Document:

Exhibit 10.1

 

2005 Salaries for the Named Executive
Officers

 

	
  Name and Principal Position of 

  Fiscal Year 2004 Named Executive 

  Officers

  	
   

  	
  2004 Salary ($)

  	
   

  	
  2005 Salary ($)

  	
   

  
	
  Ronald L. Sargent
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Chairman & Chief Executive Officer

  	
   

  	
  1,000,000

  	
   

  	
  1,036,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  John J. Mahoney 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exec. Vice President & Chief
  Administrative Officer

  	
   

  	
  570,167

  	
   

  	
  592,600

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Michael Miles 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Chief Operating Officer

  	
   

  	
  531,666

  	
   

  	
  580,200

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Basil L. Anderson 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vice Chairman

  	
   

  	
  486,734

  	
   

  	
  505,900

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Joseph G. Doody 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  President, North American Delivery

  	
   

  	
  468,558

  	
   

  	
  486,600Exhibit 10.2

 

Staples Leadership Team

Tax Services Reimbursement

 

•                  Staples will
reimburse each member of the Staples Leadership Team for up to $5,000 of tax
services from a pre-approved list of approximately ten certified public
accounting firms (not to include the Company’s auditors), with the CEO and
Chairman each eligible to be reimbursed for up to $50,000 of services.  All such reimbursements shall be “grossed up”
to reflect any tax a recipient must pay on the reimbursement.

 

•      The services will include, but not be
limited to, tax preparation and planning services and estate planning services.

 

•      The list of pre-approved C.P.A. firms will
be selected by the CFO.

 

•      The CFO will ensure adherence to maximum
reimbursement levels.

 

•                  At the first
regularly scheduled committee meeting after April 15 of each year, the CFO will
report to the committee on usage of this benefit (on a tax year basis).

 

•                  In the event the
CEO, upon consultation with the Compensation Committee, decides it is best to
terminate this benefit to the Staples Leadership Team, each individual who
would have otherwise been eligible to receive expense reimbursement shall
instead receive the benefit as additional annual compensation.Exhibit 10.1

 

OPTIONSXPRESS HOLDINGS, INC.

 

2005 EMPLOYEE STOCK PURCHASE PLAN

 

(as amended and restated May 12,
2005)

 

 

Table
of Contents

 

	
  1.

  	
   

  	
  Purpose

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Eligibility

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Offering Periods

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Participation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Plan Contributions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Grant of Option

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Exercise of Options

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Issuance of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Participant
  Accounts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Designation of Beneficiary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Transferability

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Withdrawal;
  Termination of Employment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Common Stock
  Available under the Plan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Administration

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  Amendment,
  Suspension, and Termination of the Plan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  Expenses of the Plan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  No Employment Rights

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  Applicable Law

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  Additional
  Restrictions of Rule 16b-3

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  Effective Date

  	
   

  

 

2

 

 

OPTIONSXPRESS HOLDINGS, INC.

2005 EMPLOYEE
STOCK PURCHASE PLAN

 

1.                                       Purpose. The purpose of the Plan is to provide
incentive for present and future employees of the Company and any Designated
Subsidiary to acquire a proprietary interest (or increase an existing
proprietary interest) in the Company through the purchase of Common Stock. It
is the Company’s intention that the Plan qualify as an “employee stock purchase
plan” under Section 423 of the Code. Accordingly, the provisions of the Plan
shall be administered, interpreted and construed in a manner consistent with
the requirements of that section of the Code.

 

2.                                       Definitions.

 

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

 

(b)                                 “Code”
means the Internal Revenue Code of 1986, as amended, and any successor thereto.

 

(c)                                  “Committee”
means the committee appointed by the Board to administer the Plan as described
in Section 15 of the Plan or if no such Committee is appointed, the Board.

 

(d)                                 “Common
Stock” means the Company’s common stock, par value $0.0001 per share, after
giving effect to the Company’s common stock split in connection with the
Company’s planned Initial Public Offering (the “Common Stock Split”).  All Common Stock share numbers set forth in
this Plan refer to numbers of shares of Common Stock after giving effect to the
Common Stock Split.

 

(e)                                  “Company”
means optionsXpress Holdings, Inc., a Delaware corporation.

