Exhibit 10.7  


EPOCRATES, INC.

2008 EQUITY INCENTIVE PLAN  


ADOPTED BY THE BOARD OF DIRECTORS: MARCH 19, 2008

AMENDED BY THE COMPENSATION COMMITTEE ON BEHALF OF THE

BOARD OF DIRECTORS: APRIL 17, 2009 (THE "EFFECTIVE DATE")

APPROVED BY THE STOCKHOLDERS: JUNE 22, 2009

AMENDED BY THE BOARD OF DIRECTORS: APRIL 30, 2010

AMENDED BY THE BOARD OF DIRECTORS: NOVEMBER 11, 2010

APPROVED BY STOCKHOLDERS:               

TERMINATION DATE: APRIL 16, 2019  


1.     GENERAL.  



        (a)    Successor and Continuation.    The Plan is a continuation of and successor to the Company's 1999 Stock Option
Plan that was previously adopted on August 2, 1999 (as in effect immediately prior to the Effective Date, the "Original Plan"). Following the
Effective Date, no additional stock awards shall be granted under the Original Plan. Any shares remaining available for issuance pursuant to the exercise or settlement of stock awards under the
Original Plan as of the Effective Date (the "Original Plan's Available Reserve") shall become available for issuance pursuant to Stock Awards granted
hereunder. From and after the Effective Date, all outstanding stock awards granted under the Original Plan shall remain subject to the terms of the Original Plan; provided,
however, any shares subject to outstanding stock awards granted under the Original Plan that expire or terminate for any reason prior to exercise or would otherwise return to
the Original Plan's share reserve (the "Returning Shares") shall instead become available for issuance pursuant to Awards granted hereunder. All Awards
granted on or after the Effective Date of this Plan shall be subject to the terms of this Plan. 



        (b)    Eligible Stock Award Recipients.    The persons eligible to receive Stock Awards are Employees, Directors and
Consultants. 


        (c)    Available Stock Awards.    The Plan provides for the grant of the following Stock Awards: (i) Incentive
Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Bonus Awards, (iv) Stock Unit Awards, (v) Stock Appreciation Rights, (vi) Performance Stock Awards, and
(vii) Other Stock Awards. 


        (d)    Purpose.    The Company, by means of the Plan, seeks to secure and retain the services of the group of persons
eligible to receive Stock Awards as set forth in Section 1(b), to provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate and to provide a
means by which such eligible recipients may be given an opportunity to benefit from increases in value of the Common Stock through the granting of Stock Awards. 



2.     DEFINITIONS.  


        As used in the Plan, the following definitions shall apply to the capitalized terms indicated below: 


        (a)   "Affiliate" means (i) any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company, provided each 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, and (ii) any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company, provided each 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. The 


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Board
shall have the authority to determine (i) the time or times at which the foregoing ownership tests are applied, and (ii) whether "Affiliate" includes entities other than
corporations within the foregoing definition. 


        (b)   "Annual Meeting" means, following the IPO Date, the first meeting of the
Company's stockholders held each calendar year at which Directors of the Company are selected. 


        (c)   "Board" means the Board of Directors of the Company. 


        (d)   "Capitalization Adjustment" means any change that is made in, or other
events that occur with respect to, the Common Stock subject to the Plan or subject to any Stock Award after the Effective Date without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares,
change in corporate structure or other similar transaction). Notwithstanding the foregoing, the conversion of any convertible securities of the Company shall not be treated as a Capitalization
Adjustment. 


        (e)   "Cause" means, with respect to a Participant, the occurrence of any of
the following events: (i) such Participant's commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof;
(ii) such Participant's attempted commission of, or participation in, a fraud or act of dishonesty against the Company; (iii) such Participant's intentional, material violation of any
material contract or agreement between the Participant and the Company or of any statutory duty owed to the Company; (iv) such Participant's unauthorized use or disclosure of the Company's
confidential information or trade secrets; or (v) such Participant's gross misconduct. The determination that a termination is for Cause shall be made by the Company in its sole discretion. Any
determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Stock Awards held by such Participant shall have no
effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose. 


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



        (i)    any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than
fifty percent (50%) of the combined voting power of the Company's then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a
Change in Control shall not be deemed to occur (A) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person from the
Company in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities or (B) solely because
the level of Ownership held by any Exchange Act Person (the "Subject Person") exceeds the designated percentage threshold of the outstanding voting
securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the
operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting
securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated
percentage threshold, then a Change in Control shall be deemed to occur; 


        (ii)   there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and,
immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either
(A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity in such merger, 



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consolidation
or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar
transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction; 



        (iii) the stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the
Company, or a complete dissolution or liquidation of the Company shall otherwise occur, except for a liquidation into a parent corporation; 


        (iv)  there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the
consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its
Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions
as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or 


        (v)   individuals who, on the date the Plan is adopted by the Board, are members of the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the members of the Board; provided,
however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent
Board then still in office, such new member shall, for purposes of the Plan, be considered as a member of the Incumbent Board. 




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


        Notwithstanding
the foregoing or any other provision of the Plan, the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or
any Affiliate and the Participant shall supersede the foregoing definition with respect to Stock Awards subject to such agreement; provided, however,
that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply. 


        (g)   "Code" means the Internal Revenue Code of 1986, as amended. 


        (h)   "Committee" means a committee of one (1) or more members of the
Board to whom authority has been delegated by the Board in accordance with Section 3(c). 


        (i)    "Common Stock" means the common stock of the Company. 


        (j)    "Company" means Epocrates, Inc., a Delaware corporation. 



        (k)   "Consultant" means any person, including an advisor, who is
(i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an
Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, shall not cause a Director to be considered a "Consultant" for purposes of
the Plan. 


        (l)    "Continuous Service" means that the Participant's service with the
Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an
Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant's
service with the Company or an Affiliate, shall not terminate a Participant's Continuous Service; provided, however, if the Entity for which a
Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board in its sole discretion, such Participant's Continuous Service shall be considered to have terminated on
the date such Entity ceases to qualify as an Affiliate. For example, a change in status from an employee of 


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the
Company to a consultant of an Affiliate or to a Director shall not constitute an interruption of Continuous Service. To the extent permitted by law, the Board or the chief executive officer of the
Company, in that party's sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave,
military leave or any other personal leave. Notwithstanding the foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting in a Stock Award only to such extent as may
be provided in the Company's leave of absence policy or in the written terms of the Participant's leave of absence. 


        (m)  "Corporate Transaction" means the occurrence, in a single transaction or
in a series of related transactions, of any one or more of the following events: 



        (i)    the consummation of a sale or other disposition of all or substantially all, as determined by the Board in its sole
discretion, of the consolidated assets of the Company and its Subsidiaries; 


        (ii)   the consummation of a sale or other disposition of at least ninety percent
(90%) of the outstanding securities of the Company; 


        (iii) the consummation of a merger, consolidation or similar transaction following which the Company is not the surviving
corporation; or 


        (iv)  the consummation of a merger, consolidation or similar transaction following which the Company is the surviving
corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or
similar transaction into other property, whether in the form of securities, cash or otherwise. 




        (n)   "Covered Employee" means the Company's principal executive officer and
the three (3) other highest compensated officers of the Company, excluding the Company's principal financial officer, for whom total compensation is required to be reported to stockholders
under the Exchange Act, as determined for purposes of Section 162(m) of the Code. 


        (o)   "Director" means a member of the Board. 


        (p)   "Disability" means, with respect to a Participant, the inability of such
Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for
a continuous period of not less than 12 months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code. 


