exv10w1






Exhibit 10.1



This GAIN Capital Holdings, Inc. 2006 Equity Compensation Plan (the “Plan”) was
initially adopted by GAIN Capital, Inc., a Delaware corporation, on October 1,
1999, and was assumed on August 1, 2003 by GAIN Capital Group, Inc. In connection
with that certain merger arrangement by and among GAIN Capital Holdings, Inc., a
Delaware corporation (the “Company”), GAIN Capital Group, Inc., a Delaware
limited liability company, and GH Formation, Inc., a Delaware corporation and an
indirect wholly owned subsidiary of the Company, the Company now assumes the
Plan, and all outstanding options issued thereunder, effective March 27, 2006 to
read, in its entirety, as follows:




GAIN CAPITAL HOLDINGS, INC.




2006 EQUITY COMPENSATION PLAN




     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 and stock
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. However, the Board may ratify or approve any grants as it deems
appropriate, and the Board shall approve and administer all grants made to
non-employee
directors. If a committee is appointed, the committee may delegate authority to
one or
more subcommittees, as it deems appropriate. If a committee or subcommittee
administers the Plan, references in the Plan to the “Board,” as they relate to
Plan
administration, shall be deemed to refer to the committee or subcommittee.




          (b) Board Authority. The Board 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) Board Determinations. The Board 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 Board’s interpretations of the Plan and all determinations made
by the Board 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 Board 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”) and stock
awards as described in Section 6 (“Stock Awards”) (hereinafter collectively referred
to 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 Board
deems appropriate and as are specified in writing by the Board to the individual in a
grant instrument or an amendment to the grant instrument (the “Grant Instrument”).
The Board shall approve the form and provisions of each 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 Board 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 3,600,000 shares. The shares may
be
authorized but unissued shares of Company Stock or reacquired shares of Company
Stock, including shares purchased by the Company on the open market for purposes
of
the Plan. If and to the extent Options granted under the Plan terminate, expire,
or are
canceled, forfeited, exchanged or surrendered without having been exercised or
if any
Stock Awards are forfeited, the shares subject to such Grants shall again be
available for
purposes of the Plan. Shares of Company Stock surrendered in payment of the
exercise
price of an Option shall again be available for issuance or transfer under the
Plan.




          (b)
Adjustments. If there is any change in the number or kind of shares of Company Stock outstanding (i) by reason of a stock dividend, spinoff,
recapitalization, stock split, or combination or exchange of shares, (ii) by
reason of a
merger, reorganization or consolidation, (iii) by reason of a reclassification
or change in
par value, or (iv) by reason of any other extraordinary or unusual event
affecting the
outstanding Company Stock as a class without the Company’s receipt of
consideration, or
if the value of outstanding shares of Company Stock is substantially reduced as
a result of
a spinoff or the Company’s payment of an extraordinary dividend or distribution,
the








 









 





maximum number of shares of Company Stock available for Grants, the number and
kind of shares covered by outstanding Grants, the kind of shares to be issued or
transferred under the Plan, and the price per share or applicable market value of
such Grants may be appropriately adjusted by the Board 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 such Grants; provided, however, that any fractional
shares resulting from such adjustment shall be eliminated. Any adjustments
determined by the Board shall be final, binding and conclusive.




4. Eligibility for Participation




          (a) Eligible Persons. All employees of the Company and its
subsidiaries (“Employees”), including Employees who are officers or members
of the
Board, 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 Board 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 Board
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 Board may grant Options to an Employee, Non-Employee Director or Key
Advisor, upon such terms as the Board deems appropriate. The following provisions
are applicable to Options:




          (a) Number of Shares. The Board 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 Board may grant Incentive Stock Options that are
intended to qualify as “incentive stock options” within the meaning of section
422 of the Internal Revenue Code of 1986, as amended (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 Board 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; provided, however, that an Incentive Stock Option may not be
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
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 Board 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 Board through any reasonable valuation method
authorized under the Code.



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




          (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 Board, 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 Company 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 Company for any reason other than Disability (as defined below),
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 Company (or within such other period of time as may be specified by the
Board), but in any event no later than the date of expiration of the Option term.
Except as otherwise provided by the Board, 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 Company shall terminate as of such date.




