Document:

exv10w1

 

Exhibit 10.1

 

    MOLINA
    HEALTHCARE, INC.

    2011 EQUITY INCENTIVE PLAN

 

		
	    1.       	
    ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

 

    1.1     Establishment.     The
    Molina Healthcare, Inc. 2011 Equity Incentive Plan (the
    “Plan”) is hereby established effective as of
    April 27, 2011, the date of its approval by the
    stockholders of the Company (the “Effective
    Date”).

 

    1.2     Purpose.     The
    purpose of the Plan is to advance the interests of the
    Participating Company Group and its stockholders by providing an
    incentive to attract, retain and reward persons performing
    services for the Participating Company Group and by motivating
    such persons to contribute to the growth and profitability of
    the Participating Company Group. The Plan seeks to achieve this
    purpose by providing for Awards in the form of Options, Stock
    Appreciation Rights, Restricted Stock Purchase Rights,
    Restricted Stock Bonuses, Restricted Stock Units, Performance
    Shares, Performance Units, Cash-Based Awards and Other
    Stock-Based Awards.

 

    1.3     Term of
    Plan.     The Plan shall continue
    in effect until its termination by the Committee; provided,
    however, that all Awards shall be granted, if at all, within ten
    (10) years from the Effective Date.

 

		
	    2.       	
    DEFINITIONS AND CONSTRUCTION.

 

    2.1     Definitions.     Whenever
    used herein, the following terms shall have their respective
    meanings set forth below:

 

    (a)     “Affiliate”
    means (i) a parent entity, other than a Parent
    Corporation, that directly, or indirectly through one or more
    intermediary entities, controls the Company or (ii) a
    subsidiary entity, other than a Subsidiary Corporation, that is
    controlled by the Company directly or indirectly through one or
    more intermediary entities. For this purpose, the terms
    “parent,” “subsidiary,” “control”
    and “controlled by” shall have the meanings assigned
    such terms for the purposes of registration of securities on
    Form S-8
    under the Securities Act.

 

    (b)     “Award”
    means any Option, Stock Appreciation Right, Restricted
    Stock Purchase Right, Restricted Stock Bonus, Restricted Stock
    Unit, Performance Share, Performance Unit, Cash-Based Award or
    Other Stock-Based Award granted under the Plan.

 

    (c)     “Award
    Agreement” means a written or electronic agreement
    between the Company and a Participant setting forth the terms,
    conditions and restrictions applicable to an Award.

 

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

 

    (e)     “Cash-Based
    Award” means an Award denominated in cash and
    granted pursuant to Section 11.

 

    (f)     “Cause”
    means, unless such term or an equivalent term is
    otherwise defined by the applicable Award Agreement or other
    written agreement between a Participant and a Participating
    Company applicable to an Award, any of the following:
    (i) the Participant’s theft, dishonesty, willful
    misconduct, breach of fiduciary duty for personal profit, or
    falsification of any Participating Company documents or records;
    (ii) the Participant’s material failure to abide by a
    Participating Company’s code of conduct or other policies
    (including, without limitation, policies relating to
    confidentiality and reasonable workplace conduct);
    (iii) the Participant’s unauthorized use,
    misappropriation, destruction or diversion of any tangible or
    intangible asset or corporate opportunity of a Participating
    Company (including, without limitation, the Participant’s
    improper use or disclosure of a Participating Company’s
    confidential or proprietary information); (iv) any
    intentional act by the Participant which has a material
    detrimental effect on a Participating Company’s reputation
    or business; (v) the Participant’s repeated failure or
    inability to perform any reasonable assigned duties after
    written notice from a Participating Company of, and a reasonable
    opportunity to cure, such failure or inability; (vi) any

    

    A-1

 

    material breach by the Participant of any employment, service,
    non-disclosure, non-competition,
    non-solicitation
    or other similar agreement between the Participant and a
    Participating Company, which breach is not cured pursuant to the
    terms of such agreement; or (vii) the Participant’s
    conviction (including any plea of guilty or nolo
    contendere) of any criminal act involving fraud, dishonesty,
    misappropriation or moral turpitude, or which impairs the
    Participant’s ability to perform his or her duties with a
    Participating Company.

 

    (g)     “Change in
    Control” means, unless such term or an equivalent
    term is otherwise defined by the applicable Award Agreement or
    other written agreement between the Participant and a
    Participating Company applicable to an Award, the occurrence of
    any of the following:

 

    (i)     any “person” (as such
    term is used in Sections 13(d) and 14(d) of the Exchange
    Act) becomes the “beneficial owner” (as such term is
    defined in
    Rule 13d-3
    under the Exchange Act), directly or indirectly, of securities
    of the Company representing more than fifty percent (50%) of the
    total Fair Market Value or total combined voting power of the
    Company’s then-outstanding securities entitled to vote
    generally in the election of Directors; provided, however, that
    a Change in Control shall not be deemed to have occurred if such
    degree of beneficial ownership results from any of the
    following: (A) an acquisition by any person who on the
    Effective Date is the beneficial owner of more than fifty
    percent (50%) of such voting power, (B) any acquisition
    directly from the Company, including, without limitation,
    pursuant to or in connection with a public offering of
    securities, (C) any acquisition by the Company,
    (D) any acquisition by a trustee or other fiduciary under
    an employee benefit plan of a Participating Company or
    (E) any acquisition by an entity owned directly or
    indirectly by the stockholders of the Company in substantially
    the same proportions as their ownership of the voting securities
    of the Company; or

 

    (ii)     an Ownership Change Event or
    series of related Ownership Change Events (collectively, a
    “Transaction”) in which the stockholders
    of the Company immediately before the Transaction do not retain
    immediately after the Transaction direct or indirect beneficial
    ownership of more than fifty percent (50%) of the total combined
    voting power of the outstanding securities entitled to vote
    generally in the election of Directors or, in the case of an
    Ownership Change Event described in Section 2.1(cc)(iii),
    the entity to which the assets of the Company were transferred
    (the “Transferee”), as the case may
    be; or

 

    (iii)     approval by the stockholders
    of a plan of complete liquidation or dissolution of the Company;

 

    provided, however, that a Change in Control shall be deemed not
    to include a transaction described in subsections (i) or
    (ii) of this Section 2.1(g) in which a majority of the
    members of the board of directors of the continuing, surviving
    or successor entity, or parent thereof, immediately after such
    transaction is comprised of Incumbent Directors.

 

    For purposes of the preceding sentence, indirect beneficial
    ownership shall include, without limitation, an interest
    resulting from ownership of the voting securities of one or more
    corporations or other business entities which own the Company or
    the Transferee, as the case may be, either directly or through
    one or more subsidiary corporations or other business entities.
    The Committee shall determine whether multiple sales or
    exchanges of the voting securities of the Company or multiple
    Ownership Change Events are related, and its determination shall
    be final, binding and conclusive.

 

    (h)     “Code”
    means the Internal Revenue Code of 1986, as amended, and
    any applicable regulations or administrative guidelines
    promulgated thereunder.

 

    (i)     “Committee”
    means the Compensation Committee and such other
    committee or subcommittee of the Board, if any, duly appointed
    to administer the Plan and having such powers in each instance
    as shall be specified by the Board. If, at any time, there is no
    committee of the Board then authorized or properly constituted
    to administer the Plan, the Board shall exercise all of the
    powers of the Committee granted herein, and, in any event, the
    Board may in its discretion exercise any or all of such powers.

    

    A-2

 

    (j)     “Company”
    means Molina Healthcare, Inc., a Delaware corporation,
    or any successor corporation thereto.

 

    (k)     “Consultant”
    means a person engaged to provide consulting or advisory
    services (other than as an Employee or a member of the Board) to
    a Participating Company, provided that the identity of such
    person, the nature of such services or the entity to which such
    services are provided would not preclude the Company from
    offering or selling securities to such person pursuant to the
    Plan in reliance on registration on
    Form S-8
    under the Securities Act.

 

    (l)     “Covered
    Employee” means, at any time the Plan is subject to
    Section 162(m), any Employee who is or may reasonably be
    expected to become a “covered employee” as defined in
    Section 162(m), or any successor statute, and who is
    designated, either as an individual Employee or a member of a
    class of Employees, by the Committee no later than the earlier
    of (i) the date that is ninety (90) days after the
    beginning of the Performance Period, or (ii) the date on
    which twenty-five percent (25%) of the Performance Period has
    elapsed, as a “Covered Employee” under this Plan for
    such applicable Performance Period.

 

    (m)     “Director”
    means a member of the Board.

 

    (n)     “Disability”
    means the permanent and total disability of the
    Participant, within the meaning of Section 22(e)(3) of the
    Code.

 

    (o)     “Dividend Equivalent
    Right” means the right of a Participant, granted at
    the discretion of the Committee or as otherwise provided by the
    Plan, to receive a credit for the account of such Participant in
    an amount equal to the cash dividends paid on one share of Stock
    for each share of Stock represented by an Award held by such
    Participant.

 

    (p)     “Employee”
    means any person treated as an employee (including an
    Officer or a member of the Board who is also treated as an
    employee) in the records of a Participating Company and, with
    respect to any Incentive Stock Option granted to such person,
    who is an employee for purposes of Section 422 of the Code;
    provided, however, that neither service as a member of the Board
    nor payment of a director’s fee shall be sufficient to
    constitute employment for purposes of the Plan. The Company
    shall determine in good faith and in the exercise of its
    discretion whether an individual has become or has ceased to be
    an Employee and the effective date of such individual’s
    employment or termination of employment, as the case may be. For
    purposes of an individual’s rights, if any, under the terms
    of the Plan as of the time of the Company’s determination
    of whether or not the individual is an Employee, all such
    determinations by the Company shall be final, binding and
    conclusive as to such rights, if any, notwithstanding that the
    Company or any court of law or governmental agency subsequently
    makes a contrary determination as to such individual’s
    status as an Employee.

 

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

 

    (r)     “Fair Market
    Value” means, as of any date, the value of a share
    of Stock or other property as determined by the Committee, in
    its discretion, or by the Company, in its discretion, if such
    determination is expressly allocated to the Company herein,
    subject to the following:

 

    (i)     Except as otherwise determined
    by the Committee, if, on such date, the Stock is listed or
    quoted on a national or regional securities exchange or
    quotation system, the Fair Market Value of a share of Stock
    shall be the closing price of a share of Stock as quoted on the
    national or regional securities exchange or quotation system
    constituting the primary market for the Stock, as reported in
    The Wall Street Journal or such other source as the
    Company deems reliable. If the relevant date does not fall on a
    day on which the Stock has traded on such securities exchange or
    quotation system, the date on which the Fair Market Value shall
    be established shall be the last day on which the Stock was so
    traded or quoted prior to the relevant date, or such other
    appropriate day as shall be determined by the Committee, in its
    discretion.

 

    (ii)     Notwithstanding the foregoing,
    the Committee may, in its discretion, determine the Fair Market
    Value of a share of Stock on the basis of the opening, closing,
    or average of the high and low sale prices of a share of Stock
    on such date or the preceding trading day, the actual sale price
    of a

    

    A-3

 

    share of Stock received by a Participant, any other reasonable
    basis using actual transactions in the Stock as reported on a
    national or regional securities exchange or quotation system, or
    on any other basis consistent with the requirements of
    Section 409A. The Committee may vary its method of
    determination of the Fair Market Value as provided in this
    Section for different purposes under the Plan to the extent
    consistent with the requirements of Section 409A.

 

    (iii)     If, on such date, the Stock
    is not listed or quoted on a national or regional securities
    exchange or quotation system, the Fair Market Value of a share
    of Stock shall be as determined by the Committee in good faith
    without regard to any restriction other than a restriction
    which, by its terms, will never lapse, and in a manner
    consistent with the requirements of Section 409A.

 

    (s)     “Full Value
    Award” means any Award settled in Stock, other than
    (i) an Option, (ii) a Stock Appreciation Right, or
    (iii) a Restricted Stock Purchase Right or an Other
    Stock-Based Award under which the Company will receive monetary
    consideration equal to the Fair Market Value (determined on the
    effective date of grant) of the shares subject to such Award.

 

    (t)     “Incentive Stock
    Option” means an Option intended to be (as set
    forth in the Award Agreement) and which qualifies as an
    incentive stock option within the meaning of Section 422(b)
    of the Code.

 

    (u)     “Incumbent
    Director” means a director who either (i) is a
    member of the Board as of the Effective Date or (ii) is
    elected, or nominated for election, to the Board with the
    affirmative votes of at least a majority of the Incumbent
    Directors at the time of such election or nomination (but
    excluding a director who was elected or nominated in connection
    with an actual or threatened proxy contest relating to the
    election of directors of the Company).

 

    (v)     “Insider”
    means an Officer, Director or any other person whose
    transactions in Stock are subject to Section 16 of the
    Exchange Act.

 

    (w)     “Net Exercise”
    means a procedure pursuant to which (i) the Company
    will reduce the number of shares otherwise issuable to a
    Participant upon the exercise of an Option by the largest whole
    number of shares having a Fair Market Value that does not exceed
    the aggregate exercise price for the shares with respect to
    which the Option is exercised, and (ii) the Participant
    shall pay to the Company in cash the remaining balance of such
    aggregate exercise price not satisfied by such reduction in the
    number of whole shares to be issued.

 

    (x)     “Nonemployee
    Director” means a Director who is not an Employee.

 

    (y)     “Nonstatutory Stock
    Option” means an Option not intended to be (as set
    forth in the Award Agreement) or which does not qualify as an
    incentive stock option within the meaning of Section 422(b)
    of the Code.

 

    (z)     “Officer”
    means any person designated by the Board as an officer
    of the Company.

 

    (aa)     “Option”
    means an Incentive Stock Option or a Nonstatutory Stock
    Option granted pursuant to the Plan.

 

    (bb)     “Other Stock-Based
    Award” means an Award denominated in shares of
    Stock and granted pursuant to Section 11.

 

    (cc)     “Ownership Change
    Event” means the occurrence of any of the following
    with respect to the Company: (i) the direct or indirect
    sale or exchange in a single or series of related transactions
    by the stockholders of the Company of securities of the Company
    representing more than fifty percent (50%) of the total combined
    voting power of the Company’s then-outstanding securities
    entitled to vote generally in the election of Directors;
    (ii) a merger or consolidation in which the Company is a
    party; or (iii) the sale, exchange, or transfer of all or
    substantially all of the assets of the Company (other than a
    sale, exchange or transfer to one or more subsidiaries of the
    Company).

    

    A-4

 

    (dd)     “Parent
    Corporation” means any present or future
    “parent corporation” of the Company, as defined in
    Section 424(e) of the Code.

 

    (ee)     “Participant”
    means any eligible person who has been granted one or
    more Awards.

 

    (ff)     “Participating
    Company” means the Company or any Parent
    Corporation, Subsidiary Corporation or Affiliate.

 

    (gg)     “Participating
    Company Group” means, at any point in time, the
    Company and all other entities collectively which are then
    Participating Companies.

 

    (hh)     “Performance
    Award” means an Award of Performance Shares or
    Performance Units.

 

    (ii)     “Performance Award
    Formula” means, for any Performance Award, a
    formula or table established by the Committee pursuant to
    Section 10.3 which provides the basis for computing the
    value of a Performance Award at one or more levels of attainment
    of applicable Performance Goal(s) measured as of the end of the
    applicable Performance Period.

 

    (jj)     “Performance-Based
    Compensation” means compensation under an Award
    that satisfies the requirements of Section 162(m) for
    certain performance-based compensation paid to Covered Employees.

 

    (kk)     “Performance
    Goal” means a performance goal established by the
    Committee pursuant to Section 10.3.

 

    (ll)     “Performance
    Period” means a period established by the Committee
    pursuant to Section 10.3 at the end of which one or more
    Performance Goals are to be measured.

 

    (mm)     “Performance
    Share” means a right granted to a Participant
    pursuant to Section 10 to receive a payment equal to the
    value of a Performance Share, as determined by the Committee,
    based upon attainment of applicable Performance Goal(s).

 

    (nn)     “Performance
    Unit” means a right granted to a Participant
    pursuant to Section 10 to receive a payment equal to the
    value of a Performance Unit, as determined by the Committee,
    based upon attainment of applicable Performance Goal(s).

 

    (oo)     “Restricted Stock
    Award” means an Award of a Restricted Stock Bonus
    or a Restricted Stock Purchase Right.

 

    (pp)     “Restricted Stock
    Bonus” means Stock granted to a Participant
    pursuant to Section 8.

 

    (qq)     “Restricted Stock
    Purchase Right” means a right to purchase Stock
    granted to a Participant pursuant to Section 8.

 

    (rr)     “Restricted Stock
    Unit” means a right granted to a Participant
    pursuant to Section 9 to receive on a future date or event
    a share of Stock or cash in lieu thereof, as determined by the
    Committee.

 

    (ss)     “Rule 16b-3”
    means
    Rule 16b-3
    under the Exchange Act, as amended from time to time, or any
    successor rule or regulation.

