Unassociated Document


    


    ENERGY
AND POWER SOLUTIONS, INC.

     

    AMENDED
AND RESTATED

     

    2007
STOCK AWARD PLAN

     

    


     

    1.           Purposes of the
Plan.  The
Company, by means of the Plan, seeks to attract and retain qualified personnel
for positions as Employees, Directors and Consultants and to provide incentives
to such personnel to exert maximum efforts for the success of the
Company.

     

    2.           Definitions.  As
used herein, the following definitions shall apply:

     

    (a)           “Administrator” means
the Board or any of its Committees as shall be administering the Plan in
accordance with Section 4 hereof.

     

    (b)           “Applicable Laws”
means the requirements relating to the administration of stock option plans
under U.S. state laws, U.S. federal laws, the Code, the rules and regulations of
any stock exchange or quotation system on which the Common Stock is listed or
quoted and the applicable laws of any other country or jurisdiction where
Options or Stock Awards are granted under the Plan.

     

    (c)           “Award Agreement”
means an Option Agreement or a Restricted Stock Agreement, as
applicable.

     

    (d)           “Awardholder” means
the holder of an outstanding Option or Stock Award granted under the
Plan.

     

    (e)           “Board” means
the Board of Directors of the Company.

     

    (f)           “Cause” shall, with
respect to any Participant, have the meaning specified in the Award
Agreement.  In the absence of any definition in the Award Agreement,
“Cause” shall have the equivalent meaning or the same meaning as “cause” or “for
cause” set forth in any employment, consulting, change in control or other
agreement for the performance of services between the Participant and the
Company or a Related Entity or, in the absence of any such definition in such
agreement, such term shall mean (i) the failure by the Participant to
perform his or her duties as assigned by the Company (or a Related Entity) in a
reasonable manner, (ii) any violation or breach by the Participant of his
or her employment, consulting or other similar agreement with the Company (or a
Related Entity), if any, (iii) any violation or breach by the Participant
of his or her confidential information and invention assignment,
non-competition, non-solicitation, non-disclosure and/or other similar agreement
with the Company or a Related Entity, if any, (iv) any act by the
Participant of dishonesty or bad faith with respect to the Company (or
a Related Entity), (v) any material violation or breach by the
Participant of the Company’s or a Related Entity’s policy for employee
conduct, if any, (vi) use of alcohol, drugs or other similar substances in
a manner that adversely affects the Participant’s work performance, or
(vii) the commission by the Participant of any act, misdemeanor, or crime
reflecting unfavorably upon the Participant or the Company or any Related
Entity.  The good faith determination by the Administrator of whether
the Participant’s Continuous Service was terminated by the Company for “Cause”
shall be final and binding for all purposes hereunder.

    

      
        
           


        

        
          -1-

          
            

          

        

        
           


        

      


       

      (g)           “Change in
Control” means the occurrence, in a
single transaction or in a series of related transactions, of any one or more of
the following events:

       

      (i)           any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
(an “Exchange Act
Person”), other than the stock holders as of the date this Plan is
approved by the Board or such shareholders’ affiliates, becomes the “beneficial
owner” (as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company’s then outstanding securities
other than by virtue of a merger, consolidation or similar
transaction.  Notwithstanding the foregoing, a Change in Control shall
not be deemed to occur (A) on account of the acquisition of securities of the
Company by any institutional investor, any affiliate thereof or any other
Exchange Act Person that acquires the Company’s securities in a transaction or
series of related transactions that are primarily a private financing
transaction for the Company or (B) solely because the level of ownership held by
any Exchange Act Person (the “Subject Person”)
exceeds the designated percentage threshold of the outstanding voting securities
as a result of a repurchase or other acquisition of voting securities by the
Company reducing the number of voting securities outstanding, provided that if a
Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of voting securities by the Company, and after such
acquisition, the Subject Person becomes the owner of any additional voting
securities that, assuming the repurchase or other acquisition had not occurred,
increases the percentage of the then outstanding voting securities owned by the
Subject Person over the designated percentage threshold, then a Change in
Control shall be deemed to occur;

       

      (ii)           there
is consummated a merger, consolidation or similar transaction involving
(directly or indirectly) the Company if, immediately after the consummation of
such merger, consolidation or similar transaction, the shareholders of the
Company immediately prior thereto do not own, directly or indirectly, either (A)
outstanding voting securities representing more than fifty percent (50%) of the
combined outstanding voting power of the surviving entity in such merger,
consolidation or similar transaction or (B) more than fifty percent (50%) of the
combined outstanding voting power of the parent of the surviving entity in such
merger, consolidation or similar transaction; or

       

      (iii)           there
is consummated a sale, lease, exclusive license or other disposition of all or
substantially all of the consolidated assets of the Company and its
Subsidiaries, other than a sale, lease, exclusive license or other disposition
of all or substantially all of the consolidated assets of the Company and its
Subsidiaries to an entity, more than fifty percent (50%) of the combined voting
power of the voting securities of which are owned by shareholders of the Company
in substantially the same proportion as their ownership of the Company
immediately prior to such sale, lease, license or other
disposition.
  

