Document:

Exhibit 10.9

    Exhibit
      10.9

    

    EXECUTIVE
      EMPLOYMENT AGREEMENT

    

     

    THIS
      EMPLOYMENT AGREEMENT (the "Employment Agreement") is made and entered into
      as of
      the

    

    15th
      day of
      December, 2005 (the "Commencement Date"), by and between

    

    Execute
      Sports, Inc. (the "Company"), and

    

    Todd
      M.
      Pitcher, an individual ("Employee")

    .

    WITNESSETH:
      WHEREAS, the Company under the name Execute Sports, Inc. (such activities,
      together with all other activities of the Company and its subsidiaries, if
      any,
      as conducted at or prior to the termination of this Employment Agreement, and
      any future activities reasonably related thereto which are contemplated by
      the
      Company and/or its subsidiaries at the termination of this Employment Agreement
      identified in writing by the Company to Employee at the date of such
      termination, are hereinafter referred to as the "Business
      Activities");

    

    WHEREAS,
      the Company desires to employ Employee upon the terms and subject to the terms
      and conditions set forth in this Agreement.

    

    NOW,
      THEREFORE, in consideration of the premises, the mutual promises, covenants
      and
      conditions herein contained and for other good and valuable considerations,
      the
      receipt and sufficiency of which are hereby acknowledged, the parties hereto
      intending to be legally bound hereby agree as follows:

    

    EMPLOYMENT.
      The Company hereby employs Employee, and Employee hereby accepts employment
      with
      the Company, all upon the terms and subject to the conditions set forth in
      this
      Employment Agreement.

    

    TERM
      OF
      EMPLOYMENT. The
      term
      of employment of Employee by the Company pursuant to this Employment Agreement
      shall be for the period (the "Employment Period") commencing on the Commencement
      Date and ending on the two year anniversary of the Commencement Date, or such
      earlier date that Employee's employment is terminated in accordance with the
      provisions of this Employment Agreement; provided however, that the Employment
      Period shall automatically be extended for a successive one year period, with
      Employee's written consent, unless the Company gives Employee thirty (30) days
      written notice prior to the end of such year that it does not intend to extend
      the term of the Employment Period.

    

    CAPACITY
      AND DUTIES. Employee is and shall be employed in the capacity of President
      and
      Secretary of the Company and its subsidiaries and shall have such other duties,
      responsibilities and authorities as are assigned to him by the Board of
      Directors so long as such additional duties, responsibilities and authorities
      are consistent with Employee's position and level of authority as President
      and
      Secretary of the Company. Subject to the advice and general directions of the
      Board of Directors, and except as otherwise herein provided, Employee shall
      devote substantially all of his business time, best efforts and attention to
      promote and advance the business of the Company and its subsidiaries and to
      perform diligently and faithfully all the duties, responsibilities and
      obligations of Employee to be performed by him under this Employment Agreement.
      

     

    PLACE
      OF
      EMPLOYMENT. Employee's principal place of work shall be the corporate
      headquarters of the Company, currently located in San Clemente, California
      provided that the location of the Company and its offices may be moved from
      time
      to time in the discretion of the Board of Directors. 

    

    COMPENSATION.
      During the Employment Period, subject to all the terms and conditions of this
      Employment Agreement and as compensation for all services to be rendered by
      Employee under this Employment Agreement, the Company shall pay to or provide
      Employee with the following:

    

    1. Base
      Salary. The Company shall pay to employee a base annual salary at the rate
      of
      Seventy Two Thousand ($72,000.00) dollars per annum, and any extensions thereof,
      payable at such intervals (at least monthly) as salaries are paid generally
      to
      other employees of the Company. At each anniversary date, the Compensation
      Committee shall review employee salary and performance. 

    

    2.
       Stock
      Option. Effective upon the Commencement Date, Employee will be granted options
      to purchase up to three-hundred thousand (300,000) shares at an exercise price
      of $.35 per share; such options will vest ratably, at a rate of 1/24th
      per
      month provided that Employee is employed on each vesting date and will be fully
      vested twenty-four (24) months from the date of grant provided that Employee
      has
      been continuously employed for the entire twenty four months. In the event
      of an
      Approved Transaction or Control Purchase of Execute Sports, Inc., Employee
      will
      have the right to have the options vest immediately, both upon the closing
      of
      such a Transaction or Purchase. At the end of six months of employment, employee
      will be granted an additional option on one-hundred thousand (100,000) shares
      at
      an exercise price of $.35 per share under the same terms as initial grant,
      with
      vesting period beginning starting in the seventh month of employment at a rate
      of 1/24th
      per
      month. At the end of twelve months of employment, employee will be granted
      an
      additional option on one-hundred thousand (100,000) shares at an exercise price
      of $.35 per share under the same terms as initial grant, with vesting period
      beginning starting in the thirteenth month of employment at a rate of
      1/24th
      per
      month. 