        (q)   "Effective Date" means the effective date of the Plan as set forth in
Section 13. 


        (r)   "Employee" means any person employed by the Company or an Affiliate.
However, service solely as a Director, or payment of a fee for such services, shall not cause a Director to be considered an "Employee" for purposes of the Plan. 


        (s)   "Entity" means a corporation, partnership, limited liability company or
other entity. 


        (t)    "Exchange Act" means the Securities Exchange Act of 1934, as amended. 



        (u)   "Exchange Act Person" means any natural person, Entity or "group" (within
the meaning of Section 13(d) or 14(d) of the Exchange Act), except that "Exchange Act Person" shall not include (i) the Company or any Subsidiary of the Company, (ii) any employee
benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company,
(iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or "group" (within the meaning of Section 13(d) or 14(d) of the Exchange
Act) that, as of the Effective Date, is the Owner, directly or indirectly, of 


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securities
of the Company representing more than fifty percent (50%) of the combined voting power of the Company's then outstanding securities. 



        (v)   "Fair Market Value" means, as of any date, the value of the Common Stock
determined as follows: 



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


        (ii)   In the absence of such markets for the Common Stock, the Fair Market Value shall be determined by the Board in good
faith and in a manner that complies with Sections 409A and, as applicable, 422 of the Code. 




        (w)  "Incentive Stock Option" means an Option that qualifies as an "incentive
stock option" within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 


        (x)   "IPO Date" means the date of the underwriting agreement between the
Company and the underwriter(s) managing the initial public offering of the Common Stock, pursuant to which the Common Stock is priced for the initial public offering. 



        (y)   "Non-Employee Director" means a Director who either
(i) is not a current employee or officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as
a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated
pursuant to the Securities Act ("Regulation S-K")), does not possess an interest in any other transaction for which disclosure would
be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of
Regulation S-K; or (ii) is otherwise considered a "non-employee director" for purposes of Rule 16b-3. 


        (z)   "Nonstatutory Stock Option" means an Option that does not qualify as an
Incentive Stock Option. 


        (aa) "Officer" means any person designated by the Company as an officer. 



        (bb) "Option" means an Incentive Stock Option or a Nonstatutory Stock Option
to purchase shares of Common Stock granted pursuant to the Plan. 


        (cc) "Option Agreement" means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan. 



        (dd) "Optionholder" means a person to whom an Option is granted pursuant to
the Plan or, if applicable, such other person who holds an outstanding Option. 


        (ee) "Original Plan" means the Company's 1999 Stock Option Plan in effect
immediately prior to the Effective Date. 


        (ff)  "Other Stock Award" means an award based in whole or in part by
reference to the Common Stock which is granted pursuant to the terms and conditions of Section 7(e). 


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        (gg) "Other Stock Award Agreement" means a written agreement between the
Company and a holder of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each Other Stock Award Agreement shall be subject to the terms and conditions of the
Plan. 


        (hh) "Outside Director" means a Director who either (i) is not a
current employee of the Company or an "affiliated corporation" (within the meaning of Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company
or an "affiliated corporation" who receives compensation for prior services (other than benefits under a tax-qualified retirement plan) during the taxable year, has not been an officer of
the Company or an "affiliated corporation," and does not receive remuneration from the Company or an "affiliated corporation," either directly or indirectly, in any capacity other than as a Director,
or (ii) is otherwise considered an "outside director" for purposes of Section 162(m) of the Code. 


        (ii)   "Own," "Owned,"
"Owner," "Ownership" A person or Entity shall be deemed to "Own," to have
"Owned," to be the "Owner" of, or to have acquired "Ownership" of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities. 


        (jj)  "Participant" means a person to whom a Stock Award is granted pursuant
to the Plan or, if applicable, such other person who holds an outstanding Stock Award. 


        (kk) "Performance Criteria" means the one or more criteria that the Board
shall select for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that shall be used to establish such Performance Goals may be based on any one of, or
combination of, the following: (i) earnings per share; (ii) earnings before interest, taxes and depreciation; (iii) earnings before interest, taxes, depreciation and amortization
(EBITDA); (iv) net earnings; (v) return on equity; (vi) return on assets, investment, or capital employed; (vii) operating margin; (viii) gross margin;
(ix) operating income; (x) net income (before or after taxes); (xi) net operating income; (xii) net operating income after tax; (xiii) pre- and
after-tax income; (xiv) pre-tax profit; (xv) operating cash flow; (xvi) sales or revenue; (xvii) increases in revenue or product revenue;
(xvii) expenses and cost reductions; (xix) improvement in or attainment of expense levels; (xx) improvement in or attainment of working capital levels; (xxi) economic value
added; (xxii) market share; (xxiii) cash flow; (xxiv) cash flow per share; (xxv) share price performance; (xxvi) debt reduction; (xxvii) implementation or
completion of projects or processes; (xxviii) customer satisfaction; (xxix) total stockholder return; (xxx) stockholders' equity; and (xxxi) other measures of performance
selected by the Board. Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified in the Stock Award Agreement. The
Board shall, in its sole discretion, define the manner of calculating the Performance Criteria it selects to use for such Performance Period. 



        (ll)   "Performance Goals" means, for a Performance Period, the one or more
goals established by the Board for the Performance Period based upon the satisfaction of the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to
one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or
more relevant indices. At the time of the grant of any Stock Award, the Board is authorized to determine whether, when calculating the attainment of Performance Goals for a Performance Period:
(i) to exclude restructuring and/or other nonrecurring charges; (ii) to exclude exchange rate effects, as applicable, for non-U.S. dollar denominated net sales and operating
earnings; (iii) to exclude the effects of changes to generally accepted accounting standards required by the Financial Accounting Standards Board; (iv) to exclude the effects of any
statutory adjustments to corporate tax rates; and (v) to exclude the effects of any "extraordinary items" as determined under generally accepted accounting principles. In addition, the 


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Board
retains the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals. 



        (mm)  "Performance Period" means the one or more periods of time, which may be
of varying and overlapping duration, as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant's right to
and the payment of a Performance Stock Award. 


        (nn) "Performance Stock Award" means a Stock Award granted pursuant to the
terms and conditions of Section 7(d). 


        (oo) "Plan" means this Epocrates, Inc. 2008 Equity Incentive Plan. 


        (pp) "Rule 16b-3" means Rule 16b-3
promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time. 


        (qq) "Rule 405" means Rule 405 promulgated under the Securities
Act. 


        (rr)  "Rule 701" means Rule 701 promulgated under the Securities
Act. 


        (ss) "Securities Act" means the Securities Act of 1933, as amended. 


        (tt)  "Stock Appreciation Right" means a right to receive the appreciation on
Common Stock that is granted pursuant to the terms and conditions of Section 7(c). 



        (uu) "Stock Appreciation Right Agreement" means a written agreement between
the Company and a holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right Agreement shall be subject to the terms
and conditions of the Plan. 


        (vv) "Stock Award" means any right granted under the Plan, including an
Option, a Stock Bonus Award, a Stock Unit Award, a Stock Appreciation Right, a Performance Stock Award, or any Other Stock Award. 



        (ww)  "Stock Award Agreement" means a written agreement between the Company
and a Participant evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan. 


        (xx) "Stock Bonus Award" means an award of shares of Common Stock which is
granted pursuant to the terms and conditions of Section 7(a). 


        (yy) "Stock Bonus Award Agreement" means a written agreement between the
Company and a holder of a Stock Bonus Award evidencing the terms and conditions of a Stock Bonus Award grant. Each Stock Bonus Award Agreement shall be subject to the terms and conditions of the Plan. 


