Exhibit 10.1





Exhibit 10.1




HEALTHSPORT, INC.

2009 EQUITY INCENTIVE PLAN




EFFECTIVE AS OF DECEMBER 1, 2009





 


 









 







HEALTHSPORT, INC.

2009 EQUITY INCENTIVE PLAN




EFFECTIVE AS OF DECEMBER 1, 2009




SECTION 1. INTRODUCTION.





The Company’s Board of Directors adopted the Healthsport, Inc. 2009 Equity Incentive Plan
effective as of December 1, 2009 (the “Adoption Date”). The Plan is effective on the
Adoption Date.




The purpose of the Plan is to promote the long-term success of the Company and the creation
of stockholder value by offering Key Employees an opportunity to acquire a proprietary
interest in the success of the Company, or to increase such interest, and to encourage such
Key Employees to continue to provide services to the Company and to attract new individuals
with outstanding qualifications.




The Plan seeks to achieve this purpose by providing for Awards in the form of Nonstatutory
Stock Options, Stock Appreciation Rights, Stock Awards and Stock Units. ISOs cannot be
awarded under this Plan.




The Plan shall be governed by, and construed in accordance with, the laws of the State of
Delaware (except its choice-of-law provisions). Capitalized terms shall have the meaning
provided in Section 2 unless otherwise provided in this Plan or any related Stock Option
Agreement, SAR Agreement, Stock Award Agreement or Stock Unit Agreement.



SECTION 2. DEFINITIONS.





(a) “Affiliate” means any entity other than a Subsidiary, if the Company and/or one or more
Subsidiaries own not less than 50% of such entity.




(b) “Award” means any award of an Option, SAR, Stock Award or Stock Unit under the Plan.




(c) “Board” means the Board of Directors of the Company, as constituted from time to time.




(d) “California Participant” means a Participant whose Award was issued in reliance on
Section 25102(o) of the California Corporations Code.




(e) “Cashless Exercise” means, to the extent that a Stock Option Agreement so provides and
as permitted by applicable law, a program approved by the Committee in which payment may be
made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable
direction to a securities broker to sell Shares and to deliver all or part of the sale
proceeds to the Company in payment of the aggregate Exercise
Price and any applicable tax withholding obligations (up to the maximum amount permitted by
applicable law) relating to the Option.


 


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(f) “Cause” means, except as may otherwise be provided in a Participant employment agreement
or applicable Award agreement, (i) a conviction of a Participant for a felony crime or the
failure of a Participant to contest prosecution for a felony crime, or (ii) a Participant’s
misconduct, fraud, disloyalty or dishonesty (as such terms may be defined by the Committee
in its sole discretion), or (iii) any unauthorized use or disclosure of confidential
information or trade secrets by a Participant, or (iv) a Participant’s negligence,
malfeasance, breach of fiduciary duties, neglect of duties, or (v) any material violation by
a Participant of a written Company or Subsidiary or Affiliate policy or any material breach
by a Participant of a written agreement with the Company or Subsidiary or Affiliate, or (vi)
any other act or omission by a Participant that, in the opinion of the Committee, could
reasonably be expected to adversely affect the Company’s or a Subsidiary’s or an Affiliate’s
business, financial condition, prospects and/or reputation. In each of the foregoing
subclauses (i) through (vi), whether or not a “Cause” event has occurred will be determined
by the Committee in its sole discretion and the Committee’s determination shall be
conclusive, final and binding.




(g) “Change in Control” except as may otherwise be provided in a Participant’s employment
agreement or Award agreement, means the occurrence of any of the following:




(i) The consummation of an acquisition, a merger or consolidation of the
Company with or into another entity or any other corporate reorganization, if more
than 50% of the combined voting power of the continuing or surviving entity’s
securities outstanding immediately after such acquisition, merger, consolidation or
other reorganization is owned by persons who in the aggregate owned less than 20% of
the Company’s combined voting power represented by the Company’s outstanding
securities immediately prior to such acquisition, merger, consolidation or other
reorganization;




(ii) The sale, transfer or other disposition of all or substantially all of the
Company’s assets; or




(iii) When a majority of the members of the Board shall not be Company
Incumbent Directors.




A transaction shall not constitute a Change in Control if its sole purpose is to change
the state of the Company’s incorporation or to create a holding company that will be owned
in substantially the same proportions by the persons who held the Company’s securities
immediately before such transactions.




(h) “Code” means the Internal Revenue Code of 1986, as amended.




(i) “Committee” means a committee consisting of one or more members of the Board that is
appointed by the Board (as described in Section 3) to administer the Plan.


 


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(j) “Common Stock” means the Company’s common stock, par value $0.0001 per share, and any
other securities into which such shares are changed, for which such shares are exchanged or
which may be issued in respect thereof.




(k) “Company” means Healthsport, Inc., a Delaware corporation.




(l) “Company Incumbent Directors” means (A) individuals who as of the Adoption Date are
members of the Board, (B) individuals elected or directors of the Company subsequent to the
Adoption Date for whose election proxies shall have been solicited by the Board, or (C) any
individual elected or appointed to the Board to fill vacancies of the Board caused by death
or resignation (but not by removal) or to fill newly created directorships.




(m) “Consultant” means an individual who performs bona fide services to the Company, a
Parent, a Subsidiary or an Affiliate other than as an Employee or Director or Non-Employee
Director.




(n) “Covered Employees” means those persons whose compensation is subject to the deduction
limitations of Code Section 162(m).




(o) “Director” means a member of the Board who is also an Employee.




(p) “Disability” means that the Key Employee is classified as disabled under a long-term
disability policy of the Company or, if no such policy applies, the Key Employee is unable
to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than twelve (12) months. The
Disability of a Key Employee shall be determined solely by the Committee on the basis of
such medical evidence as the Committee deems warranted under the circumstances.




(q) “Employee” means any individual who is a common-law employee of the Company, a Parent, a
Subsidiary or an Affiliate.




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




(s) “Exercise Price” means, in the case of an Option, the amount for which a Share may be
purchased upon exercise of such Option, as specified in the applicable Stock Option
Agreement. “Exercise Price,” in the case of a SAR, means an amount, as specified in the
applicable SAR Agreement, which is subtracted from the Fair Market Value in determining the
amount payable upon exercise of such SAR.




