EXHIBIT 4.1


EVOLVING
SYSTEMS, INC.

2007 STOCK INCENTIVE PLAN


Adopted
by the Board of Directors on March 12, 2007

Approved by the Stockholders on June 15, 2007


1.             GENERAL


(a)           Purpose.  The
primary purposes of the Evolving Systems, Inc. 2007 Stock Incentive Plan are to
attract, retain and motivate employees, directors and consultants, to
compensate them for their contributions to the growth and profits of the
Company and its Affiliates and to encourage them to own Common Stock.


(b)           Types of Awards.  The Plan permits the award of (i) Incentive
Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation
Rights, (iv) Restricted Stock, (v) Restricted Stock Units, (vi) Performance
Awards, and (vii) Other Stock-Based Awards.


2.             DEFINITIONS


Except
as otherwise provided in an applicable Award Agreement, the following
capitalized terms shall have the meanings indicated below for purposes of the
Plan and any Award:


(a)           “Affiliate” means a
parent or subsidiary of the Company, with “parent” meaning an entity that
controls the Company directly or indirectly, through one or more
intermediaries, and “subsidiary” meaning an entity that is controlled by the
Company directly or indirectly, through one or more intermediaries.  Solely with respect to the grant of an Incentive
Stock Option, Affiliate means any parent corporation or subsidiary corporation
of the Company, whether now or hereafter existing, as those terms are defined
in Sections 424(e) and (f), respectively, of the Code.


(b)           “Award” means any
award of an Option, Stock Appreciation Right, Restricted Stock, Restricted
Stock Unit, Performance Award, or Other Stock-Based Award.


(c)           “Award Agreement”
means the written or electronic document setting forth the terms and conditions
of an Award.  The Award Agreement is
subject to the terms and conditions of the Plan.


(d)           “Board” means the
Board of Directors of Evolving Systems, Inc.


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


(i)            a sale of
substantially all of the assets of the Company;


(ii)           a merger or
consolidation in which the Company is not the surviving corporation;


(iii)          a reverse merger in
which the Company is the surviving corporation but the shares of the Common
Stock outstanding immediately preceding the merger are converted by virtue of
the merger into other property, whether in the form of securities, cash or
otherwise; or



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(iv)          the acquisition by any
person, entity or group within the meaning of Section 13(d) or 14(d) of the
Exchange Act, or any comparable successor provisions (excluding any employee
benefit plan, or related trust, sponsored or maintained by the Company or any
Affiliate of the Company) of the beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of
securities of the Company representing at least fifty percent (50%) of the
combined voting power entitled to vote in the election of directors.


(f)            “Code” means the
Internal Revenue Code of 1986, as amended, and the applicable rulings,
regulations and guidance thereunder.


(g)           “Committee” means the
Compensation Committee of the Board or any committee designated by the Board to
administer the Plan, or if no committee is appointed, the Board.  The Compensation Committee or the Board may
designate one or more subcommittees to (i) consist solely of persons who
satisfy the applicable requirements of any stock exchange or national market
system on which the shares of Common Stock may be listed, (ii) consist solely
of persons who qualify as an “outside director” within the meaning of Section
162(m) of the Code, and (iii) consist solely of persons who qualify as a “non-employee
director” within the meaning of Rule 16b-3 promulgated under the Exchange Act.


(h)           “Common Stock” means
a share of Evolving Systems, Inc., common stock, $0.001 par value per share.


(i)            “Company” means
Evolving Systems, Inc., a Delaware corporation.


(j)            “Consultant” means
any person, including an advisor, engaged by the Company or an Affiliate to
render consulting or advisory services and who is compensated for such
services.


(k)           “Continuous Service”
means continuous service as an Employee, Director or Consultant to the Company
or an Affiliate.  Unless otherwise stated
in the applicable Award Agreement, a Participant’s change in position or duties
with the Company or any Affiliate shall not result in interrupted or terminated
service, so long as such Participant continues service as an Employee, Director
or Consultant.  Whether a termination or
interruption in service shall have occurred for purposes of the Plan shall be
determined by the Committee (or its designee), which determination shall be
final, binding and conclusive.


(l)            “Covered Employee” means
the chief executive officer and the four (4) highest compensated officers of
the Company for whom total compensation is required to be reported to
stockholders under the Exchange Act, as determined for purposes of Section
162(m) of the Code and other employees who may become subject to such
reporting.


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


(n)           “Dividend Equivalents”
means any right granted under Section 11 of the Plan.


(o)           “Employee” means any
person employed by the Company or an Affiliate, determined in accordance with
the Company’s standard personnel policies and practices.


(p)           “Exchange Act” means
the U.S. Securities Exchange Act of 1934, as it may be amended from time to
time, or any successor act thereto.