    

     

    "Clawback. 
      If Employee engages in conduct which constitutes a basis for termination WITH
      CAUSE (see definition below) by the Company, Employee agrees that any stock
      options granted by the Company shall be rescinded and, upon demand by the
      Company, shall be confirmed as having been rescinded.  Employee and the
      Company agree that this provision is subject to specific performance and gives
      rise to injunctive relief."  

     

    

     

    3.
       Bonus.
      The Company shall implement a performance-driven bonus structure for employee
      based on a percentage of employee’s base salary, which will be determined upon
      board review and recommendation by the Compensation Committee no later than
      ten
      (10) business days after the conclusion of each full year of employment.
      Employee will be responsible for providing the Board of Directors and
      Compensation Committee with a pro forma budget and accompanying projections
      for
      the Board’s review and approval, whereupon the said approved budget and
      projections shall serve as the basis for the “Cost Control and Budgeting”
component of employee’s bonus review structure. 

    

    The
      Company and the employee understand that any extraordinary adjustments to the
      said approved budget and projections resulting from a directive and/or
      resolution from the Board (e.g., such as an increase in expenditures in one
      category or another of the Company’s G&A and/or Operating Expenses) shall be
      reasonably taken into consideration when evaluating employee’s annual
      performance, and in particular, to the employee’s performance as it relates to
      the initial budget and projections set forth by the employee and agreed to
      in
      writing by the Board and incorporated into the Company’s minutes. The Company
      agrees not to unreasonably judge employee’s performance based on circumstances
      beyond employee’s direct control. In turn, employee and Company hereby agree
      that the conclusion as to the employee’s performance and as a direct consequence
      of that conclusion, to the employee’s bonus, shall be made at the Board’s sole
      discretion. The bonus structure is outlined as follows: 

    

    (a)
       Year
      1:
      10% (threshold) / 15% (target) / 30% (outstanding) of base salary

    (b)
       Year
      2:
      12.5% (threshold) / 25% (target) / 50% (outstanding) of base salary

    
      	
              (c
                ) 

            	
              Performance
                Factors and Weighting. Employee’s performance will be weighted and based
                upon certain metrics/benchmarks. In Year 1, the benchmarks and associated
                weighting will include:

            

    

    

    (i)
      Cost
      Control and Budgeting (50%) - Continuous improvement in cost management through
      effective accounting controls and financial management techniques; ensure
      efficient and effective cash management; ensure that financial data is recorded
      accurately and timely in accordance with applicable accounting principles and
      other standards and that financial reports are accurate, timely and reliable;
      ensure quality budget formulation and effective budget execution. 

    (ii)
      Administrative and Regulatory Compliance (35%), Workforce management; planning
      and implementation of SOX policies; 

    (iii)
      Business Analytics and Strategic Planning (15%) - Understanding and mapping
      key
      metrics and performance trends; improvement of core financial processes;
      implementation and oversight of CRM and related programs; financial modeling
      and
      analysis of market opportunities. 

    

    So,
      for
      example, if at after the completion of one year of employment and service to
      the
      Company, the Board determines that employee performed in an Outstanding Capacity
      with respect to Cost Control and Budgeting (30% of 50%), and in an Outstanding
      Capacity in terms of Administrative and Regulatory Compliance (30% of 35%)
      and
      in a Target Capacity in terms of Business Analytics and Strategic Planning
      (15%
      of 15%), then the weighted average would be 27.75%. In which case, employee
      would, in this case, receive a bonus of 27.75% of his annual salary, or
      $19,980.00. 

    

    4. Vacation
      and Other Benefits. 

    (a)
       Employee
      shall be entitled to Two (2) weeks vacation during the first year of employment.
      Employee shall be entitled to three (3) weeks vacation during the second year
      of
      employment. Vacation days not used during the calendar year may not be carried
      into subsequent years. 

    (b)
       Health
      Plan. Company shall underwrite a mutually agreed upon health benefits plan
      for
      Employee that Employee is responsible for administrating. 

