exv10w1







    Exhibit 10.1



 




    THE
    2003 INCENTIVE AWARD PLAN

    



 




    OF

    





    GEN-PROBE
    INCORPORATED



 



    Originally Adopted by the Board of Directors on March 3,
    2003




    Amendment Adopted by Board of Directors on May 13, 2003




    Originally Approved by the Stockholders on May 29, 2003




    Amendment and Restatement Adopted by Board of Directors on
    February 9, 2006




    Amendment and Restatement Approved by the Stockholders on
    May 17, 2006




    Second Amendment and Restatement Adopted by Board of Directors
    on November 16, 2006




    Third Amendment and Restatement Adopted by Board of Directors on
    February 8, 2007




    Fourth Amendment and Restatement Adopted by Board of Directors
    on March 20, 2009
Fourth Amendment and Restatement
Approved by the Stockholders on May 14, 2009


 



    Gen-Probe Incorporated, a Delaware corporation, has adopted The
    2003 Incentive Award Plan of Gen-Probe Incorporated (the
    “Plan”) for the benefit of its eligible Employees,
    Consultants and Directors.



 



    The purposes of the Plan are as follows:



 



    (1) To provide an additional incentive for Directors,
    Employees and Consultants (as such terms are defined below) to
    further the growth, development and financial success of the
    Company by personally benefiting through the ownership of
    Company stock
    and/or
    rights which recognize such growth, development and financial
    success.



 



    (2) To enable the Company to obtain and retain the services
    of Directors, Employees and Consultants considered essential to
    the long range success of the Company by offering them an
    opportunity to own stock in the Company
    and/or
    rights which will reflect the growth, development and financial
    success of the Company.



 




    ARTICLE I.

    



 




    DEFINITIONS
    



 



    1.1  General.  Whenever the following
    terms are used in the Plan they shall have the meanings
    specified below, unless the context clearly indicates otherwise.



 



    1.2  Administrator.  “Administrator”
    shall mean the entity that conducts the general administration
    of the Plan as provided herein. With reference to the
    administration of the Plan with respect to Awards granted to
    Independent Directors, the term “Administrator” shall
    refer to the Board. With reference to the administration of the
    Plan with respect to any other Awards, the term
    “Administrator” shall refer to the Committee, except
    to the extent the Board has assumed the authority for
    administration of the Plan as provided in Section 11.2.



 



    1.3  Award.  “Award” shall
    mean an Option, a Restricted Stock award, a Restricted Stock
    Unit award, a Performance Award, a Dividend Equivalents award, a
    Deferred Stock award, a Stock Payment award or a Stock
    Appreciation Right, which may be awarded or granted under the
    Plan (collectively, “Awards”).



 



    1.4  Award Agreement.  “Award
    Agreement” shall mean a written agreement executed by an
    authorized officer of the Company and the Holder, which shall
    contain such terms and conditions with respect to an Award, as
    the Administrator shall determine, consistent with the Plan.



 



    1.5  Award Limit.  “Award
    Limit” shall mean Five Hundred Thousand (500,000) shares of
    Common Stock, as adjusted pursuant to Section 12.3 of the
    Plan.



 



    1.6  Board.  “Board” shall
    mean the Board of Directors of the Company.




    
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    1.7  Change in Control.  “Change
    in Control” shall mean a change in ownership or control of
    the Company effected through any of the following transactions:



 



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



 



    (b) there is a change in the composition of the Board over
    a period of thirty-six (36) consecutive months (or less)
    such that a majority of the Board members (rounded up to the
    nearest whole number) ceases, by reason of one or more proxy
    contests for the election of Board members, to be comprised of
    individuals who either (i) have been Board members
    continuously since the beginning of such period or
    (ii) have been elected or nominated for election as Board
    members during such period by at least a majority of the Board
    members described in clause (i) who were still in office at
    the time such election or nomination was approved by the Board;



 



    (c) a merger or consolidation of the Company with any other
    corporation (or other entity), other than a merger or
    consolidation which would result in the voting securities of the
    Company outstanding immediately prior thereto continuing to
    represent (either by remaining outstanding or by being converted
    into voting securities of the surviving entity or another
    entity) more than
    662/3%
    of the combined voting power of the voting securities of the
    Company or such surviving entity outstanding immediately after
    such merger or consolidation; provided, however, that a merger
    or consolidation effected to implement a recapitalization of the
    Company (or similar transaction) in which no person acquires
    more than 25% of the combined voting power of the Company’s
    then outstanding voting securities shall not constitute a Change
    in Control; or



 



    (d) a plan of complete liquidation of the Company or an
    agreement for the sale or disposition by the Company of all or
    substantially all of the Company’s assets.



 



    1.8  Code.  “Code” shall
    mean the Internal Revenue Code of 1986, as amended from time to
    time.



 



    1.9  Committee.  “Committee”
    shall mean the Board, or Compensation Committee of the Board, or
    another committee or subcommittee of the Board, appointed as
    provided in Section 11.1.



 



    1.10  Common Stock.  “Common
    Stock” shall mean the Common Stock of the Company, par
    value $0.0001 per share.



 



    1.11  Company.  “Company”
    shall mean Gen-Probe Incorporated, a Delaware corporation.



 



    1.12  Consultant.  “Consultant”
    shall mean any consultant or adviser (other than an Employee) if:



 



    (a) the consultant or adviser renders bona fide services to
    the Company or any Subsidiary;



 



    (b) the services rendered by the consultant or adviser are
    not in connection with the offer or sale of securities in a
    capital-raising transaction and do not directly or indirectly
    promote or maintain a market for the Company’s
    securities; and



 



    (c) the consultant or adviser is a natural person who has
    contracted directly with the Company or any Subsidiary to render
    such services.



 



    1.13  Deferred Stock.  “Deferred
    Stock” shall mean a right to receive Common Stock awarded
    under Section 9.4.



 



    1.14  Director.  “Director”
    shall mean a member of the Board, whether such Director is an
    Employee or an Independent Director.



 



    1.15  Dividend
    Equivalent.  “Dividend Equivalent” shall
    mean a right to receive the equivalent value (in cash or Common
    Stock) of dividends paid on Common Stock, awarded under
    Section 9.2.



 



    1.16  DRO.  “DRO” shall
    mean a domestic relations order as defined by the Code or
    Title I of the Employee Retirement Income Security Act of
    1974, as amended, or the rules thereunder.




    
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    1.17  Eligible
    Individual.  “Eligible Individual” shall
    mean any person who is an Employee, a Consultant or an
    Independent Director, as determined by the Administrator.



 



    1.18  Employee.  “Employee”
    shall mean any officer or other employee (as defined in
    accordance with Section 3401(c) of the Code) of the
    Company, or of any corporation which is a Subsidiary.



 



    1.19  Equity
    Restructuring.  “Equity Restructuring”
    shall mean a non-reciprocal transaction between the Company and
    its stockholders, such as a stock dividend, stock split,
    spin-off, rights offering or recapitalization through a large,
    nonrecurring cash dividend, that affects the number or kind of
    shares of Common Stock (or other securities of the Company) or
    the share price of Common Stock (or other securities) and causes
    a change in the per share value of the Common Stock underlying
    outstanding Awards.



 



    1.20  Exchange Act.  “Exchange
    Act” shall mean the Securities Exchange Act of 1934, as
    amended.



 



    1.21  Fair Market Value.  “Fair
    Market Value” shall mean, as of any date, the value of the
    Common Stock determined as follows:



 



    (a) If the Common Stock is listed on any established stock
    exchange or a national market system, the Fair Market Value of a
    share of Common Stock shall be the closing sales price for such
    stock (or the closing bid, if no sales were reported) as quoted
    on such exchange or system (or the exchange or system with the
    greatest volume of trading in the Common Stock) for such date,
    or if no bids or sales were reported for such date, then the
    closing sales price (or the closing bid, if no sales were
    reported) on the trading date immediately prior to such date
    during which a bid or sale occurred, in each case, as reported
    by The NASDAQ Stock Market or such other source as the Board
    deems reliable.



 



    (b) In the absence of such markets for the Common Stock,
    the Fair Market Value shall be determined in good faith by the
    Board.



 



    1.22  Full Value Award.  “Full
    Value Award” shall mean any Award other than an Option or a
    Stock Appreciation Right.



 



    1.23  Holder.  “Holder”
    shall mean a person who has been granted or awarded an Award.



 



    1.24  Incentive Stock
    Option.  “Incentive Stock Option” shall
    mean an Option which conforms to the applicable provisions of
    Section 422 of the Code and which is designated as an
    Incentive Stock Option by the Administrator.



 



    1.25  Independent
    Director.  “Independent Director” shall
    mean a member of the Board who is not an Employee.



 



    1.26  Independent Director Equity Compensation
    Policy. “Independent Director Equity Compensation
    Policy” shall mean a written non-discretionary formula to
    provide for granting Awards to Independent Directors that is
    established by the Administrator in accordance with
    Article X.



 



    1.27  Non-Qualified Stock
    Option.  “Non-Qualified Stock Option”
    shall mean an Option not intended to qualify as an incentive
    stock option within the meaning of Section 422 of the Code
    and the regulations promulgated thereunder.



 



    1.28  Option.  “Option”
    shall mean a stock option granted under Article IV of the
    Plan. An Option granted under the Plan shall, as determined by
    the Administrator, be either a Non-Qualified Stock Option or an
    Incentive Stock Option; provided, however, that Options granted
    to Independent Directors and Consultants shall be Non-Qualified
    Stock Options.



 



    1.29  Performance
    Award.  “Performance Award” shall mean a
    cash bonus award, stock bonus award, performance award or
    incentive award that is paid in cash, Common Stock or a
    combination of both, awarded under Section 9.1.



 



    1.30  Performance-Based
    Compensation.  “Performance-Based
    Compensation” shall mean any compensation that is intended
    to qualify as “performance-based compensation” as
    described in Section 162(m)(4)(C) of the Code.




    

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    1.31  Performance
    Criteria.  “Performance Criteria” shall
    mean the following business criteria with respect to the
    Company, any Subsidiary or any division or operating unit:
    (a) revenue, (b) sales, (c) cash flow,
    (d) earnings per share of Common Stock (including earnings
    before any one or more of the following: (i) interest,
    (ii) taxes, (iii) depreciation and
    (iv) amortization), (e) return on equity,
    (f) total stockholder return, (g) return on capital,
    (h) return on assets or net assets, (i) income or net
    income, (j) operating income or net operating income,
    (k) operating profit or net operating profit,
    (l) operating margin, (m) cost reductions or savings,
    (n) research and development expenses (including research
    and development expenses as a percentage of sales or revenues);
    (o) working capital and (p) market share.



