Document:

Exhibit
10.2

 

Execution
Copy

 

SEPARATION AGREEMENT

 

This Separation Agreement
(this “Agreement”) is entered into as of the 11th day of
August, 2010, by and between Red Robin Gourmet Burgers, Inc. (“Red Robin”
or the “Company”) and Dennis B. Mullen (“Mullen”).  As used herein, “Parties” means,
collectively, Red Robin and Mullen, and “Party” means either Red Robin or
Mullen.  Terms not otherwise defined
herein shall have the meanings ascribed to them in the Employment Agreement (as
defined below).

 

RECITALS

 

WHEREAS, Red Robin and Mullen are parties to that
certain Second Amended and Restated Employment Agreement dated March 10,
2008, as further amended on August 15, 2009 and January 11, 2010 (the
“Employment Agreement”), and various stock option agreements, stock rights and
other stock arrangements (the “Stock Agreements”); and

 

WHEREAS, Red Robin has determined to make a change
in the position of Chief Executive Officer, and, in connection therewith, is
desirous of terminating Mullen’s role as Chief Executive Officer.  Therefore, Red Robin and Mullen agree that as
of the close of business on the effective date under the Employment Agreement
dated the date hereof between the Company and Mullen’s successor, which is
expected to be on or before September 12, 2010 (the “Effective Date”), Red
Robin will have terminated Mullen’s employment as Chief Executive Officer,
without Cause, and Mullen shall resign from his positions as a director,
officer and employee of Red Robin and any of its subsidiaries, including his position
of Chief Executive Officer; and

 

WHEREAS, in connection therewith, effective as of
the Effective Date, Mullen is relinquishing all his rights in, to and under the
Employment Agreement, the Stock Agreements, all bonuses relating to past and
pending matters benefiting Red Robin (except as expressly provided below) and
any other interests he might claim arising from his efforts as Chief Executive
Officer, and Red Robin desires to provide the payments and other consideration
specified herein.

 

NOW, THEREFORE, in consideration of the provisions
herein, and other good and valuable consideration the receipt and sufficiency
of which is hereby acknowledged by the Parties agree as follows:

 

1.                                       Termination of
Service.  Effective as of the close of
business on the Effective Date, Red Robin shall have terminated Mullen’s
employment as Chief Executive Officer, without Cause, and Mullen shall resign,
and Red Robin shall accept such resignation, from all his positions as a
director, officer and employee of Red Robin and any of its subsidiaries,
including his position of Chief Executive Officer.

 

2.                                       Consideration.  Red Robin agrees to pay Mullen his Annual
Base Salary of $800,000 (such payments to be made in accordance with the
Company’s normal payroll practices) for a period of twelve (12) months from the
Effective Date (subject to the proviso set forth in Section 4(g)(iv)(B) of
the Employment Agreement) and $53,333 in respect of the amounts payable under Section 4(g)(iv)(C) of
the Employment Agreement on the schedule set forth therein (the “Cash

 

 

Consideration”) and also pay
Mullen the Accrued Obligations and reimbursement of his reasonable business
expenses incurred through the Effective Date (the “Accrued Amounts”).  On the express condition that Mullen signs
and does not rescind the General Release attached as Exhibit A, such
amounts shall be payable by Red Robin to Mullen on the ADEA Effective Date (as
defined below) by wire transfer in immediately available funds.  Also, on the ADEA Effective Date and on the
condition that Mullen does not rescind the General Release attached as Exhibit A,
the vesting of 75,000 shares of restricted stock granted to Mullen on August 17,
2007 (remaining 25,000 shares of 75,000 share grant) and August 15, 2008
(50,000 shares) shall be accelerated, and such shares shall be subject to no
further restriction.  All payments under
this Section 2 shall be subject to applicable withholdings and deductions.

 

3.                                       Benefits.  Red Robin shall pay or reimburse Mullen the
cost of continuing coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”) or otherwise, if COBRA does not apply, for
Mullen and his spouse under the Company’s and Red Robin International, Inc.’s
then existing medical, dental and prescription insurance plans for the twelve
(12) months following the Effective Date, provided that Mullen elects such
continuing coverage in accordance with the requirements of each such plan
(provided that during any period when Mullen is eligible to receive such
benefits under any employer-provided plan or through any government-sponsored
program such as Medicare, the benefits provided under this Section 3 may
be made secondary to those provided under such other plan).  Mullen hereby agrees to acquire and maintain
any and all coverage that he is entitled to at any time during his life under
the Medicare program or any similar program of the United States or any agency
thereof.  Mullen further agrees to pay
any required premiums for Medicare coverage from his personal funds.

 

4.                                       Consulting
Services.

 

(a)                                  Mullen agrees
to make himself reasonably available for consultation to Red Robin’s Board of
Directors for a period of nine months from the Effective Date (the “Consulting
Service Term”).  The actual dates and
time of availability shall be as the Parties mutually agree in good faith,
shall be subject to reasonable notice and shall not unreasonably interfere with
Mullen’s other business and personal activities.  In no event shall Mullen provide monthly
services exceeding 20% of the average level of bona fide services performed by
Mullen on a monthly basis over the immediately preceding 36-month period.  It is the intent of both Mullen and Red Robin
that Mullen’s employment with Red Robin and its subsidiaries shall terminate as
of the Effective Date, and that the consulting services shall not constitute a
continuation of his employment.  Mullen
shall be reimbursed by Red Robin for all his out of pocket expenses incurred in
connection with performance of the consulting services.  In addition, during the Consulting Service
Term, (i) Red Robin shall pay Mullen $9,333 per month, (ii) Mullen
shall be entitled to retain his personal computer and iPhone, and be reimbursed
for the normal monthly service charges for the use of his iPhone during the
Consulting Service Term, (iii) Mullen shall be entitled to continue to use
his Red Robin restaurant card at the Company’s expense for the duration of the
Consulting Service Term, and (iv) Mullen shall be entitled to up to five (5) hours
per week of executive assistant help from P.J. Adler or such other Company
executive assistant as the Chief Executive Officer reasonably determines.

 

2

 

(b)                                 Mullen shall be
an independent contractor, not an employee or agent of Red Robin or any of its
subsidiaries or affiliates.  Other than
as expressly provided in this Agreement, neither Red Robin nor any of its
affiliates shall be required to furnish Mullen with any employee benefits for
which officers or employees of such entities are eligible at any time.

 

5.                                       Mullen’s
Relinquishment of Rights.  It
is expressly acknowledged and agreed that, subject to the actual receipt by
Mullen of the consideration to be delivered pursuant to Section 2 above,
Mullen shall relinquish all rights he may have under Sections 1, 2, 3, 4 and 5
of the Employment Agreement, all rights under the Stock Agreements (provided
that Mullen shall retain any and all shares (and stock options) of Red Robin
that are fully vested, and issued and outstanding in his name and the name of
any of the members of his family) and any and all rights he may have to any
other salary, bonus or other compensation, except for compensation as a
non-employee director during his service as such.  In the event there is no actual receipt by
Mullen of the consideration to be delivered pursuant to Section 2 above,
then Mullen shall not have relinquished any such rights.

 

6.                                       Acknowledgement
of Continuing Rights and Obligations.  It is acknowledged and agreed that, except as
provided in Section 5 above, Mullen shall continue to be entitled to his
rights under the Employment Agreement. 
It is further acknowledged and agreed that Mullen shall continue to
remain obligated under Sections 6 through 21 of the Employment Agreement.

 

7.                                       General Release. As a
condition precedent to Mullen receiving the consideration or benefits set forth
in Sections 2 and 3 above, the Parties will execute and deliver the General
Release attached as Exhibit A on the Effective Date.  The General Release shall not become
enforceable and effective against Mullen until seven calendar days after such
execution (the “ADEA Effective Date”). 
The consideration and benefits set forth in Sections 2 and 3 above,
shall not be paid or provided until after the expiration of the ADEA Effective
Date, on the express condition that Mullen does not rescind the General
Release.

 

8.                                       Representations
and Warranties.  Each of
Mullen and Red Robin (except as to subparagraphs (c) and (e) below),
severally and not jointly, warrants and represents as follows:

 

(a)                                  He or it has
read this Agreement and agrees to the conditions and obligations set forth in
it.

 

(b)                                 He or it
voluntarily executes this Agreement (i) after having been advised to
consult with legal counsel, (ii) after having had opportunity to consult
with legal counsel and (iii) without being pressured or influenced by any
statement, representation or omission of any person acting on behalf of the
other or any of its officers, directors, employees, agents and attorneys.

 

(c)                                  Mullen has no
knowledge of the existence of any lawsuit, charge or proceeding against Red
Robin or any of its officers, directors, employees or agents arising out of or
otherwise connected with any of the matters herein released.

 

(d)                                 He or it has
the individual, corporate, or entity power and authority to execute and deliver
this Agreement and to perform its obligations hereunder and, if such Party is a
corporation, limited liability company or partnership, the execution, delivery,
and performance 

 

3

 

of this Agreement has been
duly authorized by all necessary corporate, company or partnership action.  This Agreement constitutes the legal, valid,
and binding obligation of each Party.

 

(e)                                  Mullen admits,
acknowledges, and agrees that, other than the consideration set forth in this
Agreement, Mullen has been fully paid or provided all wages, compensation,
salary, commissions, bonuses, expense reimbursements, stock, stock options,
vacation, change-in-control benefits, severance benefits, deferred
compensation, or other benefits from Red Robin, which are or could be due to
Mullen under the terms of Mullen’s employment or otherwise.

