Document:

EX 4.11 BCH 2006 Equity Incentive Plan

EXHIBIT 4.11

Bridge Capital Holdings
2006 Equity Incentive Plan
Adopted by the Board of Directors on February 16, 2006
Approved by the Shareholders on May 18, 2006

		
	1.
	Purpose. The 2006 Equity Incentive Plan (the “Plan”) of Bridge Capital Holdings, a California corporation (the “Company”), is intended to encourage ownership of Stock by employees and directors of the Company and Affiliates and to provide additional incentive for them to promote the success of the Company’s business.  Awards under the Plan may also be made to Advisors and Consultants where appropriate.  The Plan is intended to be an incentive stock option plan within the meaning of Section 422 of the Code, but not all Awards are required to be Incentive Options.

2.Definitions. As used in the Plan, the following terms shall have the following meanings:
2.1Accelerate, Accelerated, and Acceleration means: 
(a) that the Award will become exercisable or the compensation under the Award will become payable, in whole or in part, prior to the time it otherwise would pursuant to its terms; and
(b) when used with respect to an Award subject to a Risk of Forfeiture, that the Risk of Forfeiture otherwise applicable to such Award shall expire with respect to some or all of the Award then still otherwise subject to the Risk of Forfeiture.  
2.2Acquisition means a merger or consolidation of the Company with or into another person or the sale, transfer, or other disposition of all or substantially all of the Company’s assets to one or more other persons in a single transaction or series of related transactions.
2.3Advisor means natural persons who provide bona fide services to the Company otherwise than in connection with the offer or sale of securities in a capital-raising transaction, and who do not directly or indirectly promote or maintain a market for the Company's securities, or such other persons to whom the Company hereafter may be permitted by the SEC to offer and sell securities on Form S-8, or on any similar form adopted in the future.
2.4Affiliate means any corporation, partnership, limited liability company, business trust, or other entity controlling, controlled by or under common control with the Company.
2.5Award means any grant or sale pursuant to the Plan of Options, Stock Appreciation Rights, Restricted Stock Purchase Awards, Restricted Stock Units, Performance Units or Stock Grants.
2.6Award Agreement means an agreement between the Company and a Participant, setting forth the terms and conditions of an Award.
2.7Board means the Board of Directors of the Company.
2.8Change of Control means and shall be deemed to have occurred if:
(a) any one person, or more than one person acting as a group, acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company; 
(b) one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group), ownership of stock possessing 35% or more of the total voting power of the stock of the Company; 

(c) a majority of the members of the Board of Directors of the Company is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board of Directors prior to the date of appointment or election; or 
(d) one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group), assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all assets of the Company immediately prior to such acquisition or acquisitions.  For purposes of the preceding clause (d), there is no acquisition of assets if the assets are transferred to:  
(i) a shareholder of the Company in exchange for or with respect to its stock; 

(ii) an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company; 

(iii) a person, or more than one person acting as a group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company; or 

(iv) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in the preceding clause (iii).

2.9Code means the Internal Revenue Code of 1986, as amended, or any successor statutes thereto, and any regulations issued from time to time thereunder.
2.10Committee means the Compensation Committee of the Board, which in general is responsible for the administration of the Plan, as provided in Section 5.  For any period during which no such committee is in existence, “Committee” means the Board, and all authority and responsibility assigned to the Committee under the Plan shall be exercised, if at all, by the Board. In the discretion of the Board, the Committee may consist solely of two or more Outside Directors, in accordance with Section 162(m) of the Code, or solely of two or more Non-Employee Directors, in accordance with Rule 16b-3 under the Exchange Act. In addition, the Board or the Committee, in its discretion, may delegate to a committee of two or more persons, who may but need not be Outside Directors or Non-Employee Directors: 
(a) the authority to grant Awards to eligible persons who are either: 

(i) not then Covered Employees and are not expected to be Covered Employees at the time of recognition of income resulting from such Award, or 

(ii) not persons with respect to whom the Company wishes to comply with Section 162(m) of the Code, and/or 

(b) the authority to grant Awards to eligible persons who are not then subject to Section 16 of the Exchange Act.

2.11Consultant means natural persons who provide bona fide services to the Company otherwise than in connection with the offer or sale of securities in a capital-raising transaction, and who do not directly or indirectly promote or maintain a market for the Company's securities, or such other persons to whom the Company hereafter may be permitted by the SEC to offer and sell securities on Form S-8, or on any similar form adopted in the future.
2.12Continuous Service means the absence of any interruption or termination of service as an employee or director of the Company or any Subsidiary.  Continuous Service shall not be considered interrupted during any period of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company and any Parent, Subsidiary or successor of the Company.  Military or sick leave or other public (such as jury duty) or personal leave approved by an authorized representative of the Company shall not be deemed an interruption or termination of Continuous Service, provided that it does not exceed the longer of 90 days or the period during which the absent Participant’s reemployment rights, if any, are guaranteed by statute or by contract.
2.13Covered Employee means an employee who is a “covered employee” within the meaning of Section 162(m) of the Code.

2.14Effective Date means February 16, 2006, the date the Plan was approved by the Board.
2.15Eligible Participant means any member of the board of directors, employee, Advisor or Consultant of the Company or Affiliate.
2.16Exchange Act means the Securities Exchange Act of 1934, as amended.
2.17Exercise Price means the price at which an Option or Stock Appreciation Right may be exercised.
2.18Grant Date means the date as of which an Award is granted and in the case of an Option, the date on which installments under the Option begin to accrue.
2.19Incentive Option means an Option which by its terms is to be treated as an “incentive stock option” within the meaning of Section 422 of the Code.
2.20Market Value means the fair market value of a share of Stock on a particular date determined by such reasonable valuation methods or procedures as may be established by the Committee.  Unless otherwise determined by the Committee, the Market Value of a share of Stock as of any date is the closing price as reported on the Nasdaq Capital Market (or on any national securities exchange or other established market on which or through which the Stock is then traded) for that date or, if no closing price is reported for that date, the closing price on the next preceding date for which a closing price was reported.
2.21Nonstatutory Option means any Option that is not an Incentive Option.
2.22Option means an Incentive Option or a Nonstatutory Option.
2.23Optionee means a Participant to whom an Option shall have been granted under the Plan or to whom an Option has been transferred pursuant to Section 6.4.
2.24Parent means a parent corporation of the Company, whether now or hereafter existing, as defined by Section 424(e) of the Code.
2.25Participant means any recipient or Permitted Transferee of an outstanding Award or of securities issued pursuant to an Award.
2.26Performance Criteria means the criteria that the Committee selects for purposes of establishing the Performance Goal or Performance Goals for a Participant for a Performance Period.  The Performance Criteria used to establish Performance Goals are limited to:  pre- or after-tax net earnings, sales growth, operating earnings, operating cash flow, return on net assets, return on shareholders’ equity, return on assets, return on capital, Stock price growth, shareholder returns, gross or net profit margin, earnings per share, price per share of Stock, and market share, any of which may be objectively measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group.  The Committee will, in the manner and within the time prescribed by Section 162(m) of the Code in the case of Qualified Performance-Based Awards, objectively define the manner of calculating the Performance Criteria it selects to use for such Performance Period for such Participant.
2.27Performance Goals means the written goals established by the Committee for a Participant during a Performance Period for such Participant based upon the Performance Criteria.  Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or the performance of a division, business unit, Subsidiary, or an individual.
2.28Performance Period means the one or more periods, which may be of varying and overlapping durations, selected by the Committee, over which the attainment of one or more Performance Goals will be measured for purposes of determining a Participant’s right to, and the payment of, a Qualified Performance-Based Awards or other performance-based Award under the Plan.
2.29Performance Unit means a right granted to a Participant under Section 7.5 to receive cash, Stock or other Awards, the payment of which is contingent on achieving Performance Goals established by the Committee.
2.30Permitted Transferee means any of the persons or entities to which certain awards may be transferred as provided in Section 6.4 of the Plan.

