Exhibit 4.1





EXHIBIT 4.1




OCEAN POWER TECHNOLOGIES, INC.




2006 STOCK INCENTIVE PLAN, AS AMENDED ON JANUARY 28, 2010




1. Purpose




The purpose of this 2006 Stock Incentive Plan, as amended (the “Plan”), of Ocean Power
Technologies, Inc., a New Jersey corporation (including any successor corporations, the “Company”),
is to advance the interests of the Company’s stockholders by enhancing the Company’s ability to
attract, retain and motivate persons who are expected to make important contributions to the
Company and by providing such persons with equity ownership opportunities and performance-based
incentives that are intended to align their interests with those of the Company’s stockholders.
Except where the context otherwise requires, the term “Company” shall include any of the Company’s
present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the
Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”)
and any other business venture (including, without limitation, joint venture or limited liability
company) in which the Company has a controlling interest, as determined by the Board of Directors
of the Company (the “Board”).



2. Eligibility




All of the Company’s employees, officers, directors, consultants and advisors are eligible to
be granted options, stock appreciation rights, restricted stock, restricted stock units and other
stock-unit awards (each, an “Award”) under the Plan. Each person who receives an Award under the
Plan is deemed a “Participant”.



3. Administration and Delegation




(a) Administration by Board of Directors. The Plan will be administered by the Board.
The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable. The Board may
construe and interpret the terms of the Plan and any Award agreements entered into under the Plan.
The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or
any Award in the manner and to the extent it shall deem expedient to carry the Plan into effect and
it shall be the sole and final judge of such expediency. All decisions by the Board shall be made
in the Board’s sole discretion and shall be final and binding on all persons having or claiming any
interest in the Plan or in any Award. No director or person acting pursuant to the authority
delegated by the Board shall be liable for any action or determination relating to or under the
Plan made in good faith.



(b) Appointment of Committees. To the extent permitted by applicable law, the Board
may delegate any or all of its powers under the Plan to one or more committees or subcommittees of
the Board (a “Committee”). All references in the Plan to the “Board” shall mean the Board or a
Committee of the Board or the officers referred to in Section 3(c) to the extent that the Board’s
powers or authority under the Plan have been delegated to such Committee or officers.


 


 









 





(c) Delegation to Officers. To the extent permitted by applicable law, the Board may
delegate to one or more officers of the Company the power to grant Awards to employees or officers
of the Company or any of its present or future subsidiary corporations and to exercise such other
powers under the Plan as the Board may determine, provided that the Board shall fix the terms of
the Awards to be granted by such officers (including the exercise price of such Awards, which may
include a formula by which the exercise price will be determined) and the maximum number of shares
subject to Awards that the officers may grant; provided further, however, that no officer shall be
authorized to grant Awards to any “executive officer” of the Company (as defined by Rule 3b-7 under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or to any “officer” of the
Company (as defined by Rule 16a-1 under the Exchange Act).



(d) Awards to Non-Employee Directors. Discretionary Awards to non-employee directors
will only be granted and administered by a Committee, all of the members of which are independent
directors as defined by Section 5605(a)(2) of the Nasdaq Marketplace Rules.



4. Stock Available for Awards




(a) Number of Shares. Subject to adjustment under Section 9, Awards may be made under
the Plan for up to the number of shares of common stock, $0.001 par value per share, of the Company
(the “Common Stock”) that is equal to 1,653,215 shares of Common Stock.



If any Award expires or is terminated, surrendered or canceled without having been fully
exercised, is forfeited in whole or in part (including as the result of shares of Common Stock
subject to such Award being repurchased by the Company at the original issuance price pursuant to a
contractual repurchase right) is settled in cash or otherwise results in any Common Stock not being
issued, the unused Common Stock covered by such Award shall again be available for the grant of
Awards under the Plan. Further, shares of Common Stock tendered to the Company by a Participant to
exercise an Award or to satisfy a tax withholding obligation (including shares retained from an
Award creating the tax obligation) shall be added to the number of shares of Common Stock available
for the grant of Awards under the Plan. However, in the case of Incentive Stock Options (as
hereinafter defined), the foregoing provisions shall be subject to any limitations under the Code.
Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or
treasury shares.



