exv10w4






Exhibit 10.4




CLOVIS ONCOLOGY, INC.




2009 EQUITY INCENTIVE PLAN



     1. Purposes of the Plan. The purposes of this Plan are:




	 	•	 	to attract and retain the best available personnel for positions of
substantial responsibility,
	 
	 	•	 	to provide additional incentive to Employees, Directors and Consultants, and
	 
	 	•	 	to promote the success of the Company’s business.





          The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock
Appreciation Rights, Restricted Stock and Restricted Stock Units.




     2. Definitions. As used herein, the following definitions will apply:



          (a) “Administrator” means the Board or any of its Committees as will be administering
the Plan, in accordance with Section 4 of the Plan.




          (b) “Applicable Laws” means the requirements relating to the administration of
equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under
the Plan.




          (c) “Award” means, individually or collectively, a grant under the Plan of Options,
Stock Appreciation Rights, Restricted Stock, or Restricted Stock Units.




          (d) “Award Agreement” means the written or electronic agreement setting forth the
terms and provisions applicable to each Award granted under the Plan. The Award Agreement is
subject to the terms and conditions of the Plan.




          (e) “Board” means the Board of Directors of the Company.




          (f) “Change in Control” means the occurrence of any of the following events:




               (i) Change in Ownership of the Company. A change in the ownership of the Company
which occurs on the date that any one person, or more than one person acting as a group (“Person”),
acquires ownership of the stock of the Company that, together with the stock held by such Person,
constitutes more than 50% of the total voting power of the stock of the Company; or



               (ii) Change in Effective Control of the Company. If the Company has a class of
securities registered pursuant to Section 12 of the Exchange Act, a change in the effective control
of the Company which occurs on the date that a majority of members of the Board is



 









 




replaced during any twelve (12) month period by Directors whose appointment or election is not
endorsed by a majority of the members of the Board prior to the date of the appointment or
election. For purposes of this clause (ii), if any Person is considered to be in effective control
of the Company, the acquisition of additional control of the Company by the same Person will not be
considered a Change in Control; or




               (iii) Change in Ownership of a Substantial Portion of the Company’s Assets. A change
in the ownership of a substantial portion of the Company’s assets which occurs on the date that any
Person acquires (or has acquired during the twelve (12) month period ending on the date of the most
recent acquisition by such person or persons) assets from the Company that have a total gross fair
market value equal to or more than 50% of the total gross fair market value of all of the assets of
the Company immediately prior to such acquisition or acquisitions. For purposes of this subsection
(iii), gross fair market value means the value of the assets of the Company, or the value of the
assets being disposed of, determined without regard to any liabilities associated with such assets.



               For purposes of this Section 2(f), persons will be considered to be acting as a group if they
are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of
stock, or similar business transaction with the Company.



               Further and for the avoidance of doubt, a transaction will not constitute a Change in Control
if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole
purpose is to create a holding company that will be owned in substantially the same proportions by
the persons who held the Company’s securities immediately before such transaction.



          (g) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a
section of the Code herein will be a reference to any successor or amended section of the Code.




          (h) “Committee” means a committee of Directors or of other individuals satisfying
Applicable Laws appointed by the Board, or by the compensation committee of the Board, in
accordance with Section 4 hereof.




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




          (j) “Company” means Clovis Oncology, Inc., a Delaware corporation, or any successor
thereto.




          (k) “Consultant” means any person, including an advisor, engaged by the Company or a
Parent or Subsidiary to render services to such entity.




          (l) “Director” means a member of the Board.




          (m) “Disability” means total and permanent disability as defined in Code Section
22(e)(3), provided that in the case of Awards other than Incentive Stock Options, the Administrator
in its discretion may determine whether a permanent and total disability exists in accordance with
uniform and non-discriminatory standards adopted by the Administrator from time to time.







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          (n) “Employee” means any person, including officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a
director’s fee by the Company will be sufficient to constitute “employment” by the Company.




          (o) “Exchange Act” means the Securities Exchange Act of 1934, as amended.




