Document:

Exhibit 10.56

 

Confidential

November 10,
2008

 

	
  o

  	
  Employee’s Copy

  	
   

  
	
  o

  	
  Employer’s Copy

  	
   

  

 

Change in
Control Retention Agreement

 

[NAME]

[ADDRESS]

 

Dear [NAME]:

 

LECG, LLC, a California
limited liability company, (the “Company”) wants to continue to retain your
services and recognizes that a Change in Control (as defined below) may result
in a material alteration or diminishment of your position and responsibilities
and substantially frustrate the purpose of your commitment to the Company and
forbearance of career options.  The
Company has determined therefore to provide enhanced severance and other
benefits in the event of a Change in Control of LECG Corporation, a Delaware
corporation (“LECG”) should the Company
decide to pursue any such transaction. In consideration of the premises and
mutual covenants contained below and for other good and valuable consideration,
the receipt and sufficiency of which is mutually acknowledged, the Company and
you, intending to be legally bound, agree as follows:

 

	
  Duties

  	
   

  	
  As part of this
  Retention Agreement (the “Agreement),
  you agree to (i) continue to perform all of your current duties for the
  Company; (ii) assist with various non-operating activities, which could
  include outside investment, financing, transactions, or business
  reconfiguration as the Board of Directors (the “Board”)
  of LECG requests; (iii) carry out any other tasks the Board reasonably
  requests to facilitate such activities or any Change in Control; and
  (iv) perform the duties assigned to you following any such activities,
  including any such restructuring or Change in Control.

  
	
   

  	
   

  	
   

  
	
  Change in Control

  	
   

  	
  If a Change in Control
  (as defined in Annex A) occurs while you are employed, any unvested or unexercisable equity or
  equity-based compensation (as the case may be) will automatically vest and/or
  become exercisable as of the Change in Control (“Accelerated Vesting”), unless such vesting will
  violate Section 409A as an impermissible acceleration of deferred
  compensation, in which event the vesting will occur in

  

 

 

	
   

  	
   

  	
  accordance with the terms of the underlying equity compensation
  agreement.

  
	
   

  	
   

  	
   

  
	
  Severance 

  	
   

  	
  If, within 12 months
  following a Change in Control, your employment with the Company ends because
  of a termination without Cause (as defined in Annex A) or as a result of your
  resignation for Good Reason (as defined in Annex A), you will be entitled to
  the following, provided that you satisfy the conditions under the Release; Payment Timing provisions:

   

  (i)           any
  accrued base salary not previously paid and any accrued prior year bonus not
  paid prior to such date;

   

  (ii)          two
  times the annual base salary in effect on the date of termination (or, if
  higher, immediately preceding the Change in Control) (“Cash
  Severance”);

   

  (iii)         payment
  by the Company of premiums for continuation health coverage under COBRA for
  the shorter of 18 months following cessation of employment and the period for
  which you are eligible for and elect such coverage;

   

  (iv)         elimination of any requirement
  to repay any portion of a sign-on bonus; and

   

  (v)          payment of any guaranteed component of the
  bonus due in the year in which the Change of Control occurs.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except to the extent
  the law requires otherwise or as provided in this section, neither you nor
  your beneficiary or estate will have any rights or claims under this
  Agreement or otherwise to receive severance or any other compensation, or to
  participate in any other plan, arrangement, or benefit, after such
  termination or resignation. If you resign voluntarily or the Company
  terminates your employment for Cause or your employment ends for any reason
  other than termination without Cause or your resignation for Good Reason, you
  will forfeit this payment and acceleration.

  
	
   

  	
   

  	
   

  
	
  Release;

  Payment Timing

  	
   

  	
  As a condition to receiving the amounts and benefits set forth in
  clauses (ii) — (v) of the Severance
  provision, you must execute and not revoke a severance agreement and
  release of claims drafted by and satisfactory to the Company (the “Severance Agreement”), which
  Severance Agreement will contain a full release (the “Release”) of the Company (other than with respect to exceptions
  the Company specifies therein).

  

 

2

 

	
   

  	
   

  	
  The Company will
  pay the Cash Severance, after and if you sign the Release and any revocation
  period expires, in a single lump sum within 60 days following the date
  your employment ends (or, if you are subject to the six month delay in the Compliance with Code Section 409A provision, the date
  it provides), provided that if the 60th day falls in the calendar
  year after the year of in which your employment ends, the payment will be
  made no earlier than the first day of such later calendar year). Benefits
  under clauses (iii), (iv), and (v) of Severance
  will occur at the same time (or such earlier post-Release date as
  Section 409A permits).