2.31person means an individual, a corporation, a partnership, a limited liability company, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
2.32Qualified Performance-Based Awards means Awards intended to qualify as “performance-based compensation” under Section 162(m) of the Code as set forth in Section 7.7.  
2.33Restricted Stock Purchase Award means an Award of Restricted Stock pursuant to Section 7.3 of the Plan.
2.34Restricted Stock Unit Award means a right to receive shares of Stock which is granted pursuant to the terms and conditions of Section 7.4.
2.35Restriction Period means the period of time, established by the Committee in connection with a Restricted Stock Purchase Award, Restricted Stock Unit Award or Performance Unit Award during which the Award is subject to a Risk of Forfeiture described in the applicable Award Agreement.
2.36Risk of Forfeiture means a limitation on the right of the Participant to receive and retain compensation under the Plan, including a right of the Company to reacquire such compensation, arising because of the occurrence or non-occurrence of specified events or conditions.
2.37Securities Act means the Securities Act of 1933, as amended.
2.38SEC means the U.S. Securities and Exchange Commission.
2.39Stock means common stock, no par value, of the Company, and such other securities as may be substituted for Stock pursuant to Section 8.
2.40Stock Appreciation Right means a right to receive in cash any excess in the Market Value of a share of Stock on the date of exercise (except as otherwise provided in Section 7.2(f)) over a specified Exercise Price.
2.41Stock Grant means the grant of Stock not subject to restrictions or other forfeiture conditions under Section 7.6.
2.42Subsidiary means a subsidiary corporation of the Company, whether now or hereafter existing, as defined in Section 424(f) of the Code.
2.43Ten Percent Owner means a person who owns, or is deemed within the meaning of Section 422(b)(6) of the Code to own, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company (or any Parent or Subsidiary of the Company).  Whether a person is a Ten Percent Owner shall be determined with respect to an Option based on the facts existing immediately prior to the Grant Date of the Option.
3.Term of the Plan. Unless the Plan shall have been earlier terminated by the Board, Awards may be granted from the time the Plan is approved by the Board until immediately prior to the tenth anniversary of the Effective Date.  Awards granted pursuant to the Plan within that period shall not expire solely by reason of the termination of the Plan.  Awards are not effective until the shareholders have approved the Plan.
4.Stock Subject to the Plan.  
(a)    Share Reserve.  Subject to Section 8, the maximum aggregate number of shares of Stock which may be issued pursuant to or subject to Awards is 500,000, plus an annual increase to be automatically added on the first day of the Company’s fiscal year beginning in 2007 equal to the lowest of (i) three percent of the number of outstanding shares of Stock on such day, (ii) 400,000 and (iii) such other amount as the Board upon recommendation of the Committee may specify prior to the date such annual increase is to take effect. 
(b)    Sub-limit Reserve for Incentive Options.  Subject to Section 8, the maximum aggregate number of shares of Stock within the Share Reserve which may be issued pursuant to or subject to Incentive Options is 500,000, plus an annual increase to be automatically added on the first day of the Company’s fiscal year beginning in 2007 equal to the lowest of (i) three percent of the number of outstanding shares of Stock on such day, (ii) 400,000 and (iii) such other amount as the Board upon recommendation of the Committee may specify prior to the date such annual increase is to take effect.  The Company may instead use some or all of this Sub-limit of shares for Awards other than Incentive Options, in which case the number of shares available for grant as Incentive Options will decrease accordingly.

(c)  Reversion of Shares to the Share Reserve.  
(i)  If any Option or Stock Appreciation Right expires, terminates, or is cancelled for any reason without having been exercised in full, or if any other Award is forfeited by the Participant, the shares of Stock to which the Award relates which are not acquired by the Optionee or which are forfeited by the Participant shall again be available for Awards to be granted under the Plan.  To the extent an Option or Stock Appreciation Right is exercised, the related number of underlying shares shall not then become available for future issuance under the Plan. 

(ii)  Shares of Stock issued pursuant to Awards which are later repurchased by the Company pursuant to any repurchase right (other than the repurchase of shares that have not vested and are subject to forfeiture prior to vesting) that the Company may have shall not be available for future grant of Awards under the Plan.  

(iii)  Exercise or settlement of any Award shall not count against the foregoing limitations except to the extent settled in the form of Stock, provided that to the extent a  Stock Appreciation Right is exercised, the related number of underlying shares shall not then become available for future issuance under the Plan.  If any shares subject to an Award are not delivered to a Participant because such shares are withheld for the payment of taxes or the Award is exercised through a reduction of shares subject to the Award through the “net exercise” feature described herein, the number of shares that are not delivered to the Participant will remain available for issuance under the Plan. 

(iv)  If the Exercise Price of any Award is satisfied by tendering shares of Stock held by the Participant, then the number of shares so tendered will be available for issuance under the Plan. 

(d)  Source of Shares.  The shares of Stock subject to the Plan may be authorized but not previously issued shares or shares reacquired on the open market or otherwise reacquired by the Company and restored to the status of unissued shares.
		
	5.
	Administration. 

(a)  The Plan shall be administered by the Committee; provided, however, that at any time and on any one or more occasions the Board may itself exercise any of the powers and responsibilities assigned the Committee under the Plan and when so acting shall have the benefit of all of the provisions of the Plan pertaining to the Committee’s exercise of its authorities hereunder.  
(b)  Subject to the provisions of the Plan, the Committee shall have complete authority, in its discretion, to make or to select the manner of making all determinations with respect to each Award to be granted by the Company under the Plan, including the Eligible Participant to receive the Award and the form of Award.  In making such determinations, the Committee may take into account the nature of the services rendered by Eligible Participants, their present and potential contributions to the success of the Company and Affiliates, and such other factors as the Committee in its discretion shall deem relevant.  
(c)  Subject to the provisions of the Plan, the Committee shall also have complete authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it, to determine the terms and provisions of the respective Award Agreements (which need not be identical), and to make all other determinations necessary or advisable for the administration of the Plan.  The Committee’s determinations made in good faith on matters referred to in the Plan shall be final, binding and conclusive on all persons having or claiming any interest under the Plan or an Award made pursuant hereto.
		
	6.
	Authorization of Grants.

6.1Eligibility.  The Committee may grant from time to time and at any time prior to the termination or expiration of the Plan one or more Awards, either alone or in combination with any other Awards, to any Eligible Participant.  However, only employees of the Company, and of any Parent or Subsidiary of the Company, shall be eligible for the grant of an Incentive Option.  Further, in no event shall the number of shares of Stock covered by Options or other Awards granted to any one person in any one calendar year exceed 250,000 shares of Stock subject to the Plan.
6.2General Terms of Awards.  Each grant of an Award shall be subject to all applicable terms and conditions of the Plan (including but not limited to any specific terms and conditions applicable to that type of Award in the following Sections), and such other terms and conditions, not inconsistent with the terms of the Plan, as the Committee may prescribe.  No prospective Participant shall have any rights with respect to an Award, unless and until such Participant has (a) (i) executed an Award Agreement with respect to such Award and delivered a fully executed copy of such Award Agreement to the 

