Document:

Exhibit 10.11

 

EXHIBIT 10.11

FIRST AMENDMENT TO LEASE

(The Campus, Carlsbad, CA)

     THIS FIRST AMENDMENT TO LEASE (“First Amendment”) is made and entered into as of the 4th day of
October, 2005, by and between PRENTISS PROPERTIES ACQUISITION PARTNERS, L.P., a Delaware limited
partnership (“Landlord”) and NTN COMMUNICATIONS,
INC., a Delaware corporation (“Tenant”).

R
E C I T A L S:

     A. Landlord and Tenant entered into that certain Standard Multi-Occupancy Lease dated as of
July 17, 2000 (the “Lease”), whereby Landlord leased to Tenant and Tenant leased from Landlord
certain office space located in that certain building located and addressed at 5966 La Place Court,
Carlsbad, California (the “Building”). By this First Amendment, Landlord and Tenant desire to
extend the Term of the Lease and to otherwise modify the Lease as provided herein.

     B. Unless otherwise defined herein, capitalized terms as used herein shall have the
same meanings as given thereto in the Lease.

     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:

A G R E E M E N T:

     1. The Premises. Landlord and Tenant hereby agree that pursuant to the Lease,
Landlord currently leases to Tenant and Tenant currently leases from Landlord that certain
office/warehouse space in the Building containing 39,397 square feet located in the Building and
known as Suite 100 (the “Premises”), as outlined on Exhibit “A” to the Lease.

     2. Extended Lease Term. The Lease Expiration Date shall be extended such that the
Lease shall terminate on June 30, 2011 (“New Termination
Date”). The period from July 1, 2006
through the New Termination Date specified above, shall be referred
to herein as the “Extended
Term.” Tenant shall not have any right to extend the Lease beyond the Extended Term;
consequently, Section C-2 of the Lease shall be null and void.

     3. Monthly Base Rent. Notwithstanding anything to the contrary in the Lease,
during the Extended Term, Tenant shall pay, in accordance with the provisions of this Section 3,
Monthly Base Rent for the Premises (in addition to all additional rent and other charges due and
payable by Tenant) as follows:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Monthly Base Rent Per
	Months of Extended Term	 	Monthly Base Rent	 	Rentable Square Foot
	1-12
	 	$	43,336.70	 	 	$	1.10	 
	13-24
	 	$	44,518.61	 	 	$	1.13	 
	25-36
	 	$	46,094.49	 	 	$	1.17	 
	37-48
	 	$	47,276.40	 	 	$	1.20	 
	49-60
	 	$	48,852.28	 	 	$	1.24	 

     4. Improvements
to the Premises. Landlord shall, at Landlord’s sole cost and
expense, using Building-standard materials and in Landlord’s Building-standard manner perform the
following work in the Premises: (i) replace the following nine (9) HVAC units serving the

 

 

Premises (WR1, EX10, EX9, EX7, WR7, NTN, EX6, WR4 and EX4) as soon as reasonably possible after
full execution and delivery of this First Amendment by Landlord and Tenant, and (ii) replace the
following three (3) HVAC units (WR6, WR5 and EX1) when Landlord determines that only such
replacement is necessary; provided, however, that Landlord acknowledges and agrees that Landlord
will be responsible for the cost of any necessary repairs (not caused by Tenant’s acts or
omissions) to these three units prior to replacement. In addition, Landlord shall, at Landlord’s
sole cost and expense, and as soon as reasonably possible after full execution and delivery of this
First Amendment, replace the condenser coils (with coated coils) in
the HVAC unit known as NTN1.
Tenant hereby acknowledges that Landlord may be performing such improvement work during the Lease
Term and/or Extended Term, and Landlord’s performance of such work shall not be deemed a
constructive eviction of Tenant, nor shall Tenant be entitled to any abatement of Rent in
connection therewith.

     5. Condition of Premises. Except as specifically set forth in Section 4 above,
Tenant hereby agrees to accept the Premises in its “as-is” condition and Tenant hereby acknowledges
that Landlord shall not be obligated to provide or pay for any improvement work or services related
to the improvement of the Premises. Tenant also acknowledges that Landlord has made no
representation or warranty regarding the condition of the Premises.

     6. Security Deposit. Tenant has previously deposited with Landlord Forty-Five
Thousand One Hundred Sixty-Seven and 14/100 Dollars ($45,167.14) as a Security Deposit under the
Lease. Landlord shall continue to hold the Security Deposit in accordance with the terms and
conditions of Section Q-12 of the Lease.

     7. Brokers. Each party represents and warrants to the other that, except for
Prentiss Properties Management, L.P. (“Landlord’s
Broker”), no broker, agent or finder negotiated
or was instrumental in negotiating or consummating this First Amendment. Each party further
agrees to defend, indemnify and hold harmless the other party from and against any claim for
commission or finder’s fee by any entity (other than Landlord’s Broker) who claims or alleges that
they were retained or engaged by the first party or at the request of such party in connection with
this First Amendment.

     8. Defaults. Tenant hereby represents and warrants to Landlord that, as of the
date of this First Amendment, Tenant is in full compliance with all terms, covenants and conditions
of the Lease and that there are no breaches or defaults under the Lease by Landlord or Tenant, and
that Tenant knows of no events or circumstances which, given the passage of time, would constitute
a default under the Lease by either Landlord or Tenant.

     9. Signing Authority. Each individual executing this First Amendment on behalf of
Tenant hereby represents and warrants that Tenant is a duly formed and
existing entity qualified to do business in the State of California and that Tenant has full right
and authority to execute and deliver this First Amendment and that each person signing on behalf of
Tenant is authorized to do so.

     10. No Further Modification. Except as set forth in this First Amendment, all of the
terms and provisions of the Lease shall remain unmodified and in full force and effect.

 

 

     IN WITNESS WHEREOF, this First Amendment has been executed as of the day and year first above
written.

	 	 	 	 	 	 	 	 	 
	“LANDLORD”	 	PRENTISS PROPERTIES ACQUISITION
PARTNERS, L.P., a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Prentiss Properties I, Inc.	 	 
	 	 	 	 	a Delaware corporation	 	 
	 	 	 	 	general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Christopher B. Mahon	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	Print Name: Christopher B. Mahon	 	 
	 	 	 	 	Print Title: Senior Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Deborah Street	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	Print Name: Deborah Street	 	 
	 	 	 	 	Print Title: Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	“TENANT”	 	NTN COMMUNICATIONS, INC., a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ A. Wrobel	 	 
	 	 	 	 	 	 	 
	 	 	Print Name: A. WROBEL	 	 
	 	 	Title: CFO	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Kathy Miles	 	 
	 	 	 	 	 	 	 
	 	 	Print Name: Kathy Miles	 	 
	 	 	Title: VP/Assistant Secretaryexv10w1

 

Exhibit 10.1

STRATAGENE CORPORATION

2006 EQUITY INCENTIVE AWARD PLAN

ARTICLE 1

PURPOSE

     The purpose of the Stratagene Corporation 2006 Equity Incentive Award Plan (the “Plan”) is to
promote the success and enhance the value of Stratagene Corporation, a Delaware corporation (the
“Company”), by linking the personal interests of the members of the Board, Employees, and
Consultants to those of Company stockholders and by providing such individuals with an incentive
for performance to generate returns to Company stockholders. The Plan is further intended to
provide flexibility to the Company in its ability to motivate, attract, and retain the services of
members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort
the successful conduct of the Company’s operation is largely dependent.

ARTICLE 2

DEFINITIONS AND CONSTRUCTION

     Wherever the following terms are used in the Plan they shall have the meanings specified
below, unless the context clearly indicates otherwise. The singular pronoun shall include the
plural where the context so indicates.

     2.1 “Administrator” means the entity that conducts the general administration of the Plan as
provided herein. With reference to the administration of the Plan with respect to Awards granted
to Independent Directors, the term “Administrator” shall refer to the Board. With reference to the
administration of the Plan with respect to any other Award, the term “Administrator” shall refer to
the Committee unless the Board has assumed the authority for administration of the Plan generally
as provided in Section 13.1. With reference to the duties of the Committee under the Plan which
have been delegated to one or more persons pursuant to Section 13.5, the term “Administrator” shall
refer to such person(s) unless the Committee or the Board has revoked such delegation.