          (p) “Exchange Program” means a program under which (i) outstanding Awards are
surrendered or cancelled in exchange for Awards of the same type (which may have higher or lower
exercise prices and different terms), Awards of a different type, and/or cash, (ii) Participants
would have the opportunity to transfer any outstanding Awards to a financial institution or other
person or entity selected by the Administrator, and/or (iii) the exercise price of an outstanding
Award is reduced or increased. The Administrator will determine the terms and conditions of any
Exchange Program in its sole discretion.




          (q) “Fair Market Value” means, as of any date, the value of Common Stock determined as
follows:




               (i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq Global Select Market, the Nasdaq Global Market or
the Nasdaq Capital Market of The Nasdaq Stock Market, its Fair Market Value will be the closing
sales price for such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;



               (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and
low asked prices for the Common Stock on the day of determination (or, if no bids and asks were
reported on that date, as applicable, on the last trading date such bids and asks were reported),
as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or



               (iii) In the absence of an established market for the Common Stock, the Fair Market Value will
be determined in good faith by the Administrator, calculated in a manner consistent with Section
409A of the Code..



          (r) “Incentive Stock Option” means an Option that by its terms qualifies and is
otherwise intended to qualify as an incentive stock option within the meaning of Code Section 422
and the regulations promulgated thereunder.




          (s) “Nonstatutory Stock Option” means an Option that by its terms does not qualify or
is not intended to qualify as an Incentive Stock Option.




          (t) “Option” means a stock option granted pursuant to the Plan.




          (u) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Code Section 424(e).







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          (v) “Participant” means the holder of an outstanding Award.




          (w) “Period of Restriction” means the period during which the transfer of Shares of
Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial
risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of
target levels of performance, or the occurrence of other events as determined by the Administrator.




          (x) “Plan” means this 2009 Equity Incentive Plan.




          (y) “Restricted Stock” means Shares issued pursuant to an Award of Restricted Stock
under Section 8 of the Plan, or issued pursuant to the early exercise of an Option.




          (z) “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to
the Fair Market Value of one Share, granted pursuant to Section 9. Each Restricted Stock Unit
represents an unfunded and unsecured obligation of the Company.




          (aa) “Service Provider” means an Employee, Director or Consultant.




          (bb) “Share” means a share of the Common Stock, as adjusted in accordance with Section
13 of the Plan.




          (cc) “Stock Appreciation Right” means an Award, granted alone or in connection with an
Option, that pursuant to Section 7 is designated as a Stock Appreciation Right.




          (dd) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing,
as defined in Code Section 424(f).




     3. Stock Subject to the Plan.



          (a) Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan,
the maximum aggregate number of Shares that may be subject to Awards and sold under the Plan is
1,500,000 Shares. The Shares may be authorized but unissued, or reacquired Common Stock.




          (b) Lapsed Awards. If an Award expires or becomes unexercisable without having been
exercised in full, is surrendered pursuant to an Exchange Program, or, with respect to Restricted
Stock or Restricted Stock Units, is forfeited to or repurchased by the Company due to the failure
to vest, the unpurchased Shares (or for Awards other than Options or Stock Appreciation Rights the
forfeited or repurchased Shares) which were subject thereto will become available for future grant
or sale under the Plan (unless the Plan has terminated). With respect to Stock Appreciation
Rights, only Shares actually issued pursuant to a Stock Appreciation Right will cease to be
available under the Plan; all remaining Shares under Stock Appreciation Rights will remain
available for future grant or sale under the Plan (unless the Plan has terminated). Shares that
have actually been issued under the Plan under any Award will not be returned to the Plan and will
not become available for future distribution under the Plan; provided, however, that if Shares
issued pursuant to Awards of Restricted Stock or Restricted Stock Units are repurchased by the
Company or are forfeited to the Company due to the failure to vest, such Shares will become
available for future grant under the Plan. Shares used to pay the exercise price of an Award or to
satisfy the tax withholding obligations related to an Award will become available for future grant
or sale under the






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Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash
payment will not result in reducing the number of Shares available for issuance under the Plan.
Notwithstanding the foregoing and, subject to adjustment as provided in Section 13, the maximum
number of Shares that may be issued upon the exercise of Incentive Stock Options will equal the
aggregate Share number stated in Section 3(a), plus, to the extent allowable under Code Section 422
and the Treasury Regulations promulgated thereunder, any Shares that become available for issuance
under the Plan pursuant to Section 3(b).




