Document:

exv10w07

 

Exhibit 10.07

 

DOUBLE-TAKE SOFTWARE

2006 OMNIBUS INCENTIVE PLAN

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page	 
	1.	 	PURPOSE	 	 	1	 
	2.	 	DEFINITIONS	 	 	1	 
	3.	 	ADMINISTRATION OF THE PLAN	 	 	5	 
	 	 	3.1.	 	Board	 	 	5	 
	 	 	3.2.	 	Committee.	 	 	6	 
	 	 	3.3.	 	Terms of Awards.	 	 	6	 
	 	 	3.4.	 	Deferral Arrangement.	 	 	7	 
	 	 	3.5.	 	No Liability.	 	 	8	 
	 	 	3.6.	 	Share Issuance/Book-Entry	 	 	8	 
	4.	 	STOCK SUBJECT TO THE PLAN	 	 	8	 
	5.	 	EFFECTIVE DATE, DURATION AND AMENDMENTS	 	 	9	 
	 	 	5.1.	 	Effective Date.	 	 	9	 
	 	 	5.2.	 	Term.	 	 	9	 
	 	 	5.3.	 	Amendment and Termination of the Plan	 	 	9	 
	6.	 	AWARD ELIGIBILITY AND LIMITATIONS	 	 	9	 
	 	 	6.1.	 	Service Providers and Other Persons	 	 	9	 
	 	 	6.2.	 	Successive Awards and Substitute Awards.	 	 	9	 
	 	 	6.3.	 	Limitation on Shares of Stock Subject to Awards and Cash Awards.	 	 	10	 
	7.	 	AWARD AGREEMENT	 	 	10	 
	8.	 	TERMS AND CONDITIONS OF OPTIONS	 	 	10	 
	 	 	8.1.	 	Option Price	 	 	10	 
	 	 	8.2.	 	Vesting.	 	 	11	 
	 	 	8.3.	 	Term.	 	 	11	 
	 	 	8.4.	 	Termination of Service.	 	 	11	 
	 	 	8.5.	 	Limitations on Exercise of Option.	 	 	11	 
	 	 	8.6.	 	Method of Exercise.	 	 	11	 
	 	 	8.7.	 	Rights of Holders of Options	 	 	12	 
	 	 	8.8.	 	Delivery of Stock Certificates.	 	 	12	 
	 	 	8.9.	 	Transferability of Options	 	 	12	 
	 	 	8.10.	 	Family Transfers.	 	 	12	 
	 	 	8.11.	 	Limitations on Incentive Stock Options.	 	 	12	 
	9.	 	TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS	 	 	13	 
	 	 	9.1.	 	Right to Payment and Grant Price.	 	 	13	 
	 	 	9.2.	 	Other Terms.	 	 	13	 
	10.	 	TERMS AND CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS	 	 	13	 
	 	 	10.1.	 	Grant of Restricted Stock or Stock Units.	 	 	13	 
	 	 	10.2.	 	Restrictions.	 	 	13	 
	 	 	10.3.	 	Restricted Stock Certificates.	 	 	14	 
	 	 	10.4.	 	Rights of Holders of Restricted Stock.	 	 	14	 

-i- 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page	 
	 	 	10.5.	 	Rights of Holders of Stock Units.	 	 	14	 
	 
	 	 	 	10.5.1.	 	Voting and Dividend Rights.	 	 	14	 
	 
	 	 	 	10.5.2.	 	Creditor’s Rights.	 	 	14	 
	 	 	10.6.	 	Termination of Service.	 	 	15	 
	 	 	10.7.	 	Purchase of Restricted Stock.	 	 	15	 
	 	 	10.8.	 	Delivery of Stock.	 	 	15	 
	11.	 	TERMS AND CONDITIONS OF UNRESTRICTED STOCK AWARDS	 	 	15	 
	12.	 	FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK	 	 	15	 
	 	 	12.1.	 	General Rule.	 	 	15	 
	 	 	12.2.	 	Surrender of Stock.	 	 	16	 
	 	 	12.3.	 	Cashless Exercise.	 	 	16	 
	 	 	12.4.	 	Other Forms of Payment.	 	 	16	 
	13.	 	TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS	 	 	16	 
	 	 	13.1.	 	Dividend Equivalent Rights.	 	 	16	 
	 	 	13.2.	 	Termination of Service.	 	 	17	 
	14.	 	TERMS AND CONDITIONS OF PERFORMANCE AND ANNUAL INCENTIVE AWARDS	 	 	17	 
	 	 	14.1.	 	Performance Conditions	 	 	17	 
	 	 	14.2.	 	Performance or Annual Incentive Awards Granted to Designated Covered Employees	 	 	17	 
	 
	 	 	 	14.2.1.	 	Performance Goals Generally.	 	 	17	 
	 
	 	 	 	14.2.2.	 	Business Criteria.	 	 	18	 
	 
	 	 	 	14.2.3.	 	Timing For Establishing Performance Goals.	 	 	18	 
	 
	 	 	 	14.2.4.	 	Settlement of Performance or Annual Incentive Awards; Other Terms.	 	 	18	 
	 	 	14.3.	 	Written Determinations.	 	 	18	 
	 	 	14.4.	 	Status of Section 14.2 Awards Under Code Section 162(m)	 	 	19	 
	15.	 	PARACHUTE LIMITATIONS	 	 	19	 
	16.	 	REQUIREMENTS OF LAW	 	 	20	 
	 	 	16.1.	 	General.	 	 	20	 
	 	 	16.2.	 	Rule 16b-3.	 	 	20	 
	17.	 	EFFECT OF CHANGES IN CAPITALIZATION	 	 	21	 
	 	 	17.1.	 	Changes in Stock.	 	 	21	 
	 	 	17.2.	 	Reorganization in Which the Company Is the Surviving Entity Which does not Constitute a Corporate Transaction.	 	 	21	 
	 	 	17.3.	 	Corporate Transaction.	 	 	22	 
	 	 	17.4.	 	Adjustments.	 	 	23	 
	 	 	17.5.	 	No Limitations on Company.	 	 	23	 
	18.	 	GENERAL PROVISIONS	 	 	23	 
	 	 	18.1.	 	Disclaimer of Rights	 	 	23	 
	 	 	18.2.	 	Nonexclusivity of the Plan	 	 	23	 
	 	 	18.3.	 	Withholding Taxes	 	 	24	 

-ii- 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page	 
	 	 	18.4.	 	Captions	 	 	24	 
	 	 	18.5.	 	Other Provisions	 	 	24	 
	 	 	18.6.	 	Number and Gender	 	 	24	 
	 	 	18.7.	 	Severability	 	 	24	 
	 	 	18.8.	 	Governing Law	 	 	24	 
	 	 	18.9.	 	Section 409A of the Code	 	 	25	 

-iii- 

 

DOUBLE-TAKE SOFTWARE

2006 OMNIBUS INCENTIVE PLAN

      Double-Take Software, Inc., a Delaware corporation (the “Company”), sets forth herein the
terms of its 2006 Omnibus Incentive Plan (the “Plan”), as follows:

	1.	 	PURPOSE

      The Plan is intended to enhance the Company’s and its Affiliates’ (as defined herein) ability
to attract and retain highly qualified officers, directors, key employees, and other persons, and
to motivate such persons to serve the Company and its Affiliates and to expend maximum effort to
improve the business results and earnings of the Company, by providing to such persons an
opportunity to acquire or increase a direct proprietary interest in the operations and future
success of the Company. To this end, the Plan provides for the grant of stock options, stock
appreciation rights, restricted stock, stock units, unrestricted stock, dividend equivalent rights
and cash awards. Any of these awards may, but need not, be made as performance incentives to
reward attainment of annual or long-term performance goals in accordance with the terms hereof.
Stock options granted under the Plan may be non-qualified stock options or incentive stock options,
as provided herein.

	2.	 	DEFINITIONS

      For purposes of interpreting the Plan and related documents (including Award Agreements), the
following definitions shall apply:

      2.1 “Affiliate” means, with respect to the Company, any company or other trade or business
that controls, is controlled by or is under common control with the Company within the meaning of
Rule 405 of Regulation C under the Securities Act, including, without limitation, any Subsidiary.

      2.2 “Annual Incentive Award” means an Award made subject to attainment of performance goals
(as described in Section 14) over a performance period of up to one year (the Company’s fiscal
year, unless otherwise specified by the Committee).

      2.3 “Award” means a grant of an Option, Stock Appreciation Right, Restricted Stock,
Unrestricted Stock, Stock Unit, Dividend Equivalent Rights, or cash award under the Plan.

      2.4 “Award Agreement” means the written agreement between the Company and a Grantee that
evidences and sets out the terms and conditions of an Award.

      2.5 “Benefit Arrangement” shall have the meaning set forth in Section 15 hereof.

      2.6 “Board” means the Board of Directors of the Company.

 

 

      2.7 “Cause” means, as determined by the Board and unless otherwise provided in an applicable
agreement with the Company or an Affiliate, (i) gross negligence or willful misconduct in
connection with the performance of duties; (ii) conviction of a criminal offense (other than minor
traffic offenses); or (iii) material breach of any term of any employment, consulting or other
services, confidentiality, intellectual property or non-competition agreements, if any, between the
Service Provider and the Company or an Affiliate.

      2.8 “Code” means the Internal Revenue Code of 1986, as now in effect or as hereafter amended.

      2.9 “Committee” means a committee of, and designated from time to time by resolution of, the
Board, which shall be constituted as provided in Section 3.2.

      2.10 “Company” means Double-Take Software, Inc.

      2.11 “Corporate Transaction” means (i) the dissolution or liquidation of the Company or a
merger, consolidation, or reorganization of the Company with one or more other entities in which
the Company is not the surviving entity, (ii) a sale of substantially all of the assets of the
Company to another person or entity, or (iii) any transaction (including without limitation a
merger or reorganization in which the Company is the surviving entity) which results in any person
or entity (other than persons who are stockholders or Affiliates immediately prior to the
transaction) owning 80% or more of the combined voting power of all classes of stock of the
Company.