        (zz) "Stock Unit Award" means a right to receive shares of Common Stock which
is granted pursuant to the terms and conditions of Section 7(b). 



        (aaa)  "Stock Unit Award Agreement" means a written agreement between the
Company and a holder of a Stock Unit Award evidencing the terms and conditions of a Stock Unit Award grant. Each Stock Unit Award Agreement shall be subject to the terms and conditions of the Plan. 


        (bbb)  "Subsidiary" means, with respect to the Company, (i) any
corporation of which more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of
whether, at the time, stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or
indirectly, Owned by the Company, and (ii) any partnership, limited liability company, or other entity in which the Company has a direct or indirect interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent (50%). 


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        (ccc)  "Ten Percent Stockholder" means a person who Owns (or is deemed to Own
pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Affiliate. 


3.     ADMINISTRATION.  


        (a)    Administration by Board.    The Board shall administer the Plan unless and until the Board delegates
administration of the Plan to a Committee or Committees, as provided in Section 3(c). 


        (b)    Powers of Board.    The Board shall have the power, subject to, and within the limitations of, the express
provisions of the Plan: 



        (i)    To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully effective. 


        (ii)   To determine from time to time (1) which of the persons eligible under the Plan shall be granted Stock Awards;
(2) when and how each Stock Award shall be granted; (3) what type or combination of types of Stock Award shall be granted; (4) the provisions of each Stock Award granted (which
need not be identical), including the time or times when a person shall be permitted to receive cash or Common Stock pursuant to a Stock Award; (5) the number of shares of Common Stock with
respect to which a Stock Award shall be granted to each such person; and (6) the Fair Market Value applicable to a Stock Award. 


        (iii) To settle all controversies regarding the Plan and Stock Awards granted under it. 


        (iv)  To accelerate the time at which a Stock Award may first be exercised or the time during which a Stock Award or any part
thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock Award stating the time at which it may first be exercised or the time during which it will vest. 


        (v)   To effect, at any time and from time to time, with the consent of any adversely affected Participant, (1) the
reduction of the exercise price of any outstanding Option or the strike price of any outstanding Stock Appreciation Right under the Plan; (2) the cancellation of any outstanding Option or Stock
Appreciation Right under the Plan and the grant in substitution therefor of (a) a new Option or Stock Appreciation Right under the Plan or another equity plan of the Company covering the same
or a different number of shares of Common Stock, (b) a Stock Bonus Award, (c) a Stock Unit Award, (e) an Other Stock Award, (e) cash, and/or (f) other valuable
consideration (as determined by the Board, in its
sole discretion); or (3) any other action that is treated as a repricing under generally accepted accounting principles. 


        (vi)  To amend the Plan or a Stock Award as provided in Section 11. 


        (vii) To amend the Plan in any respect the Board deems necessary or advisable, including, without limitation, relating to
Incentive Stock Options and certain nonqualified deferred compensation under Section 409A of the Code and/or to bring the Plan or Stock Awards granted under the Plan into compliance therewith,
subject to the limitations, if any, of applicable law. However, except as provided in Section 10(a) relating to Capitalization Adjustments, stockholder approval shall be required for any
amendment of the Plan that either (1) materially increases the number of shares of Common Stock available for issuance under the Plan, (2) materially expands the class of individuals
eligible to receive Stock Awards under the Plan, (3) materially increases the benefits accruing to Participants under the Plan or materially reduces the price at which shares of Common Stock
may be issued or purchased under the Plan, (4) materially extends the term of the Plan, or (5) expands the types of Stock Awards available for issuance under the Plan, but in each 



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of
(1) through (5) only to the extent required by applicable law or listing requirements. Except as provided above, rights under any Stock Award granted before amendment of the Plan
shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent of the affected Participant, and (ii) such Participant consents in writing. 



        (viii)  To terminate or suspend the Plan as provided in Section 12. Suspension or termination of the Plan shall not
impair rights and obligations under any Stock Award granted while the Plan is in effect except with the written consent of the affected Participant. 


        (ix)  To submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan
intended to satisfy the requirements of (i) Section 162(m) of the Code and the regulations thereunder regarding the exclusion of performance-based compensation from the limit on
corporate deductibility of compensation paid to Covered Employees, (ii) Section 422 of the Code regarding Incentive Stock Options, or (iii) Rule 16b-3. 


        (x)   To approve forms of Stock Award Agreements for use under the Plan and to amend the terms of any one or more Stock Awards,
including, but not limited to, amendments to provide terms more favorable than previously provided in the Stock Award Agreement, subject to any specified limits in the Plan that are not subject to
Board discretion; provided however, that except with respect to amendments that disqualify or impair the status of an Incentive Stock Option, a
Participant's rights under any Stock Award shall not be impaired by any such amendment unless (i) the Company requests the consent of the affected Participant, and (ii) such Participant
consents in writing. Notwithstanding the foregoing, subject to the limitations of applicable law, if any, the Board may amend the terms of any one or more
Stock Awards without the affected Participant's consent if necessary to maintain the qualified status of the Stock Award as an Incentive Stock Option or to bring the Stock Award into compliance with
Section 409A of the Code and the related guidance thereunder. 


        (xi)  Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the
best interests of the Company which are not in conflict with the provisions of the Plan. 


        (xii) To adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan
by individuals who are foreign nationals or employed outside the United States. 




        (c)    Delegation to Committee.    



        (i)    General.    The Board may delegate some or all of the
administration of the Plan to a Committee or Committees. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee is
authorized to exercise (and references in the Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or
all of the powers previously delegated. 


        (ii)    Section 162(m) and Rule 16b-3
Compliance.    In the sole discretion of the Board, the Committee may consist solely of two (2) or more Outside Directors, in accordance with
Section 162(m) of the Code, and/or solely of two or more Non-Employee Directors, in accordance with Rule 16b-3. In addition, the Board or the Committee, in its
sole discretion, may (1) delegate to a Committee who need not be Outside Directors the authority to grant Stock Awards to eligible persons who are either (a) not then Covered Employees
and are not expected to be Covered Employees at the time of recognition of income resulting from such Stock Award, or (b) not 



9







 




persons
with respect to whom the Company wishes to comply with Section 162(m) of the Code, and/or (2) delegate to a Committee who need not be Non-Employee Directors the
authority to grant Stock Awards to eligible persons who are not then subject to Section 16 of the Exchange Act. 




        (d)    Delegation to Officers.    The Board may delegate to one or more Officers of the Company the authority to do
one or both of the following (i) designate Officers and Employees of the Company or
any of its Subsidiaries to be recipients of Options (and, to the extent permitted by Delaware law, other Stock Awards) and the terms thereof, and (ii) determine the number of shares of Common
Stock to be subject to such Stock Awards granted to such Officers and Employees; provided, however, that the Board resolutions regarding such delegation
shall specify the total number of shares of Common Stock that may be subject to the Stock Awards granted by such Officers and that such Officers may not grant a Stock Award to themselves.
Notwithstanding anything to the contrary in this Section 3(d), the Board may not delegate to an Officer authority to determine the Fair Market Value of the Common Stock pursuant to
Section 2(v)(ii) above. 


        (e)    Effect of Board's Decision.    All determinations, interpretations and constructions made by the Board in good
faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons. 