          (c) Share Reserve. The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as will be sufficient to satisfy the requirements
of the Plan.




     4. Administration of the Plan.




	 	(a)	 	Procedure.





               (i) Multiple Administrative Bodies. Different Committees with respect to different
groups of Service Providers may administer the Plan.



               (ii) Other Administration. Other than as provided above, the Plan will be
administered by (A) the Board or (B) a Committee, which Committee will be constituted to satisfy
Applicable Laws.



          (b) Powers of the Administrator. Subject to the provisions of the Plan, and in the
case of a Committee, subject to the specific duties delegated by the Board to such Committee, the
Administrator will have the authority, in its discretion:




               (i) to determine the Fair Market Value;



               (ii) to select the Service Providers to whom Awards may be granted hereunder;



               (iii) to determine the number of Shares to be covered by each Award granted hereunder;



               (iv) to approve forms of Award Agreements for use under the Plan;



               (v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any
Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise
price, the time or times when Awards may be exercised (which may be based on performance criteria),
any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Award or the Shares relating thereto, based in each case on such factors as the
Administrator will determine;



               (vi) to institute and determine the terms and conditions of an Exchange Program;



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               (vii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;



               (viii) to prescribe, amend and rescind rules and regulations relating to the Plan, including
rules and regulations relating to sub-plans established for the purpose of satisfying applicable
foreign laws or for qualifying for favorable tax treatment under applicable foreign laws;



               (ix) to modify or amend each Award (subject to Section 18(d) of the Plan), including but not
limited to the discretionary authority to extend the post-termination exercisability period of
Awards and to extend the maximum term of an Option (subject to Section 6(d));



               (x) to allow Participants to satisfy withholding tax obligations in a manner prescribed in
Section 14;



               (xi) to authorize any person to execute on behalf of the Company any instrument required to
effect the grant of an Award previously granted by the Administrator;



               (xii) to allow a Participant to defer the receipt of the payment of cash or the delivery of
Shares that otherwise would be due to such Participant under an Award; and



               (xiii) to make all other determinations deemed necessary or advisable for administering the
Plan.



          (c) Effect of Administrator’s Decision. The Administrator’s decisions, determinations
and interpretations will be final and binding on all Participants and any other holders of Awards.




     5. Eligibility. Nonstatutory Stock Options, Stock Appreciation Rights, Restricted
Stock, and Restricted Stock Units may be granted to Service Providers. Incentive Stock Options may
be granted only to Employees.



     6. Stock Options.



          (a) Grant of Options. Subject to the terms and provisions of the Plan, the
Administrator, at any time and from time to time, may grant Options in such amounts as the
Administrator, in its sole discretion, will determine.




          (b) Option Agreement. Each Award of an Option will be evidenced by an Award Agreement
that will specify the exercise price, the term of the Option, the number of Shares subject to the
Option, the exercise restrictions, if any, applicable to the Option, and such other terms and
conditions as the Administrator, in its sole discretion, will determine.




          (c) Limitations. Each Option will be designated in the Award Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. Notwithstanding such designation, however,
to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by the Participant during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars
($100,000), such Options will be treated as Nonstatutory Stock Options. For purposes of this






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Section 6(c), Incentive Stock Options will be taken into account in the order in which they
were granted, the Fair Market Value of the Shares will be determined as of the time the Option with
respect to such Shares is granted, and calculation will be performed in accordance with Code
Section 422 and Treasury Regulations promulgated thereunder.




          (d) Term of Option. The term of each Option will be stated in the Award Agreement;
provided, however, that the term will be no more than ten (10) years from the date of grant
thereof. In the case of an Incentive Stock Option granted to a Participant who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term
of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as
may be provided in the Award Agreement.




          (e) Option Exercise Price and Consideration.




               (i) Exercise Price. The per Share exercise price for the Shares to be issued pursuant
to the exercise of an Option will be determined by the Administrator, but will be no less than one
hundred percent (100%) of the Fair Market Value per Share on the date of grant. In addition, in
the case of an Incentive Stock Option granted to an Employee who owns stock representing more than
ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price will be no less than one hundred ten percent (110%) of the
Fair Market Value per Share on the date of grant. Notwithstanding the foregoing provisions of this
Section 6(e)(i), Options may be granted with a per Share exercise price of less than one hundred
percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transaction
described in, and in a manner consistent with, Code Section 424(a).