  
	
   

  	
   

  	
   

  
	
  No
  Effect on 

  Running Business 

  or Employment

  	
   

  	
  You understand
  and agree that the existence of this Agreement will not affect in any way the
  right or power of the Company or its stockholders to make or authorize any
  adjustments, recapitalizations, reorganizations, or other changes in
  Company’s capital structure or its business, or any merger or consolidation
  of the Company, or any issuance of bonds, debentures, preferred or other
  stock, with preference ahead of or convertible into, or otherwise affecting
  the Company’s common stock or the rights thereof, or the dissolution or
  liquidation of the Company, or any sale or transfer of all or any part of its
  assets or business, or any other corporate act or proceeding, whether or not
  of a similar character to those described above. Nothing in this Agreement
  imposes any requirement on the Company to enter into or complete a Change in
  Control. Nothing in this Agreement restricts the Company’s rights or those of
  any of its affiliates to terminate your employment or other relationship at
  any time, with or without Cause and for any or no reason.

  
	
   

  	
   

  	
   

  
	
  Further Effect of 

  Termination on 

  Board and Officer 

  Positions

  	
   

  	
  If your employment ends for any reason, you agree
  that you will cease immediately to hold any and all officer or director
  positions you then have with the Company or any affiliate, absent a contrary
  direction from the Board (which may include either a request to continue such
  service or a direction to cease serving upon notice without regard to whether
  your employment has ended), except to the extent that you reasonably and in
  good faith determine that ceasing to serve as a director would breach your
  fiduciary duties to the Company. You hereby irrevocably appoint the Company
  to be your attorney to execute any documents and do anything in your name to
  effect your ceasing to serve as a director and officer of the Company and any
  subsidiary, should you fail to resign following a request from the Company to
  do so. A written notification signed by a director or duly authorized officer
  of the Company that any instrument, document or act falls within the
  authority conferred by this clause will be conclusive evidence that it does
  so. The Company will prepare any documents, pay any filing fees, and bear any
  other expenses related to this section.

  
	
   

  	
   

  	
   

  
	
  Term; Effect

  	
   

  	
  This Agreement begins the day you sign it (the “Effective Date”) and runs until
  your employment ends (and, if your employment ends in a manner that triggers
  Severance or other benefits hereunder, until any Company

  

 

3

 

	
   

  	
   

  	
  obligations under this
  Agreement are satisfied). This Agreement applies
  only with respect to the first Change in Control to occur after the Effective
  Date.

  
	
   

  	
   

  	
   

  
	
  Amendment; 

  Waiver

  	
   

  	
  Neither you nor the
  Company may modify, amend, or waive the terms of this Agreement other than by
  a written instrument signed by you and an executive officer of the Company,
  with the prior approval of the Board. Either party’s waiver of the other’s
  compliance with any provision of this Agreement does not waive any other
  provision of this Agreement or any subsequent breach by such party of a
  provision of this Agreement.

  
	
   

  	
   

  	
   

  
	
  No Mitigation 

  or Offset

  	
   

  	
  You are not required to
  mitigate the payments under this Agreement by seeking other employment or
  otherwise, and the Company will not offset its obligations under this
  Agreement to reflect compensation you receive from other employers.

  
	
   

  	
   

  	
   

  
	
  Governing Law;
  

  Jury Waiver;

  	
   

  	
  The laws of the State
  of California (other than its conflict of laws provisions) govern this
  Agreement.  The Company and you each hereby irrevocably waive any right to a
  trial by jury in any action, suit or other legal proceeding arising under or
  relating to any provision of this Agreement.

  
	
   

  	
   

  	
   

  
	
  Assignment

  	
   

  	
  This Agreement binds
  the Company, its successors or assigns, and your heirs and the personal
  representatives of your estate. Without the Company’s prior written consent,
  you may not assign or delegate this Agreement or any or all rights, duties,
  obligations, or interests under it.

  
	
   

  	
   

  	
   

  
	
  Compliance with 

  Code Section 409A

  	
   

  	
  All payments under this
  Agreement are subject to any required tax or other withholdings. If and to
  the extent any portion of any payment, compensation or other benefit provided
  to you in connection with your employment termination is determined to
  constitute “nonqualified deferred compensation” within the meaning of Code
  Section 409A (“Section 409A”
  of the “Code”) and you are a
  specified employee as defined in Section 409A(a)(2)(B)(i), as determined
  by the Company in accordance with its procedures, by which determination you
  hereby agrees that  you are
  bound, such portion of the payment, compensation or other benefit shall not
  be paid before the earliest of (i) the expiration of the six month
  period measured from the date of your “separation from service” (as
  determined under Section 409A) or (ii) the date of your death
  following such separation from service (the “New Payment Date”). The aggregate of any payments that
  otherwise would have been paid to you during the period between the date of
  separation from service and the New Payment Date shall be paid to the you in
  a lump sum on such New Payment Date, and any remaining payments will be paid
  on their original schedule. For purposes of this Agreement, each amount to be
  paid or benefit to be provided shall be construed as a separate identified
  payment

  

 

4

 

	
   