(t) “Fair Market Value” means the market price of a Share, determined by the Committee as
follows:




(i) If the Shares were traded on a stock exchange (such as the New York Stock
Exchange, the NASDAQ Global Market or NASDAQ Capital Market) at the time of
determination, then the Fair Market Value shall be equal to
the regular session closing price for such stock as reported by such exchange
(or the exchange or market with the greatest volume of trading in the Shares) on the
date of determination, or if there were no sales on such date, on the last date
preceding such date on which a closing price was reported;


 


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(ii) If the Shares were traded on the OTC Bulletin Board at the time of
determination, then the Fair Market Value shall be equal to the last-sale price
reported by the OTC Bulletin Board for such date, or if there were no sales on such
date, on the last date preceding such date on which a sale was reported; and




(iii) If neither of the foregoing provisions is applicable, then the Fair
Market Value shall be determined by the Committee in good faith using a reasonable
application of a reasonable valuation method as the Committee deems appropriate.




Whenever possible, the determination of Fair Market Value by the Committee shall be
based on the prices reported by the applicable exchange or the OTC Bulletin Board,
as applicable, or a nationally recognized publisher of stock prices or quotations
(including an electronic on-line publication). Such determination shall be
conclusive and binding on all persons.




(u) “Fiscal Year” means the Company’s fiscal year.




(v) “Grant” means any grant of an Option or a SAR under the Plan.




(w) “Incentive Stock Option” or “ISO” means an incentive stock option described in Code
section 422.




(x) “Key Employee” means an Employee, Director, Non-Employee Director or Consultant who has
been selected by the Committee to receive an Award under the Plan.




(y) “Non-Employee Director” means a member of the Board who is not an Employee.




(z) “Nonstatutory Stock Option” or “NSO” means a stock option that is not an ISO.




(aa) “Officer” means an individual who is an officer of the Company within the meaning of
Rule 16a-1(f) of the Exchange Act.




(bb) “Option” means an NSO granted under the Plan entitling the Optionee to purchase a
specified number of Shares, at such times and applying a specified Exercise Price, as
provided in the applicable Stock Option Agreement.




(cc) “Optionee” means an individual, estate or other entity that holds an Option.




(dd) “Parent” means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, if each of the corporations other than the Company
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. A
corporation that attains the status of a Parent on a date after the Adoption Date shall be
considered a Parent commencing as of such date.


 


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(ee) “Participant” means an individual or estate or other entity that holds an Award.




(ff) “Performance Goals” means one or more objective measurable performance factors as
determined by the Committee with respect to each Performance Period based upon one or more
of the following: (i) operating income; (ii) earnings before interest, taxes, depreciation
and amortization, or EBITDA; (iii) earnings; (iv) cash flow; (v) market share; (vi) sales or
revenue; (vii) expenses; (viii) cost of goods sold; (ix) profit/loss or profit margin; (x)
working capital; (xi) return on equity or assets; (xii) earnings per share; (xiii) economic
value added, or EVA; (xiv) stock price; (xv) price/earnings ratio; (xvi) debt or
debt-to-equity; (xvii) accounts receivable; (xviii) writeoffs; (xix) cash; (xx) assets;
(xxi) liquidity; (xxii) operations; (xxiii) research or related milestones; (xxiv) business
development; (xxv) intellectual property (e.g., patents); (xxvi) product development;
(xxvii) regulatory activity; (xxviii) information technology; (xxix) financings; (xxx)
product quality control; (xxxi) management; (xxxii) human resources; (xxxiii) corporate
governance; (xxxiv) compliance program; (xxxv) legal matters; (xxxvi) internal controls;
(xxxvii) policies and procedures; (xxxviii) accounting and reporting; (xxxix) strategic
alliances, licensing and partnering; (xl) site, plant or building development; and/or (xli)
mergers and acquisitions or divestitures; each with respect to the Company and/or one or
more Affiliates or operating units as determined by the Committee in its sole discretion.
Awards issued to persons who are not Covered Employees may take into account other (or no)
factors.




(gg) “Performance Period” means any period not exceeding 36 months as determined by the
Committee, in its sole discretion. The Committee may establish different Performance
Periods for different Participants, and the Committee may establish concurrent or
overlapping Performance Periods.




(hh) “Plan” means this Healthsport, Inc. 2009 Equity Incentive Plan as it may be amended
from time to time.




(ii) “Prior Equity Compensation Plans” means the Company’s 2000 Stock Option Plan and the
2006 Stock Option Plan.




(jj) “Re-Price” means that the Company has lowered or reduced the Exercise Price of
outstanding Options and/or outstanding SARs for any Participant(s) in a manner described by
SEC Regulation S-K Item 402(d)(2)(viii) (or as described in any successor provision(s) or
definition(s)).




(kk) “SAR Agreement” means the agreement described in Section 8 evidencing each Grant of a
Stock Appreciation Right.




(ll) “SEC” means the Securities and Exchange Commission.


 


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(mm) “Section 16 Persons” means those Officers or Directors or Non-Employee Directors or
other persons who are subject to Section 16 of the Exchange Act.




(nn) “Section 280G Approval” means the separate approval by stockholders owning more than
75% of the voting power of all outstanding stock of the Company entitled to vote immediately
before a Change in Control which approval shall be obtained in compliance with the
requirements of Code Section 280G(b)(5)(B), as amended, including any successor thereof, and
the regulations promulgated thereunder, as determined by the Committee in its sole
discretion.




(oo) “Securities Act” means the Securities Act of 1933, as amended.




(pp) “Service” means service as an Employee, Director, Non-Employee Director or Consultant.
Service will be deemed terminated as soon as the entity to which Service is being provided
is no longer either (i) the Company, (ii) a Parent, (iii) a Subsidiary or (iv) an Affiliate.
The Committee determines when Service commences and when Service terminates. A
Participant’s Service does not terminate if he or she is a common-law employee and goes on a
bona fide leave of absence that was approved by the Company in writing and the terms of the
leave provide for continued service crediting, or when continued service crediting is
required by applicable law. Service terminates in any event when the approved leave ends,
unless such Employee immediately returns to active work. The Committee determines which
leaves count toward Service and when Service terminates for all purposes under the Plan.




(qq) “Share” means one share of Common Stock.




(rr) “Stock Appreciation Right or SAR” means a stock appreciation right awarded under the
Plan.




(ss) “Stock Award” means an award of Shares under the Plan.




(tt) “Stock Award Agreement” means the agreement described in Section 9 evidencing each
Stock Award.




(uu) “Stock Option Agreement” means the agreement described in Section 6 evidencing each
Grant of an Option.




(vv) “Stock Unit” means a bookkeeping entry representing the equivalent of one Share, as
awarded under the Plan.




(ww) “Stock Unit Agreement” means the agreement described in Section 10 evidencing each
Award of a Stock Unit.




(xx) “Stockholders Agreement” means any applicable agreement between the Company’s
stockholders and/or investors that provides certain rights and obligations for all
stockholders.