(b) Per-Participant Limit. Subject to adjustment under Section 9, for Awards granted
after the Common Stock is registered under the Securities Exchange Act of 1934 (the “Exchange
Act”), the maximum number of shares of Common Stock with respect to which Awards may be granted to
any Participant under the Plan shall be 2,000,000 per fiscal year. For purposes of the foregoing
limit, the combination of an Option in tandem with an SAR (as each is hereafter defined) shall be
treated as a single Award. The per-Participant limit described in this Section 4(b) shall be
construed and applied consistently with Section 162(m) of the Code or any successor provision
thereto, and the regulations thereunder (“Section 162(m)”).


 


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(c) Substitute Awards. In connection with a merger or consolidation of an entity
with the Company or the acquisition by the Company of property or stock of an entity, the Board may
grant Awards in substitution for any options or other stock or stock-based awards granted by such
entity or an affiliate thereof. Substitute Awards may be granted on such terms as the Board deems
appropriate in the circumstances, notwithstanding any limitations on Awards contained in the Plan.
Substitute Awards shall not count against the overall share limit set forth in Section 4(a), except
as may be required by reason of Section 422 and related provisions of the Code.



5. Stock Options




(a) General. The Board may grant options to purchase Common Stock (each, an “Option”)
and determine the number of shares of Common Stock to be covered by each Option, the exercise price
of each Option and the conditions and limitations applicable to the exercise of each Option,
including conditions relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock Option (as
hereinafter defined) shall be designated a “Nonstatutory Stock Option”.



(b) Incentive Stock Options. An Option that the Board intends to be an “incentive
stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall only be
granted to employees of Ocean Power Technologies, Inc., any of Ocean Power Technologies, Inc.’s
present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the
Code, and any other entities the employees of which are eligible to receive Incentive Stock Options
under the Code, and shall be subject to and shall be construed consistently with the requirements
of Section 422 of the Code. The Company shall have no liability to a Participant, or any other
party, if an Option (or any part thereof) that is intended to be an Incentive Stock Option is not
an Incentive Stock Option or for any action taken by the Board including without limitation the
conversion of an Incentive Stock Option to a Nonstatutory Stock Option.



(c) Exercise Price. The Board shall establish the exercise price of each Option and
specify such exercise price in the applicable Option agreement; provided, however, that the
exercise price shall not be less than 100% of the Fair Market Value (as defined below) on the date
the Option is granted.



(d) Duration of Options. Each Option shall be exercisable at such times and subject
to such terms and conditions as the Board may specify in the applicable Option agreement.



(e) Exercise of Option. Options may be exercised by delivery to the Company of a
written notice of exercise signed by the proper person or by any other form of notice (including
electronic notice) approved by the Board together with payment in full as specified in Section 5(f)
for the number of shares for which the Option is exercised. Shares of Common Stock subject to the
Option will be delivered by the Company following exercise either as soon as practicable or,
subject to such conditions as the Board shall specify, on a deferred basis (with the Company’s
obligation to be evidenced by an instrument providing for future delivery of the deferred shares at
the time or times specified by the Board).



(f) Payment Upon Exercise. Common Stock purchased upon the exercise of an Option
granted under the Plan shall be paid for as follows:




(i) in cash or by check, payable to the order of the Company;


 


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(ii) except as may otherwise be provided in the applicable Option agreement, by (i) delivery
of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the
Company sufficient funds to pay the exercise price and any required tax withholding or (ii)
delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions
to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the
exercise price and any required tax withholding;



(iii) to the extent provided for in the applicable Option agreement or approved by the Board,
in its sole discretion, by delivery of shares of Common Stock owned by the Participant valued at
their fair market value as determined by (or in a manner approved by) the Board (“Fair Market
Value”), provided (i) such method of payment is then permitted under applicable law, (ii) such
Common Stock, if acquired directly from the Company, was owned by the Participant for such minimum
period of time, if any, as may be established by the Board in its discretion and (iii) such Common
Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other similar
requirements;



(iv) to the extent permitted by applicable law and provided for in the applicable Option
agreement or approved by the Board, in its sole discretion, by (i) delivery of a promissory note of
the Participant to the Company on terms determined by the Board, or (ii) payment of such other
lawful consideration as the Board may determine; or




(v) by any combination of the above permitted forms of payment.



