Document:

exv10w1

 

Exhibit 10.1

QUOVADX,
INC.

2006 EQUITY INCENTIVE PLAN

Approved
By Board on: April 20, 2006

Approved By Stockholders: June 22, 2006

Termination Date: April 20, 2016

1. General.

     (a) Amendment and Restatement of Prior Plans. This Plan is an amendment and restatement of
the Company’s existing 1997 Stock Plan and 2000 Nonstatutory Stock Option Plan (the “Prior Plans”).
The Prior Plans are hereby amended and restated in their entirety as the 2006 Equity Incentive
Plan, effective as of the Effective Date (as defined below). Except as otherwise expressly provided
herein, upon the Effective Date, all Stock Awards granted under the Prior Plans will automatically
become subject to the terms and conditions of this Plan, as set forth herein.

     (b) Eligible Award Recipients. The persons eligible to receive Awards are Employees,
Directors and Consultants.

     (c) Available Awards. The Plan provides for the grant of the following Awards: (i) Incentive Stock
Options, (ii) Nonstatutory Stock Options, (iii) Restricted Stock Awards, (iv) Restricted Stock Unit
Awards, (v) Stock Appreciation Rights, (vi) Performance Stock Awards, (vii) Performance Cash
Awards, and (viii) Other Stock Awards.

     (d) General Purpose. The Company, by means of the Plan, seeks to secure and retain the
services of the group of persons eligible to receive Awards as set forth in Section l(b), to
provide incentives for such persons to exert maximum efforts for the success of the Company and any
Affiliate and to provide a means by which such eligible recipients may be given an opportunity to
benefit from increases in value of the Common Stock through the granting of Stock Awards.

     (e) Definitions. Capitalized terms are defined in Section 13.

2. Administration.

     (a) Administration of the Plan. The “Administrator” of the Plan shall be the Board, except to
the extent that the Board delegates administration of the Plan to a Committee or Committees, as
provided in Section 2(c).

     (b) Powers of Administrator. The Administrator shall have the power, subject to, and within
the limitations of, the express provisions of the Plan:

     (i) To determine from time to time (A) which of the persons eligible under the Plan shall be
granted Awards; (B) when and
how each Award shall be granted; (C) what type or combination of types of Award shall be granted;
(D) the provisions of each Award granted (which need not be identical), including the time or times
when a person shall be permitted to receive cash or Common Stock pursuant to a Stock Award; and (E)
the number of shares of Common Stock with respect to which a Stock Award shall be granted to each
such person.

     (ii) To construe and interpret the Plan and Awards granted under it, and to establish, amend
and revoke rules and regulations for its administration. The Administrator, in the exercise of this
power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award
Agreement or in the written terms of a Performance Cash Award, in a manner and to the extent it
shall deem necessary or expedient to make the Plan or Award fully effective.

     (iii) To settle all controversies regarding the Plan and Awards granted under it.

     (iv) To accelerate the time at which a Stock Award may first be exercised or the time during
which an Award or any part

thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating
the time at which it may first be exercised or the time during which it will vest.

     (v) To suspend or terminate the Plan at any time. Suspension or termination of the Plan shall
not impair rights and obligations under any Stock Award granted while the Plan is in effect except
with the written consent of the affected Participant.

 

		
	 	     
    (vi) To amend the Plan, subject to the limitations,
    if any, of applicable law. However, except as provided in
    Section 9(a) relating to Capitalization Adjustments, no
    amendment shall be effective unless approved by the stockholders
    of the Company to the extent stockholder approval is necessary
    to satisfy applicable law or applicable exchange listing
    requirements. Rights under any Award granted before amendment of
    the Plan shall not be impaired by any amendment of the Plan
    unless (i) the Company requests the consent of the affected
    Participant, and (ii) such Participant consents in writing.
	 
	 	     
    (vii) To submit any amendment to the Plan for
    stockholder approval, including, but not limited to, amendments
    to the Plan intended to satisfy the requirements of
    Section 162(m) of the Code and the regulations thereunder
    regarding the exclusion of performance-based compensation from
    the limit on corporate deductibility of compensation paid to
    Covered Employees.
	 
	 	     
    (viii) To amend the Plan in any respect the
    Administrator deems necessary or advisable to provide eligible
    Employees with the maximum benefits provided or to be provided
    under the provisions of the Code and the regulations promulgated
    thereunder relating to Incentive Stock Options or to bring the
    Plan or Incentive Stock Options granted under it into compliance
    therewith.
	 
	 	     
    (ix) To amend the terms of any one or more Awards,
    including, but not limited to, amendments to provide terms more
    favorable than previously provided in the Award Agreement,
    subject to any specified limits in the Plan that are not subject
    to Administrator discretion; provided, however, that the
    rights under any Award shall not be impaired by any such
    amendment unless (i) the Company requests the consent of
    the affected Participant, and (ii) such Participant
    consents in writing.
	 
	 	     
    (x) Generally, to exercise such powers and perform
    such acts as the Administrator deems necessary or expedient to
    promote the best interests of the Company and that are not in
    conflict with the provisions of the Plan or Awards.
	 
	 	     
    (xi) To adopt such procedures and sub-plans as are
    necessary or appropriate to permit participation in the Plan by
    Employees, Directors or Consultants who are foreign nationals or
    employed outside the United States.

     
(c) Delegation to Committee(s).

		
	 	     
    (i) General. The Board may delegate some or all of
    the administration of the Plan to a Committee or Committees.
    Different Committees may administer the Plan with respect to
    different groups of Participants. The Board may retain the
    authority to concurrently administer the Plan with a Committee
    and may, at any time, revest in the Board some or all of the
    powers previously delegated.
	 
	 	     
    (ii) Section 162(m) and
    Rule 16b-3
    Compliance. To the extent that the Board determines it to be
    desirable to qualify Awards granted hereunder as
    “performance-based compensation” within the meaning of
    Section 162(m) of the Code, the Board may delegate the
    power to grant and administer such Awards to a Committee of two
    or more Outside Directors. To the extent that the Board
    determines it to be desirable to qualify transactions hereunder
    as exempt under
    Rule 16b-3, the
    Board may delegate the power to grant and administer such Awards
    to a Committee of two or more Non-Employee Directors and take
    such other action as may be required for such compliance.

     
(d) Effect of Administrator’s Decision. All
determinations, interpretations and constructions made by the
Administrator in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all
persons.

     
(e) Cancellation and Re-Grant of Stock Awards.
Neither the Board nor any Committee shall have the authority to:
(i) reprice any outstanding Stock Awards under the Plan, or
(ii) cancel and re-grant any outstanding Stock Awards under
the Plan, unless the stockholders of the Company have approved
such an action within twelve (12) months prior to such an
event.

		
	3.	
    Shares Subject to the
    Plan.

     
(a) Subject to the provisions of Section 9(a)
relating to Capitalization Adjustments, the number of shares of
Common Stock that may be issued pursuant to Stock Awards (some
or all of which may be Incentive Stock Options) shall not
exceed, in the aggregate, eight million five hundred
seventy-nine thousand (8,579,000) shares of Common

 

 

Stock. Shares may be issued in connection with a merger or
acquisition as permitted by NASD Rule 4350(i)(1)(A)(iii)
or, if applicable, NYSE Listed Company Manual
Section 303A.08, or AMEX Company Guide Section 711 and
such issuance shall not reduce the number of shares available
for issuance under the Plan. Furthermore, if a Stock Award
(including, without limitation, all Stock Awards outstanding
under the Prior Plans on the Effective Date) (i) expires or
otherwise terminates without having been exercised in full or
(ii) is settled in cash (i.e., the holder of the
Stock Award receives cash rather than stock), such expiration,
termination or settlement shall not reduce (or otherwise offset)
the number of shares of the Company’s common stock that may
be issued pursuant to the Plan.

     
(b) If any shares of Common Stock issued pursuant to
a Stock Award (including, without limitation, all Stock Awards
outstanding under the Prior Plans on the Effective Date) are
forfeited back to the Company because of the failure to meet a
contingency or condition required to vest such shares in the
Participant, then the shares which are forfeited shall revert to
and again become available for issuance under the Plan. In
addition, any shares reacquired by the Company pursuant to
Section 8(e) or as consideration for the exercise of an
Option shall again become available for Stock Awards under the
Plan (including awards of Incentive Stock Options), provided
that the total number of shares of Common Stock issued
pursuant to the exercise of Incentive Stock Options over the
term of the Plan shall not exceed the aggregate share reserve
set forth in Section 3(a), as adjusted for Capitalization
Adjustments and the annual increases described in
Section 3(a).

     
(c) Section 162(m) Limitation on Annual Grants.
Subject to the provisions of Section 9(a) relating to
Capitalization Adjustments, at such time as the Company may be
subject to the applicable provisions of Section 162(m) of
the Code, no Employee shall be eligible to be granted during any
calendar year Options and Stock Appreciation Rights covering
more than one million five hundred thousand (1,500,000) shares
of Common Stock, provided however, that in the calendar
year of an Employee’s commencement of Continuous Service,
an Employee shall be eligible to be granted Options and Stock
Appreciation Rights covering up to (but no more than) three
million (3,000,000) shares of Common Stock.

