life_s8-ex401.htm


    Exhibit
4.1

     

    Life
Exchange, Inc.

     

    2009 Employee Stock Option
Plan

     

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

     

    (a) attract
and retain the best available personnel for positions of substantial
responsibility,

     

    (b) provide
incentives to individuals who perform services to the Company, and

     

    (c) 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, Restricted Stock Units, Performance Units
and Performance Shares as the Administrator may determine.

     

    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, Restricted Stock Units, Performance Units and Performance
Shares as the Administrator may determine.

     

    (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) 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;
provided, however, that for purposes of this subsection (i), the acquisition of
additional stock by any one Person, who is considered to own more than 50% of
the total voting power of the stock of the Company will not be considered a
Change in Control; or

     

    (ii) 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 effectively control
the Company, the acquisition of additional control of the Company by the same
Person will not be considered a Change in Control; or

     

    
      
        
        

      

      
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    (iii) 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; provided,
however, that for purposes of this subsection (iii), the following will not
constitute a change in the ownership of a substantial portion of the Company’s
assets: (A) a transfer to an entity that is controlled by the Company’s
stockholders immediately after the transfer, or (B) a transfer of assets by the
Company to: (1) a stockholder of the Company (immediately before the asset
transfer) in exchange for or with respect to the Company’s stock, (2) an entity,
50% or more of the total value or voting power of which is owned, directly or
indirectly, by the Company, (3) a Person, that owns, directly or indirectly, 50%
or more of the total value or voting power of all the outstanding stock of the
Company, or (4) an entity, at least 50% of the total value or voting power of
which is owned, directly or indirectly, by a Person described in this subsection
(iii)(B)(3). 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.

     

    Notwithstanding
the foregoing, a transaction shall not be deemed a Change in Control unless the
transaction qualifies as a change in the ownership of the Company, change in the
effective control of the Company or a change in the ownership of a substantial
portion of the Company’s assets, each within the meaning of Section 409A of the
Code and any proposed or final Treasury Regulations and Internal Revenue Service
guidance that has been promulgated or may be promulgated thereunder from time to
time.

     

    (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 in accordance with Section 4 hereof.

     

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

     

    (j) “Company” means Life Exchange,
Inc., a Nevada 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) “Determination Date” means the
latest possible date that will not jeopardize the qualification of an Award
granted under the Plan as “performance-based compensation” under Section 162(m)
of the Code.

     

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

     

    (n) “Disability” means total and
permanent disability as defined in Section 22(e)(3) of the Code, 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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    (o) “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.

     

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

     

    (q) “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 lower exercise prices and
different terms), Awards of a different type, and/or cash, (ii) Participants
would have the opportunity to sell 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. The Administrator
will determine the terms and conditions of any Exchange Program in its sole
discretion.

     

    (r) “Fair Market Value” means, as
of any date, the value of the Common Stock as the Administrator may determine in
good faith by reference to the price of such stock as follows: (i) if the Common
Stock is listed on the Nasdaq Stock Market, the last sale price as quoted on the
Nasdaq Stock Market on the trading day immediately preceding the date for which
the determination is being made or, in the event that no such sale takes place
on such day, the average of the reported closing bid and asked prices on such
day, or, (ii) if the Common Stock is listed on a national securities exchange,
the last reported sale price on the principal national securities exchange on
which the Common Stock is listed or admitted to trading on the trading day
immediately preceding the date for which the determination is being made or, if
no such reported sale takes place on such day, the average of the closing bid
and asked prices on such day on the principal national securities exchange on
which the Common Stock is listed or admitted to trading, or, (iii) if the Common
Stock is not quoted on such Nasdaq Stock Market nor listed or admitted to
trading on a national securities exchange, then the average of the closing bid
and asked prices on the day immediately preceding the date for which the
determination is being made in the over-the-counter market as reported by Nasdaq
or, (iv) if bid and asked prices for the Common Stock on such day shall not have
been reported through Nasdaq, the average of the bid and asked prices for such
day as furnished by any New York Stock Exchange member firm regularly making a
market in the Common Stock selected for such purpose by the Board or a committee
thereof, or, (v) if none of the foregoing is applicable, then the fair market
value of the Common Stock as determined in good faith by the Administrator in
its sole discretion.