     2.2 “Award” means an Option, a Restricted Stock award, a Stock Appreciation Right award, a
Dividend Equivalents award, a Stock Payment award, a Restricted Stock Unit award or a
Performance-Based Award granted to a Participant pursuant to the Plan.

     2.3 “Award Agreement” means any written or electronic agreement, contract, or other instrument
or document evidencing an Award.

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

     2.5 “Cause,” unless otherwise defined in an employment or services agreement between the
Participant and the Company or any Parent or Subsidiary, means a Participant’s dishonesty, fraud,
gross or willful misconduct against the Company or any Parent or Subsidiary, unauthorized use or
disclosure of confidential information or trade secrets of the Company or any Parent or Subsidiary,
or conviction of, or plea of nolo contendre to, a crime punishable by law (except misdemeanor
violations), in each case as determined by the Administrator, and its determination shall be
conclusive and binding.

 

 

     2.6 “Change in Control” means and includes each of the following:

          (a) the acquisition, directly or indirectly, by any “person” or “group” (as those terms are
defined in Sections 3(a)(9), 13(d) and 14(d) of the Exchange Act and the rules thereunder) of
“beneficial ownership” (as determined pursuant to Rule 13d-3 under the Exchange Act) of securities
entitled to vote generally in the election of directors (“voting securities”) of the Company that
represent 50% or more of the combined voting power of the Company’s then outstanding voting
securities, other than:

          (i) an acquisition by a trustee or other fiduciary holding securities under any
employee benefit plan (or related trust) sponsored or maintained by the Company or any
person controlled by the Company or by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any person controlled by the Company, or

          (ii) an acquisition of voting securities by the Company or a corporation owned,
directly or indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of the stock of the Company, or

          (iii) an acquisition of voting securities pursuant to a transaction described in
subsection (c) below that would not be a Change in Control under subsection (c), or

          (iv) an acquisition of voting securities pursuant to the Company’s initial public
offering of the Stock;

          Notwithstanding the foregoing, the following event shall not constitute an “acquisition” by
any person or group for purposes of this Section 2.6: an acquisition of the Company’s securities
by the Company which causes the Company’s voting securities beneficially owned by a person or group
to represent 50% or more of the combined voting power of the Company’s then outstanding voting
securities; or

          (b) during any period of two consecutive years, individuals who, at the beginning of such
period, constitute the Board together with any new director(s) (other than a director designated by
a person who shall have entered into an agreement with the Company to effect a transaction
described in subsections (a) or (c) of this Section 2.6 whose election by the Board or nomination
for election by the Company’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the two year period or
whose election or nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or

          (c) the consummation by the Company (whether directly involving the Company or indirectly
involving the Company through one or more intermediaries) of (x) a merger, consolidation,
reorganization, or business combination or (y) a sale or other disposition of all or substantially
all of the Company’s assets or (z) the acquisition of assets or stock of another entity, in each
case other than a transaction:

          (i) which results in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being converted
into voting securities of the Company or the person that, as a result of the transaction,
controls, directly or indirectly, the Company or owns, directly or indirectly, all or
substantially all of the Company’s assets or otherwise succeeds to the business of the
Company (the Company or such person, the “Successor Entity”) directly or indirectly, at
least a majority of the combined voting power of the Successor Entity’s outstanding voting
securities immediately

2

 

after the transaction, and

          (ii) after which no person or group beneficially owns voting securities representing
50% or more of the combined voting power of the Successor Entity; provided, however, that no
person or group shall be treated for purposes of this paragraph (ii) as beneficially owning
50% or more of combined voting power of the Successor Entity solely as a result of the
voting power held in the Company prior to the consummation of the transaction; or

          (d) the Company’s stockholders approve a liquidation or dissolution of the Company.

          For purposes of subsection (a) above, the calculation of voting power shall be made as if the
date of the acquisition were a record date for a vote of the Company’s stockholders, and for
purposes of subsection (c) above, the calculation of voting power shall be made as if the date of
the consummation of the transaction were a record date for a vote of the Company’s stockholders.

          The Administrator shall have full and final authority, which shall be exercised in its
discretion, to determine conclusively whether a Change in Control of the Company has occurred
pursuant to the above definition, and the date of the occurrence of such Change in Control and any
incidental matters relating thereto.

     2.7 “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the
regulations issued thereunder.

     2.8 “Committee” means the committee of the Board described in Article 13.

     2.9 “Consultant” means any consultant or adviser if:

          (a) The consultant or adviser renders bona fide services to the Company or any Parent or
Subsidiary;

          (b) The services rendered by the consultant or adviser are not in connection with the offer or
sale of securities in a capital-raising transaction and do not directly or indirectly promote or
maintain a market for the Company’s securities; and

          (c) The consultant or adviser is a natural person who has contracted directly with the Company
or any Parent or Subsidiary to render such services.

     2.10 “Covered Employee” means an Employee who is, or is likely to become, a “covered employee”
within the meaning of Section 162(m)(3) of the Code.

     2.11 “Disability” means a permanent and total disability within the meaning of Section
22(e)(3) of the Code, as it may be amended from time to time.

     2.12 “Dividend Equivalents” means a right granted to a Participant pursuant to Article 8 to
receive the equivalent value (in cash or Stock) of dividends paid on Stock.

     2.13 “Effective Date” has the meaning set forth in Section 14.1.

     2.14 “Eligible Individual” means any person who is a member of the Board, a Consultant or an
Employee, as determined by the Administrator.

3

 

     2.15 “Employee” means any officer or other employee (as defined in accordance with Section
3401(c) of the Code) of the Company or any Parent or Subsidiary.

     2.16 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

     2.17 “Existing Plan” has the meaning set forth in Section 3.1(a).

     2.18 “Expiration Date” has the meaning set forth in Section 14.2.

     2.19 “Fair Market Value” means, as of any date, the value of Stock determined as follows:

          (a) If the Stock is listed on any established stock exchange or a national market system,
including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq
Stock Market, its Fair Market Value shall be the closing sales price for such stock as quoted on
such exchange or system for the last market trading day prior to the date of determination for
which a closing sales price is reported, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable;

          (b) If the Stock is regularly quoted by a recognized securities dealer but selling prices are
not reported, its Fair Market Value shall be the mean of the closing bid and asked prices for the
Stock on the date prior to the date of determination as reported in The Wall Street Journal or such
other source as the Administrator deems reliable; or

          (c) In the absence of an established market for the Stock, the Fair Market Value thereof shall
be determined in good faith by the Administrator.

     2.20 “Incentive Stock Option” means an Option that is intended to be an incentive stock option
and meets the requirements of Section 422 of the Code or any successor provision thereto.

     2.21 “Independent Director” means a member of the Board who is not an Employee.

     2.22 “Non-Employee Director” means a member of the Board who qualifies as a “Non-Employee
Director” as defined in Rule 16b-3(b)(3) of the Exchange Act, or any successor rule.

     2.23 “Non-Qualified Stock Option” means an Option that is not intended to be or otherwise does
not qualify as an Incentive Stock Option.

     2.24 “Option” means a right granted to a Participant pursuant to Article 5 of the Plan to
purchase a specified number of shares of Stock at a specified price during specified time periods.
An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option.

     2.25 “Parent” means any “parent corporation” as defined in Section 424(e) of the Code and any
applicable regulations promulgated thereunder of the Company or any other entity which beneficially
owns, directly or indirectly, a majority of the outstanding voting stock or voting power of the
Company.

     2.26 “Participant” means any Eligible Individual who, as a member of the Board, a Consultant
or an Employee, has been granted an Award pursuant to the Plan.

     2.27 “Performance-Based Award” means an Award granted to selected Covered Employees pursuant
to Articles 6 and 8, but which is subject to the terms and conditions set forth in Article 9.