          (iii) In the event the Grantee ceases to be employed by, or provide
service to, the Company on account of a termination for Cause by the Company, any
Option held by the Grantee shall terminate as of the date the Grantee ceases to
be employed by, or provide service to, the Company. In addition, notwithstanding
any other provisions of this Section 5, if the Board 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 Company 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 Company because the Grantee is Disabled, 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 Company (or within such other period of time as may be specified
by the Board), but in any event no later than the date of expiration of the
Option term. Except as otherwise provided by the Board, 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 Company shall terminate as
of such date.




          (v) If the Grantee dies while employed by, or providing service to,
the Company 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(e)(i) above (or within such other period of time as may be specified by the
Board), 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 Company (or within such other period of
time as may be specified by the Board), but in any event no later than the date
of expiration of the Option term. Except as otherwise provided by the Board, 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 Company shall
terminate as of such date.




          (vi) For purposes of this Section 5(f) and 6:




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



               (B) “Employed by, or provide service to, the Company” 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
Stock Awards, 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 Board 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 Company’s
long-term disability plan applicable to the Grantee, or as otherwise determined
by the Board.



               (D) “Cause” shall mean, except to the extent specified otherwise
by the Board, a finding by the Board that the Grantee (I) has breached his or
her
employment or service contract with the Company, (II) has engaged in disloyalty
to the
Company, including, without limitation, fraud, embezzlement, theft, commission
of a
felony or proven dishonesty in the course of his or her employment or service,
(III) has
disclosed trade secrets or confidential information of the Company to persons
not entitled
to receive such information, (IV) has breached any written non-competition or
non-solicitation agreement between the Grantee and the Company or (V) has engaged in
such
other behavior detrimental to the interests of the Company as the Board
determines.



     (f) 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 with payment of the Exercise Price. The Grantee shall pay the Exercise Price
for an Option as specified by the Board (i) in cash, (ii) with the approval of the
Board, 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 Board 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 Board) to ownership of shares of Company Stock having a Fair Market Value on
the date of exercise equal to the Exercise Price, or (iii) by such other method as
the Board may approve, including after a Public Offering (as defined in Section 18)
payment through a broker in accordance with procedures permitted by Regulation T of
the Federal Reserve Board. The Board may authorize loans by the Company to Grantees
in connection with the exercise of an Option, upon such terms and conditions as the
Board, 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 7) at the
time of exercise.




     (g) 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 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.



     6. Stock Awards



     The Board 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
Board 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 Board. The Board 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 Board deems appropriate, including, without limitation,
restrictions based upon the achievement of specific performance goals. The period of time
during which the Stock Award will remain subject to restrictions will be designated in
the Grant Instrument as the “Restriction Period.”



     (b) Number of Shares. The Board 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 Board
determines otherwise, if the Grantee ceases to be employed by, or provide service to,
the Company (as defined in Section 5(f)) 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 Board 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 under Section 8(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 Board 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 Board
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 Board, 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 Board. The Board may determine, as to any or all
Stock Awards, that the restrictions shall lapse without regard to any Restriction
Period.



     7. 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 Company may require that the Grantee or other person receiving or exercising
Grants pay to the Company the amount of any federal, state or local taxes that the
Company is required to withhold with respect to such Grants, or the Company may deduct
from other wages paid by the Company the amount of any withholding taxes due with
respect to such Grants.



     (b) Election to Withhold Shares. If the Board so permits, a Grantee
may elect to satisfy the Company’s tax withholding obligation with respect to a Grant
by having shares withheld up to an amount that does not exceed the Grantee’s 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 Board and may be
subject to the prior approval of the Board.



     8. 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 (i) by will or by the laws of
descent and distribution or, (ii) with respect to Grants other than Incentive
Stock Options, if permitted in any specific case by the Board, pursuant to a
domestic relations order or as otherwise permitted by the Board. When a Grantee
dies, the personal representative or other person entitled to succeed to the
rights of the Grantee may exercise such rights. Any such successor 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 Board 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
applicable securities laws, according to such terms as the Board 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.