      2.12 “Covered Employee” means a Grantee who is a covered employee within the meaning of
Section 162(m)(3) of the Code.

      2.13 “Disability” means the Grantee is unable to perform each of the essential duties of such
Grantee’s position by reason of a medically determinable physical or mental impairment which is
potentially permanent in character or which can be expected to last for a continuous period of not
less than 12 months; provided, however, that, with respect to rules regarding expiration of an
Incentive Stock Option following termination of the Grantee’s Service, Disability shall mean the
Grantee is unable to engage in any substantial gainful activity by reason of a medically
determinable physical or mental impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less than 12 months.

      2.14 “Dividend Equivalent Right” means a right, granted to a Grantee under Section 13 hereof,
to receive cash, Stock, other Awards or other property equal in value to dividends paid with
respect to a specified number of shares of Stock, or other periodic payments.

-2-

 

      2.15 “Effective Date” means September 14, 2006, the date the Plan is approved by the Board.

      2.16 “Exchange Act” means the Securities Exchange Act of 1934, as now in effect or as
hereafter amended.

      2.17 “Fair Market Value” means the value of a share of Stock, determined as follows: if on
the Grant Date or other determination date the Stock is listed on an established national or
regional stock exchange, is admitted to quotation on The Nasdaq Stock Market, Inc. or is publicly
traded on an established securities market, the Fair Market Value of a share of Stock shall be the
closing price of the Stock on such exchange or in such market (if there is more than one such
exchange or market, the Fair Market Value shall be the closing Price of the Stock on the exchange
that trades the largest volume of Stock on the Grant Date or such other determination date) on the
Grant Date or such other determination date (if there is no such reported closing price, the Fair
Market Value shall be the mean between the highest bid and lowest asked prices or between the high
and low sale prices on such trading day) or, if no sale of Stock is reported for such trading day,
on the next preceding day on which any sale shall have been reported. If the Stock is not listed
on an established national or regional stock exchange, admitted to quotation on The Nasdaq Stock
Market, Inc. or publicly traded on an established securities market, Fair Market Value shall be the
mean between the lowest reported bid price and highest reported asked price of the Stock on the
Grant Date or such other determination date in the over-the-counter market, as such prices are
reported in a publication of general circulation selected by the Board and regularly reporting the
market price of Sock in such market. If the Stock is not listed on such an exchange, quoted on such
system, or traded on such a market, Fair Market Value shall be the value of the Stock as determined
by the Board in good faith in a manner consistent with Code Section 409A.

      2.18 “Family Member” means a person who is a spouse, former spouse, child, stepchild,
grandchild, parent, stepparent, grandparent, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law, including adoptive
relationships, of the Grantee, any person sharing the Grantee’s household (other than a tenant or
employee), a trust in which any one or more of these persons have more than fifty percent of the
beneficial interest, a foundation in which any one or more of these persons (or the Grantee)
control the management of assets, and any other entity in which one or more of these persons (or
the Grantee) own more than fifty percent of the voting interests.

      2.19 “Grant Date” means, as determined by the Board, the latest to occur of (i) the date as of
which the Board approves an Award, (ii) the date on which the recipient of an Award first becomes
eligible to receive an Award under Section 6 hereof, or (iii) such other date as may be specified
by the Board.

      2.20 “Grantee” means a person who receives or holds an Award under the Plan.

      2.21 “Incentive Stock Option” means an “incentive stock option” within the meaning of Section
422 of the Code, or the corresponding provision of any subsequently enacted tax statute, as amended
from time to time.

-3-

 

      2.22 “Non-qualified Stock Option” means an Option that is not an Incentive Stock Option.

      2.23 “Option” means an option to purchase one or more shares of Stock pursuant to the Plan.

      2.24 “Option Exercise Proceeds” means, with respect to an Option, the sum of the Option Price
paid in cash, if any, to purchase shares of Stock under such Option, plus the value of all federal,
state and local tax deductions to which the Company is entitled with respect to the exercise of
such Option, determined using the highest federal tax rate applicable to corporations and a blended
tax rate for state and local taxes based on the jurisdictions in which the Company does business
and giving effect to the deduction of state and local taxes for federal tax purposes.

      2.25 “Option Price” means the exercise price for each share of Stock subject to an Option.

      2.26 “Other Agreement” shall have the meaning set forth in Section 15 hereof.

      2.27 “Outside Director” means a member of the Board who is not an officer or employee of the
Company.

      2.28 “Performance Award” means an Award made subject to the attainment of performance goals
(as described in Section 14) over a performance period of up to ten (10) years.

      2.29 “Plan” means this Double-Take Software 2006 Omnibus Incentive Plan.

      2.30 “Purchase Price” means the purchase price for each share of Stock pursuant to a grant of
Restricted Stock or Unrestricted Stock.

      2.31 “Reporting Person” means a person who is required to file reports under Section 16(a) of
the Exchange Act.

      2.32 “Restricted Stock” means shares of Stock, awarded to a Grantee pursuant to Section 10
hereof.

      2.33 “SAR Exercise Price” means the per share exercise price of an SAR granted to a Grantee
under Section 9 hereof.

      2.34 “Securities Act” means the Securities Act of 1933, as now in effect or as hereafter
amended.

      2.35 “Service” means service as a Service Provider to the Company or an Affiliate. Unless
otherwise stated in the applicable Award Agreement, a Grantee’s change in position or duties shall
not result in interrupted or terminated Service, so long as such Grantee continues to be a Service
Provider to the Company or an Affiliate. Subject to the preceding sentence, whether a termination of Service shall have occurred for purposes of the
Plan

-4-

 

shall be determined by the Board, which determination shall be final, binding and conclusive.

      2.36 “Service Provider” means an employee, officer or director of the Company or an Affiliate,
or a consultant or adviser currently providing services to the Company or an Affiliate.

      2.37 “Stock” means the common stock, par value $0.001 per share, of the Company.

      2.38 “Stock Appreciation Right” or “SAR” means a right granted to a Grantee under Section 9
hereof.

      2.39 “Stock Unit” means a bookkeeping entry representing the equivalent of one share of Stock
awarded to a Grantee pursuant to Section 10 hereof.

      2.40 “Subsidiary” means any “subsidiary corporation” of the Company within the meaning of
Section 424(f) of the Code.

      2.41 “Substitute Awards” means Awards granted upon assumption of, or in substitution for,
outstanding awards previously granted by a company or other entity acquired by the Company or any
Affiliate or with which the Company or any Affiliate combines.

      2.42 “Termination Date” means the date upon which an Option shall terminate or expire, as set
forth in Section 8.3 hereof.

      2.43 “Ten Percent Stockholder” means an individual who owns more than ten percent
(10%) of the total combined voting power of all classes of outstanding stock of the Company, its
parent or any of its Subsidiaries. In determining stock ownership, the attribution rules of
Section 424(d) of the Code shall be applied.

      2.44 “Unrestricted Stock” means an Award pursuant to Section 11 hereof.

	3.	 	ADMINISTRATION OF THE PLAN

	 	3.1.	 	Board

      The Board shall have such powers and authorities related to the administration of the Plan as
are consistent with the Company’s certificate of incorporation and by-laws and applicable law. The
Board shall have full power and authority to take all actions and to make all determinations
required or provided for under the Plan, any Award or any Award Agreement, and shall have full
power and authority to take all such other actions and make all such other determinations not
inconsistent with the specific terms and provisions of the Plan that the Board deems to be
necessary or appropriate to the administration of the Plan, any Award or any Award Agreement. All such actions and determinations shall be by the affirmative
vote of a majority of the members of the Board present at a meeting or by unanimous consent of the
Board executed in writing in accordance with the Company’s certificate of incorporation and by-laws
and applicable law. The interpretation and

-5-

 

construction by the Board of any provision of the Plan,
any Award or any Award Agreement shall be final, binding and conclusive.

	 	3.2.	 	Committee.

      The Board from time to time may delegate to the Committee such powers and authorities related
to the administration and implementation of the Plan, as set forth in Section 3.1 above and other
applicable provisions, as the Board shall determine, consistent with the certificate of
incorporation and by-laws of the Company and applicable law.

     (i) Except as provided in Subsection (ii) and except as the Board may otherwise
determine, the Committee, if any, appointed by the Board to administer the Plan shall
consist of two or more Outside Directors of the Company who: (a) qualify as “outside
directors” within the meaning of Section 162(m) of the Code and who (b) meet such other
requirements as may be established from time to time by the Securities and Exchange
Commission for plans intended to qualify for exemption under Rule 16b—3 (or its successor)
under the Exchange Act and who comply with the independence requirements of the stock
exchange on which the Common Stock is listed.

     (ii) The Board may also appoint one or more separate committees of the Board, each
composed of one or more directors of the Company who need not be Outside Directors, who may
administer the Plan with respect to employees or other Service Providers who are not
officers or directors of the Company, may grant Awards under the Plan to such employees or
other Service Providers, and may determine all terms of such Awards.

In the event that the Plan, any Award or any Award Agreement entered into hereunder provides for
any action to be taken by or determination to be made by the Board, such action may be taken or
such determination may be made by the Committee if the power and authority to do so has been
delegated to the Committee by the Board as provided for in this Section. Unless otherwise
expressly determined by the Board, any such action or determination by the Committee shall be
final, binding and conclusive. To the extent permitted by law, the Committee may delegate its
authority under the Plan to a member of the Board.

