**3. ****ELIGIBILITY**. ISOs may be granted only to Employees. All other Awards may begranted to Employees, Consultants, Directors and Outside Directors of the Company or any Parent orSubsidiary of the Company; provided such Consultants, Directors and Outside Directorsrender bona fide services not in connection with the offer and sale of securities in acapital-raising transaction. No Participant will be eligible to receive more than Three HundredThirty-Three Thousand Three Hundred Thirty-Three (333,333) Shares in any calendar year under this Plan pursuantto the grant of Awards except that new Employees of the Company or of a Parent or Subsidiary of theCompany (including new Employees who are also officers and directors of the Company or any Parentor Subsidiary of the Company) are eligible to receive up to a maximum of Six Hundred Sixty-SixThousand Six Hundred Sixty-Six (666,666) Shares in the calendar year in which they commence their employment.**4.****ADMINISTRATION**.4.1 Committee Composition; Authority. This Plan will be administered by the Committeeor by the Board acting as the Committee. Subject to the general purposes, terms and conditions ofthis Plan, and to the direction of the Board, the Committee will have full power to implement andcarry out this Plan, except, however, the Board shall establish the terms for the grant of an Awardto Outside Directors. The Committee will have the authority to:(a) construe and interpret this Plan, any Award Agreement and any other agreement or documentexecuted pursuant to this Plan;(b) prescribe, amend and rescind rules and regulations relating to this Plan or any Award;(c) select persons to receive Awards;(d) determine the form and 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, theexercise price, the time or times when Awards may be exercised (which may be based on performancecriteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction orlimitation regarding any Award or the Shares relating thereto, based in each case on such factorsas the Committee will determine;(e) determine the number of Shares or other consideration subject to Awards;(f) determine the Fair Market Value in good faith, if necessary;(g) determine whether Awards will be granted singly, in combination with, in tandem with, inreplacement of, or as alternatives to, other Awards under this Plan or any other incentive orcompensation plan of the Company or any Parent or Subsidiary of the Company;(h) grant waivers of Plan or Award conditions;(i) determine the vesting, exercisability and payment of Awards;(j) correct any defect, supply any omission or reconcile any inconsistency in this Plan, anyAward or any Award Agreement;(k) determine whether an Award has been earned;(l) determine the terms and conditions of any, and to institute any Exchange Program;(m) reduce or waive any criteria with respect to Performance Factors;
 
 

 
(n) adjust Performance Factors to take into account changes in law and accounting or tax rulesas the Committee deems necessary or appropriate to reflect the impact of extraordinary or unusualitems, events or circumstances to avoid windfalls or hardships provided that such adjustments areconsistent with the regulations promulgated under Section 162(m) of the Code with respect topersons whose compensation is subject to Section 162(m) of the Code; and(o) make all other determinations necessary or advisable for the administration of this Plan.4.2 Committee Interpretation and Discretion. Any determination made by the Committeewith respect to any Award shall be made in its sole discretion at the time of grant of the Awardor, unless in contravention of any express term of the Plan or Award, at any later time, and suchdetermination shall be final and binding on the Company and all persons having an interest in anyAward under the Plan. Any dispute regarding the interpretation of the Plan or any Award Agreementshall be submitted by the Participant or Company to the Committee for review. The resolution ofsuch a dispute by the Committee shall be final and binding on the Company and the Participant. TheCommittee may delegate to one or more executive officers the authority to review and resolvedisputes with respect to Awards held by Participants who are not Insiders, and such resolutionshall be final and binding on the Company and the Participant.4.3 Section 162(m) of the Code and Section 16 of the Exchange Act. When necessary ordesirable for an Award to qualify as “performance-based compensation” under Section 162(m) of theCode the Committee shall include at least two persons who are “outside directors” (as defined underSection 162(m) of the Code) and at least two (or a majority if more than two then serve on theCommittee) such “outside directors” shall approve the grant of such Award and timely determine (asapplicable) the Performance Period and any Performance Factors upon which vesting or settlement ofany portion of such Award is to be subject. When required by Section 162(m) of the Code, prior tosettlement of any such Award at least two (or a majority if more than two then serve on theCommittee) such “outside directors” then serving on the Committee shall determine and certify inwriting the extent to which such Performance Factors have been timely achieved and the extent towhich the Shares subject to such Award have thereby been earned. Awards granted to Insiders must beapproved by two or more “non-employee directors” (as defined in the regulations promulgated underSection 16 of the Exchange Act).**5. ****OPTIONS**. The Committee may grant Options to Participants and will determinewhether such Options will be Incentive Stock Options within the meaning of the Code (“***ISOs***”) orNonqualified Stock Options (“***NQSOs***”), the number of Shares subject to the Option, the ExercisePrice of the Option, the period during which the Option may be exercised, and all other terms andconditions of the Option, subject to the following:5.1 Option Grant. Each Option granted under this Plan will identify the Option as anISO or an NQSO. An Option may be, but need not be, awarded upon satisfaction of such PerformanceFactors during any Performance Period as are set out in advance in the Participant’s individualAward Agreement. If the Option is being earned upon the satisfaction of Performance Factors, thenthe Committee will: (x) determine the nature, length and starting date of any Performance Periodfor each Option; and (y) select from among the Performance Factors to be used to measure theperformance, if any. Performance Periods may overlap and Participants may participatesimultaneously with respect to Options that are subject to different performance goals and othercriteria.5.2 Date of Grant. The date of grant of an Option will be the date on which theCommittee makes the determination to grant such Option, or a specified future date. The AwardAgreement and a copy of this Plan will be delivered to the Participant within a reasonable timeafter the granting of the Option.5.3 Exercise Period. Options may be exercisable within the times or upon theconditions as set forth in the Award Agreement governing such Option; provided,however, that no Option will be exercisable after the expiration of ten (10) years from thedate the Option is granted; and provided further that no ISO granted to a person who, atthe time the ISO is granted, directly or by attribution owns more than ten percent (10%) of thetotal combined voting power of all classes of stock of the Company or of any Parent or Subsidiaryof the Company (“***Ten Percent Shareholder***”) will be exercisable after the expiration of five (5)years from the date the ISO is granted. The Committee also may provide for Options to becomeexercisable at one time or from time to time, periodically or otherwise, in such number of Sharesor percentage of Shares as the Committee determines.
 
