exv10w60






Exhibit 10.60




GAIN CAPITAL HOLDINGS, INC.

2006 EQUITY COMPENSATION PLAN

(Amended and Restated, effective December 31, 2006)




     The purpose of the GAIN Capital Holdings, Inc. 2006 Equity Compensation Plan (the “Plan”) is
to provide (i) designated employees of GAIN Capital Holdings, Inc. (the “Company”) and its
subsidiaries, (ii) certain consultants and advisors who perform services for the Company or its
subsidiaries and (iii) non-employee members of the Board of Directors of the Company (the “Board”)
with the opportunity to receive grants of incentive stock options, nonqualified stock options,
stock awards, stock units, stock appreciation rights and other equity-based awards. The Company
believes that the Plan will encourage the participants to contribute materially to the growth of
the Company, thereby benefiting the Company’s stockholders, and will align the economic interests
of the participants with those of the stockholders.



1. Administration




          (a) Committee. The Plan shall be administered and interpreted by the Board or by a
committee consisting of members of the Board, which shall be appointed by the Board. After an
initial public offering of the Company’s stock as described in
Section 21(b) (a “Public
Offering”), the Plan shall be administered by a committee, which may consist of “outside
directors” as defined under section 162(m) of the Internal Revenue Code of 1986, as amended (the
“Code”), and related Treasury regulations and “non-employee directors” as defined under Rule l6b-3
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). However, the Board
shall approve and administer all grants under the Plan to non-employee directors. The committee
may delegate authority to one or more subcommittees, as it deems appropriate. To the extent the
Board, committee or subcommittee administers the Plan, references in the Plan to the “Committee”
shall be deemed to refer to such Board, committee or subcommittee.




          (b)
Committee Authority. The Committee shall have the sole authority to (i) determine
the individuals to whom grants shall be made under the Plan, (ii) determine the type, size and
terms of the grants to be made to each such individual, (iii) determine the time when the grants
will be made and the duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, (iv) amend the terms of any
previously issued grant, and (v) deal with any other matters arising under the Plan.




          (c) Committee Determinations. The Committee shall have full power and authority to
administer and interpret the Plan, to make factual determinations and to adopt or amend such rules,
regulations, agreements and instruments for implementing the Plan and for the conduct of its
business as it deems necessary or advisable, in its sole discretion. The Committee’s
interpretations of the Plan and all determinations made by the Committee pursuant to the powers
vested in it hereunder shall be conclusive and binding on all persons having any interest in the
Plan or in any awards granted hereunder. All powers of the Committee shall be executed in its sole
discretion, in the best interest of



 









 






the Company, not as a fiduciary, and in keeping with the
objectives of the Plan and need not be uniform as to similarly situated individuals.




2. Grants




     Awards under the Plan may consist of grants of incentive stock options as described in
Section 5 (“Incentive Stock Options”), nonqualified stock options as described in Section 5
(“Nonqualified Stock Options”) (Incentive Stock Options and Nonqualified Stock Options are
collectively referred to as “Options”), stock awards as described in Section 6 (“Stock Awards”),
stock units as described in Section 7 (“Stock Units”), stock appreciation rights (“SARs”) as
described in Section 8, and other equity-based awards as described in Section 9 (“Other Equity
Awards”) (collectively referred to herein as “Grants”). All Grants shall be subject to the terms
and conditions set forth herein and to such other terms and conditions consistent with this Plan
as the Committee deems appropriate and as are specified in writing by the Committee to the
individual in a grant instrument or an amendment to the grant instrument (the “Grant Instrument”).
All Grants shall be made conditional upon the Grantee’s acknowledgement, in writing or by
acceptance of the Grant, that all decisions and determinations of the Committee shall be final and
binding on the Grantee, his beneficiaries and any other person having or claiming an interest
under such Grant. Grants under a particular Section of the Plan need not be uniform as among the
Grantees.



3. Shares Subject to the Plan




          (a) Shares Authorized. Subject to adjustment as described below, the aggregate number
of shares of common stock of the Company (“Company Stock”) that may be issued or transferred under
the Plan is 3,800,000 shares. After a Public Offering, the maximum aggregate number of shares of
Company Stock that shall be subject to Grants made under the Plan to any individual during any
calendar year shall be 500,000 shares, subject to adjustment as described below.




          (b) Determination of Authorized Shares. The shares may be authorized but unissued
shares of Company Stock or reacquired shares of Company Stock. If and to the extent Options
or SARs granted under the Plan terminate, expire, or are canceled,
forfeited, exchanged or surrendered without having been exercised or if any Stock
Awards, Stock Units or Other Equity Awards are forfeited, the shares subject to such Grants shall
again be available for purposes of the Plan. If shares of Company Stock are used to pay the
exercise price of an Option, only the net number of shares received by the grantee pursuant to such
exercise shall be considered to have been issued or transferred under the Plan with respect to such
Option, and the remaining number of shares subject to the Option shall again be available for
purposes of the Plan.