     
(d) Source of Shares. The stock issuable under the
Plan shall be shares of authorized but unissued or reacquired
Common Stock, including shares repurchased by the Company.

		
	4.	
    Eligibility.

     
(a) Eligibility for Specific Stock Awards. Incentive
Stock Options may be granted only to employees of the Company or
a parent corporation or subsidiary corporation (as such terms
are defined in Code Sections 424(e) and (f)). Stock Awards
other than Incentive Stock Options may be granted to Employees,
Directors and Consultants.

     
(b) Ten Percent Stockholders. A Ten Percent
Stockholder shall not be granted an Incentive Stock Option
unless the exercise price of such Option is at least one hundred
ten percent (110%) of the Fair Market Value of the Common Stock
on the date of grant and the Option is not exercisable after the
expiration of five (5) years from the date of grant.

     
(c) Consultants. A Consultant shall not be eligible
for the grant of a Stock Award if, at the time of grant, a
Form S-8
Registration Statement under the Securities Act
(“Form S-8”)
is not available to register either the offer or the sale of the
Company’s securities to such Consultant because of the
nature of the services that the Consultant is providing to the
Company, because the Consultant is not a natural person, or
because of any other rule governing the use of
Form S-8.

		
	5.	
    Option
    Provisions.

     
Each Option shall be in such form and shall contain such terms
and conditions as the Administrator shall deem appropriate. All
Options shall be separately designated Incentive Stock Options
or Nonstatutory Stock Options at the time of grant, and, if
certificates are issued, a separate certificate or certificates
shall be issued for shares of Common Stock purchased on exercise
of each type of Option. If an Option is not specifically
designated as an Incentive Stock Option, then the Option shall
be a Nonstatutory Stock Option. The provisions of separate
Options need not be identical;

 

 

provided, however, that each Option Agreement shall
include (through incorporation of provisions hereof by reference
in the Option Agreement or otherwise) the substance of each of
the following provisions:

     
(a) Term. Subject to the provisions of
Section 4(b) (relating to Ten Percent Stockholders), no
Option shall be exercisable after the expiration of ten
(10) years from the date of its grant or such shorter
period specified in the Option Agreement.

     
(b) Exercise Price. Subject to the provisions of
Section 4(b) regarding Ten Percent Stockholders, the
exercise price of each Option shall be not less than one hundred
percent (100%) of the Fair Market Value of the Common Stock
subject to the Option on the date the Option is granted.
Notwithstanding the foregoing, an Incentive Stock Option may be
granted with an exercise price lower than that set forth in the
preceding sentence if such Option is granted pursuant to an
assumption or substitution for another option in a manner
consistent with the provisions of Section 424(a) of the
Code.

     
(c) Incentive Stock Option $100,000 Limitation. To
the extent that the aggregate Fair Market Value (determined at
the time of grant) of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by
any Optionholder during any calendar year (under all plans of
the Company and any Affiliates) exceeds one hundred thousand
dollars ($100,000), the Options or portions thereof that exceed
such limit (according to the order in which they were granted)
shall be treated as Nonstatutory Stock Options, notwithstanding
any contrary provision of the applicable Option Agreement(s).

     
(d) Consideration. The purchase price of Common
Stock acquired pursuant to the exercise of an Option shall be
paid, to the extent permitted by applicable law and as
determined by the Administrator in its sole discretion, by any
combination of the methods of payment set forth below. The
Administrator shall have the authority to grant Options that do
not permit all of the following methods of payment (or otherwise
restrict the ability to use certain methods) and to grant
Options that require the consent of the Company to utilize a
particular method of payment. The methods of payment permitted
by this Section 5(d) are:

		
	 	     
    (i) by cash or check;
	 
	 	     
    (ii) bank draft or money order payable to the
    Company;
	 
	 	     
    (iii) pursuant to a program developed under
    Regulation T as promulgated by the Federal Reserve Board
    that, prior to the issuance of Common Stock, results in either
    the receipt of cash (or check) by the Company or the receipt of
    irrevocable instructions to pay the aggregate exercise price to
    the Company from the sales proceeds;
	 
	 	     
    (iv) by delivery to the Company (either by actual
    delivery or attestation) of shares of Common Stock;
	 
	 	     
    (v) by a “net exercise” arrangement
    pursuant to which the Company will reduce the number of shares
    of Common Stock issued upon exercise by the largest whole number
    of shares with a Fair Market Value that does not exceed the
    aggregate exercise price; provided, however, that the
    Company shall accept a cash or other payment from the
    Participant to the extent of any remaining balance of the
    aggregate exercise price not satisfied by such reduction in the
    number of whole shares to be issued; provided, further,
    that shares of Common Stock will no longer be outstanding
    under an Option and will not be exercisable thereafter to the
    extent that (A) shares are used to pay the exercise price
    pursuant to the “net exercise,” (B) shares are
    delivered to the Participant as a result of such exercise, and
    (C) shares are withheld to satisfy tax withholding
    obligations; or
	 
	 	     
    (vi) in any other form of legal consideration that
    may be acceptable to the Administrator.

     
(e) Transferability of Options. The Administrator
may, in its sole discretion, impose such limitations on the
transferability of Options as the Administrator shall determine.
In the absence of such a determination by the Administrator to
the contrary, the following restrictions on the transferability
of Options shall apply:

		
	 	     
    (i) Restrictions on Transfer. An Option shall not be
    transferable except by will or by the laws of descent and
    distribution and shall be exercisable during the lifetime of the
    Optionholder only by the Optionholder; provided, however, that
    the Administrator may, in its sole discretion, permit transfer
    of the Option in a manner consistent with applicable tax and
    securities laws upon the Optionholder’s request.

 

 

		
	 	     
    (ii) Domestic Relations Orders. Notwithstanding the
    foregoing, an Option may be transferred pursuant to a domestic
    relations order, provided, however, that an Incentive
    Stock Option may be deemed to be a Nonqualified Stock Option as
    a result of such transfer.
	 
	 	     
    (iii) Beneficiary Designation. Notwithstanding the
    foregoing, the Optionholder may, by delivering written notice to
    the Company, in a form provided by or otherwise satisfactory to
    the Company, designate a third party who, in the event of the
    death of the Optionholder, shall thereafter be entitled to
    exercise the Option.

     
(f) Vesting Generally. The total number of shares of
Common Stock subject to an Option may vest and therefore become
exercisable in periodic installments that may or may not be
equal. The Option may be subject to such other terms and
conditions on the time or times when it may or may not be
exercised (that may be based on the satisfaction of Performance
Goals or other criteria) as the Administrator may deem
appropriate. The vesting provisions of individual Options may
vary. The provisions of this Section 5(f) are subject to
any Option provisions governing the minimum number of shares of
Common Stock as to which an Option may be exercised.

     
(g) Termination of Continuous Service. Except as
otherwise provided in the applicable Option Agreement or other
agreement between the Optionholder and the Company, in the event
that an Optionholder’s Continuous Service terminates (other
than upon the Optionholder’s death or Disability), the
Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise such Option as of the
date of termination of Continuous Service) but only within such
period of time ending on the earlier of (i) the date three
(3) months following the termination of the
Optionholder’s Continuous Service (or such longer or
shorter period specified in the Option Agreement), or
(ii) the expiration of the term of the Option as set forth
in the Option Agreement. If, after termination of Continuous
Service, the Optionholder does not exercise his or her Option
within the time specified herein or in the Option Agreement (as
applicable), the Option shall terminate.

     
(h) Extension of Termination Date. An
Optionholder’s Option Agreement may provide that if the
exercise of the Option following the termination of the
Optionholder’s Continuous Service (other than upon the
Optionholder’s death or Disability) would be prohibited at
any time solely because the issuance of shares of Common Stock
would violate the registration requirements under the Securities
Act, then the Option shall terminate on the earlier of
(i) the expiration of a period of three (3) months
after the termination of the Optionholder’s Continuous
Service during which the exercise of the Option would not be in
violation of such registration requirements, or (ii) the
expiration of the term of the Option as set forth in the Option
Agreement.

     
(i) Disability of Optionholder. In the event that an
Optionholder’s Continuous Service terminates as a result of
the Optionholder’s Disability, the Optionholder may
exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of
termination of Continuous Service), but only within such period
of time ending on the earlier of (i) the date twelve
(12) months following such termination of Continuous
Service (or such longer or shorter period specified in the
Option Agreement), or (ii) the expiration of the term of
the Option as set forth in the Option Agreement. If, after
termination of Continuous Service, the Optionholder does not
exercise his or her Option within the time specified herein or
in the Option Agreement (as applicable), the Option shall
terminate.

     
(j) Death of Optionholder. In the event that
(i) an Optionholder’s Continuous Service terminates as
a result of the Optionholder’s death, or (ii) the
Optionholder dies within the period (if any) specified in the
Option Agreement after the termination of the
Optionholder’s Continuous Service for a reason other than
death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date
of death) by the Optionholder’s estate, by a person who
acquired the right to exercise the Option by bequest or
inheritance or by a person designated to exercise the option
upon the Optionholder’s death, but only within the period
ending on the earlier of (i) the date eighteen
(18) months following the date of death (or such longer or
shorter period specified in the Option Agreement), or
(ii) the expiration of the term of such Option as set forth
in the Option Agreement. If, after the Optionholder’s
death, the Option is not exercised within the time specified
herein or in the Option Agreement (as applicable), the Option
shall terminate.