    

    EXPENSES.
      The Company shall reimburse Employee for all reasonable, ordinary and necessary
      expenses including, but not limited to, automobile and other business travel
      and
      customer entertainment expenses (no prior approval from direct report required
      up to $500 per month) incurred by him in connection with his employment
      hereunder in accordance with the written policy and guidelines established
      by
      the Company for employee reimbursement, provided, however, Employee shall render
      to the Company a complete and accurate accounting of all such expenses in
      accordance with the substantiation requirements of the Internal Revenue Code,
      as
      amended (the "Code"), as a condition precedent to such reimbursement.

     

    ADHERENCE
      TO STANDARDS. Employee shall comply with the written policies, standards, rules
      and regulations of the Company from time to time established for all executive
      officers of the Company consistent with Employee's position and level of
      authority.

     

    REVIEW
      OF
      PERFORMANCE. The Board of Directors shall periodically review and evaluate
      the
      performance of Employee under this Employment Agreement with
      Employee.

    

    TERMINATION
      WITH CAUSE BY THE COMPANY. This Employment Agreement may be terminated with
      Cause (as hereinafter defined) by the Company provided that the Company
      shall:

    

    1. Give
      Employee the Notice of Termination (as hereinafter defined) and 

    

    2. Pay
      Employee his annual base salary through the Date of Termination (as hereinafter
      defined) at the rate in effect at the time the Notice of Termination is given
      plus any bonus or incentive compensation which has been earned or has become
      payable pursuant to the terms of any compensation or benefit plan as of the
      Date
      of Termination, but which have not yet been paid.

    

    TERMINATION
      WITHOUT CAUSE BY THE COMPANY OR FOR GOOD REASON BY EMPLOYEE. This Employment
      Agreement may be terminated by the Company:

    

    1. At
      the
      end of the Term of Employment, 

    

    2. During
      the Term of Employment without cause as hereinafter defined, or 

    

    3. By
      reason
      of death or Disability (as hereinafter defined) provided that the Company shall
      continue to pay to Employee (or the estate of Employee in the event of
      termination due to the death of employee) the compensation and other benefits
      described in the Section entitled Compensation of this Employment Agreement,
      except for annual cash bonuses or incentive compensation for six (6) months
      from
      the Date of Termination. Employee's right to terminate his employment for Good
      Reason shall not be affected by his incapacity due to physical or mental
      illness. In the event of termination by the Company by reason of Employee's
      death or Disability, medical, hospitalization or disability benefits coverage
      comparable to that provided by the Company during Employee's lifetime shall
      be
      provided to Employee, his spouse and dependents for six (6) months from the
      Date
      of Termination, and for six (6) months from the Date of Termination with respect
      to medical and hospitalization benefits for the Employee and his family. The
      benefits provided under this Section shall be no less favorable to Employee
      in
      terms of amounts, deductibles and costs to him, if any, than such benefits
      provided by the Company to him and shall not be interpreted so as to limit
      any
      benefits to which Employee, as a terminated employee of the Company, or his
      family may be entitled under the Company's life insurance, medical,
      hospitalization or disability plans following his Date of Termination or under
      applicable law.

    

    In
      the
      event of Termination by the Employee for Good Reason, the Company shall continue
      to pay to Employee the compensation and other benefits described in the Section
      entitled Compensation of this Employment Agreement, except for annual cash
      bonuses or incentive compensation for two (2) months from the Date of
      Termination, and shall continue to provide medical, hospitalization or
      disability benefits coverage to Employee, his spouse and dependents for two (2)
      months from the Date of Termination.

    

    In
      the
      event that within a period of one (1) year(s) of a Change in Control (as
      hereinafter defined), this Employment Agreement is terminated by the Company
      for
      any reason other than for cause (or the Company gives notice that it is not
      renewing the Employment Agreement pursuant to the Section entitled Term Of
      Employment), the Company shall continue to pay to Employee the compensation
      and
      other benefits described in the Section entitled Compensation of this Employment
      Agreement, except for annual cash bonuses or incentive compensation for six
      (6)
      months from the Date of Termination.

    

    DEFINITIONS.
      In addition to the words and terms elsewhere defined in this Employment
      Agreement, certain capitalized words and terms used in this Employment Agreement
      shall have the meanings given to them by the definitions and descriptions in
      this Section entitled Definitions unless the context or use indicates another
      or
      different meaning or intent, and such definition shall be equally applicable
      to
      both the singular and plural forms of any of the capitalized words and terms
      herein defined. The following words and terms are defined terms under this
      Employment Agreement:

    

    1. "Disability"
      shall mean a physical or mental illness which, in the judgment of the Company
      after consultation with the licensed physician attending Employee, impairs
      Employee's ability to substantially perform his duties under this Employment
      Agreement as an employee and as a result of which he shall have been absent
      from
      his duties with the Company on a full-time basis for one (1) entire
      month.