      The term
Change in Control shall not include a sale of assets, merger or other
transaction effected exclusively for the purpose of changing the domicile of the
Company.

       


      
        
           


        

        
          -2-

          
            

          

        

        
           


        

      

       

      Notwithstanding
the foregoing or any other provision of this Plan, the definition of Change in
Control (or any analogous term) in an individual written agreement between the
Company or any affiliate and the Awardholder shall supersede the foregoing
definition with respect to Stock Awards or Options subject to such agreement (it
being understood, however, that if no definition of Change in Control or any
analogous term is set forth in such an individual written agreement, the
foregoing definition shall apply).

       

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

       

      (i)           “Committee” means a committee of Directors delegated
responsibility of the Board for administration for the Plan in accordance with
Section 4 hereof.  For any period during which no such Committee
is in existence, “Committee” shall mean the Board and all authority and
responsibility assigned to the Committee under the Plan shall be exercised, if
at all, by the Board.

       

      (j)           “Common Stock” means the common stock of the
Company.

       

      (k)           “Company” means Energy and Power Solutions, Inc., a
California corporation.

       

      (l)           “Consultant” means any person who is engaged by the Company
or any Parent or Subsidiary to render consulting or advisory services to such
entity.

       

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

       

      (n)           “Disability” means total and permanent disability as defined
in Section 22(e)(3) of the Code.

       

      (o)           “Employee” means any person, including officers and
Directors, employed by the Company or any Parent or Subsidiary of the
Company.  Neither service as a Director nor payment of a director’s
fee by the Company shall be sufficient to constitute “employment” by the
Company.

       

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

       

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

       

      (i)           If
the Common Stock is listed on any established stock exchange or a national
market system, including without limitation the Nasdaq Global Select Market, the
Nasdaq Global Market or The Nasdaq Capital Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system on
the day of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;


      (ii)           If
the Common Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported, its Fair Market Value shall be the mean between
the high bid and low asked prices for the Common Stock on the day of
determination; or

       


      
        
           


        

        
          -3-

          
            

          

        

        
           


        

      

       

      (iii)           In
the absence of an established market for the Common Stock, the Fair Market Value
thereof shall be determined in good faith by the Administrator using the
reasonable application of a reasonable valuation method within the meaning of
Section 409A of the Code selected by the Administrator.

       

      (r)           “Incentive Stock
Option” means an Option intended to
qualify as an “incentive stock option” within the meaning of Section 422 of
the Code.

       

      (s)           “Initial Public
Offering” means the effective date of a registration statement (on Form
S-1 or its successor) for the Common Stock.

       

      
      

      (t)           “Nonstatutory Stock
Option” means an Option not intended
to qualify as an Incentive Stock Option.

       

      (u)           “Option” means a stock option granted pursuant to the
Plan.

       

      (v)           “Option Agreement” means a written or electronic agreement between
the Company and an Awardholder evidencing the terms and conditions of an
individual Option.  The Option Agreement is subject to the terms and
conditions of the Plan.

       

      (w)           “Optioned Stock” means the Common Stock subject to an Option or
a Stock Award.

       

      (x)           “Parent” means a “parent corporation,” whether now or
hereafter existing, as defined in Section 424(e) of the Code.

       

      (y)           “Plan” means this Amended and Restated 2007 Stock
Award Plan.

       

      (z)           “Restricted Stock” means Shares issued pursuant to a Stock Award
or Shares of restricted stock issued pursuant to an Option that are subject to a
repurchase option by the Company.

       

      (aa)           “Restricted Stock
Agreement” means
a written or electronic agreement between the Company and the Awardholder
evidencing the terms and conditions of the individual Stock
Award.  The Restricted Stock Agreement is subject to the terms and
conditions of the Plan.

       

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

       

      (cc)           “Service Provider” means an Employee, Director or
Consultant.

       

      (dd)           “Share” means a share of the Common Stock, as adjusted
in accordance with Section 13 below.

       

      (ee)           “Stock Award” means a right to receive or purchase Common
Stock pursuant to Section 11 below.

       

      (ff)         
  “Subsidiary” means a “subsidiary corporation,” whether now
or hereafter existing, as defined in Section 424(f) of the
Code.