 

    (tt)     “SAR”
    or “Stock Appreciation Right”
    means a right granted to a Participant pursuant to
    Section 7 to receive payment, for each share of Stock
    subject to such Award, of an amount equal to the excess, if any,
    of the Fair Market Value of a share of Stock on the date of
    exercise of the Award over the exercise price thereof.

 

    (uu)     “Section 162(m)”
    means Section 162(m) of the Code.

 

    (vv)     “Section 409A”
    means Section 409A of the Code.

 

    (ww)     “Section 409A
    Deferred Compensation” means compensation provided
    pursuant to an Award that constitutes nonqualified deferred
    compensation within the meaning of Section 409A.

 

    (xx)     “Securities
    Act” means the Securities Act of 1933, as amended.

    

    A-5

 

    (yy)     “Service”
    means a Participant’s employment or service with
    the Participating Company Group, whether as an Employee, a
    Director or a Consultant. Unless otherwise provided by the
    Committee, a Participant’s Service shall not be deemed to
    have terminated merely because of a change in the capacity in
    which the Participant renders such Service or a change in the
    Participating Company for which the Participant renders such
    Service, provided that there is no interruption or termination
    of the Participant’s Service. Furthermore, a
    Participant’s Service shall not be deemed to have been
    interrupted or terminated if the Participant takes any military
    leave, sick leave, or other bona fide leave of absence approved
    by the Company. However, unless otherwise provided by the
    Committee, if any such leave taken by a Participant exceeds
    ninety (90) days, then on the ninety-first (91st) day
    following the commencement of such leave the Participant’s
    Service shall be deemed to have terminated, unless the
    Participant’s right to return to Service is guaranteed by
    statute or contract. Notwithstanding the foregoing, unless
    otherwise designated by the Company or required by law, an
    unpaid leave of absence shall not be treated as Service for
    purposes of determining vesting under the Participant’s
    Award Agreement. A Participant’s Service shall be deemed to
    have terminated either upon an actual termination of Service or
    upon the business entity for which the Participant performs
    Service ceasing to be a Participating Company. Subject to the
    foregoing, the Company, in its discretion, shall determine
    whether the Participant’s Service has terminated and the
    effective date of such termination.

 

    (zz)     “Stock”
    means the common stock of the Company, as adjusted from
    time to time in accordance with Section 4.2.

 

    (aaa) “Subsidiary Corporation” means any
    present or future “subsidiary corporation” of the
    Company, as defined in Section 424(f) of the Code.

 

    (bbb) “Ten Percent Owner” means a
    Participant who, at the time an Option is granted to the
    Participant, owns stock possessing more than ten percent (10%)
    of the total combined voting power of all classes of stock of a
    Participating Company (other than an Affiliate) within the
    meaning of Section 422(b)(6) of the Code.

 

    (ccc)     “Trading
    Compliance Policy” means the written policy of the
    Company pertaining to the purchase, sale, transfer or other
    disposition of the Company’s equity securities by
    Directors, Officers, Employees or other service providers who
    may possess material, nonpublic information regarding the
    Company or its securities.

 

    (ddd) “Vesting Conditions” mean
    those conditions established in accordance with the Plan prior
    to the satisfaction of which shares subject to an Award remain
    subject to forfeiture or a repurchase option in favor of the
    Company exercisable for the Participant’s monetary purchase
    price, if any, for such shares upon the Participant’s
    termination of Service.

 

    2.2     Construction. Captions
    and titles contained herein are for convenience only and shall
    not affect the meaning or interpretation of any provision of the
    Plan. Except when otherwise indicated by the context, the
    singular shall include the plural and the plural shall include
    the singular. Use of the term “or” is not intended to
    be exclusive, unless the context clearly requires otherwise.

 

		
	    3.       	
    ADMINISTRATION.

 

    3.1     Administration by the
    Committee.  The Plan shall be administered by the
    Committee. All questions of interpretation of the Plan, of any
    Award Agreement or of any other form of agreement or other
    document employed by the Company in the administration of the
    Plan or of any Award shall be determined by the Committee, and
    such determinations shall be final, binding and conclusive upon
    all persons having an interest in the Plan or such Award, unless
    fraudulent or made in bad faith. Any and all actions, decisions
    and determinations taken or made by the Committee in the
    exercise of its discretion pursuant to the Plan or Award
    Agreement or other agreement thereunder (other than determining
    questions of interpretation pursuant to the preceding sentence)
    shall be final, binding and conclusive upon all persons having
    an interest therein. All expenses incurred in the administration
    of the Plan shall be paid by the Company.

 

    3.2     Authority of
    Officers.  Any Officer shall have the authority to
    act on behalf of the Company with respect to any matter, right,
    obligation, determination or election which is the
    responsibility of

    

    A-6

 

    or which is allocated to the Company herein, provided the
    Officer has apparent authority with respect to such matter,
    right, obligation, determination or election. To the extent
    permitted by applicable law, the Committee may, in its
    discretion, delegate to a committee comprised of one or more
    Officers the authority to grant one or more Awards, without
    further approval of the Committee, to any Employee, other than a
    person who, at the time of such grant, is an Insider or a
    Covered Employee, and to exercise such other powers under the
    Plan as the Committee may determine; provided, however, that
    (a) the Committee shall fix the maximum number of shares
    subject to Awards that may be granted by such Officers,
    (b) each such Award shall be subject to the terms and
    conditions of the appropriate standard form of Award Agreement
    approved by the Board or the Committee and shall conform to the
    provisions of the Plan, and (c) each such Award shall
    conform to such other limits and guidelines as may be
    established from time to time by the Committee.

 

    3.3     Administration with Respect
    to Insiders.  With respect to participation by
    Insiders in the Plan, at any time that any class of equity
    security of the Company is registered pursuant to
    Section 12 of the Exchange Act, the Plan shall be
    administered in compliance with the requirements, if any, of
    Rule 16b-3.

 

    3.4     Committee Complying with
    Section 162(m).  If the Company is a
    “publicly held corporation” within the meaning of
    Section 162(m), the Board may establish a Committee of
    “outside directors” within the meaning of
    Section 162 (m) to approve the grant of any Award
    intended to result in the payment of Performance-Based
    Compensation.

 

    3.5     Powers of the
    Committee.  In addition to any other powers set
    forth in the Plan and subject to the provisions of the Plan, the
    Committee shall have the full and final power and authority, in
    its discretion:

 

    (a)     to determine the persons to
    whom, and the time or times at which, Awards shall be granted
    and the number of shares of Stock, units or monetary value to be
    subject to each Award;

 

    (b)     to determine the type of Award
    granted;

 

    (c)     to determine the Fair Market
    Value of shares of Stock or other property;

 

    (d)     to determine the terms,
    conditions and restrictions applicable to each Award (which need
    not be identical) and any shares acquired pursuant thereto,
    including, without limitation, (i) the exercise or purchase
    price of shares pursuant to any Award, (ii) the method of
    payment for shares purchased pursuant to any Award,
    (iii) the method for satisfaction of any tax withholding
    obligation arising in connection with any Award, including by
    the withholding or delivery of shares of Stock, (iv) the
    timing, terms and conditions of the exercisability or vesting of
    any Award or any shares acquired pursuant thereto, (v) the
    Performance Measures, Performance Period, Performance Award
    Formula and Performance Goals applicable to any Award and the
    extent to which such Performance Goals have been attained,
    (vi) the time of the expiration of any Award,
    (vii) the effect of the Participant’s termination of
    Service on any of the foregoing, and (viii) all other
    terms, conditions and restrictions applicable to any Award or
    shares acquired pursuant thereto not inconsistent with the terms
    of the Plan;

 

    (e)     to determine whether an Award
    will be settled in shares of Stock, cash, other property, or in
    any combination thereof;

 

    (f)     to approve one or more forms of
    Award Agreement;

 

    (g)     to amend, modify, extend,
    cancel or renew any Award or to waive any restrictions or
    conditions applicable to any Award or any shares acquired
    pursuant thereto;

 

    (h)     to accelerate, continue, extend
    or defer the exercisability or vesting of any Award or any
    shares acquired pursuant thereto, including with respect to the
    period following a Participant’s termination of Service;

 

    (i)     to prescribe, amend or rescind
    rules, guidelines and policies relating to the Plan, or to adopt
    sub-plans or
    supplements to, or alternative versions of, the Plan, including,
    without limitation, as the Committee deems necessary or
    desirable to comply with the laws or regulations of or to

    

    A-7

 

    accommodate the tax policy, accounting principles or custom of,
    foreign jurisdictions whose citizens may be granted
    Awards; and

 

    (j)     to correct any defect, supply
    any omission or reconcile any inconsistency in the Plan or any
    Award Agreement and to make all other determinations and take
    such other actions with respect to the Plan or any Award as the
    Committee may deem advisable to the extent not inconsistent with
    the provisions of the Plan or applicable law.

 

    3.6     Option or SAR
    Repricing.  Without the affirmative vote of
    holders of a majority of the shares of Stock cast in person or
    by proxy at a meeting of the stockholders of the Company at
    which a quorum representing a majority of all outstanding shares
    of Stock is present or represented by proxy, the Committee shall
    not approve a program providing for either (a) the
    cancellation of outstanding Options or SARs having exercise
    prices per share greater than the then Fair Market Value of a
    share of Stock (“Underwater Awards”) and
    the grant in substitution therefore of new Options or SARs
    having a lower exercise price, Full Value Awards or payments in
    cash, or (b) the amendment of outstanding Underwater Awards
    to reduce the exercise price thereof. This Section shall not
    apply to adjustments pursuant to the assumption of or
    substitution for an Option or SAR in a manner that would comply
    with Section 424(a) or Section 409A of the Code or to
    an adjustment pursuant to Section 4.2.

 

    3.7     Indemnification.  In
    addition to such other rights of indemnification as they may
    have as members of the Board or the Committee or as officers or
    employees of the Participating Company Group, members of the
    Board or the Committee and any officers or employees of the
    Participating Company Group to whom authority to act for the
    Board, the Committee or the Company is delegated shall be
    indemnified by the Company against all reasonable expenses,
    including attorneys’ fees, actually and necessarily
    incurred in connection with the defense of any action, suit or
    proceeding, or in connection with any appeal therein, to which
    they or any of them may be a party by reason of any action taken
    or failure to act under or in connection with the Plan, or any
    right granted hereunder, and against all amounts paid by them in
    settlement thereof (provided such settlement is approved by
    independent legal counsel selected by the Company) or paid by
    them in satisfaction of a judgment in any such action, suit or
    proceeding, except in relation to matters as to which it shall
    be adjudged in such action, suit or proceeding that such person
    is liable for gross negligence, bad faith or intentional
    misconduct in duties; provided, however, that within sixty
    (60) days after the institution of such action, suit or
    proceeding, such person shall offer to the Company, in writing,
    the opportunity at its own expense to handle and defend the same.

 

		
	    4.       	
    SHARES SUBJECT TO PLAN.

 

    4.1     Maximum Number of
    Shares Issuable.  Subject to adjustment as
    provided in Section 4.2, the maximum aggregate number of
    shares of Stock that may be issued under the Plan shall be three
    million (3,000,000) and shall consist of authorized but unissued
    or reacquired shares of Stock or any combination thereof.

 

    4.2     Adjustments for Changes in
    Capital Structure.  Subject to any required action
    by the stockholders of the Company and the requirements of
    Sections 409A and 424 of the Code to the extent applicable,
    in the event of any change in the Stock effected without receipt
    of consideration by the Company, whether through merger,
    consolidation, reorganization, reincorporation,
    recapitalization, reclassification, stock dividend, stock split,
    reverse stock split,
    split-up,
    split-off, spin-off, combination of shares, exchange of shares,
    or similar change in the capital structure of the Company, or in
    the event of payment of a dividend or distribution to the
    stockholders of the Company in a form other than Stock
    (excepting regular, periodic cash dividends) that has a material
    effect on the Fair Market Value of shares of Stock, appropriate
    and proportionate adjustments shall be made in the number and
    kind of shares subject to the Plan and to any outstanding
    Awards, in the Award limits set forth in Section 5.3 and in
    the exercise or purchase price per share under any outstanding
    Award in order to prevent dilution or enlargement of
    Participants’ rights under the Plan. For purposes of the
    foregoing, conversion of any convertible securities of the
    Company shall not be treated as “effected without receipt
    of consideration by the Company.” If a majority of the
    shares which are of the same class as the shares that are
    subject to outstanding Awards are exchanged for, converted into,
    or otherwise become (whether or not pursuant to an Ownership
    Change Event) shares of another corporation (the “New

    

    A-8

 

    Shares”), the Committee may unilaterally amend the
    outstanding Awards to provide that such Awards are for New
    Shares. In the event of any such amendment, the number of shares
    subject to, and the exercise or purchase price per share of, the
    outstanding Awards shall be adjusted in a fair and equitable
    manner as determined by the Committee, in its discretion. Any
    fractional share resulting from an adjustment pursuant to this
    Section shall be rounded down to the nearest whole number, and
    in no event may the exercise or purchase price under any Award
    be decreased to an amount less than the par value, if any, of
    the stock subject to such Award. The Committee in its
    discretion, may also make such adjustments in the terms of any
    Award to reflect, or related to, such changes in the capital
    structure of the Company or distributions as it deems
    appropriate, including modification of Performance Goals,
    Performance Award Formulas and Performance Periods. The
    adjustments determined by the Committee pursuant to this Section
    shall be final, binding and conclusive.

 

    4.3 Assumption or Substitution of
    Awards.  The Committee may, without affecting the
    number of shares of Stock available pursuant to
    Section 4.1, authorize the issuance or assumption of
    benefits under this Plan in connection with any merger,
    consolidation, acquisition of property or stock, or
    reorganization upon such terms and conditions as it may deem
    appropriate, subject to compliance with Section 409A and
    any other applicable provisions of the Code.

 

		
	    5.       	
    ELIGIBILITY, PARTICIPATION AND AWARD LIMITATIONS.

 

    5.1     Persons Eligible for
    Awards.  Awards may be granted only to Employees,
    Consultants and Directors.

 

    5.2     Participation in the
    Plan.  Awards are granted solely at the discretion
    of the Committee. Eligible persons may be granted more than one
    Award. However, eligibility in accordance with this Section
    shall not entitle any person to be granted an Award, or, having
    been granted an Award, to be granted an additional Award.

 

    5.3     Award Limitations.

 

    (a)     Incentive Stock Option
    Limitations.

 

    (i)     Maximum Number of
    Shares Issuable Pursuant to Incentive Stock
    Options.  Subject to adjustment as provided in
    Section 4.2, the maximum aggregate number of shares of
    Stock that may be issued under the Plan pursuant to the exercise
    of Incentive Stock Options shall not exceed three million
    (3,000,000). The maximum aggregate number of shares of Stock
    that may be issued under the Plan pursuant to all Awards other
    than Incentive Stock Options shall be the number of shares
    determined in accordance with Section 4.1.

 

    (ii)     Persons
    Eligible.  An Incentive Stock Option may be
    granted only to a person who, on the effective date of grant, is
    an Employee of the Company, a Parent Corporation or a Subsidiary
    Corporation (each being an “ISO-Qualifying
    Corporation”). Any person who is not an Employee of an
    ISO-Qualifying Corporation on the effective date of the grant of
    an Option to such person may be granted only a Nonstatutory
    Stock Option.

 

    (iii)     Fair Market Value
    Limitation.  To the extent that options designated
    as Incentive Stock Options (granted under all stock option plans
    of the Participating Company Group, including the Plan) become
    exercisable by a Participant for the first time during any
    calendar year for stock having a Fair Market Value greater than
    One Hundred Thousand Dollars ($100,000), the portion of such
    options which exceeds such amount shall be treated as
    Nonstatutory Stock Options. For purposes of this Section,
    options designated as Incentive Stock Options shall be taken
    into account in the order in which they were granted, and the
    Fair Market Value of stock shall be determined as of the time
    the option with respect to such stock is granted. If the Code is
    amended to provide for a limitation different from that set
    forth in this Section, such different limitation shall be deemed
    incorporated herein effective as of the date and with respect to
    such Options as required or permitted by such amendment to the
    Code. If an Option is treated as an Incentive Stock Option in
    part and as a Nonstatutory Stock Option in part by reason of the
    limitation set forth in this Section, the Participant may
    designate which portion of such Option the Participant is
    exercising. In the absence of such

    

    A-9

 

    designation, the Participant shall be deemed to have exercised
    the Incentive Stock Option portion of the Option first. Upon
    exercise, shares issued pursuant to each such portion shall be
    separately identified.

 

    (b)     Section 162(m) Award
    Limits.  Subject to adjustment as provided in
    Section 4.2, no Employee shall be granted within any fiscal year
    of the Company one or more Awards intended to qualify for
    treatment as Performance-Based Compensation which in the
    aggregate are for more than five hundred thousand (500,000)
    shares.

