Document:

Exhibit 10.2.8

 

AMENDMENT NUMBER ONE

TO THE

CANDELA CORPORATION

1990 EMPLOYEE STOCK PURCHASE PLAN

 

The Board of Directors of Candela Corporation has amended the Candela
Corporation 1990 Employee Stock Purchase Plan (the “Plan”) as follows:

 

1.   Effective January 19, 2009, Article 5
of the Plan is hereby amended by adding the following to the end of the second
paragraph:

 

For Payment Periods beginning on or after January 1, 2009, the
Option Price for each Payment Period shall be 85% of the average market price
of the Company’s Common Stock on the last business day of the Payment Period,
rounded up to the nearest penny.

 

All provisions of the Plan not specifically mentioned in this Amendment
shall be considered modified to the extent necessary to be consistent with the
changes made in this Amendment.Exhibit 10.19

 

CANDELA
CORPORATION

 

2008 STOCK PLAN

 

October 27,
2008

 

1.          Purpose.  The purpose of this Candela Corporation 2008
Stock Plan (the “Plan”) is to encourage employees of Candela Corporation
(the “Company”) and employees of any present or future subsidiary of the
Company (collectively, “Related Corporations”) and other individuals who
render services to the Company or any Related Corporation, by providing
opportunities to participate in the ownership of the Company’s common stock,
$.01 par value per share (the “Common Stock”), and its future growth
through (a) the grant of options which qualify as “incentive stock options”
(“ISOs”) under Section 422(b) of the Internal Revenue Code of
1986, as amended (the “Code”); (b) the grant of options that do not
qualify as ISOs (“Non-Qualified Options”); (c) the grant of stock
appreciation rights (“SARs”); (d) the grant of restricted stock (“Restricted
Stock”); and (e) the grant of restricted stock unit awards (“RSUs”).  Both ISOs and Non-Qualified Options are
referred to hereafter individually as an “Option” and collectively as “Options.”  Options, SARs, Restricted Stock and RSUs are
referred to hereafter collectively as “Stock Rights.”  As used herein, the term “subsidiary”
means a “subsidiary corporation,” as that term is defined in Section 424
of the Code.

 

2.          Administration of the
Plan.

 

A.      Board or Committee
Administration.  The Plan shall be
administered by the Board of Directors of the Company (the “Board”) or,
if so designated by the Board, by the Compensation Committee of the Board, or
such other committee or committees as may be appointed by the Board from time
to time (the “Committee”). 
Hereinafter, all references in this Plan to the “Committee” shall
mean the Board if no Committee has been appointed.  To the extent allowed by applicable state
law, the Board by resolution may authorize an officer or officers to grant
Stock Rights within parameters prescribed by the Board to other officers and
employees of the Company.  Subject to
ratification of the grant or authorization of each Stock Right by the Board (if
so required by applicable state law), and subject to the terms of the Plan, the
Committee shall have the authority to (i) determine to whom (from among
the class of employees eligible under paragraph 3 to receive ISOs) ISOs shall
be granted, and to whom (from among the class of individuals eligible under
paragraph 3 to receive Non-Qualified Options, SARs, Restricted Stock, and RSUs)
Non-Qualified Options, SARs, Restricted Stock, and RSUs may be granted; (ii) determine
the time or times at which Stock Rights shall be granted; (iii) determine
the purchase price of shares subject to each Option; (iv) determine the
grant price of SARs as specified in subparagraph 6(d); (v) determine
whether each Option granted shall be an ISO or a Non-Qualified Option; (vi) determine
(subject to paragraph 6) the time or times when each Option or SAR shall become
exercisable and the duration of the exercise period; (vii) determine the
terms and conditions of any Stock Right granted under the Plan, (viii) prescribe
the forms of any instruments applicable to the grant of any Stock Right, which
need not be identical, (ix) interpret the Plan and prescribe and rescind rules and
regulations relating to it, and (x) make all other decisions and
determinations that may be required under the Plan or as the Committee deems
necessary or advisable to administer the Plan. 
If the Committee determines to issue a Non-Qualified Option, it shall
take whatever actions it deems necessary, under Section 422 of the Code
and the regulations promulgated thereunder, to ensure that such Option is not
treated as an ISO.  The interpretation
and construction by the Committee of any provisions of the Plan or of any Stock
Right granted under it shall be final unless otherwise determined by the
Board.  The Committee may from time to
time adopt such rules and regulations for carrying out the Plan as it may
deem advisable.  No member of the Board
or the Committee shall be liable for any action or determination made in good
faith with respect to the Plan or any Stock Right granted under it.