      

        
          
             


          

          
            -4-

            
              

            

          

          
             


          

        

      

       

      3.           Stock Subject to the Plan

       

      (a)           General.  Subject
to the provisions of Section 13 of the Plan, the maximum aggregate number of
Shares that may be issued under the Plan is 7,327,342 Shares.  The
number of Shares that are subject to Options or Stock Awards or any other rights
outstanding at any time under the Plan shall not exceed the number of Shares
that then remain available for issuance under the Plan.  The Company,
during the term of the Plan, shall at all times reserve and keep available
sufficient Shares to satisfy the requirements of the Plan.  The Shares
may be authorized but unissued, or reacquired Common Stock.

       

      (b)           Availability of Shares Not
Delivered under Awards.

       

      (i)           If
any Shares subject to an Option or Stock Award, are forfeited, expire or
otherwise terminate without issuance of such Shares, or any Option or Stock
Award, is settled for cash or otherwise does not result in the issuance of all
or a portion of the Shares subject to such Option or Stock Award, the Shares
shall, to the extent of such forfeiture, expiration, termination, cash
settlement or non-issuance, again be available for Award under the Plan, subject
to Section 3(b)(iv) below.

       

      (ii)           If
any Shares issued pursuant to an Option or Stock Award are forfeited back to or
repurchased by the Company, including, but not limited to, any repurchase or
forfeiture caused by the failure to meet a contingency or condition required for
the vesting of such shares, then the Share not acquired under such Option or
Stock Award shall revert to and again become available for issuance under the
Plan.

       

      (iii)           In
the event that any Option or Stock Award granted hereunder is exercised through
the tendering of  Shares (either actually or by attestation) or by the
withholding of Shares by the Company, or withholding tax liabilities arising
from such Option or Stock Award are satisfied by the tendering of Shares (either
actually or by attestation) or by the withholding of Shares by the Company, then
only the number of Shares issued net of the Shares tendered or withheld shall be
counted for purposes of determining the maximum number of Shares available for
grant under the Plan.

       

      (iv)           Notwithstanding
anything in this Section 3(b) to the contrary and solely for purposes of
determining whether Shares are available for the grant of Incentive Stock
Options, the maximum aggregate number of shares that may be granted under this
Plan shall be determined without regard to any Shares restored pursuant to this
Section 3(b) that, if taken into account, would cause the Plan to fail the
requirement under Code Section 422 that the Plan designate a maximum aggregate
number of shares that may be issued.

       

      4.           Administration of the Plan.

       

      (a)           Administrator. The
Plan shall be administered by the Board or a Committee appointed by the Board,
which Committee shall be constituted to comply with Applicable
Laws.

       

      (b)           Powers of the Administrator.  Subject
to the provisions of the Plan and, in the case of a Committee, the specific
duties delegated by the Board to such Committee, and subject to the approval of
any relevant authorities, the Administrator shall have the authority in its
discretion:

       

       

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

       

      (i)           to
determine the Fair Market Value;

       

      (ii)           to
select the Service Providers to whom Options and Stock Awards  may
from time to time be granted hereunder;

       

      (iii)           to
approve forms of Award Agreements for use under the Plan;

       

      (iv)           to
determine the terms and conditions of any Option or Stock Award granted
hereunder.  Such terms and conditions include, but are not limited to,
the exercise price, the number of Shares subject to the award, the time or times
when Options or Stock Awards may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option or Stock Award or the Common
Stock relating thereto, based in each case on such factors as the Administrator,
in its sole discretion, shall determine;

       

      (v)           to
prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans established for the
purpose of satisfying applicable foreign laws;

       

      (vi)           to
allow or require Awardholders to satisfy withholding tax obligations by electing
to have the Company withhold from the Shares to be issued upon exercise of an
Option or Stock Award that number of Shares having a Fair Market Value equal to
the minimum amount required to be withheld.  The Fair Market Value of
the Shares to be withheld shall be determined on the date that the amount of tax
to be withheld is to be determined.  All elections by Awardholders to
have Shares withheld for this purpose shall be made in such form and under such
conditions as the Administrator may deem necessary or advisable;
and

       

      (vii)           to
construe and interpret the terms of the Plan and Options granted pursuant to the
Plan.

       

      (c)           Effect of Administrator’s Decision.  All
decisions, determinations and interpretations of the Administrator shall be
final and binding on all Awardholders.