 

(f)                                    “Compensation”
means, with respect to each Participant for each pay period, the full base
salary and overtime paid to such Participant by the Company or a Designated
Subsidiary. Except as otherwise determined by the Committee, “Compensation”
does not include: (i) bonuses or commissions, (ii) any amounts contributed by
the Company or a Designated Subsidiary to any pension plan, (iii) any
automobile or relocation allowances (or reimbursement for any such expenses),
(iv) any amounts paid as a starting bonus or finder’s fee, (v) any amounts
realized from the exercise of any stock options or incentive awards, (vi) any
amounts paid by the Company or a Designated Subsidiary for other fringe
benefits, such as health and welfare, hospitalization and group life insurance
benefits, or perquisites, or paid in lieu of such benefits, or (vii) other
similar forms of extraordinary compensation.

 

(g)                                 “Continuous
Status as an Employee” means the absence of any interruption or termination of
service as an Employee. Continuous Status as an Employee shall not be
considered interrupted in the case of a leave of absence agreed to in writing
by the Company or the Designated Subsidiary that employs the Employee, provided
that such leave is for a period of not more than 90 days or reemployment upon
the expiration of such leave is guaranteed by contract or statute.

 

(h)                                 “Designated
Subsidiaries” means the Subsidiaries that have been designated by the Board
from time to time in its sole discretion as eligible to participate in the
Plan.

 

3

 

(i)                                     “Employee”
means any person, including an Officer, whose customary employment with the
Company or one of its Designated Subsidiaries is at least twenty (20) hours per
week and more than five (5) months in any calendar year.

 

(j)                                     “Entry
Date” means the first day of each Offering Period.

 

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

 

(l)                                     “Exercise
Date” means the last Trading Day ending on or before each June 30 and December
31.

 

(m)                               “Exercise
Price” means the price per share of Common Stock offered in a given Offering
Period determined as provided in Section 7(b).

 

(n)                                 “Fair
Market Value” means, with respect to a share of Common Stock, the Fair Market
Value as determined under Section 7(c).

 

(o)                                 “First
Offering Date” means the commencement date of the initial public offering
contemplated by the Registration Statement on Form S-1 filed by the Company
with the Securities and Exchange Commission.

 

(p)                                 “Offering
Date” means the first Trading Day of each Offering Period; provided, that in
the case of an individual who becomes eligible to become a Participant under
Section 3(b) after the first Trading Day of an Offering Period, the term “Offering
Date” shall mean the first Trading Day of the Offering Period coinciding with
or next succeeding the day on which that individual becomes eligible to become
a Participant. Options granted after the first day of an Offering Period will
be subject to the same terms as the options granted on the first Trading Day of
such Offering Period except that they will have a different grant date and,
because they expire at the same time as the options granted on the first
Trading Day of such Offering Period, a shorter term.

 

(q)                                 “Offering
Period” means, subject to adjustment as provided in Section 4(b), (i) with
respect to the first Offering Period, the period beginning on the First
Offering Date and ending on June 30, 2005, and (ii) with respect to each
Offering Period thereafter, the period beginning on the first Trading Day after
each Exercise Date and terminating on the immediately following Exercise Date.

 

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

 

(s)                                  “Participant”
means an Employee automatically enrolled in the Plan pursuant to Section 5(b)
hereof, or an Employee who has elected to participate in the Plan by filing an
enrollment agreement with the Company as provided in Section 5(a) hereof.

 

(t)                                    “Plan”
means this optionsXpress Holdings, Inc. 2005 Employee Stock Purchase Plan.

 

4

 

(u)                                 “Plan
Contributions” means, with respect to each Participant, the lump sum cash
transfers, if any, made by the Participant to the Plan pursuant to Section 6(a)
or 6(g)(ii) hereof, plus the after-tax payroll deductions, if any, withheld
from the Compensation of the Participant and contributed to the Plan for the
Participant as provided in Section 6 hereof, and any other amounts contributed
to the Plan for the Participant in accordance with the terms of the Plan.

 

(v)                                 “Subsidiary”
means any corporation, domestic or foreign, of which the Company owns, directly
or indirectly, 50% or more of the total combined voting power of all classes of
stock, and that otherwise qualifies as a “subsidiary corporation” within the
meaning of Section 424(f) of the Code.

 

(w)                               “Trading
Day” means a day on which the national stock exchanges and the Nasdaq system
are open for trading.

 

3.                                       Eligibility.

 

(a)                                  First
Offering Date. Any individual who is an Employee as of the First Offering
Date shall be eligible to become a Participant as of the First Offering Date.