 

B.        Committee Actions.  The Committee may select one of its members
as its chairman, and shall hold meetings at such time and places as it may
determine.  A majority of the Committee
shall constitute a quorum and acts of a majority of the members of the
Committee at a meeting at which a quorum is present, or acts reduced to or
approved in writing by all the members of the Committee (if consistent with
applicable state law), shall be the valid acts of the Committee.  From time to time the Board may increase the
size of the Committee and appoint additional members thereof, remove members
(with or without 

 

 

cause) and appoint new
members in substitution therefor, fill vacancies however caused, or remove all
members of the Committee and thereafter directly administer the Plan.

 

C.        Grant of Stock Rights
to Members of the Board.  Stock
Rights (other than ISOs) may be granted to members of the Board.  All grants of Stock Rights to members of the
Board shall in all respects be made in accordance with the provisions of this
Plan applicable to other eligible persons. 
Members of the Board who either (i) are eligible to receive grants
of Stock Rights pursuant to the Plan or (ii) have been granted Stock
Rights may vote on any matters affecting the administration of the Plan or the
grant of any Stock Rights pursuant to the Plan.

 

D.       Performance-Based
Compensation.

 

(i)                The Committee may
take such action as may be necessary to ensure that Stock Rights granted under
the Plan qualify as qualified “performance-based compensation” within the
meaning of Section 162(m) of the Code and applicable regulations
promulgated thereunder (“Performance-Based Compensation”).  Such action may include, in the Committee’s
discretion, some or all of the following:

 

(a)   requiring that the Plan be
administered by a Committee consisting solely of two or more “outside directors”
(as defined in applicable regulations promulgated under Section 162(m) of
the Code); and

 

(b)  specifying one or more of the
Performance Measures (as defined below) set forth in this subparagraph 2(D) and
determining the degree of granting, vesting and/or payout with respect to the
Stock Rights.

 

(ii)             The performance
goals, if any, to be used for Stock Rights shall be chosen from among the
following performance measures (the “Performance Measures”):  earnings, earnings before interest and taxes,
earnings before interest, taxes, depreciation and amortization, earnings per
share, economic value created, market share, net income (before or after
taxes), operating income, adjusted net income after capital charge, return on
assets, return on capital (based on earnings or cash flow), return on equity,
return on investment, revenue, cash flow, operating margin, share price, total
stockholder return, total market value, and strategic business criteria,
consisting of one or more objectives based on meeting specified market
penetration goals, productivity measures, geographic business expansion goals,
cost targets, customer satisfaction or employee satisfaction goals, goals
relating to merger synergies, management of employment practices and employee
benefits, or supervision of litigation or information technology, and goals
relating to acquisitions or divestitures of subsidiaries, affiliates or joint
ventures.  Performance Measures may be
established at the Company, subsidiary or business unit levels.  The targeted level or levels of performance
with respect to any Performance Measures may be established at such levels and
on such terms as the Committee may determine, in its discretion, including,
without limitation, in absolute terms, as a goal relative to performance in
prior periods, or as a goal compared to the performance of one or more
comparable companies or an index covering multiple companies.  Unless otherwise determined by the Committee,
measurement of performance goals with respect to the Performance Measures above
shall exclude the impact of charges for restructurings, discontinued
operations, extraordinary items, and other unusual or non-recurring items, as
well as the cumulative effects of tax or accounting changes, each as determined
in accordance with generally accepted accounting principles or identified in
the Company’s financial statements, notes to the financial statements,
management’s discussion and analysis or other public filings.

 

3.          Eligible Employees
and Others.  ISOs may be granted only
to employees of the Company or any Related Corporation.  Non-Qualified Options, SARs, Restricted Stock,
and RSUs may be granted to any employee, officer or director (whether or not
also an employee) or consultant of the Company or any Related Corporation.  The Committee may take into consideration a
recipient’s individual circumstances in determining whether to grant a Stock
Right.  The granting of any Stock Right
to any individual or entity shall neither entitle that individual or entity to,
nor disqualify such individual or entity from, participation in any other grant
of Stock Rights.