 


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(yy) “Subsidiary” means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company, if each of the corporations other than the last
corporation in the unbroken chain 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. A corporation that attains the status of a Subsidiary on a date after the Adoption
Date shall be considered a Subsidiary commencing as of such date.




(zz) “Termination Date” means the date on which a Participant’s Service terminates as
determined by the Committee.




(aaa) “10-Percent Shareholder” means an individual who owns more than ten percent (10%) of
the total combined voting power of all classes of outstanding stock of the Company, its
Parent or any of its Subsidiaries. In determining stock ownership, the attribution rules of
section 424(d) of the Code shall be applied.



SECTION 3. ADMINISTRATION.





(a) Committee Composition. A Committee appointed by the Board shall administer the Plan.
Unless the Board provides otherwise, the Board’s Compensation Committee (or a comparable
committee of the Board) shall be the Committee. The Board may also at any time terminate
the functions of the Committee and reassume all powers and authority previously delegated to
the Committee.




To the extent required, the Committee shall have membership composition which enables (i)
Awards to Section 16 Persons to qualify as exempt from liability under Section 16(b) of the
Exchange Act and (ii) Awards to Covered Employees to qualify as performance-based
compensation as provided under Code Section 162(m).




The Board may also appoint one or more separate committees of the Board, each composed of
one or more directors of the Company who need not qualify under Rule 16b-3 of the Exchange
Act or Code Section 162(m), that may administer the Plan with respect to Key Employees who
are not Section 16 Persons or Covered Employees, respectively, may grant Awards under the
Plan to such Key Employees and may determine all terms of such Awards. To the extent
permitted by applicable law, the Board may also appoint a committee, composed of one or more
officers of the Company, that may authorize Awards to Employees (who are not Section 16
Persons or Covered Employees) within parameters specified by the Board and consistent with
any limitations imposed by applicable law.




Notwithstanding the foregoing, the Board shall constitute the Committee and shall administer
the Plan with respect to all Awards granted to Non-Employee Directors.




 


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(b) Authority of the Committee. Subject to the provisions of the Plan, the Committee shall
have full authority and discretion to take any actions it deems necessary or advisable for
the administration of the Plan. Such actions shall include without limitation:



(i) selecting Key Employees who are to receive Awards under the Plan;




(ii) determining the type, number, vesting requirements, performance
conditions (if any) and their degree of satisfaction, and other features and
conditions of such Awards and amending such Awards;




(iii) correcting any defect, supplying any omission, or reconciling or
clarifying any inconsistency in the Plan or any Award agreement;




(iv) accelerating the vesting, or extending the post-termination exercise
term, or waiving restrictions, of Awards at any time and under such terms
and conditions as it deems appropriate;




(v) interpreting the Plan and any Award agreements;




(vi) making all other decisions relating to the operation of the Plan; and




(vii) adopting such plans or subplans as may be deemed necessary or
appropriate to provide for the participation by non-U.S. employees of the
Company and its Subsidiaries and Affiliates, which plans and/or subplans
shall be attached hereto as Appendices.




The Committee may adopt such rules or guidelines, as it deems appropriate to implement the
Plan. The Committee’s determinations under the Plan shall be final and binding on all
persons. The Committee’s decisions and determinations need not be uniform and may be made
selectively among Participants in the Committee’s sole discretion. The Committee’s
decisions and determinations will be afforded the maximum deference provided by law.




(c) Indemnification. To the maximum extent permitted by applicable law, each member of the
Committee, or of the Board, or any persons (including without limitation Employees and
Officers) who are delegated by the Board or Committee to perform administrative functions in
connection with the Plan, shall be indemnified and held harmless by the Company against and
from (i) any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action, suit, or
proceeding to which he or she may be a party or in which he or she may be involved by reason
of any action taken or failure to act under the Plan or any Award agreement, and (ii) from
any and all amounts paid by him or her in settlement thereof, with the Company’s approval,
or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or
proceeding against him or her, provided he or she shall give the Company an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to handle and
defend it on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be entitled under
the Company’s Certificate of Incorporation or Bylaws, by contract, as a matter of law, or
otherwise, or under any power that the Company may have to indemnify them or hold them
harmless.


 


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SECTION 4. GENERAL.





(a) Eligibility. Only Employees, Directors, Non-Employee Directors and Consultants shall be
eligible for designation as Key Employees by the Committee.




(b) Restrictions on Shares. Any Shares issued pursuant to an Award shall be subject to such
rights of repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall apply in addition to any restrictions that
may apply to holders of Shares generally and shall also comply to the extent necessary with
applicable law. In no event shall the Company be required to issue fractional Shares under
this Plan.




(c) Beneficiaries. A Participant may designate one or more beneficiaries with respect to an
Award by timely filing the prescribed form with the Company. A beneficiary designation may
be changed by filing the prescribed form with the Company at any time before the
Participant’s death. If no beneficiary was designated or if no designated beneficiary
survives the Participant, then after a Participant’s death any vested Award(s) shall be
transferred or distributed to the Participant’s estate.




(d) Performance Conditions. The Committee may, in its discretion, include performance
conditions in any Award. If performance conditions are included in Awards to Covered
Employees that are intended to qualify as performance-based compensation under Code Section
162(m), then such Awards will be subject to the achievement of Performance Goals that shall
be established and administered pursuant to the requirements of Code Section 162(m) and as
described in this Section 4(d). Before any Shares underlying an Award or any Award payments
are released to a Covered Employee with respect to a Performance Period, the Committee shall
certify in writing that the Performance Goals for such Performance Period have been
satisfied. Without limitation, the approved minutes of a Committee meeting shall constitute
such written certification. The Committee may appropriately adjust any evaluation of
performance under a Performance Goal to exclude any of the following events that occurs
during a Performance Period:




(i) asset write-downs,




(ii) litigation or claim judgments or settlements,




(iii) the effect of changes in or provisions under tax law,
accounting principles or other such laws or provisions affecting reported
results,




(iv) accruals for reorganization and restructuring programs
and




(v) any extraordinary non-recurring items as described in
applicable accounting principles and/or in management’s discussion and
analysis of financial condition and results of operations appearing in the
Company’s annual report for the applicable year.


 


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Notwithstanding satisfaction of any completion of any Performance Goal, to the extent
specified at the time of grant of an Award, the number of Shares, Options, SARs, Restricted
Stock Units or other benefits granted, issued, retainable and/or vested under an Award on
account of satisfaction of such Performance Goals may be reduced by the Committee on the
basis of such further considerations as the Committee in its sole discretion shall
determine. Awards with performance conditions that are granted to Key Employees who are not
Covered Employees or any Awards to Covered Employees which are not intended to qualify as
performance-based compensation under Code Section 162(m) need not comply with the
requirements of Code Section 162(m).