               (ii) Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator will fix the period within which the Option may be exercised and will determine any
conditions that must be satisfied before the Option may be exercised.



               (iii) Form of Consideration. The Administrator will determine the acceptable form of
consideration for exercising an Option, including the method of payment. In the case of an
Incentive Stock Option, the Administrator will determine the acceptable form of consideration at
the time of grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory
note, to the extent permitted by Applicable Laws, (4) other Shares, provided that such Shares have
a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as
to which such Option will be exercised and provided further that accepting such Shares will not
result in any adverse accounting consequences to the Company, as the Administrator determines in
its sole discretion; (5) consideration received by the Company under cashless exercise program
(whether through a broker or otherwise) implemented by the Company in connection with the Plan; (6)
by net exercise, (7) such other consideration and method of payment for the issuance of Shares to
the extent permitted by Applicable Laws, or (8) any combination of the foregoing methods of
payment. In making its determination as to the type of consideration to accept, the Administrator
will consider if acceptance of such consideration may be reasonably expected to benefit the
Company.



          (f) Exercise of Option.







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               (i) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder
will be exercisable according to the terms of the Plan and at such times and under such conditions
as determined by the Administrator and set forth in the Award Agreement. An Option may not be
exercised for a fraction of a Share.



                    An Option will be deemed exercised when the Company receives: (i) notice of exercise (in such
form as the Administrator may specify from time to time) from the person entitled to exercise the
Option, and (ii) full payment for the Shares with respect to which the Option is exercised
(together with applicable tax withholding). Full payment may consist of any consideration and
method of payment authorized by the Administrator and permitted by the Award Agreement and the
Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or,
if requested by the Participant, in the name of the Participant and his or her spouse. Until the
Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends or any other
rights as a stockholder will exist with respect to the Shares subject to an Option, notwithstanding
the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly
after the Option is exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided in Section 13 of the
Plan.



                    Exercising an Option in any manner will decrease the number of Shares thereafter available,
both for purposes of the Plan and for sale under the Option, by the number of Shares as to which
the Option is exercised.



               (ii) Termination of Relationship as a Service Provider. If a Participant ceases to be
a Service Provider, other than upon the Participant’s termination as the result of the
Participant’s death or Disability, the Participant may exercise his or her Option within thirty
(30) days of termination, or such longer period of time as is specified in the Award Agreement (but
in no event later than the expiration of the term of such Option as set forth in the Award
Agreement) to the extent that the Option is vested on the date of termination. Unless otherwise
provided by the Administrator, if on the date of termination the Participant is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the Option will revert to
the Plan. If after termination the Participant does not exercise his or her Option within the time
specified by the Administrator, the Option will terminate, and the Shares covered by such Option
will revert to the Plan.



               (iii) Disability of Participant. If a Participant ceases to be a Service Provider as
a result of the Participant’s Disability, the Participant may exercise his or her Option within six
(6) months of termination, or such longer period of time as is specified in the Award Agreement
(but in no event later than the expiration of the term of such Option as set forth in the Award
Agreement) to the extent the Option is vested on the date of termination. Unless otherwise
provided by the Administrator, if on the date of termination the Participant is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the Option will revert to
the Plan. If after termination the Participant does not exercise his or her Option within the time
specified herein, the Option will terminate, and the Shares covered by such Option will revert to
the Plan.



               (iv) Death of Participant. If a Participant dies while a Service Provider, the Option
may be exercised within six (6) months following the Participant’s death, or within such



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longer period of time as is specified in the Award Agreement (but in no event later than the
expiration of the term of such Option as set forth in the Award Agreement) to the extent that the
Option is vested on the date of death, by the Participant’s designated beneficiary, provided such
beneficiary has been designated prior to the Participant’s death in a form acceptable to the
Administrator. If no such beneficiary has been designated by the Participant, then such Option may
be exercised by the personal representative of the Participant’s estate or by the person(s) to whom
the Option is transferred pursuant to the Participant’s will or in accordance with the laws of
descent and distribution. Unless otherwise provided by the Administrator, if at the time of death
Participant is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option will immediately revert to the Plan. If the Option is not so exercised
within the time specified herein, the Option will terminate, and the Shares covered by such Option
will revert to the Plan.