4

 

     2.28 “Performance Criteria” means the criteria that the Administrator selects for purposes of
establishing the Performance Goal or Performance Goals for a Participant for a Performance Period.
The Performance Criteria that will be used to establish Performance Goals are limited to the
following: net earnings (either before or after interest, taxes, depreciation and amortization),
sales or revenue, net income (either before or after taxes), operating earnings, cash flow
(including, but not limited to, operating cash flow and free cash flow), return on net assets,
return on stockholders’ equity, return on sales, gross or net profit margin, working capital,
earnings per share and price per share of Stock, any of which may be measured either in absolute
terms or as compared to any incremental increase or as compared to results of a peer group. The
Administrator shall, within the time prescribed by Section 162(m) of the Code, define in an
objective fashion the manner of calculating the Performance Criteria it selects to use for such
Performance Period for such Participant.

     2.29 “Performance Goals” means, for a Performance Period, the goals established in writing by
the Administrator for the Performance Period 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 Subsidiary, division or
other operational unit, or an individual. The Administrator, in its discretion, may, within the
time prescribed by Section 162(m) of the Code, adjust or modify the calculation of Performance
Goals for such Performance Period in order to prevent the dilution or enlargement of the rights of
Participants (i) in the event of, or in anticipation of, any unusual or extraordinary corporate
item, transaction, event, or development, or (ii) in recognition of, or in anticipation of, any
other unusual or nonrecurring events affecting the Company, or the financial statements of the
Company, or in response to, or in anticipation of, changes in applicable laws, regulations,
accounting principles, or business conditions.

     2.30 “Performance Period” means the one or more periods of time, which may be of varying and
overlapping durations, as the Administrator may select, over which the attainment of one or more
Performance Goals will be measured for the purpose of determining a Participant’s right to, and the
payment of, a Performance-Based Award.

     2.31 “Plan” means this Stratagene Corporation 2006 Equity Incentive Award Plan, as it may be
amended from time to time.

     2.32 “Qualified Performance-Based Compensation” means any compensation that is intended to
qualify as “qualified performance-based compensation” as described in Section 162(m)(4)(C) of the
Code.

     2.33 “Restricted Stock” means Stock awarded to a Participant pursuant to Article 6 that is
subject to certain restrictions and may be subject to risk of forfeiture or repurchase.

     2.34 “Restricted Stock Unit” means a right to receive a share of Stock during specified time
periods granted pursuant to Section 8.3.

     2.35 “Securities Act” means the Securities Act of 1933, as amended from time to time.

     2.36 “Section 409A Award” has the meaning set forth in Section 10.1.

     2.37 “Stock” means the common stock of the Company and such other securities of the Company
that may be substituted for Stock pursuant to Article 12.

5

 

     2.38 “Stock Appreciation Right” or “SAR” means a right granted pursuant to Article 7 to
receive a payment equal to the excess of the Fair Market Value of a specified number of shares of
Stock on the date the SAR is exercised over the Fair Market Value of such number of shares of Stock
on the date the SAR was granted as set forth in the applicable Award Agreement.

     2.39 “Stock Payment” means (a) a payment in the form of shares of Stock, or (b) an option or
other right to purchase shares of Stock, as part of any bonus, deferred compensation or other
arrangement, made in lieu of all or any portion of the compensation, granted pursuant to Section
8.2.

     2.40 “Subsidiary” means any “subsidiary corporation” as defined in Section 424(f) of the Code
and any applicable regulations promulgated thereunder of the Company or any other entity of which a
majority of the outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Company.

     2.41 “Successor Entity” has the meaning set forth in Section 2.6.

     2.42 “Termination of Consultancy” means the time when the engagement of a Participant as a
Consultant to the Company or a Parent or Subsidiary is terminated for any reason, with or without
cause, including, but not by way of limitation, by resignation, discharge, death or retirement, but
excluding terminations where there is a simultaneous commencement of employment with the Company or
any Parent or Subsidiary. The Administrator, in its absolute discretion, shall determine the
effect of all matters and questions relating to Termination of Consultancy, including, but not by
way of limitation, the question of whether a Termination of Consultancy resulted from a discharge
for good cause, and all questions of whether a particular leave of absence constitutes a
Termination of Consultancy. Notwithstanding any other provision of the Plan, the Company or any
Parent or Subsidiary has an absolute and unrestricted right to terminate a Consultant’s service at
any time for any reason whatsoever, with or without cause, except to the extent expressly provided
otherwise in writing.

     2.43 “Termination of Directorship” shall mean the time when a Participant who is a
Non-Employee Director ceases to be a member of the Board for any reason, including, but not by way
of limitation, a termination by resignation, failure to be elected, death or retirement. The
Board, in its sole and absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Directorship with respect to Non-Employee Directors.

     2.44 “Termination of Employment” shall mean the time when the employee-employer relationship
between a Participant and the Company or any Parent or Subsidiary is terminated for any reason,
with or without cause, including, but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding: (a) terminations where there is a
simultaneous reemployment or continuing employment or consulting relationship of a Participant by
the Company or any Parent or Subsidiary, and (b) at the discretion of the Administrator,
terminations which result in a temporary severance of the employee-employer relationship. The
Administrator, in its absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment, including, but not by way of limitation, the question of
whether a Termination of Employment resulted from a discharge for good cause, and all questions of
whether a particular leave of absence constitutes a Termination of Employment.

6

 

ARTICLE 3

SHARES SUBJECT TO THE PLAN

     3.1 Number of Shares.

          (a) Subject to Article 12 and Section 3.1(b), the aggregate number of shares of Stock which
may be issued or transferred pursuant to Awards under the Plan shall be the sum of (i) 500,000
shares; (ii) the number of shares of Stock remaining available for issuance and not subject to
awards granted under the Year 2000 Stock Option Plan of Stratagene Corporation (the “Existing
Plan”) as of the Effective Date; plus (iii) with respect to awards granted under the Existing Plan
on or before the Effective Date that expire or are canceled without having been exercised in full
or shares of Stock that are repurchased pursuant to the terms of awards granted under the Existing
Plan, the number of shares of Common Stock subject to each such award as to which such award was
not exercised prior to its expiration or cancellation or which are repurchased by the Company. As
of the Effective Date, the aggregate number of shares of Stock authorized for issuance under the
Existing Plan was 3,000,000 shares and, accordingly, the total number of shares of Stock under
clauses (ii) and (iii) in the preceding sentence shall not exceed 3,000,000 shares. In addition,
subject to Article 12, commencing on January 1, 2007, and on each January 1 thereafter during the
term of the Plan, the number of shares of Stock which shall be made available for sale under the
Plan shall be increased by that number of shares of Stock equal to the lesser of (i) 5% of the
Company’s outstanding shares of Stock on such date, calculated on a fully-diluted basis, (ii)
750,000 shares of Stock, or (iii) a lesser amount determined by the Board. Notwithstanding
anything in this Section 3.1(a) to the contrary, the number of shares of Stock that may be issued
or transferred pursuant to Awards under the Plan shall not exceed an aggregate of 11,000,000
shares, subject to Article 12 and Section 3.1(b).

          (b) To the extent that an Award terminates, expires, or lapses for any reason, any shares of
Stock subject to the Award shall again be available for the grant of an Award pursuant to the Plan.
Additionally, any shares of Stock tendered or withheld to satisfy the grant or exercise price or
tax withholding obligation pursuant to any Award shall again be available for the grant of an Award
pursuant to the Plan. If any shares of Restricted Stock are forfeited by a Participant or
repurchased by the Company pursuant to Section 6.3 hereof, such shares shall again be available for
the grant of an Award pursuant to the Plan. The payment of Dividend Equivalents in cash in
conjunction with any outstanding Awards shall not be counted against the shares available for
issuance under the Plan.

          (c) Notwithstanding the provisions of this Section 3.1, no shares of Stock may again be
optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to
qualify as an Incentive Stock Option under Section 422 of the Code.

     3.2 Stock Distributed. Any Stock distributed pursuant to an Award may consist, in
whole or in part, of authorized and unissued Stock, treasury stock or Stock purchased on the open
market.

     3.3 Limitation on Number of Shares Subject to Awards. Notwithstanding any provision
in the Plan to the contrary, and subject to Article 12, the maximum number of shares of Stock with
respect to one or more Awards that may be granted to any one Participant during any calendar year
shall be 1,000,000.

7

 

ARTICLE 4

ELIGIBILITY AND PARTICIPATION

     4.1 Eligibility. Persons eligible to participate in this Plan include Employees,
Consultants and members of the Board, as determined by the Administrator.