	 	3.3.	 	Terms of Awards.

      Subject to the other terms and conditions of the Plan, the Board shall have full and final
authority to:

      (i) designate Grantees,

      (ii) determine the type or types of Awards to be made to a Grantee,

      (iii) determine the number of shares of Stock to be subject to an Award,

      (iv) establish the terms and conditions of each Award (including, but not limited to, the
exercise price of any Option, the nature and duration of any restriction or condition (or provision
for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of an Award

-6-

 

or the shares of Stock subject thereto, and any terms or conditions that may be necessary to qualify
Options as Incentive Stock Options),

      (v) prescribe the form of each Award Agreement evidencing an Award, and

      (vi) amend, modify, or supplement the terms of any outstanding Award. Such authority
specifically includes the authority, in order to effectuate the purposes of the Plan but without
amending the Plan, to modify Awards to eligible individuals who are foreign nationals or are
individuals who are employed outside the United States to recognize differences in local law, tax
policy, or custom. Notwithstanding the foregoing, no amendment, modification or supplement of any
Award shall, without the consent of the Grantee, impair the Grantee’s rights under such Award.

      The Company may retain the right in an Award Agreement to cause a forfeiture of the gain
realized by a Grantee on account of actions taken by the Grantee in violation or breach of or in
conflict with any employment agreement, non-competition agreement, any agreement prohibiting
solicitation of employees or clients of the Company or any Affiliate thereof or any confidentiality
obligation with respect to the Company or any Affiliate thereof or otherwise in competition with
the Company or any Affiliate thereof, to the extent specified in such Award Agreement applicable to
the Grantee. Furthermore, the Company may annul an Award if the Grantee is an employee of the
Company or an Affiliate thereof and is terminated for Cause as defined in the applicable Award
Agreement or the Plan, as applicable. The grant of any Award shall be contingent upon the Grantee
executing the appropriate Award Agreement.

      Notwithstanding the foregoing, no amendment or modification may be made to an outstanding
Option or SAR which reduces the Option Price or SAR grant price, either by lowering the Option
Price or SAR grant price or by canceling the outstanding Option or SAR and granting a replacement
Option or SAR with a lower exercise price or grant price without the approval of the stockholders
of the Company, provided, that, appropriate adjustments may be made to outstanding Options or SARs
pursuant to Section 17.

	 	3.4.	 	Deferral Arrangement.

      The Board may permit or require the deferral of any award payment into a deferred compensation
arrangement, subject to such rules and procedures as it may establish, which may include provisions
for the payment or crediting of interest or dividend equivalents, including converting such credits
into deferred Stock equivalents, restricting deferrals to comply with hardship distribution rules
affecting 401(k) plans. Any such deferrals shall be made in a manner that complies with Code
Section 409A.

-7-

 

	 	3.5.	 	No Liability.

      No member of the Board or of the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any Award or Award Agreement.

	 	3.6.	 	Share Issuance/Book-Entry

      Notwithstanding any provision of this Plan to the contrary, the issuance of the Stock under
the Plan may be evidenced in such a manner as the Board, in its discretion, deems appropriate,
including, without limitation, book-entry registration or issuance of one or more Stock
certificates.

	4.	 	STOCK SUBJECT TO THE PLAN

      Subject to adjustment as provided in Section 17 hereof, the number of shares of Stock
available for issuance under the Plan shall be 2,653,061; provided however, that such number shall
be increased by a number of shares of Stock equal to the number of Shares of Stock subject to
option awards that were previously granted pursuant to the Company’s 2003 Employee Stock Option
Plan that after the effectiveness of the Company’s initial public offering are either forfeited or
not purchased pursuant to the terms of the applicable option award agreement. Notwithstanding the
preceding sentence and also subject to adjustment as provided in Section 17 hereof, the aggregate
number of shares of Stock that may be issued as Incentive Stock Options shall not exceed 2,653,061.
Stock issued or to be issued under the Plan shall be authorized but unissued shares; or, to the
extent permitted by applicable law, issued shares that have been reacquired by the Company. If any
shares covered by an Award are not purchased or are forfeited, or if an Award otherwise terminates
without delivery of any Stock subject thereto, then the number of shares of Stock counted against
the aggregate number of shares available under the Plan with respect to such Award shall, to the
extent of any such forfeiture or termination, again be available for making Awards under the Plan.

      If the Option Price of any Option granted under the Plan, or if pursuant to Section 18.3 the
withholding obligation of any Grantee with respect to an Option or other Award, is satisfied by
tendering shares of Stock to the Company (by either actual delivery or by attestation) or by
withholding shares of Stock, the number of shares of Stock issued net of the shares of Stock
tendered or withheld shall be deemed delivered for purposes of determining the maximum number of
shares of Stock available for delivery under the Plan.

      The number of shares of Stock available for issuance under the Plan will be increased by the
number of any shares of Stock that the Company repurchases with Option Exercise Proceeds. The
number of shares of Stock contributed to the available shares of Stock in connection with an option
exercise, however, may not be greater than the number obtained by dividing the amount of Option
Exercise Proceeds by the Fair Market Value of the Stock on the applicable date of exercise.

-8-

 

	5.	 	EFFECTIVE DATE, DURATION AND AMENDMENTS

	 	5.1.	 	Effective Date.

      The Plan shall be effective as of the Effective Date, subject to approval of the Plan by the
Company’s stockholders within one year of the Effective Date. Upon approval of the Plan by the
stockholders of the Company as set forth above, all Awards made under the Plan on or after the
Effective Date shall be fully effective as if the stockholders of the Company had approved the Plan
on the Effective Date. If the stockholders fail to approve the Plan within one year of the
Effective Date, any Awards made hereunder shall be null and void and of no effect.

	 	5.2.	 	Term.

      The Plan shall terminate automatically ten (10) years after its adoption by the Board and may
be terminated on any earlier date as provided in Section 5.3.

	 	5.3.	 	Amendment and Termination of the Plan

      The Board may, at any time and from time to time, amend, suspend, or terminate the Plan as to
any shares of Stock as to which Awards have not been made. An amendment shall be contingent on
approval of the Company’s stockholders to the extent stated by the Board, required by applicable
law or required by applicable stock exchange listing requirements. No Awards shall be made after
termination of the Plan. No amendment, suspension, or termination of the Plan shall, without the
consent of the Grantee, impair rights or obligations under any Award theretofore awarded under the
Plan.

	6.	 	AWARD ELIGIBILITY AND LIMITATIONS

	 	6.1.	 	Service Providers and Other Persons

      Subject to this Section 6, Awards may be made under the Plan to: (i) any Service Provider to
the Company or of any Affiliate, including any Service Provider who is an officer or director of
the Company, or of any Affiliate, as the Board shall determine and designate from time to time and
(ii) any other individual whose participation in the Plan is determined to be in the best interests
of the Company by the Board.

	 	6.2.	 	Successive Awards and Substitute Awards.

      An eligible person may receive more than one Award, subject to such restrictions as are
provided herein. Notwithstanding Sections 8.1 and 9.1, the Option Price of an Option or the grant
price of an SAR that is a Substitute Award may be less than 100% of the Fair Market Value of a
share of Common Stock on the original date of grant; provided, that, the Option Price or grant
price is determined in accordance with the principles of Code Section 424 and the regulations
thereunder.

	 	6.3.	 	Limitation on Shares of Stock Subject to Awards and Cash Awards.

      During any time when the Company has a class of equity security registered under Section 12 of
the Exchange Act:

-9-

 

      (i) the maximum number of shares of Stock subject to Options or SARs that can be awarded under
the Plan to any person eligible for an Award under Section 6 hereof is 1,061,224 per calendar year;

      (ii) the maximum number of shares that can be awarded under the Plan, other than pursuant to
an Option or SAR, to any person eligible for an Award under Section 6 hereof is 1,061,224 per
calendar year; and

      (iii) the maximum amount that may be earned as an Annual Incentive Award or other cash Award
in any calendar year by any one Grantee shall be $3 million and the maximum amount that may be
earned as a Performance Award or other cash Award in respect of a performance period by any one
Grantee shall be $6 million.

      The preceding limitations in this Section 6.3 are subject to adjustment as provided in Section
17 hereof.

	7.	 	AWARD AGREEMENT

      Each Award granted pursuant to the Plan shall be evidenced by an Award Agreement, in such form
or forms as the Board shall from time to time determine. Award Agreements granted from time to
time or at the same time need not contain similar provisions but shall be consistent with the terms
of the Plan. Each Award Agreement evidencing an Award of Options shall specify whether such
Options are intended to be Non-qualified Stock Options or Incentive Stock Options, and in the
absence of such specification such options shall be deemed Non-qualified Stock Options.

	8.	 	TERMS AND CONDITIONS OF OPTIONS

	 	8.1.	 	Option Price

      The Option Price of each Option shall be fixed by the Board and stated in the Award Agreement
evidencing such Option. The Option Price of each Option shall be at least the Fair Market Value on
the Grant Date of a share of Stock; provided, however, that in the event that a
Grantee is a Ten Percent Stockholder, the Option Price of an Option granted to such Grantee that is
intended to be an Incentive Stock Option shall be not less than 110 percent of the Fair Market
Value of a share of Stock on the Grant Date. In no case shall the Option Price of any Option be
less than the par value of a share of Stock.

	 	8.2.	 	Vesting.

          Subject to Sections 8.3 and 17.3 hereof, each Option granted under the Plan shall become
exercisable at such times and under such conditions as shall be determined
by the Board and stated in the Award Agreement. For purposes of this Section 8.2, fractional
numbers of shares of Stock subject to an Option shall be rounded down to the next nearest whole
number.

-10-

 

	 	8.3.	 	Term.

      Each Option granted under the Plan shall terminate, and all rights to purchase shares of Stock
thereunder shall cease, (i) upon the expiration of ten years from the date such Option is granted,
(ii) upon the expiration of eleven years from the date such Option is granted if the Grantee
terminates Service due to death in the tenth year of the Option’s term, or (iii) under such
circumstances and on such date prior thereto as is set forth in the Plan or as may be fixed by the
Board and stated in the Award Agreement relating to such Option (the “Termination Date”);
provided, however, that in the event that the Grantee is a Ten Percent Stockholder,
an Option granted to such Grantee that is intended to be an Incentive Stock Option shall not be
exercisable after the expiration of five years from its Grant Date.