     7. Stock Appreciation Rights.



          (a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of the
Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to
time as will be determined by the Administrator, in its sole discretion.




          (b) Number of Shares. The Administrator will have complete discretion to determine
the number of Shares subject to any Award of Stock Appreciation Rights.




          (c) Exercise Price and Other Terms. The per Share exercise price for the Shares that
will determine the amount of the payment to be received upon exercise of a Stock Appreciation Right
as set forth in Section 7(f) will be determined by the Administrator and will be no less than one
hundred percent (100%) of the Fair Market Value per Share on the date of grant. Otherwise, the
Administrator, subject to the provisions of the Plan, will have complete discretion to determine
the terms and conditions of Stock Appreciation Rights granted under the Plan.




          (d) Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be
evidenced by an Award Agreement that will specify the exercise price, the term of the Stock
Appreciation Right, the conditions of exercise, and such other terms and conditions as the
Administrator, in its sole discretion, will determine.




          (e) Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under
the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set
forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 6(d) relating to
the maximum term and Section 6(f) relating to exercise also will apply to Stock Appreciation
Rights.




          (f) Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation
Right, a Participant will be entitled to receive payment from the Company in an amount determined
by multiplying:




               (i) The difference between the Fair Market Value of a Share on the date of exercise over the
exercise price; times



               (ii) The number of Shares with respect to which the Stock Appreciation Right is exercised.



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     At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may
be in cash, in Shares of equivalent value, or in some combination thereof.



     8. Restricted Stock.



          (a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the
Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service
Providers in such amounts as the Administrator, in its sole discretion, will determine.




          (b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by
an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and
such other terms and conditions as the Administrator, in its sole discretion, will determine.
Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of
Restricted Stock until the restrictions on such Shares have lapsed.




          (c) Transferability. Except as provided in this Section 8 or as the Administrator
determines, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated until the end of the applicable Period of Restriction.




          (d) Other Restrictions. The Administrator, in its sole discretion, may impose such
other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.




          (e) Removal of Restrictions. Except as otherwise provided in this Section 8, Shares
of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released
from escrow as soon as practicable after the last day of the Period of Restriction or at such other
time as the Administrator may determine. The Administrator, in its discretion, may accelerate the
time at which any restrictions will lapse or be removed.




          (f) Voting Rights. During the Period of Restriction, Service Providers holding Shares
of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares,
unless the Administrator determines otherwise.




          (g) Dividends and Other Distributions. During the Period of Restriction, Service
Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other
distributions paid with respect to such Shares, unless the Administrator provides otherwise. If
any such dividends or distributions are paid in Shares, the Shares will be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect
to which they were paid.




          (h) Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company
and again will become available for grant under the Plan.




     9. Restricted Stock Units.



          (a) Grant. Restricted Stock Units may be granted at any time and from time to time as
determined by the Administrator. After the Administrator determines that it will grant






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Restricted Stock Units, it will advise the Participant in an Award Agreement of the terms,
conditions, and restrictions related to the grant, including the number of Restricted Stock Units.




          (b) Vesting Criteria and Other Terms. The Administrator will set vesting criteria in
its discretion, which, depending on the extent to which the criteria are met, will determine the
number of Restricted Stock Units that will be paid out to the Participant. The Administrator may
set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals
(including, but not limited to, continued employment or service), or any other basis determined by
the Administrator in its discretion.




          (c) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the
Participant will be entitled to receive a payout as determined by the Administrator.
Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the
Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to
receive a payout.




          (d) Form and Timing of Payment. Payment of earned Restricted Stock Units will be made
as soon as practicable after the date(s) determined by the Administrator and set forth in the Award
Agreement. The Administrator, in its sole discretion, may settle earned Restricted Stock Units in
cash, Shares, or a combination of both.




          (e) Cancellation. On the date set forth in the Award Agreement, all unearned
Restricted Stock Units will be forfeited to the Company.