 

4.            Stock.

 

A.     The shares of Common Stock
subject to Stock Rights shall be authorized but unissued shares of Common Stock
or shares of Common Stock reacquired by the Company in any manner.  The aggregate number of shares that may be
issued pursuant to the Plan is one million
three

 

 

hundred
thousand (1,300,000), subject to adjustment as provided in paragraph
8.  The number of shares of Common Stock
available for issuance of ISOs under the Plan is one million three hundred thousand (1,300,000), subject to
adjustment as provided in paragraph 8. 
If any Option granted under the Plan shall expire or terminate for any
reason without having been exercised in full or shall cease for any reason to
be exercisable in whole or in part or shall be repurchased by the Company, the
unpurchased shares of Common Stock subject to such Option shall again be
available for grants of Stock Rights under the Plan.  Where payment upon exercise of a SAR is made
in shares of Common Stock, only the net number of shares of Common Stock issued
in connection with such exercise shall be deemed “issued” for purposes of this
paragraph 4.  If any Stock Right, other
than an Option, granted under the Plan shall expire or terminate for any reason
without delivery of Common Stock such shares of Common Stock subject to the
Stock Right shall again be available for grants of Stock Rights under the Plan.

 

B.       No employee of the Company
or any Related Corporation may be granted Options and/or SARs with respect to
more than seven hundred thousand (700,000) shares of Common Stock, in the
aggregate, under the Plan during any fiscal year of the Company, subject to
adjustment as provided in paragraph 8. 
No employee of the Company or any Related Corporation may be granted
Restricted Stock or RSUs having a fair market value in excess of two million
dollars ($2,000,000)  under the
Plan during any fiscal year of the Company.

 

5.          Granting of Stock
Rights.  Stock Rights may be granted
under the Plan at any time on or after October 27, 2008 and prior to October 26,
2018.

 

6.          Terms and Conditions
of Options and SARs.

 

A.      Grant of Options or SARs.  Subject to subparagraph 2(A), Options and
SARs shall be evidenced by instruments (which need not be identical) in such
forms as the Committee may from time to time approve.  Such instruments shall conform to the terms
and conditions set forth in this paragraph 6 and may contain such other
provisions as the Committee deems advisable which are not inconsistent with the
Plan, including restrictions applicable to shares of Common Stock issuable upon
exercise of Options or SARs and the treatment of Options or SARs upon a
termination of employment as specified in subparagraph 6(H).  The Committee may specify that any
Non-Qualified Option or SARs shall be subject to the restrictions set forth
herein with respect to ISOs, or to such other termination and cancellation
provisions as the Committee may determine. 
SARs may be granted in tandem with an Option (“Tandem SARs”), or
may be granted on a freestanding basis, not related to any Option (“Freestanding
SARs”), or any combination of these forms of SARs.  The Committee may from time to time confer
authority and responsibility on one or more of its own members and/or one or
more officers of the Company to execute and deliver such instruments.  The proper officers of the Company are
authorized and directed to take any and all action necessary or advisable from
time to time to carry out the terms of such instruments.

 

B.       Price for Options and
SARs.

 

(i)                Price for
Non-Qualified Options.  The exercise
price per share specified in the instrument relating to each Non-Qualified
Option granted under the Plan shall not be less than the fair market value, as
determined in accordance with subparagraph 6(D), per share of the Common Stock
of the Company on the date of grant.

 

(ii)             Price for ISOs.  The exercise price per share specified in the
instrument relating to each ISO granted under the Plan shall not be less than
the fair market value, as determined in accordance with subparagraph 6(D), per
share of the Common Stock on the date of grant. 
In the case of an ISO to be granted to an employee owning stock
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Related Corporation, the exercise
price per share specified in the instrument relating to such ISO shall not be
less than one hundred ten percent (110%) of the fair market value, as
determined in accordance with subparagraph 6(D), per share of the Common Stock
on the date of grant.  For purposes of determining
stock ownership under this paragraph, the rules of Section 424(d) of
the Code shall apply.

 

(iii)          Price of SARs.  The grant price per share specified in the
instrument relating to each Freestanding SAR granted under the Plan shall not
be less than the fair market value, as determined in accordance with
subparagraph 6(D), per share of the Common Stock on the date of grant.  The grant price per share specified in the
instrument relating to each Tandem SAR granted under the Plan shall equal the
exercise price of the related Option.

 

 

C.        $100,000 Annual
Limitation on ISO Vesting.  Each
eligible employee may be granted Options treated as ISOs only to the extent
that, in the aggregate under this Plan and all incentive stock option plans of
the Company, ISOs do not become exercisable for the first time by such employee
during any calendar year with respect to stock having a fair market value
(determined at the time the ISOs were granted) in excess of $100,000.  The Company intends to designate any Options
granted in excess of such limitation as Non-Qualified Options, and the Company
shall issue separate instruments to the optionee with respect to Options that
are Non-Qualified Options and Options that are ISOs.

