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Exhibit 4.1    
    

	

NUMBER	
 	

SHARES
	

 	
 	

CUSIP 02081G 10 2
	ATEC	 	SEE REVERSE FOR

CERTAIN DEFINITIONS
	COMMON STOCK	 	 

[ALPHATEC LOGO]

ALPHATEC HOLDINGS, INC.

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE 

THIS
CERTIFIES THAT 

is
the owner of 

FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK,

PAR VALUE $0.0001 PER SHARE, OF 

ALPHATEC
HOLDINGS, INC., transferable on the books of the Corporation by the holder hereof in person or by duly authorized attorney upon surrender of this certificate properly endorsed. This
certificate and the shares represented hereby are subject to the laws of the State of Delaware and to the Amended and Restated Certificate of Incorporation and the By-laws of the
Corporation, each as from time to time amended. 

        This
certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar. 

        WITNESS
the facsimile seal of Alphatec Holdings, Inc. and the facsimile signature of its duly authorized officers. 

	Dated:	 	 	 	 
	

/s/ RONALD G. HISCOCK	
 	

 	
 	

/s/ STEPHEN T.D. DIXON
	PRESIDENT and CEO	 	 	 	TREASURER AND CFO
	

 	
 	

[SEAL]	
 	

 
	COUNTERSIGNED AND REGISTERED:

MELLON INVESTOR SERVICES LLC	 	 
	TRANSFER AGENT

AND REGISTRAR

	 	 	 	 

	

BY:	

 	
 	

 	
 	

 
	 	
	 	 	 	 
	 	AUTHORIZED SIGNATURE

	 	 	 	 

        The
following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or
regulations: 

	TEN COM—	 	as tenants in common	 	UNIF GIFT MIN ACT—	 	 	 	 	 	 
	TEN ENT—	 	as tenants by the entireties	 	 	 	
	 	Custodian	 	

	JT TEN—	 	as joint tenants with right	 	 	 	(Cust)	 	 	 	(Minor)
	 	 	of survivorship and not as	 	 	 	under Uniform Gifts to Minors
	 	 	tenants in common	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Act	 	 	 	 
	 	 	 	 	 	 	 	 	
 (State)

        Additional
abbreviations may also be used though not in the above list. 

	For Value Received,	 	 	hereby sell, assign and transfer unto
	 	
	 	 

	

PLEASE INSERT SOCIAL SECURITY OR OTHER

IDENTIFYING NUMBER OF ASSIGNEE	
 	

 
	

	
 	

 

(PLEASE
PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP OF ASSIGNEE) 

	

	
 	

Shares
	of the common stock represented by this Certificate, and do hereby irrevocably constitute and appoint
	

	
 	

Attorney
	to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises.

	

Dated:	

	
 	

 	
 	

 
	

 	

	
 	

 
	 	NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.	 	 
	

SIGNATURE(S) GUARANTEED:	
 	

 
	

	
 	

 
	THE SIGNATURE (S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBRO- KERS, SAVINGS SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT TO S. E. C. RULE 17Ad-15.

	 	 

        Pursuant
to Section 151 of the Delaware General Corporation Law, Alphatec Holdings, Inc. will furnish without charge to each stockholder who so requests the powers,
designations, preferences and relative, participating, optional, or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights. 

QuickLinks

Exhibit 4.1Exhibit 10.5

 

ALPHATEC HOLDINGS, INC.

 

2005 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK PLAN

(As Amended and Restated on June       , 2006)

 

1.                                       DEFINITIONS.

 

Unless
otherwise specified or unless the context otherwise requires, the following
terms, as used in this Alphatec Holdings, Inc. 2005 Employee, Director and
Consultant Stock Plan, have the following meanings:

 

Administrator
means the Board of Directors, unless it has delegated power to act on its
behalf to the Committee, in which case the Administrator means the Committee.

 

Affiliate
means a corporation which, for purposes of Section 424 of the Code, is a
parent or subsidiary of the Company, direct or indirect.

 

Agreement
means an agreement between the Company and a Participant delivered pursuant to
the Plan, in such form as the Administrator shall approve.

 

Board
of Directors means the Board of Directors of the Company.

 

Change
of Control shall occur on the date that: (i) any one
person, entity or group acquires ownership of capital stock of the Company that,
together with the capital stock of the Company already held by such person,
entity or group, constitutes more than 50% of the total fair market value or
total voting power of the capital stock of the Company; provided, however, if
any one person, entity or group is considered to own more than 50% of the total
fair market value or total voting power of the capital stock of the Company,
the acquisition of additional capital stock by the same person, entity or group
shall not be deemed to be a Change of Control; (ii) a majority of members
of the Board is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the members of the
Board prior to the date of the appointment or election; or (iii) any one
person, entity or group acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person, entity or
group) assets from the Company that have a total gross fair market value at
least equal to 80% of the total gross fair market value of all of the assets of
the Company immediately prior to such acquisition or acquisitions; provided,
however, a transfer of assets by the Company shall not deemed to be a Change of
Control if the assets are transferred to (A) a shareholder of the Company
(immediately before the asset transfer) in exchange for or with respect to its
capital stock in the Company, (B) an entity, 50% or more of the total
value or voting power of which is owned, directly or indirectly, by the
Company, (C) a

 

 

person,
entity or group that owns, directly or indirectly, 50% or more of the total
value or voting power of all the outstanding capital stock of the Company, or (D) an
entity, at least 50% of the total value or voting power of which is owned, directly
or indirectly, by a person, entity or group described in subparagraph (C) above.
In all respects, the definition of “Change of Control” shall be interpreted to
comply with Section 409A of the Internal Revenue Code of 1986, as amended,
and the provisions of Treasury Notice 2005-1, and any successor statute,
regulation and guidance thereto.

 

Code
means the United States Internal Revenue Code of 1986, as amended.

 

Committee
means the committee of the Board of Directors to which the Board of Directors
has delegated power to act under or pursuant to the provisions of the Plan.

 

Common
Stock means shares of the Company’s Common Stock, $.0001 par
value per share.

 

Company
means Alphatec Holdings, Inc., a Delaware corporation.