	 	8.4.	 	Termination of Service.

      Each Award Agreement shall set forth the extent to which the Grantee shall have the right to
exercise the Option following termination of the Grantee’s Service. Such provisions shall be
determined in the sole discretion of the Board, need not be uniform among all Options issued
pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service.

	 	8.5.	 	Limitations on Exercise of Option.

      Notwithstanding any other provision of the Plan, in no event may any Option be exercised, in
whole or in part, prior to the date the Plan is approved by the stockholders of the Company as
provided herein or after the occurrence of an event referred to in Section 17 hereof which results
in termination of the Option.

	 	8.6.	 	Method of Exercise.

      An Option that is exercisable may be exercised by the Grantee’s delivery to the Company of
written notice of exercise on any business day, at the Company’s principal office, on the form
specified by the Company. Such notice shall specify the number of shares of Stock with respect to
which the Option is being exercised and shall be accompanied by payment in full of the Option Price
of the shares for which the Option is being exercised plus the amount (if any) of federal and/or
other taxes which the Company may, in its judgment, be required to withhold with respect to an
Award. The minimum number of shares of Stock with respect to which an Option may be exercised, in
whole or in part, at any time shall be the lesser of (i) 100 shares or such lesser number set forth
in the applicable Award Agreement and (ii) the maximum number of shares available for purchase
under the Option at the time of exercise.

	 	8.7.	 	Rights of Holders of Options

      Unless otherwise stated in the applicable Award Agreement, an individual holding or exercising
an Option shall have none of the rights of a stockholder (for example, the right to receive cash or
dividend payments or distributions attributable to the subject shares of Stock or to direct the
voting of the subject shares of Stock ) until the shares of Stock covered thereby are fully paid
and issued to him. Except as provided in Section 17 hereof, no adjustment shall

-11-

 

be made for dividends, distributions or other rights for which the record date is prior to the date of such
issuance.

	 	8.8.	 	Delivery of Stock Certificates.

      Promptly after the exercise of an Option by a Grantee and the payment in full of the Option
Price, such Grantee shall be entitled to the issuance of a stock certificate or certificates
evidencing his or her ownership of the shares of Stock subject to the Option.

	 	8.9.	 	Transferability of Options

      Except as provided in Section 8.10, during the lifetime of a Grantee, only the Grantee (or, in
the event of legal incapacity or incompetency, the Grantee’s guardian or legal representative) may
exercise an Option. Except as provided in Section 8.10, no Option shall be assignable or
transferable by the Grantee to whom it is granted, other than by will or the laws of descent and
distribution.

	 	8.10.	 	Family Transfers.

      If authorized in the applicable Award Agreement, a Grantee may transfer, not for value, all or
part of an Option which is not an Incentive Stock Option to any Family Member. For the purpose of
this Section 8.10, a “not for value” transfer is a transfer which is (i) a gift, (ii) a transfer
under a domestic relations order in settlement of marital property rights; or (iii) a transfer to
an entity in which more than fifty percent of the voting interests are owned by Family Members (or
the Grantee) in exchange for an interest in that entity. Following a transfer under this Section
8.10, any such Option shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer. Subsequent transfers of transferred Options are
prohibited except to Family Members of the original Grantee in accordance with this Section 8.10 or
by will or the laws of descent and distribution. The events of termination of Service of Section
8.4 hereof shall continue to be applied with respect to the original Grantee, following which the
Option shall be exercisable by the transferee only to the extent, and for the periods specified, in
Section 8.4.

	 	8.11.	 	Limitations on Incentive Stock Options.

      An Option shall constitute an Incentive Stock Option only (i) if the Grantee of such Option is
an employee of the Company or any Subsidiary of the Company; (ii) to the extent specifically
provided in the related Award Agreement; and (iii) to the extent that the aggregate Fair Market
Value (determined at the time the Option is granted) of the shares of Stock with respect to which
all Incentive Stock Options held by such Grantee become exercisable for the first time during any
calendar year (under the Plan and all other plans of
the Grantee’s employer and its Affiliates) does not exceed $100,000. This limitation shall be
applied by taking Options into account in the order in which they were granted.

	9.	 	TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS

	 	9.1.	 	Right to Payment and Grant Price.

      An SAR shall confer on the Grantee to whom it is granted a right to receive, upon exercise
thereof, the excess of (i) the Fair Market Value of one share of Stock on the date of exercise over
(ii) the grant price of the SAR as determined by the Board. The Award

-12-

 

Agreement for an SAR shall
specify the grant price of the SAR, which shall be at least the Fair Market Value of a share of
Stock on the date of grant. SARs may be granted in conjunction with all or part of an Option
granted under the Plan or at any subsequent time during the term of such Option, in conjunction
with all or part of any other Award or without regard to any Option or other Award; provided that
an SAR that is granted subsequent to the Grant Date of a related Option must have an SAR Price that
is no less than the Fair Market Value of one share of Stock on the SAR Grant Date.

	 	9.2.	 	Other Terms.

      The Board shall determine at the date of grant or thereafter, the time or times at which and
the circumstances under which an SAR may be exercised in whole or in part (including based on
achievement of performance goals and/or future service requirements), the time or times at which
SARs shall cease to be or become exercisable following termination of Service or upon other
conditions, the method of exercise, method of settlement, form of consideration payable in
settlement, method by or forms in which Stock will be delivered or deemed to be delivered to
Grantees, whether or not an SAR shall be in tandem or in combination with any other Award, and any
other terms and conditions of any SAR. Notwithstanding the preceding, each SAR granted under the
Plan shall terminate, and all rights thereunder shall cease, (i) upon the expiration of ten years
from the date such SAR is granted, (ii) upon the expiration of eleven years from the date such SAR
is granted if the Grantee terminates Service due to death in the tenth year of the SAR’s term, or
(iii) under such circumstances and on such date prior thereto as is set forth in the Plan or as may
be fixed by the Board and stated in the Award Agreement relating to such SAR.

	10.	 	TERMS AND CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS

	 	10.1.	 	Grant of Restricted Stock or Stock Units.

      Awards of Restricted Stock or Stock Units may be made for no consideration (other than par
value of the shares which is deemed paid by Services already rendered).

	 	10.2.	 	Restrictions.

      At the time a grant of Restricted Stock or Stock Units is made, the Board may, in its sole
discretion, establish a period of time (a “restricted period”) applicable to such Restricted Stock
or Stock Units. Each Award of Restricted Stock or Stock Units may be subject to a different
restricted period. The Board may, in its sole discretion, at the time a grant of
Restricted Stock or Stock Units is made, prescribe restrictions in addition to or other than the
expiration of the restricted period, including the satisfaction of corporate or individual
performance objectives, which may be applicable to all or any portion of the Restricted Stock or
Stock Units in accordance with Section 14.1 and 14.2. Neither Restricted Stock nor Stock Units may
be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the
restricted period or prior to the satisfaction of any other restrictions prescribed by the Board
with respect to such Restricted Stock or Stock Units.

-13-

 

	 	10.3.	 	Restricted Stock Certificates.

      The Company shall issue, in the name of each Grantee to whom Restricted Stock has been
granted, stock certificates representing the total number of shares of Restricted Stock granted to
the Grantee, as soon as reasonably practicable after the Grant Date. The Board may provide in an
Award Agreement that either (i) the Secretary of the Company shall hold such certificates for the
Grantee’s benefit until such time as the Restricted Stock is forfeited to the Company or the
restrictions lapse, or (ii) such certificates shall be delivered to the Grantee, provided,
however, that such certificates shall bear a legend or legends that comply with the
applicable securities laws and regulations and makes appropriate reference to the restrictions
imposed under the Plan and the Award Agreement.

	 	10.4.	 	Rights of Holders of Restricted Stock.

      Unless the Board otherwise provides in an Award Agreement, holders of Restricted Stock shall
have the right to vote such Stock and the right to receive any dividends declared or paid with
respect to such Stock. The Board may provide that any dividends paid on Restricted Stock must be
reinvested in shares of Stock, which may or may not be subject to the same vesting conditions and
restrictions applicable to such Restricted Stock. All distributions, if any, received by a Grantee
with respect to Restricted Stock as a result of any stock split, stock dividend, combination of
shares, or other similar transaction shall be subject to the restrictions applicable to the
original Grant.

	 	10.5.	 	Rights of Holders of Stock Units.

	 	10.5.1.	 	Voting and Dividend Rights.

      Holders of Stock Units shall have no rights as stockholders of the Company. The Board may
provide in an Award Agreement evidencing a grant of Stock Units that the holder of such Stock Units
shall be entitled to receive, upon the Company’s payment of a cash dividend on its outstanding
Stock, a cash payment for each Stock Unit held equal to the per-share dividend paid on the Stock.
Such Award Agreement may also provide that such cash payment will be deemed reinvested in
additional Stock Units at a price per unit equal to the Fair Market Value of a share of Stock on
the date that such dividend is paid.

	 	10.5.2.	 	Creditor’s Rights.

      A holder of Stock Units shall have no rights other than those of a general creditor of the
Company. Stock Units represent an unfunded and unsecured obligation of the Company, subject to the
terms and conditions of the applicable Award Agreement.

	 	10.6.	 	Termination of Service.

      Unless the Board otherwise provides in an Award Agreement or in writing after the Award
Agreement is issued, upon the termination of a Grantee’s Service, any Restricted Stock or Stock
Units held by such Grantee that have not vested, or with respect to which all applicable
restrictions and conditions have not lapsed, shall immediately be deemed forfeited. Upon
forfeiture of Restricted Stock or Stock Units, the Grantee shall have no further rights with
respect to such Award, including but not limited to any right to vote Restricted Stock or any right
to receive dividends with respect to shares of Restricted Stock or Stock Units.