(g) Repricing of Options. Unless such action is approved by the Company’s
stockholders: (i) no outstanding Option granted under the Plan may be amended to provide an
exercise price per share that is lower than the then-current exercise price per share of such
outstanding Option (other than adjustments pursuant to Section 9); and (ii) the Board may not
cancel any outstanding option (whether or not granted under the Plan) and grant in substitution
therefor new Awards under the Plan covering the same or a different number of shares of Common
Stock and having an exercise price per share lower than the then-current exercise price per share
of the cancelled option.



6. Stock Appreciation Rights.



(a) General. The Board may grant Awards consisting of a Stock Appreciation Right, or
SAR, is an Award entitling the holder, upon exercise, to receive an amount in cash, Common Stock or
a combination thereof (such form to be determined by the Board) determined by reference to
appreciation, from and after the date of grant, in the Fair Market Value of a share of Common
Stock. SARs may be based solely on appreciation in the Fair Market Value of Common Stock or on a
comparison of such appreciation with some other measure of market
growth such as (but not limited to) appreciation in a recognized market index. The date as of
which such appreciation or other measure is determined shall be the exercise date.


 


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(b) Grants. Stock Appreciation Rights may be granted in tandem with, or independently
of, Options granted under the Plan.



(i) Tandem Awards. When Stock Appreciation Rights are expressly granted in tandem
with Options, (i) the Stock Appreciation Right will be exercisable only at such time or times, and
to the extent, that the related Option is exercisable (except to the extent designated by the Board
in connection with a Reorganization Event) and will be exercisable in accordance with the procedure
required for exercise of the related Option; (ii) the Stock Appreciation Right will terminate and
no longer be exercisable upon the termination or exercise of the related Option, except to the
extent designated by the Board in connection with a Reorganization Event and except that a Stock
Appreciation Right granted with respect to less than the full number of shares covered by an Option
will not be reduced until the number of shares as to which the related Option has been exercised or
has terminated exceeds the number of shares not covered by the Stock Appreciation Right; (iii) the
Option will terminate and no longer be exercisable upon the exercise of the related Stock
Appreciation Right; and (iv) the Stock Appreciation Right will be transferable only with the
related Option.



(ii) Independent SARs. A Stock Appreciation Right not expressly granted in tandem
with an Option will become exercisable at such time or times, and on such conditions, as the Board
may specify in the SAR Award.



(c) Grant Price. The Board shall establish the grant price or exercise price of each
SAR and specify such price in the applicable Award agreement; provided, however, that the grant
price or exercise price of an SAR shall not be less than 100% of the Fair Market Value per share of
Common Stock on the date of grant of the SAR.



(d) Term. Each SAR shall be exercisable at such times and subject to such terms and
conditions as the Board may specify in the applicable Award agreement.



(e) Exercise. Stock Appreciation Rights may be exercised by delivery to the Company
of a written notice of exercise signed by the proper person or by any other form of notice
(including electronic notice) approved by the Board, together with any other documents required by
the Board.



(f) Limitation on Repricing. Unless such action is approved by the Company’s
stockholders: (1) no outstanding SAR granted under the Plan may be amended to provide an exercise
price per share that is lower than the then-current exercise price per share of such outstanding
SAR (other than adjustments pursuant to Section 9) and (2) the Board may not cancel any outstanding
SAR (whether or not granted under the Plan) and grant in substitution therefor new Awards under the
Plan covering the same or a different number of shares of Common Stock and having an exercise price
per share lower than the then-current exercise price per share of the cancelled SAR.



7. Restricted Stock; Restricted Stock Units.



(a) General. The Board may grant Awards entitling recipients to acquire shares of
Common Stock (“Restricted Stock”), subject to the right of the Company to repurchase all or part of
such shares at their issue price or other stated or formula price (or to require forfeiture of such
shares if issued at no cost) from the recipient in the event that conditions specified by the Board
in the applicable Award are not satisfied prior to the end of the applicable restriction period or
periods established by the Board for such Award. Instead of granting Awards for Restricted Stock,
the Board may grant Awards entitling the recipient to receive shares of Common Stock to be
delivered at the time such shares of Common Stock vest (“Restricted Stock Units”) (Restricted Stock
and Restricted Stock Units are each referred to herein as a “Restricted Stock Award”).


