EXHIBIT 10.1


 


BIOCRYST PHARMACEUTICALS, INC.

STOCK INCENTIVE PLAN

(AS AMENDED AND RESTATED MAY 23, 2016)


 


 


Article
One

GENERAL PROVISIONS

 


I.                  
PURPOSES OF THE PLAN


 


A.               
This Stock Incentive Plan (the “Plan”), formerly the “BioCryst Pharmaceuticals, Inc. 1991 Stock Option
Plan,” is intended to promote the interests of BioCryst Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
by providing a method whereby (i) employees (including officers and directors) of the Company (or its parent or subsidiary corporations),
(ii) non-employee members of the board of directors of the Company (the “Board”) (or of any parent or subsidiary corporations)
and (iii) consultants and other independent contractors who provide valuable services to the Company (or any parent or subsidiary
corporations) may be offered the opportunity to acquire a proprietary interest, or otherwise increase their proprietary interest,
in the Company as an incentive for them to remain in the service of the Company (or any parent or subsidiary corporations).


 


B.                
For purposes of the Plan, the following provisions shall be applicable in determining the parent and subsidiary corporations
of the Company:


 


(i)Any corporation (other than the Company) in an unbroken chain
of corporations ending with the Company shall be considered to be a parent corporation of the Company, provided each such
corporation in the unbroken chain (other than the Company) owns, at the time of the determination, 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.


 


(ii)Each corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company shall be considered to be a subsidiary of the Company, provided each such
corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, 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.


 


C.                
The Plan, as amended and restated, was approved and adopted by the Board on April 4, 2016 in order to increase by 3,800,000
the number of shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), that may
be issued pursuant to the Plan and to increase the maximum number of shares of Common Stock for which any one individual participating
in the Plan may receive options, separately exercisable stock appreciation rights and direct stock issuances and RSUs to 1,500,000
in any calendar year. The Board’s adoption of these amendments was approved by the Company’s stockholders at the Company’s
2016 Annual Stockholders Meeting. The Plan is hereby amended and restated effective as of May 23, 2016 to increase the number
of non-statutory stock options to purchase shares of Common Stock automatically granted to the Company’s non-employee Board
members pursuant to Article Four hereof.










 






     


     

    

II.               
STRUCTURE OF THE PLAN


 


A.               
The Plan shall be divided into three separate equity programs:


 


(i)the Discretionary Option Grant Program specified in
Article Two, pursuant to which eligible persons may, at the discretion of the Plan Administrator, be granted options to purchase
shares of Common Stock,


 


(ii)the Stock Issuance Program specified in Article Three,
pursuant to which eligible persons may, at the discretion of the Plan Administrator, be issued shares of Common Stock directly
or through the issuance of restricted stock units (“RSUs”) that provide for the issuance of shares of Common Stock
if the applicable vesting criteria are satisfied, and


 


(iii)the Automatic Option Grant Program specified in
Article Four, pursuant to which non-employee members of the Board will automatically receive option grants to purchase shares of
Common Stock.


 


B.                
Unless the context clearly indicates otherwise, the provisions of Articles One and Five of the Plan shall apply to all equity
programs under the Plan and shall accordingly govern the interests of all individuals under the Plan.


 


III.            
ADMINISTRATION OF THE PLAN


 


A.               
The Plan shall be administered by the Committee who shall be the Compensation Committee of the Board or, in the absence
of a Compensation Committee, a properly constituted committee or the Board itself (the administrator is referred to herein as the
“Committee” or the “Plan Administrator”). Any power of the Committee may also be exercised by the Board,
except to the extent that the grant or exercise of such authority would cause any Award or transaction to become subject to (or
lose an exemption under) the short-swing profit recovery provisions of Section 16 of the Securities Exchange Act of 1934 or cause
an Award designated as a Performance Award not to qualify for treatment as performance-based compensation under Section 162(m)
of the Code. To the extent that any permitted action taken by the Board conflicts with action taken by the Committee, the Board
action shall control. The Compensation Committee may by resolution authorize one or more officers of the Company to perform any
or all things that the Committee is authorized and empowered to do or perform under the Plan, and for all purposes under this Plan,
such officer or officers shall be treated as the Committee; provided, however, that the resolution so authorizing such officer
or officers shall specify the total number of Awards (if any) such officer or officers may award pursuant to such delegated authority,
and any such Award shall be subject to the form of award agreement theretofore approved by the Compensation Committee. No such
officer shall designate himself or herself as a recipient of any Awards granted under authority delegated to such officer. In addition,
the Compensation Committee may delegate any or all aspects of the day-to-day administration of the Plan to one or more officers
or employees of the Company or any subsidiary or affiliate, and/or to one or more agents.


 






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B.                
Subject to the express provisions of this Plan, the Committee shall be authorized and empowered to do all things that it
determines to be necessary or appropriate in connection with the administration of this Plan, including, without limitation: (i)
to prescribe, amend and rescind rules and regulations relating to this Plan and to define terms not otherwise defined herein; (ii)
to determine which persons are grantees, to which of such grantees, if any, awards shall be granted hereunder and the timing of
any such awards; (iii) to grant awards to grantees and determine the terms and conditions thereof, including the number of shares
of Common Stock subject to awards and the exercise or purchase price of such shares and the circumstances under which awards become
exercisable or vested or are forfeited or expire, which terms may but need not be conditioned upon the passage of time, continued
employment, the satisfaction of performance criteria, the occurrence of certain events (including events which constitute a Change
in Control to the extent permitted hereunder), or other factors; (iv) to establish and verify the extent of satisfaction of any
performance goals or other conditions applicable to the grant, issuance, exercisability, vesting and/or ability to retain any award;
(v) to prescribe and amend the terms of the agreements or other documents evidencing awards made under this Plan (which need not
be identical) and the terms of or form of any document or notice required to be delivered to the Company by grantees under this
Plan; (vi) to determine the extent to which adjustments are required pursuant to Article One; (vii) to interpret and construe this
Plan, any rules and regulations under this Plan and the terms and conditions of any award granted hereunder, and to make exceptions
to any such provisions for the benefit of the Company; (viii) to approve corrections in the documentation or administration of
any award; and (ix) to make all other determinations deemed necessary or advisable for the administration of this Plan.


 


C.                
All decisions, determinations and interpretations by the Committee regarding the Plan, any rules and regulations under the
Plan and the terms and conditions of or operation of any Award granted hereunder, shall be final and binding on all grantees, beneficiaries,
heirs, assigns or other persons holding or claiming rights under the Plan or any Award. The Committee shall consider such factors
as it deems relevant, in its sole and absolute discretion, to making such decisions, determinations and interpretations including,
without limitation, the recommendations or advice of any officer or other employee of the Company and such attorneys, consultants
and accountants as it may select.


 


D.               
The Compensation Committee may delegate all or a portion of their duties hereunder to one or more individuals or committees.
Any reference to the Compensation Committee or the Plan Administrator shall refer to such individual(s) or committee(s) to the
extent of such delegation.


 


E.                
Administration of the Automatic Option Grant Program shall be self-executing in accordance with the express terms and conditions
of Article Four, and no Plan Administrator shall exercise any discretionary functions under that program.


 


IV.            
ELIGIBILITY


 


A.               
The persons eligible to participate in the Discretionary Option Grant and Stock Issuance Programs shall be limited to the
following:


 


(i)officers and other employees of the Company (or its parent
or subsidiary corporations);


 






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(ii)individuals who are consultants or independent advisors and
who provide valuable services to the Company (or its parent or subsidiary corporations); and


 


(iii)non-employee members of the Board (or of the board of directors
of parent or subsidiary corporations).


