Exhibit 10.1


 


1991
STOCK PLAN OF


INCYTE
CORPORATION


(As
amended on March 10, 2009)


 


SECTION 1.  ESTABLISHMENT
AND PURPOSE.


 


The Plan was adopted on November 7, 1991, amended
and restated on February 15, 2001, and last amended on March 10,
2009. The purpose of the Plan is to offer selected employees and consultants an
opportunity to acquire a proprietary interest in the success of the Company, or
to increase such interest, by purchasing Shares of the Company’s Stock. 
The Plan provides both for the direct award or sale of Shares and for the grant
of Options to purchase Shares.  Options granted under the Plan may include
Nonstatutory Options as well as ISOs intended to qualify under section 422
of the Code.


 


The Plan is intended to comply in all respects with Rule 16b-3
(or its successor) under the Exchange Act and shall be construed accordingly.


 


SECTION 2.  DEFINITIONS.


 


(a)  “Board of
Directors” shall mean the Board of Directors of the Company, as
constituted from time to time.


 


(b)  “Change
in Control” shall mean the occurrence of either of the following
events:


 


(i)  A change in the
composition of the Board of Directors, as a result of which fewer than one-half
of the incumbent directors are directors who either:


 


(A)  Had been directors of the Company 24 months
prior to such change; or


 


(B)  Were elected,
or nominated for election, to the Board of Directors with the affirmative votes
of at least a majority of the directors who had been directors of the Company
24 months prior to such change and who were still in office at the time of
the election or nomination; or


 


(ii)  Any “person”
(as such term is used in sections 13(d) and 14(d) of the Exchange
Act) by the acquisition or aggregation of securities is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 50 percent or more of the combined voting power of the
Company’s then outstanding securities ordinarily (and apart from rights
accruing under special circumstances) having the right to vote at elections of
directors (the “Base Capital Stock”); except that any change in the relative
beneficial ownership of the Company’s securities by any person resulting solely
from a reduction in the aggregate number of outstanding shares of Base Capital
Stock, and any decrease thereafter in such person’s ownership of securities,
shall be disregarded until such person increases in any manner, directly or
indirectly, such person’s beneficial ownership of any securities of the
Company.


 


(c)  “Code”
shall mean the Internal Revenue Code of 1986, as amended.


 


(d) “Committee”
shall mean a committee of the Board of Directors, as described in Section 3(a).


 


(e)  “Company”
shall mean Incyte Corporation (formerly Incyte Genomics, Inc.), a Delaware
corporation.


 


(f)  “Employee”
shall mean (i) any individual who is a common-law employee of the Company
or of a Subsidiary or (ii) an independent contractor who performs services
for the Company or a Subsidiary and who is 


 

















 


not a member of the Board of Directors.  Service
as an independent contractor shall be considered employment for all purposes of
the Plan except the second sentence of Section 4(a).


 


(g)  “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.


 


(h)  “Exercise
Price” shall mean the amount for which one Share may be purchased
upon exercise of an Option, as specified by the Committee in the applicable
Stock Option Agreement.


 


(i)  “Fair
Market Value” with respect to a Share, shall mean the market price
of one Share of Stock, determined by the Committee as follows:


 


(i)  If the Stock
was traded over-the-counter on the date in question but was not traded on The
Nasdaq Stock Market, then the Fair Market Value shall be equal to the
last-transaction price quoted for such date by the OTC Bulletin Board or, if
not so quoted, shall be equal to the mean between the last reported
representative bid and asked prices quoted for such date by the principal
automated inter-dealer quotation system on which the Stock is quoted or, if the
Stock is not quoted on any such system, by the “Pink Sheets” published by the
National Quotation Bureau, Inc.;


 


(ii)  If the Stock
was traded on The Nasdaq Stock Market, then the Fair Market Value shall be
equal to the last reported sale price quoted for such date by The Nasdaq Stock
Market;


 


(iii)  If the Stock
was traded on a United States stock exchange on the date in question, then the
Fair Market Value shall be equal to the closing price reported for such date by
the applicable composite-transactions report; and


 


(iv)  If none of the
foregoing provisions is applicable, then the Fair Market Value shall be
determined by the Committee in good faith on such basis as it deems
appropriate.