(q)           “Fair Market Value”
means, as of any date, the value of the Common Stock of the Company determined
as follows:



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(i)            If the Common Stock is
listed on any established stock exchange, or traded on the Nasdaq 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 Common Stock) on the determination date, as reported in The Wall Street Journal or such other
source as the Board deems reliable. 
Unless otherwise provided by the Committee, if there is no closing sales
price (or closing bid if no sales were reported) for the Common Stock on the
determination date, then the Fair Market Value shall be the closing sales price
(or closing bid if no sales were reported) on the last preceding date for which
such quotation exists.


(ii)           In the absence of such
markets for the Common Stock, the Fair Market Value shall be determined in good
faith by the Committee.


(r)            “Full-Value Award”
means an Award of Restricted Stock, Restricted Stock Units, Performance Award
or Other Stock-Based Award.


(s)            “Incentive Stock Option”
means an Option granted under Section 6 of the Plan that is intended to meet
the requirements of Section 422 of the Code, or any successor provision
thereto.


(t)            “Nonstatutory Stock Option”
means an Option granted under Section 6 of the Plan that is not intended to be
an Incentive Stock Option.


(u)           “Option” or “Stock Option” means
a right to purchase one or more shares of Common Stock.


(v)           “Other Stock-Based Award”
means any right granted under Section 10 of the Plan.


(w)          “Participant” means
an eligible individual who is granted an Award under the Plan.


(x)           “Performance Award”
means any right granted under Section 9 of the Plan.


(y)           “Performance Criteria”
means any quantitative or qualitative measures, as determined by the Committee,
which may be used to measure the level of performance of the Company, an
Affiliate or any individual Participant during a Performance Period, including
any Qualifying Performance Criteria.


(z)            “Performance Period”
means any period as determined by the Committee in its sole discretion.


(aa)         “Person” means any
individual, corporation, partnership, association, joint-stock company, trust,
unincorporated organization, or government or political subdivision thereof.


(bb)         “Qualifying Performance Criteria”
means one or more of the following performance criteria applied to the
individual, the Company as a whole, an Affiliate, a business unit, or any
combination thereof, and measured quarterly, annually or cumulatively over a period
of years, on an absolute basis or relative to a pre-established target, to a
previous quarter or year’s results or to a designated comparison group, in each
case as specified by the Committee in the Award Agreement: (i) revenue (ii)
earnings before interest, taxes, depreciation and amortization (EBITDA), (iii)
net earnings, (iv) net income, and (v) cash flow, subject to adjustment by the
Committee to remove the effect of charges for restructurings, discontinued
operations, extraordinary items and all items of gain, loss or expense
determined to be extraordinary or unusual in nature or infrequent in
occurrence, related to the disposal of a segment or a business, or related to a
change in accounting principle or otherwise.


(cc)         “Plan” means this
Evolving Systems, Inc. 2007 Stock Incentive Plan.



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(dd)         “Restricted Stock”
means an Award of shares of Common Stock granted under Section 8 of the Plan.


(ee)         “Restricted Stock Unit”
means a right granted under Section 8 of the Plan that is denominated in shares
of Common Stock.


(ff)           “Share Reserve” means
as defined in Section 4 of the Plan.


(gg)         “Stock Appreciation Right”
means any right granted under Section 7 of the Plan.


(hh)         “Substitute Award” means
an Award granted in substitution for, or in assumption of, outstanding awards
previously granted by an entity acquired by the Company or an Affiliate or with
which the Company or Affiliate combines.


3.             PLAN ADMINISTRATION


(a)            Authority of the Committee.  Except as otherwise provided herein, the Plan
shall be administered by the Committee, which shall have the power to interpret
the Plan and to adopt such rules and guidelines for implementing the terms of
the Plan as it may deem appropriate.  The
Committee shall have the ability to modify the Plan provisions, to the extent
necessary, or delegate such authority, to accommodate any changes in law and
regulations in jurisdictions in which Participants will receive Awards.  Subject to the terms of the Plan and
applicable law, the Committee shall have full power and authority to:


(i)            designate
Participants;


(ii)           determine the type or
types of Awards to be granted to each Participant under the Plan;


(iii)          determine the number of
shares of Common Stock to be covered by (or with respect to which payments,
rights, or other matters are to be calculated in connection with) Awards;


(iv)          determine the terms and
conditions of any Award;


(v)           determine whether, to
what extent, and under what circumstances Awards may be settled or exercised in
cash, shares of Common Stock, other securities, or other Awards, or canceled,
forfeited, or suspended, and the method or methods by which Awards may be
settled, exercised, canceled, forfeited, or suspended;


(vi)          determine whether, to
what extent, and under what circumstances cash, shares of Common Stock, other
securities, other Awards, and other amounts payable with respect to an Award
under the Plan shall be deferred either automatically or at the election of the
holder thereof or of the Committee;


(vii)         interpret and administer
the Plan and any instrument or agreement relating to, or Award made under, the
Plan;


(viii)       establish, amend, suspend,
or waive such rules and guidelines;


(ix)          appoint such agents as
it shall deem appropriate for the proper administration of the Plan;



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(x)            make any other determination
and take any other action that the Committee deems necessary or desirable for
the administration of the Plan; and


(xi)           correct any defect,
supply any omission, or reconcile any inconsistency in the Plan or any Award in
the manner and to the extent it shall deem desirable to carry the Plan into
effect.