 

Disability
or Disabled means permanent and total disability as defined in Section 22(e)(3) of
the Code.

 

Employee
means any employee of the Company or of an Affiliate (including, without
limitation, an employee who is also serving as an officer or director of the
Company or of an Affiliate), designated by the Administrator to be eligible to
be granted one or more Stock Rights under the Plan.

 

Fair
Market Value of a Share of Common Stock means:

 

(a)                                  If
the Common Stock is listed on a national securities exchange or traded in the
over-the-counter market and sales prices are regularly reported for the Common
Stock, the closing or last price of the Common Stock on the composite tape or
other comparable reporting system for the trading day immediately preceding the
applicable date;

 

(b)                                 If
the Common Stock is not traded on a national securities exchange but is traded
on the over-the-counter market, if sales prices are not regularly reported for
the Common Stock for the trading day referred to in clause (a), and if bid
and asked prices for the Common Stock are regularly reported, the mean between
the bid and the asked price for the Common Stock at the close of trading in the
over-the-counter market for the trading day on which Common Stock was traded
immediately preceding the applicable date; and

 

2

 

(c)                                  If
the Common Stock is neither listed on a national securities exchange nor traded
in the over-the-counter market, such value as the Administrator, in good faith,
shall determine.

 

ISO
means an option meant to qualify as an incentive stock option under Section 422
of the Code.

 

Non-Qualified
Option means an option which is not intended to qualify as an
ISO.

 

Option
means an ISO or Non-Qualified Option granted under the Plan.

 

Option
Agreement means an agreement between the Company and a
Participant delivered pursuant to the Plan, in such form as the
Administrator shall approve.

 

Participant
means an Employee, director or consultant of the Company or an Affiliate to
whom one or more Stock Rights are granted under the Plan. As used herein, “Participant”
shall include “Participant’s Survivors” where the context requires.

 

Plan
means this Alphatec Holdings, Inc. 2005 Employee, Director and Consultant
Stock Plan.

 

Shares
means shares of the Common Stock as to which Stock Rights have been or may be
granted under the Plan or any shares of capital stock into which the Shares are
changed or for which they are exchanged within the provisions of
Paragraph 3 of the Plan. The Shares issued under the Plan may be authorized
and unissued shares or shares held by the Company in its treasury, or both.

 

Stock
Grant means a grant by the Company of Shares under the Plan.

 

Stock
Grant Agreement means an agreement between the Company and a
Participant delivered pursuant to the Plan, in such form as the
Administrator shall approve.

 

Stock
Right means a right to Shares of the Company granted pursuant
to the Plan — an ISO, a Non-Qualified Option or a Stock Grant.

 

Survivor
means a deceased Participant’s legal representatives and/or any person or
persons who acquired the Participant’s rights to a Stock Right by will or by
the laws of descent and distribution.

 

3

 

2.                                       PURPOSES
OF THE PLAN.

 

The
Plan is intended to encourage ownership of Shares by Employees and directors of
and certain consultants to the Company in order to attract and retain such
people, to induce them to work for the benefit of the Company or of an
Affiliate and to provide additional incentive for them to promote the success
of the Company or of an Affiliate. The Plan provides for the granting of ISOs,
Non-Qualified Options and Stock Grants.

 

3.                                       SHARES
SUBJECT TO THE PLAN.

 

(a)                                  The
number of Shares which may be issued from time to time pursuant to this
Plan shall be 6,400,000, or the equivalent of such number of Shares after the
Administrator, in its sole discretion, has interpreted the effect of any stock
split, stock dividend, combination, recapitalization or similar transaction in
accordance with Paragraph 23 of the Plan. All Shares reserved under this Plan may be
granted as ISOs, Non-Qualified Options or Stock Grants.

 

(b)                                 Notwithstanding
Subparagraph (a) above, on the first day of each fiscal year of the
Company during the period beginning in fiscal year 2007, and ending on the
second day of fiscal year 2015, the number of Shares that may be issued
from time to time pursuant to the Plan, shall be increased by an amount equal
to the lesser of (i) 1,600,000 or the equivalent of such number of Shares
after the Administrator, in its sole discretion, has interpreted the effect of
any stock split, stock dividend, combination, recapitalization or similar
transaction in accordance with Paragraph 24 of the Plan; (ii) 5% of the
number of outstanding shares of Common Stock on such date; and (iii) an
amount determined by the Board.

 

(c)                                  If
an Option ceases to be “outstanding”, in whole or in part (other than by
exercise), or if the Company shall reacquire (at not more than its original
issuance price) any Shares issued pursuant to a Stock Grant or Stock-Based
Award, or if any Stock Right expires or is forfeited, cancelled, or otherwise
terminated or results in any Shares not being issued, the unissued Shares which
were subject to such Stock Right shall again be available for issuance from
time to time pursuant to this Plan.

 

4.                                       ADMINISTRATION
OF THE PLAN.

 

The
Administrator of the Plan will be the Board of Directors, except to the extent
the Board of Directors delegates its authority to the Committee, in which case
the Committee shall be the Administrator. Subject to the provisions of the
Plan, the Administrator is authorized to:

 

(a)                                  Interpret
the provisions of the Plan or of any Option or Stock Grant and to make all rules and
determinations which it deems necessary or advisable for the administration of
the Plan;

 

4

 

(b)                                 Determine
which Employees, directors and consultants shall be granted Stock Rights;

 

(c)                                  Determine
the number of Shares for which a Stock Right or Stock Rights shall be granted,
provided, however, that in no event shall Stock Rights with respect to more
than 200,000 Shares be granted to any Participant in any fiscal year;

 

(d)                                 Specify
the terms and conditions upon which a Stock Right or Stock Rights may be
granted;

 

(e)                                  Make
changes to any outstanding Stock Right, including, without limitation, to
reduce or increase the exercise price or purchase price, accelerate the vesting
schedule or extend the expiration date, provided that no such change shall
impair the rights of a Participant under any grant previously made without such
Participant’s consent;

 

(f)                                    Buy
out for a payment in cash or Shares, a Stock Right previously granted and/or
cancel any such Stock Right and grant in substitution therefor other Stock
Rights, covering the same or a different number of Shares and having an
exercise price or purchase price per share which may be lower or higher
than the exercise price or purchase price of the cancelled Stock Right, based
on such terms and conditions as the Administrator shall establish and the
Participant shall accept; and

 

(g)                                 Adopt
any sub-plans applicable to residents of any specified jurisdiction as it deems
necessary or appropriate in order to comply with or take advantage of any tax
laws applicable to the Company or to Plan Participants or to otherwise
facilitate the administration of the Plan, which sub-plans may include
additional restrictions or conditions applicable to Options or Shares acquired
upon exercise of Options.