(e) Stockholder Rights. A Participant, or a transferee of a Participant, shall have no
rights as a stockholder (including without limitation voting rights or dividend or
distribution rights) with respect to any Common Stock covered by an Award until such person
becomes entitled to receive such Common Stock, has satisfied any applicable withholding or
tax obligations relating to the Award and has been issued the applicable stock certificate
by the Company. No adjustment shall be made for cash or stock dividends or other rights for
which the record date is prior to the date when such certificate is issued, except as
expressly provided in Section 11. The issuance of an Award may be subject to and
conditioned upon the Participant’s agreement to become a party to a Stockholders Agreement
and be bound by its terms.




(f) Buyout of Awards. The Committee may at any time offer to buy out, for a payment in cash
or cash equivalents (including without limitation Shares issued at Fair Market Value that
may or may not be issued under this Plan), an Award previously granted based upon such terms
and conditions as the Committee shall establish.




(g) Termination of Service. Unless the applicable Award agreement or employment agreement
provides otherwise (and in such case, the Award or employment agreement shall govern as to
the consequences of a termination of Service for such Awards subject to Section 4(h)), the
following rules shall govern the vesting, exercisability and term of outstanding Awards held
by a Participant in the event of termination of such Participant’s Service (in all cases
subject to the term of the Option or SAR as applicable): (i) if the Service of a
Participant is terminated for Cause, then all Options, SARs and unvested portions of Stock
Awards and Stock Units shall terminate and be forfeited immediately without consideration;
(ii) if the Service of Participant is terminated for any reason other than for Cause, death
or Disability, then the vested portion of his/her then-outstanding Options or SARs may be
exercised by such Participant or his or her personal representative within three months
after the date of such termination and all unvested portions of any outstanding Awards shall
be forfeited without consideration as of the date of such termination; or (iii) if the
Service of a Participant is terminated due to death or Disability, the vested portion of
his/her then-outstanding Options or SARs may be exercised within twelve months after the
date of termination of Service and all unvested portions of any outstanding Awards shall be
forfeited without consideration as of the date of such termination.


 


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(h) California Participants. Awards to California Participants shall also be subject to the
following terms regarding the time period to exercise vested Options or SARs after
termination of Service. These additional terms shall not be required to apply during the
time that the Shares are publicly traded and/or the Company is subject to the reporting
requirements of the Exchange Act: In the event of termination of a Participant’s Service,
(i) if such termination was for reasons other than death or Disability or Cause, the
Participant shall have at least 30 days after the date of such termination to exercise any
of his/her vested outstanding Options or SARs (but in no event later than the expiration of
the term of such Options or SARs established by the Committee as of the Grant date) or (ii)
if such termination was due to death or Disability, the Participant shall have at least six
months after the date of such termination to exercise any of his/her vested outstanding
Options or SARs (but in no event later than the expiration of the term of such Options or
SARs established by the Committee as of the Grant date). The Committee, in its discretion,
may also elect to include some or all of these Section 4(h) terms in Awards to Key Employees
who are not California Participants.




(i) Suspension or Termination of Awards. If at any time (including after a notice of
exercise has been delivered) the Committee (or the Board), reasonably believes that a
Participant has committed an act of Cause (which includes a failure to act), the Committee
(or Board) may suspend the Participant’s right to exercise any Option or SAR (or vesting of
Stock Awards or Stock Units) pending a determination of whether there was in fact an act of
Cause. If the Committee (or the Board) determines a Participant has committed an act of
Cause, neither the Participant nor his or her estate shall be entitled to exercise any
outstanding Option or SAR whatsoever and all of Participant’s outstanding Awards shall then
terminate without consideration. Any determination by the Committee (or the Board) with
respect to the foregoing shall be final, conclusive and binding on all interested parties.




(j) Code Section 409A. Notwithstanding anything in the Plan to the contrary, the Plan and
Awards granted hereunder are intended to comply with the requirements of Code Section 409A
and shall be interpreted in a manner consistent with such intention. If upon a
Participant’s “separation from service” within the meaning of Code Section 409A, he/she is
then a “specified employee” (as defined in Code Section 409A), then solely to the extent
necessary to comply with Code Section 409A and avoid the imposition of taxes under Code
Section 409A, the Company shall defer payment of “nonqualified deferred compensation”
subject to Code Section 409A payable as a result of and within six (6) months following such
separation from service under this Plan until the earlier of (i) the first business day of
the seventh month following the Participant’s separation from service, or (ii) ten (10) days
after the Company receives written notification of the Participant’s death. Any such
delayed payments shall be made without interest.




(k) Electronic Communications. Subject to compliance with applicable law and/or
regulations, an Award agreement or other documentation or notices relating to the Plan
and/or Awards may be communicated to Participants by electronic media.




(l) Unfunded Plan. Insofar as it provides for Awards, the Plan shall be unfunded. Although
bookkeeping accounts may be established with respect to Participants who are granted Awards
under this Plan, any such accounts will be used merely as a bookkeeping convenience. The
Company shall not be required to segregate any assets which may at
any time be represented by Awards, nor shall this Plan be construed as providing for such
segregation, nor shall the Company or the Committee be deemed to be a trustee of stock or
cash to be awarded under the Plan.


 


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(m) Liability of Company. The Company (or members of the Board or Committee) shall not be
liable to a Participant or other persons as to: (i) the non-issuance or sale of Shares as to
which the Company has been unable to obtain from any regulatory body having jurisdiction the
authority deemed by the Company’s counsel to be necessary to the lawful issuance and sale of
any Shares hereunder; and (ii) any unexpected or adverse tax consequence or any tax
consequence expected but not realized by any Participant or other person due to the grant,
receipt, exercise or settlement of any Award granted hereunder.




(n) Reformation. In the event any provision of this Plan shall be held illegal or invalid
for any reason, such provisions will be reformed by the Board if possible and to the extent
needed in order to be held legal and valid. If it is not possible to reform the illegal or
invalid provisions then the illegality or invalidity shall not affect the remaining parts of
this Plan, and this Plan shall be construed and enforced as if the illegal or invalid
provision had not been included.



SECTION 5. SHARES SUBJECT TO PLAN.





(a) Basic Limitation. The Common Stock issuable under the Plan shall be authorized but
unissued Shares or treasury Shares. The aggregate number of Shares reserved for Awards
under the Plan shall not exceed 10,000,000 Shares on a fully diluted basis, subject to
adjustment pursuant to Section 11.