     4.2 Participation. Subject to the provisions of the Plan, the Administrator may, from
time to time, select from among all Eligible Individuals those to whom Awards shall be granted and
shall determine the nature and amount of each Award. No individual shall have any right to be
granted an Award pursuant to this Plan.

     4.3 Foreign Participants. Notwithstanding any provision of the Plan to the contrary,
in order to comply with the laws in other countries in which the Company and its Parents or
Subsidiaries operate or have Eligible Individuals, the Administrator, in its sole discretion, shall
have the power and authority to: (i) determine which Parents or Subsidiaries shall be covered by
the Plan; (ii) determine which Eligible Individuals outside the United States are eligible to
participate in the Plan; (iii) modify the terms and conditions of any Award granted to Eligible
Individuals outside the United States to comply with applicable foreign laws; (iv) establish
subplans and modify exercise procedures and other terms and procedures, to the extent such actions
may be necessary or advisable (any such subplans and/or modifications shall be attached to this
Plan as appendices); provided, however, that no such subplans and/or modifications shall increase
the share limitations contained in Sections Error! Reference source not found. and Error! Reference
source not found. of the Plan; and (v) take any action, before or after an Award is made, that it
deems advisable to obtain approval or comply with any necessary local governmental regulatory
exemptions or approvals. Notwithstanding the foregoing, the Administrator may not take any actions
hereunder, and no Awards shall be granted, that would violate the Exchange Act, the Code, any
securities law or governing statute or any other applicable law.

ARTICLE 5

STOCK OPTIONS

     5.1 General. The Administrator is authorized to grant Options to Eligible Individuals
on the following terms and conditions:

          (a) Exercise Price. The exercise price per share of Stock subject to an Option shall
be determined by the Administrator and set forth in the Award Agreement; provided that the exercise
price per share for any Option shall not be less than 100% of the Fair Market Value per share of
the Stock on the date of grant.

          (b) Time and Conditions of Exercise. The Administrator shall determine the time or
times at which an Option may be exercised in whole or in part; provided that the term of any Option
granted under the Plan shall not exceed ten years. The Administrator shall also determine the
performance or other conditions, if any, that must be satisfied before all or part of an Option may
be exercised. The Administrator may extend the term of any outstanding Option in connection with
any Termination of Employment, Termination of Directorship or Termination of Consultancy of the
Participant holding such Option, or amend any other term or condition of such Option relating to
such a Termination of Employment, Termination of Directorship or Termination of Consultancy.

          (c) Payment. The Administrator shall determine the methods, terms and conditions by
which the exercise price of an Option may be paid, and the form and manner of payment, including,

8

 

without limitation, payment in the form of cash, a promissory note bearing interest at no less
than such rate as shall then preclude the imputation of interest under the Code, shares of Stock
previously owned by the Participant, shares of Stock otherwise issuable upon exercise of the
Option, other property acceptable to the Administrator, or payment through the delivery of a notice
that the Participant has placed a market sell order with a broker with respect to shares of Stock
then issuable upon exercise of the Option, and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option
exercise price; provided that payment of such proceeds is then made to the Company upon settlement
of such sale, and the methods by which shares of Stock shall be delivered or deemed to be delivered
to Participants. Notwithstanding any other provision of the Plan to the contrary, no Participant
who is a member of the Board or an “executive officer” of the Company within the meaning of Section
13(k) of the Exchange Act shall be permitted to pay the exercise price of an Option, or continue
any extension of credit with respect to the exercise price of an Option with a loan from the
Company or a loan arranged by the Company, in any method which would violate Section 13(k) of the
Exchange Act.

          (d) Evidence of Grant. All Options shall be evidenced by an Award Agreement between
the Company and the Participant. The Award Agreement shall include such additional provisions as
may be specified by the Administrator.

     5.2 Incentive Stock Options. Incentive Stock Options may be granted only to employees
(as defined in accordance with Section 3401(c) of the Code) of the Company or a Subsidiary which
constitutes a “subsidiary corporation” of the Company within Section 424(f) of the Code or a Parent
which constitutes a “parent corporation” of the Company within the meaning of Section 424(e) of the
Code, and the terms of any Incentive Stock Options granted pursuant to the Plan must comply with
the following additional provisions of this Section 5.2 in addition to the requirements of Section
5.1:

          (a) Ten Percent Owners. An Incentive Stock Option shall be granted to any individual
who, at the date of grant, owns stock possessing more than ten percent of the total combined voting
power of all classes of Stock of the Company or any “subsidiary corporation” of the Company or
“parent corporation” of the Company (each within the meaning of Section 424 of the Code) only if
such Option is granted at an exercise price per share that is not less than 110% of the Fair Market
Value per share of the Stock on the date of the grant and the Option is exercisable for no more
than five years from the date of grant.

          (b) Transfer Restriction. An Incentive Stock Option shall not be transferable by the
Participant other than by will or by the laws of descent or distribution.

          (c) Right to Exercise. During a Participant’s lifetime, an Incentive Stock Option may
be exercised only by the Participant.

          (d) Failure to Meet Requirements. Any Option (or portion thereof) purported to be an
Incentive Stock Option which, for any reason, fails to meet the requirements of Section 422 of the
Code shall be considered a Non-Qualified Stock Option.

     5.3 Substitution of Stock Appreciation Rights. The Administrator may provide in the
Award Agreement evidencing the grant of an Option that the Administrator, in its sole discretion,
shall have to right to substitute a Stock Appreciation Right for such Option at any time prior to
or upon exercise of such Option; provided that such Stock Appreciation Right shall be exercisable
with respect to the same number of shares of Stock for which such substituted Option would have
been exercisable.

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ARTICLE 6

RESTRICTED STOCK AWARDS

     6.1 Grant of Restricted Stock. The Administrator is authorized to make Awards of
Restricted Stock to any Eligible Individual selected by the Administrator in such amounts and
subject to such terms and conditions as determined by the Administrator. All Awards of Restricted
Stock shall be evidenced by an Award Agreement.

     6.2 Issuance and Restrictions. Restricted Stock shall be subject to such repurchase
restrictions, forfeiture restrictions, restrictions on transferability and other restrictions as
the Administrator may impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock). These restrictions
may lapse separately or in combination at such times, pursuant to such circumstances or
installments or otherwise as the Administrator determines at the time of the grant of the Award or
thereafter. Alternatively, these restrictions may lapse pursuant to the satisfaction of one or
more Performance Goals or other specific performance goals as the Administrator determines to be
appropriate at the time of the grant of the Award or thereafter, in each case on a specified date
or dates or over any period or periods determined by the Administrator.

     6.3 Repurchase or Forfeiture. Except as otherwise determined by the Administrator at
the time of the grant of the Award or thereafter, upon a Participant’s Termination of Employment,
Termination of Directorship or Termination of Consultancy during the applicable restriction period,
Restricted Stock that is at that time subject to restrictions shall be forfeited or subject to
repurchase by the Company (or its assignee) under such terms as the Administrator shall determine;
provided, however, that the Administrator may (a) provide in any Restricted Stock Award Agreement
that restrictions or forfeiture conditions relating to Restricted Stock will be waived in whole or
in part in the event of a Participant’s Termination of Employment, Termination of Directorship or
Termination of Consultancy under certain circumstances, and (b) in other cases waive in whole or in
part restrictions or forfeiture conditions relating to Restricted Stock.

     6.4 Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan
may be evidenced in such manner as the Administrator shall determine. If certificates representing
shares of Restricted Stock are registered in the name of the Participant, certificates must bear an
appropriate legend referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, and the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse or the Award Agreement may provide
that the shares shall be held in escrow by an escrow agent designated by the Company.

ARTICLE 7

STOCK APPRECIATION RIGHTS

     7.1 Grant of Stock Appreciation Rights. A Stock Appreciation Right may be granted to
any Eligible Individual selected by the Administrator. A Stock Appreciation Right shall be subject
to such terms and conditions not inconsistent with the Plan as the Administrator shall impose and
shall be evidenced by an Award Agreement.

     7.2 Terms of Stock Appreciation Rights.

          (a) A Stock Appreciation Right shall have a term set by the Administrator. A Stock

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Appreciation Right shall be exercisable in such installments as the Administrator may
determine. A Stock Appreciation Right shall cover such number of shares of Stock as the
Administrator may determine. The exercise price per share of Stock subject to each Stock
Appreciation Right shall be set by the Administrator.