Company, or (ii) otherwise affirmatively assented to the terms and conditions of an Award Agreement with respect to such Award, including by “click through” agreement, pursuant to procedures and guidelines approved by the Committee, and (b) otherwise complied with the applicable terms and conditions of such Award.
6.3Effect of Termination of Employment, Disability or Death. 
(a)Termination of Employment, Etc.  Unless the Committee shall provide otherwise (consistent with applicable law and other relevant restrictions) with respect to any Award, if the Participant’s Continuous Service ends for any reason other than by total disability or death, including because of the Participant’s employer ceasing to be an Affiliate, (i) any outstanding Option or Stock Appreciation Right of the Participant shall cease to be exercisable in any respect 90 days following that event and, for the period it remains exercisable following that event, shall be exercisable only to the extent exercisable at the date of that event, subject to the condition that no Option or Stock Appreciation Right shall be exercised after its expiration in accordance with its terms, and (ii) any other outstanding Award of the Participant shall be forfeited or otherwise subject to return to or repurchase by the Company on the terms specified in the applicable Award Agreement.
(b)Disability of Participant.  Unless the Committee shall provide otherwise (consistent with applicable law and other relevant restrictions) with respect to any Award, if a Participant’s Continuous Service ends due to disability (as defined in Section 22(e)(3) of the Code), and such Participant was in Continuous Service from the Grant Date until the date of termination of service, (i) any outstanding Option or Stock Appreciation Right of the Participant shall cease to be exercisable in any respect twelve months following the date of termination of Continuous Service and, for the period it remains exercisable following that event, shall be exercisable only to the extent exercisable at the date of that event, subject to the condition that no Option or Stock Appreciation Right shall be exercised after its expiration in accordance with its terms, and (ii) any other outstanding Award of the Participant shall be forfeited or otherwise subject to return to or repurchase by the Company on the terms specified in the applicable Award Agreement.
(c)Death of Participant.  Unless the Committee shall provide otherwise (consistent with applicable law and other relevant restrictions) with respect to any Award, in the event of the death of a Participant who was in Continuous Service from the Grant Date until the date of death, (i) any outstanding Option or Stock Appreciation Right of the Participant shall cease to be exercisable in any respect twelve months following that event and, for the period it remains exercisable following the date of death, shall be exercisable by such Participant’s estate or by a person who acquired the right to exercise such Award by bequest, inheritance or otherwise as a result of the Participant’s death, but only to the extent exercisable at the date of death, subject to the condition that no Option or Stock Appreciation Right shall be exercised after its expiration in accordance with its terms, and (ii) any other outstanding Award of such Participant shall be forfeited or otherwise subject to return to or repurchase by the Company on the terms specified in the applicable Award Agreement.  However, an Option or Stock Appreciation Right held by a Participant who was a non-employee Director at the time of death shall accelerate and become fully exercisable on the date of death, and remain exercisable until the date of its expiration pursuant to its terms.
(d)Extension of Termination Date.  An Award Agreement may provide that if the exercise of the Award following the termination of the Participant’s Continuous Service would be prohibited at any time solely because the issuance of shares of Stock would violate the registration or qualification requirements under the Securities Act or other relevant laws, then the Award will terminate on the earlier of (i) the expiration of the term of the Award set forth in the Award Agreement or (ii) the expiration of a period of three consecutive months after the termination of the Participant’s Continuous Service during which the exercise of the Award would not be in violation of such registration or qualification requirements, but only to the extent exercisable at the date of such termination, subject to the condition that no Option or Stock Appreciation Right shall be exercised after its expiration in accordance with its terms. Pursuant to the Code, any extension of the exercisability of an Incentive Option pursuant to this Section 6.3(d) will cause the Incentive Option to be treated as a Nonstatutory Option.
6.4Transferability of Awards.  Except as otherwise provided in this Section 6.4, Awards shall not be transferable, and no Award or interest therein may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.  All of a Participant’s rights in any Award may be exercised during the life of the Participant only by the Participant or the Participant’s legal representative.  Each Option shall, by its terms, be nontransferable by the Optionee other than by will or the laws of descent and distribution, and shall be exercisable during his or her lifetime only by the Optionee; provided, however, that any Nonstatutory Option may be transferred by the Optionee to any member of the Optionee's immediate family, to a partnership the members of which are all members of the Optionee's immediate family, or to a family trust the beneficiaries of which are all members of the Optionee's immediate family.  “Immediate family” includes any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships and any individual sharing the Participant’s household (other than a tenant or employee); provided, that any such transfer is without payment of any value whatsoever.  

6.5Cancellation of Awards For Improper Acts of Participant.  If a Participant is determined by the Board to have committed an act of embezzlement, fraud, dishonesty, breach of fiduciary duty to the Company or its shareholders, or to have deliberately disregarded the rules of the Company which resulted in loss, damage or injury to the Company, or if a Participant is removed from any office of the Company by any regulatory agency, or if a director Participant is removed from office pursuant to Section 302 or Section 304 of the California Corporations Code, neither the Participant nor the Participant's estate shall be entitled to exercise any Option with respect to any Stock whatsoever after termination of employment or officer status, whether or not after termination of employment or officer status the Participant may receive payment from the Company for vacation pay, for services rendered prior to termination, for services for the day on which termination occurred, for salary in lieu of notice, or for other benefits. In making such determination the Board shall act fairly and shall give the Participant an opportunity to appear and be heard at a hearing before the full Board and present evidence on the Participant's behalf. For the purpose of this section, termination of employment or officer status shall be deemed to occur when the Company dispatches notice or advice to the Participant that the Participant's employment or status as an officer is terminated and not at the time of the Participant's receipt thereof. 
		
	7.
	Specific Terms of Awards.

7.1Options.
(a)Date of Grant.  The granting of an Option shall take place at the time specified in the Award Agreement.
(b)Exercise Price.  Unless otherwise provided by law, the per share price at which Stock may be acquired under each Incentive Option and each Nonstatutory Stock Option shall be not less than 100% of the Market Value of a share of Stock on the Grant Date, or not less than 110% of the Market Value of a share of Stock on the Grant Date if the Optionee is a Ten Percent Owner.
(c)Exercise Period.  No Incentive Option may be exercised on or after the tenth anniversary of the Grant Date, or on or after the fifth anniversary of the Grant Date if the Optionee is a Ten Percent Owner.  No Nonstatutory Option may be exercised on or after the tenth anniversary of the Grant Date. 
(d)Exercisability.  An Option may be immediately exercisable or become exercisable in such installments, cumulative or non-cumulative, as the Committee may determine.  In the case of an Option not otherwise immediately exercisable in full, the Committee may Accelerate such Option in whole or in part at any time; provided, that in the case of an Incentive Option, any such Acceleration of the Option would not cause the Option to fail to comply with the provisions of Section 422 of the Code or the Optionee consents to the Acceleration.
(e)Method of Exercise.  An Option may be exercised by the Optionee giving written notice, in the manner provided in Section 16, specifying the number of shares of Stock with respect to which the Option is then being exercised.  The notice shall be accompanied by payment in the form of cash or check payable to the order of the Company in an amount equal to the Exercise Price of the Stock to be purchased plus any applicable tax withholding or, if the Committee had so authorized upon the grant of an Incentive Option or on or after grant of a Nonstatutory Option (and subject to such conditions, if any, as the Committee may deem necessary to avoid adverse accounting or tax effects on the Company) by:
(i)delivery to the Company of Stock having a Market Value equal to the Exercise Price of the shares of Stock with respect to which the Option is then being exercised, 
(ii)a “net exercise” of the Option (as further described below), 
(iii)delivery to the Company of a cash payment made pursuant to a “cashless” exercise program (as further described below),
(iv)any other form of legal consideration that may be acceptable to the Committee.
Subject to compliance with applicable law and regulation, including but not limited to Section 402 of the Sarbanes-Oxley Act of 2002, if the Stock is traded on an established market, payment of any Exercise Price may also be made through and under the terms and conditions of any formal “cashless” exercise program authorized by the Company entailing the sale of the Stock subject to an Option in a brokered transaction (other than to the Company).  Receipt by the Company of such notice and payment in any authorized or combination of authorized means shall constitute the exercise of the Option.  Within 30 days thereafter but subject to the remaining provisions of the Plan, the Company shall deliver or cause to be delivered to the Optionee or his agent a certificate or certificates for the number of shares of Stock then being purchased.  Stock issued and paid for pursuant to this section shall be fully paid and nonassessable. 