     

    (s) “Fiscal Year” means the fiscal
year of the Company.

     

    (t) “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 Section 422 of the Code and the
regulations promulgated thereunder.

     

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

     

    (v) “Officer” means a person who
is an officer of the Company within the meaning of Section 16 of the Exchange
Act and the rules and regulations promulgated thereunder.

     

    (w) “Option” means a stock option
granted pursuant to Section 6 of the Plan.

     

    
      
        
        

      

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

     

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

     

    (z) “Performance Goals” will have
the meaning set forth in Section 11 of the Plan.

     

    (aa) “Performance Period” means any
Fiscal Year of the Company or such other period as determined by the
Administrator in its sole discretion.

     

    (bb) “Performance Share” means an
Award denominated in Shares which may be earned in whole or in part upon
attainment of Performance Goals or other vesting criteria as the Administrator
may determine pursuant to Section 10.

     

    (cc) “Performance Unit” means an
Award which may be earned in whole or in part upon attainment of Performance
Goals or other vesting criteria as the Administrator may determine and which may
be settled for cash, Shares or other securities or a combination of the
foregoing pursuant to Section 10.

     

    (dd) “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.

     

    (ee) “Plan” means this 2009
Employee Stock Option Plan.

     

    (ff) “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.

     

    (gg) “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.

     

    (hh) “Rule 16b-3” means Rule 16b-3
of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion
is being exercised with respect to the Plan.

     

    (ii) “Section 16(b)” means Section
16(b) of the Exchange Act.

     

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

     

    (kk) “Share” means a share of the
Common Stock, as adjusted in accordance with Section 14 of the
Plan.

     

    (ll) “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.

     

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

     

    3. Stock Subject to the
Plan.

     

    (a) Subject
to the provisions of Section 14 of the Plan, the maximum aggregate number of
Shares that may be awarded and sold under the Plan is 35,343,000 Shares. The
Shares may be authorized, but unissued, or reacquired Common Stock. The maximum
number of Shares that may be issued upon the exercise of Incentive Stock Options
granted under the Plan shall not exceed the limits under Code Section 422 (as
adjusted pursuant to Section 14).

     

    
      
        
        

      

      
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    (b) Full Value Awards. Any Shares
subject to Awards granted with an exercise price less than the Fair Market Value
on the date of grant of such Awards will be counted against the numerical limits
of this Section 3 as three (3) Shares for every one (1) Share subject thereto.
Further, if Shares acquired pursuant to any such Award are forfeited or
repurchased by the Company and would otherwise return to the Plan pursuant to
Section 3(c), three (3) times the number of Shares so forfeited or repurchased
will return to the Plan and will again become available for
issuance.

     

    (c) 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, Restricted Stock Units, Performance Shares or Performance Units, is
forfeited to or repurchased by the Company, the unpurchased Shares (or for
Awards other than Options and 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). Upon exercise of
a Stock Appreciation Right settled in Shares, the gross number of Shares covered
by the portion of the Award so exercised will cease to be available under the
Plan. 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 unvested Shares of
Restricted Stock, Restricted Stock Units, Performance Shares or Performance
Units are repurchased by the Company or are forfeited to the Company, such
Shares will become available for future grant under the Plan. Shares used to pay
the withholding tax related to an Award or to pay for the exercise price of an
Award will not become available for future grant or sale under the 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 provisions of this Section 3(c),
subject to adjustment provided in Section 14, 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 Section 422 of the Code, any Shares that become available for issuance
under the Plan under this Section 3(c).

     

    (d) 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) Section 162(m). To the extent
that the Administrator determines it to be desirable to qualify Awards granted
hereunder as “performance-based compensation” within the meaning of Section
162(m) of the Code, the Plan will be administered by a Committee of two (2) or
more “outside directors” within the meaning of Section 162(m) of the
Code.

     

    (iii) Rule 16b-3. To the extent
desirable to qualify transactions hereunder as exempt under Rule 16b-3, the
transactions contemplated hereunder will be structured to satisfy the
requirements for exemption under Rule 16b-3.