 


In all cases, the determination of Fair Market Value
by the Committee shall be conclusive and binding on all persons.


 


(j)  “ISO”
shall mean an employee incentive stock option described in section 422(b) of
the Code.


 


(k)  “Nonstatutory
Option” shall mean an employee stock option not described in
sections 422(b) or 423(b) of the Code.


 


(l)  “Offeree”
shall mean an individual to whom the Committee has offered the right to acquire
Shares under the Plan (other than upon exercise of an Option).


 


(m)  “Option”
shall mean an ISO or Nonstatutory Option granted under the Plan and entitling
the holder to purchase Shares.


 


(n)  “Optionee”
shall mean an individual who holds an Option.


 


(o)  “Plan”
shall mean this Amended and Restated 1991 Stock Plan of Incyte Corporation.


 


(p) “Purchase
Price” shall mean the consideration for which one Share may be
acquired under the Plan (other than upon exercise of an Option), as specified
by the Committee.


 


(q)  “Service”
shall mean service as an Employee.


 


(r)  “Share”
shall mean one share of Stock, as adjusted in accordance with Section 9
(if applicable).


 


(s)  “Stock”
shall mean the Common Stock, $.001 par value, of the Company.


 


2

















 


(t)  “Stock
Option Agreement” shall mean the agreement between the Company and
an Optionee which contains the terms, conditions and restrictions pertaining to
his or her Option.


 


(u)  “Stock
Purchase Agreement” shall mean the agreement between the Company and
an Offeree who acquires Shares under the Plan which contains the terms,
conditions and restrictions pertaining to the acquisition of such Shares.


 


(v)  “Subsidiary”
shall mean any corporation, if the Company and/or one or more other
Subsidiaries own not less than 50 percent of the total combined voting
power of all classes of outstanding stock of such corporation.  A
corporation that attains the status of a Subsidiary on a date after the
adoption of the Plan shall be considered a Subsidiary commencing as of such
date.


 


(w)  “Total
and Permanent Disability” shall mean that the Optionee is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted, or can be expected to last, for a continuous period
of not less than one year.


 


SECTION 3.  ADMINISTRATION.


 


(a)  Committee
Composition.  The Plan shall be administered by the
Committee.  The Committee shall consist of two or more directors of the
Company who shall satisfy the requirements of Rule 16b-3 (or its
successor) under the Exchange Act with respect to the grant of Awards to
persons who are officers or directors of the Company under Section 16 of
the Exchange Act or the Board itself.  The Board may also appoint one or
more separate committees of the Board, each composed of one or more directors
of the Company who need not qualify under Rule 16b-3, who may administer
the Plan with respect to Employees who are not considered officers or directors
of the Company under Section 16 of the Exchange Act, may grant Shares and
Options under the Plan to such Employees and may determine all terms of such grants.


 


(b)  Committee
Procedures.  The Board of Directors shall designate one of the
members of the Committee as chairman.  The Committee may hold meetings at
such times and places as it shall determine.  The acts of a majority of
the Committee members present at meetings at which a quorum exists, or acts
reduced to or approved in writing by all Committee members, shall be valid acts
of the Committee.


 


(c)  Committee
Responsibilities.  Subject to the provisions of the Plan, the
Committee shall have full authority and discretion to take the following
actions:


 


(i)  To interpret
the Plan and to apply its provisions;


 


(ii)  To adopt,
amend or rescind rules, procedures and forms relating to the Plan;


 


(iii)  To authorize
any person to execute, on behalf of the Company, any instrument required to
carry out the purposes of the Plan;


 


(iv)  To determine
when Shares are to be awarded or offered for sale and when Options are to be
granted under the Plan;


 


(v)  To select the
Offerees and Optionees;


 


(vi)  To determine
the number of Shares to be offered to each Offeree or to be made subject to
each Option;


 


(vii)  To prescribe
the terms and conditions of each award or sale of Shares, including (without
limitation) the Purchase Price, and to specify the provisions of the Stock
Purchase Agreement relating to such award or sale;