     
(k) Non-Exempt Employees. No Option granted to an
Employee that is a non-exempt employee for purposes of the Fair
Labor Standards Act shall be first exercisable for any shares of
Common Stock until at least six months following the date of
grant of the Option. The foregoing provision is intended to
operate so that any income derived by a non-exempt employee in
connection with the exercise or vesting of an Option will be
exempt from his or her regular rate of pay.

 

 

     
(l) Early Exercise. The Option may, but need not,
include a provision whereby the Optionholder may elect at any
time before the Optionholder’s Continuous Service
terminates to exercise the Option as to any part or all of the
shares of Common Stock subject to the Option prior to the full
vesting of the Option. Any unvested shares of Common Stock so
purchased may be subject to a repurchase option in favor of the
Company or to any other restriction the Administrator determines
to be appropriate. The Company will not exercise its repurchase
option until at least six (6) months (or such longer or
shorter period of time required to avoid a charge to earnings
for financial accounting purposes) have elapsed following
exercise of the Option unless the Administrator otherwise
specifically provides in the Option.

		
	6.	
    Provisions of Stock
    Awards other than Options.

     
(a) Restricted Stock Awards. Each Restricted Stock
Award Agreement shall be in such form and shall contain such
terms and conditions as the Administrator shall deem
appropriate. To the extent consistent with the Company’s
Bylaws, at the Administrator’s election, shares of Common
Stock may be (x) held in book entry form subject to the
Company’s instructions until any restrictions relating to
the Restricted Stock Award lapse; or (y) evidenced by a
certificate, which certificate shall be held in such form and
manner as determined by the Administrator. The terms and
conditions of Restricted Stock Award Agreements may change from
time to time, and the terms and conditions of separate
Restricted Stock Award Agreements need not be identical,
provided, however, that each Restricted Stock Award
Agreement shall include (through incorporation of provisions
hereof by reference in the agreement or otherwise) the substance
of each of the following provisions:

		
	 	     
    (i) Consideration. A Restricted Stock Award may be
    awarded in consideration for (A) past or future services
    actually rendered to the Company or an Affiliate, or
    (B) any other form of legal consideration that may be
    acceptable to the Administrator in its sole discretion and
    permissible under applicable law.
	 
	 	     
    (ii) Vesting. Shares of Common Stock awarded under
    the Restricted Stock Award Agreement may be subject to
    forfeiture to the Company in accordance with a vesting schedule
    to be determined by the Administrator.
	 
	 	     
    (iii) Termination of Participant’s Continuous
    Service. In the event a Participant’s Continuous
    Service terminates, the Company may receive via a forfeiture
    condition, any or all of the shares of Common Stock held by the
    Participant that have not vested as of the date of termination
    of Continuous Service under the terms of the Restricted Stock
    Award Agreement.
	 
	 	     
    (iv) Transferability. Rights to acquire shares of
    Common Stock under the Restricted Stock Award Agreement shall be
    transferable by the Participant only upon such terms and
    conditions as are set forth in the Restricted Stock Award
    Agreement, as the Administrator shall determine in its sole
    discretion, so long as Common Stock awarded under the Restricted
    Stock Award Agreement remains subject to the terms of the
    Restricted Stock Award Agreement.

     
(b) Restricted Stock Unit Awards. Each Restricted
Stock Unit Award Agreement shall be in such form and shall
contain such terms and conditions as the Administrator shall
deem appropriate. The terms and conditions of Restricted Stock
Unit Award Agreements may change from time to time, and the
terms and conditions of separate Restricted Stock Unit Award
Agreements need not be identical, provided, however, that
each Restricted Stock Unit Award Agreement shall include
(through incorporation of the provisions hereof by reference in
the Agreement or otherwise) the substance of each of the
following provisions:

		
	 	     
    (i) Consideration. At the time of grant of a
    Restricted Stock Unit Award, the Administrator will determine
    the consideration, if any, to be paid by the Participant upon
    delivery of each share of Common Stock subject to the Restricted
    Stock Unit Award. The consideration to be paid (if any) by the
    Participant for each share of Common Stock subject to a
    Restricted Stock Unit Award may be paid in any form of legal
    consideration that may be acceptable to the Administrator in its
    sole discretion and permissible under applicable law.
	 
	 	     
    (ii) Vesting. At the time of the grant of a
    Restricted Stock Unit Award, the Administrator may impose such
    restrictions or conditions to the vesting of the Restricted
    Stock Unit Award as it, in its sole discretion, deems
    appropriate.

 

 

		
	 	     
    (iii) Payment. A Restricted Stock Unit Award may be
    settled by the delivery of shares of Common Stock, their cash
    equivalent, any combination thereof or in any other form of
    consideration, as determined by the Administrator and contained
    in the Restricted Stock Unit Award Agreement.
	 
	 	     
    (iv) Additional Restrictions. At the time of the
    grant of a Restricted Stock Unit Award, the Administrator, as it
    deems appropriate, may impose such restrictions or conditions
    that delay the delivery of the shares of Common Stock (or their
    cash equivalent) subject to a Restricted Stock Unit Award to a
    time after the vesting of such Restricted Stock Unit Award.
	 
	 	     
    (v) Dividend Equivalents. Dividend equivalents may
    be credited in respect of shares of Common Stock covered by a
    Restricted Stock Unit Award, as determined by the Administrator
    and contained in the Restricted Stock Unit Award Agreement. At
    the sole discretion of the Administrator, such dividend
    equivalents may be converted into additional shares of Common
    Stock covered by the Restricted Stock Unit Award in such manner
    as determined by the Administrator. Any additional shares
    covered by the Restricted Stock Unit Award credited by reason of
    such dividend equivalents will be subject to all the terms and
    conditions of the underlying Restricted Stock Unit Award
    Agreement to which they relate.
	 
	 	     
    (vi) Termination of Participant’s Continuous
    Service. Except as otherwise provided in the applicable
    Restricted Stock Unit Award Agreement, such portion of the
    Restricted Stock Unit Award that has not vested will be
    forfeited upon the Participant’s termination of Continuous
    Service.
	 
	 	     
    (vii) Compliance with Section 409A of the Code.
    Notwithstanding anything to the contrary set forth herein, any
    Restricted Stock Unit Award granted under 4the Plan that is not
    exempt from the requirements of Section 409A of the Code
    shall contain such provisions so that such Restricted Stock Unit
    Award will comply with the requirements of Section 409A of
    the Code. Such restrictions, if any, shall be determined by the
    Administrator and contained in the Restricted Stock Unit Award
    Agreement evidencing such Restricted Stock Unit Award. For
    example, such restrictions may include, without limitation, a
    requirement that any Common Stock that is to be issued in a year
    following the year in which the Restricted Stock Unit Award
    vests must be issued in accordance with a fixed pre-determined
    schedule.

     
(c) Stock Appreciation Rights. Each Stock
Appreciation Right Agreement shall be in such form and shall
contain such terms and conditions as the Administrator shall
deem appropriate. Stock Appreciation Rights may be granted as
stand-alone Stock Awards or in tandem with other Stock Awards.
The terms and conditions of Stock Appreciation Right Agreements
may change from time to time, and the terms and conditions of
separate Stock Appreciation Right Agreements need not be
identical; provided, however, that each Stock
Appreciation Right Agreement shall include (through
incorporation of the provisions hereof by reference in the
Agreement or otherwise) the substance of each of the following
provisions:

		
	 	     
    (i) Term. No Stock Appreciation Right shall be
    exercisable after the expiration of ten (10) years from the
    date of its grant or such shorter period specified in the Stock
    Appreciation Right Agreement.
	 
	 	     
    (ii) Strike Price. Each Stock Appreciation Right
    will be denominated in shares of Common Stock equivalents. The
    strike price of each Stock Appreciation Right granted as a
    stand-alone or tandem Stock Award shall not be less than one
    hundred percent (100%) of the Fair Market Value of the Common
    Stock equivalents subject to the Stock Appreciation Right on the
    date of grant.
	 
	 	     
    (iii) Calculation of Appreciation. The appreciation
    distribution payable on the exercise of a Stock Appreciation
    Right will be not greater than an amount equal to the excess of
    (A) the aggregate Fair Market Value (on the date of the
    exercise of the Stock Appreciation Right) of a number of shares
    of Common Stock equal to the number of shares of Common Stock
    equivalents in which the Participant is vested under such Stock
    Appreciation Right, and with respect to which the Participant is
    exercising the Stock Appreciation Right on such date, over
    (B) the strike price that will be determined by the
    Administrator at the time of grant of the Stock Appreciation
    Right.
	 
	 	     
    (iv) Vesting. At the time of the grant of a Stock
    Appreciation Right, the Administrator may impose such
    restrictions or conditions to the vesting of such Stock
    Appreciation Right as it, in its sole discretion, deems
    appropriate.

 

 

		
	 	     
    (v) Exercise. To exercise any outstanding Stock
    Appreciation Right, the Participant must provide written notice
    of exercise to the Company in compliance with the provisions of
    the Stock Appreciation Right Agreement evidencing such Stock
    Appreciation Right.
	 