       

      (d)           Award
Agreement.  Each award or sale of Shares under the Plan (other
than upon exercise of an Option) shall be evidenced by an Award Agreement
between the Awardholder and the Company.  Such award or sale shall be
subject to all applicable terms and conditions of the Plan and may be subject to
any other terms and conditions which are not inconsistent with the Plan and
which the Board deems appropriate for inclusion in an Award
Agreement.  The provisions of the various Award Agreements entered
into under the Plan need not be identical.

       

      5.           Eligibility.  Nonstatutory
Stock Options and Stock Awards may be granted to Service
Providers.  Incentive Stock Options may be granted only to
Employees.

       

       

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

       

      6.           Limitations.

       

      (a)           Incentive Stock Option
Limit.  Each
Option shall be designated in the Option Agreement as either an Incentive Stock
Option or a Nonstatutory Stock Option.  However, notwithstanding such
designation, to the extent that the aggregate Fair Market Value of the Shares
with respect to which Incentive Stock Options are exercisable for the first time
by the Awardholder during any calendar year (under all plans of the Company and
any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as
Nonstatutory Stock Options.  For purposes of this Section 6(a),
Incentive Stock Options shall be taken into account in the order in which they
were granted.  The Fair Market Value of the Shares shall be determined
as of the time the Option with respect to such Shares is granted.

       

      (b)           At-Will
Employment.  Neither
the Plan nor any Option or Stock Awards shall confer upon any Awardholder any
right with respect to continuing the Awardholder’s relationship as a Service
Provider with the Company, nor shall it interfere in any way with his or her
right or the Company’s right to terminate such relationship at any time, with or
without Cause, and with or without notice.

       

      7.           Term of Plan.  Subject
to shareholder approval in accordance with Section 19, the Plan shall become
effective upon its adoption by the Board.  Unless sooner terminated
under Section 16, it shall continue in effect for a term of ten (10)
years from the later of (i) the effective date of the Plan, or (ii) the most
recent Board approval of an increase in the number of Shares reserved for
issuance under the Plan (contingent on shareholder approval of such
increase).

       

      8.           Term of
Option.  The
maximum term of each Option shall be stated in the Option Agreement; provided, however, that the
maximum term shall be no more than ten (10) years from the date of grant
thereof.  In the case of an Incentive Stock Option granted to an
Awardholder who, at the time the Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the maximum term of the Option shall be
five (5) years from the date of grant or such shorter term as may be
provided in the Option Agreement.  For purposes of this Section 8, in
determining stock ownership, the attribution rules of Section 424(d) of the
Code shall be applied.

       

      
      

      9.           Option Exercise Price and
Consideration.

       

      (a)           Exercise
Price.  The
per Share exercise price for the Shares to be issued upon exercise of an Option
shall be such price as is determined by the Administrator, but shall be subject
to the following:

       

      (i)           In
the case of an Incentive Stock Option

       

      (A)           granted
to an Employee who, at the time of grant of such Option, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the exercise price shall be no less than
110% of the Fair Market Value per Share on the date of grant.  For
purposes of this Section 9(a)(i)(A), in determining stock ownership, the
attribution rules of Section 424(d) of the Code shall be
applied.

       

       

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

       

      (B)           granted
to any other Employee, the per Share exercise price shall be no less than 100%
of the Fair Market Value per Share on the date of grant.

       

      (ii)           If
an Option is granted with a per Share exercise price below the per Share Fair
Market Value of the Common Stock on the grant date, then the Option shall
contain such additional terms as necessary to comply with Section 409A of the
Code.

       

      (iii)           Notwithstanding
the foregoing, Options may be granted with a per Share exercise price other than
as required above pursuant to a merger or other corporate
transaction.

       

      (b)           Forms of
Consideration.  The
consideration to be paid for the Shares to be issued upon exercise of an Option,
including the method of payment, shall be determined by the Administrator (and,
in the case of an Incentive Stock Option, shall be determined at the time of
grant).  Such consideration may consist of, without limitation,
(i) cash, (ii) check, (iii) according to a deferred payment or other
similar arrangement with the Awardholder, (iv) other Shares,
(v) consideration received by the Company under a cashless exercise program
implemented by the Company in connection with the Plan, (vi) any other form of
legal consideration as determined by the Administrator or (vii) any
combination of the foregoing methods of payment. In making its determination as
to the type of consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to benefit the
Company.  Unless otherwise specifically provided in the Option, the
purchase price of Common Stock acquired pursuant to an Option that is paid by
delivery to the Company of other Common Stock acquired, directly or indirectly
from the Company (or from the Option itself at or before the time of exercise),
shall be paid only by Shares that have been held for such period of time
required to avoid a charge to earnings for financial accounting
purposes



      10.           Exercise of Option.

       

      (a)           Procedure for Exercise;
Rights as a Shareholder.  Any
Option granted hereunder shall be exercisable according to the terms of the Plan
at such times and under such conditions as determined by the Administrator and
set forth in the Option Agreement.  An Option may not be exercised for
a fraction of a Share.