 



    1.32  Plan.  “Plan” shall
    mean The 2003 Incentive Award Plan of Gen-Probe Incorporated.



 



    1.33  Restricted
    Stock.  “Restricted Stock” shall mean
    Common Stock awarded under Article VII of the Plan.



 



    1.34  Restricted Stock
    Units.  “Restricted Stock Units” shall
    mean the right to receive Common Stock awarded under
    Section 9.5.



 



    1.35  Rule 16b-3.  “Rule 16b-3”
    shall mean that certain
    Rule 16b-3
    under the Exchange Act, as such Rule may be amended from time to
    time.



 



    1.36  Section 162(m)
    Employee.  “Section 162(m)
    Employee” shall mean any Employee designated by the
    Administrator as an Employee whose compensation for the fiscal
    year in which the Employee is so designated or a future fiscal
    year may be subject to the limit on deductible compensation
    imposed by Section 162(m) of the Code.



 



    1.37  Securities
    Act.  “Securities Act” shall mean the
    Securities Act of 1933, as amended.



 



    1.38  Stock Appreciation
    Right.  “Stock Appreciation Right” shall
    mean a stock appreciation right granted under Article VIII
    of the Plan.



 



    1.39  Stock Payment. “Stock Payment”
    shall mean (a) a payment in the form of shares of Common
    Stock, or (b) an option or other right to purchase shares
    of Common Stock, as part of a bonus, deferred compensation or
    other arrangement, awarded under Section 9.3.



 



    1.40  Subsidiary.  “Subsidiary”
    shall mean any corporation in an unbroken chain of corporations
    beginning with the Company if each of the corporations other
    than the last corporation in the unbroken chain then owns stock
    possessing fifty percent (50%) or more of the total combined
    voting power of all classes of stock in one of the other
    corporations in such chain.



 



    1.41  Substitute
    Award.  “Substitute Award” shall mean an
    Option granted under the Plan upon the assumption of, or in
    substitution for, outstanding equity awards previously granted
    by another company or entity in connection with a corporate or
    similar transaction, such as a merger, combination,
    consolidation or acquisition of property or stock; provided,
    however, that in no event shall the term “Substitute
    Award” be construed to refer to an option granted in
    connection with the cancellation and repricing of an Option.



 



    1.42  Termination of
    Consultancy.  “Termination of
    Consultancy” shall mean the time when the engagement of a
    Holder as a Consultant to the Company or a Subsidiary is
    terminated for any reason, with or without cause, including, but
    not by way of limitation, by resignation, discharge, death,
    disability or retirement; but excluding terminations where there
    is a simultaneous engagement by or commencement of employment
    with the Company or any Subsidiary or a parent corporation
    thereof (within the meaning of Section 424 of the Code).
    The Administrator, in its absolute discretion, shall determine
    the effect of all matters and questions relating to Termination
    of Consultancy, including, but not by way of limitation, the
    question of whether a Termination of Consultancy resulted from a
    discharge for cause, and all questions of whether a particular
    leave of absence constitutes a Termination of Consultancy.
    Notwithstanding any other provision of the Plan, the Company or
    any Subsidiary has an absolute and unrestricted right to
    terminate a Consultant’s service at any time for any reason
    whatsoever, with or without cause, except to the extent
    expressly provided otherwise in writing.



 



    1.43  Termination of
    Directorship.  “Termination of
    Directorship” shall mean the time when a Holder who is an
    Independent Director ceases to be a Director for any reason,
    including, but not by way of limitation, a termination by
    resignation, removal, failure to be re-elected, death,
    disability or retirement. The Board, in its sole and absolute




    

    4








 






    discretion, shall determine the effect of all matters and
    questions relating to Termination of Directorship with respect
    to Independent Directors.



 



    1.44  Termination of
    Employment.  “Termination of Employment”
    shall mean the time when the employee-employer relationship
    between a Holder and the Company or any Subsidiary is terminated
    for any reason, with or without cause, including, but not by way
    of limitation, a termination by resignation, discharge, death,
    disability or retirement; but excluding (a) terminations
    where there is a simultaneous reemployment or continuing
    employment of a Holder by the Company or any Subsidiary or a
    parent corporation thereof (within the meaning of
    Section 424 of the Code), (b) at the discretion of the
    Administrator, terminations which result in a temporary
    severance of the employee-employer relationship, and (c) at
    the discretion of the Administrator, terminations which are
    followed by the simultaneous establishment of a consulting
    relationship by the Company or a Subsidiary with the former
    employee, until the consultancy terminates and
    (d) terminations of employment due to retirement which are
    followed by the continuing service of the Holder as a Director
    of the Company, until such service as a director terminates. The
    Administrator, in its absolute discretion, shall determine the
    effect of all matters and questions relating to Termination of
    Employment, including, but not by way of limitation, the
    question of whether a Termination of Employment resulted from a
    discharge for cause, and all questions of whether a particular
    leave of absence constitutes a Termination of Employment;
    provided, however, that, with respect to Incentive Stock
    Options, unless otherwise determined by the Administrator in its
    discretion, a leave of absence, change in status from an
    employee to an independent contractor or other change in the
    employee-employer relationship shall constitute a Termination of
    Employment if, and to the extent that, such leave of absence,
    change in status or other change interrupts employment for the
    purposes of Section 422(a)(2) of the Code and the then
    applicable regulations and revenue rulings under said Section.



 




    ARTICLE II.

    



 




    SHARES SUBJECT
    TO PLAN
    



 



    2.1  Shares Subject to Plan.



 



    (a) The shares of stock subject to Awards shall be Common
    Stock, subject to Section 12.3 of the Plan. The aggregate
    number of such shares which may be issued upon exercise of such
    Options or rights or upon any such Awards under the Plan shall
    not exceed Ten Million Five Hundred Thousand (10,500,000)
    shares. No additional shares may be authorized for issuance
    under the Plan without stockholder approval (subject to
    adjustment as set forth in Section 12.3). The shares of
    Common Stock issuable upon exercise of such Options or rights or
    upon any such Awards may be either previously authorized but
    unissued shares or treasury shares.



 



    (b) Subject to Section 2.2, the number of shares
    available for issuance under the Plan shall be reduced by:
    (i) one (1) share for each share of stock issued
    pursuant to (A) an Option granted under Article IV,
    (B) an award of Restricted Stock under Article VII
    granted prior to May 17, 2006 and (C) a Stock
    Appreciation Right granted under Article VIII with respect
    to which the exercise price is at least one hundred percent
    (100%) of the Fair Market Value of the underlying Common Stock
    on the date of grant; and (ii) two (2.0) shares for each
    share of Common Stock issued pursuant to a Full Value Award
    granted after May 17, 2006.



 



    (c) The maximum number of shares of Common Stock which may
    be subject to Awards granted under the Plan to any individual in
    any calendar year shall not exceed the Award Limit. To the
    extent required by Section 162(m) of the Code, shares
    subject to Options that are canceled continue to be counted
    against the Award Limit. The maximum aggregate amount of cash
    that may be paid during any calendar year with respect to one or
    more Awards payable in cash shall be $3,000,000.



 



    2.2  Add-Back of Options and Other
    Rights.  If any Option or other right to acquire
    shares of Common Stock under any other Award under the Plan
    expires or is canceled without having been fully exercised, or
    is exercised in whole or in part for cash as permitted by the
    Plan, then the number of shares of Common Stock subject to such
    Option or other right but as to which such Option or other right
    was not exercised prior to its expiration or cancellation may
    again be optioned, granted or awarded hereunder, subject to the
    limitations of Section 2.1; provided that to the extent
    there is issued a share of Common Stock pursuant to an Award
    that counted as two (2.0) shares against the number of shares
    available for issuance under the Plan pursuant to
    Section 2.1(b) and such share




    

    5








 






    of Common Stock again becomes available for issuance under the
    Plan pursuant to this Section 2.2, then the number of
    shares of Common Stock available for issuance under the Plan
    shall increase by two (2.0) shares. Furthermore, any shares
    subject to Awards which are adjusted pursuant to
    Section 12.3 and become exercisable with respect to shares
    of stock of another corporation shall be considered cancelled
    and may again be optioned, granted or awarded hereunder, subject
    to the limitations of Section 2.1. Shares of Common Stock
    which are delivered by the Holder or withheld by the Company
    upon the exercise of any Award under the Plan, in payment of the
    exercise price thereof or tax withholding thereon, may not again
    be optioned, granted or awarded hereunder, subject to the
    limitations of Section 2.1. If any shares of Restricted
    Stock are surrendered by the Holder or repurchased by the
    Company pursuant to Section 7.4 or 7.5 hereof, such shares
    may again be optioned, granted or awarded hereunder, subject to
    the provisions of Section 2.1. Notwithstanding the
    provisions of this Section 2.2, no shares of Common Stock
    may again be optioned, granted or awarded if such action would
    cause an Incentive Stock Option to fail to qualify as an
    “incentive stock option” under Section 422 of the
    Code. The payment of Dividend Equivalents in cash in conjunction
    with any outstanding Awards shall not be counted against the
    shares available for issuance under the Plan.



 




    ARTICLE III.

    



 




    GRANTING OF
    AWARDS
    



 



    3.1  Award Agreement.  Each Award
    shall be evidenced by an Award Agreement. Award Agreements
    evidencing Awards intended to qualify as Performance-Based
    Compensation shall contain such terms and conditions as may be
    necessary to meet the applicable provisions of
    Section 162(m) of the Code. Award Agreements evidencing
    Incentive Stock Options shall contain such terms and conditions
    as may be necessary to meet the applicable provisions of
    Section 422 of the Code.



 



    3.2  Provisions Applicable to Section 162(m)
    Employees.



 



    (a) The Committee, in its discretion, may determine whether
    an Award is to qualify as Performance-Based Compensation.



 



    (b) Notwithstanding anything in the Plan to the contrary,
    the Committee may grant any Award to a Section 162(m)
    Employee that vests or becomes exercisable or payable upon the
    attainment of performance goals which are related to one or more
    of the Performance Criteria, including Restricted Stock the
    restrictions to which lapse upon the obtainment of performance
    goals which are related to one or more of the Performance
    Criteria.