	 	     
    (vi) Payment. The appreciation distribution in
    respect to a Stock Appreciation Right may be paid in Common
    Stock, in cash, in any combination of the two or in any other
    form of consideration, as determined by the Administrator and
    contained in the Stock Appreciation Right Agreement evidencing
    such Stock Appreciation Right. An appreciation distribution in
    respect to a Stock Appreciation Right that is paid in a form of
    consideration other than Common Stock shall not reduce the share
    reserve.
	 
	 	     
    (vii) Termination of Continuous Service. In the
    event that a Participant’s Continuous Service terminates,
    the Participant may exercise his or her Stock Appreciation Right
    (to the extent that the Participant was entitled to exercise
    such Stock Appreciation Right as of the date of termination) but
    only within such period of time ending on the earlier of
    (A) the date three (3) months following the
    termination of the Participant’s Continuous Service (or
    such longer or shorter period specified in the Stock
    Appreciation Right Agreement), or (B) the expiration of the
    term of the Stock Appreciation Right as set forth in the Stock
    Appreciation Right Agreement. If, after termination, the
    Participant does not exercise his or her Stock Appreciation
    Right within the time specified herein or in the Stock
    Appreciation Right Agreement (as applicable), the Stock
    Appreciation Right shall terminate.
	 
	 	     
    (viii) Compliance with Section 409A of the
    Code. Notwithstanding anything to the contrary set forth
    herein, any Stock Appreciation Rights granted under the Plan
    that are not exempt from the requirements of Section 409A
    of the Code shall contain such provisions so that such Stock
    Appreciation Rights will comply with the requirements of
    Section 409A of the Code. Such restrictions, if any, shall
    be determined by the Administrator and contained in the Stock
    Appreciation Right Agreement evidencing such Stock Appreciation
    Right. For example, such restrictions may include, without
    limitation, a requirement that a Stock Appreciation Right that
    is to be paid wholly or partly in cash must be exercised and
    paid in accordance with a fixed pre-determined schedule.

     
(d) Performance Awards.

		
	 	     
    (i) Performance Stock Awards. A Performance Stock
    Award is a Stock Award that may be granted, may vest or may be
    exercised based upon the attainment during a Performance Period
    of certain Performance Goals. A Performance Stock Award may, but
    need not, require the completion of a specified period of
    Continuous Service. The length of any Performance Period, the
    Performance Goals to be achieved during the Performance Period,
    and the measure of whether and to what degree such Performance
    Goals have been attained shall be conclusively determined by the
    Administrator in its sole discretion. The maximum benefit to be
    received by any Participant in any calendar year attributable to
    Stock Awards described in this Section 6(d) shall not
    exceed the value of five hundred thousand (500,000) shares of
    Common Stock; provided however, that the maximum benefit
    to be received by a Participant in the calendar year of such
    Participant’s commencement of Continuous Service shall not
    exceed the value of one million (1,000,000) shares of Common
    Stock. In addition, to the extent permitted by applicable law
    and the applicable Award Agreement, the Administrator may
    determine that cash may be used in payment of Performance Stock
    Awards.
	 
	 	     
    (ii) Performance Cash Awards. A Performance Cash
    Award is a cash award that may be granted upon the attainment
    during a Performance Period of certain Performance Goals. A
    Performance Cash Award may also require the completion of a
    specified period of Continuous Service. The length of any
    Performance Period, the Performance Goals to be achieved during
    the Performance Period, and the measure of whether and to what
    degree such Performance Goals have been attained shall be
    conclusively determined by the Administrator in its sole
    discretion. The maximum benefit to be received by any
    Participant in any calendar year attributable to cash awards
    described in this Section 6(d) shall not exceed one million
    dollars ($1,000,000). The Administrator may provide for or,
    subject to such terms and conditions as the Administrator may
    specify, may permit a Participant to elect for, the payment of
    any Performance Cash Award to be deferred to a specified date or
    event. The Administrator may specify the form of payment of
    Performance Cash Awards, which may be cash or other property, or
    may provide for a Participant to have the option for his or her
    Performance Cash Award, or such portion thereof as the
    Administrator may specify, to be paid in whole or in part in
    cash or other property. In addition, to the extent permitted by
    applicable law and the applicable Award Agreement, the
    Administrator may determine that Common Stock authorized under
    this Plan may

 

 

		
	 	
    be used in payment of Performance Cash Awards, including
    additional shares in excess of the Performance Cash Award as an
    inducement to hold shares of Common Stock.

     
(e) Other Stock Awards. Other forms of Stock Awards
valued in whole or in part by reference to, or otherwise based
on, Common Stock may be granted either alone or in addition to
Stock Awards provided for under Section 5 and the preceding
provisions of this Section 6. Subject to the provisions of
the Plan, the Administrator shall have sole and complete
authority to determine the persons to whom and the time or times
at which such Other Stock Awards will be granted, the number of
shares of Common Stock (or the cash equivalent thereof) to be
granted pursuant to such Other Stock Awards and all other terms
and conditions of such Other Stock Awards.

		
	7.	
    Covenants of the
    Company.

     
(a) Availability of Shares. During the terms of the
Stock Awards, the Company shall keep available at all times the
number of shares of Common Stock reasonably required to satisfy
such Stock Awards.

     
(b) Securities Law Compliance. The Company shall
seek to obtain from each regulatory commission or agency having
jurisdiction over the Plan such authority as may be required to
grant Stock Awards and to issue and sell shares of Common Stock
upon exercise of the Stock Awards; provided, however,
that this undertaking shall not require the Company to
register under the Securities Act the Plan, any Stock Award or
any Common Stock issued or issuable pursuant to any such Stock
Award. If, after reasonable efforts, the Company is unable to
obtain from any such regulatory commission or agency the
authority that counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the
Company shall be relieved from any liability for failure to
issue and sell Common Stock upon exercise of such Stock Awards
unless and until such authority is obtained.

     
(c) No Obligation to Notify. The Company shall have
no duty or obligation to any holder of a Stock Award to advise
such holder as to the time or manner of exercising such Stock
Award. Furthermore, the Company shall have no duty or obligation
to warn or otherwise advise such holder of a pending termination
or expiration of a Stock Award or a possible period in which the
Stock Award may not be exercised. The Company has no duty or
obligation to minimize the tax consequences of a Stock Award to
the holder of such Stock Award.

		
	8.	
    Miscellaneous.

     
(a) Corporate Action Constituting Grant of Stock
Awards. Corporate action constituting an offer by the
Company of Common Stock to any Participant under the terms of a
Stock Award shall be deemed completed as of the date of such
corporate action, unless otherwise determined by the
Administrator, regardless of when the instrument, certificate,
or letter evidencing the Stock Award is actually received or
accepted by the Participant.

     
(b) Stockholder Rights. No Participant shall be
deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares of Common Stock subject to
such Stock Award unless and until such Participant has satisfied
all requirements for exercise of the Stock Award pursuant to its
terms.

     
(c) No Employment or Other Service Rights. Neither
the provisions of the Plan, a Stock Award Agreement nor any
other agreement executed in connection with a Stock Award shall
give any Participant the right to continue providing services to
the Company or an Affiliate, nor shall such provisions and
documents interfere in any way with the Participant’s right
or the Company’s right to terminate the Participant’s
service at any time, with or without cause.

     
(d) Investment Assurances. The Company may require a
Participant, as a condition of exercising or acquiring Common
Stock under any Stock Award, (i) to give written assurances
satisfactory to the Company (A) as to the
Participant’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative
reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters and (B) that
he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the
Stock Award; and (ii) to give written assurances
satisfactory to the Company stating that the Participant is
acquiring Common Stock subject to the Stock Award for the
Participant’s own account and not with any present
intention of selling or otherwise distributing the Common Stock.
The foregoing requirements, and any assurances given pursuant to
such requirements, shall be inoperative if (x) the issuance
of the shares upon the exercise or acquisition of Common Stock
under the Stock Award has been registered under a then currently
effective registration statement under the Securities Act, or
(y) as to any particular requirement, a determination is
made by counsel for the Company that such

 

 

requirement need not be met in the circumstances under the then
applicable securities laws. The Company may, upon advice of
counsel to the Company, place legends on stock certificates
issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer
of the Common Stock.

     
(e) Withholding Obligations. The Company may, in its
sole discretion, satisfy any federal, state or local tax
withholding obligation relating to a Stock Award by any of the
following means (in addition to the Company’s right to
withhold from any compensation paid to the Participant by the
Company) or by a combination of such means: (i) causing the
Participant to tender a cash payment; (ii) withholding
shares of Common Stock from the shares of Common Stock issued or
otherwise issuable to the Participant in connection with the
Stock Award; or (iii) by such other method as may be set
forth in the Stock Award Agreement.

     
(f) Electronic Delivery. Any reference herein to a
“written” agreement or document shall include any
agreement or document delivered electronically or posted on the
Company’s intranet.