(b) Additional Shares. If Awards are forfeited or terminated for any reason other than
being exercised, then the Shares underlying such Awards shall again become available for
Awards under the Plan. If exercised SARs or Stock Units are settled in Shares, then only
the number of Shares (if any) actually issued in settlement of such SARs or Stock Units
shall reduce the number of Shares available under Section 5(a) and the balance shall again
become available for Awards under the Plan. If a Participant pays the Exercise Price by net
exercise or by surrendering previously owned Shares (or by stock attestation) and/or, as
permitted by the Committee, pays any withholding tax obligation with respect to an Award by
electing to have Shares withheld or surrendering previously owned Shares (or by stock
attestation), the surrendered Shares and the Shares withheld to pay taxes shall be available
for issuance under the Plan and shall not count toward the maximum number of shares that may
be issued under the Plan as set forth in Section 5(a).




(c) Dividend Equivalents. Any dividend equivalents distributed under the Plan shall not be
applied against the number of Shares available for Awards.




 


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(d) Share Limits. For so long as: (x) the Company is a “publicly held corporation” within
the meaning of Code Section 162(m) and (y) the deduction limitations of Code Section 162(m)
are applicable to the Covered Employees, then the limits specified below
in this Section 5(d) shall be applicable to Awards issued under the Plan that are intended
to qualify as performance-based compensation under Code Section 162(m).



(i) Limits on Options. No Key Employee shall receive
Options to purchase Shares during any Fiscal Year covering in excess of
3,500,000 Shares.




(ii) Limits on SARs. No Key Employee shall receive
Awards of SARs during any Fiscal Year covering in excess of 3,500,000
Shares.




(iii) Limits on Stock Grants. No Key Employee shall
receive Stock Grants during any Fiscal Year covering in excess of 3,500,000
Shares.




(iv) Limits on Stock Units. No Key Employee shall
receive Stock Units during any Fiscal Year covering in excess of 3,500,000
Shares.




(v) Limit on Total Amount of All Awards. No Key
Employee shall receive Awards during any Fiscal Year in excess of the
aggregate amount of 3,500,000 Shares, whether such Awards are in the form of
Options, SARs, Stock Grants and/or Stock Units.




(vi) Increased Limits for First Year of Employment.
The limits expressed in the foregoing subparts (i) through (v) shall in each
case be increased to 7,000,000 Shares with respect to Awards granted to a
Key Employee during the Fiscal Year of the Key Employee’s commencement of
employment with the Company.



SECTION 6. TERMS AND CONDITIONS OF OPTIONS.





(a) Stock Option Agreement. Each Grant of an Option under the Plan shall be evidenced by a
Stock Option Agreement between the Optionee and the Company. Such Option shall be subject
to all applicable terms and conditions of the Plan and may be subject to any other terms and
conditions that are not inconsistent with the Plan and that the Committee deems appropriate
for inclusion in a Stock Option Agreement. The provisions of the various Stock Option
Agreements entered into under the Plan need not be identical. A Stock Option Agreement may
provide that new Options will be granted automatically to the Optionee when he or she
exercises the prior Options.




(b) Number of Shares. Each Stock Option Agreement shall specify the number of Shares that
are subject to the Option and shall provide for the adjustment of such number in accordance
with Section 11.




(c) Exercise Price. An Option’s Exercise Price shall be established by the Committee and
set forth in a Stock Option Agreement. The Exercise Price of an Option shall not be less
than 100% of the Fair Market Value of a Share on the date of Grant.


 


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(d) Exercisability and Term. Each Stock Option Agreement shall specify the date when all or
any installment of the Option is to become vested and/or exercisable. The
Stock Option Agreement shall also specify the term of the Option; provided, however that the
term of an Option shall in no event exceed ten (10) years from the date of Grant. No Option
can be exercised after the expiration date provided in the applicable Stock Option
Agreement. A Stock Option Agreement may provide for accelerated exercisability in the event
of the Optionee’s death, Disability or retirement or other events and may provide for
expiration prior to the end of its term in the event of the termination of the Optionee’s
Service. A Stock Option Agreement may permit an Optionee to exercise an Option before it is
vested (an “early exercise”), subject to the Company’s right of repurchase at the original
Exercise Price of any Shares acquired under the unvested portion of the Option which right
of repurchase shall lapse at the same rate the Option would have vested had there been no
early exercise. In no event shall the Company be required to issue fractional Shares upon
the exercise of an Option and the Committee may specify a minimum number of Shares that must
be purchased in any one Option exercise.




(e) Modifications or Assumption of Options. Within the limitations of the Plan, the
Committee may modify, extend or assume outstanding options or may accept the cancellation of
outstanding stock options (whether granted by the Company or by another issuer) in return
for the grant of new Options for the same or a different number of Shares and at the same or
a different Exercise Price. The Committee may in its discretion Re-Price outstanding
Options. No modification of an Option shall, without the consent of the Optionee, impair
his or her rights under such Option.




(f) Transferability of Options. Except as otherwise provided in the applicable Stock Option
Agreement and then only to the extent permitted by applicable law, no Option shall be
transferable by the Optionee other than by will or by the laws of descent and distribution.
Except as otherwise provided in the applicable Stock Option Agreement, an Option may be
exercised during the lifetime of the Optionee only by Optionee or by the guardian or legal
representative of the Optionee. No Option or interest therein may be assigned, pledged or
hypothecated by the Optionee during his/her lifetime, whether by operation of law or
otherwise, or be made subject to execution, attachment or similar process.



SECTION 7. PAYMENT FOR OPTION SHARES.





(a) General Rule. The entire Exercise Price of Shares issued upon exercise of Options shall
be payable in cash at the time when such Shares are purchased by the Optionee, except as
follows and if so provided for in an applicable Stock Option Agreement:




(i) The Stock Option Agreement may specify that payment may be made in any form(s)
described in this Section 7.




(ii) In the case of an NSO granted under the Plan, the Committee may in its discretion,
at any time accept payment in any form(s) described in this Section 7.


 


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(b) Surrender of Stock. To the extent that this Section 7(b) is made applicable to an
Option in a Stock Option Agreement, payment for all or any part of the Exercise Price may be
made with Shares which have already been owned by the Optionee for such duration as shall be
specified by the Committee. Such Shares shall be valued at their Fair Market Value on the
date when the new Shares are purchased under the Plan.




(c) Cashless Exercise. To the extent that this Section 7(c) is made applicable to an Option
in a Stock Option Agreement, payment for all or a part of the Exercise Price may be made
through Cashless Exercise.