 


B.                
Only Board members who are not employees of the Company (or any parent or subsidiary) shall be eligible to receive automatic
option grants pursuant to the Automatic Option Grant Program specified in Article Four.


 


C.                
The Plan Administrator shall, within the scope of its administrative jurisdiction under the Plan, have full power and authority
to determine (i) whether to grant options in accordance with the Discretionary Option Grant Program or to effect stock issuances
in accordance with the Stock Issuance Program, (ii) which eligible persons are to receive option grants under the Discretionary
Option Grant Program, the time or times when such option grants are to be made, the number of shares to be covered by each such
grant, the status of the granted option as either an incentive stock option (“Incentive Option”) which satisfies the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) or a non-statutory option
not intended to meet such requirements, the time or times when each such option is to become exercisable, the vesting schedule
(if any) applicable to the option shares and the maximum term for which such option is to remain outstanding, and (iii) which eligible
persons are to receive stock issuances under the Stock Issuance Program, the time or times when such issuances are to be made,
the number of shares to be issued to each grantee, the vesting schedule (if any) applicable to the shares and the consideration
for such shares.


 


V.               
STOCK SUBJECT TO THE PLAN


 


A.               
Shares of the Company’s Common Stock shall be available for issuance under the Plan and shall be drawn from either
the Company’s authorized but unissued shares of Common Stock or from reacquired shares of Common Stock, including shares
repurchased by the Company on the open market. The maximum number of shares of Common Stock which may be issued over the term
of the Plan, as amended and restated, shall not exceed 23,190,000 shares, subject to adjustment from time to time in accordance
with the provisions of this Section V. The total number of shares available under the Plan, as amended and restated, as of April
4, 2016 is 14,851,204. This amount consists of 10,923,851 shares reserved for awards already issued, 127,353 shares of Common
Stock available for future issuance under the Plan, and the increase of 3,800,000 shares of Common Stock authorized by the Board
and approved by the Company’s stockholders at the 2016 Annual Stockholders Meeting.


 










B.                
In no event shall the number of shares of Common Stock for which any one individual participating in the Plan may receive
options, separately exercisable stock appreciation rights and direct stock issuances and RSUs exceed 1,500,000 shares of Common
Stock in the aggregate in any calendar year. For purposes of such limitation, however, no stock options granted prior to the date
the Common Stock was first registered under Section 12 of the 1934 Act (the “Section 12(g) Registration Date”) shall
be taken into account.


 






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C.                
Should an outstanding option under this Plan expire or terminate for any reason prior to exercise in full, the shares subject
to the portion of the option not so exercised shall be available for subsequent option grant or direct stock issuances or RSUs
under the Plan. Unvested shares issued under the Plan and subsequently repurchased by the Company, at the original issue price
paid per share, pursuant to the Company’s repurchase rights under the Plan, or shares underlying terminated RSUs, shall be
added back to the number of shares of Common Stock reserved for issuance under the Plan and shall accordingly be available for
reissuance through one or more subsequent option grants or direct stock issuances or RSUs under the Plan. However, should the exercise
price of an outstanding option under the Plan be paid with shares of Common Stock or should shares of Common Stock otherwise issuable
under the Plan be withheld by the Company in satisfaction of the withholding taxes incurred in connection with the exercise of
an outstanding option or the vesting of a direct stock issuance or RSU under the Plan, then the number of shares of Common Stock
available for issuance under the Plan shall be reduced by the gross number of shares for which the option is exercised or which
vest under the direct stock issuance or RSU, and not by the net number of shares of Common Stock actually issued to the holder
of such option or stock issuance. Shares of Common Stock subject to any option surrendered for an appreciation distribution under
Section IV of Article Two or Section IV of Article Four shall not be available for subsequent issuance under the Plan.


 


D.               
In the event any change is made to the Common Stock issuable under the Plan by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without
receipt of consideration, then appropriate adjustments shall be made to (i) the maximum number and/or class of securities issuable
under the Plan, (ii) the maximum number and/or class of securities for which any one individual participating in the Plan may be
granted stock options, separately exercisable stock appreciation rights, and direct stock issuances and RSUs under the Plan from
and after the Section 12(g) Registration Date, (iii) the number and/or class of securities and price per share in effect under
each outstanding option and stock appreciation right under the Plan, (iv) the number and/or class of securities in effect under
each outstanding direct stock issuance and RSU under the Plan, and (v) the number and/or class of securities for which automatic
option grants are subsequently to be made per non-employee Board member under the Automatic Option Grant Program. The purpose of
such adjustments shall be to preclude the enlargement or dilution of rights and benefits under the Plan.


 


E.                
The fair market value per share of Common Stock on any relevant date under the Plan shall be determined in accordance with
the following provisions:


 


(i)If the Common Stock is not at the time listed or admitted
to trading on any national securities exchange but is traded in the over-the-counter market, the fair market value shall be the
mean between the highest bid and lowest asked prices (or, if such information is available, the closing selling price) per share
of Common Stock on the date in question in the over-the-counter market, as such prices are reported by the National Association
of Securities Dealers through the Nasdaq National Market, the Nasdaq Global Select Market or any successor system. If there are
no reported bid and asked prices (or closing selling price) for the Common Stock on the date in question, then the mean between
the highest bid price and lowest asked price (or the closing selling price) on the last preceding date for which such quotations
exist shall be determinative of fair market value.


 






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(ii)If the Common Stock is at the time listed or admitted to
trading on any national securities exchange, then the fair market value shall be the closing selling price per share of Common
Stock on the date in question on the securities exchange determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange. If there is no reported
sale of Common Stock on the exchange on the date in question, then the fair market value shall be the closing selling price on
the exchange on the last preceding date for which such quotation exists.


 


(iii)If the Common Stock is at the time neither listed nor admitted
to trading on any securities exchange nor traded in the over-the-counter market, then the fair market value shall be determined
by the Plan Administrator after taking into account such factors as the Plan Administrator shall deem appropriate.


 


Article
Two

DISCRETIONARY OPTION GRANT PROGRAM


 


I.                  
TERMS AND CONDITIONS OF OPTIONS


 


Options granted pursuant to this Article Two shall be authorized by
action of the Plan Administrator and may, at the Plan Administrator’s discretion, be either Incentive Options or non-statutory
options. Individuals who are not Employees may only be granted non-statutory options under this Article Two. Each option granted
shall be evidenced by one or more instruments in the form approved by the Plan Administrator. Each such instrument shall, however,
comply with the terms and conditions specified below, and each instrument evidencing an Incentive Option shall, in addition, be
subject to the applicable provisions of Section II of this Article Two.


 


A.               
Option Price.


 


1.                 
The option price per share shall be fixed by the Plan Administrator. In no event, however, shall the option price per share
be less than one hundred percent (100%) of the fair market value per share of Common Stock on the date of the option grant.