       

      An Option
shall be deemed exercised when the Company receives: (i) written or electronic
notice of exercise (in accordance with the Option Agreement) from the person
entitled to exercise the Option, (ii) full payment for the Shares with respect
to which the Option is exercised and (iii) any additional documentation required
by the Company.  Full payment may consist of any consideration and
method of payment authorized by the Administrator and permitted by the Option
Agreement and the Plan.  Shares issued upon exercise of an Option
shall be issued in the name of the Awardholder or, if requested by the
Awardholder, in the name of the Awardholder and his or her
spouse.  Until the Shares are issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive allocations of profits or losses or any
other rights as a shareholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option.  The Company shall issue
(or cause to be issued) such Shares promptly after the Option is
exercised.  No adjustment will be made for an allocation of profit or
loss or other right for which the record date is prior to the date the Shares
are issued, except as provided in Section 13 of the Plan.  An
Awardholder shall only be entitled to prospective allocations of profit or loss
upon issuance of Shares pursuant to an Option exercise.

       

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

       

      Exercise
of an Option in any manner shall result in a decrease in the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is
exercised.

       

      (b)           Termination of
Relationship as a Service Provider.  If
an Awardholder ceases to be a Service Provider other than due to death or
Disability, such Awardholder may exercise his or her Option within ninety (90)
days after the Awardholder ceases to be a Service Provider or such other period
of time as specified in the Option Agreement (but  in no event later
than the expiration of the maximum term of the Option as set forth in the Plan
or, if less, in the Option Agreement), and only to the extent that the Option is
vested and exercisable on the date of termination.   If an
Awardholder ceases to be a Service Provider as a result of the Awardholder’s
death or Disability, the Awardholder (or in the case of the Awardholder’s death,
the Awardholder’s estate, designated beneficiary or by the person(s) to whom the
Option is transferred pursuant to the Awardholder’s will or in accordance with
the laws of descent and distribution) may exercise the Awardholder’s Option
within twelve (12) months of termination, or such longer period of time as
specified in the Option Agreement, to the extent the Option is vested and
exercisable on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Option
Agreement).  Any Shares subject to the Option that are not vested or
subject to vesting acceleration on the date of termination may not be exercised
by the Awardholder on or after the date of termination and shall revert to the
Plan.  If, after termination, the Awardholder does not exercise his or
her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the
Plan.

       

      (c)           Leaves of
Absence.

       

      (i)           Unless
the Administrator provides otherwise, vesting of Options granted hereunder to
Service Providers shall be suspended during any unpaid leave of absence in
excess of ninety (90) days.

       

      (ii)           A
Service Provider shall not cease to be an Employee in the case of (A) any
leave of absence approved by the Company or (B) transfers between locations
of the Company or between the Company, its Parent, any Subsidiary, or any
successor.

       

      (iii)           For
purposes of Incentive Stock Options, no such leave may exceed ninety (90) days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract.  If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, then three (3) months following
the 91st day of such leave, any Incentive Stock Option held by the Awardholder
shall cease to be treated as an Incentive Stock Option and shall be treated for
tax purposes as a Nonstatutory Stock Option.

       

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

       

      11.           Stock
Awards.

       

      (a)           Rights to
Purchase.  Stock
Awards  may be issued either alone, in addition to, or in tandem with
other awards granted under the Plan and/or cash awards made outside of the
Plan.  After the Administrator determines that it will offer Stock
Awards under the Plan, it shall advise the offeree in writing or electronically
of the terms, conditions and restrictions related to the offer, including the
number of Shares that such person shall be entitled to purchase, the price to be
paid, and the time within which such person must accept such
offer.  The offer shall be accepted by execution of a Restricted Stock
Agreement in the form determined by the Administrator.

       

      (b)           Other
Provisions.  The Restricted Stock Agreement shall contain such
other terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Administrator in its sole discretion.

       

      (c)           Rights as a
Shareholder.  Once
the Stock Award is exercised, the purchaser shall have rights equivalent to
those of a shareholder and shall be a shareholder when his or her purchase is
entered upon the records of the duly authorized transfer agent of the
Company.  No adjustment shall be made for a dividend or other right
for which the record date is prior to the date the Stock Award is exercised,
except as provided in Section 13 of the Plan.

       

      12.           Transfer Restrictions
for Options, Stock Awards and Shares Issued Under the
Plan.

       

      (a)           Transfer
Restrictions.