(d) Net Exercise. To the extent that this Section 7(d) is made applicable to an Option in a
Stock Option Agreement, payment for all or a part of the Exercise Price may be made through
a “net exercise” arrangement pursuant to which the number of Shares issued to the Optionee
in connection with the Optionee’s exercise of the Option will be reduced by the Company’s
retention of a portion of such Shares. Upon such a net exercise of an Option, the Optionee
will receive a net number of Shares that is equal to (i) the number of Shares as to which
the Option is being exercised minus (ii) the quotient (rounded down to the nearest whole
number) of the aggregate Exercise Price of the Shares being exercised divided by the Fair
Market Value of a Share on the Option exercise date. The number of Shares covered by clause
(ii) will be retained by the Company and not delivered to the Optionee. No fractional
Shares will be created as a result of a net exercise and the Optionee must contemporaneously
pay for any portion of the aggregate Exercise Price that is not covered by the Shares
retained by the Company under clause (ii).




(e) Other Forms of Payment. To the extent that this Section 7(e) is made applicable to an
Option in a Stock Option Agreement, payment may be made in any other form that is consistent
with applicable laws, regulations and rules and approved by the Committee.



SECTION 8. TERMS AND CONDITIONS FOR STOCK APPRECIATION RIGHTS.





(a) SAR Agreement. Each Grant of a SAR under the Plan shall be evidenced by a SAR Agreement
between the Participant and the Company. Such SAR shall be subject to all applicable terms
of the Plan and may be subject to any other terms that are not inconsistent with the Plan
and that the Committee deems appropriate for inclusion in a SAR Agreement. A SAR Agreement
may provide for a maximum limit on the amount of any payout notwithstanding the Fair Market
Value on the date of exercise of the SAR. The provisions of the various SAR Agreements
entered into under the Plan need not be identical. SARs may be granted in consideration of a
reduction in the Participant’s other compensation.




(b) Number of Shares. Each SAR Agreement shall specify the number of Shares to which the
SAR pertains and is subject to adjustment of such number in accordance with Section 11.


 


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(c) Exercise Price. Each SAR Agreement shall specify the Exercise Price. A SAR Agreement
may specify an Exercise Price that varies in accordance with a predetermined formula while
the SAR is outstanding. The Exercise Price of a SAR shall not be less than 100% of the Fair
Market Value on the date of Grant.




(d) Exercisability and Term. Each SAR Agreement shall specify the date when all or any
installment of the SAR is to become exercisable. The SAR Agreement shall also specify the
term of the SAR which shall not exceed ten years from the date of Grant. A SAR Agreement
may provide for accelerated exercisability in the event of the Participant’s death, or
Disability or other events and may provide for expiration prior to the end of its term in
the event of the termination of the Participant’s Service. SARs may be awarded in
combination with Options or other Awards, and such an Award may provide that the SARs will
not be exercisable unless the related Options or other Awards are forfeited. A SAR may be
included in an NSO at the time of Award or at any subsequent time, but not later than six
months before the expiration of such NSO. A SAR granted under the Plan may provide that it
will be exercisable only in the event of a Change in Control.




(e) Exercise of SARs. If, on the date when a SAR expires, the Exercise Price under such SAR
is less than the Fair Market Value on such date but any portion of such SAR has not been
exercised or surrendered, then such SAR may automatically be deemed to be exercised as of
such date with respect to such portion to the extent so provided in the applicable SAR
agreement. Upon exercise of a SAR, the Participant (or any person having the right to
exercise the SAR after Participant’s death) shall receive from the Company (i) Shares, (ii)
cash or (iii) any combination of Shares and cash, as the Committee shall determine. The
amount of cash and/or the Fair Market Value of Shares received upon exercise of SARs shall,
in the aggregate, be equal to the amount by which the Fair Market Value (on the date of
surrender) of the Shares subject to the SARs exceeds the Exercise Price of the Shares.




(f) Modification and Assumption of SARs. Within the limitations of the Plan, the Committee
may modify, extend or assume outstanding SARs or may accept the cancellation of outstanding
SARs (including stock appreciation rights granted by another issuer) in return for the grant
of new SARs for the same or a different number of Shares and at the same or a different
Exercise Price. The Committee may in its discretion Re-Price outstanding SARs. No
modification of a SAR shall, without the consent of the Participant, impair his or her
rights or obligations under such SAR.




(g) Assignment or Transfer of SARS. Except as otherwise provided in the applicable SAR
Agreement and then only to the extent permitted by applicable law, no SAR shall be
transferable by the Participant other than by will or by the laws of descent and
distribution. Except as otherwise provided in the applicable SAR Agreement, a SAR may be
exercised during the lifetime of the Participant only by the Participant or by the guardian
or legal representative of the Participant. No SAR or interest therein may be assigned,
pledged or hypothecated by the Participant during his or her lifetime, whether by operation
of law or otherwise, or be made subject to execution, attachment or similar process.


 


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SECTION 9. TERMS AND CONDITIONS FOR STOCK AWARDS.





(a) Time, Amount and Form of Awards. Awards under the Plan may be granted in the form of
Common Stock.




(b) Stock Award Agreement. Each Stock Award under the Plan shall be evidenced by a Stock
Award Agreement between the Participant and the Company. Such Award shall be subject to all
applicable terms and conditions of the Plan and may be subject to any other terms and
conditions that are not inconsistent with the Plan and that the Committee deems appropriate
for inclusion in a Stock Award Agreement. The provisions of the various Stock Awards
Agreements entered into under the Plan need not be identical.




(c) Payment for Stock Award. Stock Awards may be issued with or without cash consideration
under the Plan.




(d) Vesting Conditions. Each Stock Award shall become vested, in full or in installments,
upon satisfaction of the conditions specified in the Stock Award Agreement. A Stock Award
Agreement may provide for accelerated vesting in the event of the Participant’s death,
Disability or retirement or other events.




(e) Assignment or Transfer of Stock Award. Except as provided in Section 14, or in a Stock
Award Agreement, or as required by applicable law, Stock Awards granted under the Plan shall
not be anticipated, assigned, attached, garnished, optioned, transferred or made subject to
any creditor’s process, whether voluntarily, involuntarily or by operation of law. Any act
in violation of this Section 9(e) shall be void. However, this Section 9(e) shall not
preclude a Participant from designating a beneficiary who will receive any outstanding Stock
Award in the event of the Participant’s death, nor shall it preclude a transfer of a Stock
Award by will or by the laws of descent and distribution.




(f) Trusts. Neither this Section 9 nor any other provision of the Plan shall preclude a
Participant from transferring or assigning a Stock Award to (a) the trustee of a trust that
is revocable by such Participant alone, both at the time of the transfer or assignment and
at all times thereafter prior to such Participant’s death, or (b) the trustee of any other
trust to the extent approved in advance by the Committee in writing. A transfer or
assignment of a Stock Award from such trustee to any person other than such Participant
shall be permitted only to the extent approved in advance by the Committee in writing, and
any Stock Award held by such trustee shall be subject to all of the conditions and
restrictions set forth in the Plan and in the applicable Stock Award Agreement, as if such
trustee were a party to such Agreement.