 



    (c) To the extent necessary to comply with the requirements
    of Section 162(m)(4)(C) of the Code, with respect to any
    Award granted under Article VII or IX which may be granted
    to one or more Section 162(m) Employees, no later than
    ninety (90) days following the commencement of any fiscal
    year in question or any other designated fiscal period or period
    of service (or such other time as may be required or permitted
    by Section 162(m) of the Code), the Committee shall, in
    writing, (i) designate one or more Section 162(m)
    Employees, (ii) select the Performance Criteria applicable
    to the fiscal year or other designated fiscal period or period
    of service, (iii) establish the various performance
    targets, in terms of an objective formula or standard, and
    amounts of such Awards, as applicable, which may be earned for
    such fiscal year or other designated fiscal period or period of
    service, and (iv) specify the relationship between
    Performance Criteria and the performance targets and the amounts
    of such Awards, as applicable, to be earned by each
    Section 162(m) Employee for such fiscal year or other
    designated fiscal period or period of service. Following the
    completion of each fiscal year or other designated fiscal period
    or period of service, the Committee shall certify in writing
    whether the applicable performance targets have been achieved
    for such fiscal year or other designated fiscal period or period
    of service. In determining the amount earned by a
    Section 162(m) Employee, the Committee shall have the right
    to reduce (but not to increase) the amount payable at a given
    level of performance to take into account additional factors
    that the Committee may deem relevant to the assessment of
    individual or corporate performance for the fiscal year or other
    designated fiscal period or period of service.



 



    (d) Furthermore, notwithstanding any other provision of the
    Plan, any Award that is granted to a Section 162(m)
    Employee and is intended to qualify as Performance-Based
    Compensation shall be subject to any additional limitations set
    forth in Section 162(m) of the Code (including any
    amendment to Section 162(m) of the Code) or any regulations
    or rulings issued thereunder that are requirements for
    qualification as Performance-




    

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    Based Compensation and the Plan and such Awards shall be deemed
    amended to the extent necessary to conform to such requirements.



 



    3.3  Limitations Applicable to
    Section 16 Persons.  Notwithstanding any
    other provision of the Plan, the Plan, and any Award granted or
    awarded to any individual who is then subject to Section 16
    of the Exchange Act, shall be subject to any additional
    limitations set forth in any applicable exemptive rule under
    Section 16 of the Exchange Act (including any amendment to
    Rule 16b-3
    of the Exchange Act) that are requirements for the application
    of such exemptive rule. To the extent permitted by applicable
    law, the Plan and Awards granted or awarded hereunder shall be
    deemed amended to the extent necessary to conform to such
    applicable exemptive rule.



 



    3.4  At-Will Employment.  Nothing in
    the Plan or in any Award Agreement hereunder shall confer upon
    any Holder any right to continue in the employ of, or as a
    Consultant for, the Company or any Subsidiary, or as a Director
    of the Company, or shall interfere with or restrict in any way
    the rights of the Company and any Subsidiary, which are hereby
    expressly reserved, to discharge any Holder at any time for any
    reason whatsoever, with or without cause, except to the extent
    expressly provided otherwise in a written employment or
    consulting agreement between the Holder and the Company and any
    Subsidiary.



 



    3.5  Foreign
    Holders.  Notwithstanding any provision of the
    Plan to the contrary, in order to comply with the laws in other
    countries in which the Company and its Subsidiaries operate or
    have Employees, Independent Directors or Consultants, or in
    order to comply with the requirements of any foreign stock
    exchange, the Administrator, in its sole discretion, shall have
    the power and authority to: (a) determine which
    Subsidiaries shall be covered by the Plan; (b) determine
    which Eligible Individuals outside the United States are
    eligible to participate in the Plan; (c) modify the terms
    and conditions of any Award granted to Eligible Individuals
    outside the United States to comply with applicable foreign laws
    or listing requirements of any such foreign stock exchange;
    (d) establish subplans and modify exercise procedures and
    other terms and procedures, to the extent such actions may be
    necessary or advisable (any such subplans
    and/or
    modifications shall be attached to the Plan as appendices);
    provided, however, that no such subplans
    and/or
    modifications shall increase the share limitations contained in
    Section 2.1 and (e) take any action, before or after
    an Award is made, that it deems advisable to obtain approval or
    comply with any necessary local governmental regulatory
    exemptions or approvals or listing requirements of any such
    foreign stock exchange. Notwithstanding the foregoing, the
    Administrator may not take any actions hereunder, and no Awards
    shall be granted, that would violate the Code, the Exchange Act,
    the Securities Act or any other securities law or governing
    statute or any other applicable law.



 




    ARTICLE IV.

    



 




    GRANTING OF
    OPTIONS
    



 



    4.1  Eligibility.  Any Employee or
    Consultant selected by the Committee pursuant to
    Section 4.4(a)(i) shall be eligible to be granted an
    Option. Any Independent Director shall be eligible to be granted
    an Option pursuant to the Independent Director Equity
    Compensation Policy. All grants, other than those made pursuant
    to the Independent Director Equity Compensation Policy, shall be
    made at the discretion of the Committee or the Board, as the
    case may be, and no person shall be entitled to a grant of an
    Option as a matter of right.



 



    4.2  Disqualification for Stock
    Ownership.  No person may be granted an Incentive
    Stock Option under the Plan if such person, at the time the
    Incentive Stock Option is granted, owns stock possessing more
    than ten percent (10%) of the total combined voting power of all
    classes of stock of the Company or any then existing Subsidiary
    or parent corporation (within the meaning of Section 424 of
    the Code) unless such Incentive Stock Option conforms to the
    applicable provisions of Section 422 of the Code.



 



    4.3  Qualification of Incentive Stock
    Options.  No Incentive Stock Option shall be
    granted to any person who is not an Employee.




    

    7








 






    4.4  Granting of Options to Employees and
    Consultants.



 



    (a) The Committee shall from time to time, in its absolute
    discretion, and subject to applicable limitations of the Plan:



 



    (i) Select from among the Employees or Consultants
    (including Employees or Consultants who have previously been
    granted Awards under the Plan) such of them as in its opinion
    should be granted Options;



 



    (ii) Subject to the Award Limit, determine the number of
    shares of Common Stock to be subject to such Options granted to
    the selected Employees or Consultants;



 



    (iii) Subject to Section 4.3, determine whether such
    Options are to be Incentive Stock Options or Non-Qualified Stock
    Options and whether such Options are to qualify as
    Performance-Based Compensation; and



 



    (iv) Determine the terms and conditions of such Options,
    consistent with the Plan; provided, however, that the terms and
    conditions of Options intended to qualify as Performance-Based
    Compensation shall include, but not be limited to, such terms
    and conditions as may be necessary to meet the applicable
    provisions of Section 162(m) of the Code.



 



    (b) Upon the selection of an Employee or Consultant to be
    granted an Option, the Committee shall instruct the Secretary of
    the Company to issue the Option and may impose such conditions
    on the grant of the Option as it deems appropriate, and the
    Committee shall authorize one or more of the officers of the
    Company to prepare, execute and deliver the Award Agreement with
    respect to such Option.



 



    (c) Any Incentive Stock Option granted under the Plan may
    be modified by the Committee, with the consent of the Holder, to
    disqualify such Option from treatment as an “incentive
    stock option” under Section 422 of the Code.



 



    4.5  Options in Lieu of Cash
    Compensation.  Options may be granted under the
    Plan to Employees and Consultants in lieu of cash bonuses that
    would otherwise be payable to such Employees and Consultants
    pursuant to such policies that may be adopted by the
    Administrator from time to time and to Independent Directors in
    lieu of directors’ fees that would otherwise be payable to
    such Independent Directors pursuant to the Independent Director
    Equity Compensation Policy.



 




    ARTICLE V.

    



 




    TERMS OF
    OPTIONS
    



 



    5.1  Option Price.  The price per
    share of the shares of Common Stock subject to each Option
    granted to Employees and Consultants shall be set by the
    Committee; provided, however, that such price shall be no less
    than 100% of the Fair Market Value of a share of Common Stock on
    the date the Option is granted, and:



 



    (a) in the case of Incentive Stock Options, such price
    shall not be less than 100% of the Fair Market Value of a share
    of Common Stock on the date the Option is modified, extended or
    renewed for purposes of Section 424(h) of the Code; and



 



    (b) in the case of Incentive Stock Options granted to an
    individual then owning (within the meaning of
    Section 424(d) of the Code) more than 10% of the total
    combined voting power of all classes of stock of the Company or
    any Subsidiary or parent corporation thereof (within the meaning
    of Section 422 of the Code), such price shall not be less
    than 110% of the Fair Market Value of a share of Common Stock on
    the date the Option is granted (or the date the Option is
    modified, extended or renewed for purposes of
    Section 424(h) of the Code).



 



    5.2  Option Term.  The term of an
    Option granted to an Employee or Consultant shall be set by the
    Committee in its absolute discretion; provided, however, that
    the term shall not be more than ten (10) years from the
    date the Option is granted; provided, further, however, that the
    term of any Option granted after May 17, 2006 shall not be
    more than seven (7) years from the date the Option is
    granted; and, provided, further, that, in the case of Incentive
    Stock Options, the term shall not be more than five
    (5) years from the date the Incentive Stock Option is
    granted if the Incentive Stock Option is granted to an
    individual then owning (within the meaning of
    Section 424(d)




    

    8








 






    of the Code) more than 10% of the total combined voting power of
    all classes of stock of the Company or any Subsidiary or parent
    corporation thereof (within the meaning of Section 424 of
    the Code). Except as limited by requirements of Section 422
    of the Code and regulations and rulings thereunder applicable to
    Incentive Stock Options, as well as any applicable requirements
    of Section 409A of the Code and the guidance and
    regulations thereunder, the Committee may extend the term of any
    outstanding Option in connection with any Termination of
    Employment or Termination of Consultancy of the Holder, or amend
    any other term or condition of such Option relating to such a
    termination; provided, however, that any extended term shall not
    be more than seven (7) years from the date the Option is
    granted.



 



    5.3  Option Vesting.



 



    (a) The period during which the right to exercise, in whole
    or in part, an Option granted to an Employee or a Consultant
    vests in the Holder shall be set by the Committee and the
    Committee may determine that an Option may not be exercised in
    whole or in part for a specified period after it is granted.
    Subject to the provisions of the prior sentence, at any time
    after grant of an Option, the Committee may, in its absolute
    discretion and subject to whatever terms and conditions it
    selects, accelerate the period during which an Option granted to
    an Employee or Consultant vests and becomes exercisable.



 



    (b) No portion of an Option granted to an Employee or
    Consultant which is unexercisable at Termination of Employment
    or Termination of Consultancy, as applicable, shall thereafter
    become exercisable, except as may be otherwise provided by the
    Committee either in the Award Agreement or by action of the
    Committee following the grant of the Option.