 


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(b) Terms and Conditions for all Restricted Stock Awards. The Board shall determine
the terms and conditions of a Restricted Stock Award, including the conditions for vesting and
repurchase (or forfeiture) and the issue price, if any. Restricted Stock Awards that vest solely
based on the passage of time shall not vest, in whole or in part, prior to the first anniversary of
the date of grant (or, in the case of Awards to non-employee directors, if earlier, the date of the
first annual meeting held after the date of grant), no more than one-third of the shares subject
thereto shall vest prior to the second anniversary of the date of grant (or, in the case of Awards
to non-employee directors, if earlier, the date of the second annual meeting held after the date of
grant), and no more than two-thirds of the shares subject thereto shall vest prior to the third
anniversary of the date of grant (or, in the case of Awards to non-employee directors, if earlier,
the date of the third annual meeting held after the date of grant). Restricted Stock Awards that
do not vest solely based on the passage of time shall not vest, in whole or in part, prior to the
first anniversary of the date of grant (or, in the case of Awards to non-employee directors, if
earlier, the date of the first annual meeting held after the date of grant). The two foregoing
sentences shall not apply to Restricted Stock Awards and Other Stock Unit Awards (together with any
other Awards the exercisability of which has been accelerated, as provided in Section 10(h)(ii)(B))
granted, in the aggregate, for up to 10% of the maximum number of authorized shares set forth in
Section 4(a). Notwithstanding any other provision of this Plan, the Board may, in its discretion,
either at the time a Restricted Stock Award is made or at any time thereafter, waive its right to
repurchase shares of Common Stock (or waive the forfeiture thereof) or remove or modify any part or
all of the restrictions applicable to the Restricted Stock Award, provided that the Board may only
exercise such rights upon death, disability or retirement of the Participant or a Reorganization
Event.




(c) Additional Provisions Relating to Restricted Stock.



(i) Dividends. Participants holding shares of Restricted Stock will be entitled to
all ordinary cash dividends paid with respect to such shares, unless otherwise provided by the
Board. If any such dividends or distributions are paid in shares, or consist of a dividend or
distribution to holders of Common Stock other than an ordinary cash dividend, the shares, cash or
other property will be subject to the same restrictions on transferability and forfeitability as
the shares of Restricted Stock with respect to which they were paid. Each dividend payment
will be made no later than the end of the calendar year in which the dividends are paid to
shareholders of that class of stock or, if later, the 15th day of the third month following the
date the dividends are paid to shareholders of that class of stock.



(ii) Stock Certificates. The Company may require that any stock certificates issued
in respect of shares of Restricted Stock shall be deposited in escrow by the Participant, together
with a stock power endorsed in blank, with the Company (or its designee). At the expiration of
the applicable restriction periods, the Company (or such designee) shall deliver the certificates
no longer subject to such restrictions to the Participant or if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a Participant to receive amounts
due or exercise rights of the Participant in the event of the Participant’s death (the “Designated
Beneficiary”). In the absence of an effective designation by a Participant, “Designated
Beneficiary” shall mean the Participant’s estate.


 


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(d) Additional Provisions Relating to Restricted Stock Units.



(i) Settlement. Upon the vesting of and/or lapsing of any other restrictions (i.e.,
settlement) with respect to each Restricted Stock Unit, the Participant shall be entitled to
receive from the Company one share of Common Stock or an amount of cash equal to the Fair Market
Value of one share of Common Stock, as provided in the applicable Award agreement. The Board may,
in its discretion, provide that settlement of Restricted Stock Units shall be deferred, on a
mandatory basis or at the election of the Participant.



(ii) Voting Rights. A Participant shall have no voting rights with respect to any
Restricted Stock Units.



(iii) Dividend Equivalents. To the extent provided by the Board, in its sole
discretion, a grant of Restricted Stock Units may provide Participants with the right to receive an
amount equal to any dividends or other distributions declared and paid on an equal number of
outstanding shares of Common Stock (“Dividend Equivalents”). Dividend Equivalents may be paid
currently or credited to an account for the Participants, may be settled in cash and/or shares of
Common Stock and may be subject to the same restrictions on transfer and forfeitability as the
Restricted Stock Units with respect to which paid, as determined by the Board in its sole
discretion, subject in each case to such terms and conditions as the Board shall establish, in each
case to be set forth in the applicable Award agreement.



8. Other Stock Unit Awards




(a) General. Other Awards of shares of Common Stock, and other Awards that are valued
in whole or in part by reference to, or are otherwise based on, shares of Common Stock or other
property, may be granted hereunder to Participants (“Other Stock Unit Awards”), including without
limitation Awards entitling recipients to receive shares of Common Stock to be delivered in the
future. Such Other Stock Unit Awards shall also be available as a form of payment in the
settlement of other Awards granted under the Plan or as payment in lieu of compensation to
which a Participant is otherwise entitled. Other Stock Unit Awards may be paid in shares of
Common Stock or cash, as the Board shall determine.