 

		
	    6.       	
    STOCK OPTIONS.

 

    Options shall be evidenced by Award Agreements specifying the
    number of shares of Stock covered thereby, in such form as the
    Committee shall from time to time establish. Award Agreements
    evidencing Options may incorporate all or any of the terms of
    the Plan by reference and shall comply with and be subject to
    the following terms and conditions:

 

    6.1     Exercise
    Price.  The exercise price for each Option shall
    be established in the discretion of the Committee; provided,
    however, that (a) the exercise price per share shall be not
    less than the Fair Market Value of a share of Stock on the
    effective date of grant of the Option and (b) no Incentive
    Stock Option granted to a Ten Percent Owner shall have an
    exercise price per share less than one hundred ten percent
    (110%) of the Fair Market Value of a share of Stock on the
    effective date of grant of the Option. Notwithstanding the
    foregoing, an Option (whether an Incentive Stock Option or a
    Nonstatutory Stock Option) may be granted with an exercise price
    lower than the minimum exercise price set forth above if such
    Option is granted pursuant to an assumption or substitution for
    another option in a manner that would qualify under the
    provisions of Section 409A or 424(a) of the Code.

 

    6.2     Exercisability and Term of
    Options.  Options shall be exercisable at such
    time or times, or upon such event or events, and subject to such
    terms, conditions, performance criteria and restrictions as
    shall be determined by the Committee and set forth in the Award
    Agreement evidencing such Option; provided, however, that
    (a) no Option shall be exercisable after the expiration of
    ten (10) years after the effective date of grant of such
    Option, (b) no Incentive Stock Option granted to a Ten
    Percent Owner shall be exercisable after the expiration of five
    (5) years after the effective date of grant of such Option
    and (c) no Option granted to an Employee who is a
    non-exempt employee for purposes of the Fair Labor Standards Act
    of 1938, as amended, shall be first exercisable until at least
    six (6) months following the date of grant of such Option
    (except in the event of such Employee’s death, disability
    or retirement, upon a Change in Control, or as otherwise
    permitted by the Worker Economic Opportunity Act). Subject to
    the foregoing, unless otherwise specified by the Committee in
    the grant of an Option, each Option shall terminate ten
    (10) years after the effective date of grant of the Option,
    unless earlier terminated in accordance with its provisions.

 

    6.3     Payment of Exercise
    Price.

 

    (a)     Forms of Consideration
    Authorized.  Except as otherwise provided below,
    payment of the exercise price for the number of shares of Stock
    being purchased pursuant to any Option shall be made (i) in
    cash, by check or in cash equivalent, (ii) by tender to the
    Company, or attestation to the ownership, of shares of Stock
    owned by the Participant having a Fair Market Value not less
    than the exercise price (a “Stock Tender
    Exercise”), (iii) by delivery of a properly
    executed notice of exercise together with irrevocable
    instructions to a broker providing for the assignment to the
    Company of the proceeds of a sale or loan with respect to some
    or all of the shares being acquired upon the exercise of the
    Option (including, without limitation, through an exercise
    complying with the provisions of Regulation T as
    promulgated from time to time by the Board of Governors of the
    Federal Reserve System) (a “Cashless
    Exercise”), (iv) by delivery of a properly
    executed notice electing a Net Exercise, (v) by such other
    consideration as may be approved by the Committee from time to
    time to the extent permitted by applicable law, or (vi) by
    any combination thereof. The Committee may at any time or from
    time to time grant Options which do not permit all of the
    foregoing forms of consideration to be used in payment of the
    exercise price or which otherwise restrict one or more forms of
    consideration.

    

    A-10

 

    (b)     Limitations on Forms of
    Consideration.

 

    (i)     Stock Tender
    Exercise.  Notwithstanding the foregoing, a Stock
    Tender Exercise shall not be permitted if it would constitute a
    violation of the provisions of any law, regulation or agreement
    restricting the redemption of the Company’s stock. If
    required by the Company, an Option may not be exercised by
    tender to the Company, or attestation to the ownership, of
    shares of Stock unless such shares either have been owned by the
    Participant for a period of time required by the Company (and
    not used for another option exercise by attestation during such
    period) or were not acquired, directly or indirectly, from the
    Company.

 

    (ii)     Cashless
    Exercise.  The Company reserves, at any and all
    times, the right, in the Company’s sole and absolute
    discretion, to establish, decline to approve or terminate any
    program or procedures for the exercise of Options by means of a
    Cashless Exercise, including with respect to one or more
    Participants specified by the Company notwithstanding that such
    program or procedures may be available to other Participants.

 

    6.4     Effect of Termination of
    Service.

 

    (a)     Option
    Exercisability.  Subject to earlier
    termination of the Option as otherwise provided herein and
    unless otherwise provided by the Committee, an Option shall
    terminate immediately upon the Participant’s termination of
    Service to the extent that it is then unvested and shall be
    exercisable after the Participant’s termination of Service
    to the extent it is then vested only during the applicable time
    period determined in accordance with this Section and thereafter
    shall terminate.

 

    (i)     Disability.  If
    the Participant’s Service terminates because of the
    Disability of the Participant, the Option, to the extent
    unexercised and exercisable for vested shares on the date on
    which the Participant’s Service terminated, may be
    exercised by the Participant (or the Participant’s guardian
    or legal representative) at any time prior to the expiration of
    twelve (12) months after the date on which the
    Participant’s Service terminated, but in any event no later
    than the date of expiration of the Option’s term as set
    forth in the Award Agreement evidencing such Option (the
    “Option Expiration Date”).

 

    (ii)     Death.  If
    the Participant’s Service terminates because of the death
    of the Participant, then (A) the Option, to the extent
    unexercised and exercisable for vested shares on the date on
    which the Participant’s Service terminated, may be
    exercised by the Participant’s legal representative or
    other person who acquired the right to exercise the Option by
    reason of the Participant’s death at any time prior to the
    expiration of twelve (12) months after the date on which
    the Participant’s Service terminated, but in any event no
    later than the Option Expiration Date, and (B) solely for
    the purposes of determining the number of vested shares subject
    to the Option as of the date on which the Participant’s
    Service terminated, the Participant shall be credited with an
    additional twelve (12) months of Service. The
    Participant’s Service shall be deemed to have terminated on
    account of death if the Participant dies within three
    (3) months after the Participant’s termination of
    Service; provided, however, that the Participant shall not be
    credited with additional months of Service if the Participant
    dies after the Participant’s Service has otherwise
    terminated.

 

    (iii)     Termination for
    Cause.  Notwithstanding any other provision of the
    Plan to the contrary, if the Participant’s Service is
    terminated for Cause or if, following the Participant’s
    termination of Service and during any period in which the Option
    otherwise would remain exercisable, the Participant engages in
    any act that would constitute Cause, the Option shall terminate
    in its entirety and cease to be exercisable immediately upon
    such termination of Service or act.

 

    (iv)     Other Termination of
    Service.  If the Participant’s Service
    terminates for any reason, except Disability, death or Cause,
    the Option, to the extent unexercised and exercisable for vested
    shares on the date on which the Participant’s Service
    terminated, may be exercised by the Participant at any time
    prior to the expiration of three (3) months after the date
    on which the Participant’s Service terminated, but in any
    event no later than the Option Expiration Date.

 

    (b)     Extension if Exercise
    Prevented by Law.  Notwithstanding the
    foregoing, other than termination of Service for Cause, if the
    exercise of an Option within the applicable time periods set
    forth in

    

    A-11

 

    Section 6.4(a) is prevented by the provisions of
    Section 14 below, the Option shall remain exercisable until
    the later of (i) thirty (30) days after the date such
    exercise first would no longer be prevented by such provisions
    or (ii) the end of the applicable time period under
    Section 6.4 (a), but in any event no later than the Option
    Expiration Date.

 

    6.5     Transferability of
    Options.  During the lifetime of the Participant,
    an Option shall be exercisable only by the Participant or the
    Participant’s guardian or legal representative. An Option
    shall not be subject in any manner to anticipation, alienation,
    sale, exchange, transfer, assignment, pledge, encumbrance, or
    garnishment by creditors of the Participant or the
    Participant’s beneficiary, except transfer by will or by
    the laws of descent and distribution. Notwithstanding the
    foregoing, to the extent permitted by the Committee, in its
    discretion, and set forth in the Award Agreement evidencing such
    Option, an Option shall be assignable or transferable subject to
    the applicable limitations, if any, described in the General
    Instructions to
    Form S-8
    under the Securities Act or, in the case of an Incentive Stock
    Option, only as permitted by applicable regulations under
    Section 421 of the Code in a manner that does not
    disqualify such Option as an Incentive Stock Option.

 

		
	    7.       	
    STOCK APPRECIATION RIGHTS.

 

    Stock Appreciation Rights shall be evidenced by Award Agreements
    specifying the number of shares of Stock subject to the Award,
    in such form as the Committee shall from time to time establish.
    Award Agreements evidencing SARs may incorporate all or any of
    the terms of the Plan by reference and shall comply with and be
    subject to the following terms and conditions:

 

    7.1     Types of SARs
    Authorized.  SARs may be granted in tandem with
    all or any portion of a related Option (a “Tandem
    SAR”) or may be granted independently of any Option
    (a “Freestanding SAR”). A Tandem SAR may
    only be granted concurrently with the grant of the related
    Option.

 

    7.2     Exercise
    Price.  The exercise price for each SAR shall be
    established in the discretion of the Committee; provided,
    however, that (a) the exercise price per share subject to a
    Tandem SAR shall be the exercise price per share under the
    related Option and (b) the exercise price per share subject
    to a Freestanding SAR shall be not less than the Fair Market
    Value of a share of Stock on the effective date of grant of the
    SAR. Notwithstanding the foregoing, a an SAR may be granted with
    an exercise price lower than the minimum exercise price set
    forth above if such SAR is granted pursuant to an assumption or
    substitution for another stock appreciation right in a manner
    that would qualify under the provisions of Section 409A of
    the Code.

 

    7.3     Exercisability and Term of
    SARs.

 

    (a)     Tandem
    SARs.  Tandem SARs shall be exercisable only
    at the time and to the extent, and only to the extent, that the
    related Option is exercisable, subject to such provisions as the
    Committee may specify where the Tandem SAR is granted with
    respect to less than the full number of shares of Stock subject
    to the related Option. The Committee may, in its discretion,
    provide in any Award Agreement evidencing a Tandem SAR that such
    SAR may not be exercised without the advance approval of the
    Company and, if such approval is not given, then the Option
    shall nevertheless remain exercisable in accordance with its
    terms. A Tandem SAR shall terminate and cease to be exercisable
    no later than the date on which the related Option expires or is
    terminated or canceled. Upon the exercise of a Tandem SAR with
    respect to some or all of the shares subject to such SAR, the
    related Option shall be canceled automatically as to the number
    of shares with respect to which the Tandem SAR was exercised.
    Upon the exercise of an Option related to a Tandem SAR as to
    some or all of the shares subject to such Option, the related
    Tandem SAR shall be canceled automatically as to the number of
    shares with respect to which the related Option was exercised.

 

    (b)     Freestanding
    SARs.  Freestanding SARs shall be exercisable
    at such time or times, or upon such event or events, and subject
    to such terms, conditions, performance criteria and restrictions
    as shall be determined by the Committee and set forth in the
    Award Agreement evidencing such SAR; provided, however, that
    (i) no Freestanding SAR shall be exercisable after the
    expiration of ten (10) years after the effective date of
    grant of such SAR and (b) no Freestanding SAR granted to an
    Employee who is a non-exempt employee for purposes of the Fair
    Labor Standards Act of 1938, as amended, shall be first
    exercisable until at least six

    

    A-12

 

    (6) months following the date of grant of such SAR (except
    in the event of such Employee’s death, disability or
    retirement, upon a Change in Control, or as otherwise permitted
    by the Worker Economic Opportunity Act). Subject to the
    foregoing, unless otherwise specified by the Committee in the
    grant of a Freestanding SAR, each Freestanding SAR shall
    terminate ten (10) years after the effective date of grant
    of the SAR, unless earlier terminated in accordance with its
    provisions.

 

    7.4     Exercise of
    SARs.  Upon the exercise (or deemed exercise
    pursuant to Section 7.5) of an SAR, the Participant (or the
    Participant’s legal representative or other person who
    acquired the right to exercise the SAR by reason of the
    Participant’s death) shall be entitled to receive payment
    of an amount for each share with respect to which the SAR is
    exercised equal to the excess, if any, of the Fair Market Value
    of a share of Stock on the date of exercise of the SAR over the
    exercise price. Payment of such amount shall be made (a) in
    the case of a Tandem SAR, solely in shares of Stock in a lump
    sum upon the date of exercise of the SAR and (b) in the
    case of a Freestanding SAR, in cash, shares of Stock, or any
    combination thereof as determined by the Committee, in a lump
    sum upon the date of exercise of the SAR. When payment is to be
    made in shares of Stock, the number of shares to be issued shall
    be determined on the basis of the Fair Market Value of a share
    of Stock on the date of exercise of the SAR. For purposes of
    Section 7, an SAR shall be deemed exercised on the date on
    which the Company receives notice of exercise from the
    Participant or as otherwise provided in Section 7.5.

 

    7.5     Deemed Exercise of
    SARs.  If, on the date on which an SAR would
    otherwise terminate or expire, the SAR by its terms remains
    exercisable immediately prior to such termination or expiration
    and, if so exercised, would result in a payment to the holder of
    such SAR, then any portion of such SAR which has not previously
    been exercised shall automatically be deemed to be exercised as
    of such date with respect to such portion.

 

    7.6     Effect of Termination of
    Service.  Subject to earlier termination of the
    SAR as otherwise provided herein and unless otherwise provided
    by the Committee, an SAR shall be exercisable after a
    Participant’s termination of Service only to the extent and
    during the applicable time period determined in accordance with
    Section 6.4 (treating the SAR as if it were an Option) and
    thereafter shall terminate.

 

    7.7     Transferability of
    SARs.  During the lifetime of the Participant, an
    SAR shall be exercisable only by the Participant or the
    Participant’s guardian or legal representative. An SAR
    shall not be subject in any manner to anticipation, alienation,
    sale, exchange, transfer, assignment, pledge, encumbrance, or
    garnishment by creditors of the Participant or the
    Participant’s beneficiary, except transfer by will or by
    the laws of descent and distribution. Notwithstanding the
    foregoing, to the extent permitted by the Committee, in its
    discretion, and set forth in the Award Agreement evidencing such
    Award, a Tandem SAR related to a Nonstatutory Stock Option or a
    Freestanding SAR shall be assignable or transferable subject to
    the applicable limitations, if any, described in the General
    Instructions to
    Form S-8
    under the Securities Act.

 

		
	    8.       	
    RESTRICTED STOCK AWARDS.

 

    Restricted Stock Awards shall be evidenced by Award Agreements
    specifying whether the Award is a Restricted Stock Bonus or a
    Restricted Stock Purchase Right and the number of shares of
    Stock subject to the Award, in such form as the Committee shall
    from time to time establish. Award Agreements evidencing
    Restricted Stock Awards may incorporate all or any of the terms
    of the Plan by reference and shall comply with and be subject to
    the following terms and conditions:

 

    8.1     Types of Restricted Stock
    Awards Authorized.  Restricted Stock Awards may be
    granted in the form of either a Restricted Stock Bonus or a
    Restricted Stock Purchase Right. Restricted Stock Awards may be
    granted upon such conditions as the Committee shall determine,
    including, without limitation, upon the attainment of one or
    more Performance Goals described in Section 10.4. If either
    the grant of or satisfaction of Vesting Conditions applicable to
    a Restricted Stock Award is to be contingent upon the attainment
    of one or more Performance Goals, the Committee shall follow
    procedures substantially equivalent to those set forth in
    Sections 10.3 through 10.5(a).

 

    8.2     Purchase
    Price.  The purchase price for shares of Stock
    issuable under each Restricted Stock Purchase Right shall be
    established by the Committee in its discretion. No monetary
    payment (other

    

    A-13

 

    than applicable tax withholding) shall be required as a
    condition of receiving shares of Stock pursuant to a Restricted
    Stock Bonus, the consideration for which shall be services
    actually rendered to a Participating Company or for its benefit.
    Notwithstanding the foregoing, if required by applicable state
    corporate law, the Participant shall furnish consideration in
    the form of cash or past services rendered to a Participating
    Company or for its benefit having a value not less than the par
    value of the shares of Stock subject to a Restricted Stock Award.

 

    8.3     Purchase
    Period.  A Restricted Stock Purchase Right shall
    be exercisable within a period established by the Committee,
    which shall in no event exceed thirty (30) days from the
    effective date of the grant of the Restricted Stock Purchase
    Right.

 

    8.4     Payment of Purchase
    Price.  Except as otherwise provided below,
    payment of the purchase price for the number of shares of Stock
    being purchased pursuant to any Restricted Stock Purchase Right
    shall be made (a) in cash, by check or in cash equivalent,
    (b) by such other consideration as may be approved by the
    Committee from time to time to the extent permitted by
    applicable law, or (c) by any combination thereof.