 



    (c) To the extent that the aggregate Fair Market Value of
    stock with respect to which “incentive stock options”
    (within the meaning of Section 422 of the Code, but without
    regard to Section 422(d) of the Code) are exercisable for
    the first time by a Holder during any calendar year (under the
    Plan and all other incentive stock option plans of the Company
    and any parent or subsidiary corporation (within the meaning of
    Section 422 of the Code) of the Company), exceeds $100,000,
    such Options or other options shall be treated as non-qualified
    stock options to the extent required by Section 422 of the
    Code. The rule set forth in the preceding sentence shall be
    applied by taking Options or other options into account in the
    order in which they were granted. For purposes of this
    Section 5.3(c), the Fair Market Value of stock shall be
    determined as of the time the Option or other options with
    respect to such stock is granted.



 



    5.4  Terms of Options Granted to Independent
    Directors.  The price per share of the shares
    subject to each Option granted to an Independent Director shall
    equal 100% of the Fair Market Value of a share of Common Stock
    on the date the Option is granted. The period during which the
    right to exercise, in whole or in part, an Option granted to an
    Independent Director vests in the Holder and the term of such
    Option shall be set forth in the Independent Director Equity
    Compensation Policy; provided, however, that the term of any
    Option granted after May 17, 2006 shall not be more than
    seven (7) years from the date the Option is granted. Except
    as otherwise provided in the Independent Director Equity
    Compensation Policy, no portion of an Option which is
    unexercisable at Termination of Directorship shall thereafter
    become exercisable. Options granted to Independent Directors
    shall be subject to such other terms and conditions as are
    determined by the Administrator and set forth in the Independent
    Director Equity Compensation Policy.



 



    5.5  Substitute
    Awards.  Notwithstanding the foregoing provisions
    of this Article V to the contrary, in the case of an Option
    that is a Substitute Award, the price per share of the shares
    subject to such Option may be less than the Fair Market Value
    per share on the date of grant, provided, that the excess of:



 



    (a) the aggregate Fair Market Value (as of the date such
    Substitute Award is granted) of the shares subject to the
    Substitute Award; over



 



    (b) the aggregate exercise price thereof; does not exceed
    the excess of;



 



    (c) the aggregate fair market value (as of the time
    immediately preceding the transaction giving rise to the
    Substitute Award, such fair market value to be determined by the
    Administrator) of the shares of the predecessor entity that were
    subject to the grant assumed or substituted for by the Company;
    over



 



    (d) the aggregate exercise price of such shares.




    

    9








 






    5.6  Restrictions on Common Stock.



 



    The Administrator may, in its sole discretion, provide under the
    terms of an Option that shares of Common Stock purchased upon
    exercise of such Option shall be subject to repurchase from the
    Holder by the Company, or shall be subject to such restrictions
    as the Administrator shall provide, which restrictions may
    include, without limitation, restrictions concerning voting
    rights and transferability and restrictions based on duration of
    employment with the Company and the Subsidiaries, Company
    performance and individual performance; provided, however, that,
    by action taken before or after the Common Stock is purchased
    upon exercise of the Option, the Administrator may, on such
    terms and conditions as it may determine to be appropriate,
    terminate the Company’s repurchase right or remove any or
    all of the restrictions imposed by the terms of the Award
    Agreement. The Company’s right to repurchase the Common
    Stock from the Holder then subject to the right shall provide
    that immediately upon a Termination of Employment, a Termination
    of Consultancy, or a Termination of Directorship, as applicable,
    and for such period as the Administrator shall determine, the
    Company shall have the right to purchase the Common Stock at a
    price per share equal to the price paid by the Holder for such
    Common Stock, or such other price as is determined by the
    Administrator; provided, however, that, in the event of a Change
    in Control, such right of repurchase shall terminate immediately
    prior to the effective date of such Change in Control. Shares of
    Common Stock purchased upon the exercise of an Option may not be
    sold, transferred or encumbered until any repurchase right and
    any and all restrictions are terminated or expire. The Secretary
    of the Company or such other escrow holder as the Administrator
    may appoint shall retain physical custody of each certificate
    representing such shares of Common Stock until the repurchase
    right and any and all of the restrictions imposed under the
    Award Agreement with respect to the shares evidenced by such
    certificate terminate, expire or shall have been removed. In
    order to enforce the restrictions imposed upon shares of Common
    Stock hereunder, the Administrator shall cause a legend or
    legends to be placed on certificates representing all shares of
    Common Stock that are still subject to any repurchase right or
    restrictions under Award Agreements, which legend or legends
    shall make appropriate reference to the conditions imposed
    thereby. If a Holder makes an election under Section 83(b)
    of the Code, or any successor section thereto, to be taxed with
    respect to the Common Stock as of the date of transfer of the
    Common Stock rather than as of the date or dates upon which the
    Holder would otherwise be taxable under Section 83(a) of
    the Code, the Holder shall deliver a copy of such election to
    the Company immediately after filing such election with the
    Internal Revenue Service.



 




    ARTICLE VI.

    



 




    EXERCISE OF
    OPTIONS
    



 



    6.1  Partial Exercise.  An
    exercisable Option may be exercised in whole or in part.
    However, an Option shall not be exercisable with respect to
    fractional shares and the Administrator may require that, by the
    terms of the Option, a partial exercise be with respect to a
    minimum number of shares.



 



    6.2  Manner of Exercise.  All or a
    portion of an exercisable Option shall be deemed exercised upon
    delivery of all of the following to the Secretary of the Company
    or his office:



 



    (a) A written notice complying with the applicable rules
    established by the Administrator stating that the Option, or a
    portion thereof, is exercised. The notice shall be signed by the
    Holder or other person then entitled to exercise the Option or
    such portion of the Option;



 



    (b) Such representations and documents as the
    Administrator, in its absolute discretion, deems necessary or
    advisable to effect compliance with all applicable provisions of
    the Securities Act and any other federal or state securities
    laws or regulations. The Administrator may, in its absolute
    discretion, also take whatever additional actions it deems
    appropriate to effect such compliance including, without
    limitation, placing legends on share certificates and issuing
    stop-transfer notices to agents and registrars;



 



    (c) In the event that the Option shall be exercised
    pursuant to Section 12.1 by any person or persons other
    than the Holder, appropriate proof of the right of such person
    or persons to exercise the Option; and



 



    (d) Full cash payment to the Secretary of the Company, or
    such other person or entity designated by the Administrator, for
    the shares with respect to which the Option, or portion thereof,
    is exercised. However, the




    

    10








 






    Administrator, may in its sole and absolute discretion
    (i) allow payment, in whole or in part, through the
    delivery of shares of Common Stock owned by the Holder duly
    endorsed for transfer to the Company (or the Holder’s
    attestation of ownership of such shares) with a Fair Market
    Value on the date of delivery equal to the aggregate exercise
    price of the Option or exercised portion thereof;
    (ii) allow payment, in whole or in part, through the
    surrender of shares of Common Stock then issuable upon exercise
    of the Option having a Fair Market Value on the date of Option
    exercise equal to the aggregate exercise price of the Option or
    exercised portion thereof; (iii) allow payment, in whole or
    in part, through the delivery of a notice that the Holder has
    placed a market sell order with a broker with respect to shares
    of Common Stock then issuable upon exercise of the Option, and
    that the broker has been directed to pay a sufficient portion of
    the net proceeds of the sale to the Company in satisfaction of
    the Option exercise price, provided that payment of such
    proceeds is then made to the Company upon settlement of such
    sale; (iv) allow payment in another form of legal
    consideration acceptable to the Administrator; or (v) allow
    payment through any combination of the consideration provided in
    the foregoing subparagraphs (i)-(iv).



 



    6.3  Conditions to Issuance of Stock
    Certificates.  The Company shall not be required
    to issue or deliver any certificate or certificates for shares
    of stock purchased upon the exercise of any Option or portion
    thereof prior to fulfillment of all of the following conditions:



 



    (a) The admission of such shares to listing on all stock
    exchanges on which such class of stock is then listed;



 



    (b) The completion of any registration or other
    qualification of such shares under any state or federal law, or
    under the rulings or regulations of the Securities and Exchange
    Commission or any other governmental regulatory body which the
    Administrator shall, in its absolute discretion, deem necessary
    or advisable;



 



    (c) The obtaining of any approval or other clearance from
    any state or federal governmental agency which the Administrator
    shall, in its absolute discretion, determine to be necessary or
    advisable;



 



    (d) The lapse of such reasonable period of time following
    the exercise of the Option as the Administrator may establish
    from time to time for reasons of administrative
    convenience; and



 



    (e) The receipt by the Company of full payment for such
    shares, including payment of any applicable withholding tax,
    which in the discretion of the Administrator may be in the form
    of consideration used by the Holder to pay for such shares under
    Section 6.2(d).



 



    6.4  Rights as Stockholders.  Holders
    shall not be, nor have any of the rights or privileges of,
    stockholders of the Company in respect of any shares purchasable
    upon the exercise of any part of an Option unless and until
    certificates representing such shares have been issued by the
    Company to such Holders.



 



    6.5  Ownership and Transfer
    Restrictions.  The Administrator, in its absolute
    discretion, may impose such restrictions on the ownership and
    transferability of the shares purchasable upon the exercise of
    an Option as it deems appropriate. Any such restriction shall be
    set forth in the respective Award Agreement and may be referred
    to on the certificates evidencing such shares. The Holder shall
    give the Company prompt notice of any disposition of shares of
    Common Stock acquired by exercise of an Incentive Stock Option
    within (a) two years from the date of granting (including
    the date the Option is modified, extended or renewed for
    purposes of Section 424(h) of the Code) such Option to such
    Holder or (b) one year after the transfer of such shares to
    such Holder.



 



    6.6  Limitations on Exercise of Options Granted to
    Independent Directors.  No Option granted to an
    Independent Director may be exercised to any extent by anyone
    after the first to occur of the following events:



 



    (a) The expiration of 12 months from the date of the
    Holder’s death;



 



    (b) The expiration of 12 months from the date of the
    Holder’s Termination of Directorship by reason of his or
    her permanent and total disability (within the meaning of
    Section 22(e)(3) of the Code); or



 



    (c) Except as otherwise provided in any Award Agreement or
    the Independent Director Equity Compensation Policy, the
    expiration of three months from the date of the Holder’s
    Termination of Directorship for any reason other than such
    Holder’s death or his or her permanent and total
    disability, unless the Holder dies within said three-month
    period.




    

    11








 






    6.7  Additional Limitations on Exercise of
    Options.  Holders may be required to comply with
    any timing or other restrictions with respect to the settlement
    or exercise of an Option, including a window-period limitation,
    as may be imposed in the discretion of the Administrator.