(b)           Administrative Actions.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee, may
be made at any time, and shall be final, conclusive, and binding upon all
Persons, including the Company, any Affiliate, any Participant, any holder or
beneficiary of any Award, any stockholder, and any employee of the Company or
of any Affiliate.  Actions of the
Committee may be taken by:


(i)             the Chairman of the
Committee;


(ii)            a subcommittee,
designated by the Committee;


(iii)           the Committee but with
one or more members abstaining or recusing himself or herself from acting on
the matter, so long as two or more members remain to act on the matter.  Such action, authorized by such a
subcommittee or by the Committee upon the abstention or recusal of such
members, shall be the action of the Committee for purposes of the Plan; or


(iv)          one or more officers of
the Company, as authorized by the Committee, or a committee of such officers
whose authority is subject to such terms and limitations set forth by the
Committee, and only with respect to Participants who are not officers or
directors of the Company for purposes of Section 16 of the Exchange Act.


(c)           No Liability.  No member of the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan, any Award or any Award Agreement.


4.             SHARES SUBJECT TO THE
PLAN


(a)           Shares Available.  Subject to adjustment as
provided in Section 14 of the Plan, the maximum aggregate number of shares of
Common Stock that may be issued pursuant to Awards granted under the Plan shall
be 2,000,000 shares (“Share
Reserve”).  Each share of Common Stock
issued pursuant to an Award shall reduce the Share Reserve by one (1) share; provided, however, that for each
Full-Value Award, the Share Reserve shall be reduced by one and one-half (1.5)
shares.  To the extent that a
distribution pursuant to an Award is made in cash, the Share Reserve shall be
reduced by the number of shares of Common Stock subject to the redeemed or
exercised portion of the Award. 
Notwithstanding any other provision of the Plan to the contrary, the
maximum aggregate number of shares of Common Stock that may be issued under the
Plan pursuant to Incentive Stock Options is 2,000,000 shares, subject to
adjustment as provided in Section 14 of the Plan.


(b)           Individual Award Limits.  Subject to adjustment as provided in Section
14, the number of shares of Common Stock that may be granted under the Plan
during any calendar year to an individual Participant shall not exceed 500,000
shares.  The maximum dollar amount that
may be paid to a single Participant in any calendar year shall not exceed
$500,000.


(c)           Changes to the Share Reserve.  If an Award granted under the
Plan shall for any reason (i) expire, be canceled or otherwise terminate, in
whole or in part, without having been exercised or redeemed in full, (ii) be
reacquired by the Company prior to vesting, or (iii) be repurchased at cost by
the Company prior to vesting, the shares of Common Stock not acquired by the
Participant under such Award shall revert or be added to the Share Reserve and
become available for issuance under the Plan; 



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provided, however,
that shares of Common Stock shall not revert or be added to the Share Reserve
that are (A) tendered in payment of an Option, (B) withheld by the Company to
satisfy any tax withholding obligation, or (C) purchased by the Company with
the proceeds from the exercise of Options, and provided,
further, that shares of Common Stock covered by a Stock Appreciation
Right, to the extent the right is exercised and settled in shares of Common
Stock, and whether or not shares of Common Stock are actually issued to the
Participant upon exercise of the Stock Appreciation Right, shall be considered
issued or transferred pursuant to the Plan.


(d)           Source of Shares.  Any shares of Common Stock delivered pursuant
to an Award may consist, in whole or in part, of authorized and unissued shares
or reacquired shares, bought on the market or otherwise.


(e)           Substitute Awards.  In
the case of Substitute Awards, the shares of Common Stock subject to the
Substitute Award shall not reduce the Share Reserve.  If a Substitute Award shall for any reason
expire, be canceled or otherwise terminate, in whole or in part, be settled in
cash or otherwise settled by issuance of fewer shares, the shares of Common
Stock not acquired by the Participant shall not be added to the Share
Reserve.  Further, any shares of Common
Stock withheld or delivered to pay tax withholding obligations relating to a
Substitute Award shall not reduce the Share Reserve.


5.             ELIGIBILITY


Individuals
eligible to participate in this Plan include Employees, Directors and
Consultants of the Company, or any Affiliate; provided,
however, to the extent required under Section 409A of the Code, an
Affiliate of the Company shall include only an entity in which the Company
possesses at least twenty percent (20%) of the total combined voting power of
the entity’s outstanding voting securities or such other threshold ownership
percentage permitted under Section 409A of the Code.