In the case of a “net exercise” of an Option, the Company will not require a payment of the Exercise Price of the Option from the Participant but will reduce the number of shares of Stock issued upon the exercise by the largest number of whole shares that have a Market Value that does not exceed the aggregate Exercise Price. With respect to any remaining balance of the aggregate Exercise Price, the Company will accept a cash payment from the Participant. 
The number of shares of Stock underlying an Option will decrease following the exercise of such Option to the extent of (i) shares used to pay the Exercise Price of an Option under the “net exercise” feature, (ii) shares actually delivered to the Participant as a result of such exercise and (iii) shares withheld for purposes of tax withholding.
(f)Early Exercise. The Option may include a provision whereby the Participant may elect at any time before his or her Continuous Service terminates to exercise the Option as to any part or all of the shares of Stock subject to the Option prior to the full vesting of the Option. Any unvested shares of Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Committee determines to be appropriate. 
(g)Limit on Incentive Option Characterization.  An Option shall be considered to be an Incentive Option only to the extent that the number of shares of Stock for which the Option first becomes exercisable in a calendar year do not have an aggregate Market Value (as of the date of the grant of the Option) in excess of the “current limit.”  The current limit for any Optionee for any calendar year shall be $100,000 minus the aggregate Market Value at the date of grant of the number of shares of Stock available for purchase for the first time in the same year under each other Incentive Option previously granted to the Optionee under all other plans of the Company and related corporations as required by the Code and the rules thereunder.  Any Stock which would cause the foregoing limit to be violated shall be deemed to have been granted under a separate Nonstatutory Option, otherwise identical in its terms to those of the Incentive Option.  The current limit will be calculated according to the chronological order in which the Options were granted.
(h)Notification of Disposition.  Each person exercising any Incentive Option granted under the Plan shall be deemed to have covenanted with the Company to report to the Company any disposition of such shares prior to the expiration of the holding periods specified by Section 422(a)(1) of the Code and, if and to the extent that the realization of income in such a disposition imposes upon the Company federal, state, local or other withholding tax requirements, or any such withholding is required to secure for the Company an otherwise available tax deduction, promptly to remit to the Company an amount in cash sufficient to satisfy those requirements.
7.2Stock Appreciation Rights.
(a)Tandem or Stand-Alone.  Stock Appreciation Rights may be granted in tandem with an Option (at or, in the case of a Nonstatutory Option, after the award of the Option), or alone and unrelated to an Option.  Stock Appreciation Rights in tandem with an Option shall terminate to the extent that the related Option is exercised, expires or is cancelled, and the related Option shall terminate to the extent that the tandem Stock Appreciation Rights are exercised, expire or are cancelled.
(b)Exercise Price.  Stock Appreciation Rights shall have such Exercise Price as the Committee may determine which must at least be equal to Market Value on Grant Date of the Stock Appreciation Right, except that in the case of Stock Appreciation Rights in tandem with Options, the Exercise Price of the Stock Appreciation Rights shall equal the Exercise Price of the related Option.
(c)Exercise Period.  No Stock Appreciation Right may be exercised on or after the tenth anniversary of the Grant Date.
(d)Exercisability.  A Stock Appreciation Right will become exercisable in such installments, cumulative or non-cumulative, as the Committee may determine.  In the case of a Stock Appreciation Right not otherwise immediately exercisable in full, the Committee may Accelerate such Stock Appreciation Right in whole or in part at any time.
(e)Method of Exercise.  A Stock Appreciation Right may be exercised by the Optionee giving written notice, in the manner provided in Section 16, specifying the number of shares of Stock with respect to which the Stock Appreciation Right is then being exercised. 
(f)Other Terms.  Except as the Committee may deem inadvisable or inapplicable in the circumstances, Stock Appreciation Rights shall be subject to terms and conditions substantially similar to those applicable to a Nonstatutory Option.  In addition, a Stock Appreciation Right related to an Option which can only be exercised during limited periods following a Change of Control may entitle the Participant to receive an amount based upon the highest price paid or offered for Stock in any transaction relating to the Change of Control or paid during the 30-day period immediately preceding the 

occurrence of the Change of Control in any transaction reported in the stock market on which or through which the Stock is normally traded.
(g)Section 409A of the Code.  Proposed Treasury Regulations under Section 409A of the Code contain various requirements which a Stock Appreciation Right must fulfill in order to avoid being classified as "deferred compensation," and thereby triggering adverse tax consequences.  Among other requirements:
(i) compensation payable under the Stock Appreciation Right cannot be greater than the difference between the fair market value of the Stock on the Grant Date of the Stock Appreciation right and the fair market value of the Stock on the Exercise Date of the Stock Appreciation Right with respect to a number of shares fixed on or before the Grant Date of the Stock Appreciation Right; 
(ii) the Exercise Price of the Stock Appreciation Right must never be less than the fair market value of the Stock on the Grant Date for the Stock Appreciation Right, 
(iii) the Stock Appreciation Right must not include any feature for the deferral of compensation other than the deferral of recognition of income until the exercise of the Stock Appreciation Right.
Under the Plan, the Company is not limited only to granting Stock Appreciation Rights which fulfill the requirements of Section 409A.  Therefore, any Stock Appreciation Right which the Company grants which does not fulfill Section 409A of the Code may trigger adverse tax consequences for any Participant who receives such a Stock Appreciation Right.
7.3Restricted Stock Purchase Award.
(a)Purchase Price.  Shares of Restricted Stock shall be issued under a Restricted Stock Purchase Award for such consideration, in cash, other property or services, or any combination thereof, as is determined by the Committee.
(b)Issuance of Certificates.  Each Participant receiving a Restricted Stock Purchase Award, subject to Section 7.3(c), shall be issued a stock certificate in respect of such Award.  Such certificate shall be registered in the name of such Participant, and, if applicable, shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Award which includes language substantially in the following form:
The transferability of this certificate and the shares represented by this certificate are subject to the terms and conditions of the 2006 Equity Incentive Plan of the issuer and an Award Agreement entered into by the registered owner and the issuer.  Copies of such Plan and Agreement are on file in the offices of the issuer.
In lieu of issuance of certificates, at the Committee’s election, shares of Stock may be held in book entry form subject to the Company’s instructions until any restrictions relating to the Restricted Stock Purchase Award lapse.
(c)Escrow of Shares.  The Committee may require that the stock certificates evidencing Restricted Stock be held in custody by a designated escrow agent (which may but need not be the Company) until the restrictions thereon shall have lapsed, and that the Participant deliver a stock power, endorsed in blank, relating to the Stock covered by such Award.
(d)Restrictions and Restriction Period.  During the Restriction Period applicable to Restricted Stock Purchase Awards, such shares shall be subject to limitations on transferability and a Risk of Forfeiture arising on the basis of such conditions related to the performance of services, Company or Affiliate performance or otherwise as the Committee may determine and provide for in the applicable Award Agreement.  Any such Risk of Forfeiture may be waived or terminated, or the Restriction Period shortened, at any time by the Committee on such basis as it deems appropriate. 
(e)Rights Pending Lapse of Risk of Forfeiture, or Forfeiture of Award.  Except as otherwise provided in the Plan or the applicable Award Agreement, at all times prior to lapse of any Risk of Forfeiture applicable to, or forfeiture of, a Restricted Stock Purchase Award, the Participant shall have all of the rights of a shareholder of the Company, including the right to vote, and the right to receive any dividends with respect to, the Restricted Stock.  The Committee, as determined at the time the Award is made, may permit or require the payment of cash dividends to be deferred and, if the Committee so determines, reinvested in additional shares of Restricted Stock to the extent shares are available under Section 4 and otherwise to be subject to the terms of the Plan.
(f)Lapse of Restrictions.  If and when the Restriction Period expires without a prior forfeiture of the Restricted Stock Purchase Award, the certificates for such shares shall be delivered to the Participant promptly if not theretofore 