 

9.                                       Section 409A.  If any payment or distribution of any type to
Mullen or for Mullen’s benefit, whether paid or payable or distributed or
distributable, pursuant to the terms of this Agreement, the Employment
Agreement or the Stock Agreements (the “Total Payments”), would be subject to
the additional tax and interest imposed by Section 409A, or any interest
or penalties with respect to such additional tax (such additional tax, together
with any such interest or penalties, are collectively referred to as the “409A
Tax”), Mullen acknowledges that any and all claims related to such 409A Tax
constitute Released Claims.

 

10.                                 Company’s
Successor.  In addition
to any obligations imposed by law upon any successor to Red Robin, Red Robin
shall require any successor to all or substantially all of Red Robin’s business
or assets (whether direct or indirect and whether by purchase, reorganization,
merger, share exchange, consolidation, or otherwise) to expressly assume and
agree to perform Red Robin’s obligations under this Agreement to the same
extent, and in the same manner, as Red Robin would be required to perform if no
such succession had occurred.  This
Agreement shall be binding upon, and inure to the benefit of, any successor to
Red Robin.

 

11.                                 Mullen’s
Successor.  This
Agreement shall inure to the benefit of, and be enforceable by, Mullen’s
personal or legal representatives, designated beneficiary, administrators,
executors and heirs.  If Mullen should
die after the date hereof but before any payment or benefit to which Mullen is
entitled under this Agreement has been received by Mullen, all payments or benefits
to which Mullen would have been entitled had he continued to live (other than
any such benefits that, by their terms, terminate upon Mullen’s death) shall be
made or provided in accordance with this Agreement to the representatives,
executors, or administrators of Mullen’s estate.

 

12.                                 Restricted
Assignment.  Except as
expressly provided in Sections 10 and 11, neither Party may assign, transfer,
or delegate this Agreement or any of its or his rights or obligations under
this Agreement without the prior written consent of the other Party.  Any attempted assignment, transfer, or
delegation in violation of the preceding sentence shall be void and of no
effect.

 

13.                                 Waiver and
Amendment.  No term or
condition of this Agreement shall be deemed waived other than by a writing
signed by the Party against whom or which enforcement of the waiver is
sought.  Without limiting the generality
of the preceding sentence, a Party’s failure to insist upon the other Party’s
strict compliance with any provision of this Agreement or to assert any right
that a Party may have under this Agreement shall not be deemed a waiver of that
provision or that right.  Any written
waiver shall operate only as to the specific term or condition waived under the
specific circumstances and shall not constitute a waiver of that term or
condition for the future or a waiver of any other term or condition.  No amendment or

 

4

 

modification of this
Agreement shall be deemed effective unless stated in a writing signed by the
Parties.

 

14.                                 Entire
Agreement.  This
Agreement, together with the General Release attached as Exhibit A,
contain the Parties’ entire agreement regarding the subject matter of this
Agreement and supersede all prior agreements and understandings between them
regarding such subject matter (except as reserved herein).  The Parties have made no agreements,
representations, or warranties regarding the subject matter of this Agreement
that are not set forth in this Agreement.

 

15.                                 Notice.  Each notice or other communication required
or permitted under this Agreement shall be in writing and transmitted,
delivered, or sent by personal delivery, prepaid courier or messenger service
(whether overnight or same-day), prepaid telecopy or facsimile, or prepaid
certified United States mail (with return receipt requested), addressed (in any
case) to the other Party at the address for that Party set forth below that
Party’s signature on this Agreement, or at such other address as the recipient
has designated by notice to the other Party, with a copies as follows:

 

If to Mullen,

 

Dennis B. Mullen

370 Detroit Street

Denver, CO  80206

P: (602) 549-4988

 

and

 

Snell & Wilmer

c/o Roger Cohen

1200 17th Street, Suite 1900

Denver, CO 80202

P: (303) 634-2000

F: (303) 634-2020

 

If to Red Robin,

 

Red Robin Gourmet Burgers, Inc.

Annita M. Menogan

Senior Vice President and General Counsel

6312 S. Fiddler’s Green Circle

Suite 200 North

Greenwood Village, CO 80111

P: (303) 846-6034

F: (303) 846-6048

 

5

 

and

 

Davis Graham & Stubbs LLP

c/o: Ronald R. Levine, II

1550 Seventeenth Street, Suite 500

Denver, Colorado 80202

P:  (303)
892-7514

F:  (303)
893-1379

 

Each notice or communication so transmitted,
delivered, or sent in person, by courier or messenger service, or by certified
United States mail shall be deemed given, received, and effective on the date
delivered to or refused by the intended recipient (with the return receipt, or
the equivalent record of the courier or messenger, being deemed conclusive
evidence of delivery or refusal.) 
Nevertheless, if the date of delivery is after 5:00 p.m. on a
business day, the notice or other communication shall be deemed given,
received, and effective on the next Business Day.

 

16.                                 Severability.  It is the desire of the Parties hereto that
this Agreement be enforced to the maximum extent permitted by law, and should
any provision contained herein be held unenforceable by a court of competent
jurisdiction or arbitrator (pursuant to Section 12), the Parties hereby
agree and consent that such provision shall be reformed to create a valid and
enforceable provision to the maximum extent permitted by law; provided,
however, if such provision cannot be reformed, it shall be deemed ineffective
and deleted herefrom without affecting any other provision of this
Agreement.  This Agreement should be
construed by limiting and reducing it only to the minimum extent necessary to
be enforceable under then applicable law.

 

17.                                 Title and
Headings; Construction. 
Titles and headings to sections hereof are for the purpose of reference
only and shall in no way limit, define or otherwise affect the provisions
hereof.  The words “herein,” “hereof,” “hereunder”
and other compounds of the word “here” shall refer to the entire Agreement and
not to any particular provision.

 

18.                                 Governing Law;
Jurisdiction.  All matters
or issues relating to the interpretation, construction, validity, and
enforcement of this Agreement shall be governed by the laws of the State of
Colorado, without giving effect to any choice-of-law principle that would cause
the application of the laws of any jurisdiction other than Colorado.  Jurisdiction and venue of any action or
proceeding relating to this Agreement or any dispute (to the extent arbitration
is not required under Section 12) shall be exclusively in Denver,
Colorado.

 

19.                                 Survival of
Certain Provisions.  Wherever
appropriate to the intention of the Parties, the respective rights and
obligations of the Parties hereunder shall survive any termination or
expiration of this Agreement.

 

20.                                 Counterparts.  This Agreement may be signed in counterparts,
with the same effect as if both Parties had signed the same document.  All counterparts shall be construed together
to constitute one, and the same, document.

 

6

 

21.                                 Attorneys Fees.  The Parties agree that Red Robin shall pay
all reasonable expenses and costs Mullen incurs with Snell & Wilmer in
connection with the negotiation and execution of this Agreement or in good
faith in obtaining or retaining payments and benefits under this Agreement
within 20 days of being incurred up to a maximum of $15,000.  Payment of this expense in any taxable year
may not affect expenses to be paid in any other year.

 

[Signature Page Follows.]

 

7

 

IN WITNESS WHEREOF, the Parties have executed this
Agreement to be effective as of August 11, 2010.

 

 

	
  MULLEN:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
  /s/ Dennis B. Mullen

  	
   

  
	
  Name:  Dennis B. Mullen

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  RED ROBIN:

  	
   

  
	
   

  	
   

  
	
  Red Robin Gourmet Burgers, Inc., a Delaware corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Annita M. Menogan

  	
   

  
	
  Its:  Senior Vice President

  	
   

  
	
  Name:  Annita M. Menogan

  	
   

  
				

 

8

 

STRICTLY
CONFIDENTIAL

 

EXHIBIT A

 

GENERAL RELEASE

 

1.                                      Definitions.

 

I
intend all words used by this General Release (the “Release”) to have their
plain meanings in ordinary English. 
These terms shall have the following meanings:

 

A.                                   I, me, my  and Releasor mean me and anyone who has or obtains any legal
rights or claims through me.

 

B.                                     Employer
means:  (i) Red Robin
Gourmet Burgers, Inc. and Red Robin International, Inc.
(collectively, the “Company”), (ii) any company related to the Company in
the past or present, (iii) the past and present officers, directors,
employees, shareholders, attorneys, agents and representatives of the Company,
(iv) any present or past employee benefit plan sponsored by the Company
and/or officers, directors, trustees, administrators, employees, attorneys,
agents and representatives of such plan, (v) and any person who acted on
behalf of the Company on instruction from the Company.

 

C.                                     Employment
Agreement means that certain Second Amended and Restated
Employment Agreement dated as of March 10, 2008, as further amended on August 15,
2009 and January 11, 2010 between me and the Company.

 

D.                                    My
Claims means all of my rights to any relief of any kind from the Employer,
including but not limited to:

 

1.                                       All claims I
now have, whether or not I now know about such claims, including all claims
arising out of or relating to my past employment with Employer, the termination
of that employment or statements or actions of the Employer including, but not
limited to: breach of contract; defamation; infliction of emotional distress;
wrongful discharge; workers’ compensation retaliation; violation of the Age
Discrimination in Employment Act of 1967; Fair Labor Standards Act; Title VII
of the Civil Rights Act of 1964; the Civil Rights Acts of 1866 and 1871; the
Civil Rights Act of 1991; the Family and Medical Leave Act; the National Labor
Relations Act; The Americans with Disabilities Act; COBRA; ERISA; the
anti-discrimination laws of the state in which I reside and of any other state;
and/or any other federal, state or local statute, law, ordinance, regulation,
order or principle of common law;

 

2.                                       All claims I
have now, whether or not I know about the claims, for any type of relief from
the Employer, including, but not limited to, all claims for back pay, front
pay, lost benefits, reinstatement, liquidated damages, punitive damages, and
damages for any alleged breach of contract, any tort claim and any alleged
personal injury or emotional injury or damage; and

 

A-1

 

3.                                       All claims for
attorneys’ fees;

 

but  excluding my rights
to receive payments and benefits pursuant to Section 4(e)(iv) of my
Employment Agreement and any claims that arise after the date I sign this
Release.