 

    8.5     Vesting and Restrictions on
    Transfer.  Shares issued pursuant to any
    Restricted Stock Award shall be made subject to
    Vesting Conditions based upon the satisfaction of such Service
    requirements, conditions, restrictions or performance criteria,
    including, without limitation, Performance Goals as described in
    Section 10.4, as shall be established by the Committee and
    set forth in the Award Agreement evidencing such Award; provided
that, with respect to all Restricted Stock Awards other than those
made to any Nonemployee Director, (i) the Vesting Conditions for
non-performance based Restricted Stock Awards shall provide that the
vesting period be at least three years and (ii) the Vesting
Conditions for performance-based Restricted Stock Awards shall
provide that the vesting period be at least one year.

 

    During any period in which shares acquired pursuant to a
    Restricted Stock Award remain subject to Vesting Conditions,
    such shares may not be sold, exchanged, transferred, pledged,
    assigned or otherwise disposed of other than pursuant to an
    Ownership Change Event or as provided in Section 8.8. The
    Committee, in its discretion, may provide in any Award Agreement
    evidencing a Restricted Stock Award that, if the satisfaction of
    Vesting Conditions with respect to any shares subject to such
    Restricted Stock Award would otherwise occur on a day on which
    the sale of such shares would violate the provisions of the
    Trading Compliance Policy, then satisfaction of the Vesting
    Conditions automatically shall be determined on the next trading
    day on which the sale of such shares would not violate the
    Trading Compliance Policy. Upon request by the Company, each
    Participant shall execute any agreement evidencing such transfer
    restrictions prior to the receipt of shares of Stock hereunder
    and shall promptly present to the Company any and all
    certificates representing shares of Stock acquired hereunder for
    the placement on such certificates of appropriate legends
    evidencing any such transfer restrictions.

 

    8.6     Voting Rights; Dividends and
    Distributions.  Except as provided in this
    Section, Section 8.5 and any Award Agreement, during any
    period in which shares acquired pursuant to a Restricted Stock
    Award remain subject to Vesting Conditions, the Participant
    shall have all of the rights of a stockholder of the Company
    holding shares of Stock, including the right to vote such shares
    and to receive all dividends and other distributions paid with
    respect to such shares; provided, however, that if so determined
    by the Committee and provided by the Award Agreement, such
    dividends and distributions shall be subject to the same Vesting
    Conditions as the shares subject to the Restricted Stock Award
    with respect to which such dividends or distributions were paid,
    and otherwise shall be paid no later than the end of the
    calendar year in which such dividends or distributions are paid
    to stockholders (or, if later, the 15th day of the third
    month following the date such dividends or distributions are
    paid to stockholders). In the event of a dividend or
    distribution paid in shares of Stock or other property or any
    other adjustment made upon a change in the capital structure of
    the Company as described in Section 4.2, any and all new,
    substituted or additional securities or other property (other
    than regular, periodic cash dividends) to which the Participant
    is entitled by reason of the Participant’s Restricted Stock
    Award shall be immediately subject to the same Vesting
    Conditions as the shares subject to the Restricted Stock Award
    with respect to which such dividends or distributions were paid
    or adjustments were made.

 

    8.7     Effect of Termination of
    Service.  Unless otherwise provided by the
    Committee in the Award Agreement evidencing a Restricted Stock
    Award, if a Participant’s Service terminates for any
    reason, whether voluntary or involuntary (including the
    Participant’s death or disability), then (a) the
    Company shall have the option to repurchase for the purchase
    price paid by the Participant any shares acquired by the

    

    A-14

 

    Participant pursuant to a Restricted Stock Purchase Right which
    remain subject to Vesting Conditions as of the date of the
    Participant’s termination of Service and (b) the
    Participant shall forfeit to the Company any shares acquired by
    the Participant pursuant to a Restricted Stock Bonus which
    remain subject to Vesting Conditions as of the date of the
    Participant’s termination of Service. The Company shall
    have the right to assign at any time any repurchase right it may
    have, whether or not such right is then exercisable, to one or
    more persons as may be selected by the Company.

 

    8.8     Nontransferability of
    Restricted Stock Award Rights.  Rights to acquire
    shares of Stock pursuant to a Restricted Stock Award shall
    not be subject in any manner to anticipation, alienation, sale,
    exchange, transfer, assignment, pledge, encumbrance or
    garnishment by creditors of the Participant or the
    Participant’s beneficiary, except transfer by will or the
    laws of descent and distribution. All rights with respect to a
    Restricted Stock Award granted to a Participant hereunder shall
    be exercisable during his or her lifetime only by such
    Participant or the Participant’s guardian or legal
    representative.

 

		
	    9.       	
    RESTRICTED STOCK UNIT AWARDS.

 

    Restricted Stock Unit Awards shall be evidenced by Award
    Agreements specifying the number of Restricted Stock Units
    subject to the Award, in such form as the Committee shall from
    time to time establish. Award Agreements evidencing Restricted
    Stock Units may incorporate all or any of the terms of the Plan
    by reference and shall comply with and be subject to the
    following terms and conditions:

 

    9.1     Grant of Restricted Stock
    Unit Awards.  Restricted Stock Unit Awards may be
    granted upon such conditions as the Committee shall determine,
    including, without limitation, upon the attainment of one or
    more Performance Goals described in Section 10.4. If either
    the grant of a Restricted Stock Unit Award or the Vesting
    Conditions with respect to such Award is to be contingent upon
    the attainment of one or more Performance Goals, the Committee
    shall follow procedures substantially equivalent to those set
    forth in Sections 10.3 through 10.5(a).

 

    9.2     Purchase
    Price.  No monetary payment (other than applicable
    tax withholding, if any) shall be required as a condition of
    receiving a Restricted Stock Unit Award, the consideration for
    which shall be services actually rendered to a Participating
    Company or for its benefit. Notwithstanding the foregoing, if
    required by applicable state corporate law, the Participant
    shall furnish consideration in the form of cash or past services
    rendered to a Participating Company or for its benefit having a
    value not less than the par value of the shares of Stock issued
    upon settlement of the Restricted Stock Unit Award.

 

    9.3     Vesting.  Restricted
    Stock Unit Awards may (but need not) be made subject to Vesting
    Conditions based upon the satisfaction of such Service
    requirements, conditions, restrictions or performance criteria,
    including, without limitation, Performance Goals as described in
    Section 10.4, as shall be established by the Committee and
    set forth in the Award Agreement evidencing such Award. The
    Committee, in its discretion, may provide in any Award Agreement
    evidencing a Restricted Stock Unit Award that, if the
    satisfaction of Vesting Conditions with respect to any shares
    subject to the Award would otherwise occur on a day on which the
    sale of such shares would violate the provisions of the Trading
    Compliance Policy, then the satisfaction of the Vesting
    Conditions automatically shall be determined on the first to
    occur of (a) the next trading day on which the sale of such
    shares would not violate the Trading Compliance Policy or
    (b) the later of (i) last day of the calendar year in
    which the original vesting date occurred or (ii) the last
    day of the Company’s taxable year in which the original
    vesting date occurred.

 

    9.4     Voting Rights, Dividend
    Equivalent Rights and Distributions.  Participants
    shall have no voting rights with respect to shares of Stock
    represented by Restricted Stock Units until the date of the
    issuance of such shares (as evidenced by the appropriate entry
    on the books of the Company or of a duly authorized transfer
    agent of the Company). However, the Committee, in its
    discretion, may provide in the Award Agreement evidencing any
    Restricted Stock Unit Award that the Participant shall be
    entitled to Dividend Equivalent Rights with respect to the
    payment of cash dividends on Stock during the period beginning
    on the date such Award is granted and ending, with respect to
    each share subject to the Award, on the earlier of the date the
    Award is settled or the date on which it is terminated. Such
    Dividend Equivalent Rights, if any, shall be paid by crediting
    the Participant with additional whole Restricted Stock Units as
    of the

    

    A-15

 

    date of payment of such cash dividends on Stock. The number of
    additional Restricted Stock Units (rounded to the nearest whole
    number) to be so credited shall be determined by dividing
    (a) the amount of cash dividends paid on such date with
    respect to the number of shares of Stock represented by the
    Restricted Stock Units previously credited to the Participant by
    (b) the Fair Market Value per share of Stock on such date.
    Such additional Restricted Stock Units shall be subject to the
    same terms and conditions and shall be settled in the same
    manner and at the same time as the Restricted Stock Units
    originally subject to the Restricted Stock Unit Award. In the
    event of a dividend or distribution paid in shares of Stock or
    other property or any other adjustment made upon a change in the
    capital structure of the Company as described in
    Section 4.2, appropriate adjustments shall be made in the
    Participant’s Restricted Stock Unit Award so that it
    represents the right to receive upon settlement any and all new,
    substituted or additional securities or other property (other
    than regular, periodic cash dividends) to which the Participant
    would be entitled by reason of the shares of Stock issuable upon
    settlement of the Award, and all such new, substituted or
    additional securities or other property shall be immediately
    subject to the same Vesting Conditions as are applicable to the
    Award.

 

    9.5     Effect of Termination of
    Service.  Unless otherwise provided by the
    Committee and set forth in the Award Agreement evidencing a
    Restricted Stock Unit Award, if a Participant’s Service
    terminates for any reason, whether voluntary or involuntary
    (including the Participant’s death or disability), then the
    Participant shall forfeit to the Company any Restricted Stock
    Units pursuant to the Award which remain subject to Vesting
    Conditions as of the date of the Participant’s termination
    of Service.

 

    9.6     Settlement of Restricted
    Stock Unit Awards.  The Company shall issue to a
    Participant on the date on which Restricted Stock Units subject
    to the Participant’s Restricted Stock Unit Award vest or on
    such other date determined by the Committee, in its discretion,
    and set forth in the Award Agreement one (1) share of Stock
    (and/or any other new, substituted or additional securities or
    other property pursuant to an adjustment described in
    Section 9.4) for each Restricted Stock Unit then becoming
    vested or otherwise to be settled on such date, subject to the
    withholding of applicable taxes, if any. If permitted by the
    Committee, the Participant may elect, consistent with the
    requirements of Section 409A, to defer receipt of all or
    any portion of the shares of Stock or other property otherwise
    issuable to the Participant pursuant to this Section, and such
    deferred issuance date(s) and amount(s) elected by the
    Participant shall be set forth in the Award Agreement.
    Notwithstanding the foregoing, the Committee, in its discretion,
    may provide for settlement of any Restricted Stock Unit Award by
    payment to the Participant in cash of an amount equal to the
    Fair Market Value on the payment date of the shares of Stock or
    other property otherwise issuable to the Participant pursuant to
    this Section.

 

    9.7     Nontransferability of
    Restricted Stock Unit Awards.  The right to
    receive shares pursuant to a Restricted Stock Unit Award shall
    not be subject in any manner to anticipation, alienation, sale,
    exchange, transfer, assignment, pledge, encumbrance, or
    garnishment by creditors of the Participant or the
    Participant’s beneficiary, except transfer by will or by
    the laws of descent and distribution. All rights with respect to
    a Restricted Stock Unit Award granted to a Participant hereunder
    shall be exercisable during his or her lifetime only by such
    Participant or the Participant’s guardian or legal
    representative.

 

		
	    10.       	
    PERFORMANCE AWARDS.

 

    Performance Awards shall be evidenced by Award Agreements in
    such form as the Committee shall from time to time establish.
    Award Agreements evidencing Performance Awards may incorporate
    all or any of the terms of the Plan by reference and shall
    comply with and be subject to the following terms and conditions:

 

    10.1     Types of Performance Awards
    Authorized.  Performance Awards may be granted in
    the form of either Performance Shares or Performance Units. Each
    Award Agreement evidencing a Performance Award shall specify the
    number of Performance Shares or Performance Units subject
    thereto, the Performance Award Formula, the Performance Goal(s)
    and Performance Period applicable to the Award, and the other
    terms, conditions and restrictions of the Award.

 

    10.2     Initial Value of
    Performance Shares and Performance Units.  Unless
    otherwise provided by the Committee in granting a Performance
    Award, each Performance Share shall have an initial monetary
    value equal to the Fair Market Value of one (1) share of
    Stock, subject to adjustment as provided in

    

    A-16

 

    Section 4.2, on the effective date of grant of the
    Performance Share, and each Performance Unit shall have an
    initial monetary value established by the Committee at the time
    of grant. The final value payable to the Participant in
    settlement of a Performance Award determined on the basis of the
    applicable Performance Award Formula will depend on the extent
    to which Performance Goals established by the Committee are
    attained within the applicable Performance Period established by
    the Committee.

 

    10.3     Establishment of
    Performance Period, Performance Goals and Performance Award
    Formula.  In granting each Performance Award, the
    Committee shall establish in writing the applicable Performance
    Period, Performance Award Formula and one or more Performance
    Goals which, when measured at the end of the Performance Period,
    shall determine on the basis of the Performance Award Formula
    the final value of the Performance Award to be paid to the
    Participant. Unless otherwise permitted in compliance with the
    requirements under Section 162(m) with respect to each
    Performance Award intended to result in the payment of
    Performance-Based Compensation, the Committee shall establish
    the Performance Goal(s) and Performance Award Formula applicable
    to each Performance Award no later than the earlier of
    (a) the date ninety (90) days after the commencement
    of the applicable Performance Period or (b) the date on
    which 25% of the Performance Period has elapsed, and, in any
    event, at a time when the outcome of the Performance Goals
    remains substantially uncertain. Once established, the
    Performance Goals and Performance Award Formula applicable to a
    Covered Employee shall not be changed during the Performance
    Period. The Company shall notify each Participant granted a
    Performance Award of the terms of such Award, including the
    Performance Period, Performance Goal(s) and Performance Award
    Formula.

 

    10.4     Measurement of Performance
    Goals.  Performance Goals shall be established by
    the Committee on the basis of targets to be attained
    (“Performance Targets”) with respect to one or
    more measures of business or financial performance
    (each, a “Performance Measure”), subject
    to the following:

 

    (a)     Performance
    Measures.  Performance Measures shall be
    calculated in accordance with the Company’s financial
    statements, or, if such terms are not used in the Company’s
    financial statements, they shall be calculated in accordance
    with generally accepted accounting principles, a method used
    generally in the Company’s industry, or in accordance with
    a methodology established by the Committee prior to the grant of
    the Performance Award. Performance Measures shall be calculated
    with respect to the Company and each Subsidiary Corporation
    consolidated therewith for financial reporting purposes or such
    division or other business unit as may be selected by the
    Committee. Unless otherwise determined by the Committee prior to
    the grant of the Performance Award, the Performance Measures
    applicable to the Performance Award shall be calculated prior to
    the accrual of expense for any Performance Award for the same
    Performance Period and excluding the effect (whether positive or
    negative) on the Performance Measures of any change in
    accounting standards or any extraordinary, unusual or
    nonrecurring item, as determined by the Committee, occurring
    after the establishment of the Performance Goals applicable to
    the Performance Award. Each such adjustment, if any, shall be
    made solely for the purpose of providing a consistent basis from
    period to period for the calculation of Performance Measures in
    order to prevent the dilution or enlargement of the
    Participant’s rights with respect to a Performance Award.
    Performance Measures may be one or more of the following, as
    determined by the Committee:

 

    (i)  revenue;

 

    (ii) sales;

 

    (iii) expenses;

 

    (iv) operating income;

 

    (v)  gross margin;

 

    (vi) operating margin;

 

			
	 	    (vii) 
	
    earnings before any one or more of: stock-based compensation
    expense, interest, taxes, depreciation and amortization;

 

    (viii) pre-tax profit;

    

    A-17

 

    (ix) net operating income;

 

    (x)  net income;

 

 

    (xi) economic value added;

 

    (xii) free cash flow;

 

    (xiii) operating cash flow;

 

    (xiv) balance of cash, cash equivalents and marketable
    securities;

 

    (xv) stock price;

 

    (xvi) earnings per share;

 

    (xvii) return on stockholder equity;

 

    (xviii) return on capital;

 

    (xix) return on assets;

 

    (xx) return on investment;

 

    (xxi) total stockholder return;

 

    (xxii) employee satisfaction;

 

    (xxiii) employee retention;

 

    (xxiv) market share;

 

    (xxv) customer satisfaction;

 

    (xxvi) product development;

 

    (xxvii) research and development expenses;

 

    (xxviii) completion of an identified special
    project; and

 

    (xxix) completion of a joint venture or other corporate
    transaction.

 

    (b)     Performance
    Targets.  Performance Targets may include a
    minimum, maximum, target level and intermediate levels of
    performance, with the final value of a Performance Award
    determined under the applicable Performance Award Formula by the
    level attained during the applicable Performance Period. A
    Performance Target may be stated as an absolute value, a growth
    or reduction in a value, or as a value determined relative to an
    index, budget or other standard selected by the Committee.

 

    10.5     Settlement of Performance
    Awards.

 

    (a)     Determination of Final
    Value.  As soon as practicable following the
    completion of the Performance Period applicable to a Performance
    Award, the Committee shall certify in writing the extent to
    which the applicable Performance Goals have been attained and
    the resulting final value of the Award earned by the Participant
    and to be paid upon its settlement in accordance with the
    applicable Performance Award Formula.