          (b) A Stock Appreciation Right shall entitle the Participant (or other person entitled to
exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a specified portion
of the Stock Appreciation Right (to the extent then exercisable pursuant to its terms) and to
receive from the Company an amount determined by multiplying (i) the amount (if any) by which the
Fair Market Value of a share of Stock on the date of exercise of the Stock Appreciation Right
exceeds the exercise price per share of the Stock Appreciation Right, by (ii) the number of shares
of Stock with respect to which the Stock Appreciation Right shall have been exercised, subject to
any limitations the Administrator may impose.

     7.3 Payment and Limitations on Exercise.

          (a) Subject to Sections 7.3(b) and (c), payment of the amounts determined under Sections
7.2(b) above shall be in cash, in Stock (based on its Fair Market Value as of the date the Stock
Appreciation Right is exercised) or a combination of both, as determined by the Administrator.

          (b) To the extent payment for a Stock Appreciation Right is to be made in cash, the Award
Agreement shall, to the extent necessary to comply with the requirements of Section 409A of the
Code, specify the date of payment, which may be different than the date of exercise of the Stock
Appreciation Right. If the date of payment for a Stock Appreciation Right is later than the date
of exercise, the Award Agreement may specify that the Participant be entitled to earnings on such
amount until paid.

          (c) To the extent any payment under Section 7.2(b) is effected in Stock, it shall be made
subject to satisfaction of all provisions of Article 5 above pertaining to Options.

ARTICLE 8

OTHER TYPES OF AWARDS

     8.1 Dividend Equivalents.

          (a) Any Eligible Individual selected by the Administrator may be granted Dividend Equivalents
based on the dividends on the shares of Stock that are subject to any Award, to be credited as of
dividend payment dates, during the period between the date the Award is granted and the date the
Award is exercised, vests or expires, as determined by the Administrator. Such Dividend
Equivalents shall be converted to cash or additional shares of Stock by such formula and at such
time and subject to such limitations as may be determined by the Administrator.

          (b) Dividend Equivalents granted with respect to Options or SARs that are intended to be
Qualified Performance-Based Compensation shall be payable, with respect to pre-exercise periods,
regardless of whether such Option or SAR is subsequently exercised.

     8.2 Stock Payments. Any Eligible Individual selected by the Administrator may receive
Stock Payments in the manner determined from time to time by the Administrator; provided, that
unless otherwise determined by the Administrator such Stock Payments shall be made in lieu of base
salary, bonus, or other cash compensation otherwise payable to such Eligible Individual. The
number of shares

11

 

shall be determined by the Administrator and may be based upon the Performance Goals or other
specific performance goals determined appropriate by the Administrator.

     8.3 Restricted Stock Units. The Administrator is authorized to make Awards of
Restricted Stock Units to any Eligible Individual selected by the Administrator in such amounts and
subject to such terms and conditions as determined by the Administrator. At the time of grant, the
Administrator shall specify the date or dates on which the Restricted Stock Units shall become
fully vested and nonforfeitable, and may specify such conditions to vesting as it deems
appropriate. Alternatively, Restricted Stock Units may become fully vested and nonforfeitable
pursuant to the satisfaction of one or more Performance Goals or other specific performance goals
as the Administrator determines to be appropriate at the time of the grant of the Restricted Stock
Units or thereafter, in each case on a specified date or dates or over any period or periods
determined by the Administrator. At the time of grant, the Administrator shall specify the
maturity date applicable to each grant of Restricted Stock Units which shall be no earlier than the
vesting date or dates of the Award and may be determined at the election of the Eligible Individual
to whom the Award is granted. On the maturity date, the Company shall transfer to the Participant
one unrestricted, fully transferable share of Stock for each Restricted Stock Unit that is vested
and scheduled to be distributed on such date and not previously forfeited. The Administrator shall
specify the purchase price, if any, to be paid by the Participant to the Company for such shares of
Stock.

     8.4 Term. Except as otherwise provided herein, the term of any Award of Dividend
Equivalents, Stock Payments or Restricted Stock Units shall be set by the Administrator in its
discretion.

     8.5 Exercise or Purchase Price. The Administrator may establish the exercise or
purchase price, if any, of any Award of Stock Payments or Restricted Stock Units; provided,
however, that such price shall not be less than the par value of a share of Stock on the date of
grant, unless otherwise permitted by applicable state law.

     8.6 Form of Payment. Payments with respect to any Awards granted under Sections 8.1,
8.2 or 8.3 shall be made in cash, in Stock or a combination of both, as determined by the
Administrator.

     8.7 Award Agreement. All Awards under this Article 8 shall be subject to such
additional terms and conditions as determined by the Administrator and shall be evidenced by a
written Award Agreement.

ARTICLE 9

PERFORMANCE-BASED AWARDS

     9.1 Purpose. The purpose of this Article 9 is to provide the Administrator the
ability to qualify Awards other than Options and SARs and that are granted pursuant to Articles 6
and 8 as Qualified Performance-Based Compensation. If the Administrator, in its discretion,
decides to grant a Performance-Based Award to a Covered Employee, the provisions of this Article 9
shall control over any contrary provision contained in Articles 6 or 8; provided, however, that the
Administrator may in its discretion grant Awards to Covered Employees that are based on Performance
Criteria or Performance Goals but that do not satisfy the requirements of this Article 9.

     9.2 Applicability. This Article 9 shall apply only to those Covered Employees
selected by the Administrator to receive Performance-Based Awards. The designation of a Covered
Employee as a Participant for a Performance Period shall not in any manner entitle the Participant
to receive an Award for the period. Moreover, designation of a Covered Employee as a Participant
for a particular Performance Period shall not require designation of such Covered Employee as a
Participant in any

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subsequent Performance Period and designation of one Covered Employee as a Participant shall
not require designation of any other Covered Employees as a Participant in such period or in any
other period.

     9.3 Procedures with Respect to Performance-Based Awards. To the extent necessary to
comply with the Qualified Performance-Based Compensation requirements of Section 162(m)(4)(C) of
the Code, with respect to any Award granted under Articles 6 and 8 which may be granted to one or
more Covered Employees, no later than ninety (90) days following the commencement of any fiscal
year in question or any other designated fiscal period or period of service (or such other time as
may be required or permitted by Section 162(m) of the Code), the Administrator shall, in writing,
(a) designate one or more Covered Employees, (b) select the Performance Criteria applicable to the
Performance Period, (c) establish the Performance Goals, and amounts of such Awards, as applicable,
which may be earned for such Performance Period, and (d) specify the relationship between
Performance Criteria and the Performance Goals and the amounts of such Awards, as applicable, to be
earned by each Covered Employee for such Performance Period. Following the completion of each
Performance Period, the Administrator shall certify in writing whether the applicable Performance
Goals have been achieved for such Performance Period. In determining the amount earned by a
Covered Employee, the Administrator shall have the right to reduce or eliminate (but not to
increase) the amount payable at a given level of performance to take into account additional
factors that the Administrator may deem relevant to the assessment of individual or corporate
performance for the Performance Period.

     9.4 Payment of Performance-Based Awards. Unless otherwise provided in the applicable
Award Agreement, a Participant must be employed by the Company or a Parent or Subsidiary on the day
a Performance-Based Award for such Performance Period is paid to the Participant. Furthermore, a
Participant shall be eligible to receive payment pursuant to a Performance-Based Award for a
Performance Period only if the Performance Goals for such period are achieved.

     9.5 Additional Limitations. Notwithstanding any other provision of the Plan, any
Award which is granted to a Covered Employee and is intended to constitute Qualified
Performance-Based Compensation shall be subject to any additional limitations set forth in Section
162(m) of the Code (including any amendment to Section 162(m) of the Code) or any regulations or
rulings issued thereunder that are requirements for qualification as qualified performance-based
compensation as described in Section 162(m)(4)(C) of the Code, and the Plan shall be deemed amended
to the extent necessary to conform to such requirements.