 




    ARTICLE VII.

    



 




    AWARD OF
    RESTRICTED STOCK
    



 



    7.1  Eligibility.  Subject to the
    Award Limit, Restricted Stock may be awarded to any Eligible
    Individual who the Administrator determines should receive such
    an Award.



 



    7.2  Award of Restricted Stock.



 



    (a) The Administrator may from time to time, in its
    absolute discretion:



 



    (i) Select from among the Eligible Individuals (including
    Eligible Individuals who have previously been granted other
    Awards under the Plan) such of them as in its opinion should be
    awarded Restricted Stock; and



 



    (ii) Determine the purchase price, if any, and other terms
    and conditions applicable to such Restricted Stock, consistent
    with the Plan.



 



    (b) The Administrator shall establish the purchase price,
    if any, and form of payment for Restricted Stock; provided,
    however, that such purchase price shall be no less than the par
    value of the Common Stock to be purchased, unless otherwise
    permitted by applicable state law. In all cases, legal
    consideration shall be required for each issuance of Restricted
    Stock.



 



    (c) Upon the selection of an Eligible Individual to be
    awarded Restricted Stock, the Administrator shall instruct the
    Secretary of the Company to issue such Restricted Stock and may
    impose such conditions on the issuance of such Restricted Stock
    as it deems appropriate, and the Committee shall authorize one
    or more officers of the Company to prepare, execute and deliver
    the Award Agreement with respect to such Restricted Stock.



 



    7.3  Rights as Stockholders.  Subject
    to Section 7.4, upon delivery of the shares of Restricted
    Stock to the escrow holder pursuant to Section 7.6, the
    Holder shall have, unless otherwise provided by the
    Administrator, all the rights of a stockholder with respect to
    said shares, subject to the restrictions in his Award Agreement,
    including the right to receive all dividends and other
    distributions paid or made with respect to the shares; provided,
    however, that in the discretion of the Administrator, any
    extraordinary distributions with respect to the Common Stock
    shall be subject to the restrictions set forth in
    Section 7.4.



 



    7.4  Restriction.  All shares of
    Restricted Stock issued under the Plan (including any shares
    received by holders thereof with respect to shares of Restricted
    Stock as a result of stock dividends, stock splits or any other
    form of recapitalization) shall, in the terms of each individual
    Award Agreement, be subject to such restrictions as the
    Administrator shall provide, if any, which restrictions may
    include, without limitation, restrictions concerning voting
    rights and transferability and restrictions based on duration of
    employment with the Company, Company performance and individual
    performance; provided, however, that, except with respect to
    shares of Restricted Stock granted to Section 162(m)
    Employees, by action taken after the Restricted Stock is issued,
    the Administrator may, on such terms and conditions as it may
    determine to be appropriate, remove any or all of the
    restrictions imposed by the terms of the Award Agreement subject
    to the limitations contained herein. Restricted Stock may not be
    sold or encumbered until all restrictions are terminated or
    expire. If no consideration was paid by the Holder upon
    issuance, a Holder’s rights in unvested Restricted Stock
    shall lapse, and such Restricted Stock shall be surrendered to
    the Company without consideration, upon Termination of
    Employment, Termination of Consultancy or, if applicable, upon
    Termination of Directorship; provided, however, that the
    Administrator in its sole and absolute discretion may provide
    that such rights shall not lapse in the event of a Termination
    of Employment because of the Holder’s death or disability.



 



    7.5  Repurchase of Restricted
    Stock.  The Administrator shall provide in the
    terms of each individual Award Agreement that the Company shall
    have the right to repurchase from the Holder the Restricted
    Stock then subject to restrictions under the Award Agreement
    immediately upon a Termination of Employment, a Termination of
    Consultancy, or, if applicable, a Termination of Directorship at
    a cash price per share equal to the price paid by the




    

    12








 






    Holder for such Restricted Stock; provided, however, that the
    Committee in its sole and absolute discretion may provide that
    no such right of repurchase shall exist in the event of a
    Termination of Employment following a “change of ownership
    or control” (within the meaning of Treasury
    Regulation Section 1.162-27(e)(2)(v)
    or any successor regulation thereto) of the Company or because
    of the Holder’s death or disability; provided, further,
    that, except with respect to shares of Restricted Stock granted
    to Section 162(m) Employees, the Committee in its sole and
    absolute discretion may provide that no such right of repurchase
    shall exist in the event of a Termination of Employment, a
    Termination of Consultancy or a Termination of Directorship
    without cause or following any Change in Control of the Company
    or because of the Holder’s retirement, or otherwise.



 



    7.6  Escrow.  The Secretary of the
    Company or such other escrow holder as the Administrator may
    appoint shall retain physical custody of each certificate
    representing Restricted Stock until all of the restrictions
    imposed under the Award Agreement with respect to the shares
    evidenced by such certificate expire or shall have been removed.



 



    7.7  Legend.  In order to enforce the
    restrictions imposed upon shares of Restricted Stock hereunder,
    the Administrator shall cause a legend or legends to be placed
    on certificates representing all shares of Restricted Stock that
    are still subject to restrictions under Award Agreements, which
    legend or legends shall make appropriate reference to the
    conditions imposed thereby.



 



    7.8  Section 83(b) Election.  If
    a Holder makes an election under Section 83(b) of the Code,
    or any successor section thereto, to be taxed with respect to
    the Restricted Stock as of the date of transfer of the
    Restricted Stock rather than as of the date or dates upon which
    the Holder would otherwise be taxable under Section 83(a)
    of the Code, the Holder shall deliver a copy of such election to
    the Company immediately after filing such election with the
    Internal Revenue Service.



 



    7.9  Restricted Stock in Lieu of Cash
    Compensation.  Notwithstanding anything herein to
    the contrary, shares of Restricted Stock may be granted to
    Independent Directors in lieu of directors’ fees which
    would otherwise be payable to such Independent Directors
    pursuant to the Independent Director Equity Compensation Policy.



 




    ARTICLE VIII.

    



 




    STOCK
    APPRECIATION RIGHTS
    



 



    8.1  Grant of Stock Appreciation
    Rights.  A Stock Appreciation Right may be granted
    to any Eligible Individual selected by the Administrator. A
    Stock Appreciation Right may be granted (a) in connection
    and simultaneously with the grant of an Option, (b) with
    respect to a previously granted Option, or (c) independent
    of an Option. The exercise price per share of Common Stock
    subject to each Stock Appreciation Right shall be set by the
    Administrator, but shall not be less than 100% of the per share
    Fair Market Value of the Common Stock on the date the Stock
    Appreciation Right is granted. A Stock Appreciation Right shall
    be subject to such other terms and conditions not inconsistent
    with the Plan as the Administrator shall impose and shall be
    evidenced by an Award Agreement.



 



    8.2  Coupled Stock Appreciation Rights.



 



    (a) A Coupled Stock Appreciation Right (“CSAR”)
    shall be related to a particular Option and shall be exercisable
    only when and to the extent the related Option is exercisable.



 



    (b) A CSAR may be granted to the Holder for no more than
    the number of shares subject to the simultaneously or previously
    granted Option to which it is coupled.



 



    (c) A CSAR shall entitle the Holder (or other person
    entitled to exercise the Option pursuant to the Plan) to
    surrender to the Company unexercised a portion of the Option to
    which the CSAR relates (to the extent then exercisable pursuant
    to its terms) and to receive from the Company in exchange
    therefor an amount determined by multiplying the difference
    obtained by subtracting the Option exercise price from the Fair
    Market Value of a share of Common Stock on the date of exercise
    of the CSAR by the number of shares of Common Stock with respect
    to which the CSAR shall have been exercised, subject to any
    limitations the Administrator may impose.




    

    13








 






    8.3  Independent Stock Appreciation Rights.



 



    (a) An Independent Stock Appreciation Right
    (“ISAR”) shall be unrelated to any Option and shall
    have a term set by the Administrator; provided, however, that
    the term shall not be more than seven (7) years from the
    date the ISAR is granted. An ISAR shall be exercisable in such
    installments as the Administrator may determine. Subject to the
    provisions of the prior sentence, at any time after grant of an
    ISAR, the Administrator may, in its absolute discretion and
    subject to whatever terms and conditions it selects, accelerate
    the period during which an Option granted to an Employee or
    Consultant vests and becomes exercisable. An ISAR shall cover
    such number of shares of Common Stock as the Administrator may
    determine. The exercise price per share of Common Stock subject
    to each ISAR shall be set by the Committee. An ISAR is
    exercisable only while the Holder is an Employee, Consultant or
    Director; provided that the Committee may determine that the
    ISAR may be exercised subsequent to Termination of Employment,
    Termination of Consultancy or Termination of Directorship
    without cause, or following a Change in Control of the Company,
    or because of the Holder’s retirement, death or disability,
    or otherwise.



 



    (b) An ISAR shall entitle the Holder (or other person
    entitled to exercise the ISAR pursuant to the Plan) to exercise
    all or a specified portion of the ISAR (to the extent then
    exercisable pursuant to its terms) and to receive from the
    Company an amount determined by multiplying the difference
    obtained by subtracting the exercise price per share of the ISAR
    from the Fair Market Value of a share of Common Stock on the
    date of exercise of the ISAR by the number of shares of Common
    Stock with respect to which the ISAR shall have been exercised,
    subject to any limitations the Administrator may impose.



 



    8.4  Payment and Limitations on Exercise.



 



    (a) Payment of the amounts determined under
    Section 8.2(c) and 8.3(b) above shall be in cash, in Common
    Stock (based on its Fair Market Value as of the date the Stock
    Appreciation Right is exercised) or a combination of both, as
    determined by the Administrator. To the extent such payment is
    effected in Common Stock it shall be made subject to
    satisfaction of all provisions of Section 6.3 above
    pertaining to Options.



 



    (b) Holders of Stock Appreciation Rights may be required to
    comply with any timing or other restrictions with respect to the
    settlement or exercise of a Stock Appreciation Right, including
    a window-period limitation, as may be imposed in the discretion
    of the Administrator.



 




    ARTICLE IX.