 


2.                 
The option price shall become immediately due upon exercise of the option and shall, subject to the provisions of Section
IV of this Article Two and the instrument evidencing the grant, be payable through one of the following methods (or a combination
thereof):


 


(i)full payment in cash or check drawn to the Company’s order;


 


(ii)full payment in shares of Common Stock held by the optionee
for the requisite period necessary to avoid a charge to the Company’s earnings for financial reporting purposes and valued
at fair market value on the Exercise Date (as such term is defined below);


 






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(iii)full payment through a combination of shares of Common Stock
held by the optionee for the requisite period necessary to avoid a charge to the Company’s earnings for financial reporting
purposes and valued at fair market value on the Exercise Date and cash or cash equivalent;


 


(iv)full payment through a broker-dealer sale and remittance procedure
pursuant to which the optionee (I) shall provide irrevocable written instructions to a designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate option price payable for the purchased shares plus all applicable Federal and State income and employment
taxes required to be withheld by the Company in connection with such purchase and (II) shall provide written directives to the
Company to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale transaction;
or


 


(v)such other method as permitted by the Plan Administrator.


 


For purposes of this subparagraph 2, the Exercise Date shall be the
date on which written notice of the option exercise is delivered to the Company. Except to the extent the sale and remittance procedure
is utilized in connection with the exercise of the option, payment of the option price for the purchased shares must accompany
such notice.


 


B.                
Term and Exercise of Options.


 


Each option granted under this Article Two shall be exercisable at
such time or times, during such period, and for such number of shares as shall be determined by the Plan Administrator and set
forth in the instrument evidencing the option grant. No such option, however, shall have a maximum term in excess of ten (10) years
from the grant date. During the lifetime of the optionee, the option, together with any stock appreciation rights pertaining to
such option, shall be exercisable only by the optionee and shall not be assignable or transferable by the optionee except for a
transfer of the option by will or by the laws of descent and distribution following the optionee’s death. However, the Plan
Administrator shall have the discretion to provide that a non-statutory option may, in connection with the optionee’s estate
plan, be assigned in whole or in part during the optionee’s lifetime either as (i) as a gift to one or more members of optionee’s
immediate family, to a trust in which optionee and/or one or more such family members hold more than fifty percent (50%) of the
beneficial interest or an entity in which more than fifty percent (50%) of the voting interests are owned by optionee and/or one
or more such family members, or (ii) pursuant to a domestic relations order. The assigned portion shall be exercisable only by
the person or persons who acquire a proprietary interest in the option pursuant to such assignment. The terms applicable to the
assigned portion shall be the same as those in effect for this option immediately prior to such assignment and shall be set forth
in such documents issued to the assignee as the Plan Administrator may deem appropriate.


 


C.                
Termination of Service.


 


1.                 
Except to the extent otherwise provided pursuant to Section V of this Article Two or pursuant to an applicable award agreement,
the following provisions shall govern the exercise period applicable to any options held by the optionee at the time of cessation
of Service or death.


 






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(i)Should the optionee cease to remain in Service for any reason
other than death or permanent disability, then the period for which each outstanding option held by such optionee is to remain
exercisable shall be limited to the three (3)-month period following the date of such cessation of Service. However, should optionee
die during the three (3)-month period following his or her cessation of Service, the personal representative of the optionee’s
estate or the person or persons to whom the option is transferred pursuant to the optionee’s will or in accordance with the
laws of descent and distribution shall have a twelve (12)-month period following the date of the optionee’s death during
which to exercise such option.


 


(ii)In the event such Service terminates by reason of permanent
disability (as defined in Section 22(e)(3) of the Internal Revenue Code), then the period for which each outstanding option held
by the optionee is to remain exercisable shall be limited to the twelve (12)-month period following the date of such cessation
of Service.


 


(iii)Should the optionee, after completing five (5) full years
of Service, die while in Service, then the exercisability of each of his or her outstanding options shall automatically accelerate
so that each such option shall become fully exercisable with respect to the total number of shares of Common Stock at the time
subject to such option and may be exercised for all or any portion of such shares. The personal representative of the optionee’s
estate or the person or persons to whom the option is transferred pursuant to the optionee’s will or in accordance with the
laws of descent and distribution shall have a twelve (12)-month period following the date of the optionee’s death during
which to exercise such option.


 


(iv)In the event such Service terminates by reason of death prior
to the optionee obtaining five (5) full years of Service, then the period for which each outstanding vested option held by the
optionee at the time of death shall be exercisable by the optionee’s estate or the person or persons to whom the option is
transferred pursuant to the optionee’s will shall be limited to the twelve (12)-month period following the date of the optionee’s
death.


 


(v)Under no circumstances, however, shall any such option be
exercisable after the specified expiration date of the option term.


 


(vi)Each such option shall, during such limited exercise period,
be exercisable for any or all of the shares for which the option is exercisable on the date of the optionee’s cessation of
Service. Upon the expiration of such limited exercise period or (if earlier) upon the expiration of the option term, the option
shall terminate and cease to be exercisable. However, each outstanding option shall immediately terminate and cease to remain outstanding,
at the time of the optionee’s cessation of Service, with respect to any shares for which the option is not otherwise at that
time exercisable or in which the optionee is not otherwise vested.


 


(vii)Should (i) the optionee’s Service be terminated for
misconduct (including, but not limited to, any act of dishonesty, willful misconduct, fraud or embezzlement) or (ii) the optionee
make any unauthorized use or disclosure of confidential information or trade secrets of the Company or its parent or subsidiary
corporations, then in any such event all outstanding options held by the optionee under this Article Two shall terminate immediately
and cease to be exercisable.


 






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2.                 
The Plan Administrator shall have complete discretion, exercisable either at the time the option is granted or at any time
while the option remains outstanding, to permit one or more options held by the optionee under this Article Two to be exercised,
during the limited period of exercisability provided under subparagraph 1 above, not only with respect to the number of shares
for which each such option is exercisable at the time of the optionee’s cessation of Service but also with respect to one
or more subsequent installments of purchasable shares for which the option would otherwise have become exercisable had such cessation
of Service not occurred.


 


3.                 
For purposes of the foregoing provisions of this Section I.C (and for all other purposes under the Plan):


 


(i)The optionee shall be deemed to remain in the Service
of the Company for so long as such individual renders services on a periodic basis to the Company (or any parent or subsidiary
corporation) in the capacity of an Employee, a non-employee member of the board of directors or an independent consultant or advisor,
unless the agreement evidencing the applicable option grant specifically states otherwise.


 


(ii)The optionee shall be considered to be an Employee for
so long as such individual remains in the employ of the Company or one or more of its parent or subsidiary corporations, subject
to the control and direction of the employer entity not only as to the work to be performed but also as to the manner and method
of performance.


 


D.               
Stockholder Rights.


 


An optionee shall have no stockholder rights with respect to any
shares covered by the option until such individual shall have exercised the option and paid the option price for the purchased
shares.


 


E.                
No Repricing.


 


No option or stock appreciation right may be repriced, regranted through
cancellation, including cancellation in exchange for cash or other awards, or otherwise amended to reduce its option price or exercise
price (other than with respect to adjustments made in connection with a transaction or other change in the Company’s capitalization
as permitted under this Plan) without the approval of the stockholders of the Company.


 


F.                 
Repurchase Rights.


 


The shares of Common Stock acquired upon the exercise of options
granted under this Article Two may be subject to repurchase by the Company in accordance with the following provisions:


 


1.The Plan Administrator shall have the discretion to grant options
which are exercisable for unvested shares of Common Stock under this Article Two. Should the optionee cease Service while holding
such unvested shares, the Company shall have the right to repurchase any or all those unvested shares at the option price paid
per share. The terms and conditions upon which such repurchase right shall be exercisable (including the period and procedure for
exercise and the appropriate vesting schedule for the purchased shares) shall be established by the Plan Administrator and set
forth in the instrument evidencing such repurchase right.