          (c) Adjustments. If there is any change in the number or kind of shares of Company
Stock outstanding by reason of a stock dividend, spinoff, stock split or reverse stock split, or
by reason of a combination, reorganization, recapitalization or reclassification affecting the
outstanding Company Stock as a class without the Company’s receipt of consideration, the maximum
number of shares of Company Stock



 









 






available for Grants, the maximum number of shares of Company
Stock that any individual participating in the Plan may be granted in any year, the number of
shares covered by outstanding Grants, the kind of shares issued under the Plan and outstanding
Grants, and the price per share of outstanding Grants shall be equitably adjusted by the
Committee, as the Committee deems appropriate, to reflect any increase or decrease in the number
of, or change in the
kind or value of, issued shares of Company Stock to preclude, to the extent practicable, the
enlargement or dilution of rights and benefits under Grants; provided, however, that any
fractional shares resulting from such adjustment shall be eliminated. In addition, the Committee
shall have discretion to make the foregoing equitable adjustments in any circumstances in which
an adjustment is not mandated by this subsection (b) or applicable law, including in the event of
a Change of Control. Any adjustments to outstanding Grants shall be consistent with section 409A
or 422 of the Code, to the extent applicable. Any adjustments
determined by the Committee shall
be final, binding and conclusive.




4. Eligibility for Participation




          (a) Eligible Persons. All employees of the Company and its subsidiaries, including
Employees who are officers or members of the Board (“Employees”), and members of the Board who
are not Employees (“Non-Employee Directors”) shall be eligible to participate in the Plan.
Consultants and advisors who perform services for the Company or any of its subsidiaries (“Key
Advisors”) shall be eligible to participate in the Plan if the Key Advisors render bona fide
services to the Company or its subsidiaries, the services are not in connection with the offer
and sale of securities in a capital-raising transaction and the Key Advisors do not directly or
indirectly promote or maintain a market for the Company’s securities.




          (b) Selection of Grantees. The Committee shall select the Employees, Non-Employee
Directors and Key Advisors to receive Grants and shall determine the number of shares of Company
Stock subject to a particular Grant in such manner as the Committee determines. Employees, Key
Advisors and Non-Employee Directors who receive Grants under this Plan shall hereinafter be
referred to as “Grantees.”




5. Granting of Options




     The Committee may grant Options to an Employee, Non-Employee Director or Key Advisor, upon
such terms as the Committee deems appropriate. The following provisions are applicable to
Options:



          (a) Number of Shares. The Committee shall determine the number of shares of Company
Stock that will be subject to each Grant of Options to Employees, Non-Employee Directors and Key
Advisors.




          (b) Type of Option and Price.




               (i) The Committee may grant Incentive Stock Options that are intended to qualify as
“incentive stock options” within the meaning of section 422 of the Code or Nonqualified Stock
Options that are not intended so to qualify or any



 









 




combination of Incentive Stock Options and
Nonqualified Stock Options, all in accordance with the terms and conditions set forth herein.
Incentive Stock Options may be granted only to Employees. Nonqualified Stock Options may be
granted to Employees, Non-Employee Directors and Key Advisors.




               (ii) The purchase price (the “Exercise Price”) of Company Stock subject to an Option shall be determined by the Committee and may be equal to or
greater than the Fair Market Value (as defined below) of a share of Company Stock on the
date the Option is granted. However, an Incentive Stock Option may not be granted to an Employee
who, at the time of grant, owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or any subsidiary of the Company, unless the Exercise Price
per share is not less than 110% of the Fair Market Value of Company Stock on the date of grant.



               (iii) If the Company Stock is publicly traded, then the Fair Market Value per share shall be
determined as follows: (A) if the principal trading market for the Company Stock is a national
securities exchange or the Nasdaq National Market, the last reported sale price thereof on the
relevant date (or if there were no trades on that date, the latest preceding date upon which a
sale was reported), or (B) if the Company Stock is not principally traded on such exchange or
market, the mean between the last reported “bid” and “asked” prices of Company Stock on the
relevant date, as reported on Nasdaq or, if not so reported, as reported by the National Daily
Quotation Bureau, Inc. or as reported in a customary financial reporting service, as applicable
and as the Committee determines. If the Company Stock is not publicly traded or, if publicly
traded, is not subject to reported transactions or “bid” or “asked” quotations as set forth above,
the Fair Market Value per share shall be as determined by the Committee through any reasonable
valuation method authorized under the Code.



          (c)
Option Term. The Committee shall determine the term of each Option. The term of
any Option shall not exceed ten years from the date of grant. However, an Incentive Stock Option
that is granted to an Employee who, at the time of grant, owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of the Company, or any parent
or subsidiary of the Company, may not have a term that exceeds five years from the date of grant.




          (d) Exercisability of Options.




                    (A) Options shall become exercisable in accordance with such terms and conditions,
consistent with the Plan, as may be determined by the Committee and specified in the Grant
Instrument. The Committee may accelerate the exercisability of any or all outstanding Options
at any time for any reason.



                    (B) The Committee may provide in a Grant Instrument that the Grantee may elect to exercise
part or all of an Option before it otherwise has become exercisable. Any shares so purchased shall
be restricted shares and shall be subject to a repurchase right in favor of the Company during a
specified restriction period, with the repurchase price equal to the lesser of (A) the Exercise
Price or (B) the



 









 




Fair Market Value of such shares at the time of repurchase, or such other restrictions as the
Committee deems appropriate.