    

    2. A
      termination with "Cause" shall mean a termination of this Employment Agreement
      by reason of a good faith determination by the Board that Employee:

    (a) Failed
      to
      substantially perform his duties with this Company (other than a failure
      resulting from his incapacity due to physical or mental illness) after a written
      demand for substantial performance has been delivered to him by the Board,
      which
      demand specifically identifies the manner in which the Board believes he has
      not
      substantially performed his duties;

    (b) Has
      engaged in conduct the consequences of which are materially adverse to the
      Company, monetarily or otherwise; or

    (c) Has
      materially breached the terms of this Employment Agreement. No act, or failure
      to act, on Employee's part shall be grounds for termination with Cause unless
      he
      has acted or failed to act with an absence of good faith or without a reasonable
      belief that his action or failure to act was in or at least not opposed to
      the
      best interests of the Company. Employee shall not be deemed to have been
      terminated with cause unless there shall have been delivered to Employee a
      letter setting forth the reasons for the Company's termination of the Employee
      with cause.

    

    3. "Good
      Reason" shall mean the occurrence of any of the following events without
      Employee's prior express written consent:

    (a) Any
      material change in Employee's status, title, authorities or responsibilities
      under this Employment Agreement which represents a demotion from such status,
      title, position or responsibilities which are materially inconsistent with
      his
      status, title, position or work responsibilities set forth in this Employment
      Agreement, or any removal of Employee from, or failure to appoint, elect,
      reappoint or reelect Employee to, any of such positions, except in connection
      with the termination of his employment with Cause, or as a result of his death
      or Disability, provided, however, that no change in title, authorities or
      responsibilities customarily attributable solely to the Company ceasing to
      be a
      publicly traded corporation shall constitute Good Reason hereunder;

    (b) The
      failure by the Company to continue in effect any incentive, bonus or other
      compensation plan in which Employee participates, unless an equitable
      arrangement (embodied in an ongoing substitute or alternative plan) has been
      made with respect to the failure to continue such plan, or the failure by the
      Company to continue Employee's participation therein, or any action by the
      Company which would directly or indirectly materially reduce his participation
      therein or reward opportunities thereunder; provided, however, that Employee
      continues to meet all eligibility requirements thereof;

    (c) The
      failure by the Company to continue in effect any employee benefit plan
      (including any medical, hospitalization, life insurance or disability benefit
      plan in which Employee participates), or any material fringe benefit or
      prerequisite enjoyed by him unless an equitable arrangement (embodied in an
      ongoing substitute or alternative plan) has been made with respect to the
      failure to continue such plan, or the failure by the Company to continue
      Employee's participation therein, or any action by the Company which would
      directly or indirectly materially reduce his participation therein or reward
      opportunities thereunder, or the failure by the Company to provide him with
      the
      benefits to which he is entitled under this Employment Agreement; provided,
      however, that Employee continues to meet all eligibility requirements
      thereof;

    (d) Any
      other
      material breach by the Company of any provision of this Employment
      Agreement;

    (e) The
      failure of the Company to obtain a satisfactory agreement from any successor
      or
      assign of the Company to assume and agree to perform this Employment Agreement,
      as contemplated in the Section entitled Indemnification Agreement
      hereof;

    (f) Any
      purported termination of employee's employment which is not effected pursuant
      to
      a Notice of Termination satisfying the requirements of this Employment
      Agreement; and for purposes of this Employment Agreement, no such purported
      termination shall be effective; or

    (g) Any
      Change of Control (as defined herein) of the Company.

    

    4. Change
      of
      Control. "Change of Control" shall be deemed to have occurred when:

    (a) Securities
      of the Company representing 50% or more of the combined voting power of the
      Company's then outstanding voting securities are acquired pursuant to a tender
      offer or an exchange offer by a person or entity which is not a wholly-owned
      subsidiary of the Company or any of its affiliates;

    (b) A
      merger
      or consolidation is consummated in which the Company is a constituent
      corporation and which results in less than 50% of the outstanding voting
      securities of the surviving or resulting entity being owned by the then existing
      stockholders of the Company; 

    (c) A
      sale is
      consummated by the Company of substantially all of the Company's assets to
      a
      person or entity which is not a wholly-owned subsidiary of the Company or any
      of
      its affiliates; or

    (d) During
      any period of two consecutive years, individuals who, at the beginning of such
      period, constituted the Board cease, for any reason, to constitute at least
      a
      majority thereof, unless the election or nomination for election for each new
      director was approved by the vote of at least two-thirds of the directors then
      still in office who were directors at the beginning of the period.