(g) Voting and Dividend Rights. The holders of a Stock Award under the Plan (irrespective
of whether the Shares subject to the Stock Award are vested or unvested) shall have the same
voting, dividend and other rights as the Company’s other stockholders. A Stock Award
Agreement, however, may require that the holders of a Stock Award invest any cash dividends
received in additional Common Stock. Such additional Common Stock shall be subject to the
same conditions and restrictions as the
Award with respect to which the dividends were paid. Such additional Common Stock shall not
reduce the number of Shares available under Section 5.


 


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(h) Modification or Assumption of Stock Awards. Within the limitations of the Plan, the
Committee may modify or assume outstanding Stock Awards or may accept the cancellation of
outstanding Stock Awards (including stock granted by another issuer) in return for the grant
of new Stock Awards for the same or a different number of Shares. No modification of a
Stock Award shall, without the consent of the Participant, impair his or her rights or
obligations under such Stock Award.



SECTION 10. TERMS AND CONDITIONS FOR STOCK UNITS.





(a) Stock Unit Agreement. Each grant of Stock Units under the Plan shall be evidenced by a
Stock Unit Agreement between the Participant and the Company. Such Stock Units shall be
subject to all applicable terms of the Plan and may be subject to any other terms that are
not inconsistent with the Plan and that the Committee deems appropriate for inclusion in a
Stock Unit Agreement. The provisions of the various Stock Unit Agreements entered into
under the Plan need not be identical. Stock Units may be granted in consideration of a
reduction in the Participant’s other compensation.




(b) Number of Shares. Each Stock Unit Agreement shall specify the number of Shares to which
the Stock Unit Award pertains and is subject to adjustment of such number in accordance with
Section 11.




(c) Payment for Awards. To the extent that an Award is granted in the form of Stock Units,
no cash consideration shall be required of the Award recipients.




(d) Vesting Conditions. Each Award of Stock Units may or may not be subject to vesting.
Vesting shall occur, in full or in installments, upon satisfaction of the conditions
specified in the Stock Unit Agreement. A Stock Unit Agreement may provide for accelerated
vesting in the event of the Participant’s death, or Disability or other events.




(e) Voting and Dividend Rights. The holders of Stock Units shall have no voting rights.
Prior to settlement or forfeiture, any Stock Unit awarded under the Plan may, at the
Committee’s discretion, carry with it a right to dividend equivalents. Such right entitles
the holder to be credited with an amount equal to all cash dividends paid on one Share while
the Stock Unit is outstanding. Dividend equivalents may be converted into additional Stock
Units. Settlement of dividend equivalents may be made in the form of cash, in the form of
Shares, or in a combination of both. Prior to distribution, any dividend equivalents which
are not paid shall be subject to the same conditions and restrictions as the Stock Units to
which they attach.





 


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(f) Form and Time of Settlement of Stock Units. Settlement of vested Stock Units may be
made in the form of (a) cash, (b) Shares or (c) any combination of both, as determined by
the Committee. The actual number of Stock Units eligible for settlement may be larger or
smaller than the number included in the original Award. Methods of converting Stock Units
into cash may include (without limitation) a method based on the
average Fair Market Value of Shares over a series of trading
days. Except as otherwise
provided in a Stock Unit Agreement or a timely completed deferral election, vested Stock
Units shall be settled within thirty days after vesting. The distribution may occur or
commence when all vesting conditions applicable to the Stock Units have been satisfied or
have lapsed or it may be deferred, in accordance with applicable law to a later specified
date. The amount of a deferred distribution may be increased by an interest factor or by
dividend equivalents. Until an Award of Stock Units is settled, the number of such Stock
Units shall be subject to adjustment pursuant to Section 11.




(g) Creditors’ Rights. A holder of Stock Units shall have no rights other than those of a
general creditor of the Company. Stock Units represent an unfunded and unsecured obligation
of the Company, subject to the terms and conditions of the applicable Stock Unit Agreement.




(h) Modification or Assumption of Stock Units. Within the limitations of the Plan, the
Committee may modify or assume outstanding Stock Units or may accept the cancellation of
outstanding Stock Units (including stock units granted by another issuer) in return for the
grant of new Stock Units for the same or a different number of Shares. No modification of a
Stock Unit shall, without the consent of the Participant, impair his or her rights or
obligations under such Stock Unit.




(i) Assignment or Transfer of Stock Units. Except as provided in Section 14, or in a Stock
Unit Agreement, or as required by applicable law, Stock Units shall not be anticipated,
assigned, attached, garnished, optioned, transferred or made subject to any creditor’s
process, whether voluntarily, involuntarily or by operation of law. Any act in violation of
this Section 10(i) shall be void. However, this Section 10(i) shall not preclude a
Participant from designating a beneficiary who will receive any outstanding vested Stock
Units in the event of the Participant’s death, nor shall it preclude a transfer of vested
Stock Units by will or by the laws of descent and distribution.



SECTION 11. ADJUSTMENTS.





(a) Adjustments. In the event of a subdivision of the outstanding Shares, a declaration of
a dividend payable in Shares, a declaration of a dividend payable in a form other than
Shares in an amount that has a material effect on the price of Shares, a combination or
consolidation of the outstanding Shares (by reclassification or otherwise) into a lesser
number of Shares, a stock split, a reverse stock split, a reclassification or other
distribution of the Shares without the receipt of consideration by the Company, of or on the
Common Stock, a recapitalization, a combination, a spin-off or a similar occurrence, the
Committee shall make equitable and proportionate adjustments to:




(i) The maximum aggregate number of Shares specified in Section 5(a);




(ii) the number and kind of securities available for Awards under Section 5;




(iii) the limits on Awards issued under the Plan that are intended to qualify as
performance-based compensation under Code Section 162(m) under Section 5(d);


 


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(iv) the number and kind of securities covered by each outstanding Award;




(v) the Exercise Price under each outstanding Option and SAR; and




(vi) the number and kind of outstanding securities issued under the Plan.




(b) Participant Rights. Except as provided in this Section 11, a Participant shall have no
rights by reason of any issue by the Company of stock of any class or securities convertible
into stock of any class, any subdivision or consolidation of shares of stock of any class,
the payment of any stock dividend or any other increase or decrease in the number of shares
of stock of any class. If by reason of an adjustment pursuant to this Section 11, a
Participant’s Award covers additional or different shares of stock or securities, then such
additional or different shares and the Award in respect thereof shall be subject to all of
the terms, conditions and restrictions which were applicable to the Award and the Shares
subject to the Award prior to such adjustment.