 


3

















 


(viii)  To prescribe
the terms and conditions of each Option, including (without limitation) the
Exercise Price, to determine whether such Option is to be classified as an ISO
or as a Nonstatutory Option, and to specify the provisions of the Stock Option
Agreement relating to such Option;


 


(ix)  To amend any
outstanding Stock Purchase Agreement or Stock Option Agreement, subject to
applicable legal restrictions and to the consent of the Offeree or Optionee who
entered into such agreement;


 


(x)  To prescribe
the consideration for the grant of each Option or other right under the Plan
and to determine the sufficiency of such consideration; and


 


(xi)  To take any
other actions deemed necessary or advisable for the administration of the Plan.


 


All decisions, interpretations and other actions of
the Committee shall be final and binding on all Offerees, all Optionees, and
all persons deriving their rights from an Offeree or Optionee.  No member
of the Committee shall be liable for any action that he or she has taken or has
failed to take in good faith with respect to the Plan, any Option, or any right
to acquire Shares under the Plan.


 


SECTION 4.  ELIGIBILITY.


 


(a)  General
Rule.  Only Employees, as defined in Section 2(f), shall
be eligible for designation as Optionees or Offerees by the Committee.  In
addition, only individuals who are employed as common-law employees by the
Company or a Subsidiary shall be eligible for the grant of ISOs.


 


(b)  Ten-Percent
Stockholders.  An Employee who owns more than 10 percent
of the total combined voting power of all classes of outstanding stock of the
Company or any of its Subsidiaries shall not be eligible for the grant of an
ISO unless (i) the Exercise Price is at least 110 percent of the Fair
Market Value of a Share on the date of grant and (ii) such ISO by its
terms is not exercisable after the expiration of five years from the date of
grant.


 


(c)  Attribution
Rules.  For purposes of Subsection (b) above, in
determining stock ownership, an Employee shall be deemed to own the stock
owned, directly or indirectly, by or for such Employee’s brothers, sisters,
spouse, ancestors and lineal descendants.  Stock owned, directly or
indirectly, by or for a corporation, partnership, estate or trust shall be
deemed to be owned proportionately by or for its stockholders, partners or
beneficiaries.  Stock with respect to which such Employee holds an option
shall not be counted.


 


(d)  Outstanding
Stock.  For purposes of Subsection (b) above, “outstanding
stock” shall include all stock actually issued and outstanding immediately
after the grant.  “Outstanding stock” shall not include shares authorized
for issuance under outstanding options held by the Employee or by any other
person.


 


SECTION 5.  STOCK SUBJECT
TO PLAN.


 


(a)  Basic
Limitation.  Shares offered under the Plan shall be authorized
but unissued Shares or treasury Shares.  The aggregate number of Shares
which may be issued under the Plan (upon exercise of Options or other rights to
acquire Shares) shall not exceed 30,475,000 Shares, subject to adjustment
pursuant to Section 9.  Notwithstanding the foregoing, the number of
Shares that may be issued under the Plan, other than (i) upon exercise of
Options or (ii) pursuant to any sale under a Stock Purchase Agreement for
a Purchase Price at least equal to 100 percent of the Fair Market Value of a
Share on the date of such Stock Purchase Agreement, shall not exceed 200,000
Shares, subject to adjustment pursuant to Section 9. The number of Shares
that are subject to Options or other rights outstanding at any time under the
Plan shall not exceed the number of Shares that then remain available for
issuance under the Plan.  The Company, during the term of the Plan, shall
at all times reserve and keep available sufficient Shares to satisfy the
requirements of the Plan.


 


(b)  Additional
Shares.  In the event that any outstanding Option or other
right for any reason expires or is canceled or otherwise terminated, the Shares
allocable to the unexercised portion of such Option or other right shall again
be available for the purposes of the Plan.  In the event that Shares
issued under the Plan are 


 


4

















 


reacquired by the Company pursuant to any forfeiture
provision, right of repurchase or right of first refusal, such Shares shall
again be available for the purposes of the Plan.


 


SECTION 6.  TERMS AND
CONDITIONS OF AWARDS OR SALES.