ARTICLE 10

COMPLIANCE WITH SECTION 409A OF THE CODE

     10.1 Awards subject to Code Section 409A. Any Award that constitutes, or provides
for, a deferral of compensation subject to Section 409A of the Code (a “Section 409A Award”) shall
satisfy the requirements of Section 409A of the Code and this Article 10, to the extent applicable.
The Award Agreement with respect to a Section 409A Award shall incorporate the terms and
conditions required by Section 409A of the Code and this Article 10.

     10.2 Distributions under a Section 409A Award.

          (a) Subject to subsection (b), any shares of Stock or other property or amounts to be paid or
distributed upon the grant, issuance, vesting, exercise or payment of a Section 409A Award shall be
distributed in accordance with the requirements of Section 409A(a)(2) of the Code, and shall not be
distributed earlier than:

13

 

               (i) the Participant’s separation from service, as determined by the Secretary of the
Treasury;

               (ii) the date the Participant becomes disabled;

               (iii) the Participant’s death;

               (iv) a specified time (or pursuant to a fixed schedule) specified under the Award Agreement at
the date of the deferral compensation;

               (v) to the extent provided by the Secretary of the Treasury, a change in the ownership or
effective control of the Company or a Parent or Subsidiary, or in the ownership of a substantial
portion of the assets of the Company or a Parent or Subsidiary; or

               (vi) the occurrence of an unforeseeable emergency with respect to the Participant.

          (b) In the case of a Participant who is a “specified employee,” the requirement of paragraph
(a)(i) shall be met only if the distributions with respect to the Section 409A Award may not be
made before the date which is six months after the Participant’s separation from service (or, if
earlier, the date of the Participant’s death). For purposes of this subsection (b), a Participant
shall be a “specified employee” if such Participant is a key employee (as defined in Section 416(i)
of the Code without regard to paragraph (5) thereof) of a corporation any stock of which is
publicly traded on an established securities market or otherwise, as determined under Section
409A(a)(2)(B)(i) of the Code and the Treasury Regulations thereunder.

          (c) The requirement of paragraph (a)(vi) shall be met only if, as determined under Treasury
Regulations under Section 409A(a)(2)(B)(ii) of the Code, the amounts distributed with respect to
the unforeseeable emergency do not exceed the amounts necessary to satisfy such unforeseeable
emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the
distribution, after taking into account the extent to which such unforeseeable emergency is or may
be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of
the Participant’s assets (to the extent the liquidation of such assets would not itself cause
severe financial hardship).

          (d) For purposes of this Section, the terms specified therein shall have the respective
meanings ascribed thereto under Section 409A of the Code and the Treasury Regulations thereunder.

     10.3 Prohibition on Acceleration of Benefits. The time or schedule of any
distribution or payment of any shares of Stock or other property or amounts under a Section 409A
Award shall not be accelerated, except as otherwise permitted under Section 409A(a)(3) of the Code
and the Treasury Regulations thereunder.

     10.4 Elections under Section 409A Awards.

          (a) Any deferral election provided under or with respect to an Award to any Eligible
Individual, or to the Participant holding a Section 409A Award, shall satisfy the requirements of
Section 409A(a)(4)(B) of the Code, to the extent applicable, and, except as otherwise permitted
under paragraph (i) or (ii) below, any such deferral election with respect to compensation for
services performed during a taxable year shall be made not later than the close of the preceding
taxable year, or at such other time as provided in Treasury Regulations.

14

 

          (i) In the case of the first year in which an Eligible Individual or a Participant
holding a Section 409A Award, becomes eligible to participate in the Plan, any such deferral
election may be made with respect to services to be performed subsequent to the election
with thirty days after the date the Eligible Individual, or the Participant holding a
Section 409A Award, becomes eligible to participate in the Plan, as provided under Section
409A(a)(4)(B)(ii) of the Code.

          (ii) In the case of any performance-based compensation based on services performed by
an Eligible Individual, or the Participant holding a Section 409A Award, over a period of at
least twelve months, any such deferral election may be made no later than six months before
the end of the period, as provided under Section 409A(a)(4)(B)(iii) of the Code.

          (b) In the event that a Section 409A Award permits, under a subsequent election by the
Participant holding such Section 409A Award, a delay in a distribution or payment of any shares of
Stock or other property or amounts under such Section 409A Award, or a change in the form of
distribution or payment, such subsequent election shall satisfy the requirements of Section
409A(a)(4)(C) of the Code, and:

          (i) such subsequent election may not take effect until at least twelve months after the
date on which the election is made,

          (ii) in the case such subsequent election relates to a distribution or payment not
described in Section 10.2(a)(ii), (iii) or (vi), the first payment with respect to such
election may be deferred for a period of not less than five years from the date such
distribution or payment otherwise would have been made, and

          (iii) in the case such subsequent election relates to a distribution or payment
described in Section 10.2(a)(iv), such election may not be made less than twelve months
prior to the date of the first scheduled distribution or payment under Section 10.2(a)(iv).

     10.5 Compliance in Form and Operation. A Section 409A Award, and any election under
or with respect to such Section 409A Award, shall comply in form and operation with the
requirements of Section 409A of the Code and the Treasury Regulations thereunder.

ARTICLE 11

PROVISIONS APPLICABLE TO AWARDS

     11.1 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the
discretion of the Administrator, be granted either alone, in addition to, or in tandem with, any
other Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other
Awards may be granted either at the same time as or at a different time from the grant of such
other Awards.

     11.2 Award Agreement. Awards under the Plan shall be evidenced by Award Agreements
that set forth the terms, conditions and limitations for each Award which may include the term of
an Award, the provisions applicable in the event of the Participant’s Termination of Employment,
Termination of Directorship or Termination of Consultancy, and the Company’s authority to
unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award.

15

 

     11.3 Limits on Transfer.

          (a) Except as otherwise provided by the Administrator pursuant to Section 11.3(b), no right or
interest of a Participant in any Award may be pledged, encumbered, or hypothecated to or in favor
of any party other than the Company or a Parent or Subsidiary, or shall be subject to any lien,
obligation, or liability of such Participant to any other party other than the Company or a Parent
or Subsidiary. Except as otherwise provided by the Administrator pursuant to Section 11.3(b), no
Award shall be assigned, transferred, or otherwise disposed of by a Participant other than by will
or the laws of descent and distribution, unless and until such Award has been exercised, or the
shares underlying such Award have been issued, and all restrictions applicable to such shares have
lapsed.

          (b) Notwithstanding Section 11.3(a), the Administrator, in its sole discretion, may permit an
Award (other than an Incentive Stock Option) to be transferred to, exercised by and paid to any one
or more Permitted Transferees (as defined below), subject to the following terms and conditions:
(i) an Award transferred to a Permitted Transferee shall not be assignable or transferable by the
Permitted Transferee other than by will or the laws of descent and distribution; (ii) any Award
which is transferred to a Permitted Transferee shall continue to be subject to all the terms and
conditions of the Award as applicable to the original Participant (other than the ability to
further transfer the Award); and (iii) the Participant and the Permitted Transferee shall execute
any and all documents requested by the Administrator, including, without limitation documents to
(A) confirm the status of the transferee as a Permitted Transferee, (B) satisfy any requirements
for an exemption for the transfer under applicable federal and state securities laws and (C)
evidence the transfer. For purposes of this Section 11.3(b), “Permitted Transferee” shall mean,
with respect to a Participant, 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, any person
sharing the Participant’s household (other than a tenant or employee), a trust in which these
persons (or the Participant) control the management of assets, and any other entity in which these
persons (or the Participant) own more than fifty percent of the voting interests, or any other
transferee specifically approved by the Administrator.

     11.4 Beneficiaries. Notwithstanding Section 11.3, a Participant may, in the manner
determined by the Administrator, designate a beneficiary to exercise the rights of the Participant
and to receive any distribution with respect to any Award upon the Participant’s death. A
beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to
the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to
the Participant, except to the extent the Plan and Award Agreement otherwise provide, and to any
additional restrictions deemed necessary or appropriate by the Administrator. If the Participant
is married and resides in a community property state, a designation of a person other than the
Participant’s spouse as his or her beneficiary with respect to more than 50% of the Participant’s
interest in the Award shall not be effective without the prior written consent of the Participant’s
spouse. If no beneficiary has been designated or survives the Participant, payment shall be made
to the person entitled thereto pursuant to the Participant’s will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a
Participant at any time provided the change or revocation is filed with the Administrator.