 

(b)                                 Subsequent
Offering Dates. Any individual who has completed at least three (3) months
of employment with the Company or any Subsidiary and who is an Employee as of
the Offering Date of a given Offering Period shall be eligible to become a
Participant as of any Entry Date within that Offering Period under the Plan.

 

4.                                       Offering Periods.

 

(a)                                  In
General. The Plan shall generally be implemented by a series of Offering
Periods.

 

(b)                                 Changes
by Committee. The Committee shall have the power to make changes to the
duration and/or the frequency of Offering Periods with respect to future
offerings if such change is announced at least five (5) days prior to the
scheduled beginning of the first Offering Period to be affected.

 

5.                                       Participation.

 

(a)                                  Entry
Dates. Employees meeting the eligibility requirements of Section 3(b)
hereof after the First Offering Date may elect to participate in the Plan
commencing on any Entry Date by completing an enrollment agreement on the form
provided by the Company and filing the enrollment agreement with the Company on
or prior to such Entry Date, unless a later time for filing the enrollment
agreement is set by the Committee for all eligible Employees with respect to a
given offering.

 

(b)                                 Special
Rule for First Offering Date. All Employees who are eligible as of the
First Offering Date shall automatically become Participants in the Plan as of
the First Offering Date.

 

5

 

6.                                       Plan Contributions.

 

(a)                                  Contribution
by Payroll Deduction. Except with respect to the initial Offering Period,
and except as otherwise authorized by the Committee, all contributions to the
Plan shall be made only by payroll deductions. The Committee may, but need not,
permit Participants to make after-tax contributions to the Plan at such times
and subject to such terms and conditions as the Committee may in its discretion
determine. All such additional contributions shall be made in a manner
consistent with the provisions of Section 423 of the Code or any successor
thereto, and shall be treated in the same manner as payroll deductions
contributed to the Plan as provided herein.

 

(b)                                 Payroll
Deduction Election on Enrollment Agreement. At the time a Participant files
the enrollment agreement with respect to an Offering Period, the Participant
may authorize payroll deductions to be made on each payroll date during the
portion of the Offering Period that he or she is a Participant in an amount not
less than 1% and not more than 15% of the Participant’s Compensation on each
payroll date during the portion of the Offering Period that he or she is a
Participant. The amount of payroll deductions must be a whole percentage (e.g.,
1%, 2%, 3%, etc.) of the Participant’s Compensation.

 

(c)                                  Commencement
of Payroll Deductions. Except as otherwise determined by the Committee
under rules applicable to all Participants, payroll deductions for Participants
enrolling in the Plan after the First Offering Date under Section 5(a) shall
commence with the earliest administratively practicable payroll period that
begins on or after the Entry Date with respect to which the Participant files
an enrollment agreement in accordance with Section 5(a).

 

(d)                                 Automatic
Continuation of Payroll Deductions. Unless a Participant elects otherwise
prior to the last Exercise Date of an Offering Period, including the last Exercise
Date prior to termination in the case of an Offering Period terminated under
Section 4(b) or 4(c) hereof, such Participant shall be deemed (i) to have
elected to participate in the immediately succeeding Offering Period (and, for
purposes of such Offering Period the Participant’s “Entry Date” shall be deemed
to be the first day of such Offering Period) and (ii) to have authorized the
same payroll deduction for the immediately succeeding Offering Period as was in
effect for the Participant immediately prior to the commencement of the
succeeding Offering Period.

 

(e)                                  Change
of Payroll Deduction Election. A Participant may decrease or increase the
rate or amount of his or her payroll deductions during an Offering Period
(within the limitations of Section 6(b) above) by completing and filing with
the Company a new enrollment agreement authorizing a change in the rate or
amount of payroll deductions; provided, that a Participant may not change the
rate or amount of his or her payroll deductions more than once in any Offering
Period. Except as otherwise determined by the Committee under rules applicable
to all Participants, the change in rate or amount shall be effective as of the
earliest administratively practicable payroll period that begins on or after
the date the Committee receives the new enrollment agreement. Additionally, a
Participant may discontinue his or her participation in the Plan as provided in
Section 13(a).