4.     SHARES SUBJECT TO THE PLAN.  



        (a)    Share Reserve.    Subject to the provisions of Section 10(a) relating to Capitalization Adjustments, the
number of shares of Common Stock that may be issued pursuant to Stock Awards from and after the Effective Date shall not exceed, in the aggregate Nine Million Seven Hundred Ninety-One Thousand
Three Hundred Fifty-Six (9,791,356) shares of Common Stock, which number includes (i) the number of shares subject to the Original Plan's Available Reserve plus (ii) an additional number
of shares in an amount not to exceed Six Million Four Hundred Twenty-Nine Thousand Four Hundred Thirty (6,429,430) shares (which number consists of the
Returning Shares, if any, as such shares become available from time to time) plus (iii) an additional One Million Four Hundred Thousand Sixty-Six (1,400,066) shares of Common Stock
reserved for issuance under the Plan. Shares may be issued in connection with a merger or acquisition as permitted by NYSE Listed Company Manual Section 303A.08 or, if applicable, NASD
Rule 4350(i)(1)(A)(iii), and such issuance shall not reduce the number of shares available for issuance under the Plan. 


        (b)    Reversion of Shares to the Share Reserve.    If any (i) Stock Award shall for any reason expire or
otherwise terminate, in whole or in part, without having been exercised in full, (ii) shares of Common Stock issued to a Participant pursuant to a Stock Award are forfeited to or repurchased by
the Company pursuant to the Company's reacquisition or repurchase rights under the Plan, including any forfeiture or repurchase caused by the failure to meet a contingency or condition required for
the vesting of such shares, (iii) Stock Award is settled in cash, or (iv) shares of Common Stock are cancelled in accordance with the cancellation and regrant provisions of
Section 3(b)(v), then the shares of Common Stock not issued under such Stock Award, or forfeited to or repurchased by the Company, shall revert to and again become available for issuance under
the Plan. If any shares subject to a Stock Award are not delivered to a Participant because such shares are withheld for the payment of taxes or the Stock Award is exercised through a reduction of
shares subject to the Stock Award (i.e., "net exercised") or an appreciation distribution in respect of a Stock Appreciation Right is paid in shares of
Common Stock, the number of shares subject to the Stock Award that are not delivered to the Participant shall remain available for subsequent issuance under the Plan. If the exercise price of any
Stock Award is satisfied by tendering shares of Common Stock held by the Participant (either by actual delivery or attestation), then the number of shares so tendered shall remain available for
subsequent issuance under the Plan. 


10









 



































  
        (c)    Incentive Stock Option Limit.    Notwithstanding anything to the contrary in Section 4(b), subject to
the provisions of Section 10(a) relating to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock
Options shall be Nine Million Seven Hundred Ninety-One Thousand Three Hundred Fifty-Six (9,791,356) shares of Common Stock. 


        (d)    Source of Shares.    The stock issuable under the Plan shall be shares of authorized but unissued or reacquired
Common Stock, including shares repurchased by the Company on the open market. 


5.     ELIGIBILITY.  


        (a)    Eligibility for Specific Stock Awards.    Incentive Stock Options may be granted only to employees of the
Company or a "parent corporation" or "subsidiary corporation" thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code). Stock Awards other than Incentive Stock Options may
be granted to Employees, Directors and Consultants; provided, however, Nonstatutory Stock Options and Stock Appreciation Rights may not be granted to
Employees, Directors, and Consultants who are providing Continuous Service to any "parent" of the Company, as such term is defined in Rule 405, unless such Stock Awards comply with the
distribution requirements of Section 409A of the Code. 


        (b)    Ten Percent Stockholders.    A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless
the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value of the Common Stock on the date of grant and the Option is not exercisable after the expiration of
five (5) years from the date of grant. 


        (c)    Section 162(m) Limitation.    Subject to the provisions of Section 10(a) relating to
Capitalization Adjustments, following the IPO Date, no Employee shall be eligible to be granted during any calendar year Options or Stock Appreciation Rights covering more than one million five
hundred thousand (1,500,000) shares of Common Stock. 


        (d)    Consultants.    A Consultant shall not be eligible for the grant of a Stock Award if, at the time of grant,
either the offer or the sale of the Company's securities to such Consultant is not exempt under Rule 701 because of the nature of the services that the Consultant is providing to the Company,
because the Consultant is not a natural person, or because of any other provision of Rule 701, unless the Company determines that such grant need not comply with the requirements of
Rule 701 and will satisfy another exemption under the Securities Act as well as comply with the securities laws of all other relevant jurisdictions. 


6.     OPTION PROVISIONS.  


        Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. All Options shall be separately designated
Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates shall be issued for shares of Common Stock purchased
on exercise of each type of Option. The provisions of separate Options need not be identical; provided, however, that each Option Agreement shall
include (through incorporation of provisions hereof by reference in the Option Agreement or otherwise) the substance of each of the following provisions: 


        (a)    Term.    No Option shall be exercisable after the expiration of ten (10) years from the date of grant,
or such shorter period specified in the Option Agreement; provided, however, that an Incentive Stock Option granted to a Ten Percent Stockholder shall
be subject to the provisions of Section 5(b). 


        (b)    Exercise Price.    Subject to the provisions of Section 5(b) regarding Ten Percent Stockholders, the
exercise price of each Option shall be not less than one hundred percent (100%) of the Fair 


11







 



Market
Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an Option may be granted with an exercise price lower than one hundred percent
(100%) of the Fair Market Value of the Common Stock subject to the Option if such Option is granted pursuant to an assumption or substitution for another option in a manner consistent with the
provisions of Sections 409A and 424(a) of the Code (whether or not such options are Incentive Stock Options). 


        (c)    Consideration.    The purchase price of Common Stock acquired pursuant to the exercise of an Option shall be
paid, to the extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below. The Board shall have the authority
to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to
utilize a particular method of payment. The methods of payment permitted by this Section 6(c) are: 



        (i)    by cash, check, bank draft or money order payable to the Company; 



        (ii)   pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the
issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales
proceeds; provided, however, that such program is not in violation of the prohibition on the extension of credit to the Company's executive officers and
Directors under Section 402 of the Sarbanes-Oxley Act of 2002, in the opinion of counsel acceptable to the Company; 



        (iii) by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock; 


        (iv)  if the Option is a Nonstatutory Stock Option, by a "net exercise" arrangement pursuant to which the Company will reduce
the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price;  provided, however, the
Company shall accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate
exercise price not satisfied by such reduction in the number of whole shares to be issued; provided, however, shares of Common Stock will no longer be
subject to an Option and will not be exercisable thereafter to the extent that (i) shares issuable upon exercise are reduced to pay the exercise price pursuant to the "net exercise,"
(ii) shares are delivered to the Participant as a result of such exercise, and (iii) shares are withheld to satisfy tax withholding obligations; or 


        (v)   in any other form of legal consideration that may be acceptable to the Board in its sole discretion and permissible under
applicable law. 




        (d)    Transferability of Options.    The Board may, in its sole discretion, impose such limitations on the
transferability of Options as the Board shall determine. In the absence of such a determination by the Board to the contrary, the following restrictions on the transferability of Options shall apply: 



        (i)    Restrictions on Transfer.    An Option shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the
Optionholder; provided, however, that the Board may, in its sole discretion, permit transfer of the Option in a manner that is not prohibited by
applicable tax and securities laws upon the Optionholder's request. 


        (ii)    Domestic Relations Orders.    Notwithstanding the foregoing,
an Option may be transferred pursuant to a domestic relations order, provided, however, that an Incentive Stock Option may be deemed to be a
Nonstatutory Stock Option as a result of such transfer. 