     

    
      
        
        

      

      
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    (iv) 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 terms and conditions, not inconsistent with the terms of the Plan,
of any Award granted hereunder;

     

    (iv) to
determine the terms and conditions of any, and , but only with the prior
approval of the Company’s stockholders, to institute an Exchange
Program;

     

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

     

    (vi) 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;

     

    (vii) to modify
or amend each Award (subject to Section 19(c) of the Plan). Notwithstanding the
previous sentence, the Administrator may not, without the approval of the
Company’s stockholders: (A) modify or amend an Option or Stock Appreciation
Right to reduce the exercise price of such Option or Stock Appreciation Right
after it has been granted (except for adjustments made pursuant to Section 14),
or (B) cancel any outstanding Option or Stock Appreciation Right and immediately
replace it with a new Option or Stock Appreciation Right with a lower exercise
price;

     

    (viii) 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;

     

    (ix) to allow
a Participant to defer the receipt of the payment of cash or the delivery of
Shares that would otherwise be due to such Participant under an Award pursuant
to such procedures as the Administrator may determine; and

     

    (x) 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, Restricted Stock, Restricted Stock Units, Stock Appreciation
Rights, Performance Units, Performance Shares, and such other cash or stock
awards as the Administrator determines may be granted to Service Providers.
Incentive Stock Options may be granted only to Employees.

     

    6. Stock Options.

     

    (a) Limitations.

     

    
      
        
        

      

      
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    (i) Each
Option will be designated in the Award Agreement as either an Incentive Stock
Option or a Nonstatutory Stock Option. However, notwithstanding such
designation, 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 $100,000, such Options will be treated as
Nonstatutory Stock Options. For purposes of this Section 6(a), 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.

     

    (ii) The
Administrator will have complete discretion to determine the number of Shares
subject to an Option granted to any Participant, provided that during any Fiscal
Year, no Participant will be granted Option or Stock Appreciation Rights
covering more than, in the aggregate, 35,343,000 Shares.

     

    (b) Term of Option. The
Administrator will determine the term of each Option in its sole discretion;
provided, however, that the term will be no more than ten (10) years from the
date of grant thereof. Moreover, 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 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.

     

    (c) Option Exercise Price and
Consideration.

     

    (i) Exercise Price. The per share
exercise price for the Shares to be issued pursuant to exercise of an Option
will be determined by the Administrator, but will be no less than 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, at the time the Incentive
Stock Option is granted, owns stock representing more than 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 110% of the Fair Market Value per
Share on the date of grant. Notwithstanding the foregoing provisions of this
Section 6(c), Options may be granted with a per Share exercise price of less
than 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, Section 424(a) of the
Code.

     

    (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(s) of consideration for
exercising an Option, including the method of payment, to the extent permitted
by Applicable Laws (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of, without
limitation: (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 shall be exercised and provided that accepting
such Shares, in the sole discretion of the Administrator, shall not result in
any adverse accounting consequences to the Company, (5) consideration received
by the Company under a cashless exercise program implemented by the Company in
connection with the Plan, (6) such other consideration and method of payment for
the issuance of Shares to the extent permitted by Applicable Laws, or (7) any
combination of the foregoing methods of payment. In making its determination as
to the type of consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to benefit the
Company.

     

     

    
      
         

      

      
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    (d) Exercise of
Option.

     

    (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 specifies 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 any applicable
withholding taxes). 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 14 of the Plan.

     

    (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 such period
of time as is specified in the Award Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Award Agreement). In the absence of
a specified time in the Award Agreement, the Option will remain exercisable for
three (3) months following the Participant’s 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 such period of
time as is specified in the Award Agreement to the extent the Option is vested
on the date of termination (but in no event later than the expiration of the
term of such Option as set forth in the Award Agreement). In the absence of a
specified time in the Award Agreement, the Option will remain exercisable for
twelve (12) months following the Participant’s 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 following
the Participant’s death within such period of time as is specified in the Award
Agreement to the extent that the Option is vested on the date of death (but in
no event may the option be exercised later than the expiration of the term of
such Option as set forth in the Award Agreement), by the Participant’s
designated beneficiary, provided such beneficiary has been designated prior to
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. In the absence of a
specified time in the Award Agreement, the Option will remain exercisable for
twelve (12) months following Participant’s death. 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.