     10. Compliance With Code Section 409A. Awards will be designed and operated in such a
manner that they are either exempt from the application of, or comply with, the requirements of
Code Section 409A, except as otherwise determined in the sole discretion of the Administrator. The
Plan and each Award Agreement under the Plan is intended to meet the requirements of Code Section
409A and will be construed and interpreted in accordance with such intent, except as otherwise
determined in the sole discretion of the Administrator. To the extent that an Award or payment, or
the settlement or deferral thereof, is subject to Code Section 409A the Award will be granted,
paid, settled or deferred in a manner that will meet the requirements of Code Section 409A, such
that the grant, payment, settlement or deferral will not be subject to the additional tax or
interest applicable under Code Section 409A.



     11. Leaves of Absence/Transfer Between Locations. Unless the Administrator provides
otherwise, vesting of Awards granted hereunder will be suspended during any unpaid leave of
absence. A Participant will not cease to be an Employee in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the Company or between the Company,
its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed
three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the Company is not so
guaranteed, then six (6) months following the first (1st) day of such leave, any
Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock
Option and will be treated for tax purposes as a Nonstatutory Stock Option.



     12. Limited Transferability of Awards.



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          (a) Unless determined otherwise by the Administrator, Awards may not be sold, pledged,
assigned, hypothecated, or otherwise transferred in any manner other than by will or by the laws of
descent and distribution, and may be exercised, during the lifetime of the Participant, only by the
Participant. If the Administrator makes an Award transferable, such Award may only be transferred
(i) by will, (ii) by the laws of descent and distribution, or (iii) as permitted by Rule 701 of the
Securities Act of 1933, as amended (the “Securities Act”).




          (b) Further, until the Company becomes subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, or after the Administrator determines that it is, will, or may no longer
be relying upon the exemption from registration under the Exchange Act as set forth in Rule
12h-1(f) promulgated under the Exchange Act, an Option, or prior to exercise, the Shares subject to
the Option, may not be pledged, hypothecated or otherwise transferred or disposed of, in any
manner, including by entering into any short position, any “put equivalent position” or any “call
equivalent position” (as defined in Rule 16a-1(h) and Rule 16a-1(b) of the Exchange Act,
respectively), other than to (i) persons who are “family members” (as defined in Rule 701(c)(3) of
the Securities Act) through gifts or domestic relations orders, or (ii) to an executor or guardian
of the Participant upon the death or disability of the Participant. Notwithstanding the foregoing
sentence, the Administrator, in its sole discretion, may determine to permit transfers to the
Company or in connection with a Change in Control or other acquisition transactions involving the
Company to the extent permitted by Rule 12h-1(f).




     13. Adjustments; Dissolution or Liquidation; Merger or Change in Control.



          (a) Adjustments. In the event that any dividend or other distribution (whether in the
form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or
exchange of Shares or other securities of the Company, or other change in the corporate structure
of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or
enlargement of the benefits or potential benefits intended to be made available under the Plan,
will adjust the number and class of Shares that may be delivered under the Plan and/or the number,
class, and price of Shares covered by each outstanding Award; provided, however, that the
Administrator will make such adjustments to an Award required by Section 25102(o) of the California
Corporations Code to the extent the Company is relying upon the exemption afforded thereby with
respect to the Award.




          (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator will notify each Participant as soon as practicable
prior to the effective date of such proposed transaction. To the extent it has not been previously
exercised, an Award will terminate immediately prior to the consummation of such proposed action.




          (c) Merger or Change in Control. In the event of a merger or Change in Control, each
outstanding Award will be treated as the Administrator determines without a Participant’s consent,
including, without limitation, that (i) Awards will be assumed, or substantially equivalent Awards
will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with
appropriate adjustments as to the number and kind of shares and prices; (ii) upon written notice to
a Participant, that the Participant’s Awards will terminate upon or immediately prior to the
consummation of such merger or Change in Control (subject to the provisions of the proceeding