 

    (b)     Discretionary Adjustment
    of Award Formula.  In its discretion, the
    Committee may, either at the time it grants a Performance Award
    or at any time thereafter, provide for the positive or negative
    adjustment of the Performance Award Formula applicable to a
    Performance Award granted to any Participant who is not a
    Covered Employee to reflect such Participant’s individual
    performance in his or her position with the Company or such
    other factors as the Committee may determine. If permitted under
    a Covered Employee’s Award Agreement, the Committee shall
    have the discretion, on the basis of such criteria as may be
    established by the Committee, to reduce some or all of the value
    of the Performance Award that would otherwise be paid to the
    Covered Employee upon its settlement notwithstanding the
    attainment of any Performance Goal and the resulting value of
    the Performance Award determined in accordance with the
    Performance Award Formula. No

    

    A-18

 

    such reduction may result in an increase in the amount payable
    upon settlement of another Participant’s Performance Award
    that is intended to result in Performance-Based Compensation.

 

    (c)     Effect of Leaves of
    Absence.  Unless otherwise required by law or
    a Participant’s Award Agreement, payment of the final
    value, if any, of a Performance Award held by a Participant who
    has taken in excess of thirty (30) days in unpaid leaves of
    absence during a Performance Period shall be prorated on the
    basis of the number of days of the Participant’s Service
    during the Performance Period during which the Participant was
    not on an unpaid leave of absence.

 

    (d)     Notice to
    Participants.  As soon as practicable
    following the Committee’s determination and certification
    in accordance with Sections 10.5(a) and (b), the Company
    shall notify each Participant of the determination of the
    Committee.

 

    (e)     Payment in Settlement of
    Performance Awards.  As soon as practicable
    following the Committee’s determination and certification
    in accordance with Sections 10.5(a) and (b), but in any
    event within the Short-Term Deferral Period described in
    Section 15.1 (except as otherwise provided below or
    consistent with the requirements of Section 409A), payment
    shall be made to each eligible Participant (or such
    Participant’s legal representative or other person who
    acquired the right to receive such payment by reason of the
    Participant’s death) of the final value of the
    Participant’s Performance Award. Payment of such amount
    shall be made in cash, shares of Stock, or a combination thereof
    as determined by the Committee. Unless otherwise provided in the
    Award Agreement evidencing a Performance Award, payment shall be
    made in a lump sum. If permitted by the Committee, the
    Participant may elect, consistent with the requirements of
    Section 409A, to defer receipt of all or any portion of the
    payment to be made to the Participant pursuant to this Section,
    and such deferred payment date(s) elected by the Participant
    shall be set forth in the Award Agreement. If any payment is to
    be made on a deferred basis, the Committee may, but shall not be
    obligated to, provide for the payment during the deferral period
    of Dividend Equivalent Rights or interest.

 

    (f)     Provisions Applicable to
    Payment in Shares.  If payment is to be made
    in shares of Stock, the number of such shares shall be
    determined by dividing the final value of the Performance Award
    by the Fair Market Value of a share of Stock determined by the
    method specified in the Award Agreement. Shares of Stock issued
    in payment of any Performance Award may be fully vested and
    freely transferable shares or may be shares of Stock subject to
    Vesting Conditions as provided in Section 8.5. Any shares
    subject to Vesting Conditions shall be evidenced by an
    appropriate Award Agreement and shall be subject to the
    provisions of Sections 8.5 through 8.8 above.

 

    10.6     Voting Rights; Dividend
    Equivalent Rights and Distributions.  Participants
    shall have no voting rights with respect to shares of Stock
    represented by Performance Share Awards until the date of the
    issuance of such shares, if any (as evidenced by the appropriate
    entry on the books of the Company or of a duly authorized
    transfer agent of the Company). However, the Committee, in its
    discretion, may provide in the Award Agreement evidencing any
    Performance Share Award that the Participant shall be entitled
    to Dividend Equivalent Rights with respect to the payment of
    cash dividends on Stock during the period beginning on the date
    the Award is granted and ending, with respect to each share
    subject to the Award, on the earlier of the date on which the
    Performance Shares are settled or the date on which they are
    forfeited. Such Dividend Equivalent Rights, if any, shall be
    credited to the Participant in the form of additional whole
    Performance Shares as of the date of payment of such cash
    dividends on Stock. The number of additional Performance Shares
    (rounded to the nearest whole number) to be so credited shall be
    determined by dividing (a) the amount of cash dividends
    paid on the dividend payment date with respect to the number of
    shares of Stock represented by the Performance Shares previously
    credited to the Participant by (b) the Fair Market Value
    per share of Stock on such date. Dividend Equivalent Rights may
    be paid currently or may be accumulated and paid to the extent
    that Performance Shares become nonforfeitable, as determined by
    the Committee. Settlement of Dividend Equivalent Rights may be
    made in cash, shares of Stock, or a combination thereof as
    determined by the Committee, and may be paid on the same basis
    as settlement of the related Performance Share as provided in
    Section 10.5. Dividend Equivalent Rights shall not be paid
    with respect to Performance Units. In the event of a dividend or
    distribution paid in shares of Stock or other property or any
    other adjustment made upon a change in the capital structure of
    the Company as described in Section 4.2,

    

    A-19

 

    appropriate adjustments shall be made in the Participant’s
    Performance Share Award so that it represents the right to
    receive upon settlement any and all new, substituted or
    additional securities or other property (other than regular,
    periodic cash dividends) to which the Participant would be
    entitled by reason of the shares of Stock issuable upon
    settlement of the Performance Share Award, and all such new,
    substituted or additional securities or other property shall be
    immediately subject to the same Performance Goals as are
    applicable to the Award.

 

    10.7     Effect of Termination of
    Service.  Unless otherwise provided by the
    Committee and set forth in the Award Agreement evidencing a
    Performance Award, the effect of a Participant’s
    termination of Service on the Performance Award shall be as
    follows:

 

    (a)     Death or
    Disability.  If the Participant’s Service
    terminates because of the death or Disability of the Participant
    before the completion of the Performance Period applicable to
    the Performance Award, the final value of the Participant’s
    Performance Award shall be determined by the extent to which the
    applicable Performance Goals have been attained with respect to
    the entire Performance Period and shall be prorated based on the
    number of months of the Participant’s Service during the
    Performance Period. Payment shall be made following the end of
    the Performance Period in any manner permitted by
    Section 10.5.

 

    (b)     Other Termination of
    Service.  If the Participant’s Service
    terminates for any reason except death or Disability before the
    completion of the Performance Period applicable to the
    Performance Award, such Award shall be forfeited in its
    entirety; provided, however, that in the event of an involuntary
    termination of the Participant’s Service, the Committee, in
    its discretion, may waive the automatic forfeiture of all or any
    portion of any such Award and determine the final value of the
    Performance Award in the manner provided by
    Section 10.7(a). Payment of any amount pursuant to this
    Section shall be made following the end of the Performance
    Period in any manner permitted by Section 10.5.

 

    10.8     Nontransferability of
    Performance Awards.  Prior to settlement in
    accordance with the provisions of the Plan, no Performance Award
    shall be subject in any manner to anticipation, alienation,
    sale, exchange, transfer, assignment, pledge, encumbrance, or
    garnishment by creditors of the Participant or the
    Participant’s beneficiary, except transfer by will or by
    the laws of descent and distribution. All rights with respect to
    a Performance Award granted to a Participant hereunder shall be
    exercisable during his or her lifetime only by such Participant
    or the Participant’s guardian or legal representative.

 

		
	    11.       	
    CASH-BASED AWARDS AND OTHER STOCK-BASED AWARDS.

 

    Cash-Based Awards and Other Stock-Based Awards shall be
    evidenced by Award Agreements in such form as the Committee
    shall from time to time establish. Award Agreements evidencing
    Cash-Based Awards and Other Stock-Based Awards may incorporate
    all or any of the terms of the Plan by reference and shall
    comply with and be subject to the following terms and conditions:

 

    11.1     Grant of Cash-Based
    Awards.  Subject to the provisions of the Plan,
    the Committee, at any time and from time to time, may grant
    Cash-Based Awards to Participants in such amounts and upon such
    terms and conditions, including the achievement of performance
    criteria, as the Committee may determine.

 

    11.2     Grant of Other Stock-Based
    Awards.  The Committee may grant other types of
    equity-based or equity-related Awards not otherwise described by
    the terms of this Plan (including the grant or offer for sale of
    unrestricted securities, stock-equivalent units, stock
    appreciation units, securities or debentures convertible into
    common stock or other forms determined by the Committee) in such
    amounts and subject to such terms and conditions as the
    Committee shall determine. Other Stock-Based Awards may be made
    available as a form of payment in the settlement of other Awards
    or as payment in lieu of compensation to which a Participant is
    otherwise entitled. Other Stock-Based Awards may involve the
    transfer of actual shares of Stock to Participants, or payment
    in cash or otherwise of amounts based on the value of Stock and
    may include, without limitation, Awards designed to comply with
    or take advantage of the applicable local laws of jurisdictions
    other than the United States.

 

    11.3     Value of Cash-Based and
    Other Stock-Based Awards.  Each Cash-Based Award
    shall specify a monetary payment amount or payment range as
    determined by the Committee. Each Other Stock-

    

    A-20

 

    Based Award shall be expressed in terms of shares of Stock or
    units based on such shares of Stock, as determined by the
    Committee. The Committee may require the satisfaction of such
    Service requirements, conditions, restrictions or performance
    criteria, including, without limitation, Performance Goals as
    described in Section 10.4, as shall be established by the
    Committee and set forth in the Award Agreement evidencing such
    Award. If the Committee exercises its discretion to establish
    performance criteria, the final value of Cash-Based Awards or
    Other Stock-Based Awards that will be paid to the Participant
    will depend on the extent to which the performance criteria are
    met. The establishment of performance criteria with respect to
    the grant or vesting of any Cash-Based Award or Other
    Stock-Based Award intended to result in Performance-Based
    Compensation shall follow procedures substantially equivalent to
    those applicable to Performance Awards set forth in
    Section 10.

 

    11.4     Payment or Settlement of
    Cash-Based Awards and Other Stock-Based
    Awards.  Payment or settlement, if any, with
    respect to a Cash-Based Award or an Other Stock-Based Award
    shall be made in accordance with the terms of the Award, in
    cash, shares of Stock or other securities or any combination
    thereof as the Committee determines. The determination and
    certification of the final value with respect to any Cash-Based
    Award or Other Stock-Based Award intended to result in
    Performance-Based Compensation shall comply with the
    requirements applicable to Performance Awards set forth in
    Section 10. To the extent applicable, payment or settlement
    with respect to each Cash-Based Award and Other Stock-Based
    Award shall be made in compliance with the requirements of
    Section 409A.

 

    11.5     Voting Rights; Dividend
    Equivalent Rights and Distributions.  Participants
    shall have no voting rights with respect to shares of Stock
    represented by Other Stock-Based Awards until the date of the
    issuance of such shares of Stock (as evidenced by the
    appropriate entry on the books of the Company or of a duly
    authorized transfer agent of the Company), if any, in settlement
    of such Award. However, the Committee, in its discretion, may
    provide in the Award Agreement evidencing any Other Stock-Based
    Award that the Participant shall be entitled to Dividend
    Equivalent Rights with respect to the payment of cash dividends
    on Stock during the period beginning on the date such Award is
    granted and ending, with respect to each share subject to the
    Award, on the earlier of the date the Award is settled or the
    date on which it is terminated. Such Dividend Equivalent Rights,
    if any, shall be paid in accordance with the provisions set
    forth in Section 9.4. Dividend Equivalent Rights shall not
    be granted with respect to Cash-Based Awards. In the event of a
    dividend or distribution paid in shares of Stock or other
    property or any other adjustment made upon a change in the
    capital structure of the Company as described in
    Section 4.2, appropriate adjustments shall be made in the
    Participant’s Other Stock-Based Award so that it represents
    the right to receive upon settlement any and all new,
    substituted or additional securities or other property (other
    than regular, periodic cash dividends) to which the Participant
    would be entitled by reason of the shares of Stock issuable upon
    settlement of such Award, and all such new, substituted or
    additional securities or other property shall be immediately
    subject to the same Vesting Conditions and performance criteria,
    if any, as are applicable to the Award.

 

    11.6     Effect of Termination of
    Service.  Each Award Agreement evidencing a
    Cash-Based Award or Other Stock-Based Award shall set forth the
    extent to which the Participant shall have the right to retain
    such Award following termination of the Participant’s
    Service. Such provisions shall be determined in the discretion
    of the Committee, need not be uniform among all Cash-Based
    Awards or Other Stock-Based Awards, and may reflect distinctions
    based on the reasons for termination, subject to the
    requirements of Section 409A, if applicable.

 

    11.7     Nontransferability of
    Cash-Based Awards and Other Stock-Based
    Awards.  Prior to the payment or settlement of a
    Cash-Based Award or Other Stock-Based Award, the Award shall not
    be subject in any manner to anticipation, alienation, sale,
    exchange, transfer, assignment, pledge, encumbrance, or
    garnishment by creditors of the Participant or the
    Participant’s beneficiary, except transfer by will or by
    the laws of descent and distribution. The Committee may impose
    such additional restrictions on any shares of Stock issued in
    settlement of Cash-Based Awards and Other Stock-Based Awards as
    it may deem advisable, including, without limitation, minimum
    holding period requirements, restrictions under applicable
    federal securities laws, under the requirements of any stock
    exchange or market upon which such shares of Stock are then
    listed
    and/or
    traded, or under any state securities laws or foreign law
    applicable to such shares of Stock.

    

    A-21

 

		
	    12.       	
    STANDARD FORMS OF AWARD AGREEMENT.

 

    12.1     Award
    Agreements.  Each Award shall comply with and be
    subject to the terms and conditions set forth in the appropriate
    form of Award Agreement approved by the Committee and as amended
    from time to time. No Award or purported Award shall be a valid
    and binding obligation of the Company unless evidenced by a
    fully executed Award Agreement, which execution may be evidenced
    by electronic means. Any Award Agreement may consist of an
    appropriate form of Notice of Grant and a form of Agreement
    incorporated therein by reference, or such other form or forms,
    including electronic media, as the Committee may approve from
    time to time.

 

    12.2     Authority to Vary
    Terms.  The Committee shall have the authority
    from time to time to vary the terms of any standard form of
    Award Agreement either in connection with the grant or amendment
    of an individual Award or in connection with the authorization
    of a new standard form or forms; provided, however, that the
    terms and conditions of any such new, revised or amended
    standard form or forms of Award Agreement are not inconsistent
    with the terms of the Plan.

 

		
	    13.       	
    CHANGE IN CONTROL.

 

    13.1     Effect of Change in Control
    on Awards.  Subject to the requirements and
    limitations of Section 409A, if applicable, the Committee
    may provide for any one or more of the following:

 

    (a)     Accelerated
    Vesting.  In its discretion, the Committee may
    provide in the grant of any Award or at any other time may take
    such action as it deems appropriate to provide for acceleration
    of the exercisability, vesting
    and/or
    settlement in connection with a Change in Control of each or any
    outstanding Award or portion thereof and shares acquired
    pursuant thereto upon such conditions, including termination of
    the Participant’s Service prior to, upon, or following such
    Change in Control, and to such extent as the Committee shall
    determine.

 

    (b)     Assumption, Continuation
    or Substitution.  In the event of a Change in
    Control, the surviving, continuing, successor, or purchasing
    corporation or other business entity or parent thereof, as the
    case may be (the “Acquiror”), may,
    without the consent of any Participant, either assume or
    continue the Company’s rights and obligations under each or
    any Award or portion thereof outstanding immediately prior to
    the Change in Control or substitute for each or any such
    outstanding Award or portion thereof a substantially equivalent
    award with respect to the Acquiror’s stock, as applicable.
    For purposes of this Section, if so determined by the Committee
    in its discretion, an Award denominated in shares of Stock shall
    be deemed assumed if, following the Change in Control, the Award
    confers the right to receive, subject to the terms and
    conditions of the Plan and the applicable Award Agreement, for
    each share of Stock subject to the Award immediately prior to
    the Change in Control, the consideration (whether stock, cash,
    other securities or property or a combination thereof) to which
    a holder of a share of Stock on the effective date of the Change
    in Control was entitled (and if holders were offered a choice of
    consideration, the type of consideration chosen by the holders
    of a majority of the outstanding shares of Stock); provided,
    however, that if such consideration is not solely common stock
    of the Acquiror, the Committee may, with the consent of the
    Acquiror, provide for the consideration to be received upon the
    exercise or settlement of the Award, for each share of Stock
    subject to the Award, to consist solely of common stock of the
    Acquiror equal in Fair Market Value to the per share
    consideration received by holders of Stock pursuant to the
    Change in Control. Any Award or portion thereof which is neither
    assumed or continued by the Acquiror in connection with the
    Change in Control nor exercised or settled as of the time of
    consummation of the Change in Control shall terminate and cease
    to be outstanding effective as of the time of consummation of
    the Change in Control.