 


(a)  Stock
Purchase Agreement.  Each award or sale of Shares under the
Plan (other than upon exercise of an Option) shall be evidenced by a Stock
Purchase Agreement between the Offeree and the Company.  Such award or
sale shall be subject to all applicable terms and conditions of the Plan and
may be subject to any other terms and conditions which are not inconsistent
with the Plan and which the Committee deems appropriate for inclusion in a
Stock Purchase Agreement.  The provisions of the various Stock Purchase
Agreements entered into under the Plan need not be identical.


 


(b)  Duration
of Offers and Nontransferability of Rights.  Any right to
acquire Shares under the Plan (other than an Option) shall automatically expire
if not exercised by the Offeree within 30 days after the grant of such right
was communicated to the Offeree by the Committee.  Such right shall not be
transferable and shall be exercisable only by the Offeree to whom such right
was granted.


 


(c)  Purchase
Price.  The Purchase Price of Shares to be offered under the
Plan shall not be less than the par value of such Shares.  Subject to the
preceding sentence, the Purchase Price shall be determined by the Committee at
its sole discretion.  The Purchase Price shall be payable in a form
described in Section 8.


 


(d)  Withholding
Taxes.  As a condition to the award, purchase, vesting or sale
of Shares, the Offeree shall make such arrangements as the Committee may
require for the satisfaction of any federal, state, local or foreign
withholding tax obligations that may arise in connection with such
Shares.  The Committee may permit the Offeree to satisfy all or part of
his or her tax obligations related to such Shares by having the Company
withhold a portion of any Shares that otherwise would be issued to him or her
or by surrendering any Shares that previously were acquired by him or
her.  The Shares withheld or surrendered shall be valued at their Fair
Market Value on the date when taxes otherwise would be withheld in cash. 
The payment of taxes by assigning Shares to the Company, if permitted by the
Committee, shall be subject to such restrictions as the Committee may impose,
including any restrictions required by rules of the Securities and
Exchange Commission.


 


(e)  Restrictions
on Transfer of Shares.  Any Shares awarded or sold under the
Plan shall be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine.  Such restrictions shall be set forth in the
applicable Stock Purchase Agreement and shall apply in addition to any general
restrictions that may apply to all holders of Shares.


 


SECTION 7.  TERMS AND
CONDITIONS OF OPTIONS.


 


(a)  Stock
Option Agreement.  Each grant of an Option under the Plan shall
be evidenced by a Stock Option Agreement between the Optionee and the
Company.  Such Option shall be subject to all applicable terms and
conditions of the Plan and may be subject to any other terms and conditions
which are not inconsistent with the Plan and which the Committee deems
appropriate for inclusion in a Stock Option Agreement.  The provisions of
the various Stock Option Agreements entered into under the Plan need not be
identical.


 


(b)  Number of
Shares.  Each Stock Option Agreement shall specify the number
of Shares that are subject to the Option and shall provide for the adjustment
of such number in accordance with Section 9.  The Stock Option
Agreement shall also specify whether the Option is an ISO or a Nonstatutory
Option.  Options granted to any Optionee in a single calendar year shall
in no event cover more than 800,000 Shares, subject to adjustment in accordance
with Section 9.


 


(c)  Exercise
Price.  Each Stock Option Agreement shall specify the Exercise
Price.  The Exercise Price of an ISO shall not be less than 100 percent of
the Fair Market Value of a Share on the date of grant, and a higher percentage
may be required by Section 4(b).  The Exercise Price of a
Nonstatutory Option shall not be less than 100 percent of the Fair Market Value
of a Share on the date of grant.  Subject to the preceding two sentences,
the Exercise Price under any Option shall be determined by the Committee at its
sole discretion.  The Exercise Price shall be payable in a form described
in Section 8.