 

D.       Determination of Fair
Market Value.  Under the terms of the
Plan, “fair market value” shall be determined as of the date of grant or, if
the prices or quotes discussed in this paragraph are unavailable for such date,
the last business day for which such prices or quotes are available prior to the
date of grant and shall mean (i) the closing selling price per share of
the Common Stock, if the Common Stock is traded on any established stock
exchange or traded on a national market system; or (ii) the closing bid
price last quoted by an established quotation service for over-the-counter
securities, if the Common Stock is not traded on any established stock exchange
or traded on a national market system. 
If the Common Stock is not publicly traded at the time an Option or SAR
is granted under the Plan, “fair market value” shall mean the fair market value
of a share of Common Stock as determined by the Committee in accordance with a
valuation methodology approved in good faith by the Committee and in compliance
with Section 409A of the Code and the regulations issued thereunder.

 

E.        Option and SAR Duration.  Subject to earlier expiration as provided in
subparagraph 6(H) or in the instrument relating to such Option or SAR,
each Option and SAR shall expire on the date specified by the Committee, but
not more than (i) ten years from the date of grant in the case of Options
and SARs generally and (ii) five years from the date of grant in the case
of ISOs granted to an employee owning stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or any Related Corporation, as determined under subparagraph 6(B).  Subject to earlier expiration as provided in
subparagraph 6(H), the term of each ISO shall be the term set forth in the
original instrument granting such ISO, except with respect to any part of such
ISO that is converted into a Non-Qualified Option pursuant to subparagraph
6(K).

 

F.        Exercise of Options and
SARs.  Subject to the provisions of
this paragraph 6, each Option or SAR granted under the Plan shall be
exercisable as follows:

 

(i)       Vesting.  The Option or SAR shall be fully exercisable
on the date of grant or shall become exercisable thereafter in such
installments as the Committee may specify.

 

(ii)             Full Vesting of
Installments.  Once an installment
becomes exercisable, it shall remain exercisable until expiration or
termination of the Option or SAR, unless otherwise specified by the Committee.

 

(iv)         Partial Exercise.  Each Option or, subject to subparagraph
6(G)(ii), each SAR or installment thereof, may be exercised at any time or from
time to time, in whole or in part, for up to the total number of shares with
respect to which it is then exercisable

 

(v)            Acceleration of
Vesting.  The Committee shall have
the right to accelerate the date that any installment of any Option or SAR
becomes exercisable; provided that the Committee shall not, without the consent
of an optionee, accelerate the permitted exercise date of any installment of
any Option granted pursuant to subparagraph 6(K) if such acceleration
would violate the annual vesting limitation contained in Section 422(d) of
the Code, as described in subparagraph 6(C).

 

G.       Means of Exercising
Options and SARs.

 

(i)                Options.  An Option (or any part or installment
thereof) shall be exercised by giving written notice to the Company at its
principal office address, or to such transfer agent as the Company shall
designate.  Such notice shall identify
the Option being exercised and specify the number of shares as to which such
Option is being exercised, accompanied by full payment of the purchase price
therefor either (a) in United States dollars in cash or by check, (b) at
the discretion of the Committee, through delivery of shares of Common Stock
having a fair market value equal as of the date of the exercise to the cash
exercise price of the Option, (c) at the discretion of the Committee and
consistent

 

 

with applicable law,
through the delivery of an assignment to the Company of a sufficient amount of
the proceeds from the sale of the Common Stock acquired upon exercise of the
Option and an authorization to the broker or selling agent to pay that amount
to the Company, which sale shall be at the optionee’s direction at the time of
exercise, or (d) at the discretion of the Committee, by any combination of
(a), (b) and (c) above.  If the
Committee exercises its discretion to permit payment of the exercise price of
an ISO by means of the methods set forth in clauses (b), (c), or (d) of
the preceding sentence, such discretion shall be exercised in writing at the
time of the grant of the ISO in question. 
The holder of an Option shall not have the rights of a shareholder with
respect to the shares covered by such Option until the date of issuance of a
stock certificate to such holder for such shares.  Except as expressly provided in paragraph 8
with respect to changes in capitalization and stock dividends, no adjustment
shall be made for dividends or similar rights for which the record date is
before the date such stock certificate is issued.