 

    (c)     Cash-Out of Outstanding
    Stock-Based Awards.  The Committee may, in its
    discretion and without the consent of any Participant, determine
    that, upon the occurrence of a Change in Control, each or any
    Award denominated in shares of Stock or portion thereof
    outstanding immediately prior to the Change in Control and not
    previously exercised or settled shall be canceled in exchange
    for a payment with respect to each vested share (and each
    unvested share, if so determined by the Committee) of Stock
    subject to such canceled Award in (i) cash, (ii) stock
    of the Company or of a corporation or other business entity a
    party to the Change in Control, or (iii) other property
    which, in any such case, shall be in an amount having a Fair

    

    A-22

 

    Market Value equal to the Fair Market Value of the consideration
    to be paid per share of Stock in the Change in Control, reduced
    (but not below zero) by the exercise or purchase price per
    share, if any, under such Award. In the event such determination
    is made by the Committee, an Award having an exercise or
    purchase price per share equal to or greater than the Fair
    Market Value of the consideration to be paid per share of Stock
    in the Change in Control may be canceled without payment of
    consideration to the holder thereof. Payment pursuant to this
    Section (reduced by applicable withholding taxes, if any) shall
    be made to Participants in respect of the vested portions of
    their canceled Awards as soon as practicable following the date
    of the Change in Control and in respect of the unvested portions
    of their canceled Awards in accordance with the vesting
    schedules applicable to such Awards.

 

    13.2     Federal Excise Tax Under
    Section 4999 of the Code.

 

    (a)     Excess Parachute
    Payment.  In the event that any acceleration
    of vesting pursuant to an Award and any other payment or benefit
    received or to be received by a Participant would subject the
    Participant to any excise tax pursuant to Section 4999 of
    the Code due to the characterization of such acceleration of
    vesting, payment or benefit as an “excess parachute
    payment” under Section 280G of the Code, the
    Participant may elect to reduce the amount of any acceleration
    of vesting called for under the Award in order to avoid such
    characterization.

 

    (b)     Determination by
    Independent Accountants.  To aid the
    Participant in making any election called for under
    Section 13.2(a), no later than the date of the occurrence
    of any event that might reasonably be anticipated to result in
    an “excess parachute payment” to the Participant as
    described in Section 13.2(a), the Company shall request a
    determination in writing by independent public accountants
    selected by the Company (the
    “Accountants”). As soon as practicable
    thereafter, the Accountants shall determine and report to the
    Company and the Participant the amount of such acceleration of
    vesting, payments and benefits which would produce the greatest
    after-tax benefit to the Participant. For the purposes of such
    determination, the Accountants may rely on reasonable, good
    faith interpretations concerning the application of
    Sections 280G and 4999 of the Code. The Company and the
    Participant shall furnish to the Accountants such information
    and documents as the Accountants may reasonably request in order
    to make their required determination. The Company shall bear all
    fees and expenses the Accountants charge in connection with
    their services contemplated by this Section.

 

		
	    14.       	
    COMPLIANCE WITH SECURITIES LAW.

 

    The grant of Awards and the issuance of shares of Stock pursuant
    to any Award shall be subject to compliance with all applicable
    requirements of federal, state and foreign law with respect to
    such securities and the requirements of any stock exchange or
    market system upon which the Stock may then be listed. In
    addition, no Award may be exercised or shares issued pursuant to
    an Award unless (a) a registration statement under the
    Securities Act shall at the time of such exercise or issuance be
    in effect with respect to the shares issuable pursuant to the
    Award, or (b) in the opinion of legal counsel to the
    Company, the shares issuable pursuant to the Award may be issued
    in accordance with the terms of an applicable exemption from the
    registration requirements of the Securities Act. The inability
    of the Company to obtain from any regulatory body having
    jurisdiction the authority, if any, deemed by the Company’s
    legal counsel to be necessary to the lawful issuance and sale of
    any shares hereunder shall relieve the Company of any liability
    in respect of the failure to issue or sell such shares as to
    which such requisite authority shall not have been obtained. As
    a condition to issuance of any Stock, the Company may require
    the Participant to satisfy any qualifications that may be
    necessary or appropriate, to evidence compliance with any
    applicable law or regulation and to make any representation or
    warranty with respect thereto as may be requested by the Company.

 

		
	    15.       	
    COMPLIANCE WITH SECTION 409A.

 

    15.1     Awards Subject to
    Section 409A.  The Company intends that
    Awards granted pursuant to the Plan shall either be exempt from
    or comply with Section 409A, and the Plan shall be so
    construed. The

    

    A-23

 

    provisions of this Section 15 shall apply to any Award or
    portion thereof that constitutes or provides for payment of
    Section 409A Deferred Compensation. Such Awards may
    include, without limitation:

 

    (a)     A Nonstatutory Stock Option or
    SAR that includes any feature for the deferral of compensation
    other than the deferral of recognition of income until the later
    of (i) the exercise or disposition of the Award or
    (ii) the time the stock acquired pursuant to the exercise
    of the Award first becomes substantially vested.

 

    (b)     Any Restricted Stock Unit
    Award, Performance Award, Cash-Based Award or Other Stock-Based
    Award that either (i) provides by its terms for settlement
    of all or any portion of the Award at a time or upon an event
    that will or may occur later than the end of the Short-Term
    Deferral Period (as defined below) or (ii) permits the
    Participant granted the Award to elect one or more dates or
    events upon which the Award will be settled after the end of the
    Short-Term Deferral Period.

 

    Subject to the provisions of Section 409A, the term
    “Short-Term Deferral Period” means the
    21/2 month
    period ending on the later of (i) the 15th day of the
    third month following the end of the Participant’s taxable
    year in which the right to payment under the applicable portion
    of the Award is no longer subject to a substantial risk of
    forfeiture or (ii) the 15th day of the third month
    following the end of the Company’s taxable year in which
    the right to payment under the applicable portion of the Award
    is no longer subject to a substantial risk of forfeiture. For
    this purpose, the term “substantial risk of
    forfeiture” shall have the meaning provided by
    Section 409A.

 

    15.2     Deferral
    and/or
    Distribution Elections.  Except as otherwise
    permitted or required by Section 409A, the following rules
    shall apply to any compensation deferral
    and/or
    payment elections (each, an “Election”)
    that may be permitted or required by the Committee pursuant to
    an Award providing Section 409A Deferred Compensation:

 

    (a)     Elections must be in writing
    and specify the amount of the payment in settlement of an Award
    being deferred, as well as the time and form of payment as
    permitted by this Plan.

 

    (b)     Elections shall be made by the
    end of the Participant’s taxable year prior to the year in
    which services commence for which an Award may be granted to
    such Participant.

 

    (c)     Elections shall continue in
    effect until a written revocation or change in Election is
    received by the Company, except that a written revocation or
    change in Election must be received by the Company prior to the
    last day for making the Election determined in accordance with
    paragraph (b) above or as permitted by Section 15.3.

 

    15.3     Subsequent
    Elections.  Except as otherwise permitted or
    required by Section 409A, any Award providing
    Section 409A Deferred Compensation which permits a
    subsequent Election to delay the payment or change the form of
    payment in settlement of such Award shall comply with the
    following requirements:

 

    (a)     No subsequent Election may take
    effect until at least twelve (12) months after the date on
    which the subsequent Election is made.

 

    (b)     Each subsequent Election
    related to a payment in settlement of an Award not described in
    Section 15.4(a)(ii), 15.4(a)(iii) or 15.4(a)(vi) must
    result in a delay of the payment for a period of not less than
    five (5) years from the date on which such payment would
    otherwise have been made.

 

    (c)     No subsequent Election related
    to a payment pursuant to Section 15.4(a)(iv) shall be made
    less than twelve (12) months before the date on which such
    payment would otherwise have been made.

 

    (d)     Subsequent Elections shall
    continue in effect until a written revocation or change in the
    subsequent Election is received by the Company, except that a
    written revocation or change in a

    

    A-24

 

    subsequent Election must be received by the Company prior to the
    last day for making the subsequent Election determined in
    accordance the preceding paragraphs of this Section 15.3.

 

    15.4     Payment of
    Section 409A Deferred Compensation.

 

    (a)     Permissible
    Payments.  Except as otherwise permitted or
    required by Section 409A, an Award providing
    Section 409A Deferred Compensation must provide for payment
    in settlement of the Award only upon one or more of the
    following:

 

    (i)     The Participant’s
    “separation from service” (as such term is defined by
    Section 409A);

 

			
	 	    (ii)     
	
    The Participant’s becoming “disabled” (as such
    term is defined by Section 409A);

 

			
	 	    (iii)     
	
    The Participant’s death;

 

    (iv)     A time or fixed schedule that
    is either (i) specified by the Committee upon the grant of
    an Award and set forth in the Award Agreement evidencing such
    Award or (ii) specified by the Participant in an Election
    complying with the requirements of Section 15.2 or 15.3, as
    applicable;

 

    (v)     A change in the ownership or
    effective control or the Company or in the ownership of a
    substantial portion of the assets of the Company determined in
    accordance with Section 409A; or

 

    (vi)     The occurrence of an
    “unforeseeable emergency” (as such term is defined by
    Section 409A).

 

    (b)     Installment
    Payments.  It is the intent of this Plan that
    any right of a Participant to receive installment payments
    (within the meaning of Section 409A) shall, for all
    purposes of Section 409A, be treated as a right to a series
    of separate payments.

 

    (c)     Required Delay in Payment
    to Specified Employee Pursuant to Separation from
    Service.  Notwithstanding any provision of the
    Plan or an Award Agreement to the contrary, except as otherwise
    permitted by Section 409A, no payment pursuant to
    Section 15.4(a)(i) in settlement of an Award providing for
    Section 409A Deferred Compensation may be made to a
    Participant who is a “specified employee” (as such
    term is defined by Section 409A) as of the date of the
    Participant’s separation from service before the date (the
    “Delayed Payment Date”) that is six
    (6) months after the date of such Participant’s
    separation from service, or, if earlier, the date of the
    Participant’s death. All such amounts that would, but for
    this paragraph, become payable prior to the Delayed Payment Date
    shall be accumulated and paid on the Delayed Payment Date.

 

    (d)     Payment Upon
    Disability.  All distributions payable by
    reason of a Participant becoming disabled shall be paid in a
    lump sum or in periodic installments as established by the
    Participant’s Election. If the Participant has made no
    Election with respect to distributions upon becoming disabled,
    all such distributions shall be paid in a lump sum upon the
    determination that the Participant has become disabled.

 

    (e)     Payment Upon
    Death.  If a Participant dies before complete
    distribution of amounts payable upon settlement of an Award
    subject to Section 409A, such undistributed amounts shall
    be distributed to his or her beneficiary under the distribution
    method for death established by the Participant’s Election
    upon receipt by the Committee of satisfactory notice and
    confirmation of the Participant’s death. If the Participant
    has made no Election with respect to distributions upon death,
    all such distributions shall be paid in a lump sum upon receipt
    by the Committee of satisfactory notice and confirmation of the
    Participant’s death.

 

    (f)     Payment Upon Change in
    Control.  Notwithstanding any provision of the
    Plan or an Award Agreement to the contrary, to the extent that
    any amount constituting Section 409A Deferred Compensation
    would become payable under this Plan by reason of a Change in
    Control, such amount shall become payable only if the event
    constituting a Change in Control would also constitute a change
    in ownership or effective control of the Company or a change in
    the ownership of a substantial portion of the assets of the
    Company within the meaning of Section 409A. Any Award which
    constitutes Section 409A Deferred Compensation and which
    would vest and otherwise become payable upon a Change in Control
    as a result of the failure of the Acquiror to assume, continue
    or substitute for such Award in accordance with
    Section 13.1(b) shall vest to the

    

    A-25

 

    extent provided by such Award but shall be converted
    automatically at the effective time of such Change in Control
    into a right to receive, in cash on the date or dates such award
    would have been settled in accordance with its then existing
    settlement schedule (or as required by Section 15.4(c)), an
    amount or amounts equal in the aggregate to the intrinsic value
    of the Award at the time of the Change in Control.

 

    (g)     Payment Upon
    Unforeseeable Emergency.  The Committee shall
    have the authority to provide in the Award Agreement evidencing
    any Award providing for Section 409A Deferred Compensation
    for payment in settlement of all or a portion of such Award in
    the event that a Participant establishes, to the satisfaction of
    the Committee, the occurrence of an unforeseeable emergency. In
    such event, the amount(s) distributed with respect to such
    unforeseeable emergency cannot exceed the amounts reasonably
    necessary to satisfy the emergency need plus amounts necessary
    to pay taxes reasonably anticipated as a result of such
    distribution(s), after taking into account the extent to which
    such emergency need is or may be relieved through reimbursement
    or compensation by insurance or otherwise, by liquidation of the
    Participant’s assets (to the extent the liquidation of such
    assets would not itself cause severe financial hardship) or by
    cessation of deferrals under the Award. All distributions with
    respect to an unforeseeable emergency shall be made in a lump
    sum upon the Committee’s determination that an
    unforeseeable emergency has occurred. The Committee’s
    decision with respect to whether an unforeseeable emergency has
    occurred and the manner in which, if at all, the payment in
    settlement of an Award shall be altered or modified, shall be
    final, conclusive, and not subject to approval or appeal.

 

    (h)     Prohibition of
    Acceleration of Payments.  Notwithstanding any
    provision of the Plan or an Award Agreement to the contrary,
    this Plan does not permit the acceleration of the time or
    schedule of any payment under an Award providing
    Section 409A Deferred Compensation, except as permitted by
    Section 409A.

 

    (i)     No Representation
    Regarding Section 409A
    Compliance.  Notwithstanding any other
    provision of the Plan, the Company makes no representation that
    Awards shall be exempt from or comply with Section 409A. No
    Participating Company shall be liable for any tax, penalty or
    interest imposed on a Participant by Section 409A.

 

		
	    16.       	
    TAX WITHHOLDING.

 

    16.1     Tax Withholding in
    General.  The Company shall have the right to
    deduct from any and all payments made under the Plan, or to
    require the Participant, through payroll withholding, cash
    payment or otherwise, to make adequate provision for, the
    federal, state, local and foreign taxes (including social
    insurance), if any, required by law to be withheld by any
    Participating Company with respect to an Award or the shares
    acquired pursuant thereto. The Company shall have no obligation
    to deliver shares of Stock, to release shares of Stock from an
    escrow established pursuant to an Award Agreement, or to make
    any payment in cash under the Plan until the Participating
    Company Group’s tax withholding obligations have been
    satisfied by the Participant.

 

    16.2     Withholding in or Directed
    Sale of Shares.  The Company shall have the right,
    but not the obligation, to deduct from the shares of Stock
    issuable to a Participant upon the exercise or settlement of an
    Award, or to accept from the Participant the tender of, a number
    of whole shares of Stock having a Fair Market Value, as
    determined by the Company, equal to all or any part of the tax
    withholding obligations of any Participating Company. The Fair
    Market Value of any shares of Stock withheld or tendered to
    satisfy any such tax withholding obligations shall not exceed
    the amount determined by the applicable minimum statutory
    withholding rates. The Company may require a Participant to
    direct a broker, upon the vesting, exercise or settlement of an
    Award, to sell a portion of the shares subject to the Award
    determined by the Company in its discretion to be sufficient to
    cover the tax withholding obligations of any Participating
    Company and to remit an amount equal to such tax withholding
    obligations to the Company in cash.

 

		
	    17.       	
    AMENDMENT, SUSPENSION OR TERMINATION OF PLAN.

 

    The Committee may amend, suspend or terminate the Plan at any
    time. However, without the approval of the Company’s
    stockholders, there shall be (a) no increase in the maximum
    aggregate number of shares of Stock that may be issued under the
    Plan (except by operation of the provisions of
    Section 4.2),

    

    A-26

 

    (b) no change in the class of persons eligible to receive
    Incentive Stock Options, and (c) no other amendment of the
    Plan that would require approval of the Company’s
    stockholders under any applicable law, regulation or rule,
    including the rules of any stock exchange or quotation system
    upon which the Stock may then be listed or quoted. No amendment,
    suspension or termination of the Plan shall affect any then
    outstanding Award unless expressly provided by the Committee.
    Except as provided by the next sentence, no amendment,
    suspension or termination of the Plan may adversely affect any
    then outstanding Award without the consent of the Participant.
    Notwithstanding any other provision of the Plan to the contrary,
    the Committee may, in its sole and absolute discretion and
    without the consent of any Participant, amend the Plan or any
    Award Agreement, to take effect retroactively or otherwise, as
    it deems necessary or advisable for the purpose of conforming
    the Plan or such Award Agreement to any present or future law,
    regulation or rule applicable to the Plan, including, but not
    limited to, Section 409A.