    



 




    AWARD OF
    PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, DEFERRED STOCK,

    





    STOCK
    PAYMENTS AND RESTRICTED STOCK UNITS
    



 



    9.1  Performance Awards.



 



    (a) The Administrator is authorized to grant Performance
    Awards to any Eligible Individual and to determine whether such
    Performance Awards shall be Performance-Based Compensation. The
    value of Performance Awards may be linked to any one or more of
    the Performance Criteria or other specific criteria determined
    by the Administrator, in each case on a specified date or dates
    or over any period or periods determined by the Administrator.
    In making such determinations, the Administrator shall consider
    (among such other factors as it deems relevant in light of the
    specific type of Award) the contributions, responsibilities and
    other compensation of the particular Eligible Individual.
    Performance Awards may be paid in cash, shares of Common Stock,
    or both, as determined by the Administrator.



 



    (b) Without limiting Section 9.1(a), the Administrator
    may grant Performance Awards to any Eligible Individual in the
    form of a cash bonus payable upon the attainment of objective
    Performance Goals, or such other criteria, whether or not
    objective, which are established by the Administrator, in each
    case on a specified date or dates or over any period or periods
    determined by the Administrator. Any such bonuses paid to a
    Holder which are intended to be Performance-Based Compensation
    shall be based upon objectively determinable bonus formulas
    established in accordance with the provisions of Article 5.
    Additionally, any such bonuses paid to any Eligible Individual
    shall be subject to the Award Limit.




    

    14








 






    9.2  Dividend Equivalents.



 



    (a) Dividend Equivalents may be granted by the
    Administrator based on dividends declared on the Common Stock
    subject to any Award, to be credited as of dividend payment
    dates during the period between the date an Award is granted to
    a Holder and the date such Award vests, is exercised, is
    distributed or expires, as determined by the Administrator. Such
    Dividend Equivalents shall be converted to cash or additional
    shares of Common Stock by such formula and at such time and
    subject to such limitations as may be determined by the
    Administrator.



 



    (b) Notwithstanding the foregoing, no Dividend Equivalents
    shall be payable with respect to Options or Stock Appreciation
    Rights.



 



    9.3  Stock Payments.  The
    Administrator is authorized to make Stock Payments to any
    Eligible Individual. The number or value of shares of any Stock
    Payment shall be determined by the Administrator and may be
    based upon one or more Performance Criteria or any other
    specific criteria, including service to the Company or any
    Subsidiary, determined by the Administrator. Common Stock
    underlying a Stock Payment which is subject to a vesting
    schedule or other conditions or criteria set by the
    Administrator will not be issued until those conditions have
    been satisfied. Unless otherwise provided by the Administrator,
    a Holder of a Stock Payment shall have no rights as a Company
    stockholder with respect to such Stock Payment until such time
    as the Stock Payment has vested and the Common Stock underlying
    the Award have been issued to the Holder. Stock Payments may,
    but are not required to be made in lieu of base salary, bonus,
    fees or other cash compensation otherwise payable to such
    Eligible Individual.



 



    9.4  Deferred Stock.  The
    Administrator is authorized to grant Deferred Stock to any
    Eligible Individual. The number of shares of Deferred Stock
    shall be determined by the Administrator and may be based on one
    or more Performance Criteria or other specific criteria,
    including service to the Company or any Subsidiary, as the
    Administrator determines, in each case on a specified date or
    dates or over any period or periods determined by the
    Administrator. Common Stock underlying a Deferred Stock award
    which is subject to a vesting schedule or other conditions or
    criteria set by the Administrator will not be issued until those
    conditions have been satisfied. Unless otherwise provided by the
    Administrator, a Holder of Deferred Stock shall have no rights
    as a Company stockholder with respect to such Deferred Stock
    until such time as the Award has vested and the Common Stock
    underlying the Award has been issued to the Holder.



 



    9.5  Restricted Stock Units.  The
    Administrator is authorized to grant Restricted Stock Units to
    any Eligible Individual. The number and terms and conditions of
    Restricted Stock Units shall be determined by the Administrator.
    The Administrator shall specify the date or dates on which the
    Restricted Stock Units shall become fully vested and
    nonforfeitable, and may specify such conditions to vesting as it
    deems appropriate, including conditions based on one or more
    Performance Criteria or other specific criteria, including
    service to the Company or any Subsidiary, in each case on a
    specified date or dates or over any period or periods, as the
    Administrator determines. The Administrator shall specify, or
    permit the Holder to elect, the conditions and dates upon which
    the shares of Common Stock underlying the Restricted Stock Units
    which shall be issued, which dates shall not be earlier than the
    date as of which the Restricted Stock Units vest and become
    nonforfeitable and which conditions and dates shall be subject
    to compliance with Section 409A of the Code. On the
    distribution dates, the Company shall issue to the Holder one
    unrestricted, fully transferable share of Common Stock for each
    vested and nonforfeitable Restricted Stock Unit.



 



    9.6  Term.  The term of a Performance
    Award, Dividend Equivalent award, Deferred Stock award, Stock
    Payment award
    and/or
    Restricted Stock Unit award shall be set by the Administrator in
    its sole discretion.



 



    9.7  Exercise or Purchase Price.  The
    Administrator may establish the exercise or purchase price of a
    Performance Award, shares of Deferred Stock, shares distributed
    as a Stock Payment award or shares distributed pursuant to a
    Restricted Stock Unit award; provided, however,
    that value of the consideration shall not be less than the par
    value of a share of Common Stock, unless otherwise permitted by
    applicable law. Any such exercise or purchase price shall be
    payable in the form(s) of legal consideration specified in the
    Award Agreement.



 



    9.8  Exercise upon Termination of
    Service.  A Performance Award, Dividend Equivalent
    award, Deferred Stock award, Stock Payment award
    and/or
    Restricted Stock Unit award is exercisable or distributable only
    while the Holder is an Employee, Director or Consultant, as
    applicable. The Administrator, however, in its sole discretion




    

    15








 






    may provide that the Performance Award, Dividend Equivalent
    award, Deferred Stock award, Stock Payment award
    and/or
    Restricted Stock Unit award may be exercised or distributed
    subsequent to a Termination of Consultancy, Termination of
    Directorship or Termination of Employment in certain events,
    including a Change in Control, the Holder’s death,
    retirement or disability or any other specified Termination of
    Consultancy, Termination of Directorship or Termination of
    Employment.



 




    ARTICLE X.

    



 




    INDEPENDENT
    DIRECTOR AWARDS
    



 



    The Board may grant Awards to Independent Directors, subject to
    the limitations of the Plan, pursuant to the Independent
    Director Equity Compensation Policy, as adopted by the
    Administrator from time to time. The Independent Director Equity
    Compensation Policy shall set forth the type of Award(s) to be
    granted to Independent Directors, the number of shares of Common
    Stock to be subject to Independent Director Awards, the
    conditions on which such Awards shall be granted, become
    exercisable
    and/or
    payable and expire, and such other terms and conditions as the
    Administrator shall determine in its discretion. For the
    avoidance of doubt, Awards granted to Independent Directors
    shall be subject to all of the limitations set forth in the Plan.



 




    ARTICLE XI.

    



 




    ADMINISTRATION
    



 



    11.1  Committee.  The Committee shall
    be the Compensation Committee of the Board, unless the Board
    specifically assumes the functions of the Committee or appoints
    another committee to assume such functions.



 



    11.2  Duties and Powers of
    Committee.  It shall be the duty of the Committee
    to conduct the general administration of the Plan in accordance
    with its provisions. The Committee shall have the power to
    interpret the Plan and the Award Agreements, and to adopt such
    rules for the administration, interpretation, and application of
    the Plan as are consistent therewith, to interpret, amend or
    revoke any such rules and to amend any Award Agreement provided
    that the rights or obligations of the Holder of the Award that
    is the subject of any such Award Agreement are not affected
    adversely. Any such interpretations and rules with respect to
    Incentive Stock Options shall be consistent with the provisions
    of Section 422 of the Code. In its absolute discretion, the
    Board may at any time and from time to time assume any and all
    rights and duties of the Committee under the Plan, except with
    respect to matters which under
    Rule 16b-3
    or Section 162(m) of the Code, or any regulations or rules
    issued thereunder, are required to be determined in the sole
    discretion of the Committee. Notwithstanding the foregoing, the
    full Board, acting by a majority of its members in office, shall
    conduct the general administration of the Plan with respect to
    Awards granted to Independent Directors.



 



    11.3  Majority Rule; Unanimous Written
    Consent.  The Committee shall act by a majority of
    its members in attendance at a meeting at which a quorum is
    present or by a memorandum or other written instrument signed by
    all members of the Committee.



 



    11.4  Compensation; Professional Assistance; Good
    Faith Actions.  Members of the Committee shall
    receive such compensation, if any, for their services as members
    as may be determined by the Board. All expenses and liabilities
    which members of the Committee incur in connection with the
    administration of the Plan shall be borne by the Company. The
    Committee may, with the approval of the Board, employ attorneys,
    consultants, accountants, appraisers, brokers, or other persons.
    The Committee, the Company and the Company’s officers and
    Directors shall be entitled to rely upon the advice, opinions or
    valuations of any such persons. All actions taken and all
    interpretations and determinations made by the Committee or the
    Board in good faith shall be final and binding upon all Holders,
    the Company and all other interested persons. No members of the
    Committee or Board shall be personally liable for any action,
    determination or interpretation made in good faith with respect
    to the Plan or Awards, and all members of the Committee and the
    Board shall be fully protected by the Company in respect of any
    such action, determination or interpretation.




    

    16








 







    ARTICLE XII.

    



 




    MISCELLANEOUS
    PROVISIONS
    



 



    12.1  Not Transferable.  No Award
    under the Plan may be sold, pledged, assigned or transferred in
    any manner other than by will or the laws of descent and
    distribution or, subject to the consent of the Administrator,
    pursuant to a DRO, unless and until such Award has been
    exercised, or the shares underlying such Award have been issued,
    and all restrictions applicable to such shares have lapsed. No
    Award or interest or right therein shall be liable for the
    debts, contracts or engagements of the Holder or his successors
    in interest or shall be subject to disposition by transfer,
    alienation, anticipation, pledge, encumbrance, assignment or any
    other means whether such disposition be voluntary or involuntary
    or by operation of law by judgment, levy, attachment,
    garnishment or any other legal or equitable proceedings
    (including bankruptcy), and any attempted disposition thereof
    shall be null and void and of no effect, except to the extent
    that such disposition is permitted by the preceding sentence.



 



    During the lifetime of the Holder, only he may exercise an
    Option or other Award (or any portion thereof) granted to him
    under the Plan, unless it has been disposed of with the consent
    of the Administrator pursuant to a DRO. After the death of the
    Holder, any exercisable portion of an Option or other Award may,
    prior to the time when such portion becomes unexercisable under
    the Plan or the applicable Award Agreement, be exercised by his
    personal representative or by any person empowered to do so
    under the deceased Holder’s will or under the then
    applicable laws of descent and distribution.