 






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2.All of the Company’s outstanding repurchase rights shall
automatically terminate, and all shares subject to such terminated rights shall immediately vest in full, upon the occurrence of
any Corporate Transaction under Section III of this Article Two, except to the extent: (i) any such repurchase right is expressly
assigned to the successor corporation (or parent thereof) in connection with the Corporate Transaction or (ii) such termination
is precluded by other limitations imposed by the Plan Administrator at the time the repurchase right is issued.


 


3.The Plan Administrator shall have the discretionary authority,
exercisable either before or after the optionee’s cessation of Service, to cancel the Company’s outstanding repurchase
rights with respect to one or more shares purchased or purchasable by the optionee under this Discretionary Option Grant Program
and thereby accelerate the vesting of such shares in whole or in part at any time.


 


II.               
INCENTIVE OPTIONS


 


The terms and conditions specified below shall be applicable to all
Incentive Options granted under this Article Two. Incentive Options may only be granted to individuals who are Employees of the
Company. Options which are specifically designated as “non-statutory” options when issued under the Plan shall not
be subject to such terms and conditions.


 


A.               
Dollar Limitation. The aggregate fair market value (determined as of the respective date or dates of grant)
of the Common Stock for which one or more options granted to any Employee under this Plan (or any other option plan of the Company
or its parent or subsidiary corporations) may for the first time become exercisable as incentive stock options under the Federal
tax laws during any one calendar year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee
holds two or more such options which become exercisable for the first time in the same calendar year, the foregoing limitation
on the exercisability of such options as incentive stock options under the Federal tax laws shall be applied on the basis of the
order in which such options are granted. Should the number of shares of Common Stock for which any Incentive Option first becomes
exercisable in any calendar year exceed the applicable One Hundred Thousand Dollar ($100,000) limitation, then that option may
nevertheless be exercised in such calendar year for the excess number of shares as a non-statutory option under the Federal tax
laws.


 


B.                
10% Stockholder. If any individual to whom an Incentive Option is granted is the owner of stock (as determined
under Section 424(d) of the Internal Revenue Code) possessing 10% or more of the total combined voting power of all classes of
stock of the Company or any one of its parent or subsidiary corporations, then the option price per share shall not be less than
one hundred and ten percent (110%) of the fair market value per share of Common Stock on the grant date, and the option term shall
not exceed five (5) years, measured from the grant date.


 






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C.                
Termination of Employment. Any portion of an Incentive Option that remains outstanding (by reason of the optionee
remaining in the Service of the Company, pursuant to the Plan Administrator’s exercise of discretion under Section V of this
Article Two, or otherwise) more than 3 months following the date an optionee ceases to be an Employee of the Company shall thereafter
be exercisable as a non-statutory option under federal tax laws.


 


Except as modified by the preceding provisions of this Section II,
the provisions of Articles One, Two and Five of the Plan shall apply to all Incentive Options granted hereunder.


 


III.            
CORPORATE TRANSACTIONS/CHANGES IN CONTROL


 


A.               
In the event of any of the following stockholder-approved transactions (a “Corporate Transaction”):


 


(1)a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to change the State of the Company’s incorporation,


 


(2)the sale, transfer or other disposition of all or substantially
all of the assets of the Company in liquidation or dissolution of the Company, or


 


(3)any reverse merger in which the Company is the surviving entity
but in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding
securities are transferred to a person or persons different from the persons holding those securities immediately prior to such
merger, then the exercisability of each option outstanding under this Article Two shall automatically accelerate so that each such
option shall, immediately prior to the specified effective date for the Corporate Transaction, become fully exercisable with respect
to the total number of shares of Common Stock at the time subject to such option and may be exercised for all or any portion of
such shares. However, an outstanding option under this Article Two shall not so accelerate if and to the extent the acceleration
of such option is subject to other limitations imposed by the Plan Administrator at the time of grant, unless the Plan Administrator,
in its discretion, later determines to waive such limitations.


 


B.                
Immediately after the consummation of the Corporate Transaction, all outstanding options under this Article Two shall terminate
and cease to be outstanding, except to the extent assumed by the successor corporation or its parent company. The Plan Administrator
shall have complete discretion to provide, on such terms and conditions as it sees fit, for a cash payment to be made to any optionee
on account of any option terminated in accordance with this paragraph, in an amount equal to the excess (if any) of (A) the fair
market value of the shares subject to the option as of the date of the Corporate Transaction, over (B) the aggregate exercise price
of the option.


 


C.                
Each outstanding option under this Article Two which is assumed in connection with the Corporate Transaction or is otherwise
to continue in effect shall be appropriately adjusted, immediately after such Corporate Transaction, to apply and pertain to the
number and class of securities which would have been issued to the option holder, in consummation of such Corporate Transaction,
had such person exercised the option immediately prior to such Corporate Transaction. Appropriate adjustments shall also be made
to the option price payable per share, provided the aggregate option price payable for such securities shall remain the
same. In addition, the class and number of securities available for issuance under the Plan following the consummation of the Corporate
Transaction shall be appropriately adjusted.


 






    	11



     

    

D.               
The grant of options under this Article Two shall in no way affect the right of the Company to adjust, reclassify, reorganize
or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or
any part of its business or assets.


 


E.                
In the event of a Change in Control: (1) options granted under this Article Two prior to May 23, 2016 shall be subject to
the provisions of the Plan as in effect prior to such date, and (2) options granted on or after May 23, 2016 shall be treated as
follows: if the grantee’s employment is terminated by the Company without Cause or the grantee resigns due to a Constructive
Termination, in either case within the ninety (90) day period preceding or the two (2) year period following the Change in Control,
the exercisability of such option shall automatically accelerate, and the Company’s outstanding repurchase rights under this
Article Two shall immediately terminate; provided, however, that if the acquiror or successor refuses to assume the option in connection
with the Change in Control, the exercisability of such option under this Article Two shall automatically accelerate, and the Company’s
outstanding repurchase rights under this Article Two shall immediately terminate upon the occurrence of such Change in Control.


 


F.                 
For purposes of this Section III (and for all other purposes under the Plan), a Change in Control shall be deemed to occur
in the event:


 


(1)any person or related group of persons (other than
the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) directly
or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Company’s outstanding securities pursuant to a tender or exchange
offer made directly to the Company’s stockholders; or


 


(2)there is a change in the composition of the Board
over a period of twenty-four (24) consecutive months or less such that a majority of the Board members (rounded up to the next
whole number) ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either
(A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for election
as Board members during such period by at least two-thirds of the Board members described in clause (A) who were still in office
at the time such election or nomination was approved by the Board.


 


G.               
All options accelerated in connection with the Change in Control (either at the time of the Change in Control or as otherwise
provided in this Section III) shall remain fully exercisable until the expiration or sooner termination of the option term.


 






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H.               
The portion of any Incentive Option accelerated under this Section III in connection with a Corporate Transaction or Change
in Control shall remain exercisable as an incentive stock option under the Federal tax laws only to the extent the dollar limitation
of Section II of this Article Two is not exceeded. To the extent such dollar limitation is exceeded, the accelerated portion of
such option shall be exercisable as a non-statutory option under the Federal tax laws.