 

provided, however, that
all such interpretations, rules, determinations, terms and conditions shall be
made and prescribed in the context of preserving the tax status under Section 422
of the Code of those Options which are designated as ISOs. Subject to the
foregoing, the interpretation and construction by the Administrator of any
provisions of the Plan or of any Stock Right granted under it shall be final,
unless otherwise determined by the Board of Directors, if the Administrator is
the Committee. In addition, if the Administrator is the Committee, the Board of
Directors may take any action under the Plan that would otherwise be the
responsibility of the Committee.

 

To the
extent permitted under applicable law, the Board of Directors or the Committee may allocate
all or any portion of its responsibilities and powers to any one or more of its
members and may delegate all or any portion of its responsibilities and
powers to any other person selected by it. The Board of Directors or the
Committee may revoke any such allocation or delegation at any time.

 

5

 

5.                                       ELIGIBILITY
FOR PARTICIPATION.

 

The
Administrator will, in its sole discretion, name the Participants in the Plan,
provided, however, that each Participant must be an Employee, director or consultant
of the Company or of an Affiliate at the time a Stock Right is granted. Notwithstanding
the foregoing, the Administrator may authorize the grant of a Stock Right
to a person not then an Employee, director or consultant of the Company or of
an Affiliate; provided, however, that the actual grant of such Stock Right
shall be conditioned upon such person becoming eligible to become a Participant
at or prior to the time of the execution of the Agreement evidencing such Stock
Right. ISOs may be granted only to Employees. Non-Qualified Options and
Stock Grants may be granted to any Employee, director or consultant of the
Company or an Affiliate. The granting of any Stock Right to any individual
shall neither entitle that individual to, nor disqualify him or her from,
participation in any other grant of Stock Rights.

 

6.                                       TERMS
AND CONDITIONS OF OPTIONS.

 

Each
Option shall be set forth in writing in an Option Agreement, duly executed by
the Company and, to the extent required by law or requested by the Company, by
the Participant. The Administrator may provide that Options be granted
subject to such terms and conditions, consistent with the terms and conditions
specifically required under this Plan, as the Administrator may deem
appropriate including, without limitation, subsequent approval by the
shareholders of the Company of this Plan or any amendments thereto. The Option
Agreements shall be subject to at least the following terms and conditions:

 

(a)                                  Non-Qualified
Options:  Each Option intended to be
a Non-Qualified Option shall be subject to the terms and conditions which the
Administrator determines to be appropriate and in the best interest of the
Company, subject to the following minimum standards for any such Non-Qualified
Option:

 

(i)                                     Option
Price: Each Option Agreement shall state the option price (per share) of the
Shares covered by each Option, which option price shall be determined by the
Administrator but shall not be less than the Fair Market Value per
share of Common Stock.

 

(ii)                                  Number
of Shares:  Each Option Agreement shall
state the number of Shares to which it pertains;

 

(iii)                               Option Periods:  Each Option Agreement shall state the date or
dates on which it first is exercisable and the date after which it may no
longer be exercised, and may provide that the Option rights accrue or
become exercisable in installments over a period of months or years, or upon
the occurrence of certain conditions or the attainment of stated goals or
events; and

 

(iv)                              Option
Conditions:  Exercise of any Option may be
conditioned upon the Participant’s execution of a share purchase agreement in form satisfactory

 

6

 

to the
Administrator providing for certain protections for the Company and its other
shareholders, including requirements that:

 

(A)                              The
Participant’s or the Participant’s Survivors’ right to sell or transfer the
Shares may be restricted; and

 

(B)                                The
Participant or the Participant’s Survivors may be required to execute
letters of investment intent and must also acknowledge that the Shares will
bear legends noting any applicable restrictions.

 

(b)                                 ISOs:  Each Option intended to be an ISO shall be
issued only to an Employee and be subject to the following terms and
conditions, with such additional restrictions or changes as the Administrator
determines are appropriate but not in conflict with Section 422 of the
Code and relevant regulations and rulings of the Internal Revenue Service:

 

(i)                                     Minimum
standards:  The ISO shall meet the
minimum standards required of Non-Qualified Options, as described in Paragraph
6(a) above, except clause (i) thereunder.

 

(ii)                                  Option
Price:  Immediately before the ISO is
granted, if the Participant owns, directly or by reason of the applicable
attribution rules in Section 424(d) of the Code:

 

(A)                              10%
or less of the total combined voting power of all classes of stock of
the Company or an Affiliate, the Option price per share of the Shares covered
by each ISO shall not be less than 100% of the Fair Market Value per share of
the Shares on the date of the grant of the Option; or

 

(B)                                More
than 10% of the total combined voting power of all classes of stock of the
Company or an Affiliate, the Option price per share of the Shares covered by
each ISO shall not be less than 110% of the said Fair Market Value on the date
of grant.

 

(iii)                               Term of Option:  For Participants who own:

 

(A)                              10%
or less of the total combined voting power of all classes of stock of
the Company or an Affiliate, each ISO shall terminate not more than ten years
from the date of the grant or at such earlier time as the Option Agreement may provide;
or

 

(B)                                More
than 10% of the total combined voting power of all classes of stock of the
Company or an Affiliate, each ISO shall terminate not more than five years from
the date of the grant or at such earlier time as the Option Agreement may provide.

 

7

 

(iv)                              Limitation
on Yearly Exercise:  The Option
Agreements shall restrict the amount of ISOs which may become exercisable
in any calendar year (under this or any other ISO plan of the Company or an
Affiliate) so that the aggregate Fair Market Value (determined at the time each
ISO is granted) of the stock with respect to which ISOs are exercisable for the
first time by the Participant in any calendar year does not exceed $100,000.