 

2.                                      Agreement
to Release My Claims.

 

In exchange for my right to receive payments and
other benefits under Section 4(e)(iv) of my Employment Agreement, to
which I am not otherwise entitled, I agree to give up all My Claims
against the Employer and give up all other actions, causes of action, claims or
administrative complaints that I have against the Employer.  I will not bring any lawsuits or other claims
against the Employer relating to the claims that I have released nor will I
allow any lawsuits or claims to be brought or continued on my behalf or in my
name.  The money and other consideration
I receive pursuant to Section 4(e)(iv) of my Employment Agreement is
a full and fair payment for the release of My Claims and the Employer does not
owe me anything further for My Claims. 
Separate from this agreement, I will also receive any compensation
due me for the last pay period during which I was an employee of Employer and
compensation for earned vacation pay.  My
rights to receive the other payments and benefits due under Section 4(e)(iv) of
my Employment Agreement shall be effective only after receipt by the Employer
of this Release, signed by me and properly notarized, and after the expiration
of the seven (7) day revocation period mentioned in Section 5,
below.  I understand that I will not
receive any payments due me under Section 4(e)(iv) of my Employment
Agreement (other than payment of the Accrued Obligations under clause (1) thereof)
if I revoke or rescind this Release, and in any event, until after the seven (7) day
revocation period has expired.

 

I further agree to:

 

A.                                   Reimburse the
Employer for any cost; loss; expense, including reasonable attorneys’ fees;
awards or judgments resulting from my failure to perform my obligations under
this Release or under my Employment Agreement or from any misstatement or
omission I have made in this Release; and

 

B.                                     Indemnify,
defend and save harmless the Employer from any costs, liability or expense,
including reasonable attorneys’ fees, arising from the taxation, if any, of any
amounts received by me pursuant to this Release, including but not limited to
any penalties or administrative expenses.

 

3.                                      Additional
Agreement and Understandings.

 

Even though the Employer will pay me to settle and
release My Claims, the Employer does not admit that it is legally obligated to
me, and the Employer denies that it is responsible or legally obligated for My
Claims or that it has engaged in any improper conduct or wrongdoing against me.

 

I have read this Release carefully and understand
its terms.  I am hereby being advised by
the Employer to consult with an attorney prior to signing this Release.  My decision to sign or not to sign this
Release is my own voluntary decision made with full knowledge 

 

A-2

 

that the Employer has advised me to consult with an
attorney.  In agreeing to sign this
Release, I have not relied on any statement or explanation of my rights or
obligations made by the Employer or its attorneys.

 

I am old enough to sign this Release and to be
legally bound by the agreements that I am making.  I represent that I have not filed for
personal bankruptcy or been involved in any personal bankruptcy proceeding
between the time any of My Claims accrued and date of my signature below.  I am legally able and entitled to receive the
entire sum of money being paid to me by the Employer in settlement of My
Claims.  I have not assigned or pledged
any of My Claims or any portion of them to any third person.  I am a resident of the State of Colorado and
have executed this Release within the State of Colorado.  I understand and agree that this Release
contains all the agreements between the Employer and me relating to this
settlement, and that it supersedes all prior negotiations and agreements
relating to the subject matter hereof.

 

I admit, acknowledge, and agree that, other than the
payments and other benefits under Section 4(e)(iv) of my Employment
Agreement, I have been fully paid or provided all wages, compensation,
salary, commissions, bonuses, expense reimbursements, stock, stock options,
vacation, change-in-control benefits, severance benefits, deferred
compensation, or other benefits from the Employer, which are or could be due to
me under the terms of my employment or otherwise.

 

4.                                      Twenty-One
Day Period to Consider the Release.

 

I understand that I have twenty-one (21) days from
the day that I receive this Release, not counting the day upon which I receive
it, to consider whether I wish to sign this Release.  If I cannot make up my mind in that time, the
Employer may or may not allow more time. 
I acknowledge that if I sign this Release before the end of the
twenty-one (21) day period, it will be my personal, voluntary decision to do
so, with the intent to waive the full twenty-one (21) day period.

 

5.                                      Seven
Day Period to Rescind the Release.

 

I understand that I may rescind (that is, cancel)
this Release for any reason within seven (7) calendar days after I sign
and deliver it to the Employer.  I
understand that my notice rescinding this agreement must be in writing and
hand-delivered or mailed to the Employer. 
If mailed, my notice rescinding this agreement must be:

 

	
  A.

  	
  Postmarked within seven (7) days after I sign and deliver this
  agreement to the Employer;

  
	
   

  	
   

  
	
  B.

  	
  Properly addressed to:

  	
  Red Robin Gourmet Burgers, Inc.

  
	
   

  	
   

  	
  Red Robin International, Inc.

  
	
   

  	
   

  	
  6312 South Fiddler’s Green Circle, Suite 200 North

  
	
   

  	
   

  	
  Greenwood Village, CO 80111

  
	
   

  	
   

  	
  Attention: Chief Legal Officer

  
	
   

  	
   

  
	
   

  	
  and

  

 

A-3

 

	
  C.

  	
  Sent by certified mail, return receipt requested, postage pre-paid.

  

 

6.                                      Confidentiality.

 

I understand that part of the consideration paid to
me by the Employer is in consideration for my agreement to keep the fact of
this Release and its terms strictly confidential, except as required by
law.  I may not discuss, disclose or
reveal, directly or indirectly, the fact of this Release or its terms or
conditions to any person, corporation, or other entity, other than to my
accountant, legal advisor and members of my immediate family who (prior to
disclosure to them) shall likewise agree in writing to maintain the
confidentiality of this Release.  Neither
may I provide any information, assistance or encouragement of any kind to any
person firm or corporation concerning the investigation or prosecution of any
claim against the Employer, except pursuant to EEOC requirements or court
order.  If I violate the terms of this
Section 6, I shall be liable to
the Employer for the return of all payments made pursuant to
Section 4(e)(iv) of my Employment Agreement (other than payment of
the Accrued Obligations thereunder and for the Employer’s costs and attorneys’
fees in any action brought to enforce the provisions of this
Section 6.  The parties agree that
fixing the amount of damages caused by my breach of this Section 6 would
be difficult or impossible to ascertain, that the amount for which I would
become liable to Employer upon my breach of my obligations under this
Section 6 is a fair and reasonable estimate of the damages that Employer may
sustain as a result of my breach.  On
that basis, the amount I have agreed to pay to Employer upon my breach of my
obligations under this Section 6 shall be payable as liquidated damages
for my breach and not as a penalty.

 

7.                                       Non-Disparagement.

 

I agree that I will not, directly or indirectly,
make or ratify any statement, public or private, oral or written, to any person
that disparages, either professionally or personally, the Company or its
parents, subsidiaries and affiliates, past and present, and each of them, as
well as its and their trustees, directors, officers, agents, attorneys,
insurers, employees, stockholders, representatives, assigns, and successors,
past and present, and each of them; and the Company agrees that its directors
and senior executive officers will not, directly or indirectly, make or ratify
any statement, public or private, oral or written, to any person that
disparages me, either professionally or personally.

 

8.                                      Survival
of Certain Provisions of Employment Agreement.

 

Sections 6 through 21 of the Employment
Agreement shall survive the termination of my employment and are incorporated
herein by reference as if fully set forth.

 

9.                                      Choice
of Law.

 

This Release shall be deemed to have been executed
and delivered within the State of Colorado, and my rights and obligations and
the rights and obligations of the Employer hereunder shall be construed and
enforced in accordance with, and governed by, the laws of the State of Colorado
without regard to principles of conflict of laws.

 

A-4

 

10.                               Arbitration.

 

Any dispute or controversy arising out of
interpretation or enforcement of this Release shall be resolved pursuant to the
terms set forth in Section 14 of the Employment Agreement.

 

11.                               Severability.

 

If any provision of this Release is declared by any
court of competent jurisdiction to be invalid for any reason, such invalidity
shall not affect the remaining provisions. 
On the contrary, such remaining provisions shall be fully severable, and this Release
shall be construed and enforced as if such invalid provisions never had been
inserted in the Release.

 

	
  RELEASOR

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dennis B. Mullen

  	
   

  
	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF

  	
  )

  
	
  COUNTY OF

  	
  ) ss:

  
				

 

Subscribed
and sworn to me a Notary Public in and for the state of                                    
by                                         
this                      
day of                                         ,
200   .

 

	
   

  	
   

  
	
   

  	
  Notary Public in and for the State of 

  
	
   

  	
  My commission expires:

  
	
   

  	
   

  
	
   

  	
   

  
	
  AGREED AND ACCEPTED:

  	
   

  
	
   

  	
   

  
	
  RED ROBIN GOURMET BURGERS, INC.

  	
   

  
	
  RED ROBIN INTERNATIONAL, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  

 

A-5Exhibit
10.1

 

NETLIST, INC.,

 

AMENDED AND RESTATED 2006 EQUITY
INCENTIVE PLAN

 

Amended by the Stockholders on
June 2, 2010

 

1.                                      Purpose

 

This
Plan is intended to encourage ownership of Stock by employees, consultants,
advisors and directors of the Company and its Affiliates and to provide
additional incentive for them to promote the success of the Company’s business
through the grant of Awards of, or pertaining to, shares of the Company’s
Stock. This Plan is intended to be an incentive stock option plan within the
meaning of Section 422 of the Code, but not all Awards are required to be
Incentive Options. This Plan shall not become effective until the Effective
Date.