 

(f)                                    Automatic
Changes in Payroll Deduction. Notwithstanding the foregoing, to the extent
necessary to comply with Section 423(b)(8) of the Code, Section 7(d) hereof, or
any other applicable law, a Participant’s payroll deductions for any calendar
year may be decreased, including to 0%, at such time during such calendar year
that the aggregate of all payroll

 

6

 

deductions accumulated during such calendar year are equal to $25,000.
Payroll deductions shall recommence at the rate provided in the Participant’s
enrollment agreement at the beginning of the first Offering Period beginning in
the following calendar year, unless the Participant terminates participation as
provided in Section 13(a).

 

(g)                                 Special
Rule for Initial Offering Period.

 

(i)                                     Prior
to Effectiveness of Form S-8. No payroll deductions shall be made (and no
payroll deduction elections shall be accepted) by the Company for Participants
during the initial Offering Period prior to the time that a registration
statement with respect to the shares of Common Stock being offered under the Plan
has been filed with the Securities and Exchange Commission on Form S-8, and is
effective. Subject to the limitations provided in Section 7(d), each
Participant shall be eligible to purchase shares of Common Stock on the
Exercise Date of the initial Offering Period in an amount equal to fifteen
(15%) percent of the Compensation that the Participant receives during the
initial Offering Period.

 

(ii)                                  After
Effectiveness of Form S-8. Once the registration statement with respect to
the shares of Common Stock being offered under the Plan has been filed with the
Securities and Exchange Commission on Form S-8, and is effective, a Participant
may, but need not, make a payroll deduction election with respect to the
initial Offering Period by filing an enrollment agreement containing the
payroll deduction election with the Company, as provided in Section 6(b) above.
A Participant may elect a lower level of participation than that provided in
Section 6(g)(i) above with respect to the initial Offering Period at that time,
or may withdraw from the Plan. If a payroll deduction is elected under this
Section 6(g)(ii), payroll deductions may commence as early as with the first
pay period beginning after the First Offering Date. Subject to the overall
participation level specified in Section 6(g)(i), the rate of payroll deduction
during the initial Offering Period may exceed the maximum permitted rate under
Section 6(b) hereof to make up for the payroll deductions, if any, which would
otherwise have been made prior to the effectiveness of the Form S-8 with
respect to the Plan. If a payroll deduction election is made under this Section
6(g)(ii), payroll deductions shall continue at the rate elected by the
Participant, up to the maximum permitted rate under Section 6(b) hereof, for
subsequent Offering Periods, unless the Participant makes a change permitted
under Section 6(e) or withdraws from the Plan under Section 13(a).
Alternatively, the Committee may permit purchases on the Exercise Date of the
initial Offering Period to be made by direct lump sum cash transfer by the
Participant.

 

(iii)                               Subsequent
Offering Periods. For all Offering Periods subsequent to the initial
Offering Period, purchases generally must be made via payroll deduction.
Participants in the initial Offering Period who do not make a payroll deduction
election pursuant to Section 6(g)(ii) must file an enrollment agreement
containing a payroll deduction election with respect to subsequent Offering
Periods with the Company prior to the commencement of a subsequent Offering
Period (unless a later time for filing is set by the Committee for all
Participants) in order to make further purchases under the Plan. Payroll
deductions for Participants required to file a payroll deduction election under
this Section 6(g)(iii) shall commence, except as otherwise determined by the
Committee under rules applicable to all Participants, effective as of the
earliest administratively practicable payroll period that begins on or after
the first day of the

 

7

 

subsequent Offering Period. A Participant who does not timely file an
enrollment agreement shall be treated as having withdrawn under Section 13(a)
hereof.

 

7.                                       Grant of Option.

 

(a)                                  Shares
of Common Stock Subject to Option. On a Participant’s Entry Date, subject
to the limitations set forth in Section 7(d) and this Section 7(a), the
Participant shall be granted an option to purchase on each subsequent Exercise
Date during the Offering Period in which such Entry Date occurs (at the Exercise
Price determined as provided in Section 7(b) below) up to a number of shares of
Common Stock determined by dividing such Participant’s Plan Contributions
accumulated prior to such Exercise Date and retained in the Participant’s
account as of such Exercise Date by the Exercise Price.

 

(b)                                 Exercise
Price. The Exercise Price per share of Common Stock offered to each
Participant in a given Offering Period shall be the Applicable Percentage of
the Fair Market Value of a share of Common Stock on the Exercise Date.  The Applicable Percentage with respect to
each Offering Period shall be 95%, unless and until such Applicable Percentage
is increased or decreased by the Committee, in its sole discretion, provided
that any such increase or decrease in the Applicable Percentage with respect to
a given Offering Period must be established not less than fifteen (15) days
prior to the Offering Date thereof.