          (e) Grants to Non-Exempt Employees. Notwithstanding the foregoing, Options granted
to persons who are non-exempt employees under the Fair Labor Standards Act of 1938, as amended,
may not be exercisable for at least six months after the date of grant (except that such Options
may become exercisable, as determined by the Committee, upon the Grantee’s death, Disability or
retirement, or upon a Change of Control or other circumstances permitted by applicable
regulations).




          (f) Termination of Employment, Disability or Death.




               (i) Except as provided below, an Option may only be exercised while the Grantee is
employed by, or providing service to, the Employer (as defined below) as an Employee, Key
Advisor or member of the Board.



               (ii) In the event that a Grantee ceases to be employed by, or provide service to, the Employer
for any reason other than Disability, death, or termination for Cause
(as defined below), any Option which is otherwise exercisable by the Grantee shall terminate unless exercised
within 90 days after the date on which the Grantee ceases to be employed by, or provide service to,
the Employer (or within such other period of time as may be specified by the Committee), but in any
event no later than the date of expiration of the Option term. Except as otherwise provided by the
Committee, any of the Grantee’s Options that are not otherwise exercisable as of the date on which
the Grantee ceases to be employed by, or provide service to, the Employer shall terminate as of
such date.



               (iii) In the event the Grantee ceases to be employed by, or provide service to, the Employer
on account of a termination for Cause by the Employer, any Option held by the Grantee shall
terminate as of the date the Grantee ceases to be employed by, or provide service to, the Employer.
In addition, notwithstanding any other provisions of this Section 5, if the Committee determines
that the Grantee has engaged in conduct that constitutes Cause at any time while the Grantee is
employed by, or providing service to, the Employer or after the Grantee’s termination of employment
or service, any Option held by the Grantee shall immediately terminate and the Grantee shall
automatically forfeit all shares underlying any exercised portion of an Option for which the
Company has not yet delivered the share certificates, upon refund by the Company of the Exercise
Price paid by the Grantee for such shares. Upon any exercise of an Option, the Company may withhold
delivery of share certificates pending resolution of an inquiry that could lead to a finding
resulting in a forfeiture.



               (iv) In the event the Grantee ceases to be employed by, or provide service to, the Employer on
account of the Grantee’s Disability, any Option which is otherwise exercisable by the Grantee shall
terminate unless exercised within one year after the date on which the Grantee ceases to be
employed by, or provide service to, the Employer (or within such other period of time as may be
specified by the Committee), but in any event no later than the date of expiration of the Option
term.




 












 




Except as otherwise provided by the Committee, any of the Grantee’s Options which are not
otherwise exercisable as of the date on which the Grantee ceases to be employed by, or provide
service to, the Employer shall terminate as of such date.




               (v) If the Grantee dies while employed by, or providing service to, the Employer or within 90
days after the date on which the Grantee ceases to be employed or provide service on account of a
termination specified in Section 5(f)(ii) above (or within such other period of time as may be
specified by the Committee), any Option that is otherwise exercisable by the Grantee shall
terminate unless exercised within one year after the date on which the Grantee ceases to be
employed by, or provide service to, the Employer (or within such other period of time as may be
specified by the Committee), but in any event no later than the date of expiration of the Option
term. Except as otherwise provided by the Committee, any of the Grantee’s Options that are not
otherwise exercisable as of the date on
which the Grantee ceases to be employed by, or provide service to, the Employer shall
terminate as of such date.



               (vi) For purposes of the Plan:



                    (A) The term “Employer” shall mean the Company and its subsidiaries, as determined by the
Committee.



                    (B) “Employed by, or provide service to, the Employer” shall mean employment or service as an
Employee, Key Advisor or member of the Board (so that, for purposes of exercising Options and
satisfying conditions with respect to other Grants, a Grantee shall not be considered to have
terminated employment or service until the Grantee ceases to be an Employee, Key Advisor and member
of the Board), unless the Committee determines otherwise.



                    (C) “Disability” shall mean a Grantee’s becoming disabled within the meaning of section
22(e)(3) of the Code, within the meaning of the Employer’s long-term disability plan applicable
to the Grantee, or as otherwise determined by the Committee.



                    (D) “Cause” shall mean, except to the extent otherwise specified by the Committee, a finding
by the Committee that the Grantee (i) has materially breached his or her employment or service
contract with the Employer, which breach has not been remedied by the Grantee after written notice
has been provided to the Grantee of such breach, (ii) has engaged in disloyalty to the Employer,
including, without limitation, fraud, embezzlement, theft, commission of a felony or proven
dishonesty, (iii) has disclosed trade secrets or confidential information of the Employer to
persons not entitled to receive such information, (iv) has breached any written non-competition or
non-solicitation agreement between the Grantee and the Employer or (v) has engaged in such other
behavior detrimental to the interests of the Employer as the Committee determines.