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paragraph); (iii) outstanding Awards will vest and become exercisable, realizable, or payable,
or restrictions applicable to an Award will lapse, in whole or in part prior to or upon
consummation of such merger or Change in Control, and, to the extent the Administrator determines,
terminate upon or immediately prior to the effectiveness of such merger of Change in Control; (iv)
(A) the termination of an Award in exchange for an amount of cash and/or property, if any, equal to
the amount that would have been attained upon the exercise of such Award or realization of the
Participant’s rights as of the date of the occurrence of the transaction (and, for the avoidance of
doubt, if as of the date of the occurrence of the transaction the Administrator determines in good
faith that no amount would have been attained upon the exercise of such Award or realization of the
Participant’s rights, then such Award may be terminated by the Company without payment), or (B) the
replacement of such Award with other rights or property selected by the Administrator in its sole
discretion; or (v) any combination of the foregoing. In taking any of the actions permitted under
this subsection 13(c), the Administrator will not be obligated to treat all Awards, all Awards held
by a Participant, or all Awards of the same type, similarly.




          In the event that the successor corporation does not assume or substitute for the Award (or
portion thereof), the Participant will fully vest in and have the right to exercise all of his or
her outstanding Options and Stock Appreciation Rights, including Shares as to which such Awards
would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted
Stock Units will lapse, and, with respect to Awards with performance-based vesting, all performance
goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target
levels and all other terms and conditions met. In addition, if an Option or Stock Appreciation
Right is not assumed or substituted in the event of a merger or Change in Control, the
Administrator will notify the Participant in writing or electronically that the Option or Stock
Appreciation Right will be exercisable for a period of time determined by the Administrator in its
sole discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of
such period.




          For the purposes of this subsection 13(c), an Award will be considered assumed if, following
the merger or Change in Control, the Award confers the right to purchase or receive, for each Share
subject to the Award immediately prior to the merger or Change in Control, the consideration
(whether stock, cash, or other securities or property) received in the merger or Change in Control
by holders of Common Stock for each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration chosen by the holders of
a majority of the outstanding Shares); provided, however, that if such consideration received in
the merger or Change in Control is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of an Option or Stock Appreciation Right or upon the
payout of a Restricted Stock Unit, for each Share subject to such Award, to be solely common stock
of the successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or Change in Control.




          Notwithstanding anything in this Section 13(c) to the contrary, an Award that vests, is earned
or paid-out upon the satisfaction of one or more performance goals will not be considered assumed
if the Company or its successor modifies any of such performance goals without the Participant’s
consent; provided, however, a modification to such performance goals only to reflect






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the successor corporation’s post-Change in Control corporate structure will not be deemed to
invalidate an otherwise valid Award assumption.




          Notwithstanding anything in this Section 13(c) to the contrary, if a payment under an Award
Agreement is subject to Code Section 409A and if the change in control definition contained in the
Award Agreement does not comply with the definition of “change of control” for purposes of a
distribution under Code Section 409A, then any payment of an amount that is otherwise accelerated
under this Section will be delayed until the earliest time that such payment would be permissible
under Code Section 409A without triggering any penalties applicable under Code Section 409A.




     14. Tax Withholding.



          (a) Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to
an Award (or exercise thereof), the Company will have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy
federal, state, local, foreign or other taxes (including the Participant’s FICA obligation)
required to be withheld with respect to such Award (or exercise thereof).




          (b) Withholding Arrangements. The Administrator, in its sole discretion and pursuant
to such procedures as it may specify from time to time, may permit a Participant to satisfy such
tax withholding obligation, in whole or in part by (without limitation) (i) paying cash, (ii)
electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equal
to the minimum statutory amount required to be withheld, (iii) delivering to the Company
already-owned Shares having a Fair Market Value equal to the statutory amount required to be
withheld, provided the delivery of such Shares will not result in any adverse accounting
consequences, as the Administrator determines in its sole discretion, or (iv) selling a sufficient
number of Shares otherwise deliverable to the Participant through such means as the Administrator
may determine in its sole discretion (whether through a broker or otherwise) equal to the amount
required to be withheld. The amount of the withholding requirement will be deemed to include any
amount which the Administrator agrees may be withheld at the time the election is made, not to
exceed the amount determined by using the maximum federal, state or local marginal income tax rates
applicable to the Participant with respect to the Award on the date that the amount of tax to be
withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered will
be determined as of the date that the taxes are required to be withheld.




     15. No Effect on Employment or Service. Neither the Plan nor any Award will confer
upon a Participant any right with respect to continuing the Participant’s relationship as a Service
Provider with the Company, nor will they interfere in any way with the Participant’s right or the
Company’s right to terminate such relationship at any time, with or without cause, to the extent
permitted by Applicable Laws.