 

(c)                                  Fair
Market Value. The Fair Market Value of a share of Common Stock on a given
date shall be determined by the Committee in its discretion; provided, that if
there is a public market for the Common Stock, the Fair Market Value per share
shall be either (i) if the Common Stock is listed on a stock exchange, the
closing price of the Common Stock on such exchange on such date (or, in the
event that the Common Stock is not traded on such date, on the immediately
preceding trading date), as reported in The Wall Street Journal, (ii) in the
event the Common Stock is not traded on a stock exchange, the closing price of the
Common Stock on such date (or, in the event that the Common Stock is not traded
on such date, on the immediately preceding trading date), as reported by the
National Association of Securities Dealers Automated Quotation (Nasdaq)
National Market System, (iii) if such price is not reported, the average of the
bid and asked prices for the Common Stock on such date (or, in the event that
the Common Stock is not traded on such date, on the immediately preceding
trading date), as reported by Nasdaq, or (iv) if no such quotations are
available for a date within a reasonable time prior to the valuation date, the
value of the Common Stock as determined by the Committee using any reasonable
means.  For purposes of the First Offering
Date, the Fair Market Value of a share of Common Stock shall be the initial
public offering price as set forth in the final prospectus filed by the Company
with the Securities and Exchange Commission pursuant to Rule 424 under the
Securities Act of 1933, as amended.

 

(d)                                 Limitation
on Option that may be Granted. Notwithstanding any provision of the Plan to
the contrary, no Participant shall be granted an option under the Plan (i) to
the extent that if, immediately after the grant, such Employee (including any
stock which is attributed to such Employee pursuant to Section 424(d) of the
Code) would own stock and/or hold outstanding options to purchase stock
possessing, in the aggregate, 5% or more of the total combined voting power or
value of all classes of stock of the Company or of any Subsidiary of the
Company as computed under Section 423(b)(3) of the Code and the Treasury
Regulations thereunder, or (ii)

 

8

 

to the extent that his or her rights to purchase stock under all
employee stock purchase plans of the Company and its Subsidiaries intended to
qualify under Section 423 of the Code accrue at a rate which exceeds $25,000 of
Fair Market Value of stock (determined at the time such option is granted) for
each calendar year in which such option is outstanding at any time, as
determined in accordance with section 423(b)(8) of the Code and the Treasury
Regulations thereunder.

 

(e)                                  No
Rights as Shareholder. A Participant will have no interest or voting right
in shares covered by his option until such option has been exercised.

 

8.                                       Exercise of Options.

 

(a)                                  Automatic
Exercise. A Participant’s option for the purchase of shares will be
exercised automatically on each Exercise Date, and the maximum number of full
shares subject to the option shall be purchased for the Participant at the
applicable Exercise Price with the accumulated Plan Contributions then credited
to the Participant’s account under the Plan. During a Participant’s lifetime, a
Participant’s option to purchase shares hereunder is exercisable only by the
Participant.

 

(b)                                 Carryover
of Excess Contributions. Any amount remaining to the credit of a
Participant’s account after the purchase of shares by the Participant on an
Exercise Date, or which is insufficient to purchase a full share of Common
Stock, shall remain in the Participant’s account, and be carried over to the
next Offering Period, unless the Participant withdraws from participation in
the Plan or elects to withdraw his or her account balance in accordance with
Section 10(c).

 

9.                                       Issuance of Shares.

 

(a)                                  Delivery
of Shares. As promptly as practicable after each Exercise Date, the Company
shall arrange for the delivery to each Participant (or the Participant’s
beneficiary), as appropriate, or to a custodial account for the benefit of each
Participant (or the Participant’s beneficiary) as appropriate, of a certificate
representing the shares purchased upon exercise of the Participant’s option.

 

(b)                                 Registration
of Shares. Shares to be delivered to a Participant under the Plan will be registered
in the name of the Participant or in the name of the Participant and his or her
spouse, as requested by the Participant.

 

(c)                                  Compliance
with Applicable Laws. The Plan, the grant and exercise of options to
purchase shares under the Plan, and the Company’s obligation to sell and
deliver shares upon the exercise of options to purchase shares shall be subject
to compliance with all applicable federal, state and foreign laws, rules and
regulations and the requirements of any stock exchange on which the shares may
then be listed.