     
(g) Deferrals. To the extent permitted by applicable
law, the Administrator, in its sole discretion, may determine
that the delivery of Common Stock or the payment of cash, upon
the exercise, vesting or settlement of all or a portion of any
Award may be deferred and may establish programs and procedures
for deferral elections to be made by Participants. Deferrals by
Participants will be made in accordance with Section 409A
of the Code. Consistent with Section 409A of the Code, the
Administrator may provide for distributions while a Participant
is still an employee. The Administrator is authorized to make
deferrals of Stock Awards and determine when, and in what annual
percentages, Participants may receive payments, including lump
sum payments, following the Participant’s termination of
employment or retirement, and implement such other terms and
conditions consistent with the provisions of the Plan and in
accordance with applicable law.

     
(h) Compliance with 409A. To the extent that the
Administrator determines that any Award granted under the Plan
is subject to Section 409A of the Code, the Award Agreement
evidencing such Award shall incorporate the terms and conditions
necessary to avoid the consequences specified in
Section 409A(a)(1) of the Code. To the extent applicable,
the Plan and Award Agreements shall be interpreted in accordance
with Section 409A of the Code and Department of Treasury
regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other
guidance that may be issued or amended after the Effective Date.
Notwithstanding any provision of the Plan to the contrary, in
the event that following the Effective Date the Administrator
determines that any Award may be subject to Section 409A of
the Code and related Department of Treasury guidance (including
such Department of Treasury guidance as may be issued after the
Effective Date), the Administrator may adopt such amendments to
the Plan and the applicable Award Agreement or adopt other
policies and procedures (including amendments, policies and
procedures with retroactive effect), or take any other actions,
that the Administrator determines are necessary or appropriate
to (i) exempt the Award from Section 409A of the Code
and/or preserve the intended tax treatment of the benefits
provided with respect to the Award, or (ii) comply with the
requirements of Section 409A of the Code and related
Department of Treasury guidance.

		
	9.	
    Adjustments upon
    Changes in Common Stock; Other Corporate Events.

     
(a) Capitalization Adjustments. In the event of a
Capitalization Adjustment, the Administrator shall appropriately
adjust: (i) the class(es) and maximum number of securities
subject to the Plan pursuant to Section 3(a), (ii) the
class(es) and maximum number of securities that may be issued
pursuant to the exercise of Incentive Stock Options pursuant to
Sections 3(a) and 3(b), (iii) the class(es) and
maximum number of securities that may be awarded to any person
pursuant to Section 3(c) and 6(d)(i), and (iv) the
class(es) and number of securities and price per share of stock
subject to outstanding Stock Awards. The Administrator shall
make such adjustments, and its determination shall be final,
binding and conclusive.

     
(b) Dissolution or Liquidation. Except as otherwise
provided in the applicable Stock Award Agreement, in the event
of a dissolution or liquidation of the Company, all outstanding
Stock Awards (other than Stock Awards consisting of vested and
outstanding shares of Common Stock not subject to the
Company’s right of repurchase) shall terminate immediately
prior to the completion of such dissolution or liquidation, and
the shares of Common Stock subject to the Company’s
repurchase option may be repurchased by the Company
notwithstanding the fact that the holder of such Stock Award is
providing Continuous Service; provided, however, that the
Administrator may, in its sole discretion, cause some

 

 

or all Stock Awards to become fully vested, exercisable and/or
no longer subject to repurchase or forfeiture (to the extent
such Stock Awards have not previously expired or terminated)
before the dissolution or liquidation is completed but
contingent on its completion. The Administrator shall notify
each Participant of the proposed dissolution or liquidation and
the treatment of such Participant’s Stock Awards pursuant
to this Section 9(b) no later than fifteen (15) days
prior to the effective date of such proposed transaction.

     
(c) Corporate Transaction. The following provisions
shall apply to Stock Awards in the event of a Corporate
Transaction unless otherwise provided in the instrument
evidencing the Stock Award or any other written agreement
between the Company or any Affiliate and the holder of the Stock
Award or unless otherwise expressly provided by the
Administrator at the time of grant of a Stock Award.

		
	 	     
    (i) Stock Awards May Be Assumed. Except as otherwise
    provided in the applicable Stock Award Agreement, in the event
    of a Corporate Transaction, any surviving corporation or
    acquiring corporation (or the surviving or acquiring
    corporation’s parent company) may assume or continue any or
    all Stock Awards outstanding under the Plan or may substitute
    similar stock awards for Stock Awards outstanding under the Plan
    (including but not limited to, awards to acquire the same
    consideration paid to the stockholders of the Company pursuant
    to the Corporate Transaction), and any reacquisition or
    repurchase rights held by the Company in respect of Common Stock
    issued pursuant to Stock Awards may be assigned by the Company
    to the successor of the Company (or the successor’s parent
    company, if any), in connection with such Corporate Transaction.
    A surviving corporation or acquiring corporation (or its parent)
    may choose to assume or continue only a portion of a Stock Award
    or substitute a similar stock award for only a portion of a
    Stock Award. The terms of any assumption, continuation or
    substitution shall be set by the Administrator in accordance
    with the provisions of Section 2.
	 
	 	     
    (ii) Stock Awards Not Assumed. Except as otherwise
    provided in the applicable Stock Award Agreement, in the event
    of a Corporate Transaction in which the surviving corporation or
    acquiring corporation (or its parent company) does not assume or
    continue such outstanding Stock Awards or substitute similar
    stock awards for such outstanding Stock Awards, then with
    respect to Stock Awards that have not been assumed, continued or
    substituted and that have not expired or terminated as of the
    time the Corporate Transaction is consummated, the vesting of
    such Stock Awards (and, if applicable, the time at which such
    Stock Awards may be exercised) shall (contingent upon the
    effectiveness of the Corporate Transaction) be accelerated in
    full. The Administrator shall notify the holders of such Stock
    Awards that they shall be exercisable (if applicable) for a
    period of fifteen (15) days from the date of such notice,
    and such Stock Awards shall terminate if not exercised (if
    applicable) prior to the effective time of the Corporate
    Transaction, and any reacquisition or repurchase rights held by
    the Company with respect to such Stock Awards shall lapse
    (contingent upon the effectiveness of the Corporate Transaction).
	 
	 	     
    (iii) Payment for Stock Awards in Lieu of Exercise.
    Notwithstanding the foregoing, in the event a Stock Award will
    terminate if not exercised prior to the effective time of a
    Corporate Transaction, the Administrator may provide, in its
    sole discretion, that the holder of any Stock Award that is not
    exercised prior to such effective time will receive a payment,
    in such form as may be determined by the Administrator, equal in
    value to the excess, if any, of (A) the value of the
    property the holder of the Stock Award would have received upon
    the exercise of the Stock Award, over (B) any exercise
    price payable by such holder in connection with such exercise.

     
(d) Change in Control. A Stock Award may be subject
to additional acceleration of vesting and exercisability upon or
after a Change in Control as may be provided in the Stock Award
Agreement for such Stock Award or as may be provided in any
other written agreement between the Company or any Affiliate and
the Participant, but in the absence of such provision, no such
acceleration shall occur.

		
	10.	
    Termination or
    Suspension of the Plan.

     
(a) Plan Term. Unless sooner terminated by the
Administrator pursuant to Section 2, the Plan shall
automatically terminate on the day before the tenth (10th)
anniversary of the date the Plan is adopted by the Board or
approved by the stockholders of the Company, whichever is
earlier. No Awards may be granted under the Plan while the Plan
is suspended or after it is terminated.

     
(b) No Impairment of Rights. Termination of the Plan
shall not impair rights and obligations under any Award granted
while the Plan is in effect except with the written consent of
the affected Participant.

 

 

		
	11.	
    Effective Date of
    Plan.

     
The Prior Plans shall be in force under the terms and conditions
set forth in the Prior Plan, as amended, until the Effective
Date. The terms and conditions as set forth herein shall become
effective on the Effective Date.

		
	12.	
    Choice of
    Law.

     
The law of the State of Colorado shall govern all questions
concerning the construction, validity and interpretation of this
Plan, without regard to such state’s conflict of laws rules.

13. Definitions.
As used in the Plan, the definitions contained in
this Section 13 shall apply to the capitalized terms
indicated below:

     
(a) “Administrator” has the meaning
ascribed to such term in Section 2(a) hereof.

     
(b) “Affiliate” means, at the time
of determination, any “parent” or
“subsidiary” as such terms are defined in
Rule 405 of the Securities Act. The Administrator shall
have the authority to determine the time or times at which
“parent” or “subsidiary” status is
determined within the foregoing definition.

     
(c) “Award” means a Stock Award or
a Performance Cash Award.

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

     
(e) “Capitalization Adjustment”
means any change that is made in, or other events that
occur with respect to, the Common Stock subject to the Plan or
subject to any Stock Award after the Effective Date without the
receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than
cash, stock split, liquidating dividend, combination of shares,
exchange of shares, change in corporate structure or other
transaction not involving the receipt of consideration by the
Company. Notwithstanding the foregoing, the conversion of any
convertible securities of the Company shall not be treated as a
transaction “without receipt of consideration” by the
Company.