 

7.                                       TERMS
AND CONDITIONS OF STOCK GRANTS.

 

Each
offer of a Stock Grant to a Participant shall state the date prior to which the
Stock Grant must be accepted by the Participant, and the principal terms of
each Stock Grant shall be set forth in a Stock Grant Agreement, duly executed
by the Company and, to the extent required by law or requested by the Company,
by the Participant. The Stock Grant Agreement shall be in a form approved
by the Administrator and shall contain terms and conditions which the
Administrator determines to be appropriate and in the best interest of the
Company, subject to the following minimum standards:

 

(a)                                  Each
Stock Grant Agreement shall state the purchase price (per share), if any, of
the Shares covered by each Stock Grant, which purchase price shall be
determined by the Administrator but shall not be less than the minimum
consideration required by the Delaware General Corporation Law on the date of
the grant of the Stock Grant;

 

(b)                                 Each
Stock Grant Agreement shall state the number of Shares to which the Stock Grant
pertains; and

 

(c)                                  Each
Stock Grant Agreement shall include the terms of any right of the Company to
restrict or reacquire the Shares subject to the Stock Grant, including the time
and events upon which such rights shall accrue and the purchase price therefor,
if any.

 

8.                                       EXERCISE
OF OPTIONS AND ISSUE OF SHARES.

 

An
Option (or any part or installment thereof) shall be exercised by giving
written notice to the Company or its designee, together with provision for
payment of the full purchase price in accordance with this Paragraph for the
Shares as to which the Option is being exercised, and upon compliance with any
other condition(s) set forth in the Option Agreement. Such notice shall be
signed by the person exercising the Option, shall state the number of Shares
with respect to which the Option is being exercised and shall contain any
representation required by the Plan or the Option Agreement. Payment of the
purchase price for the Shares as to which such Option is being exercised shall
be made (a) in United States dollars in cash or by check, or (b) at
the discretion of the Administrator, through delivery of shares of Common Stock
having a Fair Market Value equal as of the date of the exercise to the cash
exercise price of the Option, or (c)  at the discretion of the
Administrator, by having the Company retain from the Shares otherwise

 

8

 

issuable upon exercise of
the Option, a number of Shares having a Fair Market Value equal as of the date
of exercise to the exercise price of the Option, or (d) at the discretion
of the Administrator, by delivery of the grantee’s personal recourse note
bearing interest payable not less than annually at market rate on the date of
exercise and at no less than 100% of the applicable Federal rate, as defined in
Section 1274(d) of the Code, or (e) at the discretion of the
Administrator, in accordance with a cashless exercise program established with
a securities brokerage firm, and approved by the Administrator, (f) at the
discretion of the Administrator, by any combination of (a), (b), (c), (d) and
(e) above, or (g) at the discretion of the Administrator, payment of
such other lawful consideration as the Administrator may determine.
Notwithstanding the foregoing, the Administrator shall accept only such payment
on exercise of an ISO as is permitted by Section 422 of the Code.

 

The
Company shall then reasonably promptly deliver the Shares as to which such
Option was exercised to the Participant (or to the Participant’s Survivors, as
the case may be). In determining what constitutes “reasonably promptly,”
it is expressly understood that the issuance and delivery of the Shares may be
delayed by the Company in order to comply with any law or regulation
(including, without limitation, state securities or “blue sky” laws) which
requires the Company to take any action with respect to the Shares prior to
their issuance. The Shares shall, upon delivery, be fully paid, non-assessable
Shares.

 

The
Administrator shall have the right to accelerate the date of exercise of any
installment of any Option; provided that the Administrator shall not accelerate
the exercise date of any installment of any Option granted to an Employee as an
ISO (and not previously converted into a Non-Qualified Option pursuant to
Paragraph 26) if such acceleration would violate the annual vesting limitation
contained in Section 422(d) of the Code, as described in Paragraph
6(b)(iv).

 

The
Administrator may, in its discretion, amend any term or condition of an
outstanding Option provided (i) such term or condition as amended is
permitted by the Plan, (ii) any such amendment shall be made only with the
consent of the Participant to whom the Option was granted, or in the event of
the death of the Participant, the Participant’s Survivors, if the amendment is adverse to the
Participant, and (iii) any such amendment of any ISO shall be made
only after the Administrator determines whether such amendment would constitute
a “modification” of any Option which is an ISO (as that term is defined in Section 424(h) of
the Code) or would cause any adverse tax consequences for the holder of such
ISO.

 

9.                                       ACCEPTANCE
OF STOCK GRANT AND ISSUE OF SHARES.

 

A
Stock Grant (or any part or installment thereof) shall be accepted by
executing the Stock Grant Agreement and delivering it to the Company or its
designee, together with provision for payment of the full purchase price, if
any, in accordance with this Paragraph for the Shares as to which such Stock
Grant is being accepted, and upon compliance with any other conditions set
forth in the Stock Grant Agreement. Payment of the purchase price for the
Shares as to which such Stock Grant is being accepted shall be made (a) in
United States dollars in cash or by check, or (b) at the discretion of the
Administrator, through delivery of shares of Common Stock and having a Fair
Market Value equal as of the date of acceptance of the Stock Grant to the
purchase

 

9

 

price of the Stock Grant,
or (c) at the discretion of the Administrator, by delivery of the grantee’s
personal recourse note bearing interest payable not less than annually at no
less than 100% of the applicable Federal rate, as defined in Section 1274(d) of
the Code, or (d) at the discretion of the Administrator, by any
combination of (a), (b) and (c) above, or (e) at the discretion
of the Administrator, payment of such other lawful consideration as the
Administrator may determine.

 

The
Company shall then reasonably promptly deliver the Shares as to which such
Stock Grant was accepted to the Participant (or to the Participant’s Survivors,
as the case may be), subject to any escrow provision set forth in the
Stock Grant Agreement. In determining what constitutes “reasonably promptly,”
it is expressly understood that the issuance and delivery of the Shares may be
delayed by the Company in order to comply with any law or regulation
(including, without limitation, state securities or “blue sky” laws) which
requires the Company to take any action with respect to the Shares prior to
their issuance.