12







 

        (iii)    Beneficiary Designation.    Notwithstanding the foregoing,
the Optionholder may, by delivering written notice to the Company, in a form provided by or otherwise satisfactory to the Company and any broker designated by the Company to effect Option exercises,
designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option. In the absence of such a designation, the executor or administrator of
the Optionholder's estate shall be entitled to exercise the Option. 




        (e)    Vesting of Options Generally.    The total number of shares of Common Stock subject to an Option may vest and
therefore become exercisable in periodic installments that may or may not be equal. The Option may be subject to such other terms and conditions on the time or times when it may or may not be
exercised (which may be based on performance or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options may vary. The provisions of this Section 6(e) are
subject to any Option provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised. 


        (f)    Termination of Continuous Service.    In the event that an Optionholder's Continuous Service terminates (other
than for Cause or upon the Optionholder's death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date
of termination of Continuous Service) but only within such period of time ending on the earlier of (i) the date three (3) months following the termination of the Optionholder's
Continuous Service (or such longer or shorter period specified in the Option Agreement, which period shall not be less than thirty (30) days unless such termination is for Cause), or
(ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination of Continuous Service, the Optionholder does not exercise his or her Option within the
time specified herein or in the Option Agreement (as applicable), the Option shall terminate. 


        (g)    Extension of Termination Date.    Except as otherwise provided in the applicable Option Agreement or other
agreement between the Participant and the Company, in the event that exercise of an Option following the termination of the Optionholder's Continuous Service would be prohibited at any time
solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the expiration
of a period of three (3) months after the termination of the Optionholder's Continuous Service during which the exercise of the Option would not be in violation of such registration
requirements, or (ii) the expiration of the term of the Option as set forth in the Option Agreement. 


        (h)    Disability of Optionholder.    In the event that an Optionholder's Continuous Service terminates as a result of
the Optionholder's Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination of Continuous
Service), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination of Continuous Service (or such longer or shorter period
specified in the Option Agreement, which period shall not be less than six (6) months), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after
termination of Continuous Service, the Optionholder does not exercise his or her Option within the time specified herein or in the Option Agreement (as applicable), the Option shall terminate. 


        (i)    Death of Optionholder.    In the event that (i) an Optionholder's Continuous Service terminates as a
result of the Optionholder's death, or (ii) the Optionholder dies within the period (if any) specified in the Option Agreement after the termination of the Optionholder's Continuous Service for
a reason other than death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder's estate, by a person who
acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the option upon the Optionholder's death, but only within the period ending on the earlier of
(i) the date eighteen (18) months following the date of death (or such longer or shorter period 


13







 



specified
in the Option Agreement, which period shall not be less than six (6) months), or (ii) the expiration of the term of such Option as set forth in the Option Agreement. If, after
the Optionholder's death, the Option is not exercised within the time specified herein or in the Option Agreement (as applicable), the Option shall terminate. 


        (j)    Termination for Cause.    In the event that an Optionholder's Continuous Service is terminated for Cause, the
Option shall terminate immediately and cease to remain outstanding. 



        (k)    Non-Exempt Employees.    No Option or Stock Appreciation Right granted to an Employee that is a
non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, shall be first exercisable for any shares of Common Stock until at least six months following the date
of grant of the Option or Stock Appreciation Right. Notwithstanding the foregoing, consistent with the provisions of the Worker Economic Opportunity Act, in the event of the Participant's death or
Disability, upon a Corporate Transaction or a Change in Control in which the vesting of such Options or Stock Appreciation Rights accelerates, or upon the Participant's retirement (as such term may be
defined in the Participant's Option Agreement or Stock Appreciation Right Agreement or in another applicable agreement) any such vested Options and Stock Appreciation
Rights may be exercised earlier than six months following grant. The foregoing provision is intended to operate so that any income derived by a non-exempt employee in connection with the
exercise or vesting of an Option or Stock Appreciation Right will be exempt from his or her regular rate of pay. 


        (l)    Early Exercise of Options.    An Option may, but need not, include a provision whereby the Optionholder may
elect at any time before the Optionholder's Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior to the full vesting of
the Option. Subject to the "Repurchase Limitation" in Section 9(l), any unvested shares of Common Stock so purchased may be subject to a repurchase right in favor of the Company or to any other
restriction the Board determines to be appropriate. Provided that the "Repurchase Limitation" in Section 9(l) is not violated, the Company shall not be required to exercise its repurchase right
until at least six (6) months (or such longer or shorter period of time required to avoid classification of the Option as a liability for financial accounting purposes) have elapsed following
exercise of the Option unless the Board otherwise specifically provides in the Option Agreement. 


        (m)    Right of Repurchase.    Subject to the "Repurchase Limitation" in Section 9(l), an Option or Stock
Appreciation Right may include a provision whereby the Company may elect to repurchase all or any part of the vested shares of Common Stock acquired by the Participant pursuant to the exercise of the
Option or Stock Appreciation Right. 


        (n)    Right of First Refusal.    The Option or Stock Appreciation Right may include a provision whereby the Company
may elect to exercise a right of first refusal following receipt of notice from the Participant of the intent to transfer all or any part of the shares of Common Stock received upon the exercise of
the Option or Stock Appreciation Right. Such right of first refusal shall be subject to the "Repurchase Limitation" in Section 9(l). Except as expressly provided in this paragraph or in the
Option Agreement or Stock Appreciation Right Agreement, such right of first refusal shall otherwise comply with any applicable provisions of the Bylaws of the Company. 


7.     PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.  


        (a)    Stock Bonus Awards.    Each Stock Bonus Award Agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. To the extent consistent with the Company's Bylaws, at the Board's election, shares of Common Stock may be (i) held in book entry form subject to
the Company's instructions until any restrictions relating to the Stock Bonus Award lapse; or (ii) evidenced by a certificate, which certificate shall be held in such form and manner as
determined by the Board. The terms and conditions of Stock Bonus Award Agreements may change from time to time, and the terms and conditions of separate Stock Bonus Award Agreements need not 


14







 

be
identical; provided, however, that each Stock Bonus Award Agreement shall include (through incorporation of the provisions hereof by reference in the
agreement or otherwise) the substance of each of the following provisions: 



        (i)    Consideration.    A Stock Bonus Award may be awarded in
consideration for (i) past or future services actually or to be rendered to the Company or an Affiliate, (ii) cash or cash equivalents, or (iii) any other form of legal
consideration that may be acceptable to the Board in its sole discretion and permissible under applicable law. 


        (ii)    Vesting.    Subject to the "Repurchase Limitation" in
Section 9(l), shares of Common Stock awarded under a Stock Bonus Award Agreement may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the Board. 


        (iii)    Termination of Participant's Continuous Service.    In the
event a Participant's Continuous Service terminates, the Company may receive via a forfeiture condition or repurchase right, any or all of the shares of Common Stock held by the Participant which have
not vested as of the date of termination of Continuous Service under the terms of the Stock Bonus Award Agreement. 



        (iv)    Transferability.    Rights to acquire shares of Common Stock
under the Stock Bonus Award Agreement shall be transferable by the Participant only upon such terms and conditions as are set forth in the Stock Bonus Award Agreement, as the Board shall determine in
its sole discretion, so long as Common Stock awarded under the Stock Bonus Award Agreement remains subject to the terms of the Stock Bonus Award Agreement. 