 

(d)                                 Withholding.
The Company may make such provisions as it deems appropriate for withholding by
the Company pursuant to federal or state tax laws of such amounts as the
Company determines it is required to withhold in connection with the purchase
or sale by a Participant of any Common Stock acquired pursuant to the Plan. The
Company may require a

 

9

 

Participant to satisfy any relevant tax requirements before authorizing
any issuance of Common Stock to such Participant.

 

10.                                 Participant Accounts.

 

(a)                                  Bookkeeping
Accounts Maintained. Individual bookkeeping accounts will be maintained for
each Participant in the Plan to account for the balance of his Plan
Contributions, options issued, and shares purchased under the Plan. However,
all Plan Contributions made for a Participant shall be deposited in the Company’s
general corporate accounts, and no interest shall accrue or be credited with
respect to a Participant’s Plan Contributions. All Plan Contributions received
or held by the Company may be used by the Company for any corporate purpose,
and the Company shall not be obligated to segregate or otherwise set apart such
Plan Contributions from any other corporate funds.

 

(b)                                 Participant
Account Statements. Statements of account will be given to Participants
semi-annually in due course following each Exercise Date, which statements will
set forth the amounts of payroll deductions, the per share purchase price, the
number of shares purchased and the remaining cash balance, if any.

 

(c)                                  Withdrawal
of Account Balance Following Exercise Date. A Participant may elect at any
time within the first thirty (30) days following any Offering Period, or at
such other time as the Committee may from time to time prescribe, to receive in
cash any amounts carried-over in accordance with Section 8(b). An election
under this Section 10(c) shall not be treated as a withdrawal from
participation in the Plan under Section 13(a).

 

11.                                 Designation of Beneficiary.

 

(a)                                  Designation.
A Participant may file a written designation of a beneficiary who is to receive
any shares and cash, if any, from the Participant’s account under the Plan in
the event of the Participant’s death subsequent to an Exercise Date on which the
Participant’s option hereunder is exercised but prior to delivery to the
Participant of such shares and cash. In addition, a Participant may file a
written designation of a beneficiary who is to receive any cash from the
Participant’s account under the Plan in the event of the Participant’s death
prior to the exercise of the option.

 

(b)                                 Change
of Designation. A Participant’s beneficiary designation may be changed by
the Participant at any time by written notice. In the event of the death of a
Participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such Participant’s death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the Participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the Participant, or if no spouse, dependent or relative is known
to the Company, then to such other person as the Company may designate.

 

12.                                 Transferability. Neither Plan
Contributions credited to a Participant’s account nor any rights to exercise
any option or receive shares of Common Stock under the Plan may be assigned,
transferred, pledged or otherwise disposed of in any way (other than by will or
the laws

 

10

 

of descent and distribution, or as provided in Section 11). Any
attempted assignment, transfer, pledge or other distribution shall be without
effect, except that the Company may treat such act as an election to withdraw
in accordance with Section 13(a).

 

13.                                 Withdrawal; Termination of
Employment.

 

(a)                                  Withdrawal.
A Participant may withdraw from the Plan at any time after the Company’s
registration statement on Form S-8 with respect to the Plan is effective by
giving written notice to the Company. Payroll deductions, if any have been
authorized, shall cease as soon as administratively practicable after receipt
of the Participant’s notice of withdrawal, and, subject to administrative
practicability, no further purchases shall be made for the Participant’s
account. All Plan Contributions credited to the Participant’s account, if any,
and not yet invested in Common Stock, will be paid to the Participant as soon
as administratively practicable after receipt of the Participant’s notice of
withdrawal. The Participant’s unexercised options to purchase shares pursuant
to the Plan automatically will be terminated. Payroll deductions will not
resume on behalf of a Participant who has withdrawn from the Plan (a “Former
Participant”) unless the Former Participant enrolls in a subsequent Offering
Period in accordance with Section 5(a) and subject to the restriction provided
in Section 13(b), below.

 

(b)                                 Effect
of Withdrawal on Subsequent Participation. A Former Participant who has
withdrawn from the Plan pursuant to this Section 13(b) shall not again be
eligible to participate in the Plan prior to the beginning of the Offering
Period that commences at least 12 months from the date the Former Participant
withdrew, and the Former Participant must submit a new enrollment agreement in
order to again become a Participant as of that date.