 

(ii)             SARs.  Tandem SARs may be exercised for all or part
of the shares of Common Stock subject to the related Option upon the surrender
of the right to exercise the equivalent portion of the related Option.  A Tandem SAR may be exercised only with
respect to the shares of Common Stock for which its related Option is then
exercisable.  Notwithstanding any other
provision of the Plan to the contrary, with respect to a Tandem SAR granted in
connection with an ISO: (a) the Tandem SAR will expire no later than the
expiration of the underlying ISO; (b) the value of the payout with respect
to the Tandem SAR may be for no more than one hundred percent (100%) of the
difference between the exercise price of the underlying ISO and the fair market
value of the shares of Common Stock subject to the underlying ISO at the time
the Tandem SAR is exercised; and (c) the Tandem SAR may be exercised only
when the fair market value of the shares of Common Stock subject to the ISO
exceeds the exercise price of the ISO. 
Freestanding SARs may be exercised upon whatever terms and conditions
the Committee, in its sole discretion, imposes upon them and sets forth in the
applicable instrument relating to the grant of such Freestanding SARs.  Upon exercise of a SAR, a grantee shall be
entitled to receive payment from the Company in an amount determined by
multiplying: (1) the difference between the fair market value of a share
of Common Stock on the date of exercise over the grant price; by (2) the
number of shares of Common Stock with respect to which the SAR is
exercised.  At the discretion of the
Committee, the payment upon SAR exercise may be in cash, in shares of Common
Stock of equivalent value, or in some combination thereof.

 

H.      Termination of Employment.

 

(i)                ISOs.

 

(a)   Termination Other than for
Death or Disability.  Unless
otherwise specified in the instrument relating to an ISO, if an ISO optionee
ceases to be employed by the Company and all Related Corporations other than by
reason of death or disability as defined below, no further installments of his
or her ISOs shall become exercisable, and his or her ISOs shall terminate on
the earlier of (1) three months after the date of termination of his or
her employment, or (2) their specified expiration dates, except to the
extent that such ISOs (or unexercised installments thereof) have been converted
into Non-Qualified Options pursuant to subparagraph 6(K). For purposes of this
subparagraph 6(H), employment shall be considered as continuing uninterrupted
during any bona fide leave of absence (such as those attributable to illness,
military obligations or governmental service) provided that the period of such
leave does not exceed 90 days or, if longer, any period during which such
optionee’s right to re-employment is guaranteed by statute or by contract.  A bona fide leave of absence with the written
approval of the Committee shall not be considered an interruption of employment
under this subparagraph 6(H), provided that such written approval contractually
obligates the Company or any Related Corporation to continue the employment of
the optionee after the approved period of absence.  ISOs granted under the Plan shall not be
affected by any change of employment within or among the Company and Related
Corporations, so long as the optionee continues to be an employee of the
Company or any Related Corporation. 
Nothing in the Plan shall be deemed to give any grantee of any Option
the right to be retained in employment or other service by the Company or any
Related Corporation for any period of time.

 

(b)  Death.  If an ISO optionee ceases to be employed by
the Company by reason of his or her death, any ISO owned by such optionee may
be exercised, to the extent otherwise exercisable on the date of death, by the
estate, personal representative or beneficiary who has acquired the ISO by will
or by the laws of descent and distribution, until the earlier of (1) the
specified expiration date of the ISO or (2) 180 days from the date of the
optionee’s death.

 

 

(c)   Disability.  If an ISO optionee ceases to be employed by
the Company by reason of his or her disability, such optionee shall have the
right to exercise any ISO held by him or her on the date of termination of
employment, for the number of shares for which he or she could have exercised
it on that date, until the earlier of (1) the specified expiration date of
the ISO or (2) 180 days from the date of the termination of the optionee’s
employment.  For the purposes of the
Plan, the term “disability” shall mean “permanent and total disability” as
defined in Section 22(e)(3) of the Code or any successor statute.

 

(ii)             Non-Qualified
Options and SARs.  Each instrument
relating to the grant of a Non-Qualified Option or SAR shall set forth the
treatment of such Non-Qualified Option or SAR following termination of the
optionee’s or grantee’s employment or, if the grant is made to a director or
consultant, service with the Company or any Related Corporation.  Such provisions shall be determined in the
sole discretion of the Committee, need not be uniform among all grants and may
reflect distinctions based on the reasons for termination or employment or
service.  Nothing in the Plan shall be
deemed to give any optionee or grantee the right to be retained in employment
or other service by the Company or any Related Corporation for any period of
time.

 