        (b)    Stock Unit Awards.    Each Stock Unit Award Agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The terms and conditions of Stock Unit Award Agreements may change from time to time, and the terms and conditions of separate Stock Unit Award
Agreements need not be identical; provided, however, that each Stock Unit Award Agreement shall include (through incorporation of the provisions hereof
by reference in the agreement or otherwise) the substance of each of the following provisions: 



        (i)    Consideration.    At the time of grant of a Stock Unit Award,
the Board will determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject to the Stock Unit Award. The consideration to be paid (if any) by
the Participant for each share of Common Stock subject to a Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board in its sole discretion and permissible
under applicable law. 


        (ii)    Vesting.    At the time of the grant of a Stock Unit Award,
the Board may impose such restrictions or conditions to the vesting of the Stock Unit Award as it, in its sole discretion, deems appropriate. 


        (iii)    Payment.    A Stock Unit Award may be settled by the delivery
of shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Stock Unit Award Agreement. 


        (iv)    Additional Restrictions.    At the time of the grant of a
Stock Unit Award, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to a Stock
Unit Award after the vesting of such Stock Unit Award. 



        (v)    Dividend Equivalents.    Dividend equivalents may be credited
in respect of shares of Common Stock covered by a Stock Unit Award, as determined by the Board and contained in the Stock Unit Award Agreement. At the sole discretion of the Board, such dividend
equivalents may be converted into additional shares of Common Stock covered by the Stock Unit Award in such 



15







 




manner
as determined by the Board. Any additional shares covered by the Stock Unit Award credited by reason of such dividend equivalents will be subject to all the terms and conditions of the
underlying Stock Unit Award Agreement to which they relate. 


        (vi)    Termination of Participant's Continuous Service.    Except as
otherwise provided in the applicable Stock Unit Award Agreement, such portion of the Stock Unit Award that has not vested will be forfeited upon the Participant's termination of Continuous Service. 



        (vii)    Compliance with Section 409A of the
Code.    Notwithstanding anything to the contrary set forth herein, any Stock Unit Award granted under the Plan that is not exempt from the requirements of
Section 409A of the Code shall incorporate terms and conditions necessary to avoid the consequences of Section 409A(a)(1) of the Code. Such restrictions, if any, shall be determined by
the Board and contained in the Stock Unit Award Agreement evidencing such Stock Unit Award. 




        (c)    Stock Appreciation Rights.    Each Stock Appreciation Right Agreement shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate. Stock Appreciation Rights may be granted as stand-alone Stock Awards or in tandem with other Stock Awards. The terms and conditions of
Stock Appreciation Right Agreements may change from time to time, and the terms and conditions of separate Stock Appreciation Right Agreements need not be identical; provided,
however, that each Stock Appreciation Right Agreement shall include (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions as well as the provisions set forth in Section 6(l) and (n) above: 



        (i)    Term.    No Stock Appreciation Right shall be exercisable after
the expiration of ten (10) years from the date of grant, or such shorter period specified in the Stock Appreciation Right Agreement. 


        (ii)    Strike Price.    Each Stock Appreciation Right will be
denominated in shares of Common Stock equivalents. The strike price of each Stock Appreciation Right granted as a stand-alone or tandem Stock Award shall not be less than one hundred percent (100%) of
the Fair Market Value of the Common Stock equivalents subject to the Stock Appreciation Right on the date of grant. 


        (iii)    Calculation of Appreciation.    The appreciation distribution
payable on the exercise of a Stock Appreciation Right will be not greater than an amount equal to the excess of (i) the aggregate Fair Market Value (on the date of the exercise of the Stock
Appreciation Right) of a number of shares of Common Stock equal to the number of share of Common Stock equivalents in which the Participant is vested under such Stock Appreciation Right, and with
respect to which the Participant is exercising the Stock Appreciation Right on such date, over (ii) an amount (the strike price) that is determined by the Board on the date of grant of the
Stock Appreciation Right. 


        (iv)    Vesting.    At the time of the grant of a Stock Appreciation
Right, the Board may impose such restrictions or conditions to the vesting of such Stock Appreciation Right as it, in its sole discretion, deems appropriate. 


        (v)    Exercise.    To exercise any outstanding Stock Appreciation
Right, the Participant must provide written notice of exercise to the Company in compliance with the provisions of the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right. 


        (vi)    Payment.    The appreciation distribution in respect to a
Stock Appreciation Right may be paid in Common Stock, in cash, in any combination of the two or in any other form of consideration, as determined by the Board and contained in the Stock Appreciation
Right Agreement evidencing such Stock Appreciation Right. 



        (vii)    Termination of Continuous Service.    Except as otherwise
provided in the applicable Stock Award Agreement or other agreement between the Participant and the Company, the event 



16







 




that
a Participant's Continuous Service terminates, the Participant may exercise his or her Stock Appreciation Right (to the extent that the Participant was entitled to exercise such Stock
Appreciation Right as of the date of termination of Continuous Service) but only within such period of time ending on the earlier of (i) the date three (3) months following the
termination of the Participant's Continuous Service (or such longer or shorter period specified in the Stock Appreciation Right Agreement, which period shall not be less than thirty (30) days
unless the termination is for Cause), or (ii) the expiration of the term of the Stock Appreciation Right as set forth in the Stock Appreciation Right Agreement. If, after termination of
Continuous Service, the Participant does not exercise his or her Stock Appreciation Right within the time specified herein or in the Stock Appreciation Right Agreement (as applicable), the Stock
Appreciation Right shall terminate. 


        (viii)    Compliance with Section 409A of the
Code.    Notwithstanding anything to the contrary set forth herein, any Stock Appreciation Rights granted under the Plan that are not exempt from the requirements of
Section 409A of the Code shall incorporate terms and conditions necessary to avoid the consequences described in Section 409A(a)(1) of the Code. Such restrictions, if any, shall be
determined by the Board and contained in the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right. 




        (d)    Performance Stock Awards.    A Performance Stock Award is either a Stock Bonus Award or Stock Unit Award that
may be granted or may vest based upon the attainment during a Performance Period of certain Performance Goals. A Performance Stock Award may, but need not, require the completion of a specified period
of Continuous Service. The length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals
have been attained shall be conclusively determined by the Committee in its sole discretion. Following the IPO Date, the maximum benefit to be received by any Participant in a calendar year
attributable to Performance Stock Awards described in this Section 7(d) shall not exceed the value of one million five hundred thousand (1,500,000) shares of Common Stock. In addition, to the
extent permitted by applicable law and the applicable Award Agreement, the Board may determine that cash may be used in payment of Performance Stock Awards. 


        (e)    Other Stock Awards.    Other forms of Stock Awards valued in whole or in part by reference to, or otherwise
based on, Common Stock may be granted either alone or in addition to Stock Awards provided for under Section 6 and the preceding provisions of this Section 7. Subject to the provisions
of the Plan, the Board shall have sole and complete authority to determine the persons to whom and the time or times at which such Other Stock Awards will be granted, the number of shares of Common
Stock (or the cash equivalent thereof) to be granted pursuant to such Other Stock Awards and all other terms and conditions of such Other Stock Awards. 


8.     COVENANTS OF THE COMPANY.  


        (a)    Availability of Shares.    During the terms of the Stock Awards, the Company shall keep available at all times
the number of shares of Common Stock required to satisfy such Stock Awards. 


        (b)    Securities Law Compliance.    The Company shall seek to obtain from each regulatory commission or agency having
jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards; provided,
however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to
any such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until
such 


17







 



authority
is obtained. A Participant shall not be eligible for the grant of a Stock Award or the subsequent issuance of Common Stock pursuant to the Stock Award if such grant or issuance would be in
violation of any applicable securities laws. 