so delivered.  Restricted Stock Purchase Award may be subject to a share repurchase right or option in favor of the Company in accordance with a vesting schedule to be determined by the Committee. 
(g)Termination of Participant’s Continuous Service.  In the event that a Participant’s Continuous Service terminates, the Company will have the right, but not the obligation, to repurchase or otherwise reacquire, any or all of the shares of Restricted Stock held by the Participant under a Restricted Stock Purchase Award that have not vested as of the date of termination. At the Committee’s election, the repurchase price may be the lesser of:   (i) the fair market value on the relevant date or (ii) the Participant’s original cost.
7.4Restricted Stock Unit Awards.  
(a)A Restricted Stock Unit Award will be denominated in units equivalent to a number of shares of Stock and will represent a promise to pay the value of such units upon vesting.  Each Restricted Stock Unit Award Agreement will be in such form and will contain such terms and conditions as the Committee deems appropriate. 
(b)Vesting.  At the time of the grant of a Restricted Stock Unit Award, the Committee shall impose such restrictions or conditions to the vesting of the Restricted Stock Unit Award as it, in its discretion, deems appropriate.  
(c)Payment.  A Restricted Stock Unit Award, net of any withholding obligations, may, to the extent vested, be settled by the delivery of shares of Stock, their cash equivalent, any combination thereof or in any other form of consideration as determined by the Committee and contained in the Restricted Stock Unit Award Agreement.  
(d)Additional Restrictions.  At the time of the grant of a Restricted Stock Unit, the Committee, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Stock (or their cash equivalent) subject to a Restricted Stock Unit after the vesting of such Restricted Stock Unit.  
(e)Dividend Equivalents.  Dividend equivalents may be credited in respect of shares of Stock covered by a Restricted Stock Unit, as determined by the Committee and contained in the Restricted Stock Unit Award.  At the discretion of the Committee, such dividend equivalents may be converted into additional shares of Stock covered by the Restricted Stock Unit Award in such manner as determined by the Committee.  Any additional shares covered by the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all the terms and conditions of the underlying Restricted Stock Unit Award to which they relate.
7.5Performance Units.
(a)Character. Each Performance Unit shall entitle the recipient to the value of a specified number of shares of cash, Stock or other Awards, over the initial value for such number of shares, if any, established by the Committee at the time of grant, at the close of a specified Performance Period to the extent specified Performance Goals shall have been achieved.
(b)Earning of Performance Units. The Committee shall set Performance Goals in its discretion which, depending on the extent to which they are met within the applicable Performance Period, will determine the number and value of Performance Units that will be paid out to the Participant. After the applicable Performance Period has ended, the holder of Performance Units shall be entitled to receive payout on the number and value of Performance Units earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding Performance Goals have been achieved.
(c)Form and Timing of Payment. Payment of earned Performance Units shall be made in a single lump sum following the close of the applicable Performance Period. At the discretion of the Committee, Participants may be entitled to receive any dividends declared with respect to Stock which have been earned in connection with grants of Performance Units which have been earned, but not yet distributed to Participants.
7.6Stock Grants. Stock Grants shall be awarded solely in recognition of significant contributions to the success of the Company or Affiliates, in lieu of compensation otherwise already due or in such other limited circumstances as the Committee deems appropriate.  Stock Grants shall be made without forfeiture conditions of any kind.

7.7Qualified Performance-Based Awards.
(a)Purpose.  The purpose of this Section 7.7 is to provide the Committee the ability to qualify Awards as “performance-based compensation” under Section 162(m) of the Code.  If the Committee, in its discretion, decides to grant an Award as a Qualified Performance-Based Award, the provisions of this Section 7.7 will control over any contrary provision contained in the Plan.  In the course of granting any Award, the Committee may specifically designate the Award as intended to qualify as a Qualified Performance-Based Award.  However, no Award shall be considered to have failed to qualify as a Qualified Performance-Based Award solely because the Award is not expressly designated as a Qualified Performance-Based Award, if the Award otherwise satisfies the provisions of this Section 7.7 and the requirements of Section 162(m) of the Code and the regulations promulgated thereunder applicable to “performance-based compensation.”
(b)Authority.  All grants of Awards intended to qualify as Qualified Performance-Based Awards and determination of terms applicable thereto shall be made by the Committee or, if not all of the members thereof qualify as “Outside Directors” within the meaning of applicable IRS regulations under Section 162 of the Code, a subcommittee of the Committee consisting of such of the members of the Committee as do so qualify.  Any action by such a subcommittee shall be considered the action of the Committee for purposes of the Plan.
(c)Applicability.  This Section 7.7 will apply only to those Covered Employees, or to those persons who the Committee determines are reasonably likely to become Covered Employees in the period covered by an Award, selected by the Committee to receive Qualified Performance-Based Awards.  The Committee may, in its discretion, grant Awards to Covered Employees that do not satisfy the requirements of this Section 7.7.
(d)Discretion of Committee with Respect to Qualified Performance-Based Awards.  Options may be granted as Qualified Performance-Based Awards in accordance with Section 7.1, except that the Exercise Price of any Option intended to qualify as a Qualified Performance-Based Award shall in no event be less that the Market Value of the Stock on the date of grant.  With regard to other Awards intended to qualify as Qualified Performance-Based Awards, such as Restricted Stock, the Committee will have full discretion to select the length of any applicable Restriction Period, the kind or level of the applicable Performance Goal, and whether the Performance Goal is to apply to the Company, a Subsidiary or any division or business unit or to the individual.  Any Performance Goal or Goals applicable to Qualified Performance-Based Awards shall be objective, shall be established not later than 90 days after the beginning of any applicable Performance Period (or at such other date as may be required or permitted for “performance-based compensation” under Section 162(m) of the Code) and shall otherwise meet the requirements of Section 162(m) of the Code, including the requirement that the outcome of the Performance Goal or Goals be substantially uncertain (as defined in the regulations under Section 162(m) of the Code) at the time established.
(e)Payment of Qualified Performance-Based Awards.  A Participant will be eligible to receive payment under a Qualified Performance-Based Award which is subject to achievement of a Performance Goal or Goals only if the applicable Performance Goal or Goals are achieved, as determined by the Committee.  In determining the actual size of an individual Qualified Performance-Based Award, the Committee may reduce or eliminate the amount of the Qualified Performance-Based Award earned, if in its sole and absolute discretion, such reduction or elimination is appropriate. 
(f)Maximum Award Payable.  The maximum Qualified Performance-Based Award payment to any one Participant under the Plan is the number of shares of Stock set forth in Section 4, or if the Qualified Performance-Based Award is paid in cash, that number of shares multiplied by the Market Value of the Stock as of the date the Qualified Performance-Based Award is granted.
(g)Limitation on Adjustments for Certain Events.  No adjustment of any Qualified Performance-Based Award pursuant to Section 8 shall be made except on such basis, if any, as will not cause such Award to provide other than “performance-based compensation” within the meaning of Section 162(m) of the Code.
7.8Awards to Participants Outside the United States.  The Committee may modify the terms of any Award under the Plan, granted to a Participant who is, at the time of grant or during the term of the Award, resident or primarily employed outside of the United States in any manner deemed by the Committee to be necessary or appropriate in order that the Award shall conform to laws, regulations, and customs of the country in which the Participant is then resident or primarily employed, or so that the value and other benefits of the Award to the Participant, as affected by foreign tax laws and other restrictions applicable as a result of the Participant’s residence or employment abroad, shall be comparable to the value of such an Award to a Participant who is resident or primarily employed in the United States.  The Committee may establish supplements to, or amendments, restatements, or alternative versions of, the Plan for the purpose of granting and administrating any such modified Award.  No such modification, supplement, amendment, restatement or alternative version may increase the share limit of Section 4.