       

      (i)           Limited Transferability of
Options and Stock Awards.  Unless determined otherwise by the
Administrator, Options may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or the laws of
descent and distribution, and may be exercised during the lifetime of the
Awardholder, only by the Awardholder.  Stock Awards shall be
transferable to the extent provided for by the Administrator in the Restricted
Stock Agreement.

       

      (ii)           Restrictions on Transfer of
Shares.  Prior to an Initial Public Offering, Shares received
upon the exercise of an Option or through a Stock Award may not be sold,
transferred, assigned, pledged, encumbered or otherwise disposed
of.  Except as otherwise provided in the Plan, the Option Agreement or
Restricted Stock Agreement, such restrictions on transfer, however, will not
apply to (A) a gratuitous transfer of the Shares, provided, and only if,
Awardholder obtains the Company’s prior written consent to such transfer,
(B) a transfer of title to the Shares effected pursuant to Awardholder’s
will or the laws of intestate succession, (C) a transfer to the Company in
pledge as security for any purchase-money indebtedness incurred by Awardholder
in connection with the acquisition of the Shares or (D) any repurchase of the
Shares by the Company.

       

      (iii)           Transferee
Obligations.  Each person (other than the Company) to whom the
Shares are transferred by means of one of the permitted transfers specified in
Section 12(a)(ii) must, as a condition precedent to the validity of such
transfer, acknowledge in writing to the Company, in a form satisfactory to the
Company, that such person is bound by the provisions of this Plan and the
applicable Award Agreement, to the same extent the Shares would be so subject if
retained by Awardholder.

       

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

       

      (b)           Company’s Right of First
Refusal.

       

      (i)           Before
any Shares held by Awardholder may be sold or otherwise transferred (including
any assignment, pledge, encumbrance or other disposition of the Shares, but not
including a permitted transfer under Section 12(a)(ii)), the Company or its
assignee will have an assignable right of first refusal to purchase the Shares
on the terms and conditions set forth in this Section 12(b) (the “Right of First
Refusal”).  Such Right of First Refusal shall terminate after
the earlier of (i) an Initial Public Offering or (ii) a Change in Control where
the successor corporation or its parent has shares that are publicly
traded.

       

      (ii)           In
the event Awardholder desires to accept a bona fide third-party offer for the
sale or transfer of any or all of the Shares, Awardholder will promptly deliver
to the Company a written notice (the “Notice”) stating the
terms and conditions of any proposed sale or transfer, including
(a) Awardholder’s bona fide intention to sell or otherwise transfer such
Shares, (b) the name of each proposed purchaser or other transferee (the
“Proposed
Transferee”), (c) the number of Shares to be transferred to each
Proposed Transferee, and (d) the bona fide cash price or other
consideration for which Awardholder proposes to transfer the Shares (the “Offered
Price”).  Awardholder will provide satisfactory proof that the
disposition of such shares to such Proposed Transferee would not be in
contravention of the provisions of Section 12(a) and Awardholder will offer
to sell the Shares at the Offered Price to the Company.

       

      (iii)           At
any time within thirty (30) days after receipt of the Notice, the Company
or its assignee may, by giving written notice to Awardholder, elect to purchase
all or any portion of the Shares proposed to be transferred to any one or more
of the Proposed Transferees, at the purchase price determined in accordance with
Section 12(b)(iv).

       

      (iv)           The
purchase price for the Shares purchased under this Section 12(b) will be
the Offered Price.  If the Offered Price includes consideration other
than cash, the cash equivalent value of the non-cash consideration will be
determined by the Board in good faith.

       

      (v)           Payment
of the purchase price will be made, in the discretion of the Administrator,
either (a) in cash (by check), by cancellation of all or a portion of any
outstanding indebtedness of Awardholder to the Company or such assignee, or by
any combination thereof, within thirty (30) days after receipt of the
Notice or (b) in the manner and at the time(s) set forth in the
Notice.

       

      (vi)           If
any of the Shares proposed in the Notice to be transferred to a given Proposed
Transferee are not purchased by the Company and/or its assignee as provided in
this Section, then Awardholder may sell or otherwise transfer such Shares to
that Proposed Transferee at the Offered Price or at a higher price; provided
that such sale or other transfer is consummated within sixty (60) days
after the date of the Notice; and provided, further, that any such sale or other
transfer is effected in accordance with any applicable securities laws and the
Proposed Transferee agrees in writing that the provisions of this Section will
continue to apply to the Shares in the hands of such Proposed
Transferee.  If the Shares described in the Notice are not transferred
to the Proposed Transferee within such period, or if Awardholder proposes to
change the price or other terms to make them more favorable to the Proposed
Transferee, a new Notice will be given to the Company, and the Company or its
assignee will again be offered the Right of First Refusal before any Shares held
by Awardholder may be sold or otherwise transferred.