  	
   

  	
  for purposes of
  Section 409A, and any payments that are due within the “short term
  deferral period” as defined in Section 409A shall not be treated as
  deferred compensation unless applicable law requires otherwise. Neither the
  Company nor you shall have the right to accelerate or defer the delivery of
  any such payments or benefits except to the extent specifically permitted or
  required by Section 409A. This Agreement is intended to comply with the
  provisions of Section 409A and the Agreement shall, to the extent
  practicable, be construed in accordance therewith. Terms defined in the
  Agreement shall have the meanings given such terms under Section 409A if
  and to the extent required to comply with Section 409A. In any event,
  the Company makes no representations or warranty and shall have no liability
  to you or any other person, other than with respect to payments made by the
  Company in violation of the provisions of this Agreement, if any provisions
  of or payments under this Agreement are determined to constitute deferred
  compensation subject to Code Section 409A but not to satisfy the
  conditions of that section.

  
	
   

  	
   

  	
   

  
	
  Parachute

  Cutback

  	
   

  	
  If the payments to you
  under this Agreement or any other compensation owed you or becoming vested or
  nonforfeitable would constitute a Parachute Payment and cause you to be subject
  to the federal excise tax levied on certain “excess parachute payments” under Code Section 4999, then
  the amounts payable under this Agreement will be reduced or eliminated as
  follows, as determined by the Company, in the following order: (i) any
  cash payments, (ii) any taxable benefits, (iii) any nontaxable
  benefits, and (iv) any vesting of equity awards, in each case in reverse
  order beginning with payments or benefits that are to be paid the farthest in
  time from the date of change in control, to the extent necessary to maximize
  the Total After-Tax Payments to you. The Company’s independent, certified
  public accounting firm will determine whether and to what extent payments or
  vesting under this Agreement are required to be reduced in accordance with the
  preceding sentence. If there is an underpayment or overpayment under this
  Agreement (as determined after the application of this paragraph), the amount
  of such underpayment or overpayment will be immediately paid to you or
  refunded by you, as the case may be, with interest at the applicable federal
  rate provided for in Section 7872(f)(2) of the Code. For purposes
  of this Agreement, “Total
  After-Tax Payments” means the total of all “Parachute Payments” (as defined in
  Code Section 280G(b)(2) of the Code) made to or for the benefit of
  you (whether made under the Agreement or otherwise), after reduction for all
  applicable federal taxes (including, without limitation, the tax described in
  Code Section 4999).

  
	
   

  	
   

  	
   

  
	
  Counterparts

  	
   

  	
  This Agreement may be
  executed in two or more counterparts, each of which shall be an original and
  all of which shall be deemed to constitute one and the same instrument.

  

 

5

 

	
  Notices

  	
   

  	
  Notices must be given
  in writing by personal delivery, by certified mail, return receipt requested,
  by telecopy, or by overnight delivery. You should send or deliver your
  notices to the Company’s corporate headquarters, addressed to the Chairman of the Board. The Company
  will send or deliver any notice given to you at your address as reflected on
  the Company’s personnel records. You and the Company may change the address
  for notice by like notice to the other. You and the Company agree that notice
  is received on the date it is personally delivered, the date it is received
  by certified mail, the date of guaranteed delivery by the overnight service,
  or the date the fax machine confirms effective transmission.

  
	
   

  	
   

  	
   

  
	
  Superseding Effect

  	
   

  	
  This Agreement
  supersedes any prior oral or written employment, severance, or fringe benefit
  agreements between you and the Company that would provide benefits in
  connection with a Change in Control. This Agreement supersedes all prior or
  contemporaneous negotiations, commitments, agreements, and writings with
  respect to the subject matter of this Agreement. It does not supersede any
  obligations of the parties under the Company’s stockholders agreements or
  equity compensation plans. With those exceptions, all such other
  negotiations, commitments, agreements, and writings will have no further
  force or effect; and the parties to any such other negotiation, commitment,
  agreement, or writing will have no further rights or obligations thereunder.

  

 

If you accept the terms
of this Agreement, please sign below.  We
encourage you to consult with any advisors you choose.

 

Signatures on Page Following

 

6

 

	
   

  	
   

  	
  LECG, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Garrett Bouton

  
	
   

  	
   

  	
  Chairman
  of the Board, LECG Corporation

  

 

 

I accept and agree to the
terms set forth in this Agreement:

 

	
   

  	
   

  	
   

  
	
  [NAME]

  	
   

  	
  Dated:

  	
   

  

 

7

 

EXHIBIT
A

Definitions

 

	
  Cause

  	
   

  	
  For purposes of this
  Agreement, the Company’s termination of your employment will be for “Cause” as under the
  definition provided in your offer letter or employment agreement with the
  Company as then in effect or, if no such agreement is in effect, as
  determined in the sole discretion of the Board, if you:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)           are
  convicted of, or plead guilty or nolo contendere to, any felony;