(b) Terms and Conditions. Subject to the provisions of the Plan, the Board shall
determine the conditions of each Other Stock Unit Award, including any purchase price applicable
thereto. Other Stock Unit Awards that vest, if applicable, solely based on the passage of time
shall not vest, in whole or in part, prior to the first anniversary of the date of grant (or, in
the case of Awards to non-employee directors, if earlier, the date of the first annual meeting held
after the date of grant), no more than one-third of the shares subject thereto shall vest prior to
the second anniversary of the date of grant (or, in the case of Awards to non-employee directors,
if earlier, the date of the second annual meeting held after the date of grant), and no more than
two-thirds of the shares subject thereto shall vest prior to the third anniversary of the date of
grant (or, in the case of Awards to non-employee directors, if earlier, the date of the third
annual meeting held after the date of grant). Other Stock Unit Awards that do not vest



 


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solely
based on the passage of time shall not vest, in whole or in part, if applicable, prior to the first
anniversary of the date of grant (or, in the case of Awards to non-employee directors, if earlier,
the date of the first annual meeting held after the date of grant). The two foregoing sentences
shall not apply to Other Stock Unit Awards and Restricted Stock Awards (together with any other
Awards the exercisability of which has been accelerated, as provided in Section 10(h)(ii)(B))
granted, in the aggregate, for up to 10% of the maximum number of authorized shares set forth in
Section 4(a). Notwithstanding any other provision of this Plan, the Board may, in its discretion,
either at the time an Other Stock Unit Award is made or at any time thereafter, waive its right to
repurchase shares of Common Stock (or waive the forfeiture thereof), if applicable, or remove or
modify any part or all of the restrictions applicable to the Other Stock Unit Award, provided that
the Board may only exercise such rights upon death, disability or retirement of the Participant or
a Reorganization Event.



9. Adjustments for Changes in Common Stock and Certain Other Events.



(a) Changes in Capitalization. In the event of any stock split, reverse stock split,
stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or
other similar change in capitalization or event, or any distribution to holders of Common Stock
other than an ordinary cash dividend, (i) the number and class of securities available under this
Plan, (ii) the per-Participant limit set forth in Section 4(b), (iii) the number and class of
securities and exercise price per share of each outstanding Option, (iv) the share- and per-share
provisions of each Stock Appreciation Right, (v) the repurchase price per share subject to each
outstanding Restricted Stock Award, and (vi) the share- and per-share-related provisions of each
outstanding Other Stock Unit Award, shall be equitably adjusted by the Company (or substituted
Awards may be made, if applicable) in the manner determined by the Board.




(b) Reorganization Events



(i) Definition. A “Reorganization Event” shall mean: (a) any merger or consolidation
of the Company with or into another entity as a result of which all of the Common
Stock of the Company is converted into or exchanged for the right to receive cash, securities
or other property or is cancelled, (b) a sale of all or substantially all of the assets of the
Company, (c) any transaction resulting in a change of control of the Company, (d) a
recapitalization of the Company, (e) any exchange of all of the Common Stock of the Company for
cash, securities or other property pursuant to a share exchange transaction or (f) any liquidation
or dissolution of the Company.



(ii) Consequences of a Reorganization Event on Awards Other than Restricted Stock
Awards. In connection with a Reorganization Event, the Board shall take any one or more of the
following actions as to all or any outstanding Awards, other than Restricted Stock Awards, on such
terms as the Board determines: (i) provide that Awards shall be assumed, or substantially
equivalent Awards shall be substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), (ii) upon written notice to a Participant, provide that the Participant’s unexercised
Options or other unexercised Awards will terminate immediately prior to the consummation of such
Reorganization Event unless exercised by the Participant within a specified period following the
date of such notice, (iii) provide that outstanding Awards shall become exercisable, realizable or




 


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deliverable, or restrictions applicable to an Award shall lapse, in whole or in part prior to or
upon such Reorganization Event, (iv) in the event of a Reorganization Event under the terms of
which holders of Common Stock will receive upon consummation thereof a cash payment for each share
surrendered in the Reorganization Event (the “Acquisition Price”), make or provide for a cash
payment to a Participant equal to the excess, if any, of (A) the Acquisition Price times the number
of shares of Common Stock subject to the Participant’s Options or other Awards (to the extent the
exercise price does not exceed the Acquisition Price) over (B) the aggregate exercise price of all
such outstanding Options or other Awards and any applicable tax witholdings, in exchange for the
termination of such Options or other Awards, (v) provide that, in connection with a liquidation or
dissolution of the Company, Awards shall convert into the right to receive liquidation proceeds (if
applicable, net of the exercise price thereof) and (vi) any combination of the foregoing.