I.           Transferability of
Options and SARs.  Except as
otherwise provided in this subparagraph 6(I), an Option or SAR may not be sold,
pledged, assigned, hypothecated, transferred or disposed of in any manner other
than by will or by the laws of descent and distribution and may be exercised,
during the lifetime of the optionee or grantee, only by the optionee or
grantee.  Notwithstanding the foregoing,
with the consent of the Board or the Committee thereof, in either case in its
sole discretion, an optionee or grantee may transfer all or a portion of his or
her vested Non-Qualified Options or SARs to a trust for the exclusive benefit
of the optionee or grantee and/or one or more Immediate Family Members or
spouses of Immediate Family Members.  For
the purposes of this subparagraph 6(I), “Immediate Family Members” shall
mean the optionee’s or grantee’s spouse, former spouse, children or
grandchildren, whether natural or adopted. 
As a condition to any transfer pursuant to this subparagraph 6(I) each
such transferee shall agree in writing (in a form satisfactory to the
Committee) to be bound by the terms and conditions of the Option or SAR
instrument evidencing such transferred Option or SAR, as well as any additional
restrictions or conditions as the Committee may require.  Following the transfer of an Option or SAR in
accordance with this subparagraph 6(I), the term “optionee” and “grantee”
shall refer to the original transferee, except that, with respect to any
requirements of continued service or employment or provision of the Company’s
tax withholding obligations, such terms shall refer to the optionee or
grantee.  The Committee shall have no
obligation to notify any transferee of any termination of the transferred
Option or SAR, including an early termination resulting from the termination of
employment or service of the original optionee or grantee.  No transferee shall make a subsequent
transfer of a transferred Option or SAR except to the original optionee or
grantee or as otherwise provided in this subparagraph 6(I).

 

J.          Notice to Company of
a Disqualifying Disposition.  By
accepting an ISO granted under the Plan, each optionee agrees to notify the
Company in writing immediately after such optionee makes a Disqualifying Disposition
(as described in Sections 421, 422 and 424 of the Code and regulations
thereunder) of any stock acquired pursuant to the exercise of ISOs granted
under the Plan.  A Disqualifying
Disposition is generally any disposition occurring on or before the later of (a) the
date two years following the date the ISO was granted, or (b) the date one
year following the date the ISO was exercised.

 

K.      Modifications of ISOs;
Conversion of ISOs into Non-Qualified Options.  Subject to subparagraph 8(D), without the prior
written consent of the holder of an ISO, the Committee shall not alter the
terms of such ISO (including the means of exercising such ISO) if such
alteration would constitute a modification (within the meaning of Section 424(h)(3) of
the Code).  The Committee, at the written
request or with the written consent of any optionee, may in its discretion take
such actions as may be necessary to convert such optionee’s ISOs (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the optionee is an employee of
the Company or a Related Corporation at the time of such conversion.  At the time of such conversion, the Committee
(with the consent of the optionee) may impose such conditions on the exercise
of the resulting Non-Qualified Options as the Committee in its discretion may
determine, provided that such conditions shall not be inconsistent with this
Plan.  Nothing in the Plan shall be
deemed to give any optionee the right to have such optionee’s ISOs converted
into Non-Qualified Options, and no such conversion shall occur until and unless
the Committee takes

 

 

appropriate action.  Upon the taking of such action, the Company
shall issue separate instruments to the optionee with respect to Options that
are Non-Qualified Options and Options that are ISOs.

 

7.          Terms and Conditions
of Restricted Stock and RSUs.

 

A.     Grant of Restricted Stock
and RSUs.  Subject to subparagraph
2(A), Restricted Stock and RSUs shall be evidenced by instruments (which need
not be identical) in such forms as the Committee may from time to time
approve.  Such instruments shall conform
to the terms and conditions set forth in this paragraph 7 and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan.

 

B.       Restrictions.  Restricted Stock or RSUs shall be subject to
such restrictions on transferability and other restrictions as the Committee
may impose.  These restrictions may lapse
separately or in combination at such times, under such circumstances, in such
installments, upon the satisfaction of performance goals or otherwise, as the
Committee determines at the time of the grant of the Restricted Stock or
RSUs.  Except as otherwise provided in
the applicable instrument relating to the grant of the Restricted Stock or
RSUs, a grantee shall have all of the rights of a shareholder with respect to
the Restricted Stock, and such grantee shall have none of the rights of a
stockholder with respect to RSUs until such time as shares of Common Stock are
paid in settlement of the RSUs.

 

C.       Termination of
Employment.  Each instrument relating
to the grant of the Restricted Stock or RSUs shall set forth the treatment of
Restricted Stock or RSUs following termination of the grantee’s employment or,
if the grant is made to a director or consultant, service with the Company or
any Related Corporation.  Such provisions
shall be determined in the sole discretion of the Committee, need not be
uniform among all grants and may reflect distinctions based on the reasons for
termination of employment or service. 
Nothing in the Plan shall be deemed to give any grantee of any Restricted
Stock or RSUs the right to be retained in employment or other service by the
Company or any Related Corporation for any period of time.

 

D.      Nontransferability of
Restricted Stock and RSUs.  Except as
otherwise determined by the Committee, during the applicable period of
restriction, a grantee’s Restricted Stock, RSUs and rights relating thereto
shall be available during the grantee’s lifetime only to such grantee, and such
Restricted Stock or RSUs and related rights may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will or by
the laws of descent and distribution.