 









 





          (g) Exercise of Options. A Grantee may exercise an Option that has become
exercisable, in whole or in part, by delivering a notice of exercise to the Company. The Grantee
shall pay the Exercise Price for an Option as specified by the Committee (i) in cash, (ii) with
the approval of the Committee, by delivering shares of Company Stock owned by the Grantee
(including Company Stock acquired in connection with the exercise of an Option, subject to such
restrictions as the Committee deems appropriate) and having a Fair Market Value on the date of
exercise equal to the Exercise Price or by attestation (on a form prescribed by the Committee) to
ownership of shares of Company Stock having a Fair Market Value on the date of exercise equal to
the Exercise Price, (iii) after a Public Offering (as described in Section 21(b)) of the Company’s
stock, payment through a broker in accordance with procedures permitted by Regulation T of the
Federal Reserve Board, or (iv) by such other method as the Committee may approve. The Committee
may authorize loans by the Company to Grantees in connection with the exercise of an Option, upon
such terms and conditions as the Committee, in its sole discretion deems appropriate. Shares of
Company Stock used to exercise an Option shall have been held by the Grantee for the requisite
period of time to avoid adverse accounting consequences to the Company with respect to the Option.
The Grantee shall pay the Exercise Price and the amount of any withholding tax due
(pursuant to Section 10) at such time as may be specified by the Committee.




          (h) Limits on Incentive Stock Options. Each Incentive Stock Option shall provide
that, if the aggregate Fair Market Value of the stock on the date of the grant with respect to
which Incentive Stock Options are exercisable for the first time by a Grantee during any calendar
year, under the Plan or any other stock option plan of the Company or a parent or subsidiary,
exceeds $100,000, then the Option, as to the excess, shall be treated as a Nonqualified Stock
Option. An Incentive Stock Option shall not be granted to any person who is not an
Employee of the Company or a parent or subsidiary (within the meaning of section 424(f) of the
Code).




6. Stock Awards




     The Committee may issue or transfer shares of Company Stock to an Employee, Non-Employee
Director or Key Advisor under a Stock Award, upon such terms as the Committee deems appropriate.
The following provisions are applicable to Stock Awards:



          (a) General Requirements. Shares of Company Stock issued or transferred pursuant to
Stock Awards may be issued or transferred for cash consideration or for no cash consideration, and
subject to restrictions or no restrictions, as determined by the Committee. The Committee may, but
shall not be required to, establish conditions under which restrictions on Stock Awards shall lapse
over a period of time or according to such other criteria as the Committee deems appropriate,
including, without limitation, restrictions based upon the achievement of specific performance
goals. The period of time during which the Stock Awards will remain subject to restrictions will be
designated in the Grant Instrument as the “Restriction Period.”




 









 








          (b) Number of Shares. The Committee shall determine the number of shares of
Company Stock to be issued or transferred pursuant to a Stock Award and the restrictions
applicable to such shares.




          (c) Requirement of Employment or Service. Unless the Committee determines otherwise,
if the Grantee ceases to be employed by, or provide service to, the Employer during a period
designated in the Grant Instrument as the Restriction Period, or if other specified conditions are
not met, the Stock Award shall terminate as to all shares covered by the Grant as to which the
restrictions have not lapsed, and those shares of Company Stock must be immediately returned to
the Company. The Committee may, however, provide for complete or partial exceptions to this
requirement as it deems appropriate.




          (d) Restrictions on Transfer and Legend on Stock Certificate. During the Restriction
Period, a Grantee may not sell, assign, transfer, pledge or otherwise dispose of the shares of a
Stock Award except to a Successor Grantee under Section 11(a).
Each certificate for a share of a
Stock Award shall contain a legend giving appropriate notice of the restrictions in the Grant. The
Grantee shall be entitled to have the legend removed from the stock certificate covering the
shares subject to restrictions when all restrictions on such shares have lapsed. The Committee may
determine that the Company will not issue certificates for Stock Awards until all restrictions on
such shares have lapsed, or that the Company will retain possession of certificates for shares of
Stock Awards until all restrictions on such shares have lapsed.




          (e) Right to Vote and to Receive Dividends. Unless the Committee determines
otherwise, during the Restriction Period, the Grantee shall have the right to vote shares of
Stock Awards and to receive any dividends or other distributions paid on such shares, subject to
any restrictions deemed appropriate by the Committee, including, without limitation, the
achievement of specific performance goals.




          (f) Lapse of Restrictions. All restrictions imposed on Stock Awards shall
lapse upon the expiration of the applicable Restriction Period and the satisfaction of all
conditions imposed by the Committee. The Committee may determine, as to any or all Stock Awards,
that the restrictions shall lapse without regard to any Restriction Period.




7. Stock Units




     The Committee may grant Stock Units representing one or more shares of Company Stock to an
Employee, Non-Employee Director or Key Advisor, upon such terms and conditions as the Committee
deems appropriate. The following provisions are applicable to Stock Units:



          (a) Crediting of Units. Each Stock Unit shall represent the right of the Grantee to
receive an amount based on the value of a share of Company Stock, if specified conditions are met.
All Stock Units shall be credited to bookkeeping accounts established on the Company’s records for
purposes of the Plan.