6.             STOCK OPTIONS


(a)           Grant of Options.  The Committee is hereby authorized to grant
Options to Participants with the following terms and conditions, and any other
terms and conditions not inconsistent with the provisions of the Plan, as the
Committee shall determine.  Incentive
Stock Options may be granted only to eligible Employees of the Company or of
any parent corporation or subsidiary corporation (as permitted by Section 422
of the Code).


(b)           Award Agreement.  Each Option granted under the Plan shall be
evidenced by an Award Agreement.  The Award
Agreement shall specify whether the Option is intended to be an Incentive Stock
Option or a Nonstatutory Stock Option.


(i)            Exercise Price.  The purchase price per share of Common Stock
that may be purchased by an Option shall be determined by the Committee; provided, however, and except with respect
to Substitute Awards or as provided in Section 14, that such purchase price
shall not be less than 100% of the Fair Market Value of a share of Common Stock
on the date of grant of such Option.


(ii)           Term.  The term of each Option shall not exceed ten
(10) years from the date of grant.


(iii)            Vesting; Restrictions on Exercise.  The Award Agreement shall set forth any
installment or other restrictions on exercise of the Option during the term of
the Option.  Each Option shall become
exercisable and shall vest over such period of time, or upon such events or
such Performance Criteria, as determined by the Committee.



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(iv)          Time and Method of Exercise.  The Committee shall establish in the
applicable Award Agreement the time or times at which an Option may be
exercised in whole or in part, and the method or methods by which, and the form
or forms, including, without limitation, cash, shares of Common Stock, or other
Awards or any combination thereof, having a Fair Market Value on the exercise
date equal to the relevant exercise price, in which payment of the exercise
price with respect thereto may be made or deemed to have been made.


(v)           Termination of
Continuous Service.  Each
Award Agreement shall set forth the extent, if any, to which the Participant
shall have the right to exercise the Option following termination of the
Participant’s Continuous Service.  Such
provisions shall be determined in the sole discretion of the Committee, need
not be uniform among all Options issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination of Continuous Service. In the
absence of specific provisions in an Award Agreement setting forth rights to
exercise following termination of a Participant’s Continuous Service, the
following shall apply:


(A)          Termination of Continuous Service Other than as a
Result of Disability or Death. 
In the event a Participant’s Continuous Service terminates (other than
upon the Participant’s death or disability), the Participant may exercise his
or her Option (to the extent that the Participant was entitled to exercise it
as of the date of termination) but only within such period of time ending on
the earlier of (a) the date three (3) months after the termination of the Participant’s
Continuous Status as an Employee, Director or Consultant (or such longer or
shorter period specified in the Option Agreement), or (b) the expiration of the
term of the Option as set forth in the Option Agreement.  If, at the date of termination, the
Participant is not entitled to exercise his or her entire Option, the shares
covered by the unexercisable portion of the Option shall revert to and again
become available for issuance under the Plan. 
If, after termination, the Participant does not exercise his or her
Option within the time specified in the Option Agreement, the Option shall
terminate, and the shares covered by such Option shall revert to and again
become available for issuance under the Plan.


(B)           Disability of a Participant.  In the event a Participant’s Continuous
Service terminates as a result of the Participant’s disability, the Participant
may exercise his or her Option (to the extent that the Participant was entitled
to exercise it as of the date of termination), but only within such period of
time ending on the earlier of (i) the date twelve (12) months following such
termination (or such longer or shorter period specified in the Option
Agreement), or (ii) the expiration of the term of the Option as set forth in
the Option Agreement.  If, at the date of
termination, the Participant is not entitled to exercise his or her entire
Option, the shares covered by the unexercisable portion of the Option shall
revert to and again become available for issuance under the Plan.  If, after termination, the Participant does
not exercise his or her Option within the time specified herein, the Option
shall terminate, and the shares covered by such Option shall revert to and
again become available for issuance under the Plan.


(C)           Death of a Participant.  In
the event of the death of a Participant during, or within a period specified in
the Option Agreement after the termination of, the Participant’s Continuous
Service, the Option may be exercised (to the extent the Participant was
entitled to exercise the Option as of the date of death) by the Participant’s
estate, by a person who acquired the right to exercise the Option by bequest or
inheritance or by a person designated to exercise the option upon the
Participant’s death pursuant to subsection 15(b), but only within the period
ending on the earlier of (1) the date eighteen (18) months following the date
of death (or such longer or shorter period specified in the Option Agreement),
or (2) the expiration of the term of such Option as set forth in the Option
Agreement.  If, at the time of death, the
Participant was not entitled to exercise his or her entire Option, the shares
covered by the unexercisable portion of the Option shall revert to and again
become available for issuance under the Plan. 
If, after death, the Option is not exercised within the time specified
herein, the Option shall terminate, and the shares covered by such Option shall
revert to and again become available for issuance under the Plan.