7.9Award as Deferred Compensation; Limitation of Tax Liability.  Notwithstanding any other provisions of the Plan, it is not intended that any grant of an Award shall result in the deferral of compensation within the meaning of Section 409A of the Code; provided, however, that to the extent the grant of an Award would result in the deferral of compensation under Section 409A of the Code, such Award shall comply with the requirements of Section 409A of the Code.  The Company disclaims any and all liability for any taxes, penalties, interest, judgments and other amounts that a Participant may incur as a result of or related to Awards, under Section 409A of the Code or other provisions of law or interpretations thereof.
8.Adjustment Provisions.
8.1Adjustment for Corporate Actions. All of the share numbers set forth in Section 4 reflect the capital structure of the Company as of the Effective Date.  Subject to Section 8.2, if subsequent to the Effective Date the outstanding number of shares of Stock (or any other securities covered by the Plan by reason of the prior application of this Section) are increased, decreased, or exchanged for a different number or kind of shares or other securities, or if additional shares or new or different shares or other securities are distributed with respect to such outstanding Stock, through merger, consolidation, sale of all or substantially all the property of the Company, reorganization, combination, recapitalization, reclassification, stock dividend, stock split, reverse stock split, or other similar distribution of the Company’s equity securities without the receipt of consideration by the Company, an appropriate and proportionate adjustment will be made in (i) the maximum numbers and kinds of shares provided in Section 4, (ii) the numbers and kinds of shares or other securities subject to the then outstanding Awards, (iii) the Exercise Price for each share or other unit of any other securities subject to then outstanding Awards (without change in the aggregate purchase price as to which such Awards remain exercisable), and (iv) the repurchase price of each share of Restricted Stock then subject to a Risk of Forfeiture in the form of a Company repurchase right.
8.2Treatment in Certain Acquisitions.
(a)Subject to any provisions of then outstanding Awards granting different rights to the holders thereof, in the event of an Acquisition constituting a Change of Control in which some or all outstanding Awards are not Accelerated, any then outstanding Awards shall nevertheless Accelerate to the extent not assumed or replaced by comparable Awards referencing shares of the capital stock of the successor or acquiring entity or the entity in control of such successor or acquiring entity, and at the effective time of such Acquisition (or after a reasonable period following such Acquisition, as determined by the Committee) terminate. As to any one or more outstanding Awards which are not otherwise Accelerated in full by reason of such Acquisition, the Committee may also, either in advance of such Acquisition or at the effective time thereof and upon such terms as it may deem appropriate, provide for the Acceleration of such outstanding Awards in the event that the employment of the Participants should subsequently terminate following such Acquisition. Each outstanding Award that is assumed in connection with such Acquisition, or is otherwise to continue in effect subsequent to such Acquisition, will be appropriately adjusted, immediately after such Acquisition, as to the number and class of securities and other relevant terms in accordance with Section 8.1. 
(b)For the purposes of this Section 8.2, an Award shall be considered assumed or replaced by a comparable Award if, following the Acquisition constituting a Change of Control, the replacement award confers the right to receive, for each share of Stock subject or relating to the Award immediately prior to such Acquisition:
(i)  the consideration (whether stock, cash or other securities or property) received in such Acquisition by holders of Stock on the effective date of such Acquisition (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Stock); provided, however, that if such consideration received in such Acquisition was not solely common stock of the successor corporation or its Parent or Subsidiary, the Committee may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Award for each share of Stock subject to the Award to be solely common stock of the successor corporation or its Parent or Subsidiary equal in fair market value to the per share consideration received by holders of Stock in such Acquisition; or 
(ii) in the case of Awards which are payable otherwise than in Stock or other securities of the Company or other property, the same consideration which the Participant would have been entitled to receive had no such Acquisition occurred.

8.3Dissolution or Liquidation.  Upon dissolution or liquidation of the Company, other than as part of an Acquisition or similar transaction, (a) each outstanding Option and Stock Appreciation Right shall terminate, but the Optionee shall have the right, immediately prior to such dissolution or liquidation, to exercise the Option to the extent exercisable on the date of dissolution or liquidation; (b) each share of Restricted Stock that is subject to a Risk of Forfeiture immediately prior to such dissolution or liquidation may, at the election of the Company, be forfeited by the Company prior to such dissolution or 

liquidation pursuant to the terms of the applicable Award Agreement; and (c) subject to subparts (a) and (b) of this Section 8.3, each other outstanding Award shall be forfeited.
8.4Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events.  In the event of any corporate action not specifically covered by the preceding sections, including but not limited to an extraordinary cash distribution on Stock, a corporate separation or other reorganization or liquidation, the Committee may make such adjustment of outstanding Awards and their terms, if any, as it, in its sole discretion, may deem equitable and appropriate in the circumstances.  The Committee may make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in this Section 8.4) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or to provide for or preserve the appropriate tax benefits to the Company.
8.5Related Matters.  Any adjustment in Awards made pursuant to this Section 8 shall be determined and made, if at all, by the Committee and shall include any correlative modification of terms, including of Option Exercise Prices, rates of vesting or exercisability, Risks of Forfeiture, applicable repurchase prices for Restricted Stock, and Performance Goals and other financial objectives which the Committee may deem necessary or appropriate so as to ensure the rights of the Participants in their respective Awards are not substantially diminished nor enlarged as a result of the adjustment and corporate action other than as expressly contemplated in this Section 8.  
8.6Fractional Shares Prohibited. No fraction of a share shall be purchasable or deliverable in payment of an Award, but in the event any adjustment hereunder of the number of shares covered by an Award shall cause such number to include a fraction of a share, such number of shares shall be adjusted to the nearest smaller whole number of shares.
9.Settlement of Awards
9.1Violation of Law.  Notwithstanding any other provision of the Plan or the relevant Award Agreement, if, at any time, in the reasonable opinion of the Company, the issuance of Stock covered by an Award may constitute a violation of applicable law, rule, regulation or any listing standard of any market on which or through which the Company’s securities may be traded, then the Company may delay such issuance and the delivery of a certificate for such shares until compliance with such provisions has been obtained.
9.2Corporate Restrictions on Rights in Stock. Any securities to be issued pursuant to Awards shall be subject to all restrictions upon the transfer thereof which may be now or hereafter imposed by the articles of incorporation and bylaws of the Company and applicable law.  
9.3Investment Representations.  The Company shall be under no obligation to issue any securities covered by any Award unless they have been effectively registered under the Securities Act, or the Participant or his or her Permitted Transferee shall have made such written representations to the Company or otherwise (which the Company believes may be reasonably relied upon) as the Company may deem necessary or appropriate for purposes of confirming that the issuance of such securities will be exempt from the registration requirements of the Securities Act and any applicable state securities laws and otherwise in compliance with all applicable laws, rules and regulations, including but not limited to that the Participant or his or her Permitted Transferee is acquiring the securities for such person’s own account for the purpose of investment and not with a view to, or for sale in connection with, the distribution of any such securities.  The Company may require a Participant or his or her Permitted Transferee, as a condition of exercising or acquiring securities under any Award or transferring any award as may be permitted by the Plan, (i) to give written assurances satisfactory to the Company as to the Participant’s or his or her Permitted Transferee’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters, and that the Participant or his or her Permitted Transferee is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant or his or her Permitted Transferee is acquiring securities subject to the Award for the Participant’s or his or her Permitted Transferee’s own account and not with any present intention of selling or otherwise distributing the securities.
9.4Registration.  
(a)  SEC Registration.  If the Company shall deem it necessary or desirable to register under the Securities Act or other applicable statutes any securities issued or to be issued pursuant to Awards, or to qualify any such securities for exemption from the Securities Act or other applicable statutes, then the Company shall take such action at its own expense.  The Company may require from each Participant, or each holder of securities acquired pursuant to the Plan, such information in 