-14-

 

	 	10.7.	 	Purchase of Restricted Stock.

      The Grantee shall be required, to the extent required by applicable law, to purchase the
Restricted Stock from the Company at a Purchase Price equal to the greater of (i) the aggregate par
value of the shares of Stock represented by such Restricted Stock or (ii) the Purchase Price, if
any, specified in the Award Agreement relating to such Restricted Stock. The Purchase Price shall
be payable in a form described in Section 12 or, in the discretion of the Board, in consideration
for past Services rendered to the Company or an Affiliate.

	 	10.8.	 	Delivery of Stock.

      Upon the expiration or termination of any restricted period and the satisfaction of any other
conditions prescribed by the Board, the restrictions applicable to shares of Restricted Stock or
Stock Units settled in Stock shall lapse, and, unless otherwise provided in the Award Agreement, a
stock certificate for such shares shall be delivered, free of all such restrictions, to the Grantee
or the Grantee’s beneficiary or estate, as the case may be. Neither the Grantee, nor the Grantee’s
beneficiary or estate, shall have any further rights with regard to a Stock Unit once the share of
Stock represented by the Stock Unit has been delivered.

	11.	 	TERMS AND CONDITIONS OF UNRESTRICTED STOCK AWARDS

      The Board may, in its sole discretion, grant (or sell at par value or such other higher
purchase price determined by the Board) an Unrestricted Stock Award to any Grantee pursuant to
which such Grantee may receive shares of Stock free of any restrictions (“Unrestricted Stock”)
under the Plan. Unrestricted Stock Awards may be granted or sold as described in the preceding
sentence in respect of past services and other valid consideration, or in lieu of, or in addition
to, any cash compensation due to such Grantee.

	12.	 	FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK

	 	12.1.	 	General Rule.

      Payment of the Option Price for the shares purchased pursuant to the exercise of an Option or
the Purchase Price for Restricted Stock shall be made in cash or in cash equivalents acceptable to
the Company.

	 	12.2.	 	Surrender of Stock.

      To the extent the Award Agreement so provides, payment of the Option Price for shares
purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock may be
made all or in part through the tender to the Company of shares of Stock, which shall be valued,
for purposes of determining the extent to which the Option Price or Purchase Price has been paid
thereby, at their Fair Market Value on the date of exercise or surrender.

-15-

 

	 	12.3.	 	Cashless Exercise.

      With respect to an Option only (and not with respect to Restricted Stock), to the extent
permitted by law and to the extent the Award Agreement so provides, payment of the Option Price for
shares purchased pursuant to the exercise of an Option may be made all or in part by delivery (on a
form acceptable to the Board) of an irrevocable direction to a licensed securities broker
acceptable to the Company to sell shares of Stock and to deliver all or part of the sales proceeds
to the Company in payment of the Option Price and any withholding taxes described in Section 18.3.

	 	12.4.	 	Other Forms of Payment.

      To the extent the Award Agreement so provides, payment of the Option Price for shares
purchased pursuant to exercise of an Option or the Purchase Price for Restricted Stock may be made
in any other form that is consistent with applicable laws, regulations and rules.

	13.	 	TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS

	 	13.1.	 	Dividend Equivalent Rights.

      A Dividend Equivalent Right is an Award entitling the recipient to receive credits based on
cash distributions that would have been paid on the shares of Stock specified in the Dividend
Equivalent Right (or other award to which it relates) if such shares had been issued to and held by
the recipient. A Dividend Equivalent Right may be granted hereunder to any Grantee. The terms and
conditions of Dividend Equivalent Rights shall be specified in the grant. Dividend equivalents
credited to the holder of a Dividend Equivalent Right may be paid currently or may be deemed to be
reinvested in additional shares of Stock, which may thereafter accrue additional equivalents. Any
such reinvestment shall be at Fair Market Value on the date of reinvestment. Dividend Equivalent
Rights may be settled in cash or Stock or a combination thereof, in a single installment or
installments, all determined in the sole discretion of the Board. A Dividend Equivalent Right
granted as a component of another Award may provide that such Dividend Equivalent Right shall be
settled upon exercise, settlement, or payment of, or lapse of restrictions on, such other award,
and that such Dividend Equivalent Right shall expire or be forfeited or annulled under the same
conditions as such other award. A
Dividend Equivalent Right granted as a component of another Award may also contain terms and
conditions different from such other award.

	 	13.2.	 	Termination of Service.

      Except as may otherwise be provided by the Board either in the Award Agreement or in writing
after the Award Agreement is issued, a Grantee’s rights in all Dividend Equivalent Rights or
interest equivalents shall automatically terminate upon the Grantee’s termination of Service for
any reason.

-16-

 

	14.	 	TERMS AND CONDITIONS OF PERFORMANCE AND ANNUAL INCENTIVE AWARDS

	 	14.1.	 	Performance Conditions

          The right of a Grantee to exercise or receive a grant or settlement of any Award, and the
timing thereof, may be subject to such performance conditions as may be specified by the Board.
The Board may use such business criteria and other measures of performance as it may deem
appropriate in establishing any performance conditions, and may exercise its discretion to reduce
the amounts payable under any Award subject to performance conditions, except as limited under
Sections 14.2 hereof in the case of a Performance Award or Annual Incentive Award intended to
qualify under Code Section 162(m). If and to the extent required under Code Section 162(m), any
power or authority relating to a Performance Award or Annual Incentive Award intended to qualify
under Code Section 162(m), shall be exercised by the Committee and not the Board.

	 	14.2.	 	Performance or Annual Incentive Awards Granted to Designated Covered Employees

          If and to the extent that the Committee determines that a Performance or Annual Incentive
Award to be granted to a Grantee who is designated by the Committee as likely to be a Covered
Employee should qualify as “performance-based compensation” for purposes of Code Section 162(m),
the grant, exercise and/or settlement of such Performance or Annual Incentive Award shall be
contingent upon achievement of pre-established performance goals and other terms set forth in this
Section 14.2.

	 	14.2.1.	 	Performance Goals Generally.

      The performance goals for such Performance or Annual Incentive Awards shall consist of one or
more business criteria and a targeted level or levels of performance with respect to each of such
criteria, as specified by the Committee consistent with this Section 14.2. Performance goals shall
be objective and shall otherwise meet the requirements of Code Section 162(m) and regulations
thereunder including the requirement that the level or levels of performance targeted by the
Committee result in the achievement of performance goals being “substantially uncertain.” The
Committee may determine that such Performance or Annual Incentive Awards shall be granted,
exercised and/or settled
upon achievement of any one performance goal or that two or more of the performance goals must be
achieved as a condition to grant, exercise and/or settlement of such Performance or Annual
Incentive Awards. Performance goals may differ for Performance or Annual Incentive Awards granted
to any one Grantee or to different Grantees.

	 	14.2.2.	 	Business Criteria.

      One or more of the following business criteria for the Company, on a consolidated basis,
and/or specified subsidiaries or business units of the Company (except with respect to the total
stockholder return and earnings per share criteria), shall be used exclusively by the Committee in
establishing performance goals for such Performance or Annual Incentive Awards: (1) total
stockholder return; (2) such total stockholder return as compared to total

-17-

 

return (on a comparable
basis) of a publicly available index such as, but not limited to, the Standard & Poor’s 500 Stock
Index; (3) net income; (4) pretax earnings; (5) earnings, on a consolidated basis or operating
basis, before any, all or none of the following: interest expense, taxes, depreciation,
amortization bonuses, service fees, and extraordinary or special items; (6) operating margin; (7)
earnings per share; (8) return on equity; (9) return on capital; (10) operating earnings; (11)
working capital; (12) ratio of debt to stockholders’ equity; (13) growth in assets; (14) market
share; (15) stock price; (16) cash flow; (17) sales growth (in general, by type of product and by
type of customer); (18) retained earnings; (19) product development goals; (20) completion of
acquisitions; (21) completion of divestitures and asset sales; (22) cost or expense reductions;
(23) introduction or conversion of product brands; and (24) achievement of specified management
information systems objectives. Business criteria may be measured on an absolute basis or on a
relative basis (i.e., performance relative to peer companies) and on a GAAP or non-GAAP basis.

	 	14.2.3.	 	Timing For Establishing Performance Goals.

      Performance goals shall be established not later than 90 days after the beginning of any
performance period applicable to such Performance or Annual Incentive Awards, or at such other date
as may be required or permitted for “performance-based compensation” under Code Section 162(m).

	 	14.2.4.	 	Settlement of Performance or Annual Incentive Awards; Other Terms.

      Settlement of such Performance or Annual Incentive Awards shall be in cash, Stock, other
Awards or other property, in the discretion of the Committee. The Committee may, in its
discretion, reduce the amount of a settlement otherwise to be made in connection with such
Performance or Annual Incentive Awards. The Committee shall specify the circumstances in which
such Performance or Annual Incentive Awards shall be paid or forfeited in the event of termination
of Service by the Grantee prior to the end of a performance period or settlement of Performance
Awards.

	 	14.3.	 	Written Determinations.

          All determinations by the Committee as to the establishment of performance goals, the amount
of any potential Performance Awards and as to the achievement of
performance goals relating to Performance Awards, and the amount of any potential individual
Annual Incentive Awards and the amount of final Annual Incentive Awards, shall be made in writing
in the case of any Award intended to qualify under Code Section 162(m). To the extent permitted by
Section 162(m), the Committee may delegate any responsibility relating to such Performance Awards
or Annual Incentive Awards.