     11.5 Stock Certificates; Book-Entry Procedures.

          (a) Notwithstanding anything herein to the contrary, the Company shall not be required to
issue or deliver any certificates evidencing shares of Stock pursuant to the exercise of any Award,
unless and until the Board has determined, with advice of counsel, that the issuance and delivery
of such certificates is in compliance with all applicable laws, regulations of governmental
authorities and, if applicable, the requirements of any exchange on which the shares of Stock are
listed or traded. All

16

 

Stock certificates delivered pursuant to the Plan are subject to any stop-transfer orders and other
restrictions as the Administrator deems necessary or advisable to comply with federal, state, or
foreign jurisdiction, securities or other laws, rules and regulations and the rules of any national
securities exchange or automated quotation system on which the Stock is listed, quoted, or traded.
The Administrator may place legends on any Stock certificate to reference restrictions applicable
to the Stock. In addition to the terms and conditions provided herein, the Administrator may
require that a Participant make such reasonable covenants, agreements, and representations as the
Administrator, in its discretion, deems advisable in order to comply with any such laws,
regulations, or requirements. The Administrator shall have the right to require any Participant to
comply with any timing or other restrictions with respect to the settlement or exercise of any
Award, including a window-period limitation, as may be imposed in the discretion of the
Administrator.

          (b) Notwithstanding any other provision of the Plan, unless otherwise determined by the
Administrator or required by applicable law, rule or regulation, the Company shall not deliver to
any Participant certificates evidencing shares of Stock issued in connection with any Award and
instead such shares of Stock shall be recorded in the books of the Company (or, as applicable, its
transfer agent or stock plan administrator).

     11.6 Paperless Exercise. In the event that the Company establishes, for itself or
using the services of a third party, an automated system for the exercise of Awards, such as a
system using an internet website or interactive voice response, then the paperless exercise of
Awards by a Participant may be permitted through the use of such an automated system.

ARTICLE 12

CHANGES IN CAPITAL STRUCTURE

     12.1 Adjustments.

          (a) In the event of any stock dividend, stock split, combination or exchange of shares,
merger, consolidation, spin-off, recapitalization, distribution of Company assets to stockholders
(other than normal cash dividends), or any other corporate event affecting the Stock or the share
price of the Stock, the Administrator may make such proportionate adjustments, if any, as the
Administrator in its discretion may deem appropriate to reflect such change with respect to (i) the
aggregate number and type of shares that may be issued under the Plan (including, but not limited
to, adjustments of the limitations in Sections 3.1 and 3.3); (ii) the terms and conditions of any
outstanding Awards (including, without limitation, any applicable performance targets or criteria
with respect thereto); and (iii) the grant, exercise or purchase price per share for any
outstanding Awards under the Plan. Any adjustment affecting an Award intended as Qualified
Performance-Based Compensation shall be made consistent with the requirements of Section 162(m) of
the Code.

          (b) In the event of any transaction or event described in Section 12.1(a) or any unusual or
nonrecurring transactions or events affecting the Company, any affiliate of the Company, or the
financial statements of the Company or any affiliate (including without limitation any Change in
Control), or of changes in applicable laws, regulations or accounting principles, and whenever the
Administrator determines that such action is appropriate in order to prevent the dilution or
enlargement of the benefits or potential benefits intended to be made available under the Plan or
with respect to any Award under the Plan, to facilitate such transactions or events or to give
effect to such changes in laws, regulations or principles, the Administrator, in its sole
discretion and on such terms and conditions as it deems appropriate, either by the terms of the
Award or by action taken prior to the occurrence of such

17

 

transaction or event and either automatically or upon the Participant’s request, is hereby
authorized to take any one or more of the following actions:

               (i) To provide for either (A) termination of any such Award in exchange for an amount of cash,
if any, equal to the amount that would have been received upon the exercise of such Award or
realization of the Participant’s rights (and, for the avoidance of doubt, if as of the date of the
occurrence of the transaction or event described in this Section 12.1(b) the Administrator
determines in good faith that no amount would have been attained upon the exercise of such Award or
realization of the Participant’s rights, then such Award may be terminated by the Company without
payment) or (B) the replacement of such Award with other rights or property selected by the
Administrator in its sole discretion;

               (ii) To provide that such Award be assumed by the successor or survivor corporation, or a
parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards
covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof,
with appropriate adjustments as to the number and kind of shares and prices; and

               (iii) To make adjustments in the number and type of shares of Stock (or other securities or
property) subject to outstanding Awards, and in the number and kind of outstanding Restricted Stock
and/or in the terms and conditions of (including the grant or exercise price), and the criteria
included in, outstanding options, rights and awards and options, rights and awards which may be
granted in the future;

               (iv) To provide that such Award shall be exercisable or payable or fully vested with respect
to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the
applicable Award Agreement; and

               (v) To provide that the Award cannot vest, be exercised or become payable after such event.

     12.2 Acceleration Upon a Change in Control. Notwithstanding Section 12.1(b), and
except as may otherwise be provided in any applicable Award Agreement or other written agreement
entered into between the Company and a Participant, if a Change in Control occurs and a
Participant’s Awards are not continued, converted, assumed, or replaced by (i) the Company or a
Parent or Subsidiary of the Company, or (ii) a Successor Entity, such Awards shall become fully
exercisable and/or payable, as applicable, and all forfeiture, repurchase and other restrictions on
such Awards shall lapse immediately prior to such Change in Control. Upon, or in anticipation of,
a Change in Control, the Administrator may cause any and all Awards outstanding hereunder to
terminate at a specific time in the future, including but not limited to the date of such Change in
Control, and shall give each Participant the right to exercise such Awards during a period of time
as the Administrator, in its sole and absolute discretion, shall determine.

     12.3 No Other Rights. Except as expressly provided in the Plan, no Participant shall
have any rights by reason of any subdivision or consolidation of shares of stock of any class, the
payment of any dividend, any increase or decrease in the number of shares of stock of any class or
any dissolution, liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan or pursuant to action of the Administrator under the Plan,
no issuance by the Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect
to, the number of shares of Stock subject to an Award or the grant or exercise price of any Award.

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ARTICLE 13

ADMINISTRATION

     13.1 Administrator. The Administrator of the Plan shall be the Compensation Committee
of the Board (or another committee or a subcommittee of the Board to which the Board delegates
administration of the Plan) (such committee, the “Committee”), which Committee shall consist solely
of two or more members of the Board each of whom is both an “outside director,” within the meaning
of Section 162(m) of the Code, a Non-Employee Director and an “independent director” under the
rules of the Nasdaq Stock Market. Notwithstanding the foregoing: (a) the full Board, acting by a
majority of its members in office, shall conduct the general administration of the Plan with
respect to all Awards granted to Independent Directors, and for purposes of such Awards the term
“Administrator” as used in this Plan shall be deemed to refer to the Board,, and (b) the Committee
may delegate its authority hereunder to the extent permitted by Section 13.5. Appointment of
Committee members shall be effective upon acceptance of appointment. In its sole discretion, the
Board may at any time and from time to time exercise any and all rights and duties of the
Administrator under the Plan except with respect to matters which under Rule 16b-3 under the
Exchange Act or Section 162(m) of the Code, or any regulations or rules issued thereunder, are
required to be determined in the sole discretion of the Committee. Committee members may resign at
any time by delivering written notice to the Board. Vacancies in the Committee may only be filled
by the Board.

     13.2 Action by the Administrator. A majority of the Administrator shall constitute a
quorum. The acts of a majority of the members present at any meeting at which a quorum is present,
and, subject to applicable law, acts approved in writing by a majority of the Administrator in lieu
of a meeting, shall be deemed the acts of the Administrator. Each member of the Administrator is
entitled to, in good faith, rely or act upon any report or other information furnished to that
member by any officer or other employee of the Company or any Parent or Subsidiary, the Company’s
independent certified public accountants, or any executive compensation consultant or other
professional retained by the Company to assist in the administration of the Plan.