     
(f) “Change in Control” means the
occurrence, in a single transaction or in a series of related
transactions, of any one or more of the following events:

		
	 	     
    (i) any Exchange Act Person becomes the Owner,
    directly or indirectly, of securities of the Company
    representing more than fifty percent (50%) of the combined
    voting power of the Company’s then outstanding securities
    other than by virtue of a merger, consolidation or similar
    transaction. Notwithstanding the foregoing, a Change in Control
    shall not be deemed to occur (A) upon the acquisition of
    securities of the Company by an investor, any affiliate thereof
    or any other Exchange Act Person from the Company in a
    transaction or series of related transactions the primary
    purpose of which is to obtain financing for the Company through
    the issuance of equity securities or (B) solely because the
    level of Ownership held by any Exchange Act Person (the
    “Subject Person”) exceeds the designated
    percentage threshold of the outstanding voting securities as a
    result of a repurchase or other acquisition of voting securities
    by the Company reducing the number of shares outstanding,
    provided that if a Change in Control would occur (but for the
    operation of this sentence) as a result of the acquisition of
    voting securities by the Company, and after such share
    acquisition, the Subject Person becomes the Owner of any
    additional voting securities that, assuming the repurchase or
    other acquisition had not occurred, increases the percentage of
    the then outstanding voting securities Owned by the Subject
    Person over the designated percentage threshold, then a Change
    in Control shall be deemed to occur;
	 
	 	     
    (ii) there is consummated a merger, consolidation or
    similar transaction involving (directly or indirectly) the
    Company and, immediately after the consummation of such merger,
    consolidation or similar transaction, the stockholders of the
    Company immediately prior thereto do not Own, directly or
    indirectly, either (A) outstanding voting securities
    representing more than fifty percent (50%) of the combined
    outstanding voting power of the surviving Entity in such merger,
    consolidation or similar transaction or (B) more than fifty
    percent (50%) of the combined outstanding voting power of the
    parent of the surviving Entity in such merger, consolidation or
    similar transaction, in each case in substantially the same
    proportions as their Ownership of the outstanding voting
    securities of the Company immediately prior to such transaction;

 

		
	 	     
    (iii) there is consummated a sale, lease, exclusive
    license or other disposition of all or substantially all of the
    consolidated assets of the Company and its Subsidiaries, other
    than a sale, lease, license or other disposition of all or
    substantially all of the consolidated assets of the Company and
    its Subsidiaries to an Entity, more than fifty percent (50%) of
    the combined voting power of the voting securities of which are
    Owned by stockholders of the Company in substantially the same
    proportions as their Ownership of the outstanding voting
    securities of the Company immediately prior to such sale, lease,
    license or other disposition; or
	 
	 	     
    (iv) individuals who, on the Effective Date, are
    members of the Board (the “Incumbent Board”) cease for
    any reason to constitute at least a majority of the members of
    the Board (provided, however, that if the appointment or
    election (or nomination for election) of any new Board
    member was approved or recommended by a majority vote of the
    members of the Incumbent Board then still in office, such new
    member shall, for purposes of this Plan, be considered as a
    member of the Incumbent Board).
	 
	 	     
    The term Change in Control shall not include a sale of assets,
    merger or other transaction effected exclusively for the purpose
    of changing the domicile of the Company.
	 
	 	     
    The Administrator may, in its sole discretion and without
    Participant consent, amend the definition of “Change in
    Control” to conform to the definition of “Change of
    Control” under Section 409A of the Code, as amended,
    and the Treasury Department or Internal Revenue Service
    Regulations or Guidance issued thereunder.
	 
	 	     
    Notwithstanding the foregoing or any other provision of this
    Plan, the definition of Change in Control (or any analogous
    term) in an individual written agreement between the Company or
    any Affiliate and the Participant shall supersede the foregoing
    definition with respect to Awards subject to such agreement;
    provided, however, that if no definition of Change in
    Control or any analogous term is set forth in such an individual
    written agreement, the foregoing definition shall apply.

     
(g) “Code” means the Internal
Revenue Code of 1986, as amended.

     
(h) “Committee” means a committee
of one (1) or more Directors to whom authority has been
delegated by the Board in accordance with Section 2(c).

     
(i) “Common Stock” means the common
stock of the Company.

     
(j) “Company” means Quovadx, Inc.,
a Delaware corporation.

     
(k) “Consultant” means any person,
including an advisor, who is (i) engaged by the Company or
an Affiliate to render consulting or advisory services and is
compensated for such services, or (ii) serving as a member
of the board of directors of an Affiliate and is compensated for
such services. However, service solely as a Director, or payment
of a fee for such service, shall not cause a Director to be
considered a “Consultant” for purposes of the Plan.

     
(l) “Continuous Service” means that
the Participant’s service with the Company or an Affiliate,
whether as an Employee, Director or Consultant, is not
interrupted or terminated. A change in the capacity in which the
Participant renders service to the Company or an Affiliate as an
Employee, Consultant or Director or a change in the entity for
which the Participant renders such service, provided that there
is no interruption or termination of the Participant’s
service with the Company or an Affiliate, shall not terminate a
Participant’s Continuous Service. For example, a change in
status from an employee of the Company to a consultant to an
Affiliate or to a Director shall not constitute an interruption
of Continuous Service. To the extent permitted by law, the
Administrator, in its sole discretion, may determine whether
Continuous Service shall be considered interrupted in the case
of any leave of absence approved by that party, including sick
leave, military leave or any other personal leave.
Notwithstanding the foregoing, a leave of absence shall be
treated as Continuous Service for purposes of vesting in a Stock
Award only to such extent as may be provided in the
Company’s leave of absence policy, in the written terms of
any leave of absence agreement or policy applicable to the
Participant, or as otherwise required by law.

     
(m) “Corporate Transaction” means
the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:

		
	 	     
    (i) a sale or other disposition of all or
    substantially all, as determined by the Board in its sole
    discretion, of the consolidated assets of the Company and its
    Subsidiaries;

 

		
	 	     
    (ii) a sale or other disposition of at least ninety
    percent (90%) of the outstanding securities of the Company;
	 
	 	     
    (iii) the consummation of a merger, consolidation or
    similar transaction following which the Company is not the
    surviving corporation; or
	 
	 	     
    (iv) the consummation of a merger, consolidation or
    similar transaction following which the Company is the surviving
    corporation but the shares of Common Stock outstanding
    immediately preceding the merger, consolidation or similar
    transaction are converted or exchanged by virtue of the merger,
    consolidation or similar transaction into other property,
    whether in the form of securities, cash or otherwise.

     
(n) “Covered Employee” shall have
the meaning provided in Section 162(m)(3) of the Code and
the regulations promulgated thereunder.

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

     
(p) “Disability” means the
permanent and total disability of a person within the meaning of
Section 22(e)(3) of the Code and, for purposes of any
deferred compensation under this Plan, has the meaning set forth
in Section 409A of the Code and Section 223(d) of the
Social Security Act, with respect to amounts subject to
Section 409A of the Code.

     
(q) “Effective Date” means the
effective date of this Plan document, which is the date of the
annual meeting of stockholders of the Company held in 2006
provided this Plan is approved by the Company’s
stockholders at such meeting.

     
(r) “Employee” means any person
employed by the Company or an Affiliate. However, service solely
as a Director, or payment of a fee for such services, shall not
cause a Director to be considered an “Employee” for
purposes of the Plan.

     
(s) “Entity” means a corporation,
partnership, limited liability company or other entity.

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

     
(u) “Exchange Act Person” means any
natural person, Entity or “group” (within the meaning
of Section 13(d) or 14(d) of the Exchange Act), except that
“Exchange Act Person” shall not include (i) the
Company or any Subsidiary of the Company, (ii) any employee
benefit plan of the Company or any Subsidiary of the Company or
any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary of the
Company, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities,
(iv) an Entity Owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportions as their Ownership of stock of the Company; or
(v) any natural person, Entity or “group” (within
the meaning of Section 13(d) or 14(d) of the Exchange Act)
that, as of the Effective Date of the Plan as set forth in
Section 11, is the Owner, directly or indirectly, of
securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company’s then
outstanding securities.

     
(v) “Fair Market Value” means, as
of any date, the value of the Common Stock determined as follows:

		
	 	     
    (i) If the Common Stock is listed on any established
    stock exchange or traded on the Nasdaq National Market or the
    Nasdaq SmallCap Market, the Fair Market Value of a share of
    Common Stock shall be the closing sales price for such stock (or
    the closing bid, if no sales were reported) as quoted on such
    exchange or market (or the exchange or market with the greatest
    volume of trading in the Common Stock) on the last market
    trading day prior to the date of determination, as reported in
    The Wall Street Journal or such other source as the
    Administrator deems reliable. Unless otherwise provided by the
    Administrator, if there is no closing sales price (or closing
    bid if no sales were reported) for the Common Stock on the last
    market trading day prior to the date of determination, then the
    Fair Market Value shall be the closing selling price (or closing
    bid if no sales were reported) on the last preceding date for
    which such quotation exists.
	 
	 	     
    (ii) In the absence of such markets for the Common
    Stock, the Fair Market Value shall be determined by the
    Administrator in good faith.

     
(w) “Incentive Stock Option” means
an Option intended to qualify as an “incentive stock
option” within the meaning of Section 422 of the Code
and the regulations promulgated thereunder.