     

     

    
      
         

      

      
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    (v) Other Termination. A
Participant’s Award Agreement may also provide that if the exercise of the
Option following the termination of Participant’s status as a Service Provider
(other than upon the Participant’s death or Disability) would result in
liability under Section 16(b), then the Option will terminate on the earlier of
(A) the expiration of the term of the Option set forth in the Award Agreement,
or (B) the 10th day after the last date on which such exercise would result in
such liability under Section 16(b), but in no event later than the original full
term of the Option. Finally, a Participant’s Award Agreement may also provide
that if the exercise of the Option following the termination of the
Participant’s status as a Service Provider (other than upon the Participant’s
death or Disability) would be prohibited at any time solely because the issuance
of Shares would violate the registration requirements under the Securities Act,
then the Option will terminate on the earlier of (A) the expiration of the term
of the Option, or (B) the expiration of a period of three (3) months after the
termination of the Participant’s status as a Service Provider during which the
exercise of the Option would not be in violation of such registration
requirements.

     

    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 Stock
Appreciation Rights granted to any Participant, provided that during any Fiscal
Year, no Participant will be granted Options or Stock Appreciation Rights
covering more than, in the aggregate, 35,343,000 Shares.

     

    (c) Exercise Price and Other
Terms. 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, provided, however, that the exercise
price will be not less than 100% of the Fair Market Value of a Share on the date
of grant.

     

    (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; provided, however, that the term will be no more
than ten (10) years from the date of grant thereof. Notwithstanding the
foregoing, the rules of Section 6(d) also will apply to Stock Appreciation
Rights.

     

    
      
        
        

      

      
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    (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.

     

    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, as specified in the Award Agreement.

     

    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. Notwithstanding the foregoing sentence, during any Fiscal Year no
Participant will be granted more than an aggregate of 35,343,000 Shares of
Restricted Stock, Restricted Stock Units and Performance Shares. Unless the
Administrator determines otherwise, Shares of Restricted Stock will be held by
the Company as escrow agent until the restrictions on such Shares have
lapsed.

     

    (c) Transferability. Except as
provided in this Section 8, 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.
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 otherwise provided
in the Award Agreement. 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.

     

    
      
        
        

      

      
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    (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.

     

    (i) Section 162(m) Performance
Restrictions. For purposes of qualifying grants of Restricted Stock as
“performance-based compensation” under Section 162(m) of the Code, the
Administrator, in its discretion, may set restrictions based upon the
achievement of Performance Goals. The Performance Goals will be set by the
Administrator on or before the Determination Date. In granting Restricted Stock
which is intended to qualify under Section 162(m) of the Code, the Administrator
will follow any procedures determined by it from time to time to be necessary or
appropriate to ensure qualification of the Award under Section 162(m) of the
Code (e.g., in determining the Performance Goals).

     

    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. Each Restricted Stock Unit grant will be evidenced by an Award
Agreement that will specify such other terms and conditions as the
Administrator, in its sole discretion, will determine, including all terms,
conditions, and restrictions related to the grant, the number of Restricted
Stock Units and the form of payout, which, subject to Section 9(d), may be left
to the discretion of the Administrator. Notwithstanding anything to the contrary
in this subsection (a), during any Fiscal Year no Participant will be granted
more than an aggregate 35,343,000 Shares of Restricted Stock, Restricted Stock
Units and Performance Shares.

     

    (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 status as a Service Provider), or any other basis
determined by the Administrator in its discretion. After the grant of Restricted
Stock Units, the Administrator, in its sole discretion, may reduce or waive any
restrictions for such Restricted Stock Units. Each Award of Restricted Stock
Units will be evidenced by an Award Agreement that will specify the vesting
criteria, and such other terms and conditions as the Administrator, in its sole
discretion will determine. The Administrator, in its discretion, may accelerate
the time at which any restrictions will lapse or be removed.

     

    (c) Earning Restricted Stock
Units. Upon meeting the applicable vesting criteria, the Participant will
be entitled to receive a payout as specified in the Award
Agreement.

     

    (d) Form and Timing of Payment.
Payment of earned Restricted Stock Units will be made as soon as practicable
after the date(s) set forth in the Award Agreement. The Administrator, in its
sole discretion, may pay earned Restricted Stock Units in cash, Shares, or a
combination thereof. Shares represented by Restricted Stock Units that are fully
paid in cash again will be available for grant under the Plan.