 

The
Administrator may, in its discretion, amend any term or condition of an
outstanding Stock Grant or Stock Grant Agreement provided (i) such term or
condition as amended is permitted by the Plan, and (ii) any such amendment
shall be made only with the consent of the Participant to whom the Stock Grant
was made, if the amendment is adverse
to the Participant.

 

10.                                 RIGHTS
AS A SHAREHOLDER.

 

No Participant
to whom a Stock Right has been granted shall have rights as a shareholder with
respect to any Shares covered by such Stock Right, except after due exercise of
the Option or acceptance of the Stock Grant and tender of the full purchase
price, if any, for the Shares being purchased pursuant to such exercise or
acceptance and registration of the Shares in the Company’s share register in
the name of the Participant.

 

11.                                 ASSIGNABILITY
AND TRANSFERABILITY OF STOCK RIGHTS.

 

By its
terms, a Stock Right granted to a Participant shall not be transferable by the
Participant other than (a) by will or by the laws of descent and
distribution, or (b) as approved by the Administrator in its discretion
and set forth in the applicable Option Agreement or Stock Grant Agreement. Notwithstanding
the foregoing, an ISO transferred except in compliance with clause (a) above
shall no longer qualify as an ISO. The designation of a beneficiary of a Stock
Right by a Participant, with the prior approval of the Administrator and in
such form as the Administrator shall prescribe, shall not be deemed a
transfer prohibited by this Paragraph. Except as provided above, a Stock Right
shall only be exercisable or may only be accepted, during the Participant’s
lifetime, only by such Participant (or by his or her legal representative) and
shall not be assigned, pledged or hypothecated in any way (whether by operation
of law or otherwise) and shall not be subject to execution, attachment or
similar process. Any attempted transfer, assignment, pledge, hypothecation or
other disposition of any Stock Right or of any rights granted thereunder
contrary to the provisions of this Plan, or the levy of any attachment or
similar process upon a Stock Right, shall be null and void.

 

10

 

12.                                 EFFECT
ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN “FOR CAUSE” OR DEATH OR
DISABILITY.

 

Except
as otherwise provided in a Participant’s Option Agreement, in the event of a
termination of service (whether as an employee, director or consultant) with
the Company or an Affiliate before the Participant has exercised an Option, the
following rules apply:

 

(a)                                  A
Participant who ceases to be an employee, director or consultant of the Company
or of an Affiliate (for any reason other than termination “for cause”,
Disability, or death for which events there are special rules in
Paragraphs 13, 14, and 15, respectively), may exercise any Option granted
to him or her to the extent that the Option is exercisable on the date of such termination
of service, but only within such term as the Administrator has designated in a
Participant’s Option Agreement.

 

(b)                                 Except
as provided in Subparagraph (c) below, or Paragraph 14 or 15, in no event may an
Option intended to be an ISO, be exercised later than three months after the
Participant’s termination of employment.

 

(c)                                  The
provisions of this Paragraph, and not the provisions of Paragraph 14 or 15,
shall apply to a Participant who subsequently becomes Disabled or dies after
the termination of employment, director status or consultancy, provided,
however, in the case of a Participant’s Disability or death within three months
after the termination of employment, director status or consultancy, the
Participant or the Participant’s Survivors may exercise the Option within
one year after the date of the Participant’s termination of service, but in no
event after the date of expiration of the term of the Option.

 

(d)                                 Notwithstanding
anything herein to the contrary, if subsequent to a Participant’s termination
of employment, termination of director status or termination of consultancy,
but prior to the exercise of an Option, the Board of Directors determines that,
either prior or subsequent to the Participant’s termination, the Participant
engaged in conduct which would constitute “cause”, then such Participant shall
forthwith cease to have any right to exercise any Option.

 

(e)                                  A
Participant to whom an Option has been granted under the Plan who is absent
from work with the Company or with an Affiliate because of temporary disability
(any disability other than a Disability as defined in Paragraph 1 hereof), or
who is on leave of absence for any purpose, shall not, during the period of any
such absence, be deemed, by virtue of such absence alone, to have terminated
such Participant’s employment, director status or consultancy with the Company
or with an Affiliate, except as the Administrator may otherwise expressly
provide.

 

(f)                                    Except
as required by law or as set forth in a Participant’s Option Agreement, Options
granted under the Plan shall not be affected by any change of a Participant’s
status within or among the Company and any Affiliates, so long as the
Participant continues to be an employee, director or consultant of the Company
or any Affiliate.

 

11

 

13.                                 EFFECT
ON OPTIONS OF TERMINATION OF SERVICE “FOR CAUSE”.

 

Except
as otherwise provided in a Participant’s Option Agreement, the following rules apply
if the Participant’s service (whether as an employee, director or consultant)
with the Company or an Affiliate is terminated “for cause” prior to the time
that all his or her outstanding Options have been exercised:

 

(a)                                  All
outstanding and unexercised Options as of the time the Participant is notified
his or her service is terminated “for cause” will immediately be forfeited.

 

(b)                                 For
purposes of this Plan, “cause” shall include (and is not limited to) dishonesty
with respect to the Company or any Affiliate, insubordination, substantial
malfeasance or non-feasance of duty, unauthorized disclosure of confidential
information, breach by the Participant of any provision of any employment,
consulting, advisory, nondisclosure, non-competition or similar agreement
between the Participant and the Company, and conduct substantially prejudicial
to the business of the Company or any Affiliate. The determination of the
Administrator as to the existence of “cause” will be conclusive on the
Participant and the Company.

 

(c)                                  “Cause”
is not limited to events which have occurred prior to a Participant’s
termination of service, nor is it necessary that the Administrator’s finding of
“cause” occur prior to termination. If the Administrator determines, subsequent
to a Participant’s termination of service but prior to the exercise of an
Option, that either prior or subsequent to the Participant’s termination the
Participant engaged in conduct which would constitute “cause”, then the right
to exercise any Option is forfeited.

 

(d)                                 Any
provision in an agreement between the Participant and the Company or an
Affiliate, which contains a conflicting definition of “cause” for termination
and which is in effect at the time of such termination, shall supersede the
definition in this Plan with respect to that Participant.