(c) Fractional Shares. Any adjustment of Shares pursuant to this Section 11 shall be
rounded down to the nearest whole number of Shares. Under no circumstances shall the
Company be required to authorize or issue fractional shares and no consideration shall be
provided as a result of any fractional shares not being issued or authorized.



SECTION 12. EFFECT OF A CHANGE IN CONTROL.





(a) Merger or Reorganization. In the event that the Company is a party to a merger or other
reorganization, outstanding Awards shall be subject to the agreement of merger or
reorganization. Such agreement may provide, without limitation, for the assumption of
outstanding Awards by the surviving corporation or its parent, for their continuation by the
Company (if the Company is a surviving corporation), for accelerated vesting or for their
cancellation with or without consideration, in all cases without the consent of the
Participant.




(b) Acceleration of Vesting. Except as otherwise provided in the applicable Stock Option
Agreement, SAR Agreement, Stock Unit Agreement or Stock Award Agreement, in the event that a
Change in Control occurs with respect to the Company and the applicable agreement of merger
or reorganization provides for assumption or continuation of Awards pursuant to Section
12(a), no acceleration of vesting shall occur. In the event that a Change in Control occurs
with respect to the Company and there is no assumption or continuation of Awards pursuant to
Section 12(a), the Committee in its discretion may provide that all Awards shall vest and
become exercisable as of immediately before such Change in Control. The Committee may also
in its discretion include in an Award agreement a requirement that unless Section 280G
Approval has been obtained, no acceleration of vesting shall occur with respect to an Award
to the extent that such acceleration would, after taking into account any other payments in
the nature of compensation to which the Participant would have a right to receive from the
Company and any other person contingent upon the occurrence of such Change in Control,
result in a “parachute payment” as defined under Code Section 280G.


 


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SECTION 13. LIMITATIONS ON RIGHTS.





(a) Retention Rights. Neither the Plan nor any Award granted under the Plan shall be deemed
to give any individual a right to remain an Employee, Consultant, Director or Non-Employee
Director of the Company, a Parent, a Subsidiary or an Affiliate or to receive any future
Awards under the Plan. The Company and its Parents and Subsidiaries and Affiliates reserve
the right to terminate the Service of any person at any time, and for any reason, subject to
applicable laws, the Company’s Certificate of Incorporation and Bylaws and a written
employment agreement (if any).




(b) Regulatory Requirements. Any other provision of the Plan notwithstanding, the
obligation of the Company to issue Shares or other securities under the Plan shall be
subject to all applicable laws, rules and regulations and such approval by any regulatory
body as may be required. The Company reserves the right to restrict, in whole or in part,
the delivery of Shares or other securities pursuant to any Award prior to the satisfaction
of all legal requirements relating to the issuance of such Shares or other securities, to
their registration, qualification or listing or to an exemption from registration,
qualification or listing.




(c) Dissolution. To the extent not previously exercised or settled, all Options, SARs,
unvested Stock Units and unvested Stock Awards shall terminate immediately prior to the
dissolution or liquidation of the Company and be forfeited to the Company.




(d) Clawback Policy. The Company may (i) cause the cancellation of any Award, (ii) require
reimbursement of any Award by a Participant and (iii) effect any other right of recoupment
of equity or other compensation provided under this Plan or otherwise in accordance with
Company policies and/or applicable law (each, a “Clawback Policy”). In addition, a
Participant may be required to repay to the Company certain previously paid compensation,
whether provided under this Plan or an Award Agreement or otherwise, in accordance with the
Clawback Policy.



SECTION 14. WITHHOLDING TAXES.





(a) General. A Participant shall make arrangements satisfactory to the Company for the
satisfaction of any withholding tax obligations that arise in connection with his or her
Award. The Company shall not be required to issue any Shares or make any cash payment under
the Plan until such obligations are satisfied.




(b) Share Withholding. The Committee in its discretion may permit a Participant to satisfy
all or part of his or her withholding or income tax obligations by having the Company
withhold all or a portion of any Shares that otherwise would be issued to him or her or by
surrendering all or a portion of any Shares that he or she previously acquired (or by stock
attestation). Such Shares shall be valued based on the value of the actual trade or, if
there is none, the Fair Market Value as of the previous day. Any payment of taxes by
assigning Shares to the Company may be subject to restrictions, including, but not limited
to, any restrictions required by rules of the SEC. The Committee may also, in its
discretion, permit a Participant to satisfy withholding or income tax obligations (up to
the maximum amount permitted by applicable law) related to an Award through a sale of Shares
underlying the Award or, in the case of Options, through a net exercise or Cashless
Exercise.


 


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SECTION 15. DURATION AND AMENDMENTS.





(a) Term of the Plan. The Plan, as set forth herein, is effective on the Adoption Date.
The Plan shall terminate on the day before the tenth anniversary of the Adoption Date and
may be terminated on any earlier date pursuant to this Section 15. This Plan will not in
any way affect outstanding awards that were issued under the Prior Equity Compensation Plans
provided, however, that no new awards or grants may be issued under any Prior Equity
Compensation Plan on or after the Adoption Date.




(b) Right to Amend or Terminate the Plan. The Board may amend or terminate the Plan at any
time and for any reason. No Awards shall be granted under the Plan after the Plan’s
termination. An amendment of the Plan shall be subject to the approval of the Company’s
stockholders only to the extent required by applicable laws, regulations or rules. In
addition, no such amendment or termination shall be made which would impair the rights of
any Participant, without such Participant’s written consent, under any then-outstanding
Award, provided that no such Participant consent shall be required with respect to any
amendment or alteration if the Committee determines in its sole discretion that such
amendment or alteration either (i) is required or advisable in order for the Company, the
Plan or the Award to satisfy or conform to any law or regulation or to meet the requirements
of any accounting standard, or (ii) is not reasonably likely to significantly diminish the
benefits provided under such Award, or that any such diminishment has been adequately
compensated. In the event of any conflict in terms between the Plan and any Award
agreement, the terms of the Plan shall prevail and govern.



SECTION 16. EXECUTION.





To record the adoption of the Plan by the Board, the Company has caused its duly authorized
officer to execute this Plan on behalf of the Company.



	 	 	 	 	 
	 	HEALTHSPORT, INC.

 	 
	 	By:  	/s/ Robert S. Davidson
 	 
	 	 	Name:  	Robert S. Davidson 	 
	 	 	Title:  	Chairman & President 	 




 


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