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(c)           Limitations on Incentive Stock Options.


(i)             Initial Exercise.  The aggregate Fair Market Value of the shares
of Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by a Participant in any calendar year, under the Plan or
otherwise, shall not exceed $100,000. 
For this purpose, the Fair Market Value of the shares of Common Stock
shall be determined as of the date of grant and each Incentive Stock Option
shall be taken into account in the order granted.


(ii)            Ten Percent Stockholders.  An Incentive Stock Option granted to a
Participant who is the holder of record of more than ten percent (10%) of the
combined voting power of all classes of stock of the Company shall have an
exercise price at least equal to 110% of the Fair Market Value of a share of
Common Stock on the date of grant and the term of the Option shall not exceed
five (5) years.


(iii)           Notification of Disqualifying
Disposition.  If any
Participant shall make any disposition of shares of Common Stock acquired
pursuant to the exercise of an Incentive Stock Option under the circumstances
described in Section 421(b) of the Code (relating to certain disqualifying
dispositions), the Participant shall notify the Company of such disposition
within ten (10) days thereof.


7.             STOCK APPRECIATION
RIGHTS


(a)           Grant of Stock Appreciation Rights.  The Committee is hereby authorized to grant
Stock Appreciation Rights to Participants. 
Subject to the terms of the Plan and any applicable Award Agreement, a
Stock Appreciation Right granted under the Plan shall confer on the holder
thereof a right to receive, upon exercise thereof, the excess of (i) the Fair
Market Value of a share of Common Stock on the date of exercise over (ii) the
grant price of the Stock Appreciation Right as specified by the Committee.


(b)           Award Agreement.  Each Stock Appreciation Right granted under
the Plan shall be evidenced by an Award Agreement.


(i)            Grant Price.  The grant price shall be determined by the
Committee; provided, however, and
except as provided in Section 14, that such price shall not be less than 100%
of the Fair Market Value of one share of Common Stock on the date of grant,
except that if a Stock Appreciation Right is at any time granted in tandem with
an Option, the grant price of the Stock Appreciation Right shall not be less
than the exercise price of such Option.


(ii)           Term. The term of
each Stock Appreciation Right shall not exceed ten (10) years from the date of
grant.


(iii)          Time and Method of Exercise.  The Committee shall establish in the
applicable Award Agreement the time or times at which a Stock Appreciation
Right may be exercised in whole or in part. 
At the discretion of the Committee, the payment upon exercise may be in
cash, shares of Common Stock or any combination thereof, or in any other manner
approved by the Committee in its sole discretion.  The Committee’s determination as to the form
of settlement shall be set forth in the Award Agreement.


(iv)          Termination of Continuous Service.  Each Award Agreement shall set forth the
extent, if any, to which the Participant shall have the right to exercise the
Stock Appreciation Right following termination of the Participant’s Continuous
Service.  Such provisions shall be
determined in the sole discretion of the Committee, need not be uniform among
all Stock Appreciation Rights issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination of Continuous Service.



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8.             RESTRICTED STOCK AND
RESTRICTED STOCK UNITS


(a)           Grant of Restricted Stock or
Restricted Stock Units.  The Committee is hereby authorized to grant
Awards of Restricted Stock and Restricted Stock Units to Participants.


(b)           Award Agreement.  Each grant of Restricted Stock or Restricted
Stock Units shall be evidenced by an Award Agreement.


(i)            Restrictions on Transfer.  Shares of Restricted Stock and Restricted
Stock Units shall be subject to such restrictions as the Committee may
establish in the applicable Award Agreement (including, without limitation, any
limitation on the right to vote a share of Restricted Stock or the right to receive
any dividend or other right), which restrictions may lapse separately or in
combination at such time or times, in such installments or otherwise, as the
Committee may deem appropriate. 
Unrestricted shares of Common Stock, evidenced in such manner as the
Committee shall deem appropriate, shall be delivered to the holder of
Restricted Stock promptly after such restrictions have lapsed.


(ii)           Share Registration.  Any Restricted Stock granted under the Plan
may be evidenced in such manner as the Committee may deem appropriate,
including, without limitation, book-entry registration or issuance of a stock
certificate or certificates.  In the
event any stock certificate is issued in respect of shares of Restricted Stock
granted under the Plan, such certificate shall be registered in the name of the
Participant and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock.


(iii)          Forfeiture.  Upon termination of Continuous
Service during the restriction period, except as determined otherwise by the
Committee, all shares of Restricted Stock and all Restricted Stock Units that
are then subject to restrictions shall be forfeited and reacquired by the
Company.