 

2.                                      Definitions

 

As
used in this Plan, the following terms shall have the following meanings:

 

2.1           Accelerate, Accelerated, and Acceleration, means: (a) when used
with respect to an Option or Stock Appreciation Right, that as of the time of
reference the Option or Stock Appreciation Right will become exercisable with
respect to some or all of the shares of Stock for which it was not then
otherwise exercisable by its terms; (b) when used with respect to
Restricted Stock or Restricted Stock Units, that the Risk of Forfeiture
otherwise applicable to the Stock or Units shall expire with respect to some or
all of the shares of Restricted Stock or Units then still otherwise subject to
the Risk of Forfeiture; and (c) when used with respect to Performance
Units, that the applicable Performance Goals shall be deemed to have been met
as to some or all of the Units.

 

2.2           Acquisition means
(i) a merger or consolidation of the Company with or into another person,
(ii) the sale, transfer, or other disposition of all or substantially all
of the Company’s assets to one or more other persons in a single transaction or
series of related transactions, or (iii) the acquisition of beneficial
ownership (determined pursuant to Securities and Exchange Commission
Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as
amended and in effect from time to time) by any person of more than 50% of the
Company’s outstanding common stock pursuant to a tender or exchange offer made
directly to the Company’s stockholders, other than an underwriter temporarily
holding common stock pursuant to an offering of such common stock.
Notwithstanding the foregoing, a transaction shall not constitute an “Acquisition”
if its sole purpose is to change the state of the Company’s incorporation or to
create a holding company that will be owned in substantially the same
proportions by the persons who held the Company’s securities immediately prior
to such transaction.

 

2.3           Affiliate means any
corporation, partnership, limited liability company, business trust, or other
entity controlling, controlled by or under common control with the Company.

 

2.4           Award means any
grant or sale pursuant to the Plan of Options, Stock Appreciation Rights,
Performance Units, Restricted Stock, Restricted Stock Units or Stock Grants.

 

2.5           Award
Agreement means an agreement between the Company and the
recipient of an Award, setting forth the terms and conditions of the Award.

 

2.6           Board means the
Company’s Board of Directors.

 

2.7           Code means the
Internal Revenue Code of 1986, as amended from time to time, or any successor
statute thereto, and any regulations issued from time to time thereunder.

 

2.8           Committee means the
Compensation Committee of the Board, which in general is responsible for the
administration of the Plan, as provided in Section 5 of the Plan. For any
period during which no such committee is in existence “Committee” shall mean
the Board and all authority and responsibility assigned to the Committee under
the Plan shall be exercised, if at all, by the Board.

 

2.9           Company means
Netlist, Inc., a corporation organized under the laws of the State of
Delaware.

 

 

2.10         Covered
Employee means an employee who is a “covered employee”
within the meaning of Section 162(m) of the Code.

 

2.11         Effective
Date means the date on which the Company’s registration statement on
Form S-1, initially filed with the Securities and Exchange Commission on
August 18, 2006 in connection with the initial public offering of its
common stock in a firm commitment underwriting, as amended, is declared
effective by the Securities and Exchange Commission.

 

2.12         Grant Date means the date
as of which an Option is granted, as determined under Section 7.1(a).

 

2.13         Incentive
Option means an Option which by its terms is to be treated as an “incentive
stock option” within the meaning of Section 422 of the Code.

 

2.14         Market
Value means the value of a share of Stock on a particular date determined by
such methods or procedures as may be established by the Committee. Unless
otherwise determined by the Committee, the Market Value of Stock as of any date
is the closing price for the Stock as quoted on the NGM (or on any other
national securities exchange on which the Stock is then listed) for that date
or, if no closing price is reported for that date, the closing price on the
next preceding date for which a closing price was reported. For purposes of Awards
effective as of the effective date of the Company’s initial public offering,
Market Value of Stock shall be the price at which the Company’s Stock is
offered to the public in its initial public offering.

 

2.15         NGM means the
NASDAQ Global Market.

 

2.16         Nonstatutory
Option means any Option that is not an Incentive Option.

 

2.17         Option means an
option to purchase shares of Stock.

 

2.18         Optionee means a
Participant to whom an Option shall have been granted under the Plan.

 

2.19         Participant means any
holder of an outstanding Award under the Plan.

 

2.20         Performance
Criteria means the criteria that the Committee selects for
purposes of establishing the Performance Goal or Performance Goals for a
Participant for a Performance Period. The Performance Criteria used to
establish Performance Goals are limited to: (i) cash flow (before or after
dividends), (ii) earnings per share (including, without limitation,
earnings before interest, taxes, depreciation and amortization),
(iii) stock price, (iv) return on equity, (v) stockholder return
or total stockholder return, (vi) return on capital (including, without
limitation, return on total capital or return on invested capital),
(vii) return on investment, (viii) return on assets or net assets,
(ix) market capitalization, (x) economic value added, (xi) debt
leverage (debt to capital), (xii) revenue, (xiii) sales or net sales,
(xiv) backlog, (xv) income, pre-tax income or net income,
(xvi) operating income or pre-tax profit, (xvii) operating profit,
net operating profit or economic profit, (xviii) gross margin, operating
margin or profit margin, (xix) return on operating revenue or return on
operating assets, (xx) cash from operations, (xxi) operating ratio,
(xxii) operating revenue, (xxiii) market share improvement, (xxiv) general
and administrative expenses or (xxv) customer service.

 

2.21         Performance
Goals means, for a Performance Period, the written goal or goals established
by the Committee for the Performance Period based upon the Performance
Criteria. The Performance Goals may be expressed in terms of overall Company
performance or the performance of a division, business unit, subsidiary, or an
individual. either individually, alternatively or in any combination, applied
to either the Company as a whole or to a business unit or Affiliate, either
individually, alternatively or in any combination, and measured either
quarterly, annually or cumulatively over a period of years, on an absolute
basis or relative to a pre-established target, to previous years’ results or to
a designated comparison group, in each case as specified by the Committee. The
Committee will, in the manner and within the time prescribed by
Section 162(m) of the Code in the case of Qualified Performance-Based
Awards, objectively define the manner of calculating the Performance Goal or
Goals it selects to use for such Performance Period for such Participant. To
the extent consistent with Section 162(m) of the Code, the Committee
may appropriately adjust any evaluation of performance against a Performance Goal
to exclude any of the following events that occurs during a performance period:
(i) asset write-downs, (ii) litigation, 

 

 

claims, judgments or
settlements, (iii) the effect of changes in tax law, accounting principles
or other such laws or provisions affecting reported results, (iv) accruals
for reorganization and restructuring programs and (v) any extraordinary,
unusual, non-recurring or non-comparable items (A) as described in
Accounting Principles Board Opinion No. 30, (B) as described in
management’s discussion and analysis of financial condition and results of
operations appearing in the Company’s Annual Report to stockholders for the
applicable year, or (C) publicly announced by the Company in a press
release or conference call relating to the Company’s results of operations or
financial condition for a completed quarterly or annual fiscal period.

 

2.22         Performance
Period means the one or more periods of time, which may be of varying and
overlapping durations, selected by the Committee, over which the attainment of
one or more Performance Goals will be measured for purposes of determining a
Participant’s right to, and the payment of, a Performance Unit.

 

2.23         Performance
Unit means a right granted to a Participant under Section 7.5, to
receive cash, Stock or other Awards, the payment of which is contingent on
achieving Performance Goals established by the Committee.

 

2.24         Plan means this
2006 Equity Incentive Plan of the Company, as amended from time to time, and
including any attachments or addenda hereto.

 

2.25         Qualified
Performance-Based Awards means Awards intended to qualify as “performance-based
compensation” under Section 162(m) of the Code.

 

2.26         Restricted
Stock means a grant or sale of shares of Stock to a Participant subject to a
Risk of Forfeiture.

 

2.27         Restriction
Period means the period of time, established by the Committee in connection
with an Award of Restricted Stock or Restricted Stock Units, during which the
shares of Restricted Stock or Restricted Stock Units are subject to a Risk of
Forfeiture described in the applicable Award Agreement.

 

2.28         Risk of
Forfeiture means a limitation on the right of the Participant
to retain Restricted Stock or Restricted Stock Units, including a right in the
Company to reacquire shares of Restricted Stock at less than their then Market
Value, arising because of the occurrence or non-occurrence of specified events
or conditions.

 

2.29         Restricted
Stock Units means rights to receive shares of Stock at the
close of a Restriction Period, subject to a Risk of Forfeiture.

 

2.30         Stock means common
stock, par value $0.001 per share, of the Company, and such other securities as
may be substituted for Stock pursuant to Section 8.

 

2.31         Stock
Appreciation Right means a right to receive any excess in the Market
Value of shares of Stock (except as otherwise provided in Section 7.2(c))
over a specified exercise price.

 

2.32         Stock
Grant means the grant of shares of Stock not subject to restrictions or
other forfeiture conditions.

 

2.33         Ten
Percent Owner means a person who owns, or is deemed within the
meaning of Section 422(b)(6) of the Code to own, stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Company (or any parent or subsidiary corporations of the Company, as defined in
Sections 424(e) and (f), respectively, of the Code). Whether a person
is a Ten Percent Owner shall be determined with respect to an Option based on
the facts existing immediately prior to the Grant Date of the Option.

 

3.                                      Term of the Plan

 

Unless
the Plan shall have been earlier terminated by the Board, Awards may be granted
under this Plan at any time in the period commencing on the date of approval of
the Plan by the Board and ending immediately prior to the tenth anniversary of
the earlier of the adoption of the Plan by the Board or approval of the Plan by
the 

 

 

Company’s stockholders.
Awards granted pursuant to the Plan within that period shall not expire solely
by reason of the termination of the Plan. Awards of Incentive Options granted
prior to stockholder approval of the Plan are expressly conditioned upon such
approval, but in the event of the failure of the stockholders to approve the
Plan shall thereafter and for all purposes be deemed to constitute Nonstatutory
Options.