 


I.                  
For purposes of this Article Two and for purposes of Article Three:


 


1.                 
“Cause” means, unless otherwise provided in the applicable award agreement, the Company’s termination
of the grantee’s employment for any of the following reasons: (i) failure or refusal to comply in any material respect with
lawful policies, standards or regulations of Company; (ii) a violation of a federal or state law or regulation applicable to the
business of the Company; (iii) conviction or plea of no contest to a felony under the laws of the United States or any State; (iv)
fraud or misappropriation of property belonging to the Company or its affiliates; (v) a breach in any material respect of the terms
of any confidentiality, invention assignment or proprietary information agreement with the Company or with a former employer, (vi)
failure to satisfactorily perform the grantee’s duties after having received written notice of such failure and at least
thirty (30) days to cure such failure, or (vii) misconduct or gross negligence in connection with the performance of the grantee’s
duties.


 


2.                 
“Constructive Termination” means, unless otherwise provided in the applicable award agreement, the grantee’s
resignation of employment with the Company within ninety (90) days of the occurrence of any of the following: (i) a material reduction
in the grantee’s responsibilities; (ii) a material reduction in the grantee’s base salary; or (iii) a relocation of
the grantee’s principal office to a location more than 50 miles from the location of the grantee’s existing principal
office.


 


IV.            
STOCK APPRECIATION RIGHTS


 


A.               
Provided and only if the Plan Administrator determines in its discretion to implement the stock appreciation right provisions
of this Section IV, one or more optionees may be granted the right, exercisable upon such terms and conditions as the Plan Administrator
may establish, to surrender all or part of an unexercised option granted under this Article Two in exchange for a distribution
from the Company in an amount equal to the excess of (i) the fair market value (on the option surrender date) of the number of
shares in which the optionee is at the time vested under the surrendered option (or surrendered portion thereof) over (ii) the
aggregate option price payable for such vested shares. The distribution may be made in shares of Common Stock valued at fair market
value on the option surrender date, in cash, or partly in shares and partly in cash, as the Plan Administrator shall determine
in its sole discretion.


 


B.                
The shares of Common Stock subject to any option surrendered for an appreciation distribution pursuant to this Section IV
shall not be available for subsequent option grant under the Plan.


 






    	13



     

    

V.               
EXTENSION OF EXERCISE PERIOD


 


The Plan Administrator shall have full power and authority, exercisable
either at the time the option is granted or at any time while the option remains outstanding, to extend the period of time for
which any option granted under this Article Two is to remain exercisable following the optionee’s cessation of Service or
death from the limited period in effect under Section I.C.1 of Article Two to such greater period of time as the Plan Administrator
shall deem appropriate; provided, however, that in no event shall such option be exercisable after the specified expiration
date of the option term.


 


Article
Three

STOCK ISSUANCE PROGRAM


 


I.                  
STOCK ISSUANCE TERMS


 


Shares of Common Stock may be issued under the Stock Issuance Program through direct
and immediate issuances without any intervening option grants. Each such stock issuance shall be evidenced by a Stock Issuance
Agreement which complies with the terms specified below. Shares of Common Stock may also be issued under the Stock Issuance Program
pursuant to restricted stock units (“RSUs”), which are awards granted to a eligible individuals that entitle them to
shares of Common Stock (or cash in lieu thereof) in the future following the satisfaction of vesting conditions imposed by the
Plan Administrator.


 


A.               
Vesting Provisions.


 


1.                 
The Plan Administrator may issue shares of Common Stock under the Stock Issuance which are to vest in one or more installments
over the grantee's period of Service or upon attainment of specified performance objectives. Alternatively, the Plan Administrator
may issue RSUs under the Stock Issuance Program which shall entitle the recipient to receive a specified number of shares of Common
Stock upon the attainment of one or more Service and/or performance goals established by the Plan Administrator. Upon the attainment
of such Service and/or performance goals, fully-vested shares of Common Stock shall be issued in satisfaction of those RSUs. However,
notwithstanding any other provision of this Plan to the contrary, in no event shall any award granted pursuant to this Article
Three vest in full prior to the twelve (12)-month anniversary of the date of grant, other than in connection with the grantee’s
death or permanent disability or, to the extent permitted hereunder, in connection with a Change in Control (provided that this
limitation shall not apply with up to five percent (5%) of the shares of Common Stock available for issuance under this Plan following
approval of the Plan at the Company’s 2016 Annual Stockholders Meeting).


 


2.                 
Any new, substituted or additional securities or other property (including money paid other than as a regular cash dividend)
issued by reason of any stock dividend, stock split, recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Company’s receipt of consideration, shall be issued or set
aside with respect to the shares of unvested Common Stock granted to a grantee or subject to a grantee’s RSUs, subject to
(i) the same vesting requirements applicable to the grantee's unvested shares of Common Stock or RSUs, and (ii) such escrow arrangements
as the Plan Administrator shall deem appropriate.


 






    	14



     

    

3.                 
The grantee shall have full stockholder rights with respect to any shares of Common Stock issued to the grantee under the
Stock Issuance Program, whether or not the grantee's interest in those shares is vested. Accordingly, the grantee shall have the
right to vote such shares and to receive any regular cash dividends paid on such shares.


 


4.                 
The grantee shall not have any stockholders rights with respect to any shares of Common Stock subject to an RSU. However,
the Plan Administrator may provide for a grantee to receive one or more dividend equivalents with respect to such shares, entitling
the grantee to all regular cash dividends payable on the shares of Common Stock underlying the RSU, which amounts shall be (i)
subject to the same vesting requirements applicable to the shares of Common Stock underlying the RSU, and (ii) payable upon issuance
of the shares to which such dividend equivalents relate.


 


5.                 
Should the grantee cease to remain in Service while holding one or more unvested shares of Common Stock issued under the
Stock Issuance Program or should the performance objectives not be attained with respect to one or more such unvested shares of
Common Stock, then those shares shall be immediately surrendered to the Company for cancellation, and the grantee shall have no
further stockholder rights with respect to those shares. To the extent the surrendered shares were previously issued to the grantee
for consideration paid in cash, the Company shall repay to the grantee the cash consideration paid for the surrendered shares.


 


6.                 
Except as prohibited by the last sentence of paragraph 1 above, the Plan Administrator may in its discretion waive the surrender
and cancellation of one or more unvested shares of Common Stock which would otherwise occur upon the cessation of the grantee’s
Service or the non-attainment of the performance objectives applicable to those shares. Such waiver shall result in the immediate
vesting of the grantee's interest in the shares of Common Stock as to which the waiver applies. Such waiver may be effected at
any time, whether before or after the grantee's cessation of Service or the attainment or non-attainment of the applicable performance
objectives.


 


7.                 
Outstanding RSUs under the Stock Issuance Program shall automatically terminate, and no shares of Common Stock shall actually
be issued in satisfaction of those awards, if the Service and/or performance goals established for such awards are not attained.
The Plan Administrator, however, shall, except as prohibited by the last sentence paragraph 1 above, have the discretionary authority
to issue shares of Common Stock in satisfaction of one or more outstanding RSUs as to which the designated Service and/or performance
goals are not attained. Such authority may be exercised at any time, whether before or after the grantee's cessation of Service
or the attainment or non-attainment of the applicable performance objectives.


 






    	15



     

    

II.               
CORPORATE TRANSACTION/CHANGE IN CONTROL


 


A.               
All of the Company’s outstanding repurchase rights under the Stock Issuance Program shall terminate automatically,
and all the shares of Common Stock subject to those terminated rights shall immediately vest in full, in the event of any Corporate
Transaction, except to the extent (i) those repurchase rights are to be assigned to the successor corporation (or parent thereof)
in connection with the such Corporate Transaction, or (ii) such accelerated vesting is precluded by other limitations imposed in
the Stock Issuance Agreement, unless the Plan Administrator determines to waive such limitations.