9.             PERFORMANCE AWARDS


(a)           Grant of Performance Awards.  The Committee is hereby authorized to grant
Performance Awards to Participants. 
Performance Awards include arrangements under which the grant, issuance,
retention, vesting and/or transferability of any Award is subject to such
Performance Criteria and such additional conditions or terms as the Committee
may designate.


(b)           Award Agreement.  Each grant of a Performance Award shall be
evidenced by an Award Agreement.  Subject
to the terms of the Plan and any applicable Award Agreement, a Performance
Award granted under the Plan:


(i)            may be denominated or
payable in cash, shares of Common Stock (including, without limitation,
Restricted Stock), other securities, or other Awards; and


(ii)           shall confer on the
holder thereof rights valued as determined by the Committee and payable to, or
exercisable by, the holder of the Performance Award, in whole or in part, upon
the achievement of such performance goals during such Performance Periods as
the Committee shall establish.


(c)           Covered Employee. The
Committee may from time to time grant Awards to Covered Employees that are
intended to satisfy the performance-based compensation requirements of Section
162(m) of the Code.  For purposes of such
Awards, the Committee shall consider all of the requirements of Section 162(m),
including the Qualifying Performance Criteria, approvals and certification by
solely 



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outside directors, the individual Award limits and any other
requirements under Section 162(m) of the Code.


10.          OTHER STOCK-BASED AWARDS


The
Committee is hereby authorized to grant to Participants such other Awards that
are denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, shares of Common Stock, as are deemed by the
Committee to be consistent with the purposes of the Plan, provided,
however, that such grants must comply with applicable law.  Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the terms and
conditions of such Awards.  Shares of
Common Stock or other securities delivered pursuant to a purchase right granted
under this Section 10 shall be purchased for such consideration, which may be
paid by such method or methods and in such form or forms, including, without
limitation, cash, shares of Common Stock, other securities, or other Awards, or
any combination thereof, as the Committee shall determine.


11.          DIVIDEND EQUIVALENTS


The
Committee is hereby authorized to grant to Participants the right, if so
determined by the Committee, to receive, currently, or on a deferred basis,
dividends or Dividend Equivalents, with respect to the shares of Common Stock
covered by the Award.  The Committee may
provide that any dividends paid on shares of Common Stock subject to an Award
must be reinvested in additional shares of Common Stock, which may or may not
be subject to the same vesting conditions and restrictions applicable to the
Award.  Notwithstanding the award of
Dividend Equivalents or dividends, a Participant shall not be entitled to
receive a special or extraordinary dividend or distribution unless the
Committee shall have expressly authorized such receipt.  All distributions, if any, received by a
Participant with respect to an Award as a result of any split, Common Stock
dividend, combination of shares of Common Stock, or other similar transaction
shall be subject to the restrictions applicable to the original Award.


12.          TAX WITHHOLDING


The
Company or any Affiliate shall be authorized to withhold from any Award granted
or any payment due or transfer made under any Award or under the Plan the
amount (in cash, shares of Common Stock, other securities, or other Awards) of
withholding taxes due in respect of an Award, its exercise, or any payment or
transfer under such Award or under the Plan and to take such other action as
may be necessary in the opinion of the Company or Affiliate to satisfy
statutory withholding obligations for the payment of such taxes.


13.          CANCELLATION AND
RE-GRANT OF OPTIONS


(a)           The
Board or the Committee shall have the authority to effect, at any time and from
time to time (i) the repricing of any outstanding Options under the Plan and/or
(ii) with the consent of the affected holders of Options, the cancellation of
any outstanding Options and the grant in substitution therefor of new Options
under the Plan covering the same or different numbers of shares of Common Stock,
but having an exercise price per share not less than 100% of the Fair Market
Value, or, in the case of a ten percent (10%) stockholder (as defined in
subsection 6(c)), not less than 110% of the Fair Market Value) per share of
Common Stock on the new grant date.


(b)           Prior
to the implementation of any such repricing or cancellation of one or more
outstanding Options as described in Section 13(c), the Board shall obtain the
approval of the stockholders of the Company to the extent required by the New
York Stock Exchange, Nasdaq or other securities exchange listing requirements
applicable to the Company, or applicable law.



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(c)           To
the extent required by Section 162(m) of the Code, shares subject to an Option
canceled under this Section 13 shall continue to be counted against the maximum
award of Options permitted to be granted during any calendar year to an
individual Participant pursuant to Section 4(b) of the Plan.  The repricing of an Option hereunder
resulting in a reduction of the exercise price shall be deemed to be a
cancellation of the original Option and the grant of a new Option; in the event
of such repricing, both the original and the new Options shall be counted
against the maximum awards of Options permitted to be granted during any
calendar year to an individual Participant pursuant to Section 4(b) of the
Plan.  The provisions of this Section
13(c) shall be applicable only to the extent required by Section 162(m) of the
Code.