 


5

















 


(d)  Withholding
Taxes.  As a condition to the exercise of an Option, the
Optionee shall make such arrangements as the Committee may require for the
satisfaction of any federal, state, local or foreign withholding tax
obligations that may arise in connection with such exercise.  The Optionee
shall also make such arrangements as the Committee may require for the
satisfaction of any federal, state, local or foreign withholding tax
obligations that may arise in connection with the disposition of Shares
acquired by exercising an Option.  The Committee may permit the Optionee
to satisfy all or part of his or her tax obligations related to the Option by
having the Company withhold a portion of any Shares that otherwise would be
issued to him or her or by surrendering any Shares that previously were
acquired by him or her.  Such Shares shall be valued at their Fair Market
Value on the date when taxes otherwise would be withheld in cash.  The
payment of taxes by assigning Shares to the Company, if permitted by the
Committee, shall be subject to such restrictions as the Committee may impose,
including any restrictions required by rules of the Securities and
Exchange Commission.


 


(e)  Exercisability. 
Each Stock Option Agreement shall specify the date when all or any installment
of the Option is to become exercisable.  A Stock Option Agreement may
provide for accelerated exercisability in the event of the Optionee’s death,
Total and Permanent Disability or retirement or other events.


 


(f)  Effect of
Change in Control.  The Committee may determine, at the time of
granting an Option or thereafter, that such Option shall become exercisable on
an accelerated basis in the event that a Change in Control occurs with respect
to the Company.  If the Committee finds that there is a reasonable
possibility that, within the succeeding six months, a Change in Control will
occur with respect to the Company, then the Committee may determine that all
outstanding Options shall be exercisable on an accelerated basis.


 


(g)  Term. 
The Stock Option Agreement shall specify the term of the Option.  The term
shall not exceed 10 years from the date of grant, except as otherwise provided
in Section 4(b).  Subject to the preceding sentence, the Committee at
its sole discretion shall determine when an Option is to expire.


 


(h)  Nontransferability. 
Except as may be provided in the applicable Stock Option Agreement with respect
to a Nonstatutory Option, no Option shall be transferable by the Optionee other
than by will, by beneficiary designation delivered to the Company, or by the
laws of descent and distribution.  An Option may be exercised during the
lifetime of the Optionee only by the Optionee or by the Optionee’s guardian or
legal representative.  No Option or interest therein may be transferred,
assigned, pledged or hypothecated by the  Optionee during his or her lifetime, whether by
operation of law or otherwise, or be made subject to execution, attachment or
similar process.


 


(i)  Termination
of Service (Except by Death).  Except as may be provided in the
applicable Stock Option Agreement, if an Optionee’s Service terminates for any
reason other than the Optionee’s death, then such Optionee’s Option(s) shall
expire on the earliest of the following occasions:


 


(i)  The expiration
date determined pursuant to Subsection (g) above;


 


(ii)  The date 90
days after the termination of the Optionee’s Service for any reason other than
Total and Permanent Disability; or


 


(iii)  The date six
months after the termination of the Optionee’s Service by reason of Total and
Permanent Disability.


 


The Optionee may exercise all or part of his or her
Option(s) at any time before the expiration of such Option(s) under
the preceding sentence, but only to the extent that such Option(s) had
become exercisable before the Optionee’s Service terminated or became
exercisable as a result of the termination.  The balance of such Option(s) shall
lapse when the Optionee’s Service terminates.  In the event that the
Optionee dies after the termination of the Optionee’s Service but before the
expiration of the Optionee’s Option(s), all or part of such Option(s) may
be exercised (prior to expiration) by the executors or administrators of the
Optionee’s estate or by any person who has acquired such Option(s) directly
from the Optionee by bequest, beneficiary designation or inheritance, but only
to the extent that such Option(s) had become exercisable before the
Optionee’s Service terminated or became exercisable as a result of the
termination.


 


6

















 


(j)  Leaves of
Absence.  Except as may be provided in the applicable Stock
Option Agreement, for purposes of Subsection (i) above, Service shall be
deemed to continue while the Optionee is on military leave, sick leave or other
bona fide leave of absence (as determined by the Committee).  The
foregoing notwithstanding, in the case of an ISO granted under the Plan,
Service shall not be deemed to continue beyond the first 90 days of such leave,
unless the Optionee’s reemployment rights are guaranteed by statute or by
contract.