     

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

     

    (f) Section 162(m) Performance
Restrictions. For purposes of qualifying grants of Restricted Stock Units
as “performance-based compensation” under Section 162(m) of the Code, the
Administrator, in its discretion, may set restrictions based upon the
achievement of Performance Goals. The Performance Goals will be set by the
Administrator on or before the Determination Date. In granting Restricted Stock
Units which are intended to qualify under Section 162(m) of the Code, the
Administrator will follow any procedures determined by it from time to time to
be necessary or appropriate to ensure qualification of the Award under Section
162(m) of the Code (e.g., in determining the Performance Goals).

     

     

    
      
         

      

      
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    10. Performance Units and Performance
Shares.

     

    (a) Grant of Performance
Units/Shares. Performance Units and Performance Shares 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. The Administrator will have complete
discretion in determining the number of Performance Units/Shares granted to each
Participant.

     

    (b) Value of Performance
Units/Shares. Each Performance Unit will have an initial value that is
established by the Administrator on or before the date of grant. Each
Performance Share will have an initial value equal to the Fair Market Value of a
Share on the date of grant.

     

    (c) Performance Objectives and Other
Terms. The Administrator will set performance objectives or other vesting
provisions. 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 status as a Service Provider), or any
other basis determined by the Administrator in its discretion.

     

    (d) Earning of Performance
Units/Shares. After the applicable Performance Period has ended, the
holder of Performance Units/Shares will be entitled to receive a payout of the
number of Performance Units/Shares earned by the Participant over the
Performance Period, to be determined as a function of the extent to which the
corresponding performance objectives or other vesting provisions have been
achieved. After the grant of a Performance Unit/Share, the Administrator, in its
sole discretion, may reduce or waive any performance objectives or other vesting
provisions for such Performance Unit/Share.

     

    (e) Form and Timing of Payment of
Performance Units/Shares. Payment of earned Performance Units/Shares will
be made as soon as practicable after the expiration of the applicable
Performance Period. The Administrator, in its sole discretion, may pay earned
Performance Units/Shares in the form of cash, in Shares (which have an aggregate
Fair Market Value equal to the value of the earned Performance Units/Shares at
the close of the applicable Performance Period) or in a combination thereof, all
as specified in the Award Agreement.

     

    (f) Cancellation of Performance
Units/Shares. On the date set forth in the Award Agreement, all unearned
or unvested Performance Units/Shares will be forfeited to the Company, and again
will be available for grant under the Plan.

     

    (g) Section 162(m) Performance
Restrictions. For purposes of qualifying grants of Performance
Units/Shares as “performance-based compensation” under Section 162(m) of the
Code, the Administrator, in its discretion, may set restrictions based upon the
achievement of Performance Goals. The Performance Goals will be set by the
Administrator on or before the Determination Date. In granting Performance
Units/Shares which are intended to qualify under Section 162(m) of the Code, the
Administrator will follow any procedures determined by it from time to time to
be necessary or appropriate to ensure qualification of the Award under Section
162(m) of the Code (e.g., in determining the Performance Goals).

     

    
      
        
        

      

      
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    11. Performance Goals. The
granting and/or vesting of Awards of Restricted Stock, Restricted Stock Units,
Performance Shares and Performance Units the Plan may be made subject to the
attainment of performance goals relating to one or more business criteria within
the meaning of Section 162(m) of the Code and may provide for a targeted level
or levels of achievement (“Performance Goals”) including (a) earnings per share,
(b) operating cash flow, (c) operating income, (d) profit (e) return on assets,
(f) return on equity, (g) return on sales, (h) revenue, (i) stock Price, (j)
growth in stockholder value relative to the moving average of the S&P 500
Index or another index, (k) gross margin, (l) operating expenses or operating
expenses as a percentage of revenue, (m) earnings (which may include earnings
before interest and taxes, earnings before taxes and net earnings), (n) return
on capital, (o) return on assets or net assets, (p) return on investment, (q)
operating margin, (r) market share, (s) contract awards or backlog, (t) overhead
or other expense reduction, (u) objective customer indicators, (v) new product
invention or innovation, (w) attainment of research and development milestones,
and (x) total stockholder return. Any Performance Goals may be used to measure
the performance of the Company as a whole or a Subsidiary or other business unit
or segment of the Company and may be measured relative to a peer group or index.
Any criteria used may be measured, as applicable (i) in absolute terms, (ii)
against another company or companies, on a per-share basis, and/or (iii) on a
pre-tax or post-tax basis (if applicable). The Performance Goals may differ from
participant to participant and from Award to Award. In establishing the
Performance Goals, the Administrator shall determine whether to determine such
goals in accordance with United States Generally Accepted Accounting Principles
(“GAAP”) or to exclude any items otherwise includable under GAAP.