 



    Notwithstanding the foregoing provisions of this
    Section 12.1, the Administrator, in its sole discretion,
    may determine to grant a Non-Qualified Stock Option which, by
    its terms as set forth in the applicable Award Agreement, may be
    transferred by the Holder, in writing and with prior written
    notice to the Administrator, to any one or more Permitted
    Transferees (as defined below), subject to the following terms
    and conditions: (a) a Non-Qualified Stock Option
    transferred to a Permitted Transferee shall not be assignable or
    transferable by the Permitted Transferee other than by will or
    the laws of descent and distribution; (b) any Non-Qualified
    Stock Option which is transferred to a Permitted Transferee
    shall continue to be subject to all the terms and conditions of
    the Non-Qualified Stock Option as applicable to the original
    Holder (other than the ability to further transfer the
    Non-Qualified Stock Option); and (c) the Holder and the
    Permitted Transferee shall execute any and all documents
    requested by the Administrator, including, without limitation,
    documents to: (i) confirm the status of the transferee as a
    Permitted Transferee, (ii) satisfy any requirements for an
    exemption for the transfer under applicable federal and state
    securities laws and (iii) evidence the transfer. For
    purposes of this Section, “Permitted Transferee” shall
    mean, with respect to a Holder, any child, stepchild,
    grandchild, parent, stepparent, grandparent, spouse, former
    spouse, sibling, niece, nephew,
    mother-in-law,
    father-in-law,
    daughter-in-law,
    brother-in-law,
    or
    sister-in-law,
    including adoptive relationships, any person sharing the
    Holder’s household (other than a tenant or employee), a
    trust in which these persons (or the Holder) control the
    management of assets, and any other entity in which these
    persons (or the Holder) owns more than fifty percent (50%) of
    the voting interests, or any other transferee specifically
    approved by the Administrator after taking into account any
    state or federal tax or securities laws applicable to
    transferable Non-Qualified Stock Options. Notwithstanding
    anything herein to the contrary, no Award may be transferred by
    a Holder or Permitted Transferee to a third-party for
    consideration absent stockholder approval.



 



    12.2  Amendment, Suspension or Termination of the
    Plan.



 



    (a) Except as otherwise provided in this Section 12.2,
    the Plan may be wholly or partially amended or otherwise
    modified, suspended or terminated at any time or from time to
    time by the Board. However, without approval of the
    Company’s stockholders given within twelve months before or
    after the action by the Board, no action of the Board may,
    except as provided in Section 12.3, increase the limits
    imposed in Section 2.1 on the maximum number of shares that
    may be issued under the Plan.



 



    (b) No amendment, suspension or termination of the Plan
    shall, without the consent of the Holder alter or impair any
    rights or obligations under any Award theretofore granted or
    awarded, unless the Award itself otherwise expressly so
    provides. No amendment of the Plan shall have application to any
    Award granted or awarded prior to the approval of such
    amendment, unless such amendment is expressly and particularly
    stated to apply to prior awards.




    

    17








 






    (c) No Awards may be granted or awarded during any period
    of suspension or after termination of the Plan, and in no event
    may any Option be granted under the Plan after the first to
    occur of the following events:



 



    (i) The expiration of ten years from the date the Plan is
    adopted by the Board; or



 



    (ii) The expiration of ten years from the date the Plan is
    approved by the Company’s stockholders under
    Section 12.5.



 



    (d) Stockholder approval shall be required for any
    amendment to the Plan that (i) permits the Administrator to
    grant Options or Stock Appreciation Rights with an exercise
    price that is below Fair Market Value on the date of grant or
    (ii) permits the Administrator to extend the exercise
    period for an Option or Stock Appreciation Right beyond seven
    (7) years from the date of grant.



 



    (e) To the extent required by applicable law or listing
    requirements, stockholder approval shall be required for any
    amendment of the Plan that either (i) materially expands
    the class of individuals eligible to receive Awards under the
    Plan, (ii) materially increases the benefits accruing to
    Employees and Consultants under the Plan or materially reduces
    the price at which shares may be issued or purchased under the
    Plan, (iii) materially extends the term of the Plan, or
    (iv) expands the types of Awards available for issuance
    under the Plan.



 



    12.3  Changes in Common Stock or Assets of the
    Company, Acquisition or Liquidation of the Company and Other
    Corporate Events.



 



    (a) Subject to Section 12.3(e), in the event that the
    Administrator determines that other than an Equity Restructuring
    any dividend or other distribution (whether in the form of cash,
    Common Stock, other securities, or other property),
    reorganization, merger, consolidation, combination, repurchase,
    liquidation, dissolution, or sale, transfer, exchange or other
    disposition of all or substantially all of the assets of the
    Company, or exchange of Common Stock or other securities of the
    Company, issuance of warrants or other rights to purchase Common
    Stock or other securities of the Company, or other similar
    corporate transaction or event, in the Administrator’s sole
    discretion, affects the Common Stock such that an adjustment is
    determined by the Administrator to be appropriate in order to
    prevent dilution or enlargement of the benefits or potential
    benefits intended to be made available under the Plan or with
    respect to an Award, then the Administrator shall, in such
    manner as it may deem equitable, adjust any or all of:



 



    (i) the number and kind of shares of Common Stock (or other
    securities or property) with respect to which Awards may be
    granted or awarded (including, but not limited to, adjustments
    of the limitations in Section 2.1 on the maximum number and
    kind of shares which may be issued and adjustments of the Award
    Limit);



 



    (ii) the number and kind of shares of Common Stock (or
    other securities or property) subject to outstanding
    Awards; and



 



    (iii) the grant or the exercise price with respect to any
    Award.



 



    (b) Subject to Sections 12.3(e) and 12.4, in the event
    of any transaction or event described in Section 12.3(a),
    any Equity Restructuring or any unusual or nonrecurring
    transactions or events affecting the Company, any affiliate of
    the Company, or the financial statements of the Company or any
    affiliate, or of changes in applicable laws, regulations, or
    accounting principles, the Administrator, in its sole and
    absolute discretion, and on such terms and conditions as it
    deems appropriate, either by the terms of the Award or by action
    taken prior to the occurrence of such transaction or event (any
    such action applied to Employees and former Employees to be
    applied uniformly) and either automatically or upon the
    Holder’s request, is hereby authorized to take any one or
    more of the following actions whenever the Administrator
    determines that such action is appropriate in order to prevent
    dilution or enlargement of the benefits or potential benefits
    intended to be made available under the Plan or with respect to
    any




    

    18








 






    Award under the Plan, to facilitate such transactions or events
    or to give effect to such changes in laws, regulations or
    principles:



 



    (i) to provide for either the cancellation of any such
    Award for an amount of cash equal to the amount that could have
    been attained upon the exercise of such Award or realization of
    the Holder’s rights had such Award been currently
    exercisable or payable or fully vested, or the replacement of
    such Award with other rights or property selected by the
    Administrator in its sole discretion;



 



    (ii) to provide that the Award cannot vest, be exercised or
    become payable after such event;



 



    (iii) to provide that such Award shall be exercisable as to
    all shares covered thereby, notwithstanding anything to the
    contrary in Section 5.3 or 5.4 or the provisions of such
    Award;



 



    (iv) to provide that such Award be assumed by the successor
    or survivor corporation, or a parent or subsidiary thereof, or
    shall be substituted for by similar options, rights or awards
    covering the stock of the successor or survivor corporation, or
    a parent or subsidiary thereof, with appropriate adjustments as
    to the number and kind of shares and prices;



 



    (v) to make adjustments in the number and type of shares of
    Common Stock (or other securities or property) subject to
    outstanding Awards, and in the number and kind of outstanding
    Restricted Stock,
    and/or in
    the terms and conditions of (including the grant or exercise
    price), and the criteria included in, outstanding Awards and
    Awards which may be granted in the future; and



 



    (vi) to provide that, for a specified period of time prior
    to such event, the restrictions imposed under an Award Agreement
    upon some or all shares of Restricted Stock or Common Stock may
    be terminated and some or all shares of such Restricted Stock or
    Common Stock may cease to be subject to repurchase after such
    event.



 



    (c) In connection with the occurrence of any Equity
    Restructuring, and notwithstanding anything to the contrary in
    Section 12.3(a) and 11.3(b):



 



    (i) The number and type of securities subject to each
    outstanding Award and the exercise price or grant price thereof,
    if applicable, will be proportionately adjusted. The adjustments
    provided under this Section 12.3(c)(i) shall be
    nondiscretionary and shall be final and binding on the affected
    Holder and the Company.



 



    (ii) The Administrator shall make such proportionate
    adjustments, if any, as the Administrator in its discretion may
    deem appropriate to reflect such Equity Restructuring with
    respect to the aggregate number and kind of shares that may be
    issued under the Plan (including, but not limited to,
    adjustments of the limitations in Section 2 and the Award
    Limit).



 



    (iii) Notwithstanding anything in this Section 12.3(c)
    to the contrary, this Section 12.3(c) shall not apply to,
    and instead Section 12.3(a) of the Plan shall apply to, any
    Award to which the application of this Section 12.3(c)
    would (A) result in a penalty tax under Section 409A
    of the Code and the Department of Treasury proposed and final
    regulations and guidance thereunder or (B) cause any
    Incentive Stock Option to fail to qualify as an “incentive
    stock option” under Section 422 of the Code.



 



    (d) Subject to Sections 12.3(e), 3.2 and 3.3, the
    Administrator may, in its discretion, include such further
    provisions and limitations in any Award, Award Agreement or
    certificate, as it may deem equitable and in the best interests
    of the Company.



 



    (e) With respect to Awards that are granted to
    Section 162(m) Employees are intended to qualify as
    Performance-Based Compensation, no adjustment or action
    described in this Section 12.3 or in any other provision of
    the Plan shall be authorized to the extent that such adjustment
    or action would cause such Award to fail to so qualify under
    Section 162(m)(4)(C) or any successor provisions thereto.
    No adjustment or action described in this Section 12.3 or
    in any other provision of the Plan shall be authorized to the
    extent that such adjustment or action would cause the Plan to
    violate Section 422(b)(1) of the Code. Furthermore, no such
    adjustment or action shall be authorized to the extent such
    adjustment or action would result in short-swing profits
    liability under Section 16 or violate the exemptive
    conditions of
    Rule 16b-3
    unless the Administrator determines




    

    19








 






    that the Award is not to comply with such exemptive conditions.
    The number of shares of Common Stock subject to any Award shall
    always be rounded to the next whole number.