For purposes of clause (i) above, an Option shall be considered assumed if, following
consummation of the Reorganization Event, the Option confers the right to purchase, for each share
of Common Stock subject to the Option immediately prior to the consummation of the Reorganization
Event, the consideration (whether cash, securities or other property) received as a result of the
Reorganization Event by holders of Common Stock for each share of Common Stock held immediately
prior to the consummation of the Reorganization Event (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
shares of Common Stock); provided, however, that if the consideration received as a result of the
Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an
affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation,
provide for the consideration to be received upon the exercise of Options to consist solely of
common stock of the acquiring or succeeding corporation (or an affiliate thereof) equivalent in
value (as determined by the Board) to the per share consideration received by holders of
outstanding shares of Common Stock as a result of the Reorganization Event.



(iii) Consequences of a Reorganization Event on Restricted Stock Awards. Upon the
occurrence of a Reorganization Event other than a liquidation or dissolution of the Company, the
repurchase and other rights of the Company under each outstanding Restricted Stock Award shall
inure to the benefit of the Company’s successor and shall, unless the Board determines otherwise,
apply to the cash, securities or other property which the Common Stock was converted into or
exchanged for pursuant to such Reorganization Event in the same manner and to the same extent as
they applied to the Common Stock subject to such Restricted Stock Award. Upon the occurrence of a
Reorganization Event involving the liquidation or dissolution of the Company, except to the extent
specifically provided to the contrary in the instrument evidencing any Restricted Stock Award or
any other agreement between a Participant and the Company, all restrictions and conditions on all
Restricted Stock Awards then outstanding shall automatically be deemed terminated or satisfied.



10. General Provisions Applicable to Awards




(a) Transferability of Awards. Except as the Board may otherwise determine or provide
in an Award, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by
the person to whom they are granted, either voluntarily or by operation of law, except by will or
the laws of descent and distribution or, other than in the case of an Incentive Stock Option,
pursuant to a qualified domestic relations order, and, during the life of the Participant, shall be
exercisable only by the Participant. References to a Participant, to the extent relevant in the
context, shall include references to authorized transferees.


 


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(b) Documentation. Each Award shall be evidenced in such form (written, electronic or
otherwise), as the Board shall determine. Each Award may contain terms and conditions in addition
to those set forth in the Plan.



(c) Board Discretion. Except as otherwise provided by the Plan, each Award may be
made alone or in addition or in relation to any other Award. The terms of each Award need not be
identical, and the Board need not treat Participants uniformly.



(d) Termination of Status. The Board shall determine the effect on an Award of the
disability, death, retirement, authorized leave of absence or other change in the employment or
other status of a Participant and the extent to which, and the period during which, the
Participant, or the Participant’s legal representative, conservator, guardian or Designated
Beneficiary, may exercise rights under the Award.



(e) Withholding. Each Participant shall pay to the Company, or make provision
satisfactory to the Company for payment of, any taxes required by law to be withheld in connection
with an Award to such Participant; provided, however that Participant shall not be required to make
any payment until such time as the Company is obligated to make the applicable withholding payment.
Except as the Board may otherwise provide in an Award, for so long as the Common Stock is
registered under the Exchange Act, Participants may satisfy such tax obligations in whole or in
part by delivery of shares of Common Stock, including shares retained from the Award creating the
tax obligation, valued at their Fair Market Value; provided,
however, except as otherwise provided by the Board, that the total tax withholding where stock
is being used to satisfy such tax obligations cannot exceed the Company’s minimum statutory
withholding obligations (based on minimum statutory withholding rates for federal and state tax
purposes, including payroll taxes, that are applicable to such supplemental taxable income).
Shares surrendered to satisfy tax withholding requirements cannot be subject to any repurchase,
forfeiture, unfulfilled vesting or other similar requirements. The Company may, to the extent
permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to a
Participant.