 

4.                                      Stock Subject to the Plan

 

At
no time shall the number of shares of Stock issued pursuant to or subject to
outstanding Awards granted under the Plan (including, without limitation,
pursuant to Incentive Options), nor the number of shares of Common Stock issued
pursuant to Incentive Options, exceed the sum of (a) 500,000 shares of
Stock plus (b) an annual increase to be added on the first day of each
calendar year beginning on or after January 1, 2007 equal to the lesser of
(i) 500,000 shares of Stock, and (ii) such lesser number as the Board
may approve for the fiscal year, provided, however, that beginning on
January 1, 2010, the annual increase to the number of shares of Stock that
may be issued pursuant to the Plan shall be equal to the lesser of
(x) 5.0% of the number of shares of Stock that are issued and outstanding
as of the first day of the calendar year, and (y) 1,200,000 shares of
Stock; subject, however, to the
provisions of Section 8 of the Plan. For purposes of applying the
foregoing limitation, (a) if any Option or Stock Appreciation Right
expires, terminates, or is cancelled for any reason without having been
exercised in full, or if any other Award is forfeited by the recipient or
repurchased at less than its Market Value, the shares not purchased by the Optionee
or which are forfeited by the recipient or repurchased shall again be available
for Awards to be granted under the Plan and (b) if any Option is exercised
by delivering previously-owned shares in payment of the exercise price
therefor, only the net number of shares, that is, the number of shares issued
minus the number received by the Company in payment of the exercise price,
shall be considered to have been issued pursuant to an Award granted under the
Plan. In addition, settlement of any Award shall not count against the
foregoing limitations except to the extent settled in the form of Stock. Shares
of Stock issued pursuant to the Plan may be either authorized but unissued
shares or shares held by the Company in its treasury.

 

5.                                      Administration

 

The
Plan shall be administered by the Committee; provided,
however, that at any time and on any one or more occasions the Board
may itself exercise any of the powers and responsibilities assigned the
Committee under the Plan and when so acting shall have the benefit of all of
the provisions of the Plan pertaining to the Committee’s exercise of its
authorities hereunder; and provided further,
however, that the Committee may delegate to an executive officer or
officers the authority to grant Awards hereunder to employees who are not
officers, and to consultants and advisors, in accordance with such guidelines
as the Committee shall set forth at any time or from time to time. Subject to
the provisions of the Plan, the Committee shall have complete authority, in its
discretion, to make or to select the manner of making all determinations with
respect to each Award to be granted by the Company under the Plan including the
employee, consultant, advisor or director to receive the Award and the form of
Award. In making such determinations, the Committee may take into account the
nature of the services rendered by the respective employees, consultants,
advisors and directors, their present and potential contributions to the
success of the Company and its Affiliates, and such other factors as the
Committee in its discretion shall deem relevant. Subject to the provisions of
the Plan, the Committee shall also have complete authority to interpret the
Plan, to prescribe, amend and rescind rules and regulations relating to
it, to determine the terms and provisions of the respective Award Agreements
(which need not be identical), and to make all other determinations necessary
or advisable for the administration of the Plan, including, but not limited to,
the cancellation, amendment, repricing, reclassification or exchange of
outstanding Options and other Awards, subject to the provisions of
Section 14. The Committee’s determinations made in good faith on matters
referred to in the Plan shall be final, binding and conclusive on all persons
having or claiming any interest under the Plan or an Award made pursuant
hereto.

 

6.                                      Authorization of Grants

 

6.1  Eligibility.  The Committee may grant from time to time and
at any time prior to the termination of the Plan one or more Awards, either
alone or in combination with any other Awards, to any employee of, or
consultant or advisor to, one or more of the Company and its Affiliates or to
any non-employee member of the Board or of any board of directors (or similar
governing authority) of any Affiliate. However, only employees of the Company,
and of any parent or subsidiary corporations of the Company, as defined in
Sections 424(e) and (f), respectively, of the Code, shall be eligible
for the grant of an Incentive Option. Further, in no event shall the number of
shares of Stock covered by Options or other Awards granted to any one person in
any one calendar year exceed 25% of the aggregate number of shares of Stock
subject to the Plan.

 

 

6.2  General Terms
of Awards.  Each grant of an
Award shall be subject to all applicable terms and conditions of the Plan
(including but not limited to any specific terms and conditions applicable to
that type of Award set out in the following Section), and such other terms and
conditions, not inconsistent with the terms of the Plan, as the Committee may
prescribe. No prospective Participant shall have any rights with respect to an
Award, unless and until such Participant shall have complied with the
applicable terms and conditions of such Award (including, if applicable,
delivering a fully-executed copy of any agreement evidencing an Award to the
Company).

 

6.3  Effect of
Termination of Employment, Etc. 
Unless the Committee shall provide otherwise with respect to any Award,
if the Participant’s employment or other association with the Company and its
Affiliates ends for any reason, including because of the Participant’s employer
ceasing to be an Affiliate, (a) any outstanding Option or Stock
Appreciation Right of the Participant shall cease to be exercisable in any
respect not later than 90 days following that event and, for the period it
remains exercisable following that event, shall be exercisable only to the
extent exercisable at the date of that event, and (b) any other
outstanding Award of the Participant shall be forfeited or otherwise subject to
return to, or repurchase by, the Company on the terms specified in the
applicable Award Agreement. Military or sick leave or other bona fide leave
shall not be deemed a termination of employment or other association, provided that it does not exceed the
longer of 90 days or the period during which the absent Participant’s
reemployment rights, if any, are guaranteed by statute or by contract.

 

6.4 
Transferability of Awards. 
Except as otherwise provided in this Section 6.4, Awards shall not
be transferable, and no Award or interest therein may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will
or by the laws of descent and distribution. The foregoing sentence shall not
limit the transferability of Stock Grants or of Restricted Stock that is no
longer subject to a Risk of Forfeiture. All of a Participant’s rights in any
Award may be exercised during the life of the Participant only by the
Participant or the Participant’s legal representative. However, the Committee
may, at or after the grant of an Award of a Nonstatutory Option, or shares of
Restricted Stock, provide that such Award may be transferred by the recipient
to a family member; provided, however,
that any such transfer is without payment of any consideration whatsoever and
that no transfer shall be valid unless first approved by the Committee, acting
in its sole discretion. For this purpose, “family member” means any child,
stepchild, grandchild, parent, stepparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, any person
sharing the employee’s household (other than a tenant or employee), a trust in
which the foregoing persons have more than 50% of the beneficial interests, a
foundation in which the foregoing persons (or the Participant) control the
management of assets, and any other entity in which these persons (or the
Participant) own more than 50% of the voting interests.

 

7.                                      Specific Terms of Awards

 

7.1           Options.

 

(a)  Date of Grant.  The granting of an Option shall take place at
the time specified in the Award Agreement. Only if expressly so provided in the
applicable Award Agreement shall the Grant Date be the date on which the Award
Agreement shall have been duly executed and delivered by the Company and the
Optionee.

 

(b)  Exercise Price.  The price at which shares of Stock may be
acquired under each Incentive Option shall be not less than 100% of the Market
Value of Stock on the Grant Date, or not less than 110% of the Market Value of
Stock on the Grant Date if the Optionee is a Ten Percent Owner. The price at
which shares may be acquired under each Nonstatutory Option shall not be so
limited solely by reason of this Section.

 

(c)  Option Period.  No Incentive Option may be exercised on or
after the tenth anniversary of the Grant Date, or on or after the fifth
anniversary of the Grant Date if the Optionee is a Ten Percent Owner. The
Option period under each Nonstatutory Option shall not be so limited solely by
reason of this Section.

 

 

(d)  Exercisability.  An Option may be immediately exercisable or
become exercisable in such installments, cumulative or non-cumulative, as the
Committee may determine. In the case of an Option not otherwise immediately
exercisable in full, the Committee may Accelerate such Option in whole or in
part at any time; provided, however,
that in the case of an Incentive Option, any such Acceleration of the Option
would not cause the Option to fail to comply with the provisions of
Section 422 of the Code or the Optionee consents to the Acceleration.

 

(e)  Method of Exercise.  An Option may be exercised by the Optionee
giving written notice, in the manner provided in Section 16, specifying
the number of shares with respect to which the Option is then being exercised.
The notice shall be accompanied by payment in the form of cash or check payable
to the order of the Company in an amount equal to the exercise price of the
shares to be purchased or, subject in each instance to the Committee’s
approval, acting in its sole discretion, and to such conditions, if any, as the
Committee may deem necessary to avoid adverse accounting effects to the
Company) by delivery to the Company of

 

(i)                                     shares of Stock
having a Market Value equal to the exercise price of the shares to be
purchased, or

 

(ii)                                  unless
prohibited by applicable law, the Optionee’s executed promissory note in the
principal amount equal to the exercise price of the shares to be purchased and
otherwise in such form as the Committee shall have approved.

 

If the Stock is traded on an
established market, payment of any exercise price may also be made through and
under the terms and conditions of any formal cashless exercise program
authorized by the Company entailing the sale of the Stock subject to an Option
in a brokered transaction (other than to the Company). Receipt by the Company
of such notice and payment in any authorized, or combination of authorized, means
shall constitute the exercise of the Option. Within thirty (30) days
thereafter but subject to the remaining provisions of the Plan, the Company
shall deliver, or cause to be delivered, to the Optionee or his agent a
certificate or certificates for the number of shares then being purchased. Such
shares shall be fully paid and nonassessable.