writing for use in any registration statement, prospectus, preliminary prospectus or offering circular as is reasonably necessary for that purpose and may require reasonable indemnity to the Company and its Affiliates and their respective officers, directors, agents, advisors and employees from that holder against all losses, claims, damage and liabilities arising from use of the information so furnished and caused by any untrue statement of any material fact therein or caused by the omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made.  
(b)  Lock-Ups.  In addition, the Company may require of any person holding an Award or securities issued pursuant to an Award that such person agree that, without the prior written consent of the Company, such person will not sell, make any short sale of, lend, grant any option for the purchase of, pledge or otherwise encumber, or otherwise dispose of, any securities which were or may be issued pursuant to an Award or any interest therein during the 180-day period commencing on the effective date of the registration statement (or commencing on the closing date of any offering of the Company’s securities registered pursuant to a shelf registration statement, whichever is applicable) relating to an underwritten public offering. Without limiting the generality of the foregoing provisions of this Section 9.5, if in connection with any underwritten public offering of securities of the Company the managing underwriter of such offering requests that the Company’s directors and officers enter into a lock-up agreement containing provisions that are more restrictive than the provisions set forth in the preceding sentence, then (a) to the extent requested by the Company, each holder of securities acquired pursuant to the Plan (regardless of whether such person has complied or complies with the provisions of clause (b) below) shall be bound by, and shall be deemed to have agreed to, the same lock-up terms as those to which the Company’s directors and officers are required to adhere; and (b) at the request of the Company, each such person shall execute and deliver a lock-up agreement in form and substance equivalent to that which is required to be executed by the Company’s directors and officers.
9.5Placement of Legends; Stop Orders; etc.  Each certificate for securities to be issued pursuant to Awards may bear a reference to the investment representation made in accordance with Section 9.4 in addition to any other applicable restriction under the Plan, the terms of the Award and, if applicable, to the fact that no registration statement has been filed with the SEC and no registration or qualification has been filed under any state securities or blue sky laws in respect to such securities.  All certificates for Stock or other securities delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other requirements of any stock exchange or market on which or through which the Company’s securities are then traded, and any applicable federal or state securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.
9.6Tax Withholding. Whenever shares of Stock are issued or to be issued pursuant to Awards, the Company shall have the right to require the Participant to remit to the Company an amount sufficient to satisfy federal, state, local or other withholding tax requirements if, when, and to the extent required by law (whether so required to secure for the Company an otherwise available tax deduction or otherwise) prior to the delivery of any certificate or certificates for such shares.  The obligations of the Company under the Plan shall be conditional on satisfaction of all such withholding obligations and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant.  However, in such cases Participants may elect, subject to the approval of the Committee, to satisfy an applicable withholding requirement, in whole or in part, by having the Company withhold shares of Stock from Stock otherwise due to the Participant in payment of an Award, or to submit shares of Stock previously owned by the Participant, to satisfy their tax obligations. Participants may only elect to have shares withheld having a Market Value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed as a result of the transaction.  All elections shall be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the Committee deems appropriate.
10.Reservation of Stock. The Company shall at all times during the term of the Plan and any outstanding Awards granted hereunder reserve or otherwise keep available such number of shares of Stock as will be sufficient to satisfy the requirements of the Plan (if then in effect) and the Awards, and shall pay all fees and expenses necessarily incurred by the Company in connection therewith.
11.Use of Proceeds.  Proceeds from the sale of the Company’s securities pursuant to Awards will constitute general funds of the Company.
12.Limitation of Rights in Stock; No Special Service Rights.  Subject to Section 7.3(e), a Participant shall not be deemed for any purpose to be a shareholder of the Company with respect to any of the Stock subject to an Award, unless and until a certificate shall have been issued therefor and delivered to the Participant or his/her agent.  Nothing contained in the Plan or in any Award Agreement shall confer upon any Participant any right to the continuation of such Participant’s employment or other association with the Company (or any Affiliate), or interfere in any way with the right of the Company (or 

any Affiliate), subject to the terms of any separate employment or provision of law or articles of incorporation or bylaws to the contrary, at any time to terminate such employment or other association or to increase or decrease, or otherwise adjust, the other terms and conditions of the Participant’s employment or other association with the Company and Affiliates.
13.Unfunded Status of the Plan.  The Plan is intended to constitute an “unfunded” plan for incentive compensation, and the Plan is not intended to constitute a plan subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended.  With respect to any payments not yet made to a Participant by the Company, nothing contained in this Plan shall give any such Participant any rights that are greater than those of an unsecured general creditor of the Company.  In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to make payment of Awards, provided, however, that the existence of such trusts or other arrangements is consistent with the unfunded status of the Plan.
14.Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor the submission of the Plan to the shareholders of the Company shall be construed as creating any limitations on the power of the Company to adopt such other incentive arrangements as it may deem desirable, including without limitation, the granting of stock options, restricted stock and other forms of compensation (incentive or otherwise) other than under the Plan upon such terms as the Company may determine from time to time.
15.Termination and Amendment of the Plan. 
15.1The Board may at any time terminate the Plan or make such modifications of the Plan as it shall deem advisable to the extent permitted by applicable law and the rules and regulations of any market on which or through which the Company’s securities may be traded.  Unless the Board otherwise expressly provides, no amendment of the Plan shall affect the terms of any Award outstanding on the date of such amendment unless such amendment is necessary to comply with Section 409A of the Code.  In any case, no termination or amendment of the Plan may, without the consent of any Participant, adversely affect the rights of the Participant under such Award. 
15.2The Committee may amend the terms of any Award theretofore granted, prospectively or retroactively, provided that the Award as amended is consistent with the terms of the Plan, but no such amendment shall impair the rights of the Participant without such Participant’s consent unless the impairment of such rights is necessary to comply with Section 409A of the Code.
15.3No amendment will be effective unless approved by the shareholders of the Company to the extent shareholder approval is necessary to satisfy applicable law or the rules and regulations of any market on which or through which the Company’s securities may be traded.
16.Notices and Other Communications.  Any notice, demand, request or other communication hereunder to any party shall be deemed to be sufficient if contained in a written instrument delivered in person or duly sent by first class, registered, certified or overnight mail, postage prepaid, or telecopied with a confirmation copy by first class, registered, certified or overnight mail, addressed or telecopied, as the case may be, (i) if to the Participant, at such Participant’s residence or business address last filed with the Company and (ii) if to the Company, at its principal place of business, addressed to the attention of its Chief Financial Officer, or to such other address or telecopier number or electronic mail address, as the case may be, as the addressee may have designated by notice to the addressor.  All such notices, requests, demands and other communications shall be deemed to have been received: (i) in the case of personal delivery, on the date of such delivery; (ii) in the case of mailing, when received by the addressee; (iii) in the case of facsimile transmission, when confirmed by facsimile machine report; and (iv) in the case of electronic mail, when directed to an electronic mail address at which the receiving party has consented to receive notice, provided, that such consent is deemed revoked if the sender is unable to deliver by electronic transmission two consecutive notices and such inability becomes known to the secretary or assistant secretary of the Company or to the transfer agent, or other person responsible for giving notice.
17.Governing Law. The Plan and all Award Agreements and actions taken thereunder shall be governed, interpreted and enforced in accordance with the laws of the State of California, without regard to the conflict of laws principles thereof.  
18.Miscellaneous.  
(a)  Acceleration of Exercisability and Vesting. The Committee has the power to accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest. However, the Committee’s power is subject in all cases to all applicable restrictions and limitations under Section 409A of the Code and all applicable rules and interpretations thereunder.

(b)  Final and Binding.  The terms of the Plan and of any Award, and all actions and interpretations of the Committee made pursuant to the Plan, shall be final, binding and conclusive on all persons having or claiming any interest under the Plan or an Award, including but not limited to Participants and their spouses and domestic partners, and the respective Permitted Transferees, executors, administrators, heirs, personal representatives and successors of the foregoing.Exhibit 10.1

 

CONSULTING AGREEMENT

 

	Name and Address of Company:	
        The McClatchy Company

        2100 Q Street

        Sacramento, CA 95816

	Name and Address of Consultant:	
        Robert J. Weil

        Burrell Group Inc.

        2400 Leechburg Rd,
        Suite 216

        New Kensington,
        PA  15068
        

	Start Date of Term:	
        July 1, 2015

	End Date of Term:	
        December 31, 2016

	
        Consulting Fee:
	
        In exchange
for the performance of the Consulting Services during the Term at the Company’s request, the Company shall pay (or cause
to be paid) to Consultant (i) $5,000 per month of the Term during the 2015 calendar year and (ii) $2,500 per month of the Term
during the 2016 calendar year.

	Consulting Services:	
        Consultant agrees
to provide advisory transition services to assist the Company with transition matters relating to the Company’s operations
in California, the Northwest, Texas, Kentucky, and Pennsylvania, as well as to provide such other advice, counsel, and assistance
as the Company may from time to time during the Term reasonably request and to represent the Company on industry boards for the
term of any current such assignments.

 

THIS CONSULTING AGREEMENT incorporates
the attached Terms and Conditions (collectively, this “Agreement”) and is entered into as of the Start
Date of Term noted above, by and between the Company identified above (the “Company”) and the consultant identified
above (“Consultant”). The Company desires to engage Consultant to provide the services described above (the
“Consulting Services”). The parties execute and deliver this Agreement to state their mutual obligations hereunder.