     13.3 Authority of Administrator. Subject to any specific designation in the Plan, the
Administrator has the exclusive power, authority and discretion to:

          (a) Designate Participants to receive Awards;

          (b) Determine the type or types of Awards to be granted to each Participant;

          (c) Determine the number of Awards to be granted and the number of shares of Stock to which an
Award will relate;

          (d) Determine the terms and conditions of any Award granted pursuant to the Plan, including,
but not limited to, the exercise price, grant price, or purchase price, any reload provision, any
restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or
restrictions on the exercisability of an Award, and accelerations or waivers thereof, any
provisions related to non-competition and recapture of gain on an Award, based in each case on such
considerations as the Administrator in its sole discretion determines; provided, however, that the
Administrator shall not have the authority to accelerate the vesting or waive the forfeiture of any
Performance-Based Awards;

          (e) Determine whether, to what extent, and pursuant to what circumstances an Award may be
settled in, or the exercise price of an Award may be paid in, cash, Stock, other Awards, or other
property, or an Award may be canceled, forfeited, or surrendered;

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          (f) Prescribe the form of each Award Agreement, which need not be identical for each
Participant;

          (g) Decide all other matters that must be determined in connection with an Award;

          (h) Establish, adopt, or revise any rules and regulations as it may deem necessary or
advisable to administer the Plan;

          (i) Interpret the terms of, and any matter arising pursuant to, the Plan or any Award
Agreement; and

          (j) Make all other decisions and determinations that may be required pursuant to the Plan or
as the Administrator deems necessary or advisable to administer the Plan.

     13.4 Decisions Binding. The Administrator’s interpretation of the Plan, any Awards
granted pursuant to the Plan, any Award Agreement and all decisions and determinations by the
Administrator with respect to the Plan are final, binding, and conclusive on all parties.

     13.5 Delegation of Authority. To the extent permitted by applicable law, the
Committee may from time to time delegate to a committee of one or more members of the Board or one
or more officers of the Company the authority to grant or amend Awards to Participants other than
(a) senior executives of the Company who are subject to Section 16 of the Exchange Act, (b) Covered
Employees, or (c) officers of the Company (or members of the Board) to whom authority to grant or
amend Awards has been delegated hereunder. Any delegation hereunder shall be subject to the
restrictions and limits that the Committee specifies at the time of such delegation, and the
Committee may at any time rescind the authority so delegated or appoint a new delegatee. At all
times, the delegatee appointed under this Section 13.5 shall serve in such capacity at the pleasure
of the Committee.

ARTICLE 14

EFFECTIVE AND EXPIRATION DATES

     14.1 Effective Date. The Plan will be effective as of the date the Plan is approved
by the Company’s stockholders (the “Effective Date”).

     14.2 Expiration Date. The Plan will expire on, and no Award may be granted pursuant
to the Plan after, the earlier of the tenth anniversary of (i) the date this Plan is approved by
the Board or (ii) the Effective Date (the “Expiration Date”). Any Awards that are outstanding on
the tenth anniversary of the Effective Date shall remain in force according to the terms of the
Plan and the applicable Award Agreement.

ARTICLE 15

AMENDMENT, MODIFICATION, AND TERMINATION

     15.1 Amendment, Modification, And Termination. The Board may terminate, amend or
modify the Plan at any time and from time to time; provided, however, that (a) to the extent
necessary to comply with any applicable law, regulation, or stock exchange rule, the Company shall
obtain stockholder approval of any Plan amendment in such a manner and to such a degree as
required, and (b) stockholder approval is required for any amendment to the Plan that increases the
number of shares available under the Plan (other than any adjustment as provided by Article 12).
Notwithstanding any provision in this

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Plan to the contrary, the Board may at any time and without stockholder approval amend any
Option to reduce the per share exercise price of the shares subject to such Option below the per
share exercise price as of the date the Option is granted and may grant Options in exchange for, or
in connection with, the cancellation or surrender of an Option having a higher per share exercise
price.

     15.2 Awards Previously Granted. No termination, amendment, or modification of the
Plan shall adversely affect in any material way any Award previously granted pursuant to the Plan
without the prior written consent of the Participant.

ARTICLE 16

GENERAL PROVISIONS

     16.1 No Rights to Awards. No Participant, Employee, or other person shall have any
claim to be granted any Award pursuant to the Plan, and neither the Company nor the Administrator
is obligated to treat Participants, Employees, and other persons uniformly.

     16.2 No Stockholders Rights. Except as otherwise provided herein, a Participant shall
have none of the rights of a stockholder with respect to shares of Stock covered by any Award until
the Participant becomes the record owner of such shares of Stock.

     16.3 Withholding. The Company or any Parent or Subsidiary shall have the authority
and the right to deduct or withhold, or require a Participant to remit to the Company an amount
sufficient to satisfy federal, state, local and foreign taxes (including the Participant’s
employment tax obligations) required by law to be withheld with respect to any taxable event
concerning a Participant arising as a result of this Plan. The Administrator may in its discretion
and in satisfaction of the foregoing requirement allow a Participant to elect to have the Company
or a Parent or Subsidiary, as applicable, withhold shares of Stock otherwise issuable under an
Award (or allow the return of shares of Stock) having a Fair Market Value equal to the sums
required to be withheld. Notwithstanding any other provision of the Plan, the number of shares of
Stock which may be withheld with respect to the issuance, vesting, exercise or payment of any Award
(or which may be repurchased from the Participant of such Award within six months (or such other
period as may be determined by the Administrator) after such shares of Stock were acquired by the
Participant from the Company) in order to satisfy the Participant’s federal, state, local and
foreign income and payroll tax liabilities with respect to the issuance, vesting, exercise or
payment of the Award shall be limited to the number of shares which have a Fair Market Value on the
date of withholding or repurchase equal to the aggregate amount of such liabilities based on the
minimum statutory withholding rates for federal, state, local and foreign income tax and payroll
tax purposes that are applicable to such supplemental taxable income.

     16.4 No Right to Employment or Services. Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Company or any Parent or Subsidiary to
terminate any Participant’s employment or services at any time, nor confer upon any Participant any
right to continue in the employ or service of the Company or any Parent or Subsidiary.

     16.5 Unfunded Status of Awards. The Plan is intended to be an unfunded plan for
incentive compensation. With respect to any payments not yet made to a Participant pursuant to an
Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights
that are greater than those of a general creditor of the Company or any Parent or Subsidiary.

     16.6 Indemnification. To the extent allowable pursuant to applicable law, the
Administrator (and each member thereof) shall be indemnified and held harmless by the Company from
any loss, cost,

21

 

liability, or expense that may be imposed upon or reasonably incurred by such member in
connection with or resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action or failure to act pursuant to
the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in
such action, suit, or proceeding against him or her; provided he or she gives the Company an
opportunity, at its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be entitled pursuant to
the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.

     16.7 Relationship to other Benefits. No payment pursuant to the Plan shall be taken
into account in determining any benefits pursuant to any pension, retirement, savings, profit
sharing, group insurance, welfare or other benefit plan of the Company or any Parent or Subsidiary
except to the extent otherwise expressly provided in writing in such other plan or an agreement
thereunder.

     16.8 Expenses. The expenses of administering the Plan shall be borne by the Company
and its Subsidiaries.

     16.9 Titles and Headings. The titles and headings of the Sections in the Plan are for
convenience of reference only and, in the event of any conflict, the text of the Plan, rather than
such titles or headings, shall control.

     16.10 Fractional Shares. No fractional shares of Stock shall be issued and the
Administrator shall determine, in its discretion, whether cash shall be given in lieu of fractional
shares or whether such fractional shares shall be eliminated by rounding up or down as appropriate.

     16.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan, the Plan, and any Award granted or awarded to any Participant who is then
subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth
in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 under the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder
shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

     16.12 Government and Other Regulations. The obligation of the Company to make payment
of awards in Stock or otherwise shall be subject to all applicable laws, rules, and regulations,
and to such approvals by government agencies as may be required. The Company shall be under no
obligation to register pursuant to the Securities Act, any of the shares of Stock paid pursuant to
the Plan. If the shares paid pursuant to the Plan may in certain circumstances be exempt from
registration pursuant to the Securities Act, the Company may restrict the transfer of such shares
in such manner as it deems advisable to ensure the availability of any such exemption.

     16.13 Governing Law. The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the State of Delaware, without regard to the conflicts
of law principles thereof.

* * * * *

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