 

(f)  Limit on Incentive Option Characterization.  An Incentive Option shall be considered to be
an Incentive Option only to the extent that the number of shares of Stock for
which the Option first becomes exercisable in a calendar year do not have an
aggregate Market Value (as of the date of the grant of the Option) in excess of
the “current limit”. The current limit for any Optionee for any calendar year
shall be $100,000 minus the
aggregate Market Value at the date of grant of the number of shares of Stock
available for purchase for the first time in the same year under each other
Incentive Option previously granted to the Optionee under the Plan, and under
each other incentive stock option previously granted to the Optionee under any
other incentive stock option plan of the Company and its Affiliates, after
December 31, 1986. Any shares of Stock which would cause the foregoing
limit to be violated shall be deemed to have been granted under a separate
Nonstatutory Option, otherwise identical in its terms to those of the Incentive
Option.

 

(g)  Notification of Disposition.  Each person exercising any Incentive Option
granted under the Plan shall be deemed to have covenanted with the Company to
report to the Company any disposition of such shares prior to the expiration of
the holding periods specified by Section 422(a)(1) of the Code
(currently the later of two years from the Grant Date and one year from the
date of exercise of the Incentive Option) and, if and to the extent that the
realization of income in such a disposition imposes upon the Company federal,
state, local or other withholding tax requirements, or any such withholding is
required to secure for the Company an otherwise available tax deduction, to
remit to the Company an amount in cash sufficient to satisfy those
requirements.

 

7.2           Stock
Appreciation Rights.

 

(a)  Tandem or Stand-Alone.  Stock Appreciation Rights may be granted in
tandem with an Option (at or, in the case of a Nonstatutory Option, after the
award of the Option), or alone and unrelated to an Option. Stock Appreciation
Rights in tandem with an Option shall terminate to the extent that the related
Option is exercised, and the related Option shall terminate to the extent that
the tandem Stock Appreciation Rights are exercised.

 

 

(b)  Exercise Price.  Stock Appreciation Rights shall have such
exercise price as the Committee may determine, except that in the case of Stock
Appreciation Rights in tandem with Options, the exercise price of the Stock
Appreciation Rights shall equal the exercise price of the related Option.

 

(c)  Other Terms.  Except as the Committee may deem
inappropriate or inapplicable in the circumstances, Stock Appreciation Rights
shall be subject to terms and conditions substantially similar to those
applicable to a Nonstatutory Option. In addition, a Stock Appreciation Right
related to an Option which can only be exercised during limited periods
following a Change in Control may entitle the Participant to receive an amount
based upon the highest price paid or offered for Stock in any transaction
relating to the Change in Control or paid during the thirty (30) day
period immediately preceding the occurrence of the Change in Control in any
transaction reported in the stock market in which the Stock is normally traded.

 

7.3           Restricted
Stock.

 

(a)  Purchase Price.  Shares of Restricted Stock shall be issued
under the Plan for such consideration, in cash, other property or services, or any
combination thereof, as is determined by the Committee.

 

(b)  Issuance of Certificates.  Each Participant receiving a Restricted Stock
Award, subject to subsection (c) below, shall be issued a stock
certificate in respect of such shares of Restricted Stock. Such certificate
shall be registered in the name of such Participant, and, if applicable, shall
bear an appropriate legend referring to the terms, conditions, and restrictions
applicable to such Award substantially in the following form:

 

The
transferability of this certificate and the shares represented by this
certificate are subject to the terms and conditions of the Netlist, Inc.
2006 Equity Incentive Plan and an Award Agreement entered into by the
registered owner and Netlist, Inc. Copies of such Plan and Agreement are
on file in the offices of Netlist, Inc.

 

(c)  Escrow of Shares.  The Committee may require that the stock
certificates evidencing shares of Restricted Stock be held in custody by a
designated escrow agent (which may but need not be the Company) until the
restrictions thereon shall have lapsed, and that the Participant deliver a
stock power, endorsed in blank, relating to the Stock covered by such Award.

 

(d)  Restrictions and Restriction Period.  During the Restriction Period applicable to
shares of Restricted Stock, such shares shall be subject to limitations on
transferability and a Risk of Forfeiture arising on the basis of such
conditions related to the performance of services, Company or Affiliate
performance or otherwise as the Committee may determine and provide for in the
applicable Award Agreement. Any such Risk of Forfeiture may be waived or
terminated, or the Restriction Period shortened, at any time by the Committee
on such basis as it deems appropriate.

 

(e)  Rights Pending Lapse of Risk of Forfeiture or
Forfeiture of Award.  Except
as otherwise provided in the Plan or the applicable Award Agreement, at all
times prior to lapse of any Risk of Forfeiture applicable to, or forfeiture of,
an Award of Restricted Stock, the Participant shall have all of the rights of a
stockholder of the Company, including the right to vote, and the right to
receive any dividends with respect to, the shares of Restricted Stock. The
Committee, as determined at the time of Award, may permit or require the
payment of cash dividends to be deferred and, if the Committee so determines,
reinvested in additional Restricted Stock to the extent shares are available
under Section 4.

 

(f)  Lapse of Restrictions.  If and when the Restriction Period expires
without a prior forfeiture of the Restricted Stock, the certificates for such
shares shall be delivered to the Participant promptly if not previously
delivered.

 

7.4           Restricted
Stock Units.

 

(a)  Character.  Each Restricted Stock Unit shall entitle the
recipient to a share of Stock at a close of such Restriction Period as the
Committee may establish and be subject to a Risk of Forfeiture arising on the
basis of such conditions relating to the performance of services, Company or
Affiliate performance or otherwise as the Committee may determine and provide
for in the applicable Award Agreement. Any such Risk of Forfeiture may be
waived or terminated, or the Restriction Period shortened, at any time by the
Committee on such basis as it deems appropriate.

 

 

(b)  Form and Timing of Payment.  Payment of earned Restricted Stock Units
shall be made in a single lump sum following the close of the applicable
Restriction Period. At the discretion of the Committee, Participants may be
entitled to receive payments equivalent to any dividends declared with respect
to Stock referenced in grants of Restricted Stock Units but only following the
close of the applicable Restriction Period and then only if the underlying
Stock shall have been earned. Unless the Committee shall provide otherwise, any
such dividend equivalents shall be paid, if at all, without interest or other
earnings.

 

7.5           Performance
Units.

 

(a)  Character.  Each Performance Unit shall entitle the
recipient to the value of a specified number of shares of Stock, over the
initial value for such number of shares, if any, established by the Committee
at the time of grant, at the close of a specified Performance Period to the
extent specified Performance Goals shall have been achieved.

 

(b)  Earning of Performance Units.  The Committee shall set Performance Goals in
its discretion which, depending on the extent to which they are met within the
applicable Performance Period, will determine the number and value of
Performance Units that will be paid out to the Participant. After the
applicable Performance Period has ended, the holder of Performance Units shall
be entitled to receive payout on the number and value of Performance Units
earned by the Participant over the Performance Period, to be determined as a
function of the extent to which the corresponding Performance Goals have been
achieved.

 

(c)  Form and Timing of Payment.  Payment of earned Performance Units shall be
made in a single lump sum following the close of the applicable Performance
Period. At the discretion of the Committee, Participants may be entitled to
receive any dividends declared with respect to Stock which have been earned in
connection with grants of Performance Units which have been earned, but not yet
distributed to Participants. The Committee may permit or, if it so provides at
grant, require a Participant to defer such Participant’s receipt of the payment
of cash or the delivery of Stock that would otherwise be due to such
Participant by virtue of the satisfaction of any requirements or goals with
respect to Performance Units. If any such deferral election is permitted or
required, the Committee shall establish rules and procedures for such
payment deferrals.

 

7.6  Stock Grants.  Stock Grants shall be awarded solely in
recognition of significant contributions to the success of the Company or its
Affiliates, in lieu of compensation otherwise already due and in such other
limited circumstances as the Committee deems appropriate. Stock Grants shall be
made without forfeiture conditions of any kind.

 

7.7           Qualified
Performance-Based Awards.

 

(a)  Purpose. 
The purpose of this Section 7.7 is to provide the Committee the
ability to qualify Awards as “performance-based compensation” under
Section 162(m) of the Code. If the Committee, in its discretion, decides
to grant an Award as a Qualified Performance-Based Award, the provisions of
this Section 7.7 will control over any contrary provision contained in the
Plan. In the course of granting any Award, the Committee may specifically
designate the Award as intended to qualify as a Qualified Performance-Based
Award. However, no Award shall be considered to have failed to qualify as a
Qualified Performance-Based Award solely because the Award is not expressly
designated as a Qualified Performance-Based Award if the Award otherwise
satisfies the provisions of this Section 7.7 and the requirements of
Section 162(m) of the Code and the regulations thereunder applicable
to “performance-based compensation.”

 

(b)  Authority.  All grants of Awards intended to qualify as Qualified
Performance-Based Awards and determination of terms applicable thereto shall be
made by the Committee or, if not all of the members thereof qualify as “outside
directors” within the meaning of applicable IRS regulations under
Section 162 of the Code, a subcommittee of the Committee consisting of
such of the members of the Committee as do so qualify. Any action by such a
subcommittee shall be considered the action of the Committee for purposes of
the Plan.

 

 

 

(c)  Applicability.  This Section 7.7 will apply only to
those Covered Employees, or to those persons who the Committee determines are
reasonably likely to become Covered Employees in the period covered by an
Award, selected by the Committee to receive Qualified Performance-Based Awards.
The Committee may, in its discretion, grant Awards to Covered Employees that do
not satisfy the requirements of this Section 7.7.