 

8.          Adjustments.  Upon the occurrence of any of the following
events, an optionee’s or grantee’s rights with respect to Stock Rights granted
to such optionee or grantee hereunder shall be adjusted as hereinafter
provided, unless otherwise specifically provided in the written instrument
applicable to such Stock Right between the optionee or grantee and the Company:

 

A.      Stock Dividends and Stock
Splits.  If the shares of Common Stock
shall be subdivided or combined into a greater or smaller number of shares or
if the Company shall issue any shares of Common Stock as a stock dividend on
its outstanding Common Stock, the number of shares of Common Stock deliverable
upon the exercise of Options or SARs and the number of Shares subject to any
Restricted Stock or RSUs shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase
price per share of Options or SARs to reflect such subdivision, combination or
stock dividend.

 

B.        Consolidations or
Mergers.  If the Company is to be
consolidated with or acquired by another entity in a merger or other
reorganization in which the holders of the outstanding voting stock of the Company
immediately preceding the consummation of such event, shall, immediately
following such event, hold, as a group, less than a majority of the voting
securities of the surviving or successor entity, or in the event of a sale of
all or substantially all of the Company’s assets or otherwise (each, an “Acquisition”),
the Committee or the board of directors of any entity assuming the obligations
of the Company hereunder (the “Successor Board”), shall, as to
outstanding Stock Rights, either (i) make appropriate provision for the
continuation of such Stock Rights by substituting on an equitable basis for the
shares then subject to such Stock Rights either (a) the consideration
payable with respect to the outstanding shares of Common Stock in connection
with the Acquisition, (b) shares of stock of the surviving or successor
corporation, or (c) such other securities as the Successor Board deems
appropriate; or (ii) upon written notice to the optionees and grantees,
provide that all Options and SARs must be exercised, to the extent then
exercisable or to be exercisable as a result of the Acquisition, within

 

 

a specified number of
days of the date of such notice, at the end of which period the Options and
SARs shall terminate; (iii) terminate all Options and SARs in exchange for
a cash payment equal to the excess of the fair market value of the shares
subject to such Options or SARs (to the extent then exercisable or to be
exercisable as a result of the Acquisition) over the exercise price thereof, or
(iv) terminate all Stock Rights, other than Options and SARs, on such
terms and conditions as the Committee deems appropriate, including providing
for the cancellation of such Stock Rights for a cash payment to the grantee.

 

C.        Recapitalization or
Reorganization.  In the event of a
recapitalization or reorganization of the Company (other than a transaction
described in subparagraph 8(B) above) pursuant to which securities of the
Company or of another corporation are issued with respect to the outstanding
shares of Common Stock, an optionee or grantee upon exercising an Option or SAR
shall be entitled to receive for the purchase price paid upon such exercise the
securities he or she would have received if he or she had exercised such Option
or SAR prior to such recapitalization or reorganization.

 

D.       Modification of ISOs.  Notwithstanding the foregoing, any
adjustments made pursuant to subparagraphs 8(A), (B) or (C) with
respect to ISOs shall be made only after the Committee, after consulting with
counsel for the Company, determines whether such adjustments would constitute a
“modification” of such ISOs (as that term is defined in Section 424 of the
Code) or would cause any adverse tax consequences for the holders of such
ISOs.  If the Committee determines that
such adjustments made with respect to ISOs would constitute a modification of
such ISOs or would cause adverse tax consequences to the holders, it may
refrain from making such adjustments.

 

E.         Dissolution or
Liquidation.  In the event of the
proposed dissolution or liquidation of the Company, each Stock Right will
terminate immediately prior to the consummation of such proposed action or at
such other time and subject to such other conditions as shall be determined by
the Committee.

 

F.         Issuances of
Securities.  Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number of
shares of Common Stock subject to a Stock Right or price of shares of Common
Stock subject to Options and SARs.  No
adjustments shall be made for dividends paid in cash or in property other than
securities of the Company.

 

G.        Fractional Shares.  No fractional shares shall be issued under
the Plan and the optionee and grantee shall receive from the Company cash in
lieu of such fractional shares.