        (c)    No Obligation to Notify.    The Company shall have no duty or obligation to any holder of a Stock Award to
advise such holder as to the time or manner of exercising such Stock Award. Furthermore, the Company shall have no duty or obligation to warn or otherwise advise such holder of a pending termination
or expiration of a Stock Award or a possible period in which the Stock Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of a Stock Award to the holder
of such Stock Award. 


9.     MISCELLANEOUS.  


        (a)    Use of Proceeds.    Proceeds from the sale of shares of Common Stock pursuant to Stock Awards shall constitute
general funds of the Company. 


        (b)    Corporate Action Constituting Grant of Stock Awards.    Corporate action constituting a grant by the Company of
a Stock Award to any Participant shall be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter
evidencing the Stock Award is communicated to, or actually received or accepted by, the Participant. 


        (c)    Stockholder Rights.    No Participant shall be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares of Common Stock subject to such Stock Award unless and until (i) such Participant has satisfied all requirements for exercise of the Stock Award pursuant to
its terms, and (ii) the issuance of the Common Stock pursuant to such exercise has been entered into the books and records of the Company. 



        (d)    No Employment or Other Service Rights.    Nothing in the Plan, any Stock Award Agreement or other instrument
executed thereunder or in connection with any Stock Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in
effect at the time the Stock Award was granted or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without
cause, (ii) the service of a Consultant pursuant to the terms of such Consultant's agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws
of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be. 


        (e)    Incentive Stock Option $100,000 Limitation.    To the extent that the aggregate Fair Market Value (determined
at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and
any Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or portions thereof that exceed such limit (according to the order in which they were granted) shall be treated as
Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s). 



        (f)    Investment Assurances.    The Company may require a Participant, as a condition of exercising or acquiring
Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant's knowledge and experience in financial and business matters and/or to
employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or
together with the purchaser representative, the merits and risks of exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant is
acquiring Common Stock subject to the Stock Award for the Participant's own account and not with any present 


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intention
of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (i) the issuance of
the shares upon the exercise or acquisition of Common Stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act, or
(ii) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws.
The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer of the Common Stock. 


        (g)    Withholding Obligations.    Unless prohibited by the terms of a Stock Award Agreement, the Company may, in its
sole discretion, satisfy any federal, state or local tax withholding obligation relating to a Stock Award by any of the following means (in addition to the Company's right to withhold from any
compensation paid to the Participant by the Company) or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from
the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Stock Award; provided, however, that no shares of
Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law (or such lower amount as may be necessary to avoid classification of the Stock Award as a
liability for financial accounting purposes); (iii) withholding cash from a Stock Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant;
or (v) by such other method as may be set forth in the Stock Award Agreement. 


        (h)    Electronic Delivery.    Any reference herein to a "written" agreement or document shall include any agreement
or document delivered electronically or posted on the Company's intranet. 


        (i)    Deferrals.    To the extent permitted by applicable law, the Board, in its sole discretion, may determine that
the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Stock Award may be deferred and may establish programs and procedures for
deferral elections to be made by Participants. Deferrals by Participants will be made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the Board may
provide for distributions while a Participant is still an employee. The Board is authorized to make deferrals of Stock Awards and determine when, and in what annual percentages, Participants may
receive payments, including lump sum payments, following the Participant's termination of employment or retirement, and
implement such other terms and conditions consistent with the provisions of the Plan and in accordance with applicable law. 


        (j)    Compliance with Section 409A.    To the extent that the Board determines that any Stock Award granted
under the Plan is subject to Section 409A of the Code, the Stock Award Agreement evidencing such Stock Award shall incorporate the terms and conditions necessary to avoid the consequences
described in Section 409A(a)(1) of the Code. To the extent applicable, the Plan and Stock Award Agreements shall be interpreted in accordance with Section 409A of the Code and Department
of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued or amended after the Effective Date.
Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date the Board determines that any Stock Award may be subject to Section 409A of the Code
and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective Date), the Board may adopt such amendments to the Plan and the
applicable Stock Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Board determines
are necessary or appropriate to (1) exempt the Stock Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Stock
Award, or (2) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance. 


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        (k)    Compliance with Exemption Provided by Rule 12h-1(f).    If: (i) the aggregate of the
number of Optionholders and the number of holders of all other outstanding compensatory employee stock options to purchase shares of Common Stock equals or exceeds five hundred (500), and
(ii) the assets of the Company at the end of the Company's most recently completed fiscal year exceed $10 million, then the following restrictions shall apply during any period during
which the Company does not have a class of its securities registered under Section 12 of the Exchange Act and is not required to file reports under Section 15(d) of the Exchange Act:
(A) the Options and, prior to exercise, the shares of Common Stock acquired upon exercise of the Options may not be transferred until the Company is no longer relying on the exemption provided
by Rule 12h-1(f) promulgated under the Exchange Act ("Rule 12h-1(f)"), except: (1) as permitted by
Rule 701(c) promulgated under the Securities Act, (2) to a guardian upon the disability of the Optionholder, or (3) to an executor upon the death of the Optionholder
(collectively, the "Permitted Transferees"); provided, however, the following transfers are permitted:
(i) transfers by the Optionholder to the Company, and (ii) transfers in connection with a change of control or other acquisition involving the Company, if following such transaction, the
Options no longer remain outstanding and the Company is no longer relying on the exemption provided by Rule 12h-1(f); provided
further, that any Permitted Transferees may not further transfer the Options; (B) except as otherwise provided in (A) above, the Options and shares of Common
Stock acquired upon exercise of the Options are restricted as to any pledge, hypothecation, or other transfer, including any short position, any "put equivalent position" as defined by
Rule 16a-1(h) promulgated under the Exchange Act, or any "call equivalent position" as defined by Rule 16a-1(b) promulgated under the Exchange Act by the
Optionholder prior to exercise of an Option until the Company is no longer relying on the exemption provided by Rule 12h-1(f); and (C) at any time that the
Company is relying on the exemption provided by Rule 12h-1(f), the Company shall deliver to Optionholders (whether by physical or electronic delivery or written notice of the
availability of the information on an internet site) the information required by Rule 701(e)(3), (4), and (5) promulgated under the Securities Act every six (6) months, including
financial statements that are not more than one hundred eighty (180) days old; provided, however, that the Company may condition the delivery of
such information upon the Optionholder's agreement to maintain its confidentiality. 


        (l)    Repurchase Limitation.    The terms of any repurchase right shall be specified in the Stock Award Agreement.
The repurchase price for vested shares of Common Stock shall be the Fair Market Value of the shares of Common Stock on the date of repurchase. The repurchase price for unvested shares of Common Stock
shall be the lower of (i) the Fair Market Value of the shares of Common Stock on the date of repurchase or (ii) their original purchase price. However, the Company shall not exercise its
repurchase right until at least six (6) months (or such longer or shorter period of time necessary to avoid classification of the Stock Award as a liability for financial accounting purposes)
have elapsed following delivery of shares of Common Stock subject to the Stock Award, unless otherwise specifically provided by the Board. 


10.   ADJUSTMENTS UPON CHANGES IN COMMON STOCK; CORPORATE TRANSACTIONS.  


        (a)    Capitalization Adjustments.    In the event of a Capitalization Adjustment, the Board shall appropriately and
proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 4(a), (ii) the class(es) and maximum number of securities that
may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 4(c), (iii) the class(es) and maximum number of securities that may be awarded to any person
pursuant to Sections 5(c) and 7(d), and (iv) the class(es) and number of securities and price per share of stock subject to outstanding Stock Awards. The Board shall make such
adjustments, and its determination shall be final, binding and conclusive. 


