations; or recapitalizations, restructurings,
financings (issuance of debt or equity) or refinancings. A Performance
Criterion and any targets with respect thereto determined by the Administrator
need not be based upon an increase, a positive or improved result or avoidance
of loss. To the extent consistent with the requirements for satisfying the
performance-based compensation exception under Section 162(m), to the
extent applicable, the Administrator may provide in the case of any Award
intended to qualify for such exception that one or more of the Performance
Criteria applicable to such Award will be adjusted in an objectively
determinable manner to reflect events (for example, but without limitation,
acquisitions or dispositions) occurring during the performance period that affect
the applicable Performance Criterion or Criteria.


“Plan”:  The Combinatorx, Incorporated 2004 Amended
and Restated Incentive Plan as from time to time amended and in effect.



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“Prior
Plan”:  The
Combinatorx, Incorporated 2004 Amended and Restated Incentive Plan in effect
prior to the Effective Date.


“Restricted
Stock”:  An Award of
Stock for so long as the Stock remains subject to restrictions requiring that
it be redelivered or offered for sale to the Company if specified conditions
are not satisfied.


“Restricted
Stock Unit”:  A Stock
Unit that is, or as to which the delivery of Stock or cash in lieu of Stock is,
subject to the satisfaction of specified performance or other vesting
conditions.


“Section 162(m)”:  Section 162(m) of the Code.


“Section 409A”: Section 409A of the Code.


“SARs”:  Rights entitling the holder
upon exercise to receive cash or Stock, as the Administrator determines, equal
to a function (determined by the Administrator using such factors as it deems
appropriate) of the amount by which the Stock has appreciated in value since
the date of the Award.


“Stock”:  Common Stock of the Company, par value $.001
per share.


“Stock
Unit”:  An unfunded and
unsecured promise, denominated in shares of Stock, to deliver Stock or cash
measured by the value of Stock in the future.


“Stock
Options”:  Options
entitling the recipient to acquire shares of Stock upon payment of the exercise
price.


“Unrestricted
Stock”:  An Award of
Stock not subject to any restrictions under the terms of the Award.



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