   

  (ii)          breach
  your obligation to keep an actual or potential Change in Control and related
  matters confidential both within and outside the Company except as otherwise
  directed by the Board or otherwise interfere with a Change in Control;

   

  (iii)         intentionally
  violate Federal or state securities laws;

   

  (iv)         engage
  in willful misconduct or gross negligence that has or is reasonably likely to
  have a material adverse effect on the Company;

   

  (v)          materially
  or repeatedly fail to perform your reasonably assigned duties for the
  Company, where such failure has or is reasonably likely to have a material
  adverse effect on the Company;

   

  (vi)         materially
  violate any material provision of the Company’s Code of Business Ethics; or

   

  (vii)        engage
  in fraud, embezzlement, theft or dishonesty against the Company,

   

  provided that no
  finding of Cause shall be made pursuant to subsections (ii)-(vii) above
  unless the Company has provided you with written notice stating the facts and
  circumstances underlying the allegations of Cause and you have failed to cure
  such violation, if curable, within 30 calendar days following receipt
  thereof.  The Board will determine
  whether a violation is curable and/or cured in its reasonable discretion.

  
	
   

  	
   

  	
   

  
	
  Change

  in Control

  	
   

  	
  A “Change in Control”
  for purposes of this Agreement means the occurrence of any one or more of the
  following events:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)           sale
  of all or substantially all of the assets of LECG to one or more individuals,
  entities, or groups (other than an “Excluded Owner”
  as defined below);

   

  (ii)          a
  person, entity, or group (other than an Excluded Owner) acquires or attains
  ownership of at least 51% of the undiluted total voting power of 

   

  

 

8

 

	
   

  	
   

  	
  LECG’s then-outstanding
  securities eligible to vote to elect members of the Board (“Company Voting Securities”); or

   

  (iii)         completion
  of a merger or consolidation of LECG with or into any other entity (other
  than an Excluded Owner) unless the holders of the Company Voting Securities
  outstanding immediately before such completion, together with any trustee or
  other fiduciary holding securities under a Company benefit plan, hold
  securities that represent immediately after such merger or consolidation at
  least 51% of the combined voting power of the then outstanding voting securities
  of either LECG or the other surviving entity or its ultimate parent.

   

  An “Excluded Owner”
  consists of LECG, the Company, any entity owned, directly or indirectly, at
  least 50% by LECG or the Company, any entity that, directly or indirectly,
  owns at least 50% of LECG or the Company, any Company benefit plan, and any
  underwriter temporarily holding securities for an offering of such
  securities.

  
	
   

  	
   

  	
   

  
	
  Good

  Reason

  	
   

  	
  For purposes of this
  Agreement, “Good Reason” means, without
  your consent(other than in clause (vi)), the occurrence of any of the
  following events or actions during the 12 months following a Change in
  Control:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)           a
  reduction in your base salary as in effect immediately preceding the Change
  in Control;

   

  (ii)          a
  material reduction in your title, position or reporting status, unless you
  are provided with a comparable title, position or reporting status, or any
  material diminution of your duties, responsibilities, powers or authorities;

   

  (iii)         any
  relocation of your principal place of employment by more than 50 miles;

   

  (iv)         a
  material breach by the Company, LECG, or any successor of any material
  provision of this Agreement;

   

  (v)          LECG’s,
  the Company’s or a successor failure to offer you a position following the
  Change in Control with duties and base compensation that are at least
  substantially equivalent to those in effect immediately before the Change in
  Control; or

   

  (vi)         during
  a 60 day period following the closing of a Change in Control, you choose not
  to remain employed by the Company.

  

 

9

 

	
   

  	
   

  	
  No finding of Good
  Reason shall be made under clauses (i)-(iv) above unless you have
  provided the Company with written notice within 90 days after the occurrence
  or omission stating with specificity the facts and circumstances underlying
  the allegations of Good Reason and the Company has failed to cure such
  violation within 30 calendar days of receipt thereof and you actually
  separate from service within 150 days after the event or action giving
  rise to Good Reason. With respect to clause (v), you must have provided the
  Company with written notice within 30 days after the failure, the Company has
  failed to cure such violation within 30 calendar days of receipt thereof and
  you actually separate from service within 60 calendar days after the
  event or action giving rise to Good Reason. 
  With respect to clause (vi), you must have provided the Company with
  written notice of your intent not to remain employed by the Company within 60
  days after the closing of a Change in Control.

  

 

10Exhibit 10.2

 

EXACT
CORPORATION

 

2000
STOCK OPTION AND INCENTIVE PLAN

 

1.            PURPOSE AND ELIGIBILITY

 

The
purpose of this 2000 Stock Option and Incentive Plan (the “PLAN”) of Exact
Corporation (the “COMPANY”) is to provide stock options and other equity interests
in the Company (each an “AWARD”) to employees, officers, directors, consultants
and advisors of the Company and its Subsidiaries, all of whom are eligible to
receive Awards under the Plan. Any person to whom an Award has been granted
under the Plan is called a “PARTICIPANT”. Additional definitions are contained
in Section 8.