     
(x) “Non-Employee Director” means a
Director who either (i) is not a current employee or
officer of the Company or an Affiliate, does not receive
compensation, either directly or indirectly, from the Company or
an Affiliate for services

 

rendered as a consultant or in any capacity other than as a
Director (except for an amount as to which disclosure would not
be required under Item 404(a) of
Regulation S-K
promulgated pursuant to the Securities Act
(“Regulation S-K”)),
does not possess an interest in any other transaction for which
disclosure would be required under Item 404(a) of
Regulation S-K,
and is not engaged in a business relationship for which
disclosure would be required pursuant to Item 404(b) of
Regulation S-K; or
(ii) is otherwise considered a “non-employee
director” for purposes of
Rule 16b-3.

     
(y) “Nonstatutory Stock Option”
means any Option other than an Incentive Stock Option.

     
(z) “Officer” means a person who is
an officer of the Company within the meaning of Section 16
of the Exchange Act and the rules and regulations promulgated
thereunder.

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

     
(bb) “Option Agreement” means a
written agreement between the Company and an Optionholder
evidencing the terms and conditions of an Option grant. Each
Option Agreement shall be subject to the terms and conditions of
the Plan.

     
(cc) “Optionholder” means a person
to whom an Option is granted pursuant to the Plan or, if
permitted under the terms of this Plan, such other person who
holds an outstanding Option.

     
(dd) “Other Stock Award” means an
award based in whole or in part by reference to the Common Stock
which is granted pursuant to the terms and conditions of
Section 6(e).

     
(ee) “Other Stock Award Agreement”
means a written agreement between the Company and a
holder of an Other Stock Award evidencing the terms and
conditions of an Other Stock Award grant. Each Other Stock Award
Agreement shall be subject to the terms and conditions of the
Plan.

     
(ff) “Outside Director” means a
Director who either (i) is not a current employee of the
Company or an “affiliated corporation” (within the
meaning of Treasury Regulations promulgated under
Section 162(m) of the Code), is not a former employee of
the Company or an “affiliated corporation” who
receives compensation for prior services (other than benefits
under a tax-qualified retirement plan) during the taxable year,
has not been an officer of the Company or an “affiliated
corporation,” and does not receive remuneration from the
Company or an “affiliated corporation,” either
directly or indirectly, in any capacity other than as a
Director, or (ii) is otherwise considered an “outside
director” for purposes of Section 162(m) of the Code.

     
(gg) “Own,” “Owned,”
“Owner,” “Ownership” A person or
Entity shall be deemed to “Own,” to have
“Owned,” to be the “Owner” of, or to have
acquired “Ownership” of securities if such person or
Entity, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, has or
shares voting power, which includes the power to vote or to
direct the voting, with respect to such securities.

     
(hh) “Participant” means a person
to whom an Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock
Award.

     
(ii) “Performance Cash Award” means
an award of cash granted pursuant to the terms and conditions of
Section 6(d)(ii).

     
(jj) “Performance Criteria” means
the one or more criteria that the Administrator shall select for
purposes of establishing the Performance Goals for a Performance
Period. The Performance Criteria that shall be used to establish
such Performance Goals may be based on any one of, or
combination of, the following: (i) earnings per share;
(ii) earnings before interest, taxes and depreciation;
(iii) earnings before interest, taxes, depreciation and
amortization; (iv) total stockholder return;
(v) return on equity; (vi) return on assets,
investment, or capital employed; (vii) operating margin;
(viii) gross margin; (ix) operating income;
(x) net income (before or after taxes); (xi) net
operating income; (xii) net operating income after tax;
(xiii) pre-tax profit; (xiv) operating cash flow;
(xv) sales or revenue targets; (xvi) increases in
revenue or product revenue; (xvii) expenses and cost
reduction goals; (xviii) improvement in or attainment of
working capital levels; (xix) economic value added (or an
equivalent metric); (xx) market share; (xxi) cash
flow; (xxii) cash flow per share; (xxiii) share price
performance; (xxiv) debt reduction;
(xxv) implementation or completion of projects or
processes; (xxvi) customer satisfaction;
(xxvii) stockholders’ equity; (xxviii) market
capitalization; and (xxix) to the extent that an Award is
not intended to comply with Section 162(m) of the Code,
other measures of performance selected by the Administrator.
Partial achievement of the specified criteria may result in the

 

payment or vesting corresponding to the degree of achievement as
specified in the Stock Award Agreement or the written terms of a
Performance Cash Award. The Administrator shall, in its sole
discretion, define the manner of calculating the Performance
Criteria it selects to use for such Performance Period.

     
(kk) “Performance Goals” means, for
a Performance Period, the one or more goals established by the
Administrator for the Performance Period based upon the
Performance Criteria. Performance Goals may be set on a
Company-wide basis, with respect to one or more business units,
divisions, Affiliates, or business segments, and in either
absolute terms or relative to the performance of one or more
comparable companies or a relevant index. At the time of the
grant of any Award, the Administrator is authorized to determine
whether, when calculating the attainment of Performance Goals
for a Performance Period: (i) to exclude restructuring
and/or other nonrecurring charges; (ii) to exclude exchange
rate effects, as applicable, for
non-U.S. dollar
denominated net sales and operating earnings; (iii) to
exclude the effects of changes to generally accepted accounting
standards required by the Financial Accounting Standards Board;
(iv) to exclude the effects of any statutory adjustments to
corporate tax rates; and (v) to exclude the effects of any
“extraordinary items” as determined under generally
accepted accounting principles. In addition, the Administrator
retains the discretion to reduce or eliminate the compensation
or economic benefit due upon attainment of Performance Goals.

     
(ll) “Performance Period” means the
period of time selected by the Administrator over which the
attainment of one or more Performance Goals will be measured for
the purpose of determining a Participant’s right to and the
payment of a Stock Award or a Performance Cash Award.
Performance Periods may be of varying and overlapping duration,
at the sole discretion of the Administrator.

     
(mm) “Performance Stock Award”
means a Stock Award granted under the terms and
conditions of Section 6(d)(i).

     
(nn) “Plan” means this Quovadx,
Inc. 2006 Equity Incentive Plan.

     
(oo) “Restricted Stock Award” means
an award of shares of Common Stock which is granted pursuant to
the terms and conditions of Section 6(a).

     
(pp) “Restricted Stock Award Agreement”
means a written agreement between the Company and a
holder of a Restricted Stock Award evidencing the terms and
conditions of a Restricted Stock Award grant. Each Restricted
Stock Award Agreement shall be subject to the terms and
conditions of the Plan.

     
(qq) “Restricted Stock Unit Award”
means a right to receive shares of Common Stock which is
granted pursuant to the terms and conditions of
Section 6(b).

     
(rr) “Restricted Stock Unit Award
Agreement” means a written agreement between the
Company and a holder of a Restricted Stock Unit Award evidencing
the terms and conditions of a Restricted Stock Unit Award grant.
Each Restricted Stock Unit Award Agreement shall be subject to
the terms and conditions of the Plan.

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

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

     
(uu) “Stock Appreciation Right”
means a right to receive the appreciation on Common
Stock that is granted pursuant to the terms and conditions of
Section 6(c).

     
(vv) “Stock Appreciation Right Agreement”
means a written agreement between the Company and a
holder of a Stock Appreciation Right evidencing the terms and
conditions of a Stock Appreciation Right grant. Each Stock
Appreciation Right Agreement shall be subject to the terms and
conditions of the Plan.

     
(ww) “Stock Award” means any right
granted under the Plan, including an Incentive Stock Option, a
Nonstatutory Stock Option, a Restricted Stock Award, a
Restricted Stock Unit Award, a Stock Appreciation Right, a
Performance Stock Award or any Other Stock Award.

     
(xx) “Stock Award Agreement” means
a written agreement between the Company and a Participant
evidencing the terms and conditions of a Stock Award grant. Each
Stock Award Agreement shall be subject to the terms and
conditions of the Plan.

 

     
(yy) “Subsidiary” means, with
respect to the Company, (i) any corporation of which more
than fifty percent (50%) of the outstanding capital stock having
ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether, at the
time, stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening
of any contingency) is at the time, directly or indirectly,
Owned by the Company, and (ii) any partnership, limited
liability company, or other entity in which the Company has a
direct or indirect interest (whether in the form of voting or
participation in profits or capital contribution) of more than
fifty percent (50%).

     
(zz) “Ten Percent Stockholder”
means a person who Owns (or is deemed to Own pursuant to
Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes
of stock of the Company or any Affiliate.exv10w2

 

Exhibit 10.2

Executive Grant

Quovadx, Inc. 

2006 Equity Incentive Plan

Stock Option Agreement

(Incentive Stock Option or Nonstatutory Stock Option)

     Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Stock Option Agreement,
Quovadx, Inc. (the “Company”) has granted you an option under its 2006 Equity Incentive Plan (the
“Plan”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant
Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly defined
in this Stock Option Agreement but defined in the Plan shall have the same definitions as in the
Plan.

     The details of your option are as follows:

     1. Vesting. Subject to the limitations contained herein and in the Plan, your option
will vest as follows:

          (a) In General. Your option will vest as provided in the Vesting Schedule set forth in your
Grant Notice, provided that vesting will cease upon the termination of your Continuous Service.