     9. 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 60 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 the Company may pay such price in installments
over a period not to exceed four years, at the discretion of the
Board.



     (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 9.
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 Company, the Company shall
have the right 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 9.



     (f) Stockholder’s Agreement. Notwithstanding the provisions of this
Section
9, if the Board 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 9 shall not apply to
such Company Stock, unless the Board determines otherwise.



     10. 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
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other than a
person who is a stockholder of the Company) 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 consummation of (A) a 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), (B) the sale or other disposition of all or
substantially all of the assets of the Company, or (C) a liquidation or dissolution
of the Company.




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



     11. Consequences of a Change of Control



 









 





     (a) Assumption of Grants. Upon a Change of Control where the Company is
not the surviving corporation (or survives only as a subsidiary of another
corporation),
unless the Board determines otherwise, all outstanding Options that are not
exercised
shall be assumed by, or replaced with comparable options or rights by the
surviving
corporation (or a parent of the surviving corporation), and other outstanding
Grants shall
be converted to similar grants of the surviving corporation (or a parent of the
surviving
corporation). Any such assumption or replacement shall be made in accordance
with the
applicable requirements of section 409A of the Code.



     (b) Other Alternatives. Notwithstanding the foregoing, in the event of a
Change of Control, the Board may take any of the following actions with respect
to any
or all outstanding Grants: the Board may (i) determine that outstanding Options
shall
automatically accelerate and become fully exercisable and that the restrictions
and
conditions on outstanding Stock Awards shall immediately lapse, (ii) require
that
Grantees surrender their outstanding Options in exchange for one or more
payments by
the Company, in cash or Company Stock as determined by the Board, 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 exceeds the Exercise Price of
the
Options, on such terms as the Board determines, or (iii) after giving Grantees
an
opportunity to exercise their outstanding Options, terminate any or all
unexercised
Options at such time as the Board deems appropriate. Such surrender, termination
or
settlement shall take place as of the date of the Change of Control or such
other date as
the Board may specify. The Board shall have no obligation to take any of the
foregoing
actions, and, in the absence of any such actions, outstanding Grants shall
continue in
effect according to their terms (subject to any assumption pursuant to
Subsection (a)).



     12. Requirements for Issuance or Transfer of Shares



     (a) Stockholder’s Agreement. The Board may require that a Grantee
execute
a Stockholder’s agreement, with such terms as the Board 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 Board. The Board 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 Board 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 registration of the offering of any 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 180-day period following the effective
date of a registration statement of the Company filed under the Securities Act
(or such other period as may be requested in writing by the Managing Underwriter
and agreed to in writing by the Company) (the “Market Standoff Period”). Such
restriction 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.



     13. 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
stockholder approval
if such approval is required in order to comply with the Code or applicable
stock
exchange requirements.



     (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 Board acts
under Section
19(b). The termination of the Plan shall not impair the power and authority
of the Board
with respect to an outstanding Grant. Whether or not the Plan has
terminated, an
outstanding Grant may be terminated or amended under Section 19(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.



     14.
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.



     15. 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 Company or any other
employment rights.



     16. 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.



     17. 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.



     18. Effective Date of the Plan.



     (a) Effective Date. The Plan is effective October 1, 1999.



     
(b) Public Offering. The provisions of the Plan that refer to a Public Offering
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.



     19. 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 Board
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 Board 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 or any of its
subsidiaries in substitution for a stock option or stock award grants 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 Board 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. After a Public Offering it is the intent of the
Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule
16b-3 or its successors under the Exchange Act. In addition, it is the
intent of the
Company that the Plan and applicable Grants under the Plan comply with the
applicable
provisions of section 162(m) of the Code after a Public Offering, and
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 Board may determine that such Plan provision shall cease to apply.
The Board
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. The
Board may
also adopt rules regarding the withholding of taxes on payments to Grantees.
The Board
may, in its sole discretion, agree to limit its authority under this
Section.



     (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 Board
may make Grants on such terms and conditions as the Board deems appropriate
to
comply with the laws of the applicable countries, and the Board 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.