 

(d)  Discretion of Committee with Respect to Qualified
Performance-Based Awards. 
Options may be granted as Qualified Performance-Based Awards in
accordance with Section 7.1, except that the exercise price of any Option
intended to qualify as a Qualified Performance-Based Award shall in no event be
less that the Market Value of the Stock on the date of grant. With regard to
other Awards intended to qualify as Qualified Performance-Based Awards, such as
Restricted Stock, Restricted Stock Units, or Performance Units, the Committee
will have full discretion to select the length of any applicable Restriction
Period or Performance Period, the kind and/or level of the applicable
Performance Goal, and whether the Performance Goal is to apply to the Company,
a Subsidiary or any division or business unit or to the individual. Any
Performance Goal or Goals applicable to Qualified Performance-Based Awards
shall be objective, shall be established not later than ninety (90) days
after the beginning of any applicable Performance Period (or at such other date
as may be required or permitted for “performance-based compensation” under
Section 162(m) of the Code) and shall otherwise meet the requirements
of Section 162(m) of the Code, including the requirement that the
outcome of the Performance Goal or Goals be substantially uncertain (as defined
in the regulations under Section 162(m) of the Code) at the time
established.

 

(e)  Payment of Qualified Performance-Based Awards.  A Participant will be eligible to receive
payment under a Qualified Performance-Based Award which is subject to
achievement of a Performance Goal or Goals only if the applicable Performance
Goal or Goals period are achieved within the applicable Performance Period, as
determined by the Committee. In determining the actual size of an individual
Qualified Performance-Based Award, the Committee may reduce or eliminate the
amount of the Qualified Performance-Based Award earned for the Performance
Period, if in its sole and absolute discretion, such reduction or elimination
is appropriate.

 

(f)  Maximum Award Payable.  The maximum Qualified Performance-Based Award
payment to any one Participant under the Plan for a Performance Period is 25%
of the number of shares of Stock set forth in Section 4 above, or if the
Qualified Performance-Based Award is paid in cash, that number of shares
multiplied by the Market Value of the Stock as of the date the Qualified
Performance-Based Award is granted.

 

(g)  Limitation on Adjustments for Certain Events.  No adjustment of any Qualified
Performance-Based Award pursuant to Section 8 shall be made except on such
basis, if any, as will not cause such Award to provide other than “performance-based
compensation” within the meaning of Section 162(m) of the Code.

 

7.8  Awards to
Participants Outside the United States.  The Committee may modify the terms of any
Award under the Plan granted to a Participant who is, at the time of grant or
during the term of the Award, resident or primarily employed outside of the
United States in any manner deemed by the Committee to be necessary or
appropriate to conform that Award to laws, regulations, and customs of the
country in which the Participant is then resident or primarily employed, or so
that the value and other benefits of the Award to the Participant, as affected
by foreign tax laws and other restrictions applicable as a result of the
Participant’s residence or employment abroad, shall be comparable to the value
of such an Award to a Participant who is resident or primarily employed in the
United States. The Committee may establish supplements to, or amendments,
restatements, or alternative versions of, the Plan for the purpose of granting
and administrating any such modified Award. No such modification, supplement,
amendment, restatement or alternative version may increase the share limit of
Section 4.

 

8.                                      Adjustment Provisions

 

8.1  Adjustment
for Corporate Actions.  All of
the share numbers set forth in the Plan reflect the capital structure of the
Company as of the Effective Date. Subject to Section 8.2, if subsequent to
that date the outstanding shares of Stock (or any other securities covered by
the Plan by reason of the prior application of this Section) are increased,
decreased, or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities are distributed with respect to shares of Stock, through a merger,
consolidation, sale of all or substantially all the property of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split, or other similar distribution with respect to such
shares of Stock, an appropriate and proportionate adjustment will be made in
(i) the maximum numbers and kinds of shares provided in Section 4,
(ii) the numbers and kinds of shares or other securities subject to the
then outstanding Awards, (iii) the exercise price for each share or other
unit of any other securities subject to then outstanding Options and Stock
Appreciation Rights (without change in the aggregate purchase price as to which
such Options or Rights remain exercisable), and (iv) the repurchase price
of each share of Restricted Stock then subject to a Risk of Forfeiture in the
form of a Company repurchase right.

 

 

8.2           Treatment
in Certain Acquisitions.

 

(a)           Subject to any provisions of
then outstanding Awards granting greater rights to the holders thereof, in the
event of an Acquisition, the Committee may, either in advance of the
Acquisition or at the time thereof and upon such terms as it may deem
appropriate, provide for the Acceleration of any then outstanding Awards in
full if, and only if, such Awards are not assumed or replaced by comparable
Awards referencing shares of the capital stock of the successor or acquiring
entity or parent thereof, and after a reasonable period following such
Acceleration, as determined by the Committee, such Accelerated Awards and all
other then outstanding Awards not assumed or replaced by comparable Awards
shall terminate. As to any one or more outstanding Awards which are not
otherwise Accelerated in full by reason of such Acquisition, the Committee may
also, either in advance of an Acquisition or at the time thereof and upon such
terms as it may deem appropriate, provide for the Acceleration of such
outstanding Awards in the event that the employment of the Participants should
subsequently terminate following the Acquisition. Each outstanding Award that
is assumed in connection with an Acquisition, or is otherwise to continue in
effect subsequent to the Acquisition, will be appropriately adjusted,
immediately after the Acquisition, as to the number and class of securities and
other relevant terms in accordance with Section 8.1.

 

(b)           For the purposes of this
Section 8.2, an Award shall be considered assumed or replaced by a
comparable Award if, following the Acquisition, the Award confers the right to
purchase, for each share of Stock subject to the Award immediately prior to the
Acquisition, the consideration (whether stock, cash or other securities or
property) received in the Acquisition by holders of Stock on the effective date
of the Acquisition (and if holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
shares of Stock); provided, however,
that if such consideration received in the Acquisition was not solely common
stock of the successor corporation or its parent or subsidiary, the Committee
may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of the Award for each share of
Stock subject to the Award to be solely common stock of the successor
corporation or its parent or subsidiary equal in fair market value to the per
share consideration received by holders of Stock in the Acquisition, or any
combination of cash and common stock, (including the payment of cash equal to
the net of Market Value over the exercise price of the shares of Stock subject
to the Award) so approved by the Committee with the consent of the successor
corporation; and provided further that such Award may continue to be subject to
the same vesting requirements or Risks of Forfeiture after the Acquisition.

 

8.3  Dissolution
or Liquidation.  Upon the
dissolution or liquidation of the Company, other than as part of an Acquisition
or similar transaction, each outstanding Option and Stock Appreciation Right
shall terminate, but the Optionee or Stock Appreciation Right holder shall have
the right, immediately prior to the dissolution or liquidation, to exercise the
Option or Stock Appreciation Right to the extent exercisable on the date of the
dissolution or liquidation.

 

8.4  Adjustment of
Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events.  In the event of any corporate action not
specifically covered by the preceding Sections, including but not limited to an
extraordinary cash distribution on Stock, a corporate separation or other
reorganization or liquidation, the Committee may make such adjustment of
outstanding Awards and their terms, if any, as it, in its sole discretion, may
deem equitable and appropriate in the circumstances. The Committee may make
adjustments in the terms and conditions of, and the criteria included in,
Awards in recognition of unusual or nonrecurring events (including, without
limitation, the events described in this Section) affecting the Company or the
financial statements of the Company or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent the dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan.

 

8.5  Related
Matters.  Any adjustment in
Awards made pursuant to this Section 8 shall be determined and made, if at
all, by the Committee and shall include any correlative modification of terms,
including of Option exercise prices, rates of vesting or exercisability, Risks
of Forfeiture, applicable repurchase prices for Restricted Stock, and
Performance Goals and other financial objectives which the Committee may deem
necessary or 

 

 

appropriate so as to ensure
the rights of the Participants in their respective Awards are not substantially
diminished nor enlarged as a result of the adjustment and corporate action
other than as expressly contemplated in this Section 8. No fraction of a
share shall be purchasable or deliverable upon exercise, but in the event any
adjustment hereunder of the number of shares covered by an Award shall cause
such number to include a fraction of a share, such number of shares shall be
adjusted to the nearest smaller whole number of shares. No adjustment of an
Option exercise price per share pursuant to this Section 8 shall result in
an exercise price which is less than the par value of the Stock.

 

9.                                      Settlement of Awards

 

9.1  In General.  Options and Restricted Stock shall be settled
in accordance with their terms. All other Awards may be settled in cash, Stock,
or other Awards, or a combination thereof, as determined by the Committee at or
after grant and subject to any contrary Award Agreement. The Committee may not
require settlement of any Award in Stock pursuant to the immediately preceding
sentence to the extent issuance of such Stock would be prohibited or
unreasonably delayed by reason of any other provision of the Plan.

 

9.2  Violation of
Law.  Notwithstanding any
other provision of the Plan or the relevant Award Agreement, if, at any time,
in the reasonable opinion of the Company, the issuance of shares of Stock
covered by an Award may constitute a violation of law, then the Company may
delay such issuance and the delivery of a certificate for such shares until
(i) approval shall have been obtained from such governmental agencies,
other than the Securities and Exchange Commission, as may be required under any
applicable law, rule, or regulation and (ii) in the case where such
issuance would constitute a violation of a law administered by, or a regulation
of, the Securities and Exchange Commission, one of the following conditions
shall have been satisfied:

 

(a)           the shares are at the time
of the issue of such shares effectively registered under the Securities Act of
1933, as amended; or

 

(b)           the Company shall have
determined, on such basis as it deems appropriate (including an opinion of
counsel in form and substance satisfactory to the Company) that the sale,
transfer, assignment, pledge, encumbrance or other disposition of such shares
or such beneficial interest, as the case may be, does not require registration
under the Securities Act of 1933, as amended, or any applicable State
securities laws.