 


(k)  Death of
Optionee.  Except as may be provided in the applicable Stock
Option Agreement, if an Optionee dies while he or she is in Service, then such
Optionee’s Option(s) shall expire on the earlier of the following dates:


 


(i)  The expiration
date determined pursuant to Subsection (g) above; or


 


(ii)  The date six
months after the Optionee’s death.


 


All or part of the Optionee’s Option(s) may be
exercised at any time before the expiration of such Option(s) under the
preceding sentence by the executors or administrators of the Optionee’s estate
or by any person who has acquired such Option(s) directly from the
Optionee by bequest, beneficiary designation or inheritance, but only to the
extent that such Option(s) had become exercisable before the Optionee’s
death or became exercisable as a result of the Optionee’s death.  The
balance of such Option(s) shall lapse when the Optionee dies.


 


(l)  No Rights
as a Stockholder.  An Optionee, or a transferee of an Optionee,
shall have no rights as a stockholder with respect to any Shares covered by his
or her Option until he or she becomes entitled, pursuant to the terms of such
Option, to receive such Shares.  No adjustments shall be made, except as
provided in Section 9.


 


(m)  Modification,
Extension and Assumption of Options.  Within the limitations of
the Plan, the Committee may modify, extend or assume outstanding Options or may
accept the cancellation of outstanding Options (whether granted by the Company
or another issuer) in return for the grant of new Options for the same or a
different number of Shares and at the same or a different Exercise Price;
provided, however, that the Committee may not modify outstanding Options to
lower the Exercise Price nor may the Committee assume or accept the
cancellation of outstanding Options in return for the grant of new Options with
a lower Exercise Price, unless such action has been approved by the Company’s
stockholders.  The foregoing notwithstanding, no modification of an Option
shall, without the consent of the Optionee, impair such Optionee’s rights or
increase his or her obligations under such Option.


 


(n)  Restrictions
on Transfer of Shares.  Any Shares issued upon exercise of an
Option may be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine.  Such restrictions shall be set forth in the
applicable Stock Option Agreement and shall apply in addition to any general
restrictions that may apply to all holders of Shares.


 


SECTION 8.  PAYMENT FOR
SHARES.


 


(a)  General
Rule.   The entire Purchase Price or Exercise Price of Shares
issued under the Plan shall be payable in lawful money of the United States of
America at the time when such Shares are purchased, except as provided in
Subsections (b), (c), (d), (e) and (f) below.


 


(b)  Surrender
of Stock.   To the extent that a Stock Option Agreement so
provides, payment may be made all or in part with Shares which have already
been owned by the Optionee or the Optionee’s representative for more than six
months and which are surrendered to the Company in good form for
transfer.  Such Shares shall be valued at their Fair Market Value on the
date when the new Shares are purchased under the Plan.


 


(c)  Services
Rendered.   At the discretion of the Committee, Shares may be
awarded under the Plan in consideration of services rendered to the Company or
a Subsidiary prior to the award.  If Shares are awarded without the
payment of a Purchase Price in cash, the Committee shall make a determination
(at the time of the award) of the value of the services rendered by the Offeree
and the sufficiency of the consideration to meet the requirements of Section 6(c).


 


7

















 


(d)  Promissory
Note.   To the extent that a Stock Option Agreement or Stock
Purchase Agreement so provides, a portion of the Exercise Price or Purchase
Price (as the case may be) of Shares issued under the Plan may be paid with a
full-recourse promissory note, provided that (i) the par value of such
Shares must be paid in lawful money of the United States of America at the time
when such Shares are purchased, (ii) the Shares are pledged as security
for payment of the principal amount of the promissory note and interest thereon
and (iii) the interest rate payable under the terms of the promissory note
shall not be less than the minimum rate (if any) required to avoid the
imputation of additional interest under the Code.  Subject to the
foregoing, the Committee (at its sole discretion) shall specify the term,
interest rate, amortization requirements (if any) and other provisions of such
note.


 


(e)  Exercise/Sale.
  To the extent that a Stock Option Agreement so provides, payment may be
made all or in part by the delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the Company to sell
Shares and to deliver all or part of the sales proceeds to the Company in
payment of all or part of the Exercise Price and any withholding taxes.