	 	14.4.	 	Status of Section 14.2 Awards Under Code Section 162(m)

          It is the intent of the Company that Performance Awards and Annual Incentive Awards under
Section 14.2 hereof granted to persons who are designated by the Committee as likely to be Covered
Employees within the meaning of Code Section 162(m) and regulations thereunder shall, if so
designated by the Committee, constitute “qualified performance-based compensation” within the
meaning of Code Section 162(m) and

-18-

 

regulations thereunder. Accordingly, the terms of Section 14.2,
including the definitions of Covered Employee and other terms used therein, shall be interpreted in
a manner consistent with Code Section 162(m) and regulations thereunder. The foregoing
notwithstanding, because the Committee cannot determine with certainty whether a given Grantee will
be a Covered Employee with respect to a fiscal year that has not yet been completed, the term
Covered Employee as used herein shall mean only a person designated by the Committee, at the time
of grant of Performance Awards or an Annual Incentive Award, as likely to be a Covered Employee
with respect to that fiscal year. If any provision of the Plan or any agreement relating to such
Performance Awards or Annual Incentive Awards does not comply or is inconsistent with the
requirements of Code Section 162(m) or regulations thereunder, such provision shall be construed or
deemed amended to the extent necessary to conform to such requirements.

	15.	 	PARACHUTE LIMITATIONS

      Notwithstanding any other provision of this Plan or of any other agreement, contract, or
understanding heretofore or hereafter entered into by a Grantee with the Company or any Affiliate,
except an agreement, contract, or understanding hereafter entered into that expressly modifies or
excludes application of this paragraph (an “Other Agreement”), and notwithstanding any formal or
informal plan or other arrangement for the direct or indirect provision of compensation to the
Grantee (including groups or classes of Grantees or beneficiaries of which the Grantee is a
member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit
to or for the Grantee (a “Benefit Arrangement”), if the Grantee is a “disqualified individual,” as
defined in Section 280G(c) of the Code, any Option, Restricted Stock or Stock Unit held by that
Grantee and any right to receive any payment or other benefit under this Plan shall not become
exercisable or vested (i) to the extent that such right to exercise, vesting, payment, or benefit,
taking into account all other rights, payments, or benefits to or for the Grantee under this Plan,
all Other Agreements, and all Benefit Arrangements, would cause any payment or benefit to the
Grantee under this Plan to be considered a “parachute payment” within the meaning of Section
280G(b)(2) of the Code as then in effect (a “Parachute Payment”) and (ii) if, as a result
of receiving a Parachute Payment, the aggregate after-tax amounts received by the Grantee from the
Company under this Plan, all Other Agreements, and all Benefit Arrangements would be less than the
maximum after-tax amount that could be received by the Grantee
without causing any such payment or benefit to be considered a Parachute Payment. In the event
that the receipt of any such right to exercise, vesting, payment, or benefit under this Plan, in
conjunction with all other rights, payments, or benefits to or for the Grantee under any Other
Agreement or any Benefit Arrangement would cause the Grantee to be considered to have received a
Parachute Payment under this Plan that would have the effect of decreasing the after-tax amount
received by the Grantee as described in clause (ii) of the preceding sentence, then the Grantee
shall have the right, in the Grantee’s sole discretion, to designate those rights, payments, or
benefits under this Plan, any Other Agreements, and any Benefit Arrangements that should be reduced
or eliminated so as to avoid having the payment or benefit to the Grantee under this Plan be deemed
to be a Parachute Payment.

-19-

 

	16.	 	REQUIREMENTS OF LAW

	 	16.1.	 	General.

      The Company shall not be required to sell or issue any shares of Stock under any Award if the
sale or issuance of such shares would constitute a violation by the Grantee, any other individual
exercising an Option, or the Company of any provision of any law or regulation of any governmental
authority, including without limitation any federal or state securities laws or regulations. If at
any time the Company shall determine, in its discretion, that the listing, registration or
qualification of any shares subject to an Award upon any securities exchange or under any
governmental regulatory body is necessary or desirable as a condition of, or in connection with,
the issuance or purchase of shares hereunder, no shares of Stock may be issued or sold to the
Grantee or any other individual exercising an Option pursuant to such Award unless such listing,
registration, qualification, consent or approval shall have been effected or obtained free of any
conditions not acceptable to the Company, and any delay caused thereby shall in no way affect the
date of termination of the Award. Specifically, in connection with the Securities Act, upon the
exercise of any Option or the delivery of any shares of Stock underlying an Award, unless a
registration statement under such Act is in effect with respect to the shares of Stock covered by
such Award, the Company shall not be required to sell or issue such shares unless the Board has
received evidence satisfactory to it that the Grantee or any other individual exercising an Option
may acquire such shares pursuant to an exemption from registration under the Securities Act. Any
determination in this connection by the Board shall be final, binding, and conclusive. The Company
may, but shall in no event be obligated to, register any securities covered hereby pursuant to the
Securities Act. The Company shall not be obligated to take any affirmative action in order to
cause the exercise of an Option or the issuance of shares of Stock pursuant to the Plan to comply
with any law or regulation of any governmental authority. As to any jurisdiction that expressly
imposes the requirement that an Option shall not be exercisable until the shares of Stock covered
by such Option are registered or are exempt from registration, the exercise of such Option (under
circumstances in which the laws of such jurisdiction apply) shall be deemed conditioned upon the
effectiveness of such registration or the availability of such an exemption.

	 	16.2.	 	Rule 16b-3.

      During any time when the Company has a class of equity security registered under Section 12 of
the Exchange Act, it is the intent of the Company that Awards pursuant to the Plan and the exercise
of Options granted hereunder will qualify for the exemption provided by Rule 16b-3 under the
Exchange Act. To the extent that any provision of the Plan or action by the Board does not comply
with the requirements of Rule 16b-3, it shall be deemed inoperative to the extent permitted by law
and deemed advisable by the Board, and shall not affect the validity of the Plan. In the event
that Rule 16b-3 is revised or replaced, the Board may exercise its discretion to modify this Plan
in any respect necessary to satisfy the requirements of, or to take advantage of any features of,
the revised exemption or its replacement.

-20-

 

	17.	 	EFFECT OF CHANGES IN CAPITALIZATION

	 	17.1.	 	Changes in Stock.

      If the number of outstanding shares of Stock is increased or decreased or the shares of Stock
are changed into or exchanged for a different number or kind of shares or other securities of the
Company on account of any recapitalization, reclassification, stock split, reverse split,
combination of shares, exchange of shares, stock dividend or other distribution payable in capital
stock, or other increase or decrease in such shares effected without receipt of consideration by
the Company occurring after the Effective Date, the number and kinds of shares for which grants of
Options and other Awards may be made under the Plan shall be adjusted proportionately and
accordingly by the Company to prevent dilution or enlargement of the rights of the Grantees. In
addition, the number and kind of shares for which Awards are outstanding shall be adjusted
proportionately and accordingly so that the proportionate interest of the Grantee immediately
following such event shall, to the extent practicable, be the same as immediately before such
event. Any such adjustment in outstanding Options or SARs shall not change the aggregate Option
Price or SAR Exercise Price payable with respect to shares that are subject to the unexercised
portion of an outstanding Option or SAR, as applicable, but shall include a corresponding
proportionate adjustment in the Option Price or SAR Exercise Price per share. The conversion of
any convertible securities of the Company shall not be treated as an increase in shares effected
without receipt of consideration. Notwithstanding the foregoing, in the event of any distribution
to the Company’s stockholders of securities of any other entity or other assets (including an
extraordinary dividend but excluding a non-extraordinary dividend of the Company) without receipt
of consideration by the Company, the Company may, in such manner as the Company deems appropriate,
adjust (i) the number and kind of shares subject to outstanding Awards and/or (ii) the exercise
price of outstanding Options and Stock Appreciation Rights to reflect such distribution.
Notwithstanding the preceding, the Company may also make provision for the payment of cash or other
property in respect of any outstanding Award.

-21-

 

	 	17.2.	 	Reorganization in Which the Company Is the Surviving Entity Which does not Constitute a Corporate Transaction.

      Subject to Section 17.3 hereof, if the Company shall be the surviving entity in any
reorganization, merger, or consolidation of the Company with one or more other entities which does
not constitute a Corporate Transaction, any Option or SAR theretofore granted pursuant to the Plan
shall pertain to and apply to the securities to which a holder of the number of shares of Stock
subject to such Option or SAR would have been entitled immediately following such reorganization,
merger, or consolidation, with a corresponding proportionate adjustment of the Option Price or SAR
Exercise Price per share so that the aggregate Option Price or SAR Exercise Price thereafter shall
be the same as the aggregate Option Price or SAR Exercise Price of the shares remaining subject to
the Option or SAR immediately prior to such reorganization, merger, or consolidation. Subject to
any contrary language in an Award Agreement evidencing an Award, any restrictions applicable to
such Award shall apply as well to any replacement shares received by the Grantee as a result of the
reorganization, merger or consolidation. In the event of a transaction described in this Section
17.2, Stock Units shall be adjusted so as to apply to the securities that a holder of the number of
shares of Stock subject to the Stock Units would have been entitled to receive immediately
following such transaction.

	 	17.3.	 	Corporate Transaction.

          Subject to the exceptions set forth in the last sentence of this Section 17.3 and the last
sentence of Section 17.4, upon the occurrence of a Corporate Transaction:

          (i) all outstanding shares of Restricted Stock shall be deemed to have vested, and all Stock
Units shall be deemed to have vested and the shares of Stock subject thereto shall be delivered,
immediately prior to the occurrence of such Corporate Transaction, and

          (ii) either of the following two actions shall be taken:

               (A) fifteen days prior to the scheduled consummation of a Corporate Transaction, all Options
and SARs outstanding hereunder shall become immediately exercisable and shall remain exercisable
for a period of fifteen days, or

               (B) the Board may elect, in its sole discretion, to cancel any outstanding Awards of Options,
Restricted Stock, Stock Units, and/or SARs and pay or deliver, or cause to be paid or delivered, to
the holder thereof an amount in cash or securities having a value (as determined by the Board
acting in good faith), in the case of Restricted Stock or Stock Units, equal to the formula or
fixed price per share paid to holders of shares of Stock and, in the case of Options or SARs, equal
to the product of the number of shares of Stock subject to the Option or SAR (the “Award Shares”)
multiplied by the amount, if any, by which (I) the formula or fixed price per share paid to holders
of shares of Stock pursuant to such transaction exceeds (II) the Option Price or SAR Exercise Price
applicable to such Award Shares.