          (b) Change in Control. If a Change in Control occurs and if, within three months before and
twelve (12) months after, the effective time of such Change in Control, your Continuous Service
terminates due to (i) an involuntary termination (excluding death or Disability) without Cause, or
(ii) a voluntary termination for Good Reason, then, subject to your compliance with the
provisions of your employment agreement and you executing and not revoking a separation agreement
and general release of claims in a form satisfactory to the Company, your option shall become
fully vested and exercisable upon the later of (A) the date your Continuous Service terminates, or
(B) the date such Change in Control is consummated, provided that your option has not previously
expired or terminated prior to the date such acceleration would occur under this paragraph.

     For purposes of this Subsection 1(b), “Cause” has the meaning given in your written employment
agreement with the Company OR, in the absence of a written employment agreement, “Cause”
means a termination by the Company because of any one of the following events: (i) Your breach of
your employment agreement that results in material injury to the Company which, if capable of cure,
has not been cured by you within thirty (30) days after receipt by you of written notice from the
Company’s chief executive officer (the “CEO”) of such breach; (ii) your misconduct, fraud,
dishonesty, or malfeasance that results in material injury to the Company; (iii) your willful or
intentional failure to (a) perform your duties under your employment agreement, (b) follow the
reasonable and legal direction of the CEO, or (c) follow the policies, procedures, and rules of the
Company (provided that, for any such failure listed in

-1-

 

this sub-section (iii), the CEO shall first give you written notice setting forth with specificity
the reasons that the CEO believes you are failing, and thirty (30) days to cure such failure); or
(iv) your conviction of, or plea of nolo contendre to, a felony. For purposes of this Agreement,
your failure to achieve certain results, such as those set forth in a business plan of the Company,
that is not the result of your demonstrating willful and deliberate dereliction of duty shall not
constitute Cause.

     For purposes of this Subsection 1(b), “Good Reason” has the meaning given in your written
employment agreement with the Company OR, in the absence of a written employment agreement,
“Good Reason” means the occurrence of any of the following: (i) the Company, without your written
consent, (a) takes any action which results in the reduction of your then current title, duties, or
responsibilities, other than a reduction or change required by applicable law or listing
requirements, (b) reduces your then current base salary or target bonus other than a one-time
reduction of not more than 10% that also is applied to substantially all executive officers of the
Company, (c) reduces the benefits to which you are entitled on the effective date of your
employment agreement, unless a similar reduction is made for substantially all other executive
officers, or (d) relocates you to a facility or a location more than 75 miles from your then
present location, (ii) a successor to the Company fails to assume your employment agreement in
writing upon becoming a successor or assignee of the Company, or (iii) the Company breaches your
employment agreement and such breach results in material injury to you; provided, however, that if
the event that potentially constitutes Good Reason is capable of cure, Good Reason only shall exist
if the Company has not cured such event within thirty (30) days after receipt by the CEO of written
notice from you describing why you believe Good Reason exists.

     2. Number of Shares and Exercise Price. The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments.

     3. Method of Payment. Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of the exercise price in cash or by
check or in any other manner permitted by your Grant Notice, which may include one or more of the
following:

          (a) Bank draft or money order payable to the Company.

          (b) In the Company’s sole discretion at the time your option is exercised and provided that at
the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street
Journal, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check)
by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to
the Company from the sales proceeds.

          (c) In the Company’s sole discretion at the time your option is exercised and provided that at
the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street
Journal, by delivery to the Company (either by actual delivery or attestation) of already-owned
shares of Common Stock either that you have held for the period required to

-2-

 

avoid a charge to the Company’s reported earnings (generally six (6) months) or that you did
not acquire, directly or indirectly from the Company, that are owned free and clear of any liens,
claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of
exercise. “Delivery” for these purposes, in the sole discretion of the Company at the time you
exercise your option, shall include delivery to the Company of your attestation of ownership of
such shares of Common Stock in a form approved by the Company. Notwithstanding the foregoing, you
may not exercise your option by tender to the Company of Common Stock to the extent such tender
would violate the provisions of any law, regulation or agreement restricting the redemption of the
Company’s stock.

          (d) By a “net exercise” arrangement pursuant to which the Company will reduce the number of
shares of Common Stock issued upon exercise of your option by the largest whole number of shares
with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, that
the Company shall accept a cash or other payment from you to the extent of any remaining balance of
the aggregate exercise price not satisfied by such reduction in the number of whole shares to be
issued; provided further, however, that shares of Common Stock will no longer be outstanding under
your option and will not be exercisable thereafter to the extent that (1) shares are used to pay
the exercise price pursuant to the “net exercise,” (2) shares are delivered to you as a result of
such exercise, and (3) shares are withheld to satisfy tax withholding obligations.

     4. Whole Shares. You may exercise your option only for whole shares of Common Stock.

     5. Securities Law Compliance. Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common Stock are not
then so registered, the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option also must comply
with other applicable laws and regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such
laws and regulations.

     6. Term. You may not exercise your option before the commencement or after the
expiration of its term. The term of your option commences on the Date of Grant and expires upon
the earliest of the following:

          (a) three (3) months after the termination of your Continuous Service for any reason other
than your Disability or death, provided, however, that (i) if during any part of such three (3)
month period your option is not exercisable solely because of the condition set forth in Section 5,
your option shall not expire until the earlier of the Expiration Date or until it shall have been
exercisable for an aggregate period of three (3) months after the termination of your Continuous
Service and (ii) if (x) you are a Non-Exempt Employee, (y) you terminate your Continuous Service
within six (6) months after the Date of Grant specified in your Grant Notice, and (z) you have
vested in a portion of your option at the time of your termination of Continuous Service, your
option shall not expire until the earlier of (A) the later of the date that is seven (7)

-3-

 

months after the Date of Grant specified in your Grant Notice or the date that is three (3)
months after the termination of your Continuous Service or (B) the Expiration Date;

          (b) twelve (12) months after the termination of your Continuous Service due to your
Disability;

          (c) eighteen (18) months after your death if you die either during your Continuous Service or
within three (3) months after your Continuous Service terminates;

          (d) the Expiration Date indicated in your Grant Notice; or

          (e) the
day before the seventh (7th) anniversary of the Date of Grant.

     If your option is an Incentive Stock Option, note that to obtain the federal income tax
advantages associated with an Incentive Stock Option, the Code requires that at all times beginning
on the date of grant of your option and ending on the day three (3) months before the date of your
option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of
your death or your permanent and total disability, as defined in Section 22(e) of the Code. The
Company has provided for extended exercisability of your option under certain circumstances for
your benefit but cannot guarantee that your option will necessarily be treated as an Incentive
Stock Option if you continue to provide services to the Company or an Affiliate as a Consultant or
Director after your employment terminates or if you otherwise exercise your option more than three
(3) months after the date your employment with the Company or an Affiliate terminates.

     7. Exercise.

          (a) You may exercise the vested portion of your option during its term by delivering a Notice
of Exercise (in a form designated by the Company) together with the exercise price to the Secretary
of the Company, or to such other person as the Company may designate, during regular business
hours, together with such additional documents as the Company may then require.

          (b) By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the shares of Common
Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock
acquired upon such exercise.

          (c) If your option is an Incentive Stock Option, by exercising your option you agree that you
will notify the Company in writing within fifteen (15) days after the date of any disposition of
any of the shares of the Common Stock issued upon exercise of your option that occurs within two
(2) years after the date of your option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of your option.

-4-

 

     8. Transferability.

          (a) Restrictions on Transfer. Your option shall not be transferable except by will or by the
laws of descent and distribution and shall be exercisable during your lifetime only by you;
provided, however, that the Board may, in its sole discretion, permit you to transfer your option
in a manner consistent with applicable tax and securities laws upon your request.

          (b) Domestic Relations Orders. Notwithstanding the foregoing, your option may be transferred
pursuant to a domestic relations order; provided, however, that if your option is an Incentive
Stock Option, your option shall be deemed to be a Nonstatutory Stock Option as a result of such
transfer.

          (c) Beneficiary Designation. Notwithstanding the foregoing, you may, by delivering written
notice to the Company, in a form provided by or otherwise satisfactory to the Company, designate a
third party who, in the event of your death, shall thereafter be entitled to exercise your option.

     9. Option not a Service Contract. Neither the Plan nor this Agreement confer upon
you the right to continue providing services to the Company or an Affiliate, nor do they interfere
in any way with your right or the Company’s right to terminate your service at any time, with or
without cause.

     10. Withholding Obligations.

          (a) At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
“cashless exercise” pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with the exercise of your option.

          (b) Upon your request and subject to approval by the Company, in its sole discretion, and
compliance with any applicable legal conditions or restrictions, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a
number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or
such lower amount as may be necessary to avoid variable award accounting). If the date of
determination of any tax withholding obligation is deferred to a date later than the date of
exercise of your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of the Code, covering
the aggregate number of shares of Common Stock acquired upon such exercise with respect to which
such determination is otherwise deferred, to accelerate the determination of such tax withholding
obligation to the date of exercise of your option. Notwithstanding the filing of such election,
shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined
as of the date of exercise of your option that are otherwise issuable to you upon such exercise. Any adverse consequences to you
arising in connection with such share withholding procedure shall be your sole responsibility.

-5-

 

          (c) You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when
desired even though your option is vested, and the Company shall have no obligation to issue a
certificate for such shares of Common Stock or release such shares of Common Stock from any escrow
provided for herein unless such obligations are satisfied.

     11. Notices. Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.

     12. Governing Plan Document. Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations, which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.

-6-

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