       

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

       

      (vii)           Notwithstanding
any other provision of the Plan, the Awardholder may not deliver a Notice and
the Company may not exercise the Right of First Refusal earlier than six months
and one day following the date of issuance of the Shares (or any longer or
shorter period necessary to avoid a charge to the Company’s earnings for
financial reporting purposes).

       

      13.           Adjustments; Dissolution or
Liquidation; Change in Control.

       

      (a)           Adjustments to
Awards.  In the event that any stock dividend or other
extraordinary distribution (whether in the form of cash, Stock, or other
property), recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange, liquidation,
dissolution or other similar corporate transaction or event affects the Stock
and/or such other securities of the Company or any other issuer, then the
Committee or the Board shall equitably and proportionately substitute,
exchange, or adjust as necessary (A) the number and kind of shares of
Stock which may be delivered in connection with Awards granted thereafter, (B)
the number and kind of shares of Stock by which annual per-person Award
limitations are measured under Section 5 hereof, (C) the number and kind of
shares of Stock subject to or deliverable in respect of outstanding Awards, (E)
the exercise price, grant price or purchase price relating to any Award and/or
make provision for payment of cash or other property in respect of any
outstanding Award, and (F) other aspects of an
Award as appropriate.

       

      (b)           Dissolution or
Liquidation.  In
the event of the proposed dissolution or liquidation of the Company, the
Administrator shall notify each Awardholder as soon as practicable prior to the
effective date of such proposed transaction.  To the extent it has not
been previously exercised, an Option will terminate immediately prior to the
consummation of such proposed action.

       

      (c)           Change in
Control.  In
the event of a Change in Control of the Company, each outstanding Option may be
assumed, continued or an equivalent option substituted by the successor
corporation or a Parent of the successor corporation (together, the “Successor
Corporation”).  In the event that the Successor Corporation
refuses to assume, continue or substitute for the Option in a Change in Control,
then the Option shall terminate immediately prior to the close of the Change in
Control.  The Administrator, in its sole discretion, shall determine
whether each Option is assumed, continued, substituted or
terminated.  To the extent that the agreement relating to the Change
in Control provides for the treatment of each Option, the treatment in such
agreement shall be determinative for the treatment of each Option for purposes
of this Plan.  If such Option shall be terminated immediately prior to
and contingent upon a Change in Control, the Administrator shall provide the
Awardholder notice of such termination and a period of at least fifteen (15)
business days to exercise such Option prior to its termination in accordance
with its terms.  To the extent the Option is not exercised and shall
terminate upon a Change in Control pursuant to the terms of this Section, then
the Company shall provide a cash payment in exchange for the termination of the
vested portion of the Option contingent upon the effectiveness of such Change in
Control.  The cash payment to the Optionee shall be equal to the
excess of (A) the Fair Market Value of the vested Shares subject to the
Option as of the closing date of such Change in Control over (B) the
exercise price of the Option.  Such payment shall be made in the form
of cash, cash equivalents, or securities of the surviving corporation or its
parent with a Fair Market Value equal to the required amount.  Subject
to Section 409A of the Code, such payment may be made in installments and
may be deferred until the date or dates when the Option would have become
exercisable or such Shares would have vested.  Such payment may be
subject to vesting based on the Awardholder’s continuing service, provided that
the vesting schedule shall not be less favorable to the Awardholder than the
schedule under which the Option would have become exercisable or such Shares
would have vested.  If the Exercise Price of the Shares subject to the
Option exceeds the Fair Market Value of such Shares, then the Option may be
cancelled without making a payment to the Awardholder.  For purposes
of this Section 13(c), the Fair Market Value of any security shall be determined
without regard to any vesting conditions that may apply to such
security.

       

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

      



      In the
event of a Change in Control, any reacquisition or repurchase rights held by the
Company in respect of Common Stock issued pursuant to a Stock Award (the “Reacquisition
Rights”) may continue or be assigned by the Company to the Successor
Corporation, in connection with such Change in Control.  In the event
any Repurchase Rights are not continued or assigned to the Successor
Corporation, then such Repurchase Rights shall lapse and the Stock Award shall
be fully vested as of the effective date of the Change in Control.