    

    5. Notice
      of
      Termination. "Notice of Termination" shall mean a written notice which shall
      indicate the specified termination provision in this Employment Agreement relied
      upon and shall set forth in reasonable detail the facts and circumstances
      claimed to provide a basis for termination of Employee's employment under the
      provision so indicated; provided, however, no such purported termination shall
      be effective without such Notice of Termination; provided further, however,
      any
      purported termination by the Company or by Employee shall be communicated by
      a
      Notice of Termination to the other party hereto in accordance with the Section
      entitled Notices of this Employment Agreement.

    

    6. Date
      of
      Termination. "Date of Termination" shall mean the date specified in the Notice
      of Termination (which, in the case of a termination pursuant to the Section
      entitled Termination Without Cause By The Company Or For Good Reason By Employee
      of this Employment Agreement shall not be less than sixty (60) days, and in
      the
      case of a termination pursuant to this Section, entitled Definitions, of this
      Employment Agreement shall not be more than sixty (60) days, from the date
      such
      Notice of Termination is given); provided, however, that if within thirty (30)
      days after any Notice of Termination is given the party receiving such Notice
      of
      Termination notifies the other party that a dispute exists concerning the
      termination, the Date of Termination shall be the date finally determined by
      either mutual written agreement of the parties or by the final judgment, order
      or decree of a court of competent jurisdiction (the time for appeal therefrom
      having expired and no appeal having been taken).

    

    FEES
      AND
      EXPENSES. The Company shall pay all legal fees and related expenses (including
      the costs of experts, evidence and counsel) incurred by Employee as a result
      of
      a contest or dispute over Employee's termination of employment only if such
      contest or dispute is resolved in Employee's favor.

    

    NOTICES.
      For the purposes of this Employment Agreement, notices and all other
      communications provided for in the Employment Agreement shall be in writing
      and
      shall be deemed to have been duly given when personally delivered or sent by
      certified mail, return receipt requested, postage prepaid, or by expedited
      (overnight) courier with established national reputation, shipping prepaid
      or
      billed to sender, in either case addressed to the respective addresses last
      given by each party to the other (provided that all notices to the Company
      shall
      be directed to the attention of the Chairman with a copy to the Secretary of
      the
      Company) or to such other address as either party may have furnished to the
      other in writing in accordance herewith. All notices and communication shall
      be
      deemed to have been received on the date of delivery thereof, or on the second
      day after deposit thereof with an expedited courier service, except that notice
      of change of address shall be effective only upon receipt. 

    

    ཉ Company
      at: 1284
      Puerta del Sol

    Suite
      150

    San
      Clemente, CA 

    92673

    

    ཉ Employee
      at:  3435
      Aldford Drive 

    San
      Diego, CA 92111

    

    LIFE
      INSURANCE. The Company may, at any time after the execution of this Employment
      Agreement, apply for and procure as owner and for its own benefit, life
      insurance on Employee, in such amounts and in such form or forms as the Company
      may determine. Employee shall, at the request of the Company, submit to such
      medical examinations, supply such information, and execute such documents as
      may
      be required by the insurance company or companies to whom the Company has
      applied for such insurance. Employee hereby represents that to his knowledge
      he
      is in excellent physical and mental condition and is not under the influence
      of
      alcohol, drugs or similar substance.

    

    PRIOR
      EMPLOYMENT AGREEMENTS. Employee represents and warrants that Employee's
      performance of all the terms of this Employment Agreement and as an employee
      of
      the Company does not, and will not, breach any employment agreement, arrangement
      or understanding or any agreement, arrangement or understanding to keep in
      confidence proprietary information acquired by Employee in confidence or in
      trust prior to Employee's employment by the Company. Employee has not entered
      into, and shall not enter into, any agreement, arrangement or understanding,
      either written or oral, which is in conflict with this Employment Agreement
      or
      which would be violated by Employee entering into, or carrying out his
      obligations under, this Employment Agreement.