     16. Date of Grant. The date of grant of an Award will be, for all purposes, the date
on which the Administrator makes the determination granting such Award, or such other later date as
is determined by the Administrator. Notice of the determination will be provided to each
Participant within a reasonable time after the date of such grant.



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     17. Term of Plan. Subject to Section 21 of the Plan, the Plan will become effective
upon its adoption by the Board. Unless sooner terminated under Section 18, it will continue in
effect for a term of ten (10) years from the later of (a) the effective date of the Plan, or (b)
the earlier of the most recent Board or stockholder approval of an increase in the number of Shares
reserved for issuance under the Plan.



     18. Amendment and Termination of the Plan; Amendment of Awards.



          (a) Amendment and Termination. The Board may at any time amend, alter, suspend or
terminate the Plan.




          (b) Stockholder Approval. The Company will obtain stockholder approval of any Plan
amendment to the extent necessary and desirable to comply with Applicable Laws. The repricing or
exchange of any Award pursuant to an Exchange Program shall be expressly permitted under the Plan
without the requirement of additional stockholder approval.




          (c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise
between the Participant and the Administrator, which agreement must be in writing and signed by the
Participant and the Company. Termination of the Plan will not affect the Administrator’s ability
to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior
to the date of such termination.




          (d) Amendment of Awards. The Board, at any time, and from time to time, may amend the
terms of any one or more Awards; provided, however, that no such amendment will impair the rights
of any Participant, unless mutually agreed otherwise between the Participant and the Administrator,
which agreement must be in writing and signed by the Participant and the Company (it being
understood that no action taken by the Board that is expressly permitted under the Plan, including,
without limitation, any actions described in Section 13 hereof, shall constitute an amendment of an
Award for such purpose). Notwithstanding the foregoing, subject to the limitations of applicable
law, if any, and without an affected Participant’s consent, the Board may amend the terms of any
one or more Awards if necessary to bring the Award into compliance with Section 409A of the Code
and Department of Treasury regulations and other interpretive guidance issued thereunder.




     19. Conditions Upon Issuance of Shares.



          (a) Legal Compliance. Shares will not be issued pursuant to the exercise of an Award
unless the exercise of such Award and the issuance and delivery of such Shares will comply with
Applicable Laws and will be further subject to the approval of counsel for the Company with respect
to such compliance.




          (b) Investment Representations. As a condition to the exercise of an Award, the
Company may require the person exercising such Award to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.







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     20. 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 any Shares hereunder, will relieve the Company of
any liability in respect of the failure to issue or sell such Shares as to which such requisite
authority will not have been obtained.



     21. Stockholder Approval. The Plan will be subject to approval by the stockholders of
the Company within twelve (12) months after the date the Plan is adopted by the Board. Such
stockholder approval will be obtained in the manner and to the degree required under Applicable
Laws.



     22. Information to Participants. Beginning on the earlier of (i) the date that the
aggregate number of Participants under this Plan is five hundred (500) or more and the Company is
relying on the exemption provided by Rule 12h-1(f)(1) under the Exchange Act and (ii) the date that
the Company is required to deliver information to Participants pursuant to Rule 701 under the
Securities Act, and until such time as the Company becomes subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, is no longer relying on the exemption provided by Rule
12h-1(f)(1) under the Exchange Act or is no longer required to deliver information to Participants
pursuant to Rule 701 under the Securities Act, the Company shall provide to each Participant the
information described in paragraphs (e)(3), (4), and (5) of Rule 701 under the Securities Act not
less frequently than every six (6) months with the financial statements being not more than 180
days old and with such information provided either by physical or electronic delivery to the
Participants or by written notice to the Participants of the availability of the information on an
Internet site that may be password-protected and of any password needed to access the information.
The Company may request that Participants agree to keep the information to be provided pursuant to
this section confidential. If a Participant does not agree to keep the information to be provided
pursuant to this section confidential, then the Company will not be required to provide the
information unless otherwise required pursuant to Rule 12h-1(f)(1) under the Exchange Act or Rule
701 of the Securities Act.



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