 

14.                                 EFFECT
ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY.

 

Except
as otherwise provided in a Participant’s Option Agreement, a Participant who
ceases to be an employee, director or consultant of the Company or of an
Affiliate by reason of Disability may exercise any Option granted to such
Participant:

 

(a)                                  To
the extent that the Option has become exercisable but has not been exercised on
the date of Disability; and

 

(b)                                 In
the event rights to exercise the Option accrue periodically, to the extent of a
pro rata portion through the date of Disability of any additional vesting
rights that would have accrued on the next vesting date had the Participant not
become

 

12

 

Disabled.
The proration shall be based upon the number of days accrued in the current
vesting period prior to the date of Disability.

 

A
Disabled Participant may exercise such rights only within the period
ending one year after the date of the Participant’s termination of employment,
directorship or consultancy, as the case may be, notwithstanding that the
Participant might have been able to exercise the Option as to some or all of
the Shares on a later date if the Participant had not become Disabled and had
continued to be an employee, director or consultant or, if earlier, within the
originally prescribed term of the Option.

 

The
Administrator shall make the determination both of whether Disability has
occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician selected or
approved by the Administrator, the cost of which examination shall be paid for
by the Company.

 

15.                                 EFFECT
ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.

 

Except
as otherwise provided in a Participant’s Option Agreement, in the event of the
death of a Participant while the Participant is an employee, director or
consultant of the Company or of an Affiliate, such Option may be exercised
by the Participant’s Survivors:

 

(a)                                  To
the extent that the Option has become exercisable but has not been exercised on
the date of death; and

 

(b)                                 In
the event rights to exercise the Option accrue periodically, to the extent of a
pro rata portion through the date of death of any additional vesting rights
that would have accrued on the next vesting date had the Participant not died. The
proration shall be based upon the number of days accrued in the current vesting
period prior to the Participant’s date of death.

 

If the
Participant’s Survivors wish to exercise the Option, they must take all
necessary steps to exercise the Option within one year after the date of death
of such Participant, notwithstanding that the decedent might have been able to
exercise the Option as to some or all of the Shares on a later date if he or
she had not died and had continued to be an employee, director or consultant
or, if earlier, within the originally prescribed term of the Option.

 

16.                                 EFFECT
OF TERMINATION OF SERVICE ON STOCK GRANTS.

 

In the
event of a termination of service (whether as an employee, director or
consultant) with the Company or an Affiliate for any reason before the
Participant has accepted a Stock Grant, such offer shall terminate.

 

13

 

For
purposes of this Paragraph 16 and Paragraph 17 below, a Participant to whom a
Stock Grant has been offered and accepted under the Plan who is absent from
work with the Company or with an Affiliate because of temporary disability (any
disability other than a Disability as defined in Paragraph 1 hereof), or who is
on leave of absence for any purpose, shall not, during the period of any such
absence, be deemed, by virtue of such absence alone, to have terminated such
Participant’s employment, director status or consultancy with the Company or
with an Affiliate, except as the Administrator may otherwise expressly
provide.

 

In
addition, for purposes of this Paragraph 16 and Paragraph 17 below, any change
of employment or other service within or among the Company and any Affiliates
shall not be treated as a termination of employment, director status or
consultancy so long as the Participant continues to be an employee, director or
consultant of the Company or any Affiliate.

 

17.                                 EFFECT
ON STOCK GRANTS OF TERMINATION OF SERVICE OTHER THAN “FOR CAUSE” OR DEATH OR
DISABILITY.

 

Except
as otherwise provided in a Participant’s Stock Grant Agreement, in the event of
a termination of service (whether as an employee, director or consultant),
other than termination “for cause,” Disability, or death for which events there
are special rules in Paragraphs 18, 19, and 20, respectively, before all
Company rights of repurchase shall have lapsed, then the Company shall have the
right to repurchase that number of Shares subject to a Stock Grant as to which
the Company’s repurchase rights have not lapsed.

 

18.                                 EFFECT
ON STOCK GRANTS OF TERMINATION OF SERVICE “FOR CAUSE”.

 

Except
as otherwise provided in a Participant’s Stock Grant Agreement, the following rules apply
if the Participant’s service (whether as an employee, director or consultant)
with the Company or an Affiliate is terminated “for cause”:

 

(a)                                  All
Shares subject to any Stock Grant shall be immediately subject to repurchase by
the Company at the purchase price,
if any, thereof.

 

(b)                                 For
purposes of this Plan, “cause” shall include (and is not limited to) dishonesty
with respect to the employer, insubordination, substantial malfeasance or non-feasance
of duty, unauthorized disclosure of confidential information, breach by the
Participant of any provision of any employment, consulting, advisory,
nondisclosure, non-competition or similar agreement between the Participant and
the Company, and conduct substantially prejudicial to the business of the
Company or any Affiliate. The determination of the Administrator as to the
existence of “cause” will be conclusive on the Participant and the Company.

 

(c)                                  “Cause”
is not limited to events which have occurred prior to a Participant’s
termination of service, nor is it necessary that the Administrator’s finding of
“cause” occur prior to termination. If the Administrator determines, subsequent
to a Participant’s termination of service, that either prior or subsequent to
the Participant’s termination the Participant engaged in conduct which would

 

14

 

constitute
“cause,” then the Company’s right to repurchase all of such Participant’s
Shares shall apply.

 

(d)                                 Any
provision in an agreement between the Participant and the Company or an
Affiliate, which contains a conflicting definition of “cause” for termination
and which is in effect at the time of such termination, shall supersede the
definition in this Plan with respect to that Participant.

 

19.                                 EFFECT
ON STOCK GRANTS OF TERMINATION OF SERVICE FOR DISABILITY.

 

Except
as otherwise provided in a Participant’s Stock Grant Agreement, the following rules apply
if a Participant ceases to be an employee, director or consultant of the
Company or of an Affiliate by reason of Disability:  to the extent the Company’s rights of
repurchase have not lapsed on the date of Disability, they shall be
exercisable; provided, however, that in the event such rights of repurchase
lapse periodically, such rights shall lapse to the extent of a pro rata portion
of the Shares subject to such Stock Grant through the date of Disability as
would have lapsed had the Participant not become Disabled. The proration shall
be based upon the number of days accrued prior to the date of Disability.