 

 
5.4 Exercise Price. The Exercise Price of an Option will be determined by theCommittee whenthe Option is granted; provided that: (i) the Exercise Price of an ISO will be not less thanone hundred percent (100%) of the Fair Market Value of the Shares on the date of grant and (ii) theExercise Price of any ISO granted to a Ten Percent Shareholder will not be less than one hundredten percent (110%) of the Fair Market Value of the Shares on the date of grant. Payment for theShares purchased may be made in accordance with Section 11. The Exercise Price of a NQSO may beless than one hundred percent (100%) of the Fair Market Value per Share on the date of grant in theCommittee’s discretion.5.5 Method of Exercise. Any Option granted hereunder will be exercisable according tothe terms of the Plan and at such times and under such conditions as determined by the Committeeand set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share. AnOption will be deemed exercised when the Company receives: (i) notice of exercise (in such form asthe Committee 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 withapplicable withholding taxes). Full payment may consist of any consideration and method of paymentauthorized by the Committee and permitted by the Award Agreement and the Plan. Shares issued uponexercise of an Option will be issued in the name of the Participant. Until the Shares are issued(as evidenced by the appropriate entry on the books of the Company or of a duly authorized transferagent of the Company), no right to vote or receive dividends or any other rights as a stockholderwill exist with respect to the Shares, notwithstanding the exercise of the Option. The Company willissue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustmentwill be made for a dividend or other right for which the record date is prior to the date theShares are issued, except as provided in Section 2.6 of the Plan. Exercising an Option in anymanner will decrease the number of Shares thereafter available, both for purposes of the Plan andfor sale under the Option, by the number of Shares as to which the Option is exercised.5.6 Termination. The exercise of an Option will be subject to the following (exceptas may be otherwise provided in an Award Agreement):(a) If the Participant is Terminated for any reason except for Cause or the Participant’sdeath or Disability, then the Participant may exercise such Participant’s Options only to theextent that such Options would have been exercisable by the Participant on the Termination Date nolater than three (3) months after the Termination Date (or such shorter time period or longer timeperiod not exceeding five (5) years as may be determined by the Committee, with any exercise beyondthree (3) months after the Termination Date deemed to be an NQSO), but in any event no later thanthe expiration date of the Options.(b) If the Participant is Terminated because of the Participant’s death (or the Participantdies within three (3) months after a Termination other than for Cause or because of theParticipant’s Disability), then the Participant’s Options may be exercised only to the extent thatsuch Options would have been exercisable by the Participant on the Termination Date and must beexercised by the Participant’s legal representative, or authorized assignee, no later than twelve(12) months after the Termination Date (or such shorter time period not less than six (6) months orlonger time period not exceeding five (5) years as may be determined by the Committee, with anyexercise beyond (a) three (3) months after the Termination Date when the Termination is for anyreason other than the Participant’s death, or (b) twelve (12) months after the Termination Datewhen the Termination is for the Participant’s death, deemed to be an NQSO), but in any event nolater than the expiration date of the Options.(c) If the Participant is Terminated because of the Participant’s Disability, then theParticipant’s Options may be exercised only to the extent that such Options would have beenexercisable by the Participant on the Termination Date and must be exercised by the Participant (orthe Participant’s legal representative or authorized assignee) no later than twelve (12) monthsafter the Termination Date (with any exercise beyond (a) three (3) months after the TerminationDate when the Termination is for a Disability that is not a “permanent and totaldisability” as defined in Section 22(e)(3) of the Code, or (b) twelve (12) months after theTermination Date when the Termination is for a Disability that is a “permanent and totaldisability” as defined in Section 22(e)(3) of the Code, deemed to be exercise of an NQSO), but inany event no later than the expiration date of the Options.(d) If the Participant is terminated for Cause, then Participant’s Options shall expire onsuch Participant’s Termination Date, or at such later time and on such conditions as are determinedby the Committee, but in any no event later than the expiration date of the Options.
 
 

 
5.7 Limitations on Exercise. The Committee may specify a minimum number of Sharesthat maybe purchased on any exercise of an Option, provided that such minimum number will not preventany Participant from exercising the Option for the full number of Shares for which it is thenexercisable.5.8 Limitations on ISOs. With respect to Awards granted as ISOs, to the extent thatthe aggregate Fair Market Value of the Shares with respect to which such ISOs are exercisable forthe first time by the Participant during any calendar year (under all plans of the Company and anyParent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treatedas NQSOs. For purposes of this Section 5.8, ISOs will be taken into account in the order in whichthey were granted. The Fair Market Value of the Shares will be determined as of the time the Optionwith respect to such Shares is granted. In the event that the Code or the regulations promulgatedthereunder are amended after the Effective Date to provide for a different limit on the Fair MarketValue of Shares permitted to be subject to ISOs, such different limit will be automaticallyincorporated herein and will apply to any Options granted after the effective date of suchamendment.5.9 Modification, Extension or Renewal. The Committee may modify, extend or renewoutstanding Options and authorize the grant of new Options in substitution therefor, provided thatany such action may not, without the written consent of a Participant, impair any of suchParticipant’s rights under any Option previously granted. Any outstanding ISO that is modified,extended, renewed or otherwise altered will be treated in accordance with Section 424(h) of theCode. Subject to Section 18 of this Plan, by written notice to affected Participants, theCommittee may reduce the Exercise Price of outstanding Options without the consent of suchParticipants; provided, however, that the Exercise Price may not be reduced belowthe Fair Market Value on the date the action is taken to reduce the Exercise Price.5.10 No Disqualification. Notwithstanding any other provision in this Plan, no termof this Plan relating to ISOs will be interpreted, amended or altered, nor will any discretion orauthority granted under this Plan be exercised, so as to disqualify this Plan under Section 422 ofthe Code or, without the consent of the Participant affected, to disqualify any ISO under Section422 of the Code.**6. ****RESTRICTED STOCK AWARDS**.6.1 Awards of Restricted Stock. A Restricted Stock Award is an offer by the Companyto sell to a Participant Shares that are subject to restrictions (“***Restricted Stock***”). TheCommittee will determine to whom an offer will be made, the number of Shares the Participant maypurchase, the Purchase Price, the restrictions under which the Shares will be subject and all otherterms and conditions of the Restricted Stock Award, subject to the Plan.6.2 Restricted Stock Purchase Agreement. All purchases under a Restricted Stock Awardwill be evidenced by an Award Agreement. A Participant accepts a Restricted Stock Award by signingand delivering to the Company an Award Agreement with full payment of the Purchase Price, withinthirty (30) days from the date the Award Agreement was delivered to the Participant. If theParticipant does not accept such Award within thirty (30) days, then the offer of such RestrictedStock Award will terminate, unless the Committee determines otherwise.6.3 Purchase Price. The Purchase Price for a Restricted Stock Award will bedetermined by the Committee and may be less than Fair Market Value on the date the Restricted StockAward is granted. Payment of the Purchase Price must be made in accordance with Section 11 of thePlan, and the Award Agreement.6.4 Terms of Restricted Stock Awards. Restricted Stock Awards will be subject to suchrestrictions as the Committee may impose or are required by law. These restrictions may be basedon completion of a specified number of years of service with the Company or upon completion ofPerformance Factors, if any, during any Performance Period as set out in advance in theParticipant’s Award Agreement. Prior to the grant of a Restricted Stock Award, the Committeeshall: (a) determine the nature, length and starting date of any Performance Period for theRestricted Stock Award; (b) select from among the Performance Factors to be used to measureperformance goals, if any; and (c) determine the number of Shares that may be awarded to theParticipant. Performance Periods may overlap and a Participant may participate simultaneously withrespect to Restricted Stock Awards that are subject to different Performance Periods and havingdifferent performance goals and other criteria.6.5 Termination of Participant. Except as may be set forth in the Participant’s AwardAgreement, vesting ceases on such Participant’s Termination Date (unless determined otherwise bythe Committee).
 
 

 
**7. ****STOCK BONUS AWARDS**.7.1 Awards of Stock Bonuses. A Stock Bonus Award is an award to an eligible person ofShares (which may consist of Restricted Stock or Restricted Stock Units) for services to berendered or for past services already rendered to the Company or any Parent or Subsidiary. AllStock Bonus Awards shall be made pursuant to an Award Agreement. No payment from Participant willbe required for Shares awarded pursuant to a Stock Bonus Award.7.2 Terms of Stock Bonus Awards. The Committee will determine the number of Shares tobe awarded to the Participant under a Stock Bonus Award and any restrictions thereon. Theserestrictions may be based upon completion of a specified number of years of service with theCompany or upon satisfaction of performance goals based on Performance Factors during anyPerformance Period as set out in advance in the Participant’s Stock Bonus Agreement. Prior to thegrant of any Stock Bonus Award the Committee shall: (a) determine the nature, length and startingdate of any Performance Period for the Stock Bonus Award; (b) select from among the PerformanceFactors to be used to measure performance goals; and (c) determine the number of Shares that may beawarded to the Participant. Performance Periods may overlap and a Participant may participatesimultaneously with respect to Stock Bonus Awards that are subject to different Performance Periodsand different performance goals and other criteria.7.3 Form of Payment to Participant. Payment may be made in the form of cash, wholeShares, or a combination thereof, based on the Fair Market Value of the Shares earned under a StockBonus Award on the date of payment.7.4 Termination of Participation. Except as may be set forth in the Participant’sAward Agreement, vesting ceases on such Participant’s Termination Date (unless determined otherwiseby the Committee).**8. ****STOCK APPRECIATION RIGHTS**.8.1 Awards of SARs. A Stock Appreciation Right (“***SAR***”) is an award to a Participantthat may be settled in cash, or Shares (which may consist of Restricted Stock), having a valueequal to (a) the difference between the Fair Market Value on the date of exercise over the ExercisePrice multiplied by (b) the number of Shares with respect to which the SAR is being settled(subject to any maximum number of Shares that may be issuable as specified in an Award Agreement).All SARs shall be made pursuant to an Award Agreement.8.2 Terms of SARs. The Committee will determine the terms of each SAR including,without limitation: (a) the number of Shares subject to the SAR; (b) the Exercise Price and thetime or times during which the SAR may be settled; (c) the consideration to be distributed onsettlement of the SAR; and (d) the effect of the Participant’s Termination on each SAR. TheExercise Price of the SAR will be determined by the Committee when the SAR is granted, and may beless than Fair Market Value. A SAR may be awarded upon satisfaction of Performance Factors, ifany, during any Performance Period as are set out in advance in the Participant’s individual AwardAgreement. If the SAR is being earned upon the satisfaction of Performance Factors, then theCommittee will: (x) determine the nature, length and starting date of any Performance Period foreach SAR; and (y) select from among the Performance Factors to be used to measure the performance,if any. Performance Periods may overlap and Participants may participate simultaneously withrespect to SARs that are subject to different Performance Factors and other criteria.8.3 Exercise Period and Expiration Date. A SAR will be exercisable within the timesor upon the occurrence of events determined by the Committee and set forth in the Award Agreementgoverning such SAR. The SAR Agreement shall set forth the expiration date; provided that no SARwill be exercisable after the expiration of ten (10) years from the date the SAR is granted. TheCommittee may also provide for SARs to become exercisable at one time or from time to time,periodically or otherwise (including, without limitation, upon the attainment during a PerformancePeriod of performance goals based on Performance Factors), in such number of Shares or percentageof the Shares subject to the SAR as the Committee determines. Except as may be set forth in theParticipant’s Award Agreement, vesting ceases on such Participant’s Termination Date (unlessdetermined otherwise by the Committee). Notwithstanding the foregoing, the rules of Section 5.6also will apply to SARs.8.4 Form of Settlement. Upon exercise of a SAR, a Participant will be entitled toreceive payment from the Company in an amount determined by multiplying (i) the difference betweenthe Fair Market Value of aShare on the date of exercise over the Exercise Price; times (ii) the number of Shares withrespect to which the SAR is exercised. At the discretion of the Committee, the payment from theCompany for the SAR exercise may be in cash, in Shares of equivalent value, or in some combinationthereof.
 
 

 
**9. ****RESTRICTED STOCK UNITS**.9.1 Awards of Restricted Stock Units. A Restricted Stock Unit (“***RSU***”) is an award toa Participant covering a number of Shares that may be settled in cash, or by issuance of thoseShares (which may consist of Restricted Stock). All RSUs shall be made pursuant to an AwardAgreement.9.2 Terms of RSUs. The Committee will determine the terms of an RSU including,without limitation: (a) the number of Shares subject to the RSU; (b) the time or times during whichthe RSU may be settled; and (c) the consideration to be distributed on settlement, and the effectof the Participant’s Termination on each RSU. An RSU may be awarded upon satisfaction of suchPerformance Factors (if any) during any Performance Period as are set out in advance in theParticipant’s Award Agreement. If the RSU is being earned upon satisfaction of PerformanceFactors, then the Committee will: (x) determine the nature, length and starting date of anyPerformance Period for the RSU; (y) select from among the Performance Factors to be used to measurethe performance, if any; and (z) determine the number of Shares deemed subject to the RSU.Performance Periods may overlap and participants may participate simultaneously with respect toRSUs that are subject to different Performance Periods and different performance goals and othercriteria.9.3 Form and Timing of Settlement. Payment of earned RSUs shall be made as soon aspracticable after the date(s) determined by the Committee and set forth in the Award Agreement. TheCommittee, in its sole discretion, may settle earned RSUs in cash, Shares, or a combination ofboth.9.4 Termination of Participant. Except as may be set forth in the Participant’s AwardAgreement, vesting ceases on such Participant’s Termination Date (unless determined otherwise bythe Committee).**10. ****PERFORMANCE SHARES**.10.1 Awards of Performance Shares. A Performance Share Award is an award to aParticipant denominated in Shares that may be settled in cash, or by issuance of those Shares(which may consist of Restricted Stock). Grants of Performance Shares shall be made pursuant to anAward Agreement.10.2 Terms of Performance Shares. The Committee will determine, and each AwardAgreement shall set forth, the terms of each award of Performance Shares including, withoutlimitation: (a) the number of Shares deemed subject to such Award; (b) the Performance Factors andPerformance Period that shall determine the time and extent to which each award of PerformanceShares shall be settled; (c) the consideration to be distributed on settlement, and the effect ofthe Participant’s Termination on each award of Performance Shares. In establishing PerformanceFactors and the Performance Period the Committee will: (x) determine the nature, length andstarting date of any Performance Period; (y) select from among the Performance Factors to be used;and (z) determine the number of Shares deemed subject to the award of Performance Shares. Prior tosettlement the Committee shall determine the extent to which Performance Shares have been earned.Performance Periods may overlap and Participants may participate simultaneously with respect toPerformance Shares that are subject to different Performance Periods and different performancegoals and other criteria.10.3 Value, Earning and Timing of Performance Shares. Each Performance Share willhave an initial value equal to the Fair Market Value of a Share on the date of grant. After theapplicable Performance Period has ended, the holder of Performance Shares will be entitled toreceive a payout of the number of Performance Shares earned by the Participant over the PerformancePeriod, to be determined as a function of the extent to which the corresponding Performance Factorsor other vesting provisions have been achieved. The Committee, in its sole discretion, may payearned Performance Shares in the form of cash, in Shares (which have an aggregate Fair Market Valueequal to the value of the earned Performance Shares at the close of the applicable PerformancePeriod) or in a combination thereof.10.4 Termination of Participant. Except as may be set forth in the Participant’sAward Agreement, vesting ceases on such Participant’s Termination Date (unless determined otherwiseby the Committee).
 
 

 
**11. ****PAYMENT FOR SHARE PURCHASES**.Payment from Participant for Shares purchased pursuant to this Plan may be made in cash or bycheck or, where expressly approved for the Participant by the Committee and where permitted by law(and to the extent not otherwise set forth in the applicable Award Agreement):(a) by cancellation of indebtedness of the Company to the Participant;(b) by surrender of shares of the Company held by the Participant that have a Fair MarketValue on the date of surrender equal to the aggregate exercise price of the Shares as to which saidAward will be exercised or settled;(c) by waiver of compensation due or accrued to the Participant for services rendered or to berendered to the Company or a Parent or Subsidiary of the Company;(d) by consideration received by the Company pursuant to a broker-assisted and/or same daysale (or other) cashless exercise program implemented by the Company in connection with the Plan;(e) by any combination of the foregoing; or(f) by any other method of payment as is permitted by applicable law.**12. ****GRANTS TO OUTSIDE DIRECTORS**.12.1 Types of Awards. Outside Directors are eligible to receive any type of Awardoffered under this Plan except ISOs. Awards pursuant to this Section 12 may be automatically madepursuant to policy adopted by the Board, or made from time to time as determined in the discretionof the Board.12.2 Eligibility. Awards pursuant to this Section 12 shall be granted only to OutsideDirectors. An Outside Director who is elected or re-elected as a member of the Board will beeligible to receive an Award under this Section 12.12.3 Vesting, Exercisability and Settlement. Except as set forth in Section 21,Awards shall vest, become exercisable and be settled as determined by the Board. With respect toOptions and SARs, the exercise price granted to Outside Directors shall not be less than the FairMarket Value of the Shares at the time that such Option or SAR is granted.**13. ****WITHHOLDING TAXES**.13.1 Withholding Generally. Whenever Shares are to be issued in satisfaction ofAwards granted under this Plan, the Company may require the Participant to remit to the Company anamount sufficient to satisfy applicable federal, state, local and international withholding taxrequirements prior to the delivery of Shares pursuant to exercise or settlement of any Award.Whenever payments in satisfaction of Awards granted under this Plan are to be made in cash, suchpayment will be net of an amount sufficient to satisfy applicable federal, state, local andinternational withholding tax requirements.13.2 Stock Withholding. The Committee, in its sole discretion and pursuant to suchprocedures as it may specify from time to time, may require or permit a Participant to satisfy suchtax 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 MarketValue equal to the minimum statutory amount required to be withheld, or (iii) delivering to theCompany already-owned Shares having a Fair Market Value equal to the minimum statutory amountrequired to be withheld. The Fair Market Value of the Shares to be withheld or delivered will bedetermined as of the date that the taxes are required to be withheld.**14. ****TRANSFERABILITY**. Unless determined otherwise by the Committee, an Award may notbe sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than bywill or by the laws of descent or distribution. If the Committee makes an Award transferable, suchAward will contain such additionalterms and conditions as the Committee deems appropriate. All Awards shall be exercisable: (i)during the Participant’s lifetime only by (A) the Participant, or (B) the Participant’s guardian orlegal representative; and (ii) after the Participant’s death, by the legal representative of theParticipant’s heirs or legatees
 
 

 
**15. ****PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES**.15.1 Voting and Dividends. No Participant will have any of the rights of ashareholder with respect to any Shares until the Shares are issued to the Participant. AfterShares are issued to the Participant, the Participant will be a shareholder and have all the rightsof a shareholder with respect to such Shares, including the right to vote and receive all dividendsor other distributions made or paid with respect to such Shares; provided, that if suchShares are Restricted Stock, then any new, additional or different securities the Participant maybecome entitled to receive with respect to such Shares by virtue of a stock dividend, stock splitor any other change in the corporate or capital structure of the Company will be subject to thesame restrictions as the Restricted Stock; provided, further, that the Participantwill have no right to retain such stock dividends or stock distributions with respect to Sharesthat are repurchased at the Participant’s Purchase Price or Exercise Price, as the case may be,pursuant to Section 15.2.15.2 Restrictions on Shares. At the discretion of the Committee, the Company mayreserve to itself and/or its assignee(s) a right to repurchase (a “***Right of Repurchase***”) a portionof any or all Unvested Shares held by a Participant following such Participant’s Termination at anytime within ninety (90) days after the later of the Participant’s Termination Date and the date theParticipant purchases Shares under this Plan, for cash and/or cancellation of purchase moneyindebtedness, at the Participant’s Purchase Price or Exercise Price, as the case may be.**16. ****CERTIFICATES**. All certificates for Shares or other securities delivered underthis Plan will be subject to such stock transfer orders, legends and other restrictions as theCommittee may deem necessary or advisable, including restrictions under any applicable federal,state or foreign securities law, or any rules, regulations and other requirements of the SEC or anystock exchange or automated quotation system upon which the Shares may be listed or quoted.**17. ****ESCROW; PLEDGE OF SHARES**. To enforce any restrictions on a Participant’s Shares,the Committee may require the Participant to deposit all certificates representing Shares, togetherwith stock powers or other instruments of transfer approved by the Committee, appropriatelyendorsed in blank, with the Company or an agent designated by the Company to hold in escrow untilsuch restrictions have lapsed or terminated, and the Committee may cause a legend or legendsreferencing such restrictions to be placed on the certificates. Any Participant who is permittedto execute a promissory note as partial or full consideration for the purchase of Shares under thisPlan will be required to pledge and deposit with the Company all or part of the Shares so purchasedas collateral to secure the payment of the Participant’s obligation to the Company under thepromissory note; provided, however, that the Committee may require or accept otheror additional forms of collateral to secure the payment of such obligation and, in any event, theCompany will have full recourse against the Participant under the promissory note notwithstandingany pledge of the Participant’s Shares or other collateral. In connection with any pledge of theShares, the Participant will be required to execute and deliver a written pledge agreement in suchform as the Committee will from time to time approve. The Shares purchased with the promissorynote may be released from the pledge on a pro rata basis as the promissory note is paid.**18. ****REPRICING; EXCHANGE AND BUYOUT OF AWARDS**. The Committee may reprice Options orSARS without prior stockholder approval. The Committee may, at any time or from time to timeauthorize the Company, in the case of an Option or SAR exchange, and with the consent of therespective Participants (unless not required pursuant to Section 5.9 of the Plan), to pay cash orissue new Awards in exchange for the surrender and cancellation of any, or all, outstanding Awards.The Committee may reduce the Exercise Price of outstanding Options or SARs without the consent ofaffected Participants by a written notice to them.**19. ****SECURITIES LAW AND OTHER REGULATORY COMPLIANCE**. An Award will not be effectiveunless such Award is in compliance with all applicable federal and state securities laws, rules andregulations of any governmental body, and the requirements of any stock exchange or automatedquotation system upon which the Shares may then be listed or quoted, as they are in effect on thedate of grant of the Award and also on the date of exercise or other issuance. Notwithstanding anyother provision in this Plan, the Company will have no obligation to issue or deliver certificatesfor Shares under this Plan prior to: (a) obtaining any approvals fromgovernmental agencies that the Company determines are necessary or advisable; and/or (b)completion of any registration or other qualification of such Shares under any state or federal lawor ruling of any governmental body that the Company determines to be necessary or advisable. TheCompany will be under no obligation to register the Shares with the SEC or to effect compliancewith the registration, qualification or listing requirements of any state securities laws, stockexchange or automated quotation system, and the Company will have no liability for any inability orfailure to do so.
 
 

 
**20. ****NO OBLIGATION TO EMPLOY**. Nothing in this Plan or any Award granted under thisPlan will confer or be deemed to confer on any Participant any right to continue in the employ of,or to continue any other relationship with, the Company or any Parent or Subsidiary of the Companyor limit in any way the right of the Company or any Parent or Subsidiary of the Company toterminate Participant’s employment or other relationship at any time.**21. ****CORPORATE TRANSACTIONS**.21.1 Assumption or Replacement of Awards by Successor. In the event of a CorporateTransaction any or all outstanding Awards may be assumed or replaced by the successor corporation,which assumption or replacement shall be binding on all Participants. In the alternative, thesuccessor corporation may substitute equivalent Awards or provide substantially similarconsideration to Participants as was provided to stockholders (after taking into account theexisting provisions of the Awards). The successor corporation may also issue, in place ofoutstanding Shares of the Company held by the Participant, substantially similar shares or otherproperty subject to repurchase restrictions no less favorable to the Participant. In the eventsuch successor or acquiring corporation (if any) refuses to assume, convert, replace or substituteAwards, as provided above, pursuant to a Corporate Transaction, then notwithstanding any otherprovision in this Plan to the contrary, such Awards will expire on such transaction at such timeand on such conditions as the Board will determine; the Board (or, the Committee, if so designatedby the Board) may, in its sole discretion, accelerate the vesting of such Awards in connection witha Corporate Transaction. In addition, in the event such successor or acquiring corporation (ifany) refuses to assume, convert, replace or substitute Awards, as provided above, pursuant to aCorporate Transaction, the Committee will notify the Participant in writing or electronically thatsuch Award will be exercisable for a period of time determined by the Committee in its solediscretion, and such Award will terminate upon the expiration of such period. Awards need not betreated similarly in a Corporate Transaction.Notwithstanding anything to the contrary in this Section 21.1, the Committee, in its solediscretion, may grant Awards that provide for acceleration upon a Corporate Transaction or in otherevents in the specific Award Agreements.21.2 Assumption of Awards by the Company. The Company, from time to time, also maysubstitute or assume outstanding awards granted by another company, whether in connection with anacquisition of such other company or otherwise, by either; (a) granting an Award under this Plan insubstitution of such other company’s award; or (b) assuming such award as if it had been grantedunder this Plan if the terms of such assumed award could be applied to an Award granted under thisPlan. Such substitution or assumption will be permissible if the holder of the substituted orassumed award would have been eligible to be granted an Award under this Plan if the other companyhad applied the rules of this Plan to such grant. In the event the Company assumes an awardgranted by another company, the terms and conditions of such award will remain unchanged(except that the Purchase Price or the Exercise Price, as the case may be, and the numberand nature of Shares issuable upon exercise or settlement of any such Award will be adjustedappropriately pursuant to Section 424(a) of the Code).21.3 Outside Directors’ Awards. Notwithstanding any provision to the contrary herein,in the event of a Corporate Transaction, the vesting of all Awards granted to Outside Directorsshall accelerate and such Awards shall become exercisable (as applicable) in full prior to theconsummation of such event at such times and on such conditions as the Committee determines.**22. ****ADOPTION AND SHAREHOLDER APPROVAL**. This Plan shall be submitted for the approvalof the Company’s shareholders, consistent with applicable laws, within twelve (12) months before orafter the date this Plan is adopted by the Board.**23. ****TERM OF PLAN**. Unless earlier terminated as provided herein, this Plan will becomeeffective on theEffective Date and will terminate ten (10) years from the date this Plan is adopted by theBoard. This Plan and all Awards granted hereunder shall be governed by and construed in accordancewith the laws of the State of Delaware.
 
 

 
**24. ****AMENDMENT OR TERMINATION OF PLAN**. The Board may at any time terminate or amendthis Plan in any respect, including, without limitation, amendment of any form of Award Agreementor instrument to be executed pursuant to this Plan; provided, however, that theBoard will not, without the approval of the shareholders of the Company, amend this Plan in anymanner that requires such shareholder approval; provided further, that a Participant’sAward shall be governed by the version of this Plan then in effect at the time such Award wasgranted.**25. ****NONEXCLUSIVITY OF THE PLAN**. Neither the adoption of this Plan by the Board, thesubmission of this Plan to the shareholders of the Company for approval, nor any provision of thisPlan will be construed as creating any limitations on the power of the Board to adopt suchadditional compensation arrangements as it may deem desirable, including, without limitation, thegranting of stock awards and bonuses otherwise than under this Plan, and such arrangements may beeither generally applicable or applicable only in specific cases.**26. ****INSIDER TRADING POLICY**. Each Participant who receives an Award shall comply withany policy adopted by the Company from time to time covering transactions in the Company’ssecurities by Employees, officers and/or directors of the Company.**27. ****DEFINITIONS****.**As used in this Plan, and except as elsewhere defined herein, thefollowing terms will have the following meanings:“***Award***” means any award under the Plan, including any Option, Restricted Stock, Stock Bonus,Stock Appreciation Right, Restricted Stock Unit or award of Performance Shares.“***Award Agreement***” means, with respect to each Award, the written or electronic agreementbetween the Company and the Participant setting forth the terms and conditions of the Award, whichshall be in substantially a form (which need not be the same for each Participant) that theCommittee has from time to time approved, and will comply with and be subject to the terms andconditions of this Plan.“***Board***” means the Board of Directors of the Company.“***Cause***” means (a) the commission of an act of theft, embezzlement, fraud, dishonesty, (b) abreach of fiduciary duty to the Company or a Parent or Subsidiary, or (c) a failure to materiallyperform the customary duties of Employee’s employment.“***Code***” means the United States Internal Revenue Code of 1986, as amended, and the regulationspromulgated thereunder.“***Committee***” means the Compensation Committee of the Board or those persons to whomadministration of the Plan, or part of the Plan, has been delegated as permitted by law.“***Company***” means Glu Mobile Inc., or any successor corporation.“***Consultant***” means any person, including an advisor or independent contractor, engaged by theCompany or a Parent or Subsidiary to render services to such entity.“***Corporate Transaction***” means the occurrence of any of the following events: (i) any “person”(as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficialowner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of theCompany representing fifty percent (50%) or more of the total voting power represented by theCompany’s then-outstanding voting securities; (ii) the consummation of the sale or disposition bythe Company of all or substantially all of the Company’s assets; (iii) the consummation of a mergeror consolidation of the Company with any other corporation, other than a merger or consolidationwhich would result in the voting securities of the Company outstanding immediately prior theretocontinuing to represent (either by remaining outstanding or by being converted into votingsecurities of the survivingentity or its parent) at least fifty percent (50%) of the total voting power represented bythe voting securities of the Company or such surviving entity or its parent outstanding immediatelyafter such merger or consolidation.
 
 

 
“***Director***” means a member of the Board.“***Disability***” means total and permanent disability as defined in Section 22(e)(3) of the Code,provided, however, that except with respect to Awards granted as ISOs, the Committee in itsdiscretion may determine whether a total and permanent disability exists in accordance withnon-discriminatory and uniform standards adopted by the Committee from time to time, whethertemporary or permanent, partial or total, as determined by the Committee.“***Effective Date***” means the date of the underwritten initial public offering of the Company’sCommon Stock pursuant to a registration statement is declared effective by the SEC.“***Employee***” means any person, including Officers and Directors, employed by the Company or anyParent or Subsidiary of the Company. Neither service as a Director nor payment of a director’s feeby the Company will be sufficient to constitute “employment” by the Company.“***Exchange Act***” means the United States Securities Exchange Act of 1934, as amended.“***Exercise Price***” means the price at which a holder of an Option or SAR may purchase the Sharesissuable upon exercise of an Option or SAR.“***Exchange Program***” means a program pursuant to which outstanding Awards are surrendered,cancelled or exchanged for cash, the same type of Award or a different Award (or combinationthereof).“***Fair Market Value***” means, as of any date, the value of a share of the Company’s Common Stockdetermined as follows:(a) if such Common Stock is then quoted on the Nasdaq Global Select Market, the Nasdaq GlobalMarket or the Nasdaq Capital Market (collectively, the “***Nasdaq Market***”), its closing price on theNasdaq Market on the date of determination, or if there are no sales for such date, then the lastpreceding business day on which there were sales, as reported in *The Wall Street Journal*or suchother source as the Board or the Committee deems reliable;(b) if such Common Stock is publicly traded and is then listed on a national securitiesexchange, its closing price on the date of determination on the principal national securitiesexchange on which the Common Stock is listed or admitted to trading as reported in *The Wall StreetJournal*or such other source as the Board or the Committee deems reliable;(c) if such Common Stock is publicly traded but is neither quoted on the Nasdaq Market norlisted or admitted to trading on a national securities exchange, the average of the closing bid andasked prices on the date of determination as reported in *The Wall Street Journal*or such othersource as the Board or the Committee deems reliable;(d) in the case of an Option or SAR made on the Effective Date, the price per share at whichshares of the Company’s Common Stock are initially offered for sale to the public by the Company’sunderwriters in the initial public offering of the Company’s Common Stock pursuant to aregistration statement filed with the SEC under the Securities Act; or(e) if none of the foregoing is applicable, by the Board or the Committee in good faith.“***Insider***” means an officer or director of the Company or any other person whose transactionsin the Company’s Common Stock are subject to Section 16 of the Exchange Act.“***Option***” means an award of an option to purchase Shares pursuant to Section 5.
 
 

 
“***Outside Director***” means a Director who is not an Employee of the Company or any Parent orSubsidiary.“***Parent***” means any corporation (other than the Company) in an unbroken chain of corporationsending with the Company if each of such corporations other than the Company owns stock possessingfifty percent (50%) or more of the total combined voting power of all classes of stock in one ofthe other corporations in such chain.“***Participant***” means an Employee, Consultant or Director (including Outside Directors) whoreceives an Award under this Plan.“***Performance Factors***” means the factors selected by the Committee, which may include, but arenot limited to the, the following measures (whether or not in comparison to other peer companies)to determine whether the performance goals established by the Committee and applicable to Awardshave been satisfied: **•** Net revenue and/or net revenue growth;  **•** Earnings per share and/or earnings per share growth;  **•** Earnings before income taxes and amortization and/or earnings beforeincome taxes and amortization growth;  **•** Operating income and/or operating income growth;  **•** Net income and/or net income growth;  **•** Total stockholder return and/or total stockholder return growth;  **•** Return on equity;  **•** Operating cash flow return on income;  **•** Adjusted operating cash flow return on income;  **•** Economic value added;  **•** Individual business objectives; and  **•** Company specific operational metrics.“***Performance Period***” means the period of service determined by the Committee, not to exceedfive (5) years, during which years of service or performance is to be measured for the Award.“***Performance Share***” means an Award granted pursuant to Section 10 of the Plan.“***Plan***” means this Glu Mobile Inc. 2007 Equity Incentive Plan.“***Purchase Price***” means the price to be paid for Shares acquired under the Plan, other thanShares acquired upon exercise of an Option or SAR.“***Restricted Stock Award***” means an award of Shares pursuant to Section 6 of the Plan, or issuedpursuant to the early exercise of an Option.“***Restricted Stock Unit***” means an Award granted pursuant to Section 9 of the Plan.“***SEC***” means the United States Securities and Exchange Commission.“***Securities Act***” means the United States Securities Act of 1933, as amended.
 
 

 
“***Shares***” means shares of the Company’s Common Stock, as adjusted pursuant to Sections 2 and21, and any successor security.“***Stock Appreciation Right***” means an Award granted pursuant to Section 8 of the Plan.“***Stock Bonus***” means an Award granted pursuant to Section 7 of the Plan.“***Subsidiary***” means any corporation (other than the Company) in an unbroken chain ofcorporations beginning with the Company if each of the corporations other than the last corporationin the unbroken chain owns stock possessing fifty percent (50%) or more of the total combinedvoting power of all classes of stock in one of the other corporations in such chain.“***Termination***” or “***Terminated***” means, for purposes of this Plan with respect to a Participant,that the Participant has for any reason ceased to provide services as an employee, officer,director, consultant, independent contractor or advisor to the Company or a Parent or Subsidiary ofthe Company. An employee will not be deemed to have ceased to provide services in the case of (i)sick leave, (ii) military leave, or (iii) any other leave of absence approved by the Committee;provided, that such leave is for a period of not more than 90 days, unless reemploymentupon the expiration of such leave is guaranteed by contract or statute or unless provided otherwisepursuant to formal policy adopted from time to time by the Company and issued and promulgated toemployees in writing. In the case of any employee on an approved leave of absence, the Committeemay make such provisions respecting suspension of vesting of the Award while on leave from theemploy of the Company or a Parent or Subsidiary of the Company as it may deem appropriate, exceptthat in no event may an Award be exercised after the expiration of the term set forth in theapplicable Award Agreement. The Committee will have sole discretion to determine whether aParticipant has ceased to provide services and the effective date on which the Participant ceasedto provide services (the “***Termination Date***”).“***Unvested Shares***” means Shares that have not yet vested or are subject to a right ofrepurchase in favor of the Company (or any successor thereto).