          With respect to the Company’s establishment of an exercise window, (i) any exercise of an
Option or SAR during such fifteen-day period shall be conditioned upon the consummation of the event and shall be effective only immediately before the consummation

-22-

 

of the
event, and (ii) upon consummation of any Corporate Transaction the Plan, and all outstanding but
unexercised Options and SARs shall terminate. The Board shall send written notice of an event that
will result in such a termination to all individuals who hold Options and SARs not later than the
time at which the Company gives notice thereof to its stockholders. This Section 17.3 shall not
apply to any Corporate Transaction to the extent that provision is made in writing in connection
with such Corporate Transaction for the assumption or continuation of the Options, SARs, Stock
Units and Restricted Stock theretofore granted, or for the substitution for such Options, SARs,
Stock Units and Restricted Stock for new common stock options and stock appreciation rights and new
common stock stock units and restricted stock relating to the stock of a successor entity, or a
parent or subsidiary thereof, with appropriate adjustments as to the number of shares (disregarding
any consideration that is not common stock) and option and stock appreciation right exercise
prices, in which event the Plan, Options, SARs, Stock Units and Restricted Stock theretofore
granted shall continue in the manner and under the terms so provided.

	 	17.4.	 	Adjustments.

      Adjustments under this Section 17 related to shares of Stock or securities of the Company
shall be made by the Board, whose determination in that respect shall be final, binding and
conclusive. No fractional shares or other securities shall be issued pursuant to any such
adjustment, and any fractions resulting from any such adjustment shall be eliminated in each case
by rounding downward to the nearest whole share. The Board shall determine the effect of a
Corporate Transaction upon Awards other than Options, SARs, Stock Units and Restricted Stock, and
such effect shall be set forth in the appropriate Award Agreement. The Board may provide in the
Award Agreements at the time of grant, or any time thereafter with the consent of the Grantee, for
different provisions to apply to an Award in place of those described in Sections 17.1, 17.2 and
17.3.

	 	17.5.	 	No Limitations on Company.

      The making of Awards pursuant to the Plan shall not affect or limit in any way the right or
power of the Company to make adjustments, reclassifications, reorganizations, or changes of its
capital or business structure or to merge, consolidate, dissolve, or liquidate, or to sell or
transfer all or any part of its business or assets.

	18.	 	GENERAL PROVISIONS

	 	18.1.	 	Disclaimer of Rights

      No provision in the Plan or in any Award or Award Agreement shall be construed to confer upon
any individual the right to remain in the employ or service of the Company or any Affiliate, or to
interfere in any way with any contractual or other right or authority of the Company either to
increase or decrease the compensation or other payments to any individual at any time, or to
terminate any employment or other relationship between any individual and the Company. In
addition, notwithstanding anything contained in the Plan to the contrary, unless otherwise stated
in the applicable Award Agreement, no Award granted under the Plan shall be affected by any change
of duties or position of the Grantee, so long as such Grantee continues to be a director, officer, consultant or employee of the Company or an
Affiliate. The obligation of the Company to pay any benefits pursuant to this Plan shall be

-23-

 

interpreted as a contractual obligation to pay only those amounts described herein, in the manner
and under the conditions prescribed herein. The Plan shall in no way be interpreted to require the
Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or
escrow for payment to any Grantee or beneficiary under the terms of the Plan.

	 	18.2.	 	Nonexclusivity of the Plan

      Neither the adoption of the Plan nor the submission of the Plan to the stockholders of the
Company for approval shall be construed as creating any limitations upon the right and authority of
the Board to adopt such other incentive compensation arrangements (which arrangements may be
applicable either generally to a class or classes of individuals or specifically to a particular
individual or particular individuals) as the Board in its discretion determines desirable,
including, without limitation, the granting of stock options otherwise than under the Plan.

	 	18.3.	 	Withholding Taxes

      The Company or an Affiliate, as the case may be, shall have the right to deduct from payments
of any kind otherwise due to a Grantee any federal, state, or local taxes of any kind required by
law to be withheld with respect to the vesting of or other lapse of restrictions applicable to an
Award or upon the issuance of any shares of Stock upon the exercise of an Option or pursuant to an
Award. At the time of such vesting, lapse, or exercise, the Grantee shall pay to the Company or
the Affiliate, as the case may be, any amount that the Company or the Affiliate may reasonably
determine to be necessary to satisfy such withholding obligation. Subject to the prior approval of
the Company or the Affiliate, which may be withheld by the Company or the Affiliate, as the case
may be, in its sole discretion, the Grantee may elect to satisfy such obligations, in whole or in
part, (i) by causing the Company or the Affiliate to withhold shares of Stock otherwise issuable to
the Grantee or (ii) by delivering to the Company or the Affiliate shares of Stock already owned by
the Grantee. The shares of Stock so delivered or withheld shall have an aggregate Fair Market
Value equal to such withholding obligations. The Fair Market Value of the shares of Stock used to
satisfy such withholding obligation shall be determined by the Company or the Affiliate as of the
date that the amount of tax to be withheld is to be determined. A Grantee who has made an election
pursuant to this Section 18.3 may satisfy his or her withholding obligation only with shares of
Stock that are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar
requirements.

	 	18.4.	 	Captions

      The use of captions in this Plan or any Award Agreement is for the convenience of reference
only and shall not affect the meaning of any provision of the Plan or such Award Agreement.

	 	18.5.	 	Other Provisions

      Each Award granted under the Plan may contain such other terms and conditions not inconsistent
with the Plan as may be determined by the Board, in its sole discretion.

-24-

 

	 	18.6.	 	Number and Gender

      With respect to words used in this Plan, the singular form shall include the plural form, the
masculine gender shall include the feminine gender, etc., as the context requires.

	 	18.7.	 	Severability

      If any provision of the Plan or any Award Agreement shall be determined to be illegal or
unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof
shall be severable and enforceable in accordance with their terms, and all provisions shall remain
enforceable in any other jurisdiction.

	 	18.8.	 	Governing Law

      The validity and construction of this Plan and the instruments evidencing the Awards hereunder
shall be governed by the laws of the State of Delaware, other than any conflicts or choice of law
rule or principle that might otherwise refer construction or interpretation of this Plan and the
instruments evidencing the Awards granted hereunder to the substantive laws of any other
jurisdiction.

	 	18.9.	 	Section 409A of the Code

      The Board intends to comply with Section 409A of the Code (“Section 409A”), or an exemption to
Section 409A, with regard to Awards hereunder that constitute nonqualified deferred compensation
within the meaning of Section 409A. To the extent that the Board determines that a Grantee would
be subject to the additional 20% tax imposed on certain nonqualified deferred compensation plans
pursuant to Section 409A as a result of any provision of any Award granted under this Plan, such
provision shall be deemed amended to the minimum extent necessary to avoid application of such
additional tax. The nature of any such amendment shall be determined by the Board.

* * *

      To record adoption of the Plan by the Board as of September 14, 2006, approval of the Plan by
the stockholders on September 14, 2006, the amendment of the Plan by the Board as of November 2,
2006 (effective as of the first closing of the Corporation’s public offering), and approval of the
amendment of the Plan by the stockholders on November 2, 2006 (effective as of the first closing of
the Corporation’s public offering), the Company has caused its authorized officer to execute the
Plan.

-25-exv10w08wa

 

Exhibit 10.08A

Option No.: _______

DOUBLE-TAKE SOFTWARE

2006 OMNIBUS INCENTIVE PLAN

INCENTIVE STOCK OPTION AGREEMENT

Double-Take Software, Inc, a Delaware corporation (the “Company”), hereby grants an option to
purchase shares of its common stock, $.001 par value, (the “Stock”) to the optionee named below.
The terms and conditions of the option are set forth in this cover sheet, in the attachment, and in
the Company’s 2006 Omnibus Incentive Plan (the “Plan”).

Grant Date:                                                             , 200___

Name of Optionee:                                                                                                                         
                                        

Optionee’s Employee Identification Number: ___-___-___

Number of Shares Covered by Option:                                         

Option Price per Share: $_____.___(At least 100% of Fair Market Value)

Vesting Start Date:                                         , ___

      By signing this cover sheet, you agree to all of the terms and conditions described in the
attached Agreement and in the Plan, a copy of which is also attached. You acknowledge that you
have carefully reviewed the Plan, and agree that the Plan will control in the event any provision
of this Agreement should appear to be inconsistent.

	 	 	 	 	 
	Optionee:
	 	 	 	 
	 	 	 
	 	 	(Signature)

	 
	 	 	 	 
	Company:
	 	 	 	 
	 	 	 
	 	 	(Signature)

	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

Attachment

      This is not a stock certificate or a negotiable instrument.

 

 

DOUBLE-TAKE SOFTWARE

2006 OMNIBUS INCENTIVE PLAN

INCENTIVE STOCK OPTION AGREEMENT

	 	 	 
	Incentive Stock Option

	 	This option is intended to be an incentive
stock option under Section 422 of the
Internal Revenue Code and will be
interpreted accordingly. If you cease to be
an employee of the Company, its parent or a
subsidiary (“Employee”) but continue to
provide Service, this option will be deemed
a nonstatutory stock option three months
after you cease to be an Employee. In
addition, to the extent that all or part of
this option exceeds the $100,000 rule of
section 422(d) of the Internal Revenue Code,
this option or the lesser excess part will
be deemed to be a nonstatutory stock option.
	 
	 	 
	Vesting

	 	This option is only exercisable before it
expires and then only with respect to the
vested portion of the option. Subject to
the preceding sentence, you may exercise
this option, in whole or in part, to
purchase a whole number of vested shares not
less than 100 shares, unless the number of
shares purchased is the total number
available for purchase under the option, by
following the procedures set forth in the
Plan and below in this Agreement.
	 