 

2.            ADMINISTRATION

 

a.
ADMINISTRATION BY BOARD OF DIRECTORS. The Plan will be administered by the
Board of Directors of the Company (the “BOARD”). The Board, in its sole discretion,
shall have the authority to grant and amend Awards, to adopt, amend and repeal rules relating
to the Plan and to interpret and correct the provisions of the Plan and any
Award. All decisions by the Board shall be final and binding on all interested
persons. Neither the Company nor any member of the Board shall be liable for
any action or determination relating to the Plan.

 

b.
APPOINTMENT OF COMMITTEES. To the extent permitted by applicable law, the Board
may delegate any or all of its powers under the Plan to one or more committees
or subcommittees of the Board (a “COMMITTEE”). All references in the Plan to
the “BOARD” shall mean such Committee or the Board.

 

c.
DELEGATION TO EXECUTIVE OFFICERS. To the extent permitted by applicable law,
the Board may delegate to one or more executive officers of the Company the
power to grant Awards and exercise such other powers under the Plan as the
Board may determine, PROVIDED THAT the Board shall fix the maximum number
of Awards to be granted and the
maximum number of shares issuable to any one Participant pursuant to Awards
granted by such executive officers.

 

3.            STOCK AVAILABLE FOR AWARDS

 

a.
NUMBER OF SHARES. Subject to adjustment under Section 3(c), the aggregate
number of shares of Common Stock, par value $.01 per share, of the Company (the
“COMMON STOCK”) that may be issued pursuant to the Plan is 1,000,000 shares,
which number shall automatically increase on January 1, 2002 and each January 1
thereafter (each, an “Adjustment Date”) by such number of shares as is equal to
the greater of (i) 5% of the number of shares of Common Stock outstanding
on the immediately preceding December 31, and (ii) the number of
shares of Common Stock that has been made subject to Awards made under the Plan
during the year immediately prior to such Adjustment Date; PROVIDED, HOWEVER,
that the Board may provide for a lesser number of shares on any Adjustment Date
by designating such lesser number by resolution adopted on or before such
Adjustment Date; and PROVIDED FURTHER, HOWEVER, that the

 

 

cumulative
number of additional shares that may be issued pursuant to the Plan as a result
of increases on all Adjustment Dates taken together may not exceed 20,000,000
shares (such number to be subject to adjustment in accordance with Section 3(c) below).
If any Award expires, or is terminated, surrendered or forfeited, in whole or
in part, the unissued Common Stock covered by such Award shall again be
available for the grant of Awards under the Plan. If shares of Common Stock
issued pursuant to the Plan are repurchased by, or are surrendered or forfeited
to, the Company at no more than cost, such shares of Common Stock shall again
be available for the grant of Awards under the Plan; PROVIDED, HOWEVER, that
the cumulative number of such shares that may be so reissued under the Plan
will not exceed the total of 1,000,000 shares plus the number of  additional shares resulting from Adjustment
Date increases effected in accordance with this Section 3(a) (such
number to be subject to adjustment in accordance with Section 3(c) below).
Shares issued under the Plan may consist in whole or in part of authorized but
unissued shares or treasury shares.

 

b.
RESERVED.

 

c.
ADJUSTMENT TO COMMON STOCK. In the event of any stock split, stock dividend,
extraordinary cash dividend, recapitalization, reorganization, merger, consolidation,
combination, exchange of shares, liquidation, spin-off, split-up, or other
similar change in capitalization or event, (i) the number and class of securities
available for Awards under the Plan and the per-Participant share limit, (ii) the
number and class of securities, vesting schedule and exercise price per share
subject to each outstanding Option, (iii) the repurchase price per
security subject to repurchase, and (iv) the terms of each other
outstanding stock-based Award shall be adjusted by the Company (or substituted
Awards may be made) to the extent the Board shall determine, in good faith,
that such an adjustment (or substitution) is appropriate. If Section 7(e)(i) applies
for any event, this Section 3(c) shall not be applicable.

 

4.            STOCK OPTIONS

 

a.
GENERAL. The Board may grant options to purchase Common Stock (each, an “OPTION”)
and determine the number of shares of Common Stock to be covered by each
Option, the exercise price of each Option and the conditions and limitations
applicable to the exercise of each Option and the Common Stock issued upon the
exercise of each Option, including vesting provisions, repurchase provisions
and restrictions relating to applicable federal or state securities laws, as it
considers advisable.