 

H.       Actions of the Committee
or Board.  Upon the happening of any
of the events described in subparagraphs 8(A), (B) or (C) above, (i) the
class and aggregate number of shares set forth in paragraph 4(A) hereof
that are subject to Stock Rights which previously have been or subsequently may
be granted under the Plan shall also be appropriately adjusted to reflect the
events described in such subparagraphs, (ii) the class and aggregate
number of shares set forth in paragraph 4(A) hereof that are subject to
ISOs which previously have been or subsequently may be granted under the Plan
shall also be appropriately adjusted to reflect the events described in such
subparagraphs and (iii) the class and aggregate number of shares set forth
in paragraph 4(B) hereof that are subject to Options and SARs which
previously have been or subsequently may be granted under the Plan shall also
be appropriately adjusted to reflect the events described in such
subparagraphs.  The Committee or the
Successor Board shall determine the specific adjustments to be made under this
paragraph 8 and, subject to paragraph 2, its determination shall be
conclusive.  Notwithstanding the
foregoing, as may be determined by the Committee, any such adjustment shall not
(i) cause a Stock Right which is exempt from Section 409A of the Code
to become subject to Section 409A of the Code or (ii) cause an Stock
Right subject to Section 409A of the Code not to comply with the
requirements of Section 409A of the Code.

 

9.          Term and Amendment of
Plan.  This Plan was adopted by the
Board on October 27, 2008,
subject to approval of the Plan by the stockholders of the Company.  The Plan shall expire 10 years from the date
of Board approval (except as to Options outstanding on that date).  The Board may terminate or amend the Plan in
any respect at any time, except that, no amendment which requires stockholder
approval in order for the Plan to continue to comply with any rule promulgated
by the Securities and Exchange Commission or any securities exchange on which
shares of Common Stock are listed or any applicable laws shall be effective
unless such amendment is approved by the requisite vote of the stockholders of
the Company entitled to vote thereon within the time period required under such
applicable listing standard or rule, including, without limitation, an
amendment relating to the following: (a) the total number of shares

 

 

that may be issued under
the Plan may not be increased (except by adjustment pursuant to paragraph 8); (b) the
provisions of paragraph 3 regarding eligibility for grants of ISOs may not be
modified; (c) the provisions of paragraph 6(B) regarding the exercise
price at which shares may be offered pursuant to ISOs may not be modified
(except by adjustment pursuant to paragraph 8); and (d) the expiration
date of the Plan may not be extended. 
Except as otherwise provided herein, in no event may action of the Board
or stockholders alter or impair the rights of a grantee or optionee, without
such grantee’s or optionee’s consent, under any Stock Right previously granted
to such grantee or optionee.

 

10.    Application of Funds.  The proceeds received by the Company from the
sale of shares pursuant to Options granted under the Plan shall be used for
general corporate purposes.

 

11.    Withholding of Additional
Income Taxes.  Upon the exercise of a
Non-Qualified Option, the exercise of a SAR, the making of a Disqualifying
Disposition (as defined in subparagraph 6(J)), the vesting or transfer of
Restricted Stock or RSUs or securities acquired on the exercise of an Option or
SAR hereunder, or the making of a distribution or other payment with respect to
such stock or securities, the Company may withhold taxes in respect of amounts
that constitute compensation includible in gross income.  The Committee in its discretion may condition
(A) the exercise of an Option, (B) the transfer of a Non-Qualified
Option, (C) the exercise of a SAR, or (D) the vesting or
transferability of Restricted Stock or RSUs or securities acquired by
exercising an Option or SAR, on the optionee’s or grantee’s making satisfactory
arrangements for such withholding.  Such
arrangements may include payment by the optionee or grantee in cash or by check
of the amount of the withholding taxes or, at the discretion of the Committee,
by the optionee’s or grantee’s delivery of previously held shares of Common
Stock or the withholding from the shares of Common Stock otherwise deliverable
upon exercise of a Option or SAR shares having an aggregate fair market value
equal to the amount of such withholding taxes.

 

12. Governmental
Regulation.  The Company’s obligation
to sell and deliver shares of the Common Stock under this Plan is subject to
the approval of any governmental authority required in connection with the
authorization, issuance or sale of such shares. 
Government regulations may impose reporting or other obligations on the
Company with respect to the Plan.  For
example, the Company may be required to send tax information statements to
employees and former employees that exercise ISOs under the Plan, and the
Company may be required to file tax information returns reporting the income
received by optionees in connection with the Plan.

 

13.    Governing Law.  The validity and construction of the Plan and
the instruments evidencing Stock Rights shall be governed by the laws of
Delaware, or the laws of any jurisdiction in which the Company or its
successors in interest may be organized.

 

14.    Code Section 409A.  To the extent applicable, it is intended that
this Plan and any Stock Rights granted hereunder comply with, and should be
interpreted consistent with, the requirements of Section 409A of the Code
and any related regulations or other guidance promulgated thereunder by the
U.S. Department of the Treasury or the Internal Revenue Service.

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