 









 








          (b) Terms of Stock Units. The Committee may grant Stock Units that are payable
if specified performance goals or other conditions are met, or under other circumstances. Stock
Units may be paid at the end of a specified performance period or other period, or payment may be
deferred to a date authorized by the Committee. The Committee shall determine the number of Stock
Units to be granted and the requirements applicable to such Stock Units.




          (c) Requirement of Employment or Service. Unless the Committee determines otherwise,
if the Grantee ceases to be employed by, or provide service to, the Employer during a specified
period, or if other conditions established by the Committee are not met, the Grantee’s Stock
Units shall be forfeited. The Committee may, however, provide for complete or partial exceptions
to this requirement as it deems appropriate.




          (d) Payment With Respect to Stock Units. Payments with respect to Stock Units may be
made in cash, in Company Stock, or in a combination of the two, as determined by the Committee.




8. Stock Appreciation Rights




     The Committee may grant SARs to an Employee, Non-Employee Director or Key Advisor separately
or in tandem with any Option. The following provisions are applicable to SARs:



          (a) Base Amount. The Committee shall establish the base amount of the SAR at the time
the SAR is granted. The base amount of each SAR shall not be less than the Fair Market Value of a
share of Company Stock on the date of Grant of the SAR.




          (b) Tandem SARs. In the case of tandem SARs, the number of SARs granted to
a Grantee that shall be exercisable during a specified period shall not exceed the number of shares
of Company Stock that the Grantee may purchase upon the exercise of the related Option during such
period. Upon the exercise of an Option, the SARs relating to the Company Stock covered by such
Option shall terminate. Upon the exercise of SARs, the related Option shall terminate to the extent
of an equal number of shares of Company Stock.




          (c) Exercisability. An SAR shall be exercisable during the period
specified by the Committee in the Grant Instrument and shall be subject to such vesting and other
restrictions as may be specified in the Grant Instrument. The Committee may accelerate the
exercisability of any or all outstanding SARs at any time for any reason. SARs may only be
exercised while the Grantee is employed by, or providing service to, the Employer or during the
applicable period after termination of employment or service as
described in Section 5(f) above. A
tandem SAR shall be exercisable only during the period when the Option to which it is related is
also exercisable.




          (d) Grants to Non-Exempt Employees. Notwithstanding the foregoing, SARs granted to
persons who are non-exempt employees under the Fair Labor Standards Act of 1938, as amended, may
not be exercisable for at least six months after



 









 






the date of grant (except that such SARs may
become exercisable, as determined by the Committee, upon the Grantee’s death, Disability or
retirement, or upon a Change of Control or other circumstances permitted by applicable
regulations).




          (e) Value of SARs. When a Grantee exercises SARs, the Grantee shall receive in
settlement of such SARs an amount equal to the value of the stock appreciation for the number of
SARs exercised. The stock appreciation for an SAR is the amount by which the Fair Market Value of
the underlying Company Stock on the date of exercise of the SAR exceeds the base amount of the SAR
as described in subsection (a).




          (f) Form of Payment. The appreciation in an SAR shall be paid in shares of Company
Stock, cash or any combination of the foregoing, as the Committee shall determine. For purposes
of calculating the number of shares of Company Stock to be received, shares of Company Stock
shall be valued at their Fair Market Value on the date of exercise of the SAR.




9. Other Equity Awards




     The Committee may grant Other Equity Awards, which are awards (other than those described in
Sections 5, 6, 7 and 8 of the Plan) that are based on, measured by or payable in Company Stock,
including, without limitation, stock appreciation rights, to any Employee, Non-Employee Director
or Key Advisor, on such terms and conditions as the Committee shall determine. Other Equity Awards
may be awarded subject to the achievement of performance goals or other conditions and may be
payable in cash, Company Stock or any combination of the foregoing, as the Committee shall
determine.



10. Withholding of Taxes




          (a) Required Withholding. All Grants under the Plan shall be subject to applicable
federal (including FICA), state and local tax withholding requirements. The
Employer may require that the Grantee or other person receiving or exercising Grants pay to
the Employer the amount of any federal, state or local taxes that the Employer is required to
withhold with respect to such Grants, or the Employer may deduct from other wages paid by the
Employer the amount of any withholding taxes due with respect to such Grants.




          (b) Election to Withhold Shares. If the Committee so permits, a Grantee may elect to
satisfy the Employer’s tax withholding obligation with respect to Grants paid in Company Stock by
having shares withheld up to an amount that does not exceed the minimum applicable withholding
tax rate for federal (including FICA), state and local tax liabilities. The election must be in
a form and manner prescribed by the Committee and may be subject to the prior approval of the
Committee.




11. Transferability of Grants




          (a) Nontransferability of Grants. Except as provided below, only the Grantee may
exercise rights under a Grant during the Grantee’s lifetime. A Grantee may not transfer those
rights except by will or by the laws of descent and distribution or with





 












 




respect to Grants other
than Incentive Stock Options, if permitted in any specific case by the Committee, pursuant to a
domestic relations order (as defined under the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended, or the regulations thereunder) or otherwise as permitted by the
Committee. When a Grantee dies, the personal representative or other person entitled to succeed to
the rights of the Grantee (the “Successor Grantee”) may exercise such rights. A Successor Grantee
must furnish proof satisfactory to the Company of his or her right to receive the Grant under the
Grantee’s will or under the applicable laws of descent and distribution.