 


B.                
Each award which is assigned in connection with (or is otherwise to continue in effect after) a Corporate Transaction shall
be appropriately adjusted such that it shall apply and pertain to the number and class of securities issued to the grantee in consummation
of the Corporate Transaction with respect to the shares granted to grantee under this Article Three.


 


C.                
In the event of a Change in Control: (1) shares of restricted stock and RSUs granted under this Article Three prior to May
23, 2016 shall be subject to the provisions of the Plan as in effect prior to such date, and (2) shares of restricted stock and
RSUs granted on or after May 23, 2016 shall be treated as follows: if the grantee’s employment is terminated by the Company
without Cause or the grantee resigns due to a Constructive Termination, in either case within the ninety (90) day period preceding
or the two (2) year period following the Change in Control, the vesting of such restricted stock and RSUs shall automatically accelerate
(and all of the shares of Common Stock subject to such RSUs shall be issued to grantees), and the Company’s outstanding repurchase
rights under this Article Three shall immediately terminate; provided, however, that if the acquiror or successor refuses to assume
the shares of restricted stock or RSUs or substitute an award of equivalent value (as determined by the Committee in its discretion)
in connection with the Change in Control, the vesting of such restricted stock or RSUs under this Article Three shall automatically
accelerate (and all of the shares of Common Stock subject to such RSUs shall be issued to grantees). To the extent any shares of
restricted stock or RSUs vest in whole or in part based on the achievement of performance criteria, the amount that shall vest
in accordance with the proviso to clause (2) of the immediately-preceding sentence shall vest based on actual performance goal
attainment through the date of the Change in Control and/or be prorated based on the time elapsed in the performance period as
of the date of the Change in Control.


 


III.            
STOCKHOLDER RIGHTS


 


A.Individuals who are granted
shares of Common Stock pursuant to this Article Three shall be the owners of such shares for all purposes while holding such Common
Stock, and may exercise full voting rights with respect to those shares at all times while held by the individuals. Individuals
who have been granted RSUs shall have no voting rights with respect to Common Stock underlying RSUs unless and until such Common
Stock is reflected as issued and outstanding shares on the Company’s stock ledger. 


 


B.Unless otherwise determined
by the Committee, individuals who are granted shares of Common Stock pursuant to this Article Three shall have full dividend rights
with respect to such shares at all times while held by the individual. Unless determined otherwise by the Plan Administrator, shares
of Common Stock underlying RSUs shall not be entitled to dividends or dividend equivalents with respect to such RSUs. 


 






    	16



     

    

IV.            
SHARE ESCROW / LEGENDS


 


Unvested shares may, in the Plan Administrator's discretion, be held
in escrow by the Company until the grantee's interest in such shares vests or may be issued directly to the grantee with restrictive
legends on the certificates evidencing those unvested shares.


 


Article
Four

AUTOMATIC OPTION GRANT PROGRAM


 


I.                  
ELIGIBILITY.


 


The individuals eligible to receive automatic option grants pursuant
to the provisions of this Article Four shall be (i) those individuals who, after the effective date of this amendment and restatement,
first become non-employee Board members, whether through appointment by the Board, election by the Company’s stockholders,
or by continuing to serve as a Board member after ceasing to be employed by the Company, and (ii) those individuals already serving
as non-employee Board members on the effective date of this amendment and restatement. As used herein, a “non-employee”
Board member is any Board member who is not employed by the Company on the date in question.


 


II.               
TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS


 


A.               
Grants. Option grants shall be made under this Article Four as follows:


 


1.                 
Each individual who first becomes a non-employee Board member on or after the effective date of this amendment and restatement
shall automatically be granted at such time a non-statutory stock option under the terms and conditions of this Article Four, to
purchase a number shares of Common Stock equal to the product of (i) 60,000, and (ii) a fraction, the numerator of which is the
number of months (rounded to the nearest whole number) remaining between the date such Board member first became a non-employee
Board member and the Company’s next scheduled Annual Stockholders Meeting, and the denominator of which is 12.


 


2.                 
Immediately following each Annual Stockholders Meeting of the Company, each individual who is then serving as a non-employee
Board member (except for those individuals first elected to serve as non-employee Board members at such meeting), shall
automatically be granted a non-statutory stock option under this Article Four to acquire 30,000 shares of Common Stock.


 


B.                
Exercise Price. The exercise price per share of each automatic option grant made under this Article
Four shall be equal to one hundred percent (100%) of the fair market value per share of Common Stock on the automatic grant date.


 


C.                
Payment. The exercise price shall be through one of the following methods (or a combination thereof):


 






    	17



     

    

(1)payment in cash or check made payable to the Company’s
order; or


 


(2)full payment in shares of Common Stock held for the requisite
period necessary to avoid a charge to the Company’s reported earnings and valued at fair market value on the Exercise Date
(as such term is defined below); or


 


(3)full payment in a combination of shares of Common Stock held
for the requisite period necessary to avoid a charge to the Company’s reported earnings and valued at fair market value on
the Exercise Date and cash or check payable to the Company’s order;


 


(4)full payment through a sale and remittance procedure pursuant
to which the non-employee Board member (I) shall provide irrevocable written instructions to a designated brokerage firm to effect
the immediate sale of the purchased shares and remit to the Company, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate exercise price payable for the purchased shares and shall (II) concurrently provide written
directives to the Company to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete
the sale transaction; or


 


(5)such other method as permitted by the Plan Administrator.


 


For purposes of this subparagraph C, the Exercise Date shall be the
date on which written notice of the option exercise is delivered to the Company. Except to the extent the sale and remittance procedure
specified above is utilized for the exercise of the option, payment of the option price for the purchased shares must accompany
the exercise notice.


 


D.               
Option Term. Each automatic grant under this Article Four shall have a term of ten (10) years measured
from the automatic grant date.


 


E.                
 Exercisability.


 


1.                 
Each initial automatic grant made pursuant to Section II.A.1 of this Article Four shall vest and become exercisable over
the period extending from the date of grant to the scheduled date of the next Annual Stockholders Meeting following the grant.
A pro rata portion of such automatic grant shall vest on the last day of each calendar month following the date of grant, with
the final portion vesting on the scheduled date of such Annual Stockholders Meeting.


 


2.                 
Each 30,000 share automatic grant made pursuant to Section II.A.2 of this Article Four shall vest and become exercisable
for 1/12th of the option shares upon the optionee’s completion of each month of Board service over the twelve (12)-month
period measured from the automatic grant date.


 


F.                 
Non-Transferability. During the lifetime of the optionee, each automatic option grant, together with
the limited stock appreciation right pertaining to such option, shall be exercisable only by the optionee, except to the extent
such option or the limited stock appreciation right is assigned or transferred (i) by will or by the laws of descent and distribution
following the optionee’s death, or (ii) during optionee’s lifetime either (A) as a gift in connection with the optionee’s
estate plan to one or more members of optionee’s immediate family, to a trust in which optionee and/or one or more such family
members hold more than fifty percent (50%) of the beneficial interest or to an entity in which more than fifty percent (50%) of
the voting interests are owned by optionee and/or one or more such family members, or (B) pursuant to a domestic relations order.
The portion of any option assigned or transferred during optionee’s lifetime shall be exercisable only by the person or persons
who acquire a proprietary interest in the option pursuant to such assignment. The terms applicable to the assigned portion shall
be the same as those in effect for this option immediately prior to such assignment and shall be set forth in such documents issued
to the assignee as the Plan Administrator may deem appropriate.