 

    18.     MISCELLANEOUS
    PROVISIONS.

 

    18.1     Repurchase
    Rights.  Shares issued under the Plan may be
    subject to one or more repurchase options, or other conditions
    and restrictions as determined by the Committee in its
    discretion at the time the Award is granted. The Company shall
    have the right to assign at any time any repurchase right it may
    have, whether or not such right is then exercisable, to one or
    more persons as may be selected by the Company. Upon request by
    the Company, each Participant shall execute any agreement
    evidencing such transfer restrictions prior to the receipt of
    shares of Stock hereunder and shall promptly present to the
    Company any and all certificates representing shares of Stock
    acquired hereunder for the placement on such certificates of
    appropriate legends evidencing any such transfer restrictions.

 

    18.2     Forfeiture Events.

 

    (a)     The Committee may specify in an
    Award Agreement that the Participant’s rights, payments,
    and benefits with respect to an Award shall be subject to
    reduction, cancellation, forfeiture, or recoupment upon the
    occurrence of specified events, in addition to any otherwise
    applicable vesting or performance conditions of an Award. Such
    events may include, but shall not be limited to, termination of
    Service for Cause or any act by a Participant, whether before or
    after termination of Service, that would constitute Cause for
    termination of Service.

 

    (b)     If the Company is required to
    prepare an accounting restatement due to the material
    noncompliance of the Company, as a result of misconduct, with
    any financial reporting requirement under the securities laws,
    any Participant who knowingly or through gross negligence
    engaged in the misconduct, or who knowingly or through gross
    negligence failed to prevent the misconduct, and any Participant
    who is one of the individuals subject to automatic forfeiture
    under Section 304 of the Sarbanes-Oxley Act of 2002, shall
    reimburse the Company for (i) the amount of any payment in
    settlement of an Award received by such Participant during the
    twelve-(12-) month period following the first public issuance or
    filing with the United States Securities and Exchange Commission
    (whichever first occurred) of the financial document embodying
    such financial reporting requirement, and (ii) any profits
    realized by such Participant from the sale of securities of the
    Company during such twelve-(12-) month period.

 

    18.3     Provision of
    Information.  Each Participant shall be given
    access to information concerning the Company equivalent to that
    information generally made available to the Company’s
    common stockholders.

 

    18.4     Rights as Employee,
    Consultant or Director.  No person, even though
    eligible pursuant to Section 5, shall have a right to be
    selected as a Participant, or, having been so selected, to be
    selected again as a Participant. Nothing in the Plan or any
    Award granted under the Plan shall confer on any Participant a
    right to remain an Employee, Consultant or Director or interfere
    with or limit in any way any right of a Participating Company to
    terminate the Participant’s Service at any time. To the
    extent that an Employee of a Participating Company other than
    the Company receives an Award under the Plan, that Award shall
    in no event be understood or interpreted to mean that the
    Company is the Employee’s employer or that the Employee has
    an employment relationship with the Company.

 

    18.5     Rights as a
    Stockholder.  A Participant shall have no rights
    as a stockholder with respect to any shares covered by an Award
    until the date of the issuance of such shares (as evidenced by
    the appropriate entry on the books of the Company or of a duly
    authorized transfer agent of the Company). No

    

    A-27

 

    adjustment shall be made for dividends, distributions or other
    rights for which the record date is prior to the date such
    shares are issued, except as provided in Section 4.2 or
    another provision of the Plan.

 

    18.6     Delivery of Title to
    Shares.  Subject to any governing rules or
    regulations, the Company shall issue or cause to be issued the
    shares of Stock acquired pursuant to an Award and shall deliver
    such shares to or for the benefit of the Participant by means of
    one or more of the following: (a) by delivering to the
    Participant evidence of book entry shares of Stock credited to
    the account of the Participant, (b) by depositing such
    shares of Stock for the benefit of the Participant with any
    broker with which the Participant has an account relationship,
    or (c) by delivering such shares of Stock to the
    Participant in certificate form.

 

    18.7     Fractional
    Shares.  The Company shall not be required to
    issue fractional shares upon the exercise or settlement of any
    Award.

 

    18.8     Retirement and Welfare
    Plans.  Neither Awards made under this Plan nor
    shares of Stock or cash paid pursuant to such Awards may be
    included as “compensation” for purposes of computing
    the benefits payable to any Participant under any Participating
    Company’s retirement plans (both qualified and
    non-qualified) or welfare benefit plans unless such other plan
    expressly provides that such compensation shall be taken into
    account in computing a Participant’s benefit.

 

    18.9     Beneficiary
    Designation.  Subject to local laws and
    procedures, each Participant may file with the Company a written
    designation of a beneficiary who is to receive any benefit under
    the Plan to which the Participant is entitled in the event of
    such Participant’s death before he or she receives any or
    all of such benefit. Each designation will revoke all prior
    designations by the same Participant, shall be in a form
    prescribed by the Company, and will be effective only when filed
    by the Participant in writing with the Company during the
    Participant’s lifetime. If a married Participant designates
    a beneficiary other than the Participant’s spouse, the
    effectiveness of such designation may be subject to the consent
    of the Participant’s spouse. If a Participant dies without
    an effective designation of a beneficiary who is living at the
    time of the Participant’s death, the Company will pay any
    remaining unpaid benefits to the Participant’s legal
    representative.

 

    18.10     Severability.  If
    any one or more of the provisions (or any part thereof) of this
    Plan shall be held invalid, illegal or unenforceable in any
    respect, such provision shall be modified so as to make it
    valid, legal and enforceable, and the validity, legality and
    enforceability of the remaining provisions (or any part thereof)
    of the Plan shall not in any way be affected or impaired thereby.

 

    18.11     No Constraint on Corporate
    Action.  Nothing in this Plan shall be construed
    to: (a) limit, impair, or otherwise affect the
    Company’s or another Participating Company’s right or
    power to make adjustments, reclassifications, reorganizations,
    or changes of its capital or business structure, or to merge or
    consolidate, or dissolve, liquidate, sell, or transfer all or
    any part of its business or assets; or (b) limit the right
    or power of the Company or another Participating Company to take
    any action which such entity deems to be necessary or
    appropriate.

 

    18.12     Unfunded
    Obligation.  Participants shall have the status of
    general unsecured creditors of the Company. Any amounts payable
    to Participants pursuant to the Plan shall be considered
    unfunded and unsecured obligations for all purposes, including,
    without limitation, Title I of the Employee Retirement
    Income Security Act of 1974. No Participating Company shall be
    required to segregate any monies from its general funds, or to
    create any trusts, or establish any special accounts with
    respect to such obligations. The Company shall retain at all
    times beneficial ownership of any investments, including trust
    investments, which the Company may make to fulfill its payment
    obligations hereunder. Any investments or the creation or
    maintenance of any trust or any Participant account shall not
    create or constitute a trust or fiduciary relationship between
    the Committee or any Participating Company and a Participant, or
    otherwise create any vested or beneficial interest in any
    Participant or the Participant’s creditors in any assets of
    any Participating Company. The Participants shall have no claim
    against any Participating Company for any changes in the value
    of any assets which may be invested or reinvested by the Company
    with respect to the Plan.

 

    18.13     Choice of
    Law.  Except to the extent governed by applicable
    federal law, the validity, interpretation, construction and
    performance of the Plan and each Award Agreement shall be
    governed by the laws of the State of California, without regard
    to its conflict of law rules

    

    A-28

 

    IN WITNESS WHEREOF, the undersigned Secretary of the Company
    certifies that the foregoing sets forth the Molina Healthcare,
    Inc. 2011 Equity Incentive Plan as duly adopted by the Board on
    March 18, 2011.

 

    /s/  Jeff
    D. Barlow

    Corporate Secretary

    

    A-29exv10w2

 

Exhibit 10.2

 

    MOLINA
    HEALTHCARE, INC.

    

 

    2011
    EMPLOYEE STOCK PURCHASE PLAN

 

    1.     Establishment of
    Plan.  Molina Healthcare, Inc., a Delaware
    corporation (the “Company”), proposes to grant
    options to purchase shares of the Company’s common stock,
    $0.001 par value per share (the “Common
    Stock”), to eligible employees of the Company and its
    Participating Affiliates (as defined below) pursuant to this
    2011 Employee Stock Purchase Plan (this
    “Plan”). For purposes of this Plan,
    “Parent Corporation” and “Subsidiary
    Corporation” shall have the same meanings as
    “parent corporation” and “subsidiary
    corporation” in Sections 424(e) and 424(f),
    respectively, of the Internal Revenue Code of 1986, as amended
    (the “Code”). “Participating
    Affiliates” are Parent Corporations or Subsidiary
    Corporations that the Board of Directors of the Company (the
    “Board”) designates from time to time as
    corporations that shall participate in this Plan. Affiliates may
    be designated as Participating Affiliates either before or after
    this Plan is approved by the Company’s stockholders as
    provided in Section 22. The Company intends this Plan to
    qualify as an “employee stock purchase plan” under
    Section 423 of the Code (including any amendments to or
    replacements of such Section), and this Plan shall be so
    construed. Any term not expressly defined in this Plan but
    defined for purposes of Section 423 of the Code shall have
    the same definition herein. A total of two million (2,000,000)
    shares of the Common Stock are reserved for issuance under this
    Plan.

 

    2.     Purpose.  The
    purpose of this Plan is to provide eligible employees of the
    Company and Participating Affiliates with a convenient means of
    acquiring an equity interest in the Company through payroll
    deductions, to enhance such employees’ sense of
    participation in the affairs of the Company and Participating
    Affiliates, and to provide an incentive for continued employment.

 

    3.     Administration

 

    (a)     This Plan shall be administered
    by the Compensation Committee of the Board (the
    “Committee”). Subject to the provisions of this
    Plan and the limitations of Section 423 of the Code or any
    successor provision in the Code, all questions of interpretation
    or application of this Plan shall be determined by the Committee
    in its sole discretion and its decisions shall be final and
    binding upon all participants. Members of the Committee shall
    receive no compensation for their services in connection with
    the administration of this Plan, other than standard fees as
    established from time to time by the Board for services rendered
    by Board members serving on Board committees. All expenses
    incurred in connection with the administration of this Plan
    shall be paid by the Company.

 

    (b)     The Committee may, from time to
    time, consistent with this Plan and the requirements of
    Section 423 of the Code, establish, change or terminate
    such rules, guidelines, policies, procedures, limitations, or
    adjustments as deemed advisable by the Company, in its sole
    discretion, for the proper administration of this Plan,
    including, without limitation: (a) a minimum payroll
    deduction amount required for participation in an Offering
    Period, (b) a limitation on the frequency or number of
    changes permitted in the rate of payroll deduction during an
    Offering Period, (c) a payroll deduction greater or less
    than the amount designated by a participant in order to adjust
    for the Company’s delay or mistake in processing an
    Enrollment Form or in otherwise effecting a participant’s
    election under this Plan or as advisable to comply with the
    requirements of Section 423 of the Code,
    (d) determination of the date and manner by which the Fair
    Market Value of the Common Stock is determined for purposes of
    administration of this Plan, (e) delegate responsibility
    for Plan operation, management and administration, subject to
    the Committee’s oversight and control, on such terms as the
    Committee may establish, and (f) delegate to other persons
    the responsibility for performing appropriate functions as
    necessary, desirable or appropriate to further the purposes of
    this Plan.

 

    4.     Eligibility.  Any
    individual employed by the Company or the Participating
    Affiliates on the “Offering Date” of an “Offering
    Period” (each as defined in Section 5 below) is
    eligible to participate in such Offering Period except the
    following:

 

    (a)     employees who are customarily
    employed for twenty (20) hours or less per week; and

 

    (b)     employees who, together with
    any other person whose stock would be attributed to such
    employee pursuant to Section 424(d) of the Code, own stock
    or hold options to purchase stock

    

    B-1

 

    possessing five percent (5%) or more of the total combined
    voting power or value of all classes of stock of the Company or
    any of its Participating Affiliates or who, as a result of being
    granted an option under this Plan with respect to such Offering
    Period, would own stock or hold options to purchase stock
    possessing five percent (5%) or more of the total combined power
    or value of all classes of stock of the Company or any of its
    Participating Affiliates; and

 

    (c)     individuals who provide
    services to the Company or any of its Participating Affiliates
    as independent contractors who are reclassified as common law
    employees for any reason except for federal income
    and employment tax purposes.

 

    5.     Offering
    Periods.  The offering periods of this Plan (each,
    an “Offering Period”) shall be of six
    (6) months duration commencing on January 1 and July 1 of
    the Company’s fiscal year. The first day of each Offering
    Period is referred to as the “Offering Date.”
    The last day of each Offering Period is referred to as the
    “Purchase Date.” The Committee shall have the
    power to change the Offering Dates or Purchase Dates and the
    duration of Offering Periods without stockholder approval if
    such change is announced prior to the start of the relevant
    Offering Period, or prior to such other time period as specified
    by the Committee; provided, however, that no Offering Period may
    have a duration exceeding twenty-seven (27) months. If the
    first or last day of an Offering Period is not a day on which
    the New York Stock Exchange is open for trading, the Company
    shall specify the trading day that will be deemed the first or
    last day, as the case may be, of the Offering Period.

 

    6.     Participation in this
    Plan.  An employee may participate during an
    Offering Period on the first Offering Date after such employee
    satisfies the eligibility requirements set forth in
    Section 4 above and delivers an appropriate enrollment form
    (the “Enrollment Form”) to the Company prior to
    such Offering Date, or such other time period as specified by
    the Committee. Notwithstanding the foregoing, the Committee may
    set a later time for filing the Enrollment Form authorizing
    payroll deductions for all eligible employees with respect to a
    given Offering Period. An eligible employee who does not timely
    deliver an Enrollment Form to the Company after becoming
    eligible to participate in such Offering Period shall not
    participate in that Offering Period or any subsequent Offering
    Period until filing an Enrollment Form with the Company prior to
    the applicable Offering Date, or such other time period as
    specified by the Committee. Once an employee becomes a
    participant in an Offering Period, such employee will
    automatically participate in the Offering Period commencing
    immediately following the last day of the prior Offering Period
    unless the employee withdraws or is deemed to withdraw from this
    Plan or terminates further participation in the Offering Period
    as set forth in Section 11 below. A participant who has not
    otherwise withdrawn from this Plan under Section 11 is not
    required to file any additional Enrollment Form in order to
    continue participation in this Plan. However a participant may
    deliver a new Enrollment Form for a subsequent Offering Period
    in accordance with applicable rules and procedures if the
    participant wishes to change any of the elections contained in
    the participant’s then effective Enrollment Form.

 

    7.     Grant of Option on
    Enrollment.  Enrollment by an eligible employee in
    an Offering Period under this Plan will constitute the grant (as
    of the Offering Date for such Offering Period) by the Company to
    such employee of an option to purchase on the Purchase Date up
    to that number of shares of Common Stock of the Company
    determined by dividing (a) the amount accumulated in such
    employee’s payroll deduction account during such Offering
    Period by (b) the Per Share Purchase Price as determined
    pursuant to Section 8 below (but in no event less than the
    par value of a share of Company’s Common Stock),
    provided, however, that the number of shares of
    the Company’s Common Stock subject to any option granted
    pursuant to this Plan shall not exceed the maximum number of
    shares which may be purchased pursuant to Section 10 below
    with respect to the applicable Purchase Date. The Fair Market
    Value of a share of the Company’s Common Stock shall be
    determined as provided in Section 8 below.

 

    8.     Purchase
    Price.  The purchase price per share (“Per
    Share Purchase Price”) at which a share of Common Stock
    will be sold in any Offering Period shall be eighty-five percent
    (85%) of the lesser of:

 

    (a)     The Fair Market Value on the
    Offering Date; or

 

    (b)     The Fair Market Value on the
    Purchase Date.

    

    B-2

 

 

    For purposes of this Plan, the term “Fair Market
    Value” of the Common Stock on any given date means
    (i) the last reported closing price for a share of Stock on
    the New York Stock Exchange or, (ii) in the absence of
    reported sales on the New York Stock Exchange on a given date,
    the closing price of the New York Stock Exchange on the last
    date on which a sale occurred prior to such date; or
    (iii) if the stock is no longer publicly traded on the New
    York Stock Exchange, the Committee in good faith shall determine
    Fair Market Value; provided that, if the date for
    which the Fair Market Value is determined is the first day when
    trading prices for the Stock are reported on the New York Stock
    Exchange, the Fair Market Value shall be the public offering
    price set forth on the cover page for the final prospectus
    relating to the Company’s Initial Public Offering.

 

    9.     Payment of Purchase Price;
    Changes in Payroll Deductions; Issuance of Shares.

 

    (a)     The purchase price of the
    shares shall be accumulated by regular payroll deductions made
    during each Offering Period. The deductions are made as a
    percentage of the participant’s Compensation in one percent
    (1%) increments not less than one percent (1%) (except as a
    result of an election pursuant to Section 9(c) to stop
    payroll deductions during an Offering Period), nor greater than
    fifteen percent (15%) or such lower limit set by the Committee.
    “Compensation” shall mean all
    W-2 cash
    compensation, including base salary, wages, commissions,
    overtime, shift premiums and bonuses, provided,
    however, that for purposes of determining a
    participant’s compensation, any election by such
    participant to reduce his or her regular cash remuneration under
    Sections 125 or 401(k) of the Code shall be treated as if
    the participant did not make such election. Notwithstanding the
    foregoing, Compensation shall not include reimbursements of
    expenses, allowances, long-term disability, workers’
    compensation or any amount deemed received without the actual
    transfer of cash or any amounts directly or indirectly paid
    pursuant to this Plan or any other stock purchase or stock
    option plan, or any other compensation not included above.
    Payroll deductions shall commence on the first payday of the
    Offering Period and shall continue to the end of the Offering
    Period unless sooner altered or terminated as provided in this
    Plan.