          (b) Transfer of Nonqualified Stock Options. Notwithstanding the foregoing, the
Committee may provide, in a Grant Instrument, that a Grantee may transfer Nonqualified Stock
Options to family members, or one or more trusts or other entities for the benefit of or owned by
family members, consistent with the applicable securities laws, according to such terms as the
Committee may determine; provided that the Grantee receives no consideration for the transfer of an
Option and the transferred Option shall continue to be subject to the same terms and conditions as
were applicable to the Option immediately before the transfer.




12. Right of First Refusal; Repurchase Right




          (a) Offer. Prior to a Public Offering, if at any time an individual desires to sell,
encumber, or otherwise dispose of shares of Company Stock that were distributed to him or her
under this Plan and that are transferable, the individual may do so only pursuant to a bona fide
written offer, and the individual shall first offer the shares to the Company by giving the
Company written notice disclosing: (i) the name of the proposed transferee of the Company Stock,
(ii) the certificate number and number of shares of Company Stock proposed to be transferred or
encumbered, (iii) the proposed price, (iv) all other terms of the proposed transfer, and (v) a
written copy of the proposed offer. Within 90 days after receipt of such notice, the Company shall
have the option to purchase all or part of such Company Stock at the price and on the terms
described in the written notice; provided that if the price exceeds $1 million, the Company may
pay such price in installments over a period not to exceed five years, at the discretion of the
Committee.




          (b) Sale. In the event the Company (or a stockholder, as described below) does not
exercise the option to purchase Company Stock, as provided above, the individual shall have the
right to sell, encumber, or otherwise dispose of the shares of Company Stock described in
subsection (a) at the price and on the terms of the transfer set forth in the written notice to
the Company, provided such transfer is effected within 15 days after the expiration of the option
period. If the transfer is not effected within such period, the Company must again be given an
option to purchase, as provided above.




          (c) Assignment
of Rights. The Board, in its sole discretion, may waive the Company’s right of
first refusal and repurchase right under this Section 12. If the Company’s right of first refusal
or repurchase right is so waived, the Board may, in its sole discretion, assign such right to the
remaining stockholders of the Company in the same proportion that each stockholder’s stock
ownership bears to the stock ownership of



 









 






all the stockholders of the Company, as determined
by the Board. To the extent that a stockholder has been given such right and does not purchase his
or her allotment, the other stockholders shall have the right to purchase such allotment on the
same basis.




          (d) Purchase by the Company. Prior to a Public Offering, if a Grantee
ceases to be employed by, or provide service to, the Employer, the Company shall have the right
(but not the obligation) to purchase all or part of any Company Stock distributed to the Grantee
under this Plan at its then current Fair Market Value (as defined in Section 5(b)) or at such
other price as may be established in the Grant Instrument; provided, however, that such repurchase
shall be made in accordance with applicable accounting rules to avoid adverse accounting
treatment.




          (e) Public Offering. On and after a Public Offering, the Company shall have no
further right to purchase shares of Company Stock under this Section 12. The requirements of
this Section 12 shall lapse and cease to be effective upon a Public Offering.




          (f) Stockholder’s Agreement. Notwithstanding the provisions of this
Section 12, if the Committee requires that a Grantee execute a stockholder’s agreement with
respect to any Company Stock distributed pursuant to this Plan, which contains a right of first
refusal or repurchase right, the provisions of this Section 12 shall not apply to such Company
Stock, unless the Committee determines otherwise.




13. Change of Control of the Company.




          (a) As used herein, a “Change of Control” shall be deemed to have occurred if:




               (i) Any “person” (as such term is used in sections 13(d) and 14(d) of the Exchange Act) (other
than persons who are stockholders on the effective date of the Plan) becomes a “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing more than 50% of the voting power of the then outstanding securities of the
Company; provided that a Change of Control shall not be deemed to occur as a result of a change of
ownership resulting from the death of a stockholder, and a Change of Control shall not
be deemed to occur as a result of a transaction in which the Company becomes a subsidiary of
another corporation and in which the stockholders of the Company, immediately prior to the
transaction, will beneficially own, immediately after the transaction, shares entitling such
stockholders to more than 50% of all votes to which all stockholders of the parent corporation
would be entitled in the election of directors (without consideration of the rights of any class of
stock to elect directors by a separate class vote); or



               (ii) The stockholders of the Company approve (or, if stockholder approval is not required,
the Board approves) an agreement providing for (i) the merger or consolidation of the Company with
another corporation where the stockholders of the Company, immediately prior to the merger or
consolidation, will not beneficially own, immediately after the merger or consolidation, shares
entitling such



 









 




stockholders to more than 50% of all votes to which all stockholders of the
surviving corporation would be entitled in the election of directors (without consideration of the
rights of any class of stock to elect directors by a separate class vote), (ii) the sale or other
disposition of all or substantially all of the assets of the Company, or (iii) a liquidation or
dissolution of the Company.