 



    (f) The existence of the Plan, any Award Agreement and the
    Awards granted hereunder shall not affect or restrict in any way
    the right or power of the Company or the stockholders of the
    Company to make or authorize any adjustment, recapitalization,
    reorganization or other change in the Company’s capital
    structure or its business, any merger or consolidation of the
    Company, any issue of stock or of options, warrants or rights to
    purchase stock or of bonds, debentures, preferred or prior
    preference stocks whose rights are superior to or affect the
    Common Stock or the rights thereof or which are convertible into
    or exchangeable for Common Stock, or the dissolution or
    liquidation of the Company, or any sale or transfer of all or
    any part of its assets or business, or any other corporate act
    or proceeding, whether of a similar character or otherwise.



 



    12.4  Change in
    Control.  Notwithstanding any other provision of
    the Plan, in the event of a Change in Control, each outstanding
    Award shall, immediately prior to the effective date of the
    Change in Control, automatically become fully exercisable for
    all of the shares of Common Stock at the time subject to such
    Award and may be exercised for any or all of those shares as
    fully-vested shares of Common Stock.



 



    12.5  Approval of Plan by
    Stockholders.  The Plan shall be submitted for the
    approval of the Company’s stockholders within twelve months
    after the date of the Board’s initial adoption of the Plan.
    Awards may be granted or awarded prior to such stockholder
    approval; provided, however, that such Awards shall not be
    exercisable nor shall such Awards vest prior to the time when
    the Plan is approved by the stockholders; and provided, further,
    that if such approval has not been obtained at the end of said
    twelve-month period, all Awards previously granted or awarded
    under the Plan shall thereupon be canceled and become null and
    void. In addition, if the Board determines that Awards other
    than Options or Stock Appreciation Rights which may be granted
    to Section 162(m) Employees should continue to be eligible
    to qualify as Performance-Based Compensation, the Performance
    Criteria must be disclosed to and approved by the Company’s
    stockholders no later than the first stockholder meeting that
    occurs in the fifth year following the year in which the
    Company’s stockholders previously approved the Performance
    Criteria.



 



    12.6  Tax Withholding.  The Company
    shall be entitled to require payment in cash or deduction from
    other compensation payable to each Holder of any sums required
    by federal, state or local tax law to be withheld with respect
    to the issuance, vesting, exercise or payment of any Award. The
    Administrator may in its discretion and in satisfaction of the
    foregoing requirement allow such Holder to elect to have the
    Company withhold shares of Common Stock otherwise issuable under
    such Award (or allow the return of shares of Common Stock)
    having a Fair Market Value equal to the sums required to be
    withheld. Notwithstanding any other provision of the Plan, the
    number of shares of Common Stock which may be withheld with
    respect to the issuance, vesting, exercise or payment of any
    Award (or which may be repurchased from the Holder of such Award
    within six months after such shares of Common Stock were
    acquired by the Holder from the Company) in order to satisfy the
    Holder’s federal and state income and payroll tax
    liabilities with respect to the issuance, vesting, exercise or
    payment of the Award shall be limited to the number of shares
    which have a Fair Market Value on the date of withholding or
    repurchase equal to the aggregate amount of such liabilities
    based on the minimum statutory withholding rates for federal and
    state tax income and payroll tax purposes that are applicable to
    such supplemental taxable income.



 



    12.7  Forfeiture Provisions.  Subject
    to the limitations of applicable law, pursuant to its general
    authority to determine the terms and conditions applicable to
    Awards under the Plan, the Administrator shall have the right to
    provide, in the terms of Awards made under the Plan, or to
    require a Holder to agree by separate written instrument, that
    if (a)(i) the Holder at any time, or during a specified time
    period, engages in any activity in competition with the Company,
    or which is inimical, contrary or harmful to the interests of
    the Company, as further defined by the Administrator or
    (ii) the Holder incurs a Termination of Employment,
    Termination of Consultancy or Termination of Directorship for
    cause, then (b) (i) any proceeds, gains or other economic
    benefit actually or constructively received by the Holder upon
    any exercise of the Award, or upon the receipt or resale of any
    Common Stock underlying any Award, must be paid to the Company,
    and (ii) the Award shall terminate and any unexercised
    portion of the Award (whether or not vested) shall be forfeited.




    

    20








 






    12.8  Effect of Plan upon Options and Compensation
    Plans.  The adoption of the Plan shall not affect
    any other compensation or incentive plans in effect for the
    Company or any Subsidiary. Nothing in the Plan shall be
    construed to limit the right of the Company (a) to
    establish any other forms of incentives or compensation for
    Employees, Directors or Consultants of the Company or any
    Subsidiary or (b) to grant or assume options or other
    rights or awards otherwise than under the Plan in connection
    with any proper corporate purpose including but not by way of
    limitation, the grant or assumption of options in connection
    with the acquisition by purchase, lease, merger, consolidation
    or otherwise, of the business, stock or assets of any
    corporation, partnership, limited liability company, firm or
    association.



 



    12.9  Compliance with Laws.  The
    Plan, the granting and vesting of Awards under the Plan and the
    issuance and delivery of shares of Common Stock and the payment
    of money under the Plan or under Awards granted or awarded
    hereunder are subject to compliance with all applicable federal
    and state laws, rules and regulations (including but not limited
    to state and federal securities law and federal margin
    requirements) and to such approvals by any listing, regulatory
    or governmental authority as may, in the opinion of counsel for
    the Company, be necessary or advisable in connection therewith.
    Any securities delivered under the Plan shall be subject to such
    restrictions, and the person acquiring such securities shall, if
    requested by the Company, provide such assurances and
    representations to the Company as the Company may deem necessary
    or desirable to assure compliance with all applicable legal
    requirements. To the extent permitted by applicable law, the
    Plan and Awards granted or awarded hereunder shall be deemed
    amended to the extent necessary to conform to such laws, rules
    and regulations.



 



    12.10  Inability to Obtain
    Authority.  The inability of the Company to obtain
    authority from any regulatory body having jurisdiction, which
    authority is deemed by the Company’s counsel to be
    necessary to the lawful issuance and sale of share of Common
    Stock hereunder, shall relieve the Company of any liability in
    respect of the failure to issue or sell such shares of Common
    Stock as to which such requisite authority shall not have been
    obtained.



 



    12.11  Reservation of Shares.  The
    Company, during the term of this Plan, shall at all times
    reserve and keep available such number of shares of Common Stock
    as shall be sufficient to satisfy the requirements of the Plan.



 



    12.12  Titles.  Titles are provided
    herein for convenience only and are not to serve as a basis for
    interpretation or construction of the Plan.



 



    12.13  Governing Law.  The Plan and
    any agreements hereunder shall be administered, interpreted and
    enforced under the internal laws of the State of California
    without regard to conflicts of laws thereof.



 



    12.14  Section 409A.  To the
    extent that the Administrator determines that any Award granted
    under the Plan is subject to Section 409A of the Code, the
    Award Agreement evidencing such Award shall incorporate the
    terms and conditions required by Section 409A of the Code.
    To the extent applicable, the Plan and Award Agreements shall be
    interpreted in accordance with Section 409A of the Code and
    Department of Treasury regulations and other interpretive
    guidance issued thereunder, including without limitation any
    such regulations or other guidance that may be issued.
    Notwithstanding any provision of the Plan to the contrary, in
    the event that the Administrator determines that any Award may
    be subject to Section 409A of the Code and related
    Department of Treasury guidance (including such subsequent
    Department of Treasury guidance as may be issued), the
    Administrator may adopt such amendments to the Plan and the
    applicable Award Agreement or adopt other policies and
    procedures (including amendments, policies and procedures with
    retroactive effect), or take any other actions, that the
    Administrator determines are necessary or appropriate to
    (a) exempt the Award from Section 409A of the Code
    and/or
    preserve the intended tax treatment of the benefits provided
    with respect to the Award, or (b) comply with the
    requirements of Section 409A of the Code and related
    Department of Treasury guidance and thereby avoid the
    application of any penalty taxes under such Section.



 



    12.15  Repricing
    Awards.  Notwithstanding any provision in this
    Plan to the contrary, absent approval of the stockholders of the
    Company, no Option or Stock Appreciation Right may be amended to
    reduce the per share exercise price of the shares subject to
    such Option or Stock Appreciation Right below the per share
    exercise price of the shares subject to such Option or Stock
    Appreciation Right below the per share exercise price as of the
    date the Option or Stock Appreciation Right was granted and,
    except as permitted by Section 12.3, no Option or Stock
    Appreciation Right may be granted in exchange for, or in
    connection with, the cancellation or surrender of an




    

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    Option, Stock Appreciation Right or other Award. Further
    notwithstanding any provision of this Plan to the contrary,
    except as permitted by Section 12.3, absent the approval of
    the stockholders of the Company, the Administrator shall not
    offer to buyout for a payment in cash, an Option or Stock
    Appreciation Right previously granted.



 



    12.16  Full Value Award Vesting
    Limitations.  Notwithstanding any other provision
    of this Plan to the contrary, Full Value Awards made to
    Employees or Consultants shall become vested over a period of
    not less than three years (or, in the case of vesting based upon
    the attainment of Performance Goals or other performance-based
    objectives, over a period of not less than one year measured
    from the commencement of the period over which performance is
    evaluated) following the date the Award is made; provided,
    however, that, notwithstanding the foregoing, Full Value Awards
    that result in the issuance of an aggregate of up to five
    percent (5%) of the shares of Common Stock available pursuant to
    Section 2.1 may be granted to any one or more Holders
    without respect to such minimum vesting provisions.



 



    * * *




    

    22








 






    I hereby certify that the foregoing Plan was duly adopted by the
    Board of Directors of Gen-Probe Incorporated on March 3rd,
    2003, adopted as initially amended and restated on
    February 9, 2006, adopted as amended a second time and
    restated on November 16, 2006, adopted as amended a third
    time and restated on February 8, 2007 and adopted as
    amended a fourth time and restated on March 20, 2009.



 



    Executed on this
    24th day

    of March, 2009.



 



    /s/  R.
    William Bowen








    R. William Bowen




    Secretary



 



    * * *



 



    I hereby certify that the foregoing Plan was duly approved by
    the stockholders of Gen-Probe Incorporated on May 29, 2003,
    approved as initially amended and restated on May 17, 2006
    and subsequently approved as amended and restated
    on May 14,
    2009. The Plan as amended and restated on November 16, 2006
    and February 8, 2007 did not require additional stockholder
    approval.



 



    Executed on
    this 14th
    day
    of May,
    2009.



 


/s/ R. William Bowen



    R. William Bowen




    Secretary




    

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