 

b.
INCENTIVE STOCK OPTIONS. An Option that the Board intends to be an “incentive
stock option” as defined in Section 422 of the Code (an “INCENTIVE STOCK
OPTION”) shall be granted only to employees of the Company and shall be subject
to and shall be construed consistently with the requirements of Section422 of
the Code. The Board and the Company shall have no liability if an Option or any
part thereof that is intended to be an Incentive Stock Option does not qualify
as such. An Option or any part thereof that does not qualify as an Incentive
Stock Option is referred to herein as a “NONSTATUTORY STOCK OPTION.”

 

2

 

c.
EXERCISE PRICE. The Board shall establish the exercise price (or determine the
method by which the exercise price shall be determined) at the time each Option
is granted and specify it in the applicable option agreement.

 

d.
DURATION OF OPTIONS. Each Option shall be exercisable at such times  and subject to such terms and conditions as
the Board may specify in the applicable option agreement.

 

e.
EXERCISE OF OPTION. Options may be exercised only by delivery to the Company of
a written notice of exercise signed by the proper person together with payment
in full as specified in Section 4(f) for the number of shares for which
the Option is exercised.

 

f.
PAYMENT UPON EXERCISE. Common Stock purchased upon the exercise of an Option
shall be paid for by one or any combination of the following forms of payment:

 

(i) 
by check payable to the order of the Company;

 

(ii) except
as otherwise explicitly provided in the applicable option agreement, and only
if the Common Stock is then publicly traded, delivery of an irrevocable and
unconditional undertaking by a creditworthy broker to  deliver promptly to the Company sufficient
funds to pay the exercise price, or delivery by the Participant to the Company
of a copy of irrevocable and unconditional instructions to a creditworthy
broker to deliver promptly to the Company cash or a check sufficient to pay the
exercise price; or

 

(iii) to
the extent explicitly provided in the applicable option agreement, by (x) delivery
of shares of Common Stock owned by the Participant valued at fair market value
(as determined by the Board or as determined pursuant to the applicable option
agreement), (y) delivery of a promissory note of the Participant to the
Company (and delivery to the Company by the Participant of a check in an amount
equal to the par value of the shares purchased), or (z) payment of such
other lawful consideration as the Board may determine.

 

5.            RESTRICTED STOCK

 

a.
GRANTS. The Board may grant Awards entitling recipients to acquire shares of
Common Stock, subject to (i) delivery to the Company by the Participant of
a check in an amount at least equal to the par value of the shares purchased,
and (ii) the right of the Company to repurchase all or part of such shares
at their issue price or other stated or formula price from the Participant in
the event that conditions specified by the Board in the applicable Award are
not satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, a “RESTRICTED STOCK AWARD”).

 

b.
TERMS AND CONDITIONS. The Board shall determine the terms and conditions of any
such Restricted Stock Award. Any stock certificates issued in respect of a
Restricted Stock Award shall be registered in the name of the Participant and,
unless otherwise determined by the Board, deposited by the Participant,
together with a stock power endorsed in blank, with the

 

3

 

Company
(or its designee). After the expiration of the applicable restriction periods,
the Company (or such designee) shall deliver the certificates no longer subject
to such restrictions to the Participant or, if the Participant has died, to the
beneficiary designated by a Participant, in a manner determined by the Board,
to receive amounts due or exercise rights of the Participant in the event of
the Participant’s death (the “DESIGNATED BENEFICIARY”). In the absence of an effective
designation by a Participant, Designated Beneficiary shall mean the Participant’s
estate.

 

6.            OTHER STOCK-BASED AWARDS

 

The
Board shall have the right to grant other Awards based upon the Common Stock
having such terms and conditions as the Board may determine, including, without
limitation, the grant of shares based upon certain conditions, the grant of
securities convertible into Common Stock and the grant of stock appreciation
rights, phantom stock awards or stock units.

 

7.            GENERAL PROVISIONS APPLICABLE TO AWARDS

 

a.
TRANSFERABILITY OF AWARDS. Except as the Board may otherwise  determine or provide in an Award, Awards
shall not be sold, assigned, transferred, pledged or otherwise encumbered by
the person to whom they are granted, either voluntarily or by operation of law,
except by will or the laws of descent and distribution, and, during the life of
the Participant, shall be exercisable only by the Participant. References to a
Participant, to the extent relevant in the context, shall include references to
authorized transferees.

 

b.
DOCUMENTATION. Each Award under the Plan shall be evidenced by a written
instrument in such form as the Board shall determine or as executed by an
officer of the Company pursuant to authority delegated by the Board. Each
Award may contain terms and
conditions in addition to those set forth in the Plan PROVIDED THAT such terms
and conditions do not contravene the provisions of the Plan.

 

c.
BOARD DISCRETION. The terms of each type of Award need not be identical, and
the Board need not treat Participants uniformly.

 

d.
TERMINATION OF STATUS. The Board shall determine the effect on an Award of the
disability, death, retirement, authorized leave of absence or other change in
the employment or other status of a Participant and the extent to which, and
the period during which, the Participant, or the Participant’s legal representative,
conservator, guardian or Designated Beneficiary, may exercise rights under the
Award.