          (b) Other Definition. The Committee may modify the definition of Change of Control
for a particular Grant as the Committee deems appropriate to comply with section 409A of the Code
or otherwise.




14. Consequences of a Change of Control




          (a) Acceleration. Upon a Change of Control, unless the Committee determines
otherwise, (i) all outstanding Options and SARs shall accelerate and become fully exercisable,
and (ii) all outstanding Stock Awards, Stock Units and Other Equity Awards shall become fully
vested and shall be payable on terms determined by the Committee.




          (b) Other Alternatives. In the event of a Change of Control, the Committee may take
any of the following actions with respect to any or all outstanding Grants: the Committee may (i)
determine that all outstanding Options and SARs that are not exercised shall be assumed by, or
replaced with comparable options by the surviving corporation (or a parent or subsidiary of the
surviving corporation), and other outstanding Grants that remain in effect after the Change of
Control shall be converted to similar grants of the surviving corporation (or a parent or
subsidiary of the surviving corporation), (ii) require that Grantees surrender their outstanding
Options and SARs in exchange for one or more payments, in cash or Company Stock as determined by
the Committee, in an amount, if any, equal to the amount by which the then Fair Market Value of the
shares of Company Stock subject to the Grantee’s unexercised Options and SARs exceeds the Exercise
Price or base amount of the Options and SARs, on such terms as the Committee determines, or (iii)
after giving Grantees an opportunity to exercise their outstanding Options and SARs, terminate any
or all unexercised Options and SARs at such time as the Committee deems appropriate. Such
assumption, surrender or termination shall take place as of the date of the Change of Control or
such other date as the Committee may specify.




15. Requirements for Issuance or Transfer of Shares




          (a) Stockholder’s Agreement. The Committee may require that a Grantee execute a
stockholder’s agreement, with such terms as the Committee deems appropriate, with respect to
any Company Stock issued or distributed pursuant to this Plan.




          (b) Limitations on Issuance or Transfer of Shares. No Company Stock shall be issued
or transferred in connection with any Grant hereunder unless and until all legal requirements
applicable to the issuance or transfer of such Company Stock have been complied with to the
satisfaction of the Committee. The Committee shall have the



 









 






right to condition any Grant made to
any Grantee hereunder on such Grantee’s undertaking in writing to comply with such restrictions
on his or her subsequent disposition of such shares of Company Stock as the Committee shall deem
necessary or advisable, and certificates representing such shares may be legended to reflect any
such restrictions. Certificates representing shares of Company Stock issued or transferred under
the Plan will be subject to such stop-transfer orders and other restrictions as may be required
by applicable laws, regulations and interpretations, including any requirement that a legend be
placed thereon.




          (c) Lock-Up Period. If so requested by the Company or any representative of the
underwriters (the “Managing Underwriter”) in connection with any underwritten offering of
securities of the Company under the Securities Act of 1933, as amended (the “Securities Act”), a
Grantee (including any successor or assigns) shall not sell or otherwise transfer any shares or
other securities of the Company during the 30-day period preceding and the 180-day period following
the effective date of a registration statement filed by the Company under the Securities Act for
such underwriting (or such shorter period as may be requested in writing by the Managing
Underwriter and agreed to in writing by the Company) (the “Market Standoff Period”). Such
restrictions shall apply only to the first registration statement of the Company to become
effective under the Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing restrictions until
the end of such Market Standoff Period.




16. Amendment and Termination of the Plan




          (a) Amendment. The Board may amend or terminate the Plan at any time; provided,
however, that the Board shall not amend the Plan without shareholder approval if such approval is
required in order to comply with the Code or to other applicable law.




          (b) Termination of Plan. The Plan shall terminate on the day immediately
preceding the tenth anniversary of its effective date, unless the Plan is terminated earlier
by the Board or is extended by the Board with the approval of the stockholders.




          (c) Termination and Amendment of Outstanding Grants. A termination or amendment of
the Plan that occurs after a Grant is made shall not materially impair the rights of a Grantee
unless the Grantee consents or unless the Committee acts under Section 23(b). The termination of
the Plan shall not impair the power and authority of the Committee with respect to an outstanding
Grant. Whether or not the Plan has terminated, an
outstanding Grant may be terminated or amended under Section 23(b) or may be amended by
agreement of the Company and the Grantee consistent with the Plan.




          (d) Governing Document. The Plan shall be the controlling document. No other
statements, representations, explanatory materials or examples, oral or written,



 









 






may amend the Plan
in any manner. The Plan shall be binding upon and enforceable against the Company and its
successors and assigns.




17. Funding of the Plan




     This Plan shall be unfunded. The Company shall not be required to establish any special or
separate fund or to make any other segregation of assets to assure the payment of any Grants under
this Plan. In no event shall interest be paid or accrued on any Grant, including unpaid
installments of Grants.



18. Rights of Participants




     Nothing in this Plan shall entitle any Employee, Key Advisor, Non-Employee Director or
other person to any claim or right to be granted a Grant under this Plan. Neither this Plan
nor any action taken hereunder shall be construed as giving any individual any rights to be
retained by or in the employ of the Employer or any other employment rights.