	 	 
	 

	 	Your right to purchase shares of Stock under
this option vests [as to                     
(___) of the total number of shares
covered by this option, as shown on the
cover sheet, on the one-year anniversary of
the Vesting Start Date (“Anniversary Date”),
provided you then continue in Service.
Thereafter, for each such vesting date that
you remain in Service, the number of shares
of Stock which you may purchase under this
option shall vest ]at the rate of
                     (___) per month as of the first
day of each month following the month of the
Anniversary Date. The resulting aggregate
number of vested shares will be rounded to
the nearest whole number, and you cannot
vest in more than the number of shares
covered by this option.]
	 
	 	 
	 

	 	No additional shares of Stock will vest
after your Service has terminated for any
reason.
	 
	 	 
	Term

	 	Your option will expire in any event at the
close of business at Company headquarters on
the day before the 10th anniversary of the
Grant Date, as shown on the cover sheet.
Your option will expire earlier if your
Service terminates, as described below.
	 
	 	 
	Regular Termination

	 	If your Service terminates for any reason,
other than death, Disability or Cause, then
your option will expire at the close of
business at Company headquarters on the 90th
day after your

2

 

	 	 	 
	 

	 	termination date.
	 
	 	 
	Termination for Cause

	 	If your Service is terminated for Cause,
then you shall immediately forfeit all
rights to your option and the option shall
immediately expire.
	 
	 	 
	Death

	 	If your Service terminates because of your
death, then your option will expire at the
close of business at Company headquarters on
the date twelve (12) months after the date
of death. During that twelve month period,
your estate or heirs may exercise the vested
portion of your option.
	 
	 	 
	 

	 	In addition, if you die during the 90-day
period described in connection with a
regular termination (i.e., a termination of
your Service not on account of your death,
Disability or Cause), and a vested portion
of your option has not yet been exercised,
then your option will instead expire on the
date twelve (12) months after your
termination date. In such a case, during
the period following your death up to the
date twelve (12) months after your
termination date, your estate or heirs may
exercise the vested portion of your option.
	 
	 	 
	Disability

	 	If your Service terminates because of your
Disability, then your option will expire at
the close of business at Company
headquarters on the date twelve (12) months
after your termination date.
	 
	 	 
	Leaves of Absence

	 	For purposes of this option, your Service
does not terminate when you go on a bona
fide employee leave of absence that was
approved by the Company in writing, if the
terms of the leave provide for continued
Service crediting, or when continued Service
crediting is required by applicable law.
However, your Service will be treated as
terminating 90 days after you went on
employee leave, unless your right to return
to active work is guaranteed by law or by a
contract. Your Service terminates in any
event when the approved leave ends unless
you immediately return to active employee
work.
	 
	 	 
	 

	 	The Company determines, in its sole
discretion, which leaves count for this
purpose, and when your Service terminates
for all purposes under the Plan.
	 
	 	 
	Notice of Exercise

	 	When you wish to exercise this option, you
must notify the Company by filing the proper
“Notice of Exercise” form at the address
given on the form. Your notice must specify
how many shares you wish to purchase (in a
parcel of at least 100 shares generally).
Your notice must also specify how your
shares of Stock should be registered (in
your name only or in your and your spouse’s
names as joint tenants with right of
survivorship). The notice will be effective
when it is received by the Company.

3

 

	 	 	 
	 

	 	If someone else wants to exercise this
option after your death, that person must
prove to the Company’s satisfaction that he
or she is entitled to do so.
	 
	 	 
	Form of Payment

	 	When you submit your notice of exercise, you
must include payment of the option price for
the shares you are purchasing. Payment may
be made in one (or a combination) of the
following forms:
	 
	 	 
	 

	 	Ÿ     Cash, your personal check, a cashier’s check,
a money order or another cash equivalent acceptable to the Company.
	 
	 	 
	 

	 	Ÿ     Shares of Stock which are surrendered to the Company. The
value of the shares, determined as of the effective date of the
option exercise, will be applied to the option price.
	 
	 	 
	 

	 	Ÿ     By delivery (on a form prescribed by the Company) of an irrevocable direction to
a licensed securities broker acceptable to the Company to sell Stock and to deliver all
or part of the sale proceeds to the Company in payment of the aggregate option price and
any withholding taxes (if approved in advance by the Compensation Committee of the
Board if you are either an executive officer or a director of the Company).
	 
	 	 
	Withholding Taxes

	 	You will not be allowed to exercise this
option unless you make acceptable
arrangements to pay any withholding or other
taxes that may be due as a result of the
option exercise or sale of Stock acquired
under this option. In the event that the
Company determines that any federal, state,
local or foreign tax or withholding payment
is required relating to the exercise or sale
of shares arising from this grant, the
Company shall have the right to require such
payments from you, or withhold such amounts
from other payments due to you from the
Company or any Affiliate.
	 
	 	 
	Transfer of Option

	 	During your lifetime, only you (or, in the
event of your legal incapacity or
incompetency, your guardian or legal
representative) may exercise the option.
You cannot transfer or assign this option.
For instance, you may not sell this option
or use it as security for a loan. If you
attempt to do any of these things, this
option will immediately become invalid. You
may, however, dispose of this option in your
will or it may be transferred upon your
death by the laws of descent and
distribution.
	 
	 	 
	 

	 	Regardless of any marital property
settlement agreement, the Company is not
obligated to honor a notice of exercise from
your spouse, nor is the Company obligated to
recognize your spouse’s

4

 

	 	 	 
	 

	 	interest in your option in any other way.
	 
	 	 
	Retention Rights

	 	Neither your option nor this Agreement give
you the right to be retained by the Company
(or any parent, Subsidiaries or Affiliates)
in any capacity. The Company (and any
parent, Subsidiaries or Affiliates) reserve
the right to terminate your Service at any
time and for any reason.
	 
	 	 
	Shareholder Rights

	 	You, or your estate or heirs, have no rights
as a shareholder of the Company until a
certificate for your option’s shares has
been issued (or an appropriate book entry
has been made). No adjustments are made for
dividends or other rights if the applicable
record date occurs before your stock
certificate is issued (or an appropriate
book entry has been made), except as
described in the Plan.
	 
	 	 
	Forfeiture of Rights

	 	If you should take actions in competition
with the Company, the Company shall have the
right to cause a forfeiture of your rights,
including, but not limited to, the right to
cause: (i) a forfeiture of any outstanding
option, and (ii) with respect to the period
commencing twelve (12) months prior to your
termination of Service with the Company and
ending twelve (12) months following such
termination of Service (A) a forfeiture of
any gain recognized by you upon the exercise
of an option or (B) a forfeiture of any
Stock acquired by you upon the exercise of
an option (but the Company will pay you the
option price without interest). Unless
otherwise specified in an employment or
other agreement between the Company and you,
you take actions in competition with the
Company if you directly or indirectly, own,
manage, operate, join or control, or
participate in the ownership, management,
operation or control of, or are a
proprietor, director, officer, stockholder,
member, partner or an employee or agent of,
or a consultant to any business, firm,
corporation, partnership or other entity
which competes with any business in which
the Company or any of its Affiliates is
engaged during your employment or other
relationship with the Company or its
Affiliates or at the time of your
termination of Service. Under the prior
sentence, ownership of less than 1% of the
securities of a public company shall not be
treated as an action in competition with the
Company.
	 
	 	 
	Adjustments

	 	In the event of a stock split, a stock
dividend or a similar change in the Stock,
the number of shares covered by this option
and the option price per share shall be
adjusted (and rounded down to the nearest
whole number) if required pursuant to the
Plan. Your option shall be subject to the
terms of the agreement of merger,
liquidation or reorganization in the event
the Company is subject to

5

 

	 	 	 
	 

	 	such corporate activity.
	 
	 	 
	Applicable Law

	 	This Agreement will be interpreted and
enforced under the laws of the State of
Delaware, other than any conflicts or choice
of law rule or principle that might
otherwise refer construction or
interpretation of this Agreement to the
substantive law of another jurisdiction.
	 
	 	 
	The Plan

	 	The text of the Plan is incorporated in this
Agreement by reference. Certain capitalized
terms used in this Agreement are defined in
the Plan, and have the meaning set forth in
the Plan.
	 
	 	 
	 

	 	This Agreement and the Plan constitute the
entire understanding between you and the
Company regarding this option. Any prior
agreements, commitments or negotiations
concerning this option are superseded.
	 
	 	 
	Data Privacy

	 	In order to administer the Plan, the Company
may process personal data about you. Such
data includes but is not limited to the
information provided in this Agreement and
any changes thereto, other appropriate
personal and financial data about you such
as home address and business addresses and
other contact information, payroll
information and any other information that
might be deemed appropriate by the Company
to facilitate the administration of the
Plan.
	 
	 	 
	 

	 	By accepting this option, you give explicit
consent to the Company to process any such
personal data. You also give explicit
consent to the Company to transfer any such
personal data outside the country in which
you work or are employed, including, with
respect to non-U.S. resident Optionees, to
the United States, to transferees who shall
include the Company and other persons who
are designated by the Company to administer
the Plan.
	 
	 	 
	Consent to Electronic Delivery

	 	The Company may choose to deliver certain
statutory materials relating to the Plan in
electronic form. By accepting this option
grant you agree that the Company may deliver
the Plan prospectus and the Company’s annual
report to you in an electronic format. If
at any time you would prefer to receive
paper copies of these documents, as you are
entitled to, the Company would be pleased to
provide copies. Please contact ___at
___to request paper copies of these
documents.
	 
	 	 
	Certain Dispositions

	 	If you sell or otherwise dispose of Stock
acquired pursuant to the exercise of this
option sooner than the one year anniversary
of the date you acquired the Stock, then you
agree to notify the Company in writing of
the date of sale or disposition, the number
of share of Stock sold or disposed of and
the sale price per share within 30

6

 

	 	 	 
	 

	 	days of such sale or disposition.

      By signing the cover sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan.

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}]]