(f) Amendment of Award. The Board may amend, modify or terminate any outstanding
Award, including but not limited to, substituting therefor another Award of the same or a different
type, changing the date of exercise or realization, and converting an Incentive Stock Option to a
Nonstatutory Stock Option, provided that the Participant’s consent to such action shall be required
unless the Board determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.



(g) Conditions on Delivery of Stock. The Company will not be obligated to deliver any
shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously
delivered under the Plan until (i) all conditions of the Award have been met or removed to the
satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied, including any
applicable securities laws and any applicable stock exchange or stock market rules and regulations,
and (iii) the Participant has executed and delivered to the Company such representations or
agreements as the Company may consider appropriate to satisfy the requirements of any applicable
laws, rules or regulations.


 


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(h) Acceleration.



(i) Restricted Stock Awards and Other Stock Unit Awards. The Board may, at any time,
provide that a Restricted Stock Award or Other Stock Unit Award shall become immediately
exercisable in full or in part, free of some or all restrictions or conditions, or otherwise
realizable in full or in part, as the case may be, subject to the limitations provided in Sections
7(b) and 8(b).



(ii) Options and Stock Appreciation Rights. With respect to any Option or SAR, the
Board may, in its discretion, either at the time an Option or an SAR is granted or at any time
thereafter, provide that such Option or SAR shall become immediately exercisable in full or in
part, free of some or all restrictions or conditions, or otherwise realizable in full or in part,
as the case may be (collectively, “accelerated”), (A) upon the death, disability or retirement of
the Participant or a Reorganization Event, and (B) in any other circumstance, provided that the
number of Options and SARs that may be accelerated, together with any Restricted Stock Awards and
Other Stock Unit Awards that do not satisfy the minimum vesting provisions in Sections 7(b) and
8(b), respectively, may not, in the aggregate, exceed 10% of the maximum number of authorized
shares set forth in Section 4(a).



11. Miscellaneous




(a) No Right To Employment or Other Status. No person shall have any claim or right
to be granted an Award, and the grant of an Award shall not be construed as giving a Participant
the right to continued employment or any other relationship with the Company. The Company
expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a
Participant free from any liability or claim under the Plan, except as expressly provided in the
applicable Award.



(b) No Rights As Stockholder. Subject to the provisions of the applicable Award, no
Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any
shares of Common Stock to be distributed with respect to an Award until becoming the record holder
of such shares. Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the number of shares
subject to such Option are adjusted as of the date of the distribution of the dividend (rather than
as of the record date for such dividend), then an optionee who exercises an Option between the
record date and the distribution date for such stock dividend shall be entitled to receive, on the
distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such
Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of
business on the record date for such stock dividend.


 


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(c) Effective Date and Term of Plan. The Plan shall become effective on the date on
which the Securities and Exchange Commission declares the registration statement on Form S-1 for
the initial public offering of the Company’s common stock effective (the “Effective Date”). No
Awards shall be granted under the Plan after the completion of 10 years from the earlier of (i) the
date on which the Plan was adopted by the Board or (ii) the date the Plan was approved by the
Company’s stockholders, but Awards previously granted may extend beyond that date.



(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any
portion thereof at any time; provided, however that, to the extent determined by the Board, no
amendment requiring stockholder approval under any applicable legal, regulatory or listing
requirement shall become effective until such stockholder approval is obtained.



(e) Provisions for Foreign Participants. The Board may modify Awards or Options
granted to Participants who are foreign nationals or employed outside the United States or
establish subplans or procedures under the Plan to recognize differences in laws, rules,
regulations or customs of such foreign jurisdictions with respect to tax, securities, currency,
employee benefit or other matters.



(f) Compliance with Code Section 409A. No Award shall provide for deferral of
compensation that does not comply with Section 409A of the Code, unless the Board, at the time of
grant, specifically provides that the Award is not intended to comply with Section 409A of the
Code. The Company shall have no liability to a Participant, or any other party, if an Award that
is intended to be exempt from, or compliant with, Section 409A is not so exempt or compliant or for
any action taken by the Board.



(g) Governing Law. The provisions of the Plan and all Awards made hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware, excluding
choice-of-law principles of the law of such state that would require the application of the laws of
a jurisdiction other than such state.


 


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