 

The
Company shall make all reasonable efforts to bring about the occurrence of said
events.

 

9.3  Corporate
Restrictions on Rights in Stock. 
Any Stock to be issued pursuant to Awards granted under the Plan shall
be subject to all restrictions upon the transfer thereof which may be now or
hereafter imposed by the certificate of incorporation and by-laws (or similar
charter documents) of the Company.

 

9.4  Investment
Representations.  The Company
shall be under no obligation to issue any shares covered by any Award unless
the shares to be issued pursuant to Awards granted under the Plan have been
effectively registered under the Securities Act of 1933, as amended, or the
Participant shall have made such written representations to the Company (upon
which the Company believes it may reasonably rely) as the Company may deem
necessary or appropriate for purposes of confirming that the issuance of such
shares will be exempt from the registration requirements of that Act and any
applicable state securities laws and otherwise in compliance with all
applicable laws, rules and regulations, including but not limited to that
the Participant is acquiring the shares for his or her own account for the
purpose of investment and not with a view to, or for sale in connection with,
the distribution of any such shares.

 

9.5  Registration.  If the Company shall deem it necessary or
desirable to register under the Securities Act of 1933, as amended or other
applicable statutes any shares of Stock issued or to be issued pursuant to Awards
granted under the Plan, or to qualify any such shares of Stock for exemption
from the Securities Act of 1933, as amended, or other applicable statutes, then
the Company shall take such action at its own expense. The Company may require
from each recipient of an Award, or each holder of shares of Stock acquired
pursuant to the Plan, such information in writing for use in any registration
statement, prospectus, preliminary prospectus or offering circular as is
reasonably necessary for that purpose and may require reasonable indemnity to
the Company and its officers and directors from that holder against all losses,
claims, damage and liabilities arising from use of the information so furnished
and caused by any untrue statement of any material fact therein or caused by
the omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of 

 

 

the circumstances under
which they were made. In addition, the Company may require of any such person
that he or she agree that, without the prior written consent of the Company or
the managing underwriter in any public offering of shares of Stock, he or she
will not sell, make any short sale of, loan, grant any option for the purchase
of, pledge or otherwise encumber, or otherwise dispose of, any shares of Stock
during the 180 day period commencing on the effective date of the
registration statement relating to the underwritten public offering of
securities. Without limiting the generality of the foregoing provisions of this
Section 9.5, if in connection with any underwritten public offering of
securities of the Company the managing underwriter of such offering requires
that the Company’s directors and officers enter into a lock-up agreement containing
provisions that are more restrictive than the provisions set forth in the
preceding sentence, then (a) each holder of shares of Stock acquired
pursuant to the Plan (regardless of whether such person has complied or
complies with the provisions of clause (b) below) shall be bound by,
and shall be deemed to have agreed to, the same lock-up terms as those to which
the Company’s directors and officers are required to adhere; and (b) at
the request of the Company or such managing underwriter, each such person shall
execute and deliver a lock-up agreement in form and substance equivalent to
that which is required to be executed by the Company’s directors and officers.

 

9.6  Placement of
Legends; Stop Orders; etc. 
Each share of Stock to be issued pursuant to Awards granted under the
Plan may bear a reference to the investment representation made in accordance
with Section 9.4 in addition to any other applicable restriction under the
Plan, the terms of the Award and if applicable under the Stockholders’ Agreement
and to the fact that no registration statement has been filed with the
Securities and Exchange Commission in respect to such shares of Stock. All
certificates for shares of Stock or other securities delivered under the Plan
shall be subject to such stock transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of any stock exchange upon which the Stock is then listed, and any
applicable federal or state securities law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

 

9.7  Tax
Withholding.  Whenever shares
of Stock are issued or to be issued pursuant to Awards granted under the Plan,
the Company shall have the right to require the recipient to remit to the
Company an amount sufficient to satisfy federal, state, local or other
withholding tax requirements if, when, and to the extent required by law
(whether so required to secure for the Company an otherwise available tax
deduction or otherwise) prior to the delivery of any certificate or
certificates for such shares. The obligations of the Company under the Plan
shall be conditional on satisfaction of all such withholding obligations and
the Company shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the recipient of an
Award. However, in such cases Participants may elect, subject to the approval
of the Committee, to satisfy an applicable withholding requirement, in whole or
in part, by having the Company withhold shares to satisfy their tax
obligations. Participants may only elect to have Shares withheld having a
Market Value on the date the tax is to be determined equal to the minimum
statutory total tax which could be imposed on the transaction. All elections
shall be irrevocable, made in writing, signed by the Participant, and shall be
subject to any restrictions or limitations that the Committee deems
appropriate.

 

10.                               Reservation of Stock

 

The
Company shall at all times during the term of the Plan and any outstanding
Awards granted hereunder reserve or otherwise keep available such number of
shares of Stock as will be sufficient to satisfy the requirements of the Plan
(if then in effect) and the Awards and shall pay all fees and expenses
necessarily incurred by the Company in connection therewith.

 

11.                               Limitation of Rights in Stock; No Special Service Rights

 

A
Participant shall not be deemed for any purpose to be a stockholder of the
Company with respect to any of the shares of Stock subject to an Award, unless
and until a certificate shall have been issued therefor and delivered to the
Participant or his agent. Nothing contained in the Plan or in any Award
Agreement shall confer upon any recipient of an Award any right with respect to
the continuation of his or her employment or other association with the Company
(or any Affiliate), or interfere in any way with the right of the Company (or
any Affiliate), subject to the terms of any separate employment or consulting
agreement or provision of law or corporate articles, by-laws or similar charter
documents to the contrary, at any time to terminate such employment or
consulting agreement or to increase or decrease, or otherwise adjust, the other
terms and conditions of the recipient’s employment or other association with
the Company and its Affiliates.

 

 

12.                               Unfunded Status of Plan

 

The
Plan is intended to constitute an “unfunded” plan for incentive compensation,
and the Plan is not intended to constitute a plan subject to the provisions of
the Employee Retirement Income Security Act of 1974, as amended. With respect
to any payments not yet made to a Participant by the Company, nothing contained
herein shall give any such Participant any rights that are greater than those
of a general creditor of the Company. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Stock or payments with respect to Options,
Stock Appreciation Rights and other Awards hereunder, provided, however, that the existence of
such trusts or other arrangements is consistent with the unfunded status of the
Plan.

 

13.                               Nonexclusivity of the Plan

 

Neither
the adoption of the Plan by the Board nor the submission of the Plan to the
stockholders of the Company shall be construed as creating any limitations on
the power of the Board to adopt such other incentive arrangements as it may
deem desirable, including without limitation, the granting of stock options and
restricted stock other than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.

 

14.                               Termination and Amendment of the Plan

 

The
Board may at any time terminate the Plan or make such modifications of the Plan
as it shall deem advisable. Unless the Board otherwise expressly provides, no
amendment of the Plan shall affect the terms of any Award outstanding on the
date of such amendment.

 

The
Committee may amend the terms of any Award theretofore granted, prospectively
or retroactively, provided that the Award as amended is consistent with the
terms of the Plan. Also within the limitations of the Plan, the Committee may
modify, extend or assume outstanding Awards or may accept the cancellation of
outstanding Awards or of outstanding stock options or other equity-based
compensation awards granted by another issuer in return for the grant of new
Awards for the same or a different number of shares and on the same or
different terms and conditions (including but not limited to the exercise price
of any Option). Furthermore, the Committee may at any time (a) offer to
buy out for a payment in cash or cash equivalents an Award previously granted
or (b) authorize the recipient of an Award to elect to cash out an Award
previously granted, in either case at such time and based upon such terms and
conditions as the Committee shall establish.

 

No
amendment or modification of the Plan by the Board, or of an outstanding Award
by the Committee, shall impair the rights of the recipient of any Award
outstanding on the date of such amendment or modification or such Award, as the
case may be, without the Participant’s consent; provided, however, that no such consent shall be required if
(i) the Board or Committee, as the case may be, determines in its sole
discretion and prior to the date of any Acquisition that such amendment or
alteration either is required or advisable in order for the Company, the Plan
or the Award to satisfy any law or regulation, including without limitation the
provisions of Section 409A of the Code or to meet the requirements of or
avoid adverse financial accounting consequences under any accounting standard,
or (ii) the Board or Committee, as the case may be, determines in its sole
discretion that such amendment or alteration is not reasonably likely to
significantly diminish the benefits provided under the Award, or that any such
diminution has been adequately compensated.

 

15.                               Notices and Other Communications

 

Any
notice, demand, request or other communication hereunder to any party shall be
deemed to be sufficient if contained in a written instrument delivered in
person or duly sent by first class registered, certified or overnight mail,
postage prepaid, or telecopied with a confirmation copy by regular, certified
or overnight mail, addressed or telecopied, as the case may be, (i) if to
the recipient of an Award, at his or her residence address last filed with the
Company and (ii) if to the Company, at its principal place of business,
addressed to the attention of its 

 

 

Treasurer, or to such other
address or telecopier number, as the case may be, as the addressee may have
designated by notice to the addressor. All such notices, requests, demands and
other communications shall be deemed to have been received: (i) in the
case of personal delivery, on the date of such delivery; (ii) in the case
of mailing, when received by the addressee; and (iii) in the case of
facsimile transmission, when confirmed by facsimile machine report.

 

16.                               Governing Law

 

The
Plan and all Award Agreements and actions taken thereunder shall be governed,
interpreted and enforced in accordance with the laws of the State of Delaware,
without regard to the conflict of laws principles thereof.

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