 






    	18



     

    

G.               
Cessation of Board Service.


 


1.                 
Should the optionee cease to serve as a Board member for any reason while holding one or more automatic option grants under
this Article Four, then such optionee shall have the remainder of the ten (10) year term of each such option in which to exercise
each such option for any or all of the shares of Common Stock for which the option is exercisable at the time of such cessation
of Board service. Each such option shall immediately terminate and cease to be outstanding, at the time of such cessation of Board
service, with respect to any shares for which the option is not otherwise at that time exercisable. Upon the expiration of the
ten (10)-year option term, the automatic grant shall terminate and cease to be outstanding in its entirety. Upon the death of the
optionee, whether before or after cessation of Board service, any option held by optionee at the time of optionee’s death
may be exercised, for any or all of the shares of Common Stock for which the option was exercisable at the time of cessation of
Board service by the optionee and which have not been theretofore exercised by the optionee, by the personal representative of
the optionee’s estate or by the person or persons to whom the option is transferred pursuant to the optionee’s will
or in accordance with the laws of descent and distribution. Any such exercise must occur during the reminder of the ten (10) year
term of such option.


 


H.               
Stockholder Rights. The holder of an automatic option grant under this Article Four shall have none of the
rights of a stockholder with respect to any shares subject to such option until such individual shall have exercised the option
and paid the exercise price for the purchased shares.


 


III.            
CORPORATE TRANSACTIONS/CHANGES IN CONTROL


 


A.               
In the event of a Corporate Transaction, the exercisability of each option outstanding under this Article Four shall automatically
accelerate so that each such option shall, immediately prior to the specified effective date for the Corporate Transaction, become
fully exercisable with respect to the total number of shares of Common Stock at the time subject to such option and may be exercised
for all or any portion of such shares.


 


B.                
Immediately after the consummation of the Corporate Transaction, all outstanding options under this Article Four shall terminate
and cease to be outstanding, except to the extent assumed by the successor corporation or its parent company. If so provided by
the terms of the Corporate Transaction, the optionee shall receive a cash payment on account of any option terminated in accordance
with this paragraph, in an amount equal to the excess (if any) of (A) the fair market value of the shares subject to the option
as valued pursuant to the Corporate Transaction over (B) the aggregate exercise price of the option.


 






    	19



     

    

C.                
Each outstanding option under this Article Four which is assumed in connection with the Corporate Transaction or is otherwise
to continue in effect shall be appropriately adjusted, immediately after such Corporate Transaction, to apply and pertain to the
number and class of securities which would have been issued to the option holder, in consummation of such Corporate Transaction,
had such person exercised the option immediately prior to such Corporate Transaction. Appropriate adjustments shall also be made
to the option price payable per share, provided the aggregate option price payable for such securities shall remain the
same.


 


D.               
In connection with any Change in Control, the exercisability of each option grant outstanding at the time under this Article
Four shall automatically accelerate so that each such option shall, immediately prior to the specified effective date for the Change
in Control, become fully exercisable with respect to the total number of shares of Common Stock at the time subject to such option
and may be exercised for all or any portion of such shares.


 


E.                
The automatic grant of options under this Article Four shall in no way affect the right of the Company to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer
all or any part of its business or assets.


 


IV.            
STOCK APPRECIATION RIGHTS


 


A.               
With respect to options granted under the Automatic Option Grant Program prior to March 7, 2006:


 


1.                 
Upon the occurrence of a Hostile Take-Over, the optionee shall have a thirty (30)-day period in which to surrender to the
Company each option held by him or her under this Article Four. The optionee shall in return be entitled to a cash distribution
from the Company in an amount equal to the excess of (i) the Take-Over Price of the shares of Common Stock at the time subject
to each surrendered option (whether or not the option is then exercisable for those shares) over (ii) the aggregate exercise price
payable for such shares. The cash distribution shall be made within five (5) days following the date the option is surrendered
to the Company, and neither the approval of the Plan Administrator nor the consent of the Board shall be required in connection
with the option surrender and cash distribution. Any unsurrendered portion of the option shall continue to remain outstanding and
become exercisable in accordance with the terms of the instrument evidencing such grant. This limited stock appreciation right
shall in all events terminate upon the expiration or sooner termination of the option term and may not be assigned or transferred
by the optionee.


 


2.                 
For purposes of Article Four, the following definitions shall be in effect:


 


(i)A Hostile Take-Over shall be deemed to occur in the event
any person or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled
by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule
13d-3 of the 1934 Act, as amended) of securities possessing more than fifty percent (50%) of the total combined voting power of
the Company’s outstanding securities pursuant to a tender or exchange offer made directly to the Company’s stockholders
which the Board does not recommend such stockholders to accept.


 






    	20



     

    

(ii)The Take-Over Price per share shall be deemed to be
equal to the fair market value per share on the option surrender date.


 


B.                
With respect to each option granted under the Automatic Option Grant Program on and after March 7, 2006, each optionee shall
have the right to surrender all or part of the option (to the extent not then exercised) in exchange for a distribution from the
Company in an amount equal to the excess of (i) the fair market value (on the option surrender date) of the number of shares in
which the optionee is at the time vested under the surrendered option (or surrendered portion thereof) over (ii) the aggregate
option price payable for such vested shares. The distribution shall be made in shares of Common Stock valued at fair market value
on the option surrender date.


 


C.                
The shares of Common Stock subject to any option surrendered for an appreciation distribution pursuant to this Section IV
shall not be available for subsequent option grant under the Plan.


 


Article
Five

SECTION 162(M) PERFORMANCE GOALS


 


I.                  
GENERAL


 


The Plan Administrator may establish
performance criteria and level of achievement versus such criteria that shall determine the number of shares of Common Stock or
RSUs to be granted, retained, vested, issued or issuable under or in settlement of or the amount payable pursuant to an award hereunder,
which criteria may be based on Qualifying Performance Criteria (as defined below) or other standards of financial performance and/or
personal performance evaluations. In addition, the Plan Administrator may specify that an award or a portion of an award is intended
to satisfy the requirements for “performance-based compensation” under Section 162(m) of the Code, provided that the
performance criteria for such award or portion of an award that is intended by the Plan Administrator to satisfy the requirements
for “performance-based compensation” under Section 162(m) of the Code shall be a measure based on one or more Qualifying
Performance Criteria selected by the Committee and specified at the time the award is granted. The Committee shall certify the
extent to which any Qualifying Performance Criteria have been satisfied, and the amount payable as a result thereof, prior to payment,
settlement or vesting of any award that is intended to satisfy the requirements for “performance-based compensation”
under Section 162(m) of the Code. Notwithstanding satisfaction of any performance goals, the number of shares of Common Stock issued
under or the amount paid under an award may, to the extent specified in the applicable award agreement, be reduced by the Committee
on the basis of such further considerations as the Committee in its sole discretion shall determine. The Committee may not delegate
its duties under this Article Five to any other person with respect to any award that is intended to satisfy the requirements for
“performance-based compensation” under Section 162(m) of the Code.