 


(f)  Exercise/Pledge.
  To the extent that a Stock Option Agreement so provides, payment may be
made all or in part by the delivery (on a form prescribed by the Company) of an
irrevocable direction to pledge Shares to a securities broker or lender
approved by the Company, as security for a loan, and to deliver all or part of
the loan proceeds to the Company in payment of all or part of the Exercise
Price and any withholding taxes.


 


SECTION 9.  ADJUSTMENT OF
SHARES.


 


(a)  General.
  In the event of a subdivision of the outstanding Stock, a declaration of
a dividend payable in Shares, a declaration of a dividend payable in a form
other than Shares in an amount that has a material effect on the value of
Shares, a combination or consolidation of the outstanding Stock into a lesser
number of Shares, a recapitalization, a spinoff, a reclassification or a
similar occurrence, the Committee shall make appropriate adjustments in one or
more of (i) the number of Shares available for future grants under Section 5,
(ii) the limit set forth in Section 7(b), (iii) the number of
Shares covered by each outstanding Option or (iv) the Exercise Price under
each outstanding Option.


 


(b)  Reorganizations.
  In the event that the Company is a party to a merger or other
reorganization, outstanding Options shall be subject to the agreement of merger
or reorganization.  Such agreement may provide, without limitation, (i) for
the assumption of outstanding Options by the surviving corporation or its parent,
(ii) for their continuation by the Company, if the Company is a surviving
corporation, (iii) for payment of a cash settlement equal to the
difference between the amount to be paid for one Share pursuant to such
agreement and the Exercise Price or (iv) for the acceleration of their
exercisability followed by the cancellation of Options not exercised, in all
cases without the Optionees’ consent.  Any cancellation shall not occur
until after such acceleration is effective and Optionees have been notified of
such acceleration.


 


(c)  Reservation
of Rights.   Except as provided in this Section 9, an
Optionee or Offeree shall have no rights by reason of (i) any subdivision
or consolidation of shares of stock of any class, (ii) the payment of any
dividend or (iii) any other increase or decrease in the number of shares
of stock of any class.  Any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number or Exercise Price of Shares subject to an Option.  The grant of an
Option pursuant to the Plan shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes
of its capital or business structure, to merge or consolidate or to dissolve,
liquidate, sell or transfer all or any part of its business or assets.


 


SECTION 10.  SECURITIES
LAWS.


 


Shares shall not be issued under the Plan unless the
issuance and delivery of such Shares comply with (or are exempt from) all
applicable requirements of law, including (without limitation) the Securities
Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, state securities laws and regulations, and the
regulations of any stock exchange on which the Company’s securities may then be
listed.


 


8

















 


SECTION 11.  NO EMPLOYMENT
RIGHTS.


 


No provision of the Plan, nor any right or Option
granted under the Plan, shall be construed to give any person any right to
become, to be treated as, or to remain an Employee.  The Company and its
Subsidiaries reserve the right to terminate any person’s Service at any time
and for any reason.


 


SECTION 12.  DURATION AND
AMENDMENTS.


 


(a)  Term of
the Plan.   The Plan, as amended as set forth herein, shall
become effective as of March 11, 2008, subject to approval of the Company’s
stockholders.  The Plan shall terminate automatically on February 15,
2011 and may be terminated on any earlier date pursuant to Subsection (b) below.


 


(b)  Right to
Amend or Terminate the Plan.   The Board of Directors may
amend, suspend or terminate the Plan at any time and for any reason.  An
amendment of the Plan shall be subject to the approval of the Company’s
stockholders to the extent required by applicable laws, regulations, rules,
listing standards or other requirements, including (without limitation) Rule 16b-3
under the Exchange Act.  Stockholder approval shall not be required for
any other amendment of the Plan.


 


(c)  Effect of
Amendment or Termination.  No Shares shall be issued or sold
under the Plan after the termination thereof, except upon exercise of an Option
granted prior to such termination.  The termination of the Plan, or any
amendment thereof, shall not affect any Share previously issued or any Option
previously granted under the Plan.


 


9