    

    PROPRIETARY
      INFORMATION AND INVENTIONS. Employee understands and acknowledges
      that:

    

    1. During
      the term of the Employee's employment under this Agreement, the Employee shall
      not, directly or indirectly, engage or be interested (as a stockholder,
      director, officer, employee, salesperson, agent, broker, partner, individual
      proprietor, lender, consultant, or otherwise), either individually or in or
      through any person (whether a corporation, partnership, association, or other
      entity) which engages, anywhere in the United States, in a business which is
      conducted by or competitive to the Company on the date of termination of his/her
      employment, except that he/she may be employed by an affiliate of the Company
      and hold not more than 2% of the outstanding securities of any class of any
      publicly held company which is competitive with the business of the
      Company.

    

    2. The
      Employee shall not, directly or indirectly, either during the term of the
      Employee's employment under this Agreement or thereafter, disclose to anyone
      (except in the regular course of the Company's business or as required by law),
      or use in any manner, any information acquired by the Employee during his/her
      employment by the Company with respect to any clients or customers of the
      Company or any confidential or secret aspect of the Company's operations or
      affairs unless such information has become public knowledge other than by reason
      of actions, direct or indirect, of the Employee. Information subject to the
      provisions of this paragraph shall include, without limitation:

    

    (a)
      Procedures for computer access and passwords of the Company's clients and
      customers, program manuals, user manuals, or other documentation, run books,
      screen, file, or database layouts, systems flowcharts, and all documentation
      normally related to the design or implementation of any computer programs
      developed by the Company relating to computer programs or systems installed
      either for customers or for internal use;

    (b)
      Lists
      of present clients and customers and the names of individuals at each client
      or
      customer location with whom the Company deals, the type of equipment or computer
      software they purchase or use, and information relating to those clients and
      customers which has been given to the Company by them or developed by the
      Company, relating to computer programs or systems installed;

    (c)
      Lists
      of or information about personnel seeking employment with or who are employed
      by
      the Company;

    (d)
      Prospect lists for actual or potential clients and customers of the Company
      and
      contact persons at such actual or potential clients and customers;

    (e)
      Any
      other information relating to the Company's research, development, inventions,
      purchasing, engineering, marketing, merchandising, and selling.

    

    3. The
      Employee shall not, directly or indirectly, either during the term of the
      Employee's employment under this Agreement or for a period of one (1) year
      thereafter or for six (6) months following the Termination Date if this
      Employment Agreement is terminated by the Company other than with Cause or
      by
      the Employee for Good Reason;

    (a)
      Solicit, directly or indirectly, the services of any person who was a full-time
      employee of the Company, its subsidiaries, divisions, or affiliates, or solicit
      the business of any person who was a client or customer of the Company, its
      subsidiaries, divisions, or affiliates, in each case at any time during the
      past
      year of the term of the Employee's employment under this Agreement. For purposes
      of this Agreement, the term "person" shall include natural persons,
      corporations, business trusts, associations, sole proprietorships,
      unincorporated organizations, partnerships, joint ventures, and governments,
      or
      any agencies, instrumentalities, or political subdivisions thereof.

    (b)
      Induce employees of the Company to terminate their employment with the Company
      or engage in any Competitive Business in the United States; provided, however,
      that the ownership of the outstanding capital stock of a corporation whose
      shares are traded on a national securities exchange or on the over-the-counter
      market or the ownership and/or operation of a franchise under a franchise
      agreement with the Company shall not be deemed engaging any Competitive
      Business. "Competitive Business" shall mean any other business that is the
      same
      as or similar to the Company concept as it exists on the date of this Employment
      Agreement or on the Termination Date.

    

    4. All
      memoranda, notes, records, or other documents made or composed by the Employee,
      or made available to him during the term of this Agreement concerning or in
      any
      way relating to the business or affairs of the Company, its subsidiaries,
      divisions, affiliates, or clients shall be the Company's property and shall
      be
      delivered to the Company on the termination of this Agreement or at any other
      time at the request of the Company.

    

    5. During
      the employment period: 

    (a)
      The
      Employee hereby assigns and agrees to assign to the Company all his rights
      to
      and title and interest to all Inventions, and to applications for United States
      and foreign patents and United States and foreign patents granted upon such
      Inventions and to all copyrightable material or other works related
      thereto.

    (b)
      The
      Employee agrees for himself and his heirs, personal representatives, successors,
      and assigns, upon request of the Company, to at all times do such acts, such
      as
      giving testimony in support of the Employee's inventorship, and to execute
      and
      deliver promptly to the Company such papers, instruments, and documents, without
      expense to him, as from time to time may be necessary or useful in the Company's
      opinion to apply for, secure, maintain, reissue, extend, or defend the Company's
      worldwide rