WWW.EXFILE.COM, INC. -- 15066 -- ZAP -- EXHIBIT 4.1 TO FORM S-8


    EXHIBIT
      4.1

    


    
      	
              ZAP

            
	
              AMENDED
                AND RESTATED

            
	
              2006
                INCENTIVE STOCK PLAN

            


    

    


    


    1. Purpose.
      The
      purpose of this 2006 Incentive Stock Plan (this “Plan”)
      is to
      assist ZAP, a California corporation (the “Company”)
      and
      its Related Entities (as hereinafter defined) in attracting, motivating,
      retaining and rewarding high-quality executives and other employees, officers,
      directors, consultants and other persons who provide services to the Company
      or
      its Related Entities by enabling such persons to acquire or increase a
      proprietary interest in the Company in order to strengthen the mutuality of
      interests between such persons and the Company’s shareholders, and providing
      such persons with annual and long-term performance incentives to expend their
      maximum efforts in the creation of shareholder value. This Plan is intended
      to
      qualify certain compensation awarded under this Plan for tax deductibility
      under
      Section 162(m) of the Code (as hereafter defined) to the extent deemed
      appropriate by the Plan Administrator (as hereafter defined).

    


    2. Definitions.
      For
      purposes of this Plan, the following terms shall be defined as set forth below,
      in addition to such terms defined in this Plan.

    


    (a) “2002
      Plan”
means
      the ZAP 2002 Incentive Stock Plan that was adopted by the Company and to which
      10,000,000 Shares of Stock are subject.

    


    (b) “Applicable
      Laws”
means
      the requirements relating to the administration of equity compensation plans
      under U.S. state corporate laws, U.S. federal and state securities laws, the
      Code, the rules and regulations of any stock exchange upon which the Stock
      is
      listed and the applicable laws of any foreign country or jurisdiction where
      Awards are granted under this Plan.

    


    (c) “Award”
means
      any award granted pursuant to the terms of this Plan including, an Option,
      Stock
      Appreciation Right, Restricted Stock, Warrant, Stock Unit, Stock granted as
      a
      bonus or in lieu of another award, Dividend Equivalent, Other Stock-Based Award
      or Performance Award, together with any other right or interest, granted to
      a
      Participant under this Plan.

    


    (d) “Award
      Agreement”
means
      the written agreement evidencing an Award granted under this Plan.

    


    (e) “Beneficiary”
means
      the person, persons, trust or trusts that have been designated by a Participant
      in his or her most recent written beneficiary designation filed with the Plan
      Administrator to receive the benefits specified under this Plan upon such
      Participant’s death or to which Awards or other rights are transferred if and to
      the extent permitted under Section 10(b) hereof. If, upon a Participant’s death,
      there is no designated Beneficiary or surviving designated Beneficiary, then
      the
      term Beneficiary means the person, persons, trust or trusts entitled by will
      or
      the laws of descent and distribution to receive such benefits.

    


    (f) “Beneficial
      Owner,”
      “Beneficially
      Owning”
and
      “Beneficial
      Ownership”
shall
      have the meanings ascribed to such terms in Rule 13d-3 under the Exchange Act
      and any successor to such Rule.

    


    (g) “Board”
means
      the Company’s Board of Directors.

    


    (h) “Cause”
shall,
      with respect to any Participant, have the meaning specified in the Award
      Agreement. In the absence of any definition in the Award Agreement,
“Cause”
shall
      have the equivalent meaning or the same meaning as “cause”
or
      “for
      cause”
set
      forth in any employment, consulting, or other agreement for the performance
      of
      services between the Participant and the Company or a Related Entity or, in
      the
      absence of any such definition in such agreement, such term shall mean: (i)
      the
      failure by the Participant to perform his or her duties as assigned by the
      Company (or a Related Entity) in a reasonable manner; (ii) any material
      violation or material breach by the Participant of his or her employment,
      consulting or other similar agreement with the Company (or a Related Entity),
      if
      any; (iii) any violation or breach by the Participant of any confidential
      information and invention assignment, non-competition, non-solicitation,
      non-

     

    
      
        
        

      

      
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    disclosure
      and/or other similar agreement with the Company or a Related Entity, if any;
      (iv) any act by the Participant of dishonesty or bad faith with respect to
      the
      Company (or a Related Entity); (v) any material violation or breach by the
      Participant of the Company’s or a Related Entity’s policy for employee conduct,
      if any; (vi) use of alcohol, drugs or other similar substances in a manner
      that
      adversely affects the Participant’s work performance; or (vii) the commission by
      the Participant of any act, misdemeanor, or crime reflecting unfavorably upon
      the Participant or the Company or any Related Entity. The good faith
      determination of the Plan Administrator of whether the Participant’s Continuous
      Service has been terminated for “Cause”
shall
      be final and binding on all parties and for all purposes hereunder.

    


    (i) “Change
      in Control”
means
      and shall be deemed to have occurred on the earliest of the following dates:
      (i)
      the date on which any “person”
(as
      such term is used in Sections 13(d) and 14(d) of the Exchange Act) obtains
      “beneficial
      ownership”
(as
      defined in Rule 13d-3 of the Exchange Act) or a pecuniary interest in fifty
      percent or more of the combined voting power of the Company’s then outstanding
      securities (“Voting
      Stock”);
      (ii)
      the consummation of a merger, consolidation, reorganization or similar
      transaction other than a transaction (A) in which substantially all of the
      holders of Company’s Voting Stock hold or receive directly or indirectly fifty
      percent or more of the voting stock of the resulting entity or a parent company
      thereof, in substantially the same proportions as their ownership of the Company
      immediately prior to the transaction or (B) in which the holders of Company’s
      capital stock immediately before such transaction will, immediately after such
      transaction, hold as a group on a fully diluted basis the ability to elect
      at
      least a majority of the directors of the surviving corporation (or a parent
      company); (iii) there is consummated a sale, lease, exclusive license or other
      disposition of all or substantially all of the consolidated assets of the
      Company and its Subsidiaries, other than a sale, lease, license or other
      disposition of all or substantially all of the consolidated assets of the
      Company and its Subsidiaries to an entity, fifty percent or more of the combined
      voting power of the voting securities of which are owned by shareholders of
      the
      Company in substantially the same proportions as their ownership of the Company
      immediately prior to such sale, lease, license or other disposition; or (iv)
      individuals who, on the date this Plan is adopted by the Board, are Directors
      (the “Incumbent
      Board”)
      cease
      for any reason to constitute at least a majority of the Directors; provided,
      however, that if the appointment or election (or nomination for election) of
      any
      new Director was approved or recommended by a majority vote of the members
      of
      the Incumbent Board then still in office, such new member shall, for purposes
      of
      this Plan, be considered as a member of the Incumbent Board. For purposes of
      determining whether a Change in Control has occurred, a transaction includes
      all
      transactions in a series of related transactions, and terms used in this
      definition but not defined are used as defined in this Plan. The term Change
      in
      Control shall not include a sale of assets, merger or other transaction effected
      exclusively for the purpose of changing the domicile of the
      Company.

    


    Notwithstanding
      the foregoing or any other provision of this Plan, the definition of Change
      in
      Control (or any analogous term) in an individual written agreement between
      the
      Company and the Participant shall supersede the foregoing definition with
      respect to Awards subject to such agreement (it being understood, however,
      that
      if no definition of Change in Control or any analogous term is set forth in
      such
      an individual written agreement, the foregoing definition shall
      apply).

    


    (j) “Code”
means
      the Internal Revenue Code of 1986, as amended from time to time, including
      regulations thereunder and successor provisions and regulations
      thereto.

    


    (k) “Committee”
means
      a
      committee designated by the Board to administer this Plan with respect to at
      least a group of Employees, Directors or Consultants.

    


    (l) “Consultant”
means
      any person (other than an Employee or a Director, solely with respect to
      rendering services in such person’s capacity as a director) who is engaged by
      the Company or any Related Entity to render services to the Company or such
      Related Entity.

    


    (m) “Continuous
      Service”
means
      uninterrupted provision of services to the Company or any Related Entity in
      the
      capacity as either an officer, Employee, Director, Consultant or other service
      provider. Continuous Service shall not be considered to be interrupted in the
      case of: (i) any approved leave of absence; (ii) transfers among the Company,
      any Related Entities, or any successor entities, in the capacity as either
      an
      officer, Employee, Director, Consultant or other service provider; or (iii)
      any
      change in status as long as the individual remains in the service of the Company
      or a Related Entity in the capacity as either an officer, Employee, Director,
      Consultant or other service provider (except as otherwise provided in the Award
      Agreement). An approved leave of absence shall include sick leave, military
      leave, or any other authorized personal leave.

    


    
      
        
        

      

      
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    (n) “Corporate
      Transaction”
means
      the occurrence, in a single transaction or in a series of related transactions,
      of any one or more of the following events: (i) a sale, lease, exclusive license
      or other disposition of a significant portion of the consolidated assets of
      the
      Company and its Subsidiaries, as determined by the Board in its discretion;
      (ii)
      a sale or other disposition of more than twenty percent of the outstanding
      securities of the Company; or (iii) a merger, consolidation, reorganization
      or
      similar transaction, whether or not the Company is the surviving
      corporation.

    


    (o) “Covered
      Employee”
means
      an Eligible Person who is a Covered Employee as specified in Section 7 of this
      Plan.

    


    (p) “Director”
means
      a
      member of the Board or the board of directors of any Related
      Entity.

    


    (q) “Disability”
means
      a
      permanent and total disability (within the meaning of Code Section 22(e)),
      as
      determined by a medical doctor satisfactory to the Plan
      Administrator.

    


    (r) “Dividend
      Equivalent”
means
      a
      right, granted to a Participant under Section 6(g) hereof, to receive cash,
      Stock, other Awards or other property equal in value to dividends paid with
      respect to a specified number of Shares, or other periodic
      payments.

    


    (s) “Effective
      Date”
means
      the effective date of this Plan, which shall be the date this Plan is adopted
      by
      the Board, subject to the subsequent approval of the shareholders of the
      Company.

    


    (t) “Eligible
      Person”
means
      each officer, Director, Employee or Consultant who provides services to the
      Company or any Related Entity. The foregoing notwithstanding, only common law
      employees of the Company, the Parent, or any Subsidiary shall be Eligible
      Persons for purposes of receiving any Incentive Stock Options. An Employee
      on
      leave of absence may be considered as still in the employ of the Company or
      a
      Related Entity for purposes of eligibility for participation in this
      Plan.

    


    (u) “Employee”
means
      any person, including an officer or Director, who is an employee of the Company
      or any Related Entity. The payment of a director’s fee by the Company or a
      Related Entity shall not be sufficient to constitute “employment”
by
      the
      Company.

    


    (v) “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended from time to time, including
      rules thereunder and successor provisions and rules thereto.

    


    (w) “Fair
      Market Value”
means
      the fair market value of Shares, Awards or other property as determined by
      the
      Plan Administrator, or under procedures established by the Plan Administrator.
      Unless otherwise determined by the Plan Administrator, the Fair Market Value
      of
      a Share as of any given date, after which the Stock is publicly traded on a
      stock exchange or market, shall be the closing sale price per share reported
      on
      a consolidated basis for stock listed on the principal stock exchange or market
      on which the Stock is traded on the date as of which such value is being
      determined or, if there is no sale on that date, then on the last previous
      day
      on which a sale was reported.

    


    (x) “Good
      Reason”
shall,
      with respect to any Participant, have the meaning specified in the Award
      Agreement. In the absence of any definition in the Award Agreement,
“Good
      Reason”
shall
      have the equivalent meaning (or the same meaning as “good
      reason”
or
      “for
      good reason”)
      set
      forth in any employment, consulting or other agreement for the performance
      of
      services between the Participant and the Company or a Related Entity or, in
      the
      absence of any such definition in such agreement, such term shall mean: (i)
      the
      assignment to the Participant of any duties inconsistent in any material respect
      with the Participant’s position (including status, offices, titles and reporting
      requirements), authority, duties or responsibilities as assigned by the Company
      or a Related Entity, or any other action by the Company (or a Related Entity)
      that results in a material diminution in such duties or responsibilities,
      excluding for this purpose an isolated, insubstantial and inadvertent action
      not
      taken in bad faith, and that is remedied by the Company (or a Related Entity)
      promptly after receipt of notice thereof given by the Participant; (ii) any
      material failure by the Company (or a Related Entity) to comply with its
      material obligations to the Participant as agreed upon (other than an isolated,
      insubstantial and inadvertent failure not occurring in bad faith) that is
      remedied by the Company (or a Related Entity) promptly after receipt of notice
      thereof given by the Participant; (iii) the Company’s (or Related Entity’s)
      requiring the Participant to be based at any office or location more than one
      hundred miles from the location of employment immediately prior to such
      relocation, except for travel reasonably required in the performance of the
      Participant’s responsibilities; (iv) any purported termination by the Company


     

    
      
        
        

      

      
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    (or
      a
      Related Entity) of the Participant’s Continuous Service otherwise than for Cause
      (as defined in Section 2(h)), death, or by reason of the Participant’s
      Disability (as defined in Section 2(q)); or (v) any reduction in the
      Participant’s base salary.

    


    (y) “Incentive
      Stock Option”
means
      any Option intended to be designated as an incentive stock option within the
      meaning of Code Section 422 or any successor provision thereto.

    


    (z) “Non-Qualified
      Stock Option”
means
      any Option that is not intended to be designated as an Incentive Stock
      Option.

    


    (aa) “Option”
means
      a
      right granted to a Participant under Section 6(b) hereof, to purchase Stock
      or
      other Awards at a specified price during specified time periods.

    


    (bb) “Option
      Expiration Date”
means
      the date of expiration of the Option’s maximum term as set forth in the Award
      Agreement evidencing such Option.

    


    (cc) “Other
      Stock-Based Awards”
means
      Awards granted to a Participant pursuant to Section 6(i) hereof.

    


    (dd) “Parent”
means
      any corporation (other than the Company), whether now or hereafter existing,
      in
      an unbroken chain of corporations ending with the Company, if each of the
      corporations in the chain (other than the Company) owns stock possessing fifty
      percent or more of the combined voting power of all classes of stock in one
      of
      the other corporations in the chain.

    


    (ee) “Participant”
means
      a
      person who has been granted an Award under this Plan that remains outstanding,
      including a person who is no longer an Eligible Person.

    


    (ff) “Performance
      Award”
means
      a
      right, granted to an Eligible Person under Section 6(h) and, if applicable,
      Section 7 hereof, to receive Awards based upon performance criteria specified
      by
      the Plan Administrator.

    


    (gg) “Performance
      Period”
means
      that period of time established by the Plan Administrator at the time any
      Performance Award is granted or at any time thereafter during which any
      performance goals specified by the Plan Administrator with respect to such
      Award
      are to be measured.

    


    (hh) “Person”
has
      the
      meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used
      in
      Sections 13(d) and 14(d) thereof, and shall include a “group”
as
      defined in Section 12(d) thereof.

    


    (ii) “Plan
      Administrator”
means
      the Board or any Committee delegated by the Board to administer this Plan.
      There
      may be different Plan Administrators with respect to different groups of
      Eligible Persons.

    


    (jj) “Related
      Entity”
means
      any Subsidiary and any business, corporation, partnership, limited partnership,
      limited liability company or other entity designated by the Plan Administrator
      in which the Company, a Parent or a Subsidiary, directly or indirectly, holds
      a
      substantial ownership interest.

    


    (kk) “Restricted
      Stock”
means
      Stock granted to a Participant under Section 6(d) hereof, that is subject to
      certain restrictions, including a risk of forfeiture.

    


    (ll) “Rule
      16b-3”
and
      “Rule
      16a-1(c)(3)”
means
      Rule 16b-3 and Rule 16a-1(c)(3), as from time to time in effect and applicable
      to this Plan and Participants, promulgated by the Securities and Exchange
      Commission under Section 16 of the Exchange Act.

    


    (mm) “Section
      260.140.45”
means
      Section 260.140.45 of Title 10 of the California Code of
      Regulations.

    


    (nn) “Share”
or
      “Shares”
mean
      one or more shares of Stock, and one or more shares of such other securities
      as
      may be substituted (or resubstituted) for Stock pursuant to Section 10(c)
      hereof.

    


    
      
        
        

      

      
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    (oo) “Stock”
means
      the Company’s common stock, and such other securities as may be substituted (or
      resubstituted) for the Company’s common stock pursuant to Section 10(c)
      hereof.

    


    (pp) “Stock
      Appreciation Right”
means
      a
      right granted to a Participant pursuant to Section 6(c) hereof.

    


    (qq) “Stock
      Unit”
means
      a
      right, granted to a Participant pursuant to Section 6(e) hereof, to receive
      Shares, cash or a combination thereof at the end of a specified period of
      time.

    


    (rr) “Subsidiary”
means
      any corporation (other than the Company), whether now or hereafter existing,
      in
      an unbroken chain of corporations beginning with the Company, if each of the
      corporations other than the last corporation in the unbroken chain owns stock
      possessing fifty percent or more of the total combined voting power of all
      classes of stock in one of the other corporations in such chain.

    


    3. Administration.

    


    (a) Administration
      by Board.
      The
      Board shall administer this Plan unless and until the Board delegates
      administration to a Committee, as provided in Section 3(b).

    


    (b) Delegation
      to Committee.

    


    (i) General.
      The
      Board may delegate administration of this Plan to a Committee or Committees,
      and
      the term “Committee”
shall
      apply to any person or persons to whom such authority has been delegated. If
      administration is delegated to a Committee, the Committee shall have, in
      connection with the administration of this Plan, the powers theretofore
      possessed by the Board, including the power to delegate to a subcommittee any
      of
      the administrative powers the Committee is authorized to exercise (and
      references in this Plan to the Board shall thereafter be to the Committee or
      subcommittee), subject, however, to such resolutions, not inconsistent with
      the
      provisions of this Plan, as may be adopted from time to time by the Board.
      The
      Board may abolish the Committee at any time and revest in the Board the
      administration of this Plan.

    


    (ii) Section
      162(m) and Rule 16b-3 Compliance.
      In the
      discretion of the Board, the Committee may consist solely of two or more
“Outside
      Directors”,
      in
      accordance with Code Section 162(m), and/or solely of two or more “Non-Employee
      Directors”,
      in
      accordance with Rule 16b-3. In addition, the Board or the Committee may delegate
      to a committee the authority to grant Awards to eligible persons who are either:
      (A) not then Covered Employees and are not expected to be Covered Employees
      at
      the time of recognition of income resulting from such Award; (B) not persons
      with respect to whom the Company wishes to comply with Code Section 162(m);
      or
      (C) not then subject to Section 16 of the Exchange Act.

    


    (c) Powers
      of the Plan Administrator.
      The
      Plan Administrator shall have the power, subject to, and within the limitations
      of, the express provisions of this Plan:

    


    (i) To
      determine from time to time which of the persons eligible under this Plan shall
      be granted Awards, when and how each Award shall be granted, what type or
      combination of types of Award shall be granted, the provisions of each Award
      granted (which need not be identical), including the time or times when a person
      shall be permitted to receive Shares or cash pursuant to an Award, and the
      number of Shares or amount of cash with respect to which an Award shall be
      granted to each such person;

    


    (ii) To
      construe and interpret this Plan and Awards granted under it, and to establish,
      amend and revoke rules and regulations for its administration, and to correct
      any defect, omission or inconsistency in this Plan or in any Award Agreement,
      in
      a manner and to the extent it shall deem necessary or expedient to make this
      Plan fully effective;

    


    (iii) To
      amend
      this Plan or an Award as provided in Section 10(e);

    


    (iv) To
      terminate or suspend this Plan as provided in Section 10(e);

    


    (v) To
      adopt
      such modifications, procedures, and subplans as may be necessary or desirable
      to
      comply with provisions of the laws of foreign countries in which the Company
      or
      Related Entities may operate to assure the viability of the benefits from Awards
      granted to Participants performing services in such countries and to meet the
      objectives of this Plan;

    


    
      
        
        

      

      
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    (vi) To
      make
      all determinations required under this Plan or any Award Agreements thereunder,
      including, but not limited to, the determination if there has been a Change
      in
      Control, a Corporate Transaction, whether a termination of Continuous Service
      was for Cause or for Good Reason and whether a Participant was prevented from
      selling his or her Shares due to federal or state securities laws or by
      agreement; and

    


    (vii) Generally,
      to exercise such powers and to perform such acts as the Plan Administrator
      deems
      necessary or appropriate to promote the best interests of the Company and that
      are not in conflict with the provisions of this Plan.

    


    (d) Effect
      of Plan Administrator’s Decision.
      All
      determinations, interpretations and constructions made by the Plan Administrator
      in good faith shall not be subject to review by any person and shall be final,
      binding and conclusive on all persons.

    


    (e) Arbitration.
      Any
      dispute or claim concerning any Award granted (or not granted) pursuant to
      this
      Plan or any disputes or claims relating to or arising out of this Plan shall
      be
      fully, finally and exclusively resolved by binding and confidential arbitration
      conducted pursuant to the rules of Judicial Arbitration and Mediation Services,
      Inc. (“JAMS”)
      in the
      nearest city in which JAMS conducts business to the city in which the
      Participant is employed by the Company. The Company shall pay all arbitration
      fees. In addition to any other relief, the arbitrator may award to the
      prevailing party recovery of its attorneys’ fees and costs. By accepting an
      Award, the Participant and the Company waive their respective rights to have
      any
      such disputes or claims tried by a judge or jury.

    


    (f) Limitation
      of Liability.
      The
      Plan Administrator, and each member thereof, shall be entitled to, in good
      faith, rely or act upon any report or other information furnished to him or
      her
      by any officer or Employee, the Company’s independent auditors, Consultants or
      any other agents assisting in the administration of this Plan. Members of the
      Plan Administrator, and any officer or Employee acting at the direction or
      on
      behalf of the Plan Administrator, shall not be personally liable for any action
      or determination taken or made in good faith with respect to this Plan, and
      shall, to the extent permitted by law, be fully indemnified and protected by
      the
      Company with respect to any such action or determination.

    


    4. Shares
      Issuable Under this Plan.

    


    (a) Limitation
      on Overall Number of Shares Available for Issuance Under this
      Plan.
      Subject
      to adjustment as provided in Section 10(c) hereof, the total number of Shares
      that may be issued in connection with Awards under this Plan shall not exceed
      in
      the aggregate 14,000,000 as of the date of the 2007 annual shareholders meeting.
      Any Shares delivered under this Plan may consist, in whole or in part, of
      authorized and unissued Shares or treasury shares.

    


    (b) Availability
      of Shares Not Issued Pursuant to Awards.

    


    (i) If
      any
      Shares subject to an Award or any Shares subject to an award granted under
      the
      2002 Plan are forfeited, expire or otherwise terminate without issuance of
      such
      Shares, or any Award or any award granted under the 2002 Plan is settled for
      cash or otherwise does not result in the issuance of all or a portion of the
      Shares subject to such Award, the Shares shall, to the extent of such
      forfeiture, expiration, termination, cash settlement or non-issuance, be
      available for Awards under this Plan, subject to Section 4(b)(iv)
      below.

    


    (ii) If
      any
      Shares issued pursuant to an Award or any Shares subject to an award granted
      under the 2002 Plan are forfeited back to or repurchased by the Company,
      including, but not limited to, any repurchase or forfeiture caused by the
      failure to meet a contingency or condition required for the vesting of such
      shares, then such forfeited or repurchased Shares shall revert to and become
      available for issuance under this Plan, subject to Section 4(b)(iv)
      below.

    


    (iii) In
      the
      event that any Option or other Award is exercised by the withholding of Shares
      from the Award by the Company, or withholding tax liabilities arising from
      such
      Option or other Award are satisfied by the withholding of Shares from the Award
      by the Company, then only the net number of Shares actually issued to the
      Participant, excluding the Shares withheld, shall be counted as issued for
      purposes of determining the maximum number of Shares available for grant under
      this Plan, subject to Section 4(b)(iv) below.

    


    
      
        
        

      

      
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    (iv) Notwithstanding
      anything in this Section 4(b) to the contrary and solely for purposes of
      determining whether Shares are available for the grant of Incentive Stock
      Options, the maximum aggregate number of shares that may be granted under this
      Plan shall be determined without regard to any Shares restored pursuant to
      this
      Section 4(b) that, if taken into account, would cause this Plan to fail the
      requirement under Code Section 422 that this Plan designate a maximum aggregate
      number of shares that may be issued.

    


    (c) Application
      of Limitations.
      The
      limitations contained in this Section 4 shall apply not only to Awards that
      are
      settled by the delivery of Shares but also to Awards relating to Shares but
      settled only in cash (such as cash-only Stock Appreciation Rights). The Plan
      Administrator may adopt reasonable counting procedures to ensure appropriate
      counting, avoid double counting (as, for example, in the case of tandem or
      substitute awards) and may make adjustments if the number of Shares actually
      delivered differs from the number of shares previously counted in connection
      with an Award.

    


    (d) Section
      260.140.45 Limitation.
      Notwithstanding the foregoing provisions of this Section 4, at any such time
      as
      the offer and sale of securities pursuant to the Plan is subject to compliance
      with Section 260.140.45, the total number of shares of Stock issuable under
      the
      Plan (together with securities of the Company issuable under any other stock
      option plan, stock plan, bonus plan or other similar arrangement or agreement
      of
      the Company) shall not exceed 30% (or such other higher percentage limitation
      as
      may be approved by the shareholders of the Company pursuant to Section
      260.140.45) of the then outstanding securities of the Company as calculated
      in
      accordance with the conditions and exclusions of Section
      260.140.45.

    


    5. Eligibility;
      Per-Person Award Limitations.
      Awards
      may be granted under this Plan only to Eligible Persons. Subject to adjustment
      as provided in Section 10(c), for each fiscal year in which awards granted
      under
      this Plan are subject to the requirements of Code Section 162(m), an Eligible
      Person may not be granted: (a) Options or Stock Appreciation Rights with respect
      to more than the total number of Shares reserved under this Plan; or (b) Awards,
      other than Options or Stock Appreciation Rights, with respect to more than
      the
      total number of Shares reserved under this Plan. In addition, the maximum dollar
      value payable in any fiscal year to any one Participant with respect to Awards
      granted under this Plan is $5,000,000.

    


    6. Terms
      of Awards.

    


    (a) General.
      Awards
      may be granted on the terms and conditions set forth in this Section. In
      addition, the Plan Administrator may impose on any Award or the exercise
      thereof, at the date of grant or thereafter (subject to Section 10(e)), such
      additional terms and conditions, not inconsistent with the provisions of this
      Plan, as the Plan Administrator shall determine, including terms requiring
      forfeiture of Awards in the event of termination of the Participant’s Continuous
      Service and terms permitting a Participant to make elections relating to his
      or
      her Award. The Plan Administrator shall retain full power and discretion to
      accelerate, waive or modify, at any time, any term or condition of an Award
      that
      is not mandatory under this Plan.

    


    (b) Options.
      The
      Plan Administrator is authorized to grant Options to any Eligible Person on
      the
      following terms and conditions:

    


    (i) Stock
      Option Agreement.
      Each
      grant of an Option shall be evidenced by an Award Agreement. Such Award
      Agreement shall be subject to all applicable terms and conditions of this Plan
      and may be subject to any other terms and conditions that are not inconsistent
      with this Plan and that the Plan Administrator deems appropriate for inclusion
      in the Award Agreement. The provisions of the various Award Agreements entered
      into under this Plan need not be identical. Notwithstanding any other provision
      of this Plan, any Non-Qualified Stock Option shall be structured to comply
      with
      or be exempt from Code Section 409A, unless otherwise specifically determined
      by
      the Plan Administrator.

    


    (ii) Number
      of Shares.
      Each
      Award Agreement shall specify the number of Shares that are subject to the
      Option and shall provide for the adjustment of such number in accordance with
      Section 10(c) hereof. The Award Agreement shall also specify whether the Stock
      Option is an Incentive Stock Option or a Non-Qualified Stock
      Option.

    


    (iii) Exercise
      Price.

    


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (A) In
      General.
      Each
      Award Agreement shall state the price at which Shares subject to the Option
      may
      be purchased (the “Exercise
      Price”),
      which
      shall be, with respect to Incentive Stock Options, not less than one hundred
      percent of the Fair Market Value of the Stock on the date of grant. In the
      case
      of Non-Qualified Stock Options, the Exercise Price shall be determined in the
      sole discretion of the Plan Administrator; provided, however, that if the
      Exercise Price is less than one hundred percent of the Fair Market Value of
      the
      Stock on the date of grant, the Non-Qualified Stock Option shall be structured
      to comply with or be exempt from Code Section 409A; provided further, however,
      that the Exercise Price may never be less than eighty-five percent of the Fair
      Market Value of the Stock on the date of grant.

    


    (B) Ten
      Percent Shareholder.
      If a
      Participant owns or is deemed to own (by reason of the attribution rules
      applicable under Code Section 424(d)) more than ten percent of the combined
      voting power of all classes of stock of the Company or any Parent or Subsidiary,
      any Incentive Stock Option granted to such Employee must have an exercise price
      per Share of at least one hundred ten percent of the Fair Market Value of a
      Share on the date of grant.

    


    (iv) Time
      and Method of Exercise.
      The
      Plan Administrator shall determine the time or times at which or the
      circumstances under which an Option may be exercised in whole or in part
      (including based on achievement of performance goals and/or future service
      requirements), the time or times at which Options shall cease to be or become
      exercisable following termination of Continuous Service or upon other
      conditions, the methods by which the exercise price may be paid or deemed to
      be
      paid (including, in the discretion of the Plan Administrator, a cashless
      exercise procedure), the form of such payment, including, without limitation,
      cash, Stock, Shares subject to the Option (a “net”
      exercise), other Awards or awards granted under other plans of the Company
      or a
      Related Entity, other property (including notes or other contractual obligations
      of Participants to make payment on a deferred basis) or any other form of
      consideration legally permissible, and the methods by or forms in which Stock
      will be delivered or deemed to be delivered to Participants.

    


    (v) Termination
      of Service.
      Subject
      to earlier termination of the Option as otherwise provided in this Plan and
      unless otherwise specifically provided by the Plan Administrator with respect
      to
      an Option and set forth in the Award Agreement, an Option shall remain
      exercisable, to the extent vested, after a Participant’s termination of
      Continuous Service only during the applicable time period determined in
      accordance with this Section and thereafter shall terminate and no longer be
      exercisable:

    


    (A) Death
      or Disability.
      If the
      Participant’s Continuous Service terminates because of the death or Disability
      of the Participant, the Option, to the extent unexercised and vested and
      exercisable on the date on which the Participant’s Continuous Service
      terminated, may be exercised by the Participant (or the Participant’s legal
      representative or estate) at any time prior to the expiration of twelve months
      (or such other period of time as determined by the Plan Administrator, in its
      discretion) after the date on which the Participant’s Continuous Service
      terminated, but in any event only with respect to the vested portion of the
      Option and no later than the Option Expiration Date.

    


    (B) Termination
      for Cause.
      Notwithstanding any other provision of this Plan to the contrary, if the
      Participant’s Continuous Service is terminated for Cause, the Option shall
      terminate and cease to be exercisable immediately upon such termination of
      Continuous Service.

    


    (C) Other
      Termination of Service.
      If the
      Participant’s Continuous Service terminates for any reason, except Disability,
      death or Cause, the Option, to the extent unexercised, vested and exercisable
      by
      the Participant on the date on which the Participant’s Continuous Service
      terminated, may be exercised by the Participant at any time prior to the
      expiration of thirty days (or such longer period of time as determined by the
      Plan Administrator, in its discretion) after the date on which the Participant’s
      Continuous Service terminated, but in any event only with respect to the vested
      portion of the Option and no later than the Option Expiration Date.

    


    (D) Extension
      for Securities Law Violations.
      Notwithstanding the other provisions of this Section 6(b)(v) and contingent
      upon
      this provision not adversely affecting the exemption of the Option from the
      provisions of Code Section 409A, if the Participant’s Continuous Service
      terminates for any reason, except Cause, and the Participant is precluded by
      federal or state securities laws from selling the Shares, so that the
      Participant has less than a thirty-day period from the termination of
      Participant’s Continuous Service to the expiration date of the Option in which
      the Participant would be permitted by federal or state securities laws to sell
      the Shares, then the period for exercising the Option following the termination
      of Participant’s Continuous Service shall automatically be extended by an
      additional period of up to thirty days measured from the date the Participant
      is
      first free to sell Shares; provided, however, that in no event shall the Option
      be exercisable after the specified Option Expiration Date and the maximum date
      permitted for exemption of the Option under Code Section 409A. The determination
      of whether the Participant is precluded from selling the Shares subject to
      the
      Option by federal or state securities laws shall be made by the Plan
      Administrator and such determination shall be final, binding and
      conclusive.

    


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (vi) Incentive
      Stock Options.
      The
      terms of any Incentive Stock Option granted under this Plan shall comply in
      all
      respects with the provisions of Code Section 422. If and to the extent required
      to comply with Code Section 422, Options granted as Incentive Stock Options
      shall be subject to the following special terms and conditions:

    


    (A) The
      Option shall not be exercisable more than ten years after the date such
      Incentive Stock Option is granted; provided, however, that if a Participant
      owns
      or is deemed to own (by reason of the attribution rules of Code Section 424(d))
      more than ten percent of the combined voting power of all classes of stock
      of
      the Company or any Parent or Subsidiary and the Incentive Stock Option is
      granted to such Participant, the Incentive Stock Option shall not be exercisable
      (to the extent required by the Code at the time of the grant) for no more than
      five years from the date of grant; and

    


    (B) If
      the
      aggregate Fair Market Value (determined as of the date the Incentive Stock
      Option is granted) of the Shares with respect to which Incentive Stock Options
      granted under this Plan and all other option plans of the Company, its Parent
      or
      any Subsidiary are exercisable for the first time by a Participant during any
      calendar year in excess of $100,000, then such Participant’s Incentive Stock
      Option(s) or portions thereof that exceed such $100,000 limit shall be treated
      as Non-Qualified Stock Options (in the reverse order in which they were granted,
      so that the last Incentive Stock Option will be the first treated as a
      Non-Qualified Stock Option). This paragraph shall only apply to the extent
      such
      limitation is applicable under the Code at the time of the grant.

    


    (vii) Vesting
      and Repurchase Requirements.
      The
      right to exercise any Option under this Plan must vest at the rate of at least
      twenty percent per year over five years from the date of grant of such Option.
      Any repurchase rights of the Company to repurchase Stock subject to an Option
      upon the termination of a Participant’s Continuous Service must be: (i) for a
      repurchase price of not less the lower of (A) than the Fair Market Value of
      such
      Shares on the date that the Participant’s Continuous Service terminated, or (B)
      the original purchase price paid by the Participant for such Shares; (ii)
      exercised within ninety days of the date that the Participant’s Continuous
      Service terminated; and (iii) must lapse at the rate of at least twenty percent
      of the Shares of Stock per year over five years from the date right to receive
      such Award was first granted to the Participant (without regard to the date
      an
      Option was exercised or became exercisable).

    


    (c) Stock
      Appreciation Rights.
      The
      Plan Administrator is authorized to grant Stock Appreciation Rights to
      Participants on the following terms and conditions:

    


    (i) Agreement.
      Each
      grant of a Stock Appreciation Right shall be evidenced by an Award Agreement.
      Such Award Agreement shall be subject to all applicable terms and conditions
      of
      this Plan and may be subject to any other terms and conditions that are not
      inconsistent with this Plan and that the Plan Administrator deems appropriate
      for inclusion in the Award Agreement. The provisions of the various Award
      Agreements entered into under this Plan need not be identical.

    


    (ii) Right
      to Payment.
      A Stock
      Appreciation Right shall confer on the Participant to whom it is granted a
      right
      to receive, upon exercise thereof, the excess of (A) the Fair Market Value
      of
      one Share of Stock on the date of exercise over (B) the grant price of the
      Stock
      Appreciation Right as determined by the Plan Administrator.

    


    (iii) Other
      Terms.
      The
      Plan Administrator shall determine at the date of grant or thereafter, the
      time
      or times at which and the circumstances under which a Stock Appreciation Right
      may be exercised in whole or in part (including based on achievement of
      performance goals and/or future service requirements), the time or times at
      which Stock Appreciation Rights shall cease to be or become exercisable
      following termination of Continuous Service or upon other conditions, the form
      of payment upon exercise of the Stock Appreciation Right (e.g.,
      Shares,
      cash or other property), the method of exercise, the method of settlement,
      the
      form of consideration payable in settlement (e.g.,
      cash,
      Shares or other property), the method by or the forms in which Stock will be
      delivered or deemed to be delivered to Participants, whether or not a Stock
      Appreciation Right shall be in tandem or in combination with any other Award,
      and any other terms and conditions of any Stock Appreciation Right. Stock
      Appreciation Rights may be either freestanding or in tandem with other Awards.
      Notwithstanding any other provision of this Plan, unless otherwise specifically
      determined by the Plan Administrator, each Stock Appreciation Right shall be
      structured to either comply with or be exempt from Code Section 409A and, if
      applicable, Section
      260.140 of Title 10 of the California Code of Regulations.

    


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (d) Restricted
      Stock.
      The
      Plan Administrator is authorized to grant Restricted Stock to any Eligible
      Person on the following terms and conditions:

    


    (i) Grant
      and Restrictions.
      Restricted Stock shall be subject to such restrictions on transferability,
      risk
      of forfeiture and other restrictions, if any, as the Plan Administrator may
      impose, or as otherwise provided in this Plan. The terms of any Restricted
      Stock
      granted under this Plan shall be set forth in a written Award Agreement that
      shall contain provisions determined by the Plan Administrator and not
      inconsistent with this Plan. The restrictions may lapse separately or in
      combination at such times, under such circumstances (including based on
      achievement of performance goals and/or future service requirements), in such
      installments or otherwise, as the Plan Administrator may determine at the date
      of grant or thereafter. Except to the extent restricted under the terms of
      this
      Plan and any Award Agreement relating to the Restricted Stock, a Participant
      granted Restricted Stock shall have all of the rights of a shareholder,
      including the right to vote the Restricted Stock and the right to receive
      dividends thereon (subject to any mandatory reinvestment or other requirement
      imposed by the Plan Administrator). During the restricted period applicable
      to
      the Restricted Stock, subject to Section 10(b) below, the Restricted Stock
      may
      not be sold, transferred, pledged, hypothecated, margined or otherwise
      encumbered by the Participant.

    


    (ii) Forfeiture.
      Except
      as otherwise determined by the Plan Administrator, upon termination of a
      Participant’s Continuous Service during the applicable restriction period, the
      Participant’s Restricted Stock that is at that time subject to a risk of
      forfeiture that has not lapsed or otherwise been satisfied shall be forfeited
      to
      or reacquired by the Company; provided that the Plan Administrator may provide,
      by rule or regulation or in any Award Agreement, or may determine in any
      individual case, that restrictions or forfeiture conditions relating to
      Restricted Stock shall be waived in whole or in part in the event of
      terminations resulting from specified causes, and the Plan Administrator may
      in
      other cases waive in whole or in part the forfeiture of Restricted Stock, as
      the
      Plan Administrator determines, in its discretion.

    


    (iii) Certificates
      for Shares.
      Restricted Stock granted under this Plan may be evidenced in such manner as
      the
      Plan Administrator shall determine. If certificates representing Restricted
      Stock are registered in the name of the Participant, the Plan Administrator
      may
      require that such certificates bear an appropriate legend referring to the
      terms, conditions and restrictions applicable to such Restricted Stock, that
      the
      Company retain physical possession of the certificates, that the certificates
      be
      kept with an escrow agent and that the Participant deliver a stock power to
      the
      Company, endorsed in blank, relating to the Restricted Stock.

    


    (iv) Dividends
      and Splits.
      As a
      condition to the grant of an Award of Restricted Stock, the Plan Administrator
      may require or permit a Participant to elect that any cash dividends paid on
      a
      Share of Restricted Stock be automatically reinvested in additional Shares
      of
      Restricted Stock or applied to the purchase of additional Awards under this
      Plan. Unless otherwise determined by the Plan Administrator, Shares distributed
      in connection with a stock split or stock dividend, and other property
      distributed as a dividend, shall be subject to restrictions and a risk of
      forfeiture to the same extent as the Restricted Stock with respect to which
      such
      Shares or other property have been distributed.

    


    (e) Stock
      Units.
      The
      Plan Administrator is authorized to grant Stock Units to Participants, which
      are
      rights to receive Shares, cash or other property, or a combination thereof
      at
      the end of a specified time period, subject to the following terms and
      conditions:

    


    (i) Award
      and Restrictions.
      Satisfaction of an Award of Stock Units shall occur upon expiration of the
      time
      period specified for such Stock Units by the Plan Administrator (or, if
      permitted by the Plan Administrator, as elected by the Participant). In
      addition, Stock Units shall be subject to such restrictions (which may include
      a
      risk of forfeiture) as the Plan Administrator may impose, if any, which
      restrictions may lapse at the expiration of the time period or at earlier
      specified times (including based on achievement of performance goals and/or
      future service requirements), separately or in combination, in installments
      or
      otherwise, as the Plan Administrator may determine. The terms of an Award of
      Stock Units shall be set forth in a written Award Agreement that shall contain
      provisions determined by the Plan Administrator and not inconsistent with this
      Plan. Stock Units may be satisfied by delivery of Stock, cash equal to the
      Fair
      Market Value of the specified number of Shares covered by the Stock Units,
      or a
      combination thereof, as determined by the Plan Administrator at the date of
      grant or thereafter. Prior to satisfaction of an Award of Stock Units, an Award
      of Stock Units carries no voting or dividend or other rights associated with
      share ownership. Notwithstanding any other provision of this Plan, unless
      specifically determined by the Plan Administrator, each Stock Unit shall be
      structured to either comply with or be exempt from Code Section 409A and, if
      applicable, Section
      260.140 of Title 10 of the California Code of Regulations.

    


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (ii) Forfeiture.
      Except
      as otherwise determined by the Plan Administrator, upon termination of a
      Participant’s Continuous Service during the applicable time period or portion
      thereof to which forfeiture conditions apply (as provided in the Award Agreement
      evidencing the Stock Units), the Participant’s Stock Units (other than those
      vested Stock Units subject to deferral at the election of the Participant)
      shall
      be forfeited; provided that the Plan Administrator may provide, by rule or
      regulation or in any Award Agreement, or may determine in any individual case,
      that restrictions or forfeiture conditions relating to Stock Units shall be
      waived in whole or in part in the event of terminations resulting from specified
      causes, and the Plan Administrator may in other cases waive in whole or in
      part
      the forfeiture of Stock Units at its discretion.

    


    (iii) Dividend
      Equivalents.
      Unless
      otherwise determined by the Plan Administrator at date of grant, any Dividend
      Equivalents that are granted with respect to any Award of Stock Units shall
      be
      either (A) paid with respect to such Stock Units at the dividend payment date
      in
      cash or in Shares of unrestricted Stock having a Fair Market Value equal to
      the
      amount of such dividends, or (B) deferred with respect to such Stock Units
      and
      the amount or value thereof automatically deemed reinvested in additional Stock
      Units, other Awards or other investment vehicles, as the Plan Administrator
      shall determine or permit the Participant to elect.

    


    (f) Bonus
      Stock and Awards in Lieu of Obligations.
      The
      Plan Administrator is authorized to grant Stock as a bonus, or to grant Stock
      or
      other Awards in lieu of Company obligations to pay cash or deliver other
      property under this Plan or under other plans or compensatory arrangements,
      provided that, in the case of Participants subject to Section 16 of the Exchange
      Act, the amount of such grants remains within the discretion of the Plan
      Administrator to the extent necessary to ensure that acquisitions of Stock
      or
      other Awards are exempt from liability under Section 16(b) of the Exchange
      Act.
      Stock or Awards granted hereunder shall be subject to such other terms as shall
      be determined by the Plan Administrator.

    


    (g) Dividend
      Equivalents.
      The
      Plan Administrator is authorized to grant Dividend Equivalents to any Eligible
      Person entitling the Eligible Person to receive cash, Shares, other Awards,
      or
      other property equal in value to dividends paid with respect to a specified
      number of Shares, or other periodic payments. Dividend Equivalents may be
      awarded on a free-standing basis or in connection with another Award. The terms
      of an Award of Dividend Equivalents shall be set forth in a written Award
      Agreement that shall contain provisions determined by the Plan Administrator
      and
      not inconsistent with this Plan. The Plan Administrator may provide that
      Dividend Equivalents shall be paid or distributed when accrued or shall be
      deemed to have been reinvested in additional Stock, Awards, or other investment
      vehicles, and subject to such restrictions on transferability and risks of
      forfeiture, as the Plan Administrator may specify. Notwithstanding any other
      provision of this Plan, unless specifically determined by the Plan
      Administrator, each Dividend Equivalent shall be structured to either comply
      with or be exempt from Code Section 409A and, if applicable, Section
      260.140 of Title 10 of the California Code of Regulations.

    


    (h) Performance
      Awards.
      The
      Plan Administrator is authorized to grant Performance Awards to any Eligible
      Person payable in cash, Shares, other property, or other Awards, on terms and
      conditions established by the Plan Administrator, subject to the provisions
      of
      Section 7 if and to the extent that the Plan Administrator shall, in its sole
      discretion, determine that an Award shall be subject to those provisions. The
      performance criteria to be achieved during any Performance Period and the length
      of the Performance Period shall be determined by the Plan Administrator upon
      the
      grant of each Performance Award. Except as provided in this Plan or as may
      be
      provided in an Award Agreement, Performance Awards will be distributed only
      after the end of the relevant Performance Period. The performance goals to
      be
      achieved for each Performance Period shall be conclusively determined by the
      Plan Administrator and may be based upon the criteria set forth in Section
      7(b),
      or in the case of an Award that the Plan Administrator determines shall not
      be
      subject to Section 7 hereof, any other criteria that the Plan Administrator,
      in
      its sole discretion, shall determine should be used for that purpose. The amount
      of the Award to be distributed shall be conclusively determined by the Plan
      Administrator. Performance Awards may be paid in a lump sum or in installments
      following the close of the Performance Period or, in accordance with procedures
      established by the Plan Administrator, on a deferred basis.

    


    (i) Other
      Stock-Based Awards.
      The
      Plan Administrator is authorized, subject to limitations under applicable law,
      to grant to any Eligible Person such other Awards that may be denominated or
      payable in, valued in whole or in part by reference to, or otherwise based
      on,
      or related to, Shares, as deemed by the Plan Administrator to be consistent
      with


     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    the
      purposes of this Plan, including, without limitation, convertible or
      exchangeable debt securities, other rights convertible or exchangeable into
      Stock, purchase rights for Stock, Awards with value and payment contingent
      upon
      performance of the Company or any other factors designated by the Plan
      Administrator, and Awards valued by reference to the book value of Stock or
      the
      value of securities of or the performance of specified Related Entities or
      business units. These Awards may be granted alone or in connection with other
      awards (whether or not such other awards are granted under this Plan). The
      Plan
      Administrator shall determine the terms and conditions of such Awards. The
      terms
      of any Award pursuant to this Section shall be set forth in a written Award
      Agreement that shall contain provisions determined by the Plan Administrator
      and
      not inconsistent with this Plan. Stock delivered pursuant to an Award in the
      nature of a purchase right granted under this Section 6(i) shall be purchased
      for such consideration (including without limitation loans from the Company
      or a
      Related Entity), paid for at such times, by such methods, and in such forms,
      including, without limitation, cash, Stock, other Awards or other property,
      as
      the Plan Administrator shall determine. Cash Awards, as an element of or
      supplement to any other Award under this Plan, may also be granted pursuant
      to
      this Section 6(i). Notwithstanding any other provision of this Plan, unless
      specifically determined by the Plan Administrator, each Award shall be
      structured to either be exempt or comply with Code Section 409A and, if
      applicable, Section
      260.140 of Title 10 of the California Code of Regulations.

    


    (j) Vesting
      and Repurchase Requirements.
      In the
      event that the Company has a right to repurchase Stock granted pursuant to
      an
      Award under this Plan upon the termination of a Participant’s Continuous
      Service, such repurchase rights must: (i) be for a repurchase price of not
      less
      the lower of (A) than the Fair Market Value of such Shares on the date that
      the
      Participant’s Continuous Service terminated, or (B) the original purchase price
      (if any) paid by the Participant for such Shares; (ii) be exercised within
      ninety days of the date that the Participant’s Continuous Service terminated;
      and (iii) lapse at the rate of at least twenty percent of the Shares of Stock
      per year over five years from the date right to receive such Award was first
      granted to the Participant (without regard to the date an Award was granted
      or
      otherwise became exercisable).

    


    7. Tax
      Qualified Performance Awards.

    


    (a) Covered
      Employees.
      A
      Committee, composed in compliance with the requirements of Code Section 162(m),
      in its discretion, may determine at the time an Award is granted to an Eligible
      Person who is, or is likely to be, as of the end of the tax year in which the
      Company would claim a tax deduction in connection with such Award, a Covered
      Employee, that the provisions of this Section 7 shall be applicable to such
      Award.

    


    (b) Performance
      Criteria.
      If an
      Award is subject to this Section 7, then the lapsing of restrictions thereon
      and
      the distribution of cash, Shares or other property pursuant thereto, as
      applicable, shall be contingent upon achievement of one or more objective
      performance goals. Performance goals shall be objective and shall otherwise
      meet
      the requirements of Code Section 162(m) and regulations thereunder including
      the
      requirement that the level or levels of performance targeted by the Committee
      result in the achievement of performance goals being “substantially
      uncertain.”
One
      or
      more of the following business criteria for the Company, on a consolidated
      basis, and/or for Related Entities, or for business or geographical units of
      the
      Company and/or a Related Entity (except with respect to the total stockholder
      return and earnings per share criteria), shall be used by the Committee in
      establishing performance goals for such Awards: (i) earnings per share; (ii)
      revenues or margins; (iii) cash flow; (iv) operating margin; (v) return on
      net
      assets, investment, capital, or equity; (vi) economic value added; (vii) direct
      contribution; (viii) net income; (ix) pretax earnings; (x) earnings before
      interest and taxes; (xi) earnings before interest, taxes, depreciation and
      amortization; (xii) earnings after interest expense and before extraordinary
      or
      special items; (xiii) operating income; (xiv) income before interest income
      or
      expense, unusual items and income taxes, local, state or federal and excluding
      budgeted and actual bonuses that might be paid under any ongoing bonus plans
      of
      the Company; (xv) working capital; (xvi) management of fixed costs or variable
      costs; (xvii) identification or consummation of investment opportunities or
      completion of specified projects in accordance with corporate business plans,
      including strategic mergers, acquisitions or divestitures; (xviii) total
      stockholder return; and (xix) debt reduction. Any of the above goals may be
      determined on an absolute or relative basis or as compared to the performance
      of
      a published or special index deemed applicable by the Committee including,
      but
      not limited to, the Standard & Poor’s 500 Stock Index or a group of
      companies that are comparable to the Company.

    


    The
      Committee shall exclude the impact of an event or occurrence that the Committee
      determines should appropriately be excluded, including without limitation:
      (i)
      restructurings, discontinued operations, extraordinary items, and other unusual
      or non-recurring charges; (ii) an event either not directly related to the
      operations of the Company or not within the reasonable control of the Company’s
      management; or (iii) a change in accounting standards required by generally
      accepted accounting principles.

    


    
      
        
        

      

      
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    (c) Performance
      Period; Timing For Establishing Performance Goals.
      Achievement of performance goals in respect of such Performance Awards shall
      be
      measured over a Performance Period, as specified by the Committee. Performance
      goals shall be established not later than ninety days after the beginning of
      any
      Performance Period applicable to such Performance Awards, or at such other
      date
      as may be required or permitted for “performance-based
      compensation”
under
      Code Section 162(m).

    


    (d) Adjustments.
      The
      Committee may, in its discretion, reduce the amount of a settlement otherwise
      to
      be made in connection with Awards subject to this Section 7, but may not
      exercise discretion to increase any such amount payable to a Covered Employee
      in
      respect of an Award subject to this Section 7. The Committee shall specify
      the
      circumstances in which such Awards shall be paid or forfeited in the event
      of
      termination of Continuous Service by the Participant prior to the end of a
      Performance Period or settlement of Awards.

    


    (e) Committee
      Certification.
      No
      Participant shall receive any payment under this Plan unless the Committee
      has
      certified, by resolution or other appropriate action in writing, that the
      performance criteria and any other material terms previously established by
      the
      Committee or set forth in this Plan, have been satisfied to the extent necessary
      to qualify as “performance
      based compensation”
under
      Code Section 162(m).

    


    8. Certain
      Provisions Applicable to Awards or Sales.

    


    (a) Stand-Alone,
      Additional, Tandem, and Substitute Awards.
      Awards
      granted under this Plan may, in the discretion of the Plan Administrator, be
      granted either alone or in addition to, in tandem with, or in substitution
      or
      exchange for, any other Award or any award granted under another plan of the
      Company, any Related Entity, or any business entity to be acquired by the
      Company or a Related Entity, or any other right of a Participant to receive
      payment from the Company or any Related Entity. Such additional, tandem, and
      substitute or exchange Awards may be granted at any time. If an Award is granted
      in substitution or exchange for another Award or award, the Plan Administrator
      shall require the surrender of such other Award or award in consideration for
      the grant of the new Award. In addition, Awards may be granted in lieu of cash
      compensation, including in lieu of cash amounts payable under other plans of
      the
      Company or any Related Entity.

    


    (b) Form
      and Timing of Payment Under Awards; Deferrals.
      Subject
      to the terms of this Plan and any applicable Award Agreement, payments to be
      made by the Company or a Related Entity upon the exercise of an Option or other
      Award or settlement of an Award may be made in such forms as the Plan
      Administrator shall determine, including, without limitation, cash, other Awards
      or other property, and may be made in a single payment or transfer, in
      installments, or on a deferred basis. The settlement of any Award may be
      accelerated, and cash paid in lieu of Stock in connection with such settlement,
      in the discretion of the Plan Administrator or upon occurrence of one or more
      specified events (in addition to a Change in Control). Installment or deferred
      payments may be required by the Plan Administrator (subject to Section 10(g)
      of
      this Plan) or permitted at the election of the Participant on terms and
      conditions established by the Plan Administrator. Payments may include, without
      limitation, provisions for the payment or crediting of a reasonable interest
      rate on installment or deferred payments or the grant or crediting of Dividend
      Equivalents or other amounts in respect of installment or deferred payments
      denominated in Stock.

    


    (c) Exemptions
      from Section 16(b) Liability.
      It is
      the intent of the Company that this Plan comply in all respects with applicable
      provisions of Rule 16b-3 or Rule 16a-1(c)(3) to the extent necessary to ensure
      that neither the grant of any Awards to nor other transaction by a Participant
      who is subject to Section 16 of the Exchange Act is subject to liability under
      Section 16(b) thereof (except for transactions acknowledged in writing to be
      non-exempt by such Participant). Accordingly, if any provision of this Plan
      or
      any Award Agreement does not comply with the requirements of Rule 16b-3 or
      Rule
      16a-1(c)(3) as then applicable to any such transaction, such provision will
      be
      construed or deemed amended to the extent necessary to conform to the applicable
      requirements of Rule 16b-3 or Rule 16a-1(c)(3) so that such Participant shall
      avoid liability under Section 16(b).

    


    (d) Code
      Section 409A.
      If and
      to the extent that the Plan Administrator believes that any Awards may
      constitute a “nonqualified
      deferred compensation plan”
under
      Code Section 409A, the terms and conditions set forth in the Award Agreement
      for
      that Award shall be drafted in a manner that is intended to comply with, and
      shall be interpreted in a manner consistent with, the applicable requirements
      of
      Code Section 409A, unless otherwise agreed to in writing by the Participant
      and
      the Company.

    


    
      
        
        

      

      
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    (e) Financial
      Information.
      At
      least annually, copies of the Company’s balance sheet and income statement for
      the just completed fiscal year shall be made available to each Participant
      under
      this Plan. The Company shall not be required to provide such information to
      key
      employees whose duties in connection with the Company assure them access to
      equivalent information. Furthermore, the Company shall deliver to each
      Participant such disclosures as are required in accordance with Rule 701 under
      the Exchange Act.

    


    9. Change
      in Control; Corporate Transaction.

    


    (a) Change
      in Control.
      The
      Plan Administrator may, in its discretion, accelerate the vesting,
      exercisability, lapsing of restrictions, or expiration of deferral of any Award,
      including upon the occurrence of a Change in Control. In addition, the Plan
      Administrator may provide in an Award Agreement that the performance goals
      relating to any Award will be deemed to have been met upon the occurrence of
      any
      Change in Control. In addition to the terms of preceding sentences, the effect
      of a “change
      in control”
may
      be
      provided (i) in an employment, compensation, or severance agreement, if any,
      between the Company or any Related Entity and the Participant, relating to
      the
      Participant’s employment, compensation, or severance with or from the Company or
      such Related Entity, or (ii) in the Award Agreement.

    


    (b) Corporate
      Transactions.
      In the
      event of a Corporate Transaction, any surviving entity or acquiring entity
      or
      its parent (together, the “Surviving
      Entity”)
      may
      either: (i) assume any or all Awards outstanding under this Plan; (ii) continue
      any or all Awards outstanding under this Plan; or (iii) substitute similar
      stock
      awards for outstanding Awards (it being understood that similar awards include,
      but are not limited to, awards to acquire the same consideration paid to the
      shareholders or the Company, as the case may be, pursuant to the Corporate
      Transaction). In the event that any Surviving Entity does not assume or continue
      any or all such outstanding Awards or substitute similar stock awards for such
      outstanding Awards, then with respect to Awards that have been not assumed,
      continued or substituted, then such Awards shall terminate if not exercised
      (if
      applicable) at or prior to such effective time (contingent upon the
      effectiveness of the Corporate Transaction); provided that the Plan
      Administrator provides the Participants reasonable notice of the termination
      of
      their Awards and a period of at least three business days to exercise the Awards
      (to the extent the Awards are exercisable).

    


    The
      Plan
      Administrator, in its discretion and without the consent of any Participant,
      may
      (but is not obligated to) either: (i) accelerate the vesting of any Awards
      (and,
      if applicable, the time at which such Awards may be exercised) in full or as
      to
      some percentage of the Award to a date prior to the effective time of such
      Corporate Transaction as the Plan Administrator shall determine (contingent
      upon
      the effectiveness of each Corporate Transaction); or (ii) provide for a cash
      payment in exchange for the termination of an Award or any portion thereof
      where
      such cash payment is equal to the Fair Market Value of the Shares that the
      Participant would receive if the Award were fully vested and exercised (if
      applicable) as of such date (less any applicable exercise price). In the event
      that the Plan Administrator accelerates the vesting of any Award, the Plan
      Administrator shall provide the Participant whose Award has been accelerated
      notice of the vesting acceleration and a period of fifteen days from the date
      of
      the notice in which to exercise the Award.

    


    Notwithstanding
      the foregoing, with respect to Restricted Stock and any other Award granted
      under this Plan where the Company has any forfeiture, reacquisition or
      repurchase rights, the forfeiture, reacquisition or repurchase rights for such
      Awards may be assigned by the Company to the Successor Entity in connection
      with
      such Corporate Transaction. In the event any such rights are not continued
      or
      assigned to the Successor Entity, then such rights shall lapse and the Award
      shall be fully vested as of the effective time of the Corporate Transaction.
      In
      addition, the Plan Administrator, in its discretion, may (but is not obligated
      to) provide that any forfeiture, reacquisition or repurchase rights held by
      the
      Company with respect to any such Awards shall lapse in whole or in part
      (contingent upon the effectiveness of the Corporate Transaction).

    


    (c) Dissolution
      or Liquidation.
      In the
      event of a dissolution or liquidation of the Company, then all outstanding
      Awards shall terminate immediately prior to the completion of such dissolution
      or liquidation, and Shares subject to the Company’s repurchase option may be
      repurchased by the Company notwithstanding the fact that the holder of such
      Stock is still in Continuous Service.

    


    10. General
      Provisions.

    


    (a) Compliance
      With Legal and Other Requirements.
      The
      Company may, to the extent deemed necessary or advisable by the Plan
      Administrator, postpone the issuance or delivery of Stock or payment of other
      benefits 

     

    
      
        
        

      

      
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    under
      any
      Award until completion of registration or qualification of such Stock or other
      required action under any federal or state law, rule or regulation, listing
      or
      other required action with respect to any stock exchange or automated quotation
      system upon which the Stock or other Company securities are listed or quoted,
      or
      compliance with any other obligation of the Company, as the Plan Administrator,
      may consider appropriate, and may require any Participant to make such
      representations, furnish such information and comply with or be subject to
      such
      other conditions as it may consider appropriate in connection with the issuance
      or delivery of Stock or payment of other benefits in compliance with applicable
      laws, rules, and regulations, listing requirements, or other obligations. The
      foregoing notwithstanding, in connection with a Change in Control, the Company
      shall take or cause to be taken no action, and shall undertake or permit to
      arise no legal or contractual obligation, that results or would result in any
      postponement of the issuance or delivery of Stock or payment of benefits under
      any Award or the imposition of any other conditions on such issuance, delivery
      or payment, to the extent that such postponement or other condition would
      represent a greater burden on a Participant than existed on the ninetieth day
      preceding the Change in Control.

    


    (b) Limits
      on Transferability; Beneficiaries.
      Except
      as determined by the Plan Administrator, a Participant may not assign, sell,
      transfer, or otherwise encumber or subject to any lien any Award or other right
      or interest granted under this Plan, in whole or in part, other than by will
      or
      by operation of the laws of descent and distribution, and such Awards or rights
      that may be exercisable shall be exercised during the lifetime of the
      Participant only by the Participant or his or her guardian or legal
      representative.

    


    (c) Adjustments.

    


    (i) Adjustments
      to Awards.
      In the
      event that any extraordinary dividend or other distribution (whether in the
      form
      of cash, Stock, or other property), recapitalization, forward or reverse split,
      reorganization, merger, consolidation, spin-off, combination, repurchase, share
      exchange, liquidation, dissolution or other similar corporate transaction or
      event affects the Stock and/or such other securities of the Company or any
      other
      issuer such that a substitution, exchange, or adjustment is determined by the
      Plan Administrator to be appropriate, then the Plan Administrator shall, in
      such
      manner as the Plan Administrator may deem equitable, substitute, exchange,
      or
      adjust any or all of (A) the number and kind of shares of stock that are
      reserved for issuance in connection with Awards granted thereafter, (B) the
      number and kind of shares of stock by which annual per-person Award limitations
      are measured under Section 5 hereof, (C) the number and kind of shares of stock
      subject to or deliverable in respect of outstanding Awards, (D) the exercise
      price, grant price or purchase price relating to any Award and/or make provision
      for payment of cash or other property in respect of any outstanding Award,
      and
      (E) any other aspect of any Award that the Plan Administrator determines to
      be
      appropriate.

    


    (ii) Other
      Adjustments.
      The
      Plan Administrator (which shall be a Committee to the extent such authority
      is
      required to be exercised by a Committee to comply with Code Section 162(m))
      is
      authorized to make adjustments in the terms and conditions of, and the criteria
      included in, Awards (including Awards subject to performance goals) in
      recognition of unusual or nonrecurring events (including, without limitation,
      acquisitions and dispositions of businesses and assets) affecting the Company,
      any Related Entity or any business unit, or the financial statements of the
      Company or any Related Entity, or in response to changes in applicable laws,
      regulations, accounting principles, tax rates and regulations or business
      conditions or in view of the Plan Administrator’s assessment of the business
      strategy of the Company, any Related Entity or business unit thereof,
      performance of comparable organizations, economic and business conditions,
      personal performance of a Participant, and any other circumstances deemed
      relevant; provided that no such adjustment shall be authorized or made if and
      to
      the extent that such authority or the making of such adjustment would cause
      Options, Stock Appreciation Rights or Performance Awards granted to Participants
      designated by the Plan Administrator as Covered Employees and intended to
      qualify as “performance-based
      compensation”
under
      Code Section 162(m) and the regulations thereunder to otherwise fail to qualify
      as “performance-based
      compensation”
under
      Code Section 162(m) and regulations thereunder.

    


    (d) Taxes.
      The
      Company and any Related Entity are authorized to withhold from any Award
      granted, any payment relating to an Award under this Plan, including from a
      distribution of Stock, or any payroll or other payment to a Participant, amounts
      of withholding and other taxes due or potentially payable in connection with
      any
      transaction involving an Award, and to take such other action as the Plan
      Administrator may deem advisable to enable the Company, any Related Entity
      and
      the Participants to satisfy obligations for the payment of withholding taxes
      and
      other tax obligations relating to any Award. This authority shall include
      authority to withhold or receive Stock or other property and to make cash
      payments in respect thereof in satisfaction of a Participant’s tax obligations,
      either on a mandatory or elective basis in the discretion of the Plan
      Administrator.

    


    
      
        
        

      

      
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    (e) Changes
      to this Plan and Awards.
      The
      Board may amend, alter, suspend, discontinue or terminate this Plan, or any
      Committee’s authority to grant Awards under this Plan, without the consent of
      shareholders of the Company or Participants. Any amendment or alteration to
      this
      Plan shall be subject to the approval of the Company’s shareholders if such
      shareholder approval is deemed necessary and advisable by the Board. However,
      without the consent of an affected Participant, no such amendment, alteration,
      suspension, discontinuance or termination of this Plan may materially and
      adversely affect the rights of such Participant under any previously granted
      and
      outstanding Award. The Plan Administrator may waive any conditions or rights
      under, or amend, alter, suspend, discontinue or terminate any Award theretofore
      granted and any Award Agreement relating thereto, except as otherwise provided
      in this Plan; provided that, without the consent of an affected Participant,
      no
      such action may materially and adversely affect the rights of such Participant
      under such Award.

    


    (f) Limitation
      on Rights Conferred Under Plan.
      Neither
      this Plan nor any action taken hereunder shall be construed as: (i) giving
      any
      Eligible Person or Participant the right to continue as an Eligible Person
      or
      Participant or in the employ of the Company or a Related Entity; (ii)
      interfering in any way with the right of the Company or a Related Entity to
      terminate any Eligible Person’s or Participant’s Continuous Service at any time;
      (iii) giving an Eligible Person or Participant any claim to be granted any
      Award
      under this Plan or to be treated uniformly with other Participants and
      Employees; or (iv) conferring on a Participant any of the rights of a
      shareholder of the Company unless and until the Participant is duly issued
      or
      transferred Shares in accordance with the terms of an Award.

    


    (g) Unfunded
      Status of Awards; Creation of Trusts.
      This
      Plan is intended to constitute an “unfunded”
plan
      for incentive and deferred compensation. With respect to any payments not yet
      made to a Participant or obligations to deliver Stock pursuant to an Award,
      nothing contained in this Plan or any Award shall give any such Participant
      any
      rights that are greater than those of a general creditor of the Company;
      provided that the Plan Administrator may authorize the creation of trusts and
      deposit therein cash, Stock, other Awards or other property, or make other
      arrangements to meet the Company’s obligations under this Plan. Such trusts or
      other arrangements shall be consistent with the “unfunded”
status
      of this Plan unless the Plan Administrator otherwise determines with the consent
      of each affected Participant. The trustee of such trusts may be authorized
      to
      dispose of trust assets and reinvest the proceeds in alternative investments,
      subject to such terms and conditions as the Plan Administrator may specify
      and
      in accordance with applicable law.

    


    (h) Nonexclusivity
      of this Plan.
      Neither
      the adoption of this Plan by the Board nor its submission to the shareholders
      of
      the Company for approval shall be construed as creating any limitations on
      the
      power of the Board or the Committee thereof to adopt such other incentive
      arrangements as it may deem desirable including incentive arrangements and
      awards that do not qualify under Code Section 162(m).

    


    (i) Fractional
      Shares.
      No
      fractional Shares shall be issued or delivered pursuant to this Plan or any
      Award. The Plan Administrator shall determine whether cash, other Awards or
      other property shall be issued or paid in lieu of such fractional shares or
      whether such fractional shares or any rights thereto shall be forfeited or
      otherwise eliminated.

    


    (j) Governing
      Law.
      The
      validity, construction and effect of this Plan, any rules and regulations under
      this Plan, and any Award Agreement shall be determined in accordance with the
      laws of the State of California without giving effect to principles of conflicts
      of laws, and applicable federal law.

    


    (k) Plan
      Effective Date and Shareholder Approval; Termination of Plan.
      This
      Plan shall become effective on the Effective Date, subject to subsequent
      approval within twelve months of its adoption by the Board by shareholders
      of
      the Company eligible to vote in the election of directors, by a vote sufficient
      to meet the requirements of Applicable Laws. Awards may be granted prior and
      subject to shareholder approval, but may not be exercised or otherwise settled
      in the event shareholder approval is not obtained. This Plan shall terminate
      no
      later than ten years from the date of the later of (i) the Effective Date and
      (ii) the date an increase in the number of shares reserved for issuance under
      this Plan is approved by the Board (so long as such increase is also
      subsequently approved by the shareholders).

    


    


    


    
      
        
        

      

      
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