 

4

 

e.
ACQUISITION OF THE COMPANY

 

(i) CONSEQUENCES
OF AN ACQUISITION.

 

(A) ACQUISITION.
Except as otherwise specifically provided in the applicable award agreement, upon
the consummation of an Acquisition: (x) all outstanding Awards shall
remain the obligation of the Company or be assumed by the surviving or
acquiring entity, and there shall be automatically substituted for the shares
of Common Stock then subject to such Awards the consideration payable with
respect to the outstanding shares of Common Stock in connection with the
Acquisition and (y) all outstanding Awards shall vest as if the vesting
start date with respect to such Award was one year prior to the vesting start
date set forth in the agreement relating to such Award. In addition to the
foregoing, with respect to Awards granted prior to the consummation of the
Acquisition, in the event that any such Participant who remains an employee of
the Company or the acquiring or surviving entity immediately following the
consummation of the Acquisition is terminated without “CAUSE” (as defined in
the applicable option agreement) or terminates his or her own employment “FOR
GOOD REASON” (as defined below) prior to the first anniversary of the
consummation of the Acquisition: (1) all Options outstanding on the date
such Participant’s employment is terminated, shall become immediately
exercisable in full and will terminate, to the extent unexercised, on their
scheduled expiration date, and if the shares of Common Stock subject to such
Options are subject to repurchase provisions then such repurchase restrictions
shall immediately lapse; (2) all Restricted Stock Awards outstanding on
the date such Participant’s employment is terminated, shall become free of all
repurchase provisions; and (3) all other stock-based Awards shall become
exercisable, realizable or vested in full, or shall be free of all repurchase
provisions, as the case may be.

 

“GOOD
REASON” means, with respect to any Employee, any of the following actions taken
without the employee’s consent: (i) a reduction by the Company in the employee’s
annual base salary as in effect on the date of the consummation of the
Acquisition or as the same may be increased from time to time; or (ii) the
failure by the Company to pay to the employee any portion of the employee’s current
compensation within seven (7) days of the date such compensation is due; or
(iii) a substantial reduction in the value of the employee’s benefit
package from the value of the employee’s benefit package on the date of the
consummation of the Acquisition.

 

(B) ACQUISITION
DEFINED. An “ACQUISITION” shall mean:(x) any merger, consolidation or
purchase of outstanding capital stock of the Company after which the voting
securities of the Company outstanding immediately prior thereto represent
(either by remaining outstanding or by being converted into voting securities
of the surviving or acquiring entity) less than 50% of the combined voting
power of the voting securities of the Company or such  surviving or acquiring entity outstanding
immediately after such event (other than as a result of a financing
transaction); (y) any sale of all or substantially all of the assets or
capital stock of the Company (other than in a spin-off or similar transaction)
or (z) any other acquisition of the business of the Company, as determined
by the Board.

 

(ii) ASSUMPTION
OF OPTIONS UPON CERTAIN EVENTS. In connection with a merger or consolidation of
an entity with the Company or the acquisition by the Company of property or

 

5

 

stock
of an entity, the Board may grant Awards under the Plan in substitution for
stock and stock-based awards issued by such entity or an affiliate thereof. The
substitute Awards shall be granted on such terms and conditions as the Board considers
appropriate in the circumstances.

 

(iii) POOLING-OF
INTERESTS-ACCOUNTING. If the Company proposes to engage in an Acquisition
intended to be accounted for as a pooling-of-interests, and in the event that
the provisions of this Plan or of any Award hereunder, or any actions of the
Board taken in connection with such Acquisition, are determined by the Company’s
or the acquiring company’s independent public accountants to cause such Acquisition
to fail to be accounted for as a pooling-of-interests, then such provisions or
actions shall be amended or rescinded by the Board, without the consent of any
Participant, to be consistent with pooling-of-interests accounting treatment
for such Acquisition.

 

(iv) PARACHUTE
AWARDS. Except as otherwise specifically provided in the applicable award
agreement, notwithstanding the provisions of Section 7(e)(i)(A), if, in
connection with an Acquisition described therein, a tax under Section 4999
of the Code would be imposed on the Participant (after taking into account the
exceptions set forth in Sections 280G(b)(4) and  280G(b)(5) of the Code), then the number
of Awards which shall become exercisable, realizable or vested as provided in
such section shall be reduced(or delayed), to the minimum extent necessary, so
that no such tax would be imposed on the Participant (the Awards not becoming
so accelerated, realizable or vested, the “PARACHUTE AWARDS”); PROVIDED,
HOWEVER, that if the “aggregate present value” of the Parachute Awards would
exceed the tax that, but for this sentence, would be imposed on the Participant
under Section 4999 of the Code in connection with the Acquisition, then
the Awards shall become immediately exercisable, realizable and vested without
regard to the provisions of this sentence. For purposes of the preceding
sentence, the “AGGREGATE PRESENT VALUE” of an Award shall be calculated on an
after-tax basis (other than taxes imposed by Section 4999 of the Code) and
shall be based on economic principles rather than the principles set forth
under Section 280G of the Code and the regulations promulgated thereunder.
All determinations required to be made under this Section 7(e)(iv) shall
be made by the Company.