 

The
Administrator shall make the determination both of whether Disability has
occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician selected or
approved by the Administrator, the cost of which examination shall be paid for
by the Company.

 

20.                                 EFFECT
ON STOCK GRANTS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.

 

Except
as otherwise provided in a Participant’s Stock Grant Agreement, the following rules apply
in the event of the death of a Participant while the Participant is an
employee, director or consultant of the Company or of an Affiliate:  to the extent the Company’s rights of
repurchase have not lapsed on the date of death, they shall be exercisable;
provided, however, that in the event such rights of repurchase lapse
periodically, such rights shall lapse to the extent of a pro rata portion of
the Shares subject to such Stock Grant through the date of death as would have
lapsed had the Participant not died. The proration shall be based upon the
number of days accrued prior to the Participant’s death.

 

21.                                 PURCHASE
FOR INVESTMENT.

 

Unless
the offering and sale of the Shares to be issued upon the particular exercise
or acceptance of a Stock Right shall have been effectively registered under the
Securities Act of 1933, as now in force or hereafter amended (the “1933 Act”),
the Company shall be under no

 

15

 

obligation to issue the
Shares covered by such exercise unless and until the following conditions have
been fulfilled:

 

(a)                                  The
person(s) who exercise(s) or accept(s) such Stock Right shall warrant to the
Company, prior to the receipt of such Shares, that such person(s) are acquiring
such Shares for their own respective accounts, for investment, and not with a
view to, or for sale in connection with, the distribution of any such Shares,
in which event the person(s) acquiring such Shares shall be bound by the
provisions of the following legend which shall be endorsed upon the
certificate(s) evidencing their Shares issued pursuant to such exercise or such
grant:

 

“The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by any
person, including a pledgee, unless (1) either (a) a Registration
Statement with respect to such shares shall be effective under the Securities
Act of 1933, as amended, or (b) the Company shall have received an opinion
of counsel satisfactory to it that an exemption from registration under such
Act is then available, and (2) there shall have been compliance with all
applicable state securities laws.”

 

(b)                                 At
the discretion of the Administrator, the Company shall have received an opinion
of its counsel that the Shares may be issued upon such particular exercise
or acceptance in compliance with the 1933 Act without registration thereunder.

 

22.                                 DISSOLUTION
OR LIQUIDATION OF THE COMPANY.

 

Upon
the dissolution or liquidation of the Company, all Options granted under this
Plan which as of such date shall not have been exercised and all Stock Grants
which have not been accepted will terminate and become null and void; provided,
however, that if the rights of a Participant or a Participant’s Survivors have
not otherwise terminated and expired, the Participant or the Participant’s
Survivors will have the right immediately prior to such dissolution or
liquidation to exercise or accept any Stock Right to the extent that the Stock
Right is exercisable or subject to acceptance as of the date immediately prior
to such dissolution or liquidation.

 

23.                                 ADJUSTMENTS.

 

Upon
the occurrence of any of the following events, a Participant’s rights with
respect to any Stock Right granted to him or her hereunder shall be adjusted as
hereinafter provided, unless otherwise specifically provided in a Participant’s
Option Agreement or Stock Grant Agreement:

 

(a)                                  Stock
Dividends and Stock Splits. If (i) the shares of Common Stock shall be
subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, or (ii) additional shares or new or different
shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock, the number of shares
of

 

16

 

Common Stock deliverable
upon the exercise or acceptance of such Stock Right may be appropriately
increased or decreased proportionately, and appropriate adjustments may be
made including, in the purchase price per share, to reflect such events. The
number of Shares subject to the limitation in Paragraph 4(c) shall also be
proportionately adjusted upon the occurrence of such events.

 

(b)                                 Corporate
Transactions. If the Company is to be consolidated with or acquired by
another entity in a merger, sale of all or substantially all of the Company’s
assets other than a transaction to merely change the state of incorporation (a “Corporate
Transaction”), the Administrator or the board of directors of any entity
assuming the obligations of the Company hereunder (the “Successor Board”),
shall, as to outstanding Options, either (i) make appropriate provision
for the continuation of such Options by substituting on an equitable basis for
the Shares then subject to such Options either the consideration payable with
respect to the outstanding shares of Common Stock in connection with the
Corporate Transaction or securities of any successor or acquiring entity; or (ii) upon
written notice to the Participants, provide that all Options must be exercised
(either to the extent then exercisable or, at the discretion of the
Administrator, all Options being made fully exercisable for purposes of this
Subparagraph), within a specified number of days of the date of such notice, at
the end of which period the Options shall terminate; or (iii) terminate
all Options in exchange for a cash payment equal to the excess of the Fair
Market Value of the Shares subject to such Options (either to the extent then
exercisable or, at the discretion of the Administrator, all Options being made
fully exercisable for purposes of this Subparagraph) over the exercise price
thereof.

 

With
respect to outstanding Stock Grants, the Administrator or the Successor Board,
shall either (i) make appropriate provisions for the continuation of such
Stock Grants by substituting on an equitable basis for the Shares then subject
to such Stock Grants either the consideration payable with respect to the
outstanding Shares of Common Stock in connection with the Corporate Transaction
or securities of any successor or acquiring entity; or (ii) terminate all
Stock Grants in exchange for a cash payment equal to the excess of the Fair
Market Value of the Shares subject to such Stock Grants over the purchase price
thereof, if any. In addition, in the event of a Corporate Transaction, the
Administrator may waive any or all Company repurchase rights with respect
to outstanding Stock Grants.

 

(c)                                  Recapitalization
or Reorganization. In the event of a recapitalization or reorganization of
the Company other than a Corporate Transaction pursuant to which securities of
the Company or of another corporation are issued with respect to the
outstanding shares of Common Stock, a Participant upon exercising or accepting
a Stock Right after the recapitalization or reorganization shall be entitled to
receive for the purchase price paid upon such exercise or acceptance the number
of replacement securities which would have been received if such Stock Right
had been exercised or accepted prior to such recapitalization or
reorganization.