 

 

	THE MCCLATCHY COMPANY	Consultant

 

 

	By: 		 	 	
	 	Patrick Talamantes	 	Robert J. Weil	 
	 	President & Chief Executive Officer  	 	 	 

  

	By: 	 	 	 	 
	 	Billie McConkey 	 	 	 
	 	Vice President Human Resources 	 	 	 

 

	Date: 	 	 	Date: 	  	 

 

    	 

    	 

    

 

TERMS AND CONDITIONS

 

1.Consulting Services; Term.
Commencing on and ending on the dates shown above (the “Term”), Consultant hereby agrees to provide the Consulting
Services to the Company. Consultant shall perform the Consulting Services in accordance with the standard of care and diligence
normally observed in his profession. Consultant shall be expected to work as a consultant to the Company no more than eight (8)
hours per week, on average, during the Term. Upon the expiration or termination of this Agreement, this Agreement will terminate
except that Sections 3-11 will continue in full force and effect.

 

2.Consulting
Fees; Expenses.

 

(a)As compensation
for the Consulting Services, the Company shall pay Consultant the consulting fee shown above (the “Consulting Fee”)
in arrears within thirty (30) days following the end of each month of the Term. Consultant understands and agrees that no other
compensation will be provided to Consultant for the Consulting Services and that no other compensation will be due or owed to Consultant
for the Consulting Services aside from the Consulting Fee.

 

(b)During the Term,
Consultant shall also be reimbursed for reasonable travel and other expenses incurred or paid by Consultant in connection with
the performance of the Consulting Services under this Agreement, upon presentation of expense statements or vouchers or such other
supporting information as may from time to time be requested by the Company, in accordance with such policies of the Company. The
Company will reimburse Consultant within thirty (30) days of receiving supporting documentation.

 

3.Non-Disclosure.

 

(a) To the
extent that, before or after the Start Date of Term, Consultant comes into possession of any proprietary or confidential
information regarding the Company or any party related to or affiliated with the Company (such information collectively
referred to herein as “Confidential Information”), neither Consultant nor any party related to or
affiliated with Consultant shall, during the Term and thereafter, directly or indirectly disclose to any third party any
Confidential Information, except that with respect to Confidential Information relating to the Company, Consultant may
disclose such Confidential Information: (i) as required by law; (ii) to the extent it becomes generally available to the
public without breach of this Agreement; and (iii) if received lawfully from a third party that has no legal obligation to
keep such information confidential. In the event that Consultant is required by legal process to disclose Confidential
Information, Consultant shall, to the extent legally permissible to do so at any time, immediately advise the Company, and if
requested, Consultant shall cooperate with the Company to limit and shield such disclosure.

 

(b) Consultant acknowledges that
the Confidential Information may constitute material, non-public information. Consultant is aware that the securities laws of the
United States and other relevant jurisdictions prohibit any person who has material, non-public information concerning the issuer
of publicly traded securities from purchasing or selling such securities or from communicating such information to any other person
when it is reasonably foreseeable that such person is likely to purchase or sell such securities.

 

(c) The Company
and each of their respective related or affiliated parties shall be entitled to injunctive relief, to which Consultant hereby consents,
and all other relief available at law or in equity to prevent or remedy any breach of this Section 3.

 

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4.Independent
Contractor Status. The relationship of Consultant to the Company in performing the Consulting Services shall be that of an
independent contractor, and nothing contained in this Agreement shall create or imply a partnership, joint venture, agency, or
employment relationship between Consultant and the Company. Consultant shall have sole control of the manner and means of performing
the Consulting Services under this Agreement and shall complete such services in accordance with Consultant’s own means and
methods of work. Consultant is not authorized to bind the Company or to otherwise make any representation, agreement, or commitment
on behalf of the Company. The Company will not withhold any federal, state, or local payroll taxes or any state unemployment or
similar taxes in respect of the Consulting Services. Consultant will be responsible for the payment of all federal, state, or local
taxes relating to the Consulting Fees. The Company shall not provide to Consultant workers’ compensation, disability insurance,
Social Security, or unemployment compensation coverage, nor any other statutory benefit generally granted to employees of the Company.

 

5.Ownership
Rights. Any and all content, products, materials, and the like developed or created in any manner by Consultant during this
engagement relative to the Consulting Services (“Deliverables”) shall be the sole and exclusive property of
and full ownership in the Deliverables (including intellectual property rights therein) shall be vested with the Company. Consultant
hereby assigns all right, title, and interest in the Deliverables to the Company and waives all moral rights therein. The Company
shall have the exclusive right to copy, publish, perform, use, exploit, advertise, and exhibit all Deliverables, and to authorize
others to do so, in any and all media (whether known or unknown or hereafter devised) throughout the world in perpetuity as the
Company in its sole discretion shall determine. Upon the expiration or termination of the Agreement for any reason, Consultant
will promptly deliver to the Company all Deliverables, whether or not completed, as of the effective date of termination, including
drafts and copies thereof, and all Company materials that were obtained by Consultant as a result of this Agreement.

 

6.Termination.
Either party may terminate this Agreement at any time for any reason prior to the end of the Term by ten (10) business days’
written notice to the other. If the Company terminates this Agreement with ten (10) business days’ written notice but without
a material breach by Consultant, the Company will pay all consulting fees remaining for the full Term. If Consultant terminates
this Agreement with ten (10) business days’ written notice, the Company will only be responsible to pay Consultant for the
Consulting Services satisfactorily rendered through the effective date of termination in an amount prorated through the effective
date of termination. If Consultant materially breaches any provision of this Agreement, the Company may terminate the Agreement
immediately without prior written notice and will pay Consultant only for the Consulting Services satisfactorily rendered through
the effective date of termination in an amount prorated through the effective date of termination.

 

7.Indemnification.
Consultant agrees to indemnify and hold harmless the Company and its officers, directors, employees, and agents (“Indemnitees”)
against any and all loss, liability, damages, consequential damages, legal judgments, costs, and expenses, including reasonable
attorneys’ fees, which Indemnitees incur arising out of, relating to, or resulting from any and all acts or omissions of
Consultant in connection with his performance under this Agreement, including without limitation any breach by Consultant of any
provision of this Agreement.

 

8.Notices.
All notices, requests, demands, and other communications under this Agreement shall be in writing, shall be addressed to the receiving
party at the address provided above, and shall be deemed to have been duly given on the date of delivery to the party’s indicated
address. Either party may change its address for purposes of this Section 8 by giving the other party written notice of
the new address in the manner set forth above. For purposes of this Agreement, the term “in writing” includes an email
communication from the sending party to the known email address of the receiving party.

 

9.Assignment.
Consultant shall not assign any rights under this Agreement or delegate the performance of any of the Consulting Services hereunder
without the prior written consent of the Company.

 

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10.Certain Representations.
Consultant represents and warrants to the Company that (i) Consultant, and to Consultant’s knowledge, all of Consultant’s
agents and advisers, if any, are persons that Company is permitted to do business with in accordance with applicable laws; (ii)
Consultant will not employ or engage any agents or advisers that the Company is not permitted to do business with under any applicable
law; (iii) this Agreement and the Consulting Services contemplated hereby do not conflict with or violate any contractual, fiduciary,
or any other obligations that Consultant owes any other person or entity; and (iv) Consultant will comply with all applicable laws
in performing the Consulting Services.

 

11.Miscellaneous.
This Agreement (i) contains the entire understanding between the parties hereto with respect to the subject matter hereof and entirely
supersedes all prior agreements, arrangements, and communications regarding such subject matter; (ii) may be amended, waived, changed,
or modified only by an agreement in writing signed by both parties; (iii) is entered into by and between sophisticated parties
with benefit of counsel and shall be construed neutrally to effect the intent hereof; (iv) shall be interpreted (and if appropriate,
reformed) to the fullest extent possible to permit enforcement hereof; and (v) shall be governed by and interpreted in accordance
with the laws of the State of California, excluding laws pertaining to conflicts of law. With respect to any suit, action, or proceeding
relating to this Agreement, each party hereby irrevocably submits to the jurisdiction of the State and Federal courts located in
Sacramento County, State of California. Venue for any such action shall lie exclusively in the State and Federal courts located
in Sacramento County, State of California. The prevailing party in any action to enforce this Agreement shall be reimbursed all
of its costs, including reasonable attorneys’ fees and expenses, incurred in connection with such enforcement.

 

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