14.           ADJUSTMENTS UPON
CHANGES IN STOCK


(a)           Changes in Capital.  If any change is made in the
Common Stock subject to the Plan, or subject to any Award, without the receipt
of consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan will be appropriately
adjusted in the class(es) and maximum number of shares subject to the Plan and
the maximum number of shares subject to award to any person during any calendar
year, and the outstanding Awards will be appropriately adjusted in the
class(es) and number of shares and price per share of stock subject to such
outstanding Awards.  Such adjustments
shall be made by the Committee proportionately, so as to put the Participant in
the same economic position both prior to and after the change in capital.  The determination of the Committee shall be
final, binding and conclusive.  (The
conversion of any convertible securities of the Company shall not be treated as
a “transaction not involving the receipt of consideration by the Company.”)


(b)           Change of Control.  In the event of a Change of
Control, to the extent permitted by applicable law: (i) any surviving
corporation (or an Affiliate thereof), shall assume any Awards outstanding
under the Plan or shall substitute similar Awards for those outstanding under
the Plan and (ii) such Awards shall continue in full force and
effect.  In the event any surviving
corporation (or an Affiliate) refuses to assume or continue such Awards, or to
substitute similar Awards for those outstanding under the Plan, then vesting
(or release from the repurchase option) shall accelerate such that such Awards
are fully vested at such event and shall be exercisable for a period of 15 days
after notice from the Company.  If not so
exercised within the 15 day period, then such Awards shall be terminated.


15.           GENERAL PROVISIONS


(a)           
Forms of Payment for
Awards.  Subject to the
terms of the Plan and any applicable Award Agreement, payments or transfers to
be made by the Company or an Affiliate upon the grant, exercise, or payment of
an Award may be made in such form or forms as the Committee shall determine,
including, without limitation, cash, shares of Common Stock, rights in or
shares issuable under the Award or other Awards, other securities, or other
Awards or any combination thereof, and may be in a single payment or transfer,
in installments, or on a deferred basis, in each case in accordance with the
rules and procedures established by the Committee.  Such rules and procedures may include,
without limitation, provisions for the payment or crediting of reasonable
interest on installment or deferred payments or the grant or crediting of
Dividend Equivalents in respect of installment or deferred payments.


(b)           Limits on Transfer of Awards.  Except as provided by the Committee, no Award,
and no right under any such Award, shall be assignable, alienable, saleable, or
transferable by a Participant otherwise than by will or by the laws of descent
and distribution; provided, however, that, if so
determined by the Committee, a Participant may, in the manner established by
the Committee, designate a beneficiary or beneficiaries to exercise the rights
of the Participant with respect to any Award upon the 



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death of a Participant.  Each
Award, and each right under any Award, shall be exercisable, during the
Participant’s lifetime, only by the Participant or, if permissible under
applicable law, by the Participant’s guardian or legal representative.  No Award, and no right under any such Award,
may be pledged, alienated, attached, or otherwise encumbered, and any purported
pledge, alienation, attachment, or encumbrance thereof shall be void and
unenforceable against the Company or any Affiliate.


(c)           Conditions and Restrictions Upon
Securities Subject to Awards. 
The Committee may provide that the shares of Common Stock issued upon
exercise of an Option or Stock Appreciation Right or otherwise subject to or
issued under an Award shall be subject to such further agreements, restrictions,
conditions or limitations as the Committee in its discretion may specify prior
to the exercise of such Option or Stock Appreciation Right or the grant,
vesting or settlement of such Award, including without limitation, conditions
on vesting or transferability and forfeiture or repurchase provisions or
provisions on payment of taxes arising in connection with an Award.  Without limiting the foregoing, such
restrictions may address the timing and manner of any resales by the Participant
or other subsequent transfers by the Participant of any shares of Common Stock
issued under an Award, including without limitation: (i) restrictions under an
insider trading policy or pursuant to applicable law; (ii) restrictions
designed to delay and/or coordinate the timing and manner of sales by
Participant and holders of other Company equity compensation arrangements;
(iii) restrictions as to the use of a specified brokerage firm for such resales
or other transfers; and (iv) provisions requiring shares to be sold on the open
market or to the Company in order to satisfy tax withholding or other
obligations.


(d)           Share Certificates.  All shares or other securities delivered
under the Plan pursuant to any Award or the exercise thereof shall be subject
to such stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations, and other requirements of
the Securities and Exchange Commission, any stock exchange upon which such
shares of Common Stock or other securities are then listed, and any applicable
Federal, state, or local securities laws, and the Committee may cause a legend
or legends to be put on any such certificates to make appropriate reference to
such restrictions.  Notwithstanding any
other provision of this Plan to the contrary, the Company may elect to satisfy
any requirement under this Plan for the registration or delivery of stock
certificates through the use of book-entry registration.