19. No Fractional Shares




     No fractional shares of Company Stock shall be issued or delivered pursuant to the Plan or
any Grant. The Board shall determine whether cash, other awards or other property shall be
issued or paid in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.



20. Headings




     Section headings are for reference only. In the event of a conflict between a
title and the content of a Section, the content of the Section shall control.



21. Effective Date of the Plan.




          (a)
Effective Date. The Plan was originally effective October 1, 1999. The Plan as
amended and restated is effective as of December 31, 2006.




          (b) Public Offering. The provisions of the Plan that refer to a Public
Offering, or that refer to, or are applicable to persons subject to, section 16 of the Exchange
Act or section 162(m) of the Code, shall be effective, if at all, upon the initial registration
of the Company Stock under section 12(g) of the Exchange Act, and shall remain effective
thereafter for so long as such stock is so registered.




22. California Requirements




          (a) Application. The provisions of this Section 22 shall apply only if any Grantee is
a resident of the state of California on the date on which a Grant is made under the Plan.




 









 





          (b) California Residents. The following provisions shall apply only to a Grantee who
is a resident of the state of California on the date on which a Grant is made under the Plan:




               (i) A Nonqualified Stock Option may not be granted to a person who, at the time of grant,
owns securities possessing more than 10% of the total combined voting power of all securities of
the Company or any parent or subsidiary of the Company, unless the Exercise Price per share is
not less than 110% of the Fair Market Value of a share on the date of grant.



               (ii) Options granted to persons other than officers, Board members or Key Advisors shall
become exercisable over a period of not more than five years from the date of grant and at a
rate of not less than 20% per year.



               (iii) Stock Awards and Stock Units granted to persons other than officers, Board members or
Key Advisors shall vest over a period of not more than five years from the date of grant and at a
rate of not less than 20% per year.



               (iv) The Company shall provide Grantees with financial statements of the Company at
least annually.



               (v) If shares are repurchased by the Company pursuant to Section 12(d) of the Plan, the
repurchase right must be exercised for cash within 90 days after the date of the Grantee’s
termination of employment or service or within 90 days after exercise of the applicable Option,
whichever is later.



          (c) Grant Limit. As required by California law, at no time shall the total number of
securities issuable upon exercise of all outstanding options to purchase securities of the Company
and the total number of Company securities called for under any bonus or similar plan or agreement
exceed a number of securities which is equal to 30% of then outstanding securities of the Company,
based on the securities of the Company which are outstanding at the time the calculation is made.
The foregoing limit shall be calculated in accordance with applicable California law (California
Code of Regulations Section 260.140.45).




23. Miscellaneous




          (a) Grants in Connection with Corporate Transactions and Otherwise. Nothing contained
in this Plan shall be construed to (i) limit the right of the Committee to make Grants under this
Plan in connection with the acquisition, by purchase, lease, merger, consolidation or otherwise,
of the business or assets of any corporation, firm or association, including Grants to employees
thereof who become Employees, or for other proper corporate purposes, or (ii) limit the right of
the Company to grant stock options or make other awards outside of this Plan. Without limiting the
foregoing, the Committee may make a Grant to an employee, director or advisor of another
corporation who becomes an Employee, Non-Employee Director or Key Advisor by reason of a corporate
merger,
consolidation, acquisition of stock or property, reorganization or liquidation involving the
Company, the parent or any of their subsidiaries in substitution for a stock



 









 






option or stock award
grant made by such corporation. The terms and conditions of the substitute grants may vary from
the terms and conditions required by the Plan and from those of the substituted stock incentives.
The Committee shall prescribe the provisions of the substitute grants.




          (b) Compliance with Law. The Plan, the exercise of Options and the obligations of the
Company to issue or transfer shares of Company Stock under Grants shall be subject to all
applicable laws and to approvals by any governmental or regulatory agency as may be required. It
is the intent of the Company that the Plan and Incentive Stock Options granted under the Plan
comply with the applicable provisions of section 422 of the Code and that, to the extent
applicable, Grants made under the Plan comply with the requirements of section 409A of the Code
and the regulations thereunder. To the extent that any legal requirement as set forth in the Plan
ceases to be required under applicable law, the Committee may determine that such Plan provision
shall cease to apply. The Committee may revoke any Grant if it is contrary to law or modify a
Grant or the Plan to bring a Grant or the Plan into compliance with any applicable law or
regulation.




          (c) Employees Subject to Taxation Outside the United States. With respect to
Grantees who are subject to taxation in countries other than the United States, the Committee may
make Grants on such terms and conditions as the Committee deems appropriate to comply with the
laws of the applicable countries, and the Committee may create such procedures, addenda and
subplans and make such modifications as may be necessary or advisable to comply with such laws.




          (d) Governing Law. The validity, construction, interpretation and effect of the
Plan and Grant Instruments issued under the Plan shall be governed and construed by and
determined in accordance with the laws of the State of Delaware, without giving effect to the
conflict of laws provisions thereof.