 






    	21



     

    

II.               
QUALIFYING PERFORMANCE CRITERIA


 


For purposes of this Plan, the term
“Qualifying Performance Criteria” shall mean any one or more of the following performance criteria, either individually,
alternatively or in any combination, applied to either the Company as a whole or to a business unit or subsidiary, either individually,
alternatively or in any combination, and measured either quarterly, annually or cumulatively over a period of years, on an absolute
basis or relative to a pre-established target, to previous years’ results or to a designated comparison group, in each case
as specified by the Committee: (i) revenue growth; (ii) earnings before interest, taxes, depreciation and amortization; (iii) earnings
before interest, taxes and amortization; (iv) operating income; (v) pre- or after-tax income; (vi) cash flow; (vii) cash flow per
share; (viii) net income; (ix) earnings per share; (x) return on equity; (xi) return on invested capital; (xii) return on assets;
(xiii) economic value added (or an equivalent metric); (xiv) share price performance; (xv) total shareholder return; (xvi) improvement
in or attainment of expense levels; (xvii) improvement in or attainment of working capital levels; (xviii) debt reduction; (xix)
progress for advancing drug discovery and/or drug development programs; or (xx) implementation, completion or attainment of measurable
objectives with respect to research, development, manufacturing, commercialization, products or projects, or production volume
levels. To the extent consistent with Section 162(m) of the Code, the Committee (A) shall appropriately adjust any evaluation of
performance under a Qualifying Performance Criteria to eliminate the effects of charges for restructurings, discontinued operations,
extraordinary items and all items of gain, loss or expense determined to be extraordinary or unusual in nature or related to the
acquisition or disposal of a segment of a business or related to a change in accounting principle all as determined in accordance
with standards established by opinion No. 30 of the Accounting Principles Board (APB Opinion No. 30) or other applicable or successor
accounting provisions, as well as the cumulative effect of accounting changes, in each case as determined in accordance with generally
accepted accounting principles or identified in the Company’s financial statements or notes to the financial statements,
and (B) may appropriately adjust any evaluation of performance under a Qualifying Performance Criteria to exclude any of the following
events that occurs during a performance period: (i) asset write-downs, (ii) litigation, claims, judgments or settlements, (iii)
the effect of changes in tax law or other such laws or provisions affecting reported results, (iv) the adverse effect of work stoppages
or slowdowns, (v) accruals for reorganization and restructuring programs and (vi) accruals of any amounts for payment under this
Plan or any other compensation arrangement maintained by the Company. 


 


Article
Six

MISCELLANEOUS


 


I.                  
AMENDMENT OF THE PLAN


 


The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects whatsoever. However, no such amendment or modification shall, without the consent
of the holders, adversely affect rights and obligations with respect to options at the time outstanding under the Plan. In addition,
certain amendments may require stockholder approval pursuant to applicable laws or regulations.


 






    	22



     

    

II.               
TAX WITHHOLDING


 


A.               
The Company’s obligation to deliver shares or cash upon the exercise of stock options or stock appreciation rights
or upon the grant or vesting of direct stock issuances or RSUs under the Plan shall be subject to the satisfaction of all applicable
Federal, State and local income and employment tax withholding requirements.


 


B.                
The Plan Administrator may, in its discretion and upon such terms and conditions as it may deem appropriate, provide any
or all holders of outstanding options or stock issuances under the Plan (other than the automatic option grants under Article Four)
with the election to have the Company withhold, from the shares of Common Stock otherwise issuable upon the exercise or vesting
of such awards, a whole number of such shares with an aggregate fair market value equal to the minimum amount necessary to satisfy
the Federal, State and local income and employment tax withholdings (the “Taxes”) incurred in connection with the acquisition
or vesting of such shares. In lieu of such direct withholding, one or more grantees may also be granted the right to deliver whole
shares of Common Stock to the Company in satisfaction of such Taxes. Any withheld or delivered shares shall be valued at their
fair market value on the applicable determination date for such Taxes.


 


III.            
EFFECTIVE DATE AND TERM OF PLAN


 


A.               
The Plan, as amended and restated, shall be effective on the date specified in the Board of Directors resolution adopting
the Plan. Except as provided below, each option issued and outstanding under the Plan immediately prior to such effective date
shall continue to be governed solely by the terms and conditions of the agreement evidencing such grant, and nothing in this restatement
of the Plan shall be deemed to affect or otherwise modify the rights or obligations of the holders of such options with respect
to their acquisition of shares of Common Stock thereunder. The Plan Administrator shall, however, have full power and authority,
under such circumstances as the Plan Administrator may deem appropriate (but in accordance with Section I of this Article Five),
to extend one or more features of this amendment and restatement to any options outstanding on the effective date.


 


B.                
Unless sooner terminated in accordance with the other provisions of this Plan, the Plan shall terminate upon the earlier
of (i) ten years following the date this amendment and restatement of the Plan is approved by the Board or (ii) the date on which
all shares available for issuance under the Plan shall have been issued or cancelled pursuant to the exercise, surrender or cash-out
of the options granted hereunder. If the date of termination is determined under clause (i) above, then any options or stock issuances
outstanding on such date shall continue to have force and effect in accordance with the provisions of the agreements evidencing
those awards.


 


C.                
Options may be granted with respect to a number of shares of Common Stock in excess of the number of shares at the time
available for issuance under the Plan, provided each granted option is not to become exercisable, in whole or in part, at
any time prior to stockholder approval of an amendment authorizing a sufficient increase in the number of shares issuable under
the Plan.


 






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IV.            
USE OF PROCEEDS


 


Any cash proceeds received by the Company from the sale of shares pursuant
to options or stock issuances granted under the Plan shall be used for general corporate purposes.


 


V.               
REGULATORY APPROVALS


 


A.               
The implementation of the Plan, the granting of any option hereunder, and the issuance of stock (i) upon the exercise or
surrender of any option or (ii) under the Stock Issuance Program shall be subject to the procurement by the Company of all approvals
and permits required by regulatory authorities having jurisdiction over the Plan, the options granted under it and the stock issued
pursuant to it.


 


B.                
No shares of Common Stock or other assets shall be issued or delivered under the Plan unless and until there shall have
been compliance with all applicable requirements of Federal and state securities laws, including (to the extent required) the filing
and effectiveness of the Form S-8 registration statement for the shares of Common Stock issuable under the Plan, and all applicable
listing requirements of any stock exchange (or the Nasdaq National Market, the Nasdaq Global Select Market or any successor system,
if applicable) on which Common Stock is then trading.


 


VI.            
NO EMPLOYMENT/SERVICE RIGHTS


 


Neither the action of the Company in establishing or restating the
Plan, nor any action taken by the Plan Administrator hereunder, nor any provision of the Plan shall be construed so as to grant
any individual the right to remain in the employ or service of the Company (or any parent or subsidiary corporation) for any period
of specific duration, and the Company (or any parent or subsidiary corporation retaining the services of such individual) may terminate
such individual’s employment or service at any time and for any reason, with or without cause.


 


VII.         
MISCELLANEOUS PROVISIONS


 


A.               
Except to the extent otherwise expressly provided in the Plan, the right to acquire Common Stock or other awards under the
Plan may not be assigned, encumbered or otherwise transferred by any grantee.


 


B.                
Awards issued under the Plan shall be subject to any clawback policy of the Company as in effect from time-to-time.


 


C.                
The provisions of the Plan relating to the exercise of options and the issuance and/or vesting of shares shall be governed
by the laws of the State of Delaware without resort to that state’s conflict-of-laws provisions, as such laws are applied
to contracts entered into and performed in such State.


 






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D.               
The Plan is intended to be an unfunded plan. Grantees are and shall at all times be general creditors of the Company with
respect to their awards. If the Committee or the Company chooses to set aside funds in a trust or otherwise for the payment of
awards under the Plan, such funds shall at all times be subject to the claims of the creditors of the Company in the event of its
bankruptcy or insolvency.


 




 


 


 


 


 


 


 


 


 


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