(e)           
Changes in Accounting or
Tax Rules.  Except as
provided otherwise at the time an Award is granted, notwithstanding any other
provision of the Plan to the contrary, if, during the term of the Plan, any
changes in the financial or tax accounting rules applicable to any Award shall
occur which, in the sole judgment of the Committee, may have a material adverse
effect on the reported earnings, assets or liabilities of the Company, the
Committee shall have the right and power to modify, as necessary, any then
outstanding and unexercised Options, Stock Appreciation Rights and other
outstanding Awards as to which the applicable services or other restrictions
have not been satisfied.


(f)            Nonexclusivity of the Plan.  The adoption of the Plan shall not be
construed as creating any limitations upon the right and authority of the
Committee to adopt such other incentive compensation arrangements (which
arrangements may be applicable either generally to a class or classes of
individuals or specifically to a particular individual or particular
individuals) as the Committee in its discretion determines desirable.


(g)           Other Award Agreement Provisions.  Each Award Agreement may contain such other
terms and conditions not inconsistent with the Plan as may be determined by the
Committee, in its sole discretion.


(h)           Other Employee Benefits.  The amount of any compensation deemed to be
received by a Participant as a result of the exercise of an Option or Stock
Appreciation Right, the sale of shares received upon such exercise, the vesting
of any Restricted Stock, receipt of Performance Shares, distributions with respect
to Restricted Stock Units, Performance Awards, or Other Stock-Based Awards 



 12
 









shall not constitute “earnings” or “compensation” with respect to which
any other employee benefits of such employee are determined, including without
limitation, benefits under any pension, profit sharing, 401(k), life insurance
or salary continuation plan.


(i)            Severability.  If any provision of the Plan or any Award
Agreement shall be determined to be illegal or unenforceable by any court of
law in any jurisdiction, the remaining provisions hereof and thereof shall be
severable and enforceable in accordance with their terms, and all provisions
shall remain enforceable in any other jurisdiction.


(j)            Governing Law.  The validity and construction of this Plan
and the Award Agreements shall be construed in accordance with and governed by
the laws of the State of Delaware other than any conflicts or choice of law
rule or principle that might otherwise refer construction or interpretation of
this Plan and the Award Agreements to the substantive laws of any other
jurisdiction.


(k)           Section 409A.  Notwithstanding anything in this Plan to the
contrary, the Plan and Awards made under the Plan are intended to comply with
the requirements imposed by Section 409A of the Code.  If any Plan provision or Award under the Plan
would result in the imposition of an additional tax under Section 409A of the
Code, the Company and the Participant intend that the Plan provision or Award
will be reformed to avoid imposition, to the extent possible, of the applicable
tax and no action taken to comply with Section 409A of the Code shall be deemed
to adversely affect the Participant’s rights to an Award.  The Participant further agrees that the
Committee, in the exercise of its sole discretion and without the consent of
the Participant, may amend or modify an Award in any manner and delay the
payment of any amounts payable pursuant to an Award to the minimum extent
necessary to meet the requirements of Section 409A of the Code as the Committee
deems appropriate or desirable.


(l)            Stockholder Rights.  No Participant nor any other holder of an
Award granted under the Plan shall be deemed to be the holder of, or to have
any of the rights of a holder with respect to, any shares subject to such Award
unless and until such person has satisfied all requirements for exercise of the
Award or lapse of restrictions pursuant to its terms.


16.          AMENDMENT, MODIFICATION
AND TERMINATION


(a)           Amendment, Modification, and
Termination.  Subject to
Sections 3, 15(k) and 16(b), the Board may at any time terminate, and from time
to time may amend or modify, the Plan; provided, however,
that no amendment or modification may become effective without approval of the
stockholders of the Company if stockholder approval is required to enable the
Plan to satisfy any applicable statutory or regulatory requirements, or if the
Company, on the advice of counsel, determines that stockholder approval is
otherwise necessary or desirable.


(b)           Awards Previously Granted.  Except as otherwise may be required under
Section 15(k), notwithstanding Section 16(a), to the contrary, no amendment,
modification or termination of the Plan or Award Agreement shall adversely
affect in any material way any previously granted Award, without the written
consent of the Participant holding such Award.


17.          STOCKHOLDER APPROVAL;
EFFECTIVE DATE OF PLAN


The
Plan shall be effective immediately upon approval by the stockholders.  Unless sooner terminated by the Board, this
Plan shall terminate automatically on March 11, 2017.  After the Plan is terminated, no Awards may
be granted.  Awards outstanding at the
time the Plan is terminated shall remain outstanding in accordance with the
terms and conditions of the Plan and the Award Agreement.



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