 

(c)                                  Termination
of Employment. Upon termination of a Participant’s Continuous Status as an
Employee prior to any Exercise Date for any reason, including retirement or
death, the Plan Contributions credited to the Participant’s account and not yet
invested in Common Stock will be returned to the Participant or, in the case of
death, to the Participant’s beneficiary as determined pursuant to Section 11,
and the Participant’s option to purchase shares under the Plan will
automatically terminate.

 

14.                                 Common Stock Available under
the Plan.

 

(a)                                  Number
of Shares. Subject to adjustment as provided in Section 14(b) below, the
maximum number of shares of the Company’s Common Stock that shall be made
available for sale under the Plan shall be 500,000. Shares of Common Stock
subject to the Plan may be newly issued shares or shares reacquired in private
transactions or open market purchases. If and to the extent that any right to
purchase reserved shares shall not be exercised by any Participant for any
reason or if such right to purchase shall terminate as provided herein, shares
that have not been so purchased hereunder shall again become available for the
purpose of the Plan unless the Plan shall have been terminated, but all shares
sold under the Plan, regardless of source, shall be counted against the
limitation set forth above.

 

(b)                                 Adjustments
Upon Changes in Capitalization; Corporate Transactions.

 

(i)                                     At
any time after the completion (the closing and funding) of the Company’s
Initial Public Offering, if the outstanding shares of Common Stock are
increased or

 

11

 

decreased, or are changed into or are exchanged for a different number
or kind of shares, as a result of one or more reorganizations, restructurings,
recapitalizations, reclassifications, stock splits, reverse stock splits, stock
dividends or the like, upon authorization of the Committee, appropriate
adjustments shall be made in the number and/or kind of shares, and the
per-share option price thereof, which may be issued in the aggregate and to any
Participant upon exercise of options granted under the Plan.

 

(ii)                                  In
the event of the proposed dissolution or liquidation of the Company, the
Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Committee.

 

(iii)                               In
the event of a proposed sale of all or substantially all of the Company’s
assets, or the merger of the Company with or into another corporation (each, a “Sale
Transaction”), each option under the Plan shall be assumed or an equivalent
option shall be substituted by such successor corporation or a parent or
subsidiary of such successor corporation, unless the Committee determines, in
the exercise of its sole discretion and in lieu of such assumption or substitution,
to shorten the Offering Period then in progress by setting a new Exercise Date
(the “New Exercise Date”). If the Committee shortens the Offering Period then
in progress in lieu of assumption or substitution in the event of a Sale
Transaction, the Committee shall notify each Participant in writing, at least
ten (10) days prior to the New Exercise Date, that the exercise date for such
Participant’s option has been changed to the New Exercise Date and that such
Participant’s option will be exercised automatically on the New Exercise Date,
unless prior to such date the Participant has withdrawn from the Plan as
provided in Section 13(a). For purposes of this Section 14(b), an option
granted under the Plan shall be deemed to have been assumed if, following the
Sale Transaction, the option confers the right to purchase, for each share of
option stock subject to the option immediately prior to the Sale Transaction,
the consideration (whether stock, cash or other securities or property)
received in the Sale Transaction by holders of Common Stock for each share of
Common Stock held on the effective date of the Sale Transaction (and if such
holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding shares of Common Stock);
provided, that if the consideration received in the Sale Transaction was not
solely common stock of the successor corporation or its parent (as defined in
Section 424(e) of the Code), the Committee may, with the consent of the successor
corporation and the Participant, provide for the consideration to be received
upon exercise of the option to be solely common stock of the successor
corporation or its parent equal in fair market value to the per share
consideration received by the holders of Common Stock in the Sale Transaction.

 

(iv)                              In
all cases, the Committee shall have sole discretion to exercise any of the
powers and authority provided under this Section 14, and the Committee’s
actions hereunder shall be final and binding on all Participants. No fractional
shares of stock shall be issued under the Plan pursuant to any adjustment
authorized under the provisions of this Section 14.

 

15.                                 Administration.

 

(a)                                  Committee.
The Plan shall be administered by the Committee. The Committee shall have the
authority to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to the Plan, and to make all other determinations
necessary or advisable for

 

12

 

the administration of the Plan. The administration, interpretation, or
application of the Plan by the Committee shall be final, conclusive and binding
upon all persons.