     

    12. 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
Service Provider 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 and one day following the commencement 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.

     

    13. Transferability of Awards.
Unless determined otherwise by the Administrator, an Award may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Participant, only by the Participant. If the
Administrator makes an Award transferable, such Award will contain such
additional terms and conditions as the Administrator deems
appropriate.

     

    14. 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, and the numerical Share limits set forth in Sections 3, 6, 7, 8, 9, and
10.

     

    
      
        
        

      

      
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    (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) Change in Control. In the
event of a merger or Change in Control, each outstanding Award will be treated
as the Administrator determines, including, without limitation, that each Award
will be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation (the
“Successor Corporation”). The Administrator will not be required to treat all
Awards similarly in the transaction.

     

    In the
event that the Successor Corporation does not assume or substitute for the
Award, 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 will lapse, and, with respect to Restricted
Stock Units, Performance Shares and Performance Units, all Performance Goals or
other vesting criteria will be deemed achieved at target levels and all other
terms and conditions met. In addition, if an Option or Stock Appreciation Right
is not assumed or substituted for in the event of a Change in Control, the
Administrator will notify the Participant in writing or electronically that the
Option or Stock Appreciation Right will be fully vested and exercisable for a
period of time determined by the Administrator in its sole discretion (but in no
event longer than the original full term), and the Option or Stock Appreciation
Right will terminate upon the expiration of such period.

     

    For the
purposes of this subsection (c), an Award will be considered assumed if,
following the Change in Control, the Award confers the right to purchase or
receive, for each Share subject to the Award immediately prior to the Change in
Control, the consideration (whether stock, cash, or other securities or
property) or, in the case of a Stock Appreciation Right upon the exercise of
which the Administrator determines to pay cash or a Performance Share or
Performance Unit which the Administrator can determine to pay in cash, the fair
market value of the consideration 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 Change in Control
is not solely common stock of the Successor Corporation, 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, Performance Share or Performance Unit,
for each Share subject to such Award (or in the case of Performance Units, the
number of implied shares determined by dividing the value of the Performance
Units by the per share consideration received by holders of Common Stock in the
Change in Control), to be solely common stock of the Successor Corporation equal
in fair market value to the per share consideration received by holders of
Common Stock in the Change in Control.

     

    
      
        
        

      

      
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    Notwithstanding
anything in this Section 14(c) to the contrary, an Award that vests, is earned
or paid-out upon the satisfaction of one or more Performance Goals or other
performance criteria will not be considered assumed if the Company or its
successor modifies any of such Performance Goals or other performance criteria
without the Participant’s consent; provided, however, a modification to such
Performance Goals or other performance criteria only to reflect the Successor
Corporation’s post-Change in Control corporate structure will not be deemed to
invalidate an otherwise valid Award assumption.

     

    15. 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 cash or
Shares having a Fair Market Value equal to the minimum amount required to be
withheld, (iii) delivering to the Company already-owned Shares having a Fair
Market Value equal to the amount required to be withheld, 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 minimum statutory federal, state or
local income and employment tax withholding 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.

     

    16. 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.

     

    17. 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.

     

    18. Term of Plan. Subject to
Section 22 of the Plan, the Plan will become effective upon its adoption by the
Board. It will continue in effect for a term of ten (10) years unless terminated
earlier under Section 19 of the Plan.

     

    19. Amendment and Termination of the
Plan.

     

    (a) Amendment and Termination.
The Administrator 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.

     

    
      
        
        

      

      
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    (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.

     

    20. 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.

     

    21. 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.

     

    22. 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. Such stockholder approval
will be obtained in the manner and to the degree required under Applicable
Laws.

     

     

     

     

     

    16