 

(d)                                 Modification
of ISOs. Notwithstanding the foregoing, any adjustments made pursuant to
Subparagraph (a), (b) or (c) above with respect to ISOs shall be made
only after the Administrator determines whether such adjustments would
constitute a “modification” of such ISOs (as that term is defined in Section 424(h) of
the Code) or would cause any adverse tax

 

17

 

consequences for the
holders of such ISOs. If the Administrator determines that such adjustments
made with respect to ISOs would constitute a modification of such ISOs, it may refrain
from making such adjustments, unless the holder of an ISO specifically requests
in writing that such adjustment be made and such writing indicates that the
holder has full knowledge of the consequences of such “modification” on his or
her income tax treatment with respect to the ISO.

 

24.                                 ISSUANCES
OF SECURITIES.

 

Except
as expressly provided herein, no issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares subject to Stock Rights. Except as expressly provided
herein, no adjustments shall be made for dividends paid in cash or in property
(including without limitation, securities) of the Company prior to any issuance
of Shares pursuant to a Stock Right.

 

25.                                 FRACTIONAL
SHARES.

 

No
fractional shares shall be issued under the Plan and the person exercising a
Stock Right shall receive from the Company cash in lieu of such fractional
shares equal to the Fair Market Value thereof.

 

26.                                 CONVERSION
OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.

 

The
Administrator, at the written request of any Participant, may in its
discretion take such actions as may be necessary to convert such
Participant’s ISOs (or any portions thereof) that have not been exercised on
the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the Participant is an employee
of the Company or an Affiliate at the time of such conversion. At the time of
such conversion, the Administrator (with the consent of the Participant) may impose
such conditions on the exercise of the resulting Non-Qualified Options as the
Administrator in its discretion may determine, provided that such
conditions shall not be inconsistent with this Plan. Nothing in the Plan shall
be deemed to give any Participant the right to have such Participant’s ISOs
converted into Non-Qualified Options, and no such conversion shall occur until
and unless the Administrator takes appropriate action. The Administrator, with
the consent of the Participant, may also terminate any portion of any ISO
that has not been exercised at the time of such conversion.

 

27.                                 WITHHOLDING.

 

In the
event that any federal, state, or local income taxes, employment taxes, Federal
Insurance Contributions Act (“F.I.C.A.”) withholdings or other amounts are
required by applicable law or governmental regulation to be withheld from the
Participant’s salary, wages or other remuneration in connection with the
exercise or acceptance of a Stock Right or in connection with a Disqualifying
Disposition (as defined in Paragraph 28) or upon the lapsing of any right of
repurchase, the Company may withhold from the Participant’s compensation,
if any,

 

18

 

or may require that
the Participant advance in cash to the Company, or to any Affiliate of the
Company which employs or employed the Participant, the statutory minimum amount
of such withholdings unless a different withholding arrangement, including the
use of shares of the Company’s Common Stock or a promissory note, is authorized
by the Administrator (and permitted by law). For purposes hereof, the fair
market value of the shares withheld for purposes of payroll withholding shall
be determined in the manner provided in Paragraph 1 above, as of the most
recent practicable date prior to the date of exercise. If the fair market value
of the shares withheld is less than the amount of payroll withholdings
required, the Participant may be required to advance the difference in
cash to the Company or the Affiliate employer. The Administrator in its
discretion may condition the exercise of an Option for less than the then
Fair Market Value on the Participant’s payment of such additional withholding.

 

28.                                 NOTICE
TO COMPANY OF DISQUALIFYING DISPOSITION.

 

Each
Employee who receives an ISO must agree to notify the Company in writing
immediately after the Employee makes a Disqualifying Disposition of any shares
acquired pursuant to the exercise of an ISO. A Disqualifying Disposition is
defined in Section 424(c) of the Code and includes any disposition
(including any sale or gift) of such shares before the later of (a) two
years after the date the Employee was granted the ISO, or (b) one year
after the date the Employee acquired Shares by exercising the ISO, except as
otherwise provided in Section 424(c) of the Code. If the Employee has
died before such stock is sold, these holding period requirements do not apply
and no Disqualifying Disposition can occur thereafter.

 

29.                                 TERMINATION
OF THE PLAN.

 

The
Plan will terminate on April     , 2016.
The Plan may be terminated at an earlier date by vote of the shareholders
or the Board of Directors of the Company; provided, however, that any such
earlier termination shall not affect any Agreements executed prior to the
effective date of such termination.

 

30.                                 AMENDMENT
OF THE PLAN AND AGREEMENTS.

 

The
Plan may be amended by the shareholders of the Company. The Plan may also
be amended by the Administrator, including, without limitation, to the extent
necessary to qualify any or all outstanding Stock Rights granted under the Plan
or Stock Rights to be granted under the Plan for favorable federal income tax
treatment (including deferral of taxation upon exercise) as may be
afforded incentive stock options under Section 422 of the Code, and to the
extent necessary to qualify the shares issuable upon exercise or acceptance of
any outstanding Stock Rights granted, or Stock Rights to be granted, under the
Plan for listing on any national securities exchange or quotation in any
national automated quotation system of securities dealers. Any amendment
approved by the Administrator which the Administrator determines is of a scope
that requires shareholder approval shall be subject to obtaining such
shareholder approval. Any modification or amendment of the Plan shall not,
without the consent of a Participant, adversely
affect his or her rights under a Stock Right previously granted to him
or her. With the consent of the Participant affected, the Administrator may amend
outstanding Agreements in a manner which may be adverse to the Participant
but which is not inconsistent with the Plan. In the

 

19

 

discretion of the
Administrator, outstanding Agreements may be amended by the Administrator
in a manner which is not adverse to the Participant.

 

31.                                 EMPLOYMENT
OR OTHER RELATIONSHIP.

 

Nothing
in this Plan or any Agreement shall be deemed to prevent the Company or an
Affiliate from terminating the employment, consultancy or director status of a
Participant, nor to prevent a Participant from terminating his or her own
employment, consultancy or director status or to give any Participant a right
to be retained in employment or other service by the Company or any Affiliate
for any period of time.

 

32.                                 GOVERNING
LAW.

 

This
Plan shall be construed and enforced in accordance with the law of the State of
Delaware.

 

20

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