       

      The
Administrator, in its discretion, may (but is not obligated to) either (x)
accelerate the vesting of any Options and Stock Awards (including permitting the
lapse of any repurchase rights held by the Company) and, if applicable, the time
at which any Option may be exercised, in full or as to some percentage of the
Option or Stock Award to a date prior to the effective time of a Change in
Control contingent upon the effectiveness of such Change in Control or (y)
provide for a cash payment in exchange for the termination of any Option or
Stock Award or any portion thereof contingent upon the effectiveness of such
Change in Control.

       

      (d)           Change in
Control.  The
Administrator in its discretion, may (but is not obligated to) provide for the
acceleration of vesting of Options or Stock Awards in the individual Option or
Restricted Stock Agreements.

       

      (e)           Reservation of
Rights.  Except as provided in this Section 13, an
Awardholder shall have no rights by reason of (i) any subdivision or
consolidation of shares of stock of any class, (ii) the payment of any
dividend or (iii) any other increase or decrease in the number of shares of
stock of any class.  Any issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number or exercise price of Shares subject to an Option.  The
grant of an Option pursuant to the Plan shall not affect in any way the right or
power of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure, to merge or consolidate or to
dissolve, liquidate, sell or transfer all or any part of its business or
assets.

       

      14.           Code Section
409A.  If and to the extent that the Administrator believes
that any Options or Stock Awards may constitute a “nonqualified deferred
compensation plan” under Section 409A of the Code, the terms and conditions
set forth in the respective Option or Restricted Stock Agreement for
such  Options or Stock Award shall be drafted in a manner that is
intended to comply with, and shall be interpreted in a manner consistent with,
the applicable requirements of Section 409A of the Code, unless otherwise
agreed to in writing by the Awardholder and the Company.


      
 

      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

        

      

      15.           Time of Granting Options and
Stock Awards.  The
date of grant of an Option or Stock Award shall, for all purposes, be the date
on which the Administrator makes the determination granting such Option or Stock
Award, or such later date as is determined by the
Administrator.  Notice of the determination shall be given to each
Service Provider to whom an Option or Stock Award is so granted within a
reasonable time after the date of such grant.

       

      16.           Amendment and Termination of
the Plan.

       

      (a)           Amendment and
Termination.  The
Administrator may at any time amend, alter, suspend or terminate the
Plan.

       

      (b)           Shareholder
Approval.  The
Administrator shall obtain shareholder approval of any Plan amendment to the
extent the Administrator deems necessary and desirable to comply with Applicable
Laws; provided,
however, that
any amendment of the Plan shall be subject to the approval of the Company’s
shareholders if it (i) increases the number of Shares available for
issuance under the Plan (except as provided in Section 13) or
(ii) materially changes the class of persons who are eligible for the grant
of Options.  Shareholder approval shall not be required for any other
amendment of the Plan.

       

      (c)           Effect of Amendment or Termination.  No
amendment, alteration, suspension or termination of the Plan shall impair the
rights of any Awardholder, unless mutually agreed otherwise between the
Awardholder and the Administrator, which agreement must be in writing and signed
by the Awardholder and the Company.  Termination of the Plan shall not
affect the Administrator’s ability to exercise the powers granted to it
hereunder with respect to Options granted under the Plan prior to the date of
such termination.

       

      (d)           Amendment of Options and
Stock Awards.  The
Administrator may at any time, and from time to time, amend the terms of any one
or more Options or Stock Awards; provided, however, that the
rights under any Option or Stock Award shall not be impaired by any such
amendment unless the Awardholder consents in writing.

       

      17.           Acceleration of
Vesting.  The Administrator may at any time, and from time to
time, in its discretion, accelerate the vesting schedule in whole or in part,
conditionally or unconditionally, upon written notice to the Awardholder,
regardless of the terms of the grant.  Any such acceleration by the
Administrator shall not affect the expiration date of an Option or Stock
Award.

       

      18.           Conditions Upon Issuance of Shares.

       

      (a)           Legal
Compliance.  Shares
shall not be issued pursuant to the exercise of an Option or Stock Award unless
the exercise of such Option or Stock Award and the issuance and delivery of such
Shares shall comply with Applicable Laws and shall be further subject to the
approval of counsel for the Company with respect to such
compliance.

       

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

      



      (b)           Investment
Representations.  As
a condition to the exercise of an Option or Stock Purchase Right, the
Administrator may require the person exercising such Option or Stock Award to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

       

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

       

      20.           Shareholder
Approval.  At
the discretion of the Board, in order to comply with the requirements for the
grant of  Incentive Stock Options or any Applicable Laws, the Plan may
be subject to approval by the shareholders of the Company within
twelve (12) months after the date the Plan is adopted.  Such
shareholder approval shall be obtained in the degree and manner required under
Applicable Laws.

       

      


       

       

      
        
          
          

        

        
          -15-