 

(b)                                 Requirements
of Exchange Act. Notwithstanding the provisions of Section 15(a) above, in
the event that Rule

16b-3 promulgated under the Exchange Act or any successor provision thereto (“Rule
16b-3”) provides specific requirements for the administrators of plans of this
type, the Plan shall only be administered by such body and in such a manner as
shall comply with the applicable requirements of Rule 16b-3. Unless permitted
by Rule 16b-3, no discretion concerning decisions regarding the Plan shall be
afforded to any person that is not “disinterested” as that term is used in Rule
16b-3.

 

16.                                 Amendment, Suspension, and
Termination of the Plan.

 

(a)                                  Amendment
of the Plan. The Board or the Committee may at any time, or from time to
time, amend the Plan in any respect; provided, that (i) except as otherwise
provided in Section 4(c) hereof, no such amendment may make any change in any
option theretofore granted which adversely affects the rights of any
Participant and (ii) the Plan may not be amended in any way that will cause
rights issued under the Plan to fail to meet the requirements for employee
stock purchase plans as defined in Section 423 of the Code or any successor
thereto. To the extent necessary to comply with Rule 16b-3 under the Exchange
Act, Section 423 of the Code, or any other applicable law or regulation), the
Company shall obtain shareholder approval of any such amendment.

 

(b)                                 Suspension
of the Plan. The Board or the Committee may, as of the close of any
Exercise Date, suspend the Plan; provided, that the Board or Committee provides
notice to the Participants at least five (5) business days prior to the
suspension. The Board or Committee may resume the normal operation of the Plan
as of any Exercise Date; provided further, that the Board or Committee provides
notice to the Participants at least twenty (20) business days prior to the date
of termination of the suspension period. A Participant shall remain a
Participant in the Plan during any suspension period (unless he or she
withdraws pursuant to Section 13(a)), however no options shall be granted or
exercised, and no payroll deductions shall be made in respect of any
Participant during the suspension period. Participants shall have the right to
withdraw carryover funds provided in Section 10(c) throughout any suspension
period. The Plan shall resume its normal operation upon termination of a
suspension period.

 

(c)                                  Termination
of the Plan. The Plan and all rights of Employees hereunder shall terminate
on the earliest of:

 

(i)                                     the
Exercise Date that Participants become entitled to purchase a number of shares
greater than the number of reserved shares remaining available for purchase
under the Plan;

 

(ii)                                  such
date as is determined by the Board in its discretion; or

 

(iii)                               the
last Exercise Date immediately preceding the tenth (10th) anniversary of the
Plan’s effective date.

 

13

 

In the
event that the Plan terminates under circumstances described in Section
16(c)(i) above, reserved shares remaining as of the termination date shall be
sold to Participants on a pro rata basis, based on the relative value of their
cash account balances in the Plan as of the termination date.

 

17.                                 Notices. All notices or other communications
by a Participant to the Company under or in connection with the Plan shall be
deemed to have been duly given when received in the form specified by the
Company at the location, or by the person, designated by the Company for the
receipt thereof.

 

18.                                 Expenses of the Plan. All costs and
expenses incurred in administering the Plan shall be paid by the Company,
except that any stamp duties or transfer taxes applicable to participation in
the Plan may be charged to the account of such Participant by the Company.

 

19.                                 No Employment Rights. The Plan does
not, directly or indirectly, create any right for the benefit of any employee
or class of employees to purchase any shares under the Plan, or create in any
employee or class of employees any right with respect to continuation of
employment by the Company or any Subsidiary, and it shall not be deemed to
interfere in any way with the right of the Company or any Subsidiary to
terminate, or otherwise modify, an employee’s employment at any time.

 

20.                                 Applicable Law. The internal laws of the
State of Delaware shall govern all matters relating to this Plan except to the
extent (if any) superseded by the laws of the United States.

 

21.                                 Additional Restrictions of
Rule 16b-3. The terms and conditions of options granted hereunder to,
and the purchase of shares by, persons subject to Section 16 of the Exchange
Act shall comply with the applicable provisions of Rule 16b-3. This Plan shall
be deemed to contain, and such options shall contain, and the shares issued
upon exercise thereof shall be subject to, such additional conditions and
restrictions as may be required by Rule 16b-3 to qualify for the maximum
exemption from Section 16 of the Exchange Act with respect to Plan
transactions.

 

22.                                 Effective Date. Subject to adoption of
the Plan by the Board, the Plan shall become effective on the First Offering
Date. The Board shall submit the Plan to the shareholders of the Company for
approval within twelve months after the date the Plan is adopted by the Board.

 

14

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