        (b)    Dissolution or Liquidation.    In the event of a dissolution or liquidation of the Company, all outstanding
Stock Awards (other than Stock Awards consisting of vested and outstanding shares of 


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Common
Stock not subject to the Company's right of repurchase) shall terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to the
Company's repurchase option may be repurchased by the Company notwithstanding the fact that the holder of such Stock Award is providing Continuous Service, provided,
however, that the Board may, in its sole discretion, cause some or all Stock Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to
the extent such Stock Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion. 


        (c)    Corporate Transaction.    The following provisions shall apply to Stock Awards in the event of a Corporate
Transaction unless otherwise provided in a written agreement between the Company or any Affiliate and the holder of the Stock Award: 



        (i)    Stock Awards May Be Assumed.    In the event of a Corporate
Transaction, any surviving corporation or acquiring corporation (or the surviving or acquiring corporation's parent company) may assume or continue any or all Stock Awards outstanding under the Plan
or may substitute similar stock awards for Stock Awards outstanding under the Plan (including but not limited to, awards to acquire the same consideration paid to the stockholders of the Company
pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to Stock Awards may be assigned by the Company to the
successor of the Company (or the successor's parent company, if any), in connection with such Corporate Transaction. A surviving corporation or acquiring corporation may choose to assume or continue
only a portion of a Stock Award or substitute a similar stock award for only a portion of a Stock Award. The terms of any assumption, continuation or substitution shall be set by the Board in
accordance with the provisions of Section 3. 


        (ii)    Stock Awards Held by Current Participants.    In the event of
a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue any or all outstanding Stock Awards or substitute similar stock
awards for such outstanding Stock Awards, then with respect to Stock Awards that have not been assumed, continued or substituted and that are held by Participants whose Continuous Service has not
terminated prior to the effective time of the Corporate Transaction (referred to as the "Current Participants"), the vesting of such Stock Awards (and,
if applicable, the time at which such Stock Awards may be exercised) shall (contingent upon the effectiveness of the Corporate Transaction) be accelerated in full to a date prior to the effective time
of such Corporate Transaction as the Board shall determine (or, if the Board shall not determine such a date, to the date that is five (5) days prior to the effective time of the Corporate
Transaction), and such Stock Awards shall terminate if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction, and any reacquisition or repurchase rights held by
the Company with respect to such Stock Awards shall lapse (contingent upon the effectiveness of the Corporate Transaction). No vested Stock Unit Award shall terminate pursuant to this
Section 10(c)(ii) without being settled by delivery of shares of Common Stock, their cash equivalent, any combination thereof, or in any other form of consideration, as determined by the Board,
prior to the effective time of the Corporate Transaction. 


        (iii)    Stock Awards Held by Former Participants.    In the event of
a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue any or all outstanding Stock Awards or substitute similar stock
awards for such outstanding Stock Awards, then with respect to Stock Awards that have not been assumed, continued or substituted and that are held by persons other than Current Participants, the
vesting of such Stock Awards (and, if applicable, the time at which such Stock Award may be exercised) shall not be accelerated and such Stock Awards (other than a Stock Award consisting of vested and
outstanding shares of Common Stock not subject to the Company's right of repurchase) shall terminate if not exercised (if applicable) prior to the effective time of the Corporate Transaction; 



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 provided, however, that any reacquisition or repurchase rights held by the Company with respect to such Stock Awards shall not terminate and may continue to be exercised
notwithstanding the Corporate Transaction. No vested Stock Unit Award shall terminate pursuant to this Section 10(c)(iii) without being settled by delivery of shares of Common Stock, their cash
equivalent, any combination thereof, or in any other form of consideration, as determined by the Board, prior to the effective time of the Corporate Transaction. 


        (iv)    Payment for Stock Awards in Lieu of
Exercise.    Notwithstanding the foregoing, in the event a Stock Award will terminate if not exercised prior to the effective time of a Corporate Transaction, the
Board may provide, in its sole discretion, that the holder of such Stock Award may not exercise such Stock Award but will receive a payment, in such form as may be determined by the Board, equal in
value to the excess, if any, of (i) the value of the property the holder of the Stock Award would have received upon the exercise of the Stock Award, over (ii) any exercise price payable
by such holder in connection with such exercise. 




        (d)    Change in Control.    A Stock Award may be subject to additional acceleration of vesting and exercisability
upon or after a Change in Control as may be provided in the Stock Award Agreement for such Stock Award or as may be provided in any other written agreement between the Company or any Affiliate and the
Participant. A Stock Award may vest as to all or any portion of the shares subject to the Stock Award (i) immediately upon the occurrence of a Change in Control, whether or not such Stock Award
is assumed, continued, or substituted by a surviving or acquiring entity in the Change in Control, or (ii) in the event a Participant's Continuous Service is terminated, actually or
constructively, within a designated period following the occurrence of a Change in Control. In the absence of such provisions, no such acceleration shall occur. 



11.   AMENDMENT OF THE PLAN AND STOCK AWARDS.  


        (a)    Amendment of Plan.    Subject to the limitations, if any, of applicable law, the Board at any time, and from
time to time, may amend the Plan. However, except as provided in Section 10(a) relating to Capitalization Adjustments, no amendment shall be effective unless approved by the stockholders of the
Company to the extent stockholder approval is necessary to satisfy applicable law. 



        (b)    Stockholder Approval.    The Board, in its sole discretion, may submit any other amendment to the Plan for
stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder regarding the
exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to Covered Employees. 


        (c)    Contemplated Amendments.    It is expressly contemplated that the Board may amend the Plan in any respect the
Board deems necessary or advisable to provide eligible Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder
relating to Incentive Stock Options and/or to bring the Plan and/or Incentive Stock Options granted under it into compliance therewith. 


        (d)    No Impairment of Rights.    Rights under any Stock Award granted before amendment of the Plan shall not be
impaired by any amendment of the Plan unless (i) the Company requests the consent of the affected Participant, and (ii) such Participant consents in writing. 



        (e)    Amendment of Stock Awards.    The Board, at any time and from time to time, may amend the terms of any one or
more Stock Awards, including, but not limited to, amendments to provide terms more favorable than previously provided in the Stock Award Agreement, subject to any specified limits in the Plan that are
not subject to Board discretion; provided, however, that the rights under any Stock Award shall not be impaired by any such amendment unless
(i) the Company requests the consent of the affected Participant, and (ii) such Participant consents in writing. 


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12.   TERMINATION OR SUSPENSION OF THE PLAN.  


        (a)    Plan Term.    The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall
terminate on the day before the tenth (10th) anniversary of the earlier of (i) the date the Plan is adopted by the Board, or (ii) the date the Plan is approved by the stockholders of the
Company. No Stock Awards may be granted under the Plan while the Plan is suspended or after it is terminated. 


        (b)    No Impairment of Rights.    Suspension or termination of the Plan shall not impair rights and obligations under
any Stock Award granted while the Plan is in effect except with the written consent of the affected Participant. 


13.   EFFECTIVE DATE OF PLAN.  



        The Plan shall become effective on the date the Plan is adopted by the Board (the "Effective Date"), but no Stock
Award shall be exercised (or, in the case of a Stock Bonus Award, Stock Unit Award, or Other Stock Award shall be granted) unless and until the Plan has been approved by the stockholders of the
Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board. 


14.   CHOICE OF LAW.  



        The law of the State of Delaware shall govern all questions concerning the construction, validity and interpretation of the Plan, without regard to that state's
conflict of laws rules. 


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