 

f.
WITHHOLDING. Each Participant shall pay to the Company, or make provisions
satisfactory to the Company for payment of, any taxes required by law to be
withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. The Board may allow Participants to
satisfy such tax obligations in whole or in part by transferring shares of Common
Stock, including shares retained from the Award creating the tax obligation,
valued at their fair market value (as determined by the Board or as determined
pursuant to the applicable option agreement). The Company may, to the extent
permitted by law, deduct any such tax obligations from any payment of any kind
otherwise due to a Participant.

 

g.
AMENDMENT OF AWARDS. The Board may amend, modify or terminate any outstanding
Award including, but not limited to, substituting therefor another Award of the
same or a different type, changing the date of exercise or realization, and
converting an Incentive Stock Option to a Nonstatutory Stock Option, PROVIDED
THAT, except as otherwise provided in Section 7(e)(iii), the Participant’s
consent to such action shall be required unless the Board determines

 

6

 

that
the action, taking into account any related action, would not materially and
adversely affect the Participant.

 

h.
CONDITIONS ON DELIVERY OF STOCK. The Company will not be obligated to deliver
any shares of Common Stock pursuant to the Plan or to remove restrictions from
shares previously delivered under the Plan until (i) all conditions of the
Award have been met or removed to the satisfaction of the Company, (ii) in
the opinion of the Company’s counsel, all other legal matters in connection
with the issuance and delivery of such shares have been satisfied, including
any applicable securities laws and any applicable stock exchange or stock
market rules and regulations, and (iii) the Participant has executed
and delivered to the Company such representations or agreements as the Company
may consider appropriate to satisfy the requirements of any applicable laws,
rules or regulations.

 

i.
ACCELERATION. The Board may at any time provide that any Options shall become
immediately exercisable in full or in part, that any Restricted Stock Awards
shall be free of some or all restrictions, or that any other stock-based Awards
may become exercisable in full or in part or free of some or all restrictions
or conditions, or otherwise realizable in full or in part, as the case may be,
despite the fact that the foregoing actions may (i) cause the application
of Sections 280G and 4999 of the Code if a change in control of the Company
occurs, or (ii) disqualify all or part of the Option as an Incentive
Stock Option.

 

8.            MISCELLANEOUS

 

a.
DEFINITIONS.

 

(i) “COMPANY,”
for purposes of eligibility under the Plan, shall include any present or future
subsidiary corporations of Exact Corporation, as defined in Section 424(f) of
the Code (a “SUBSIDIARY”), and any present or future parent corporation of
Exact Corporation, as defined in Section424(e) of the Code. For purposes
of Awards other than Incentive Stock Options, the term “COMPANY” shall include
any other business venture in which the Company has a direct or indirect
significant interest, as determined by the Board in its sole discretion.

 

(ii) “CODE”
means the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder.

 

(iii) “EMPLOYEE”
for purposes of eligibility under the Plan(but not for purposes of Section 4(b))
shall include a person to whom an offer of employment has been extended by the
Company.

 

b.
NO RIGHT TO EMPLOYMENT OR OTHER STATUS. No person shall have any claim or right
to be granted an Award, and the grant of an Award shall not be construed as
giving a Participant the right to continued employment or any other relationship
with the Company. The Company expressly reserves the right at any time to
dismiss or otherwise terminate its relationship with a Participant free from
any liability or claim under the Plan.

 

7

 

c.
NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the applicable Award, no
Participant or Designated Beneficiary shall have any rights  as a stockholder with respect to any shares
of Common Stock to be distributed with respect to an Award until becoming the
record holder thereof.

 

d.
EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective on the date on
which it is adopted by the Board. No Awards shall be granted under the Plan
after the completion of ten years from the date on which the Plan was adopted
by the Board, but Awards previously granted may extend beyond that date.

 

e.
AMENDMENT OF PLAN. The Board may amend, suspend or terminate the Plan or any
portion thereof at any time.     

 

f.
GOVERNING LAW. The provisions of the Plan and all Awards made hereunder shall
be governed by and interpreted in accordance with the laws of Delaware, without
regard to any applicable conflicts of law.

 

	
   

  	
  Adopted by the Board of
  Directors on

  
	
   

  	
   

  
	
   

  	
  October 17, 2000

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Approved by the stockholders
  on

  
	
   

  	
   

  
	
   

  	
  October 20, 2000

  
	
   

  	
   

  

 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00156-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00156-of-00352.parquet"}]]