 

    (b)     A participant may increase or
    decrease the rate of payroll deductions during an Offering
    Period by providing to the Company a new Enrollment Form, in
    which case the new rate shall become effective for the next
    payroll period commencing after the Company’s receipt of
    the Enrollment Form and shall continue for the remainder of the
    Offering Period unless changed as described below. Such change
    in the rate of payroll deductions may be made at any time during
    an Offering Period, but not more than one (1) increase and
    one (1) decrease in the rate of payroll deductions may be
    made during any Offering Period. A participant may increase or
    decrease the rate of payroll deductions for any subsequent
    Offering Period by filing with the Company a new Enrollment Form
    prior to the beginning of such Offering Period, or prior to such
    other time period as specified by the Committee.

 

    (c)     A participant may reduce his or
    her payroll deduction percentage to zero during an Offering
    Period by providing to the Company a revised Enrollment Form.
    Such reduction shall be effective beginning with the next
    payroll period after the Company’s receipt of the request
    and no further payroll deductions will be made for the duration
    of the Offering Period. Payroll deductions credited to the
    participant’s account prior to the effective date of the
    request shall be used to purchase shares of Common Stock in
    accordance with Section (e) below. Notwithstanding
    Section 9(b), a participant may not resume making payroll
    deductions during the Offering Period in which he or she reduced
    his or her payroll deductions to zero.

 

    (d)     All payroll deductions made for
    a participant are credited to his or her account under this Plan
    and are deposited with the general funds of the Company. No
    interest accrues on the payroll deductions. All payroll
    deductions received or held by the Company may be used by the
    Company for any corporate purpose, and the Company shall not be
    obligated to segregate such payroll deductions.

 

    (e)     On each Purchase Date, so long
    as this Plan remains in effect and provided that the participant
    has not submitted a revised Enrollment Form withdrawing from
    this Plan before such Purchase Date in accordance with
    Section 11, the Company shall apply the funds then in the
    participant’s account (or, if applicable, the lump sum cash
    payment received from the participant) to the purchase of whole
    shares of Common Stock reserved under the option granted to such
    participant with respect to the Offering Period to the extent
    that such option is exercisable on the Purchase Date. The Per
    Share Purchase Price shall be as specified

    

    B-3

 

    in Section 8. Any cash remaining in such participant’s
    account on a Purchase Date which is less than the amount
    necessary to purchase a full share of Common Stock of the
    Company shall be carried forward, without interest, into the
    next Offering Period. If this Plan has been oversubscribed, all
    funds not used to purchase shares on the Purchase Date shall be
    returned to the participant, without interest. No Common Stock
    shall be purchased on a Purchase Date on behalf of any employee
    whose participation in this Plan has terminated prior to such
    Purchase Date.

 

    (f)     As promptly as practicable
    after the Purchase Date, the Company shall issue shares for the
    participant’s benefit representing the shares purchased
    upon exercise of his or her option, subject to compliance with
    Section 24 below.

 

    (g)     During a participant’s
    lifetime, his or her option to purchase shares hereunder is
    exercisable only by him or her. The participant will have no
    interest or voting right in shares covered by his or her option
    until such option has been exercised.

 

    10.     Limitations on Shares to be
    Purchased.

 

    (a)     No participant shall be
    entitled to purchase Common Stock under this Plan at a rate
    which, when aggregated with his or her rights to purchase stock
    under all other employee stock purchase plans of the Company or
    any Parent Corporation or Subsidiary Corporation, exceeds
    $25,000 in Fair Market Value, determined as of the Offering Date
    (or such other limit as may be imposed by the Code) for each
    calendar year in which the employee participates in this Plan.
    The Company shall automatically suspend the payroll deductions
    of any participant as necessary to enforce such limit;
    provided that when the Company automatically resumes such
    payroll deductions, the Company must apply the rate in effect
    immediately prior to such suspension.

 

    (b)     No participant shall be
    entitled to purchase more than the Maximum Share Amount (as
    defined below) on any single Purchase Date. Prior to the
    commencement of any Offering Period or before such time period
    as specified by the Committee, the Committee may, in its sole
    discretion, set a maximum number of shares which may be
    purchased by any employee at any single Purchase Date (the
    “Maximum Share Amount”). Until otherwise
    determined by the Committee, there shall be no Maximum Share
    Amount. If a new Maximum Share Amount is set, then all
    participants must be notified of such Maximum Share Amount
    before commencing the next Offering Period. The Maximum Share
    Amount shall continue to apply with respect to all succeeding
    Purchase Dates and Offering Periods unless revised by the
    Committee as set forth above.

 

    (c)     If the number of shares to be
    purchased on a Purchase Date by all employees participating in
    this Plan exceeds the number of shares then available for
    issuance under this Plan, then the Company will make a pro rata
    allocation of the remaining shares in as uniform a manner as
    shall be reasonably practicable and as the Committee shall
    determine to be equitable.

 

    (d)     Any payroll deductions
    accumulated in a participant’s account which are not used
    to purchase stock due to the limitations in this Section 10
    shall be returned to the participant as soon as practicable
    after the end of the applicable Offering Period, without
    interest, provided that, any amount remaining in such
    participant’s account which is less than the amount
    necessary to purchase a full share of Common Stock of the
    Company shall be carried forward, without interest, into the
    next Offering Period or Offering Period.

 

    11.     Withdrawal.

 

    (a)     Each participant may withdraw
    from an Offering Period under this Plan by signing and
    delivering to the Company a revised Enrollment Form indicating
    such participant’s intention to withdraw. Such withdrawal
    may be elected at any time prior to the end of an Offering
    Period, or such other time period as specified by the Committee.

 

    (b)     Upon withdrawal from this Plan,
    the accumulated payroll deductions shall be returned to the
    withdrawn participant, without interest, and his or her interest
    in this Plan shall terminate. If a participant voluntarily
    elects to withdraw from this Plan, he or she may not resume his
    or her participation in this Plan

    

    B-4

 

    during the same Offering Period, but he or she may participate
    in any Offering Period under this Plan commencing after such
    withdrawal by filing a new authorization for payroll deductions
    in the same manner as set forth in Section 6 above for
    initial participation in this Plan.

 

    12.     Termination of
    Employment.  Termination of a participant’s
    employment for any reason, including retirement, death or the
    failure of a participant to remain an eligible employee of the
    Company or of a Participating Affiliate, immediately terminates
    his or her participation in this Plan. In such event, the
    payroll deductions credited to the participant’s account
    will be returned to him or her or, in the case of his or her
    death, to his or her legal representative, without interest. For
    purposes of this Section 12, an employee will not be deemed
    to have terminated employment or failed to remain in the
    continuous employ of the Company or of a Participating Affiliate
    in the case of sick leave, military leave, or any other leave of
    absence approved by the Board; provided that such leave
    is for a period of not more than ninety (90) days or
    reemployment upon the expiration of such leave is guaranteed by
    contract or statute.

 

    13.     Return of Payroll
    Deductions.  If a participant’s interest in
    this Plan is terminated by withdrawal, termination of employment
    or otherwise, or if this Plan is terminated by the Board, the
    Company shall deliver to the participant all payroll deductions
    credited to such participant’s account. No interest shall
    accrue on the payroll deductions of a participant in this Plan.

 

    14.     Capital
    Changes.  Subject to any required action by the
    stockholders of the Company, the number of shares of Common
    Stock covered by each option under this Plan which has not yet
    been exercised and the number of shares of Common Stock which
    have been authorized for issuance under this Plan but have not
    yet been placed under option (collectively, the
    “Reserves”), as well as the price per share of
    Common Stock covered by each option under this Plan which has
    not yet been exercised, shall be proportionately adjusted for
    any increase or decrease in the number of issued and outstanding
    shares of Common Stock resulting from a stock split or the
    payment of a stock dividend (but only on the Common Stock) or
    any other increase or decrease in the number of issued and
    outstanding shares of Common Stock effected without receipt of
    any consideration by the Company; provided,
    however, that conversion of any convertible securities of
    the Company shall not be deemed to have been “effected
    without receipt of consideration”. Notwithstanding the
    foregoing, any fractional shares resulting from an adjustment
    pursuant to this Section 14 shall be rounded down to the
    nearest whole number, and in no event may the Per Share Purchase
    Price be decreased to an amount less than the par value, if any,
    of the Common Stock. Such adjustment shall be made by the
    Committee, whose determination shall be final, binding and
    conclusive.

 

    In the event of the proposed dissolution or liquidation of the
    Company, the Offering Period will terminate immediately prior to
    the consummation of such proposed action, unless otherwise
    provided by the Committee. The Committee may, in its sole
    discretion in such instances, declare that this Plan shall
    terminate as of a date fixed by the Committee and either give
    each participant the right to purchase shares under this Plan
    prior to such termination or return all accumulated payroll
    deductions to each participant, without interest. In the event
    of (i) a merger or consolidation in which the Company is
    not the surviving corporation (other than a merger or
    consolidation with a wholly-owned subsidiary, a reincorporation
    of the Company in a different jurisdiction, or other transaction
    in which there is no substantial change in the stockholders of
    the Company or their relative stock holdings, provided that the
    options under this Plan are assumed, converted or replaced by
    the successor corporation, which assumption will be binding on
    all participants), (ii) a merger in which the Company is
    the surviving corporation but after which the stockholders of
    the Company immediately prior to such merger (other than any
    stockholder that merges, or which owns or controls another
    corporation that merges, with the Company in such merger) cease
    to own their shares or other equity interest in the Company,
    (iii) the sale of all or substantially all of the assets of
    the Company or (iv) the acquisition, sale, or transfer of
    more than 50% of the outstanding shares of the Company by tender
    offer or similar transaction, (each a “Sale
    Event”) the Company shall apply the funds contributed
    under this Plan to the purchase of shares of Common Stock
    pursuant to the provisions of Section 9 immediately prior
    to the effective date of such Sale Event. Notwithstanding the
    foregoing, the surviving, continuing, successor or purchasing
    corporation or parent corporation thereof (the
    “Acquiring Corporation”), may elect to assume
    the Company’s rights and obligations under ths Plan and, in
    that event, there shall be no purchase before the end of the
    Offering Period in which the Sale Event occurs.

    

    B-5

 

    The Committee may, if it so determines in its sole discretion,
    also make provision for adjusting the share reserve set forth in
    Section 1, as well as the price per share of Common Stock
    covered by each outstanding option, solely in the event that the
    Company effects one or more reorganizations, recapitalizations,
    rights offerings or other increases or reductions of shares of
    its outstanding Common Stock, or in the event of the Company
    being consolidated with or merged into any other corporation.

 

    15.     Withholding.  The
    participant shall make adequate provision for the foreign,
    federal, state and local tax withholding obligations of the
    Company or any of its Participating Affiliates, if any, which
    arise in connection with participation in this Plan. The Company
    and its Participating Affiliates 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.

 

    16.     Nonassignability.  Neither
    payroll deductions credited to a participant’s account nor
    any rights with regard to the exercise of an option or to
    receive shares under this Plan may be assigned, transferred,
    pledged or otherwise disposed of in any way (other than by will,
    the laws of descent and distribution or as provided in
    Section 23 below) by the participant. Any such attempt at
    assignment, transfer, pledge or other disposition shall be void
    and without effect.

 

    17.     Reports.  Individual
    accounts will be maintained for each participant in this Plan.
    Each participant shall receive as soon as practicable after the
    end of each Offering Period a report of his or her account
    setting forth the total payroll deductions accumulated, the
    number of shares purchased, the per share price thereof and the
    remaining cash balance, if any, carried forward to the next
    Offering Period.

 

    18.     Notice of Disqualifying
    Disposition.  Each participant shall notify the
    Company in writing if the participant disposes of any of the
    shares purchased in any Offering Period pursuant to this Plan if
    such disposition occurs within two (2) years from the
    Offering Date or within one (1) year from the Purchase Date
    on which such shares were purchased (the “Notice
    Period”). The Company may, at any time during the
    Notice Period, place a legend or legends on any certificate
    representing shares acquired pursuant to this Plan requesting
    the Company’s transfer agent to notify the Company of any
    transfer of the shares. The obligation of the participant to
    provide such notice shall continue notwithstanding the placement
    of any such legend on the certificates.

 

    19.     No Rights as Stockholder or
    to Continued Employment.  A participant shall have
    no rights as a stockholder by virtue of participation in this
    Plan until the date of the issuance of a certificate for the
    shares purchased pursuant to the exercise of the
    participant’s purchase right (as evidenced by the
    appropriate entry on the books of the Company or of a duly
    authorized transfer agent of the Company). No adjustment shall
    be made for dividends, distributions or other rights for which
    the record date is prior to the date such certificate is issued,
    except as provided in Section 14. Neither this Plan nor the
    grant of any option hereunder shall confer any right on any
    employee to remain in the employ of the Company or any
    Participating Affiliate, or restrict the right of the Company or
    any Participating Affiliate to terminate such employee’s
    employment at any time.

 

    20.     Equal Rights and
    Privileges.  All eligible employees shall have
    equal rights and privileges with respect to this Plan so that
    this Plan qualifies as an “employee stock purchase
    plan” within the meaning of Section 423 or any
    successor provision of the Code and the related regulations. Any
    provision of this Plan which is inconsistent with
    Section 423 or any successor provision of the Code shall,
    without further act or amendment by the Company, the Committee
    or the Board, be reformed to comply with the requirements of
    Section 423. This Section 20 shall take precedence
    over all other provisions in this Plan.

 

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

 

    22.     Term; Stockholder
    Approval.  This Plan was adopted by the Board of
    Directors of the Company on March 18, 2011, effective as of
    July 1, 2011 (the “Effective Date”), and
    shall apply to any purchase right granted, or stock transferred
    pursuant to any purchase right granted, on or after the
    Effective Date. This Plan shall continue until the earlier to
    occur of (a) termination of this Plan by the Board (which

    

    B-6

 

    termination may be effected by the Board at any time),
    (b) issuance of all of the shares of Common Stock reserved
    for issuance under this Plan, or (c) April 27, 2021.

 

    23.     Designation of
    Beneficiary

 

    (a)     A participant may file a
    written designation of a beneficiary who is to receive any
    shares and cash, if any, from the participant’s account
    under this Plan in the event of such participant’s death
    subsequent to the end of any Offering Period but prior to
    delivery to him of such shares and cash. In addition, a
    participant may file a written designation of a beneficiary who
    is to receive any cash from the participant’s account under
    this Plan in the event of such participant’s death prior to
    a Purchase Date.

 

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

 

    24.     Conditions Upon Issuance of
    Shares; Limitation on Sale of Shares.  Shares
    shall not be issued with respect to an option unless the
    exercise of such option and the issuance and delivery of such
    shares pursuant thereto shall comply with all applicable
    provisions of law, domestic or foreign, including, without
    limitation, the Securities Act of 1933, as amended, the
    Securities Exchange Act of 1934, as amended, the rules and
    regulations promulgated thereunder, and the requirements of any
    stock exchange or automated quotation system upon which the
    shares may then be listed, and shall be further subject to the
    approval of counsel for the Company with respect to such
    compliance.

 

    25.     Applicable
    Law.  This Plan shall be governed by the
    substantive laws (excluding the conflict of laws rules) of the
    State of California.

 

    26.     Amendment or Termination of
    this Plan.  The Board may at any time amend,
    terminate or extend the term of this Plan, except that
    (i) any such termination cannot affect options previously
    granted under this Plan unless the Board determines that the
    termination of this Plan immediately following any Purchase Date
    is in the best interests of the Company and its stockholders,
    (ii) any amendment may not adversely affect the previously
    granted purchase right of any participant unless permitted by
    this Plan or as may be necessary to qualify this Plan as an
    employee stock purchase plan pursuant to Section 423 of the
    Code or to obtain qualification or registration of the Common
    Stock under applicable federal, state or foreign securities
    laws, and (iii) any amendment must be approved by the
    stockholders of the Company in accordance with Section 2
    above within twelve (12) months of the adoption of such
    amendment (or earlier if required by Section 22) if
    such amendment would:

 

    (a)     increase the number of shares
    that may be issued under this Plan;

 

    (b)     change the designation of the
    employees (or class of employees) eligible for participation in
    this Plan; or

 

    (c)     any other action taken by the
    Board that, by its terms, is contingent on stockholder approval.

 

    Notwithstanding the foregoing, the Board may make such
    amendments to this Plan as the Board determines to be advisable,
    if the continuation of this Plan or any Offering Period would
    result in financial accounting treatment for this Plan that is
    different from the financial accounting treatment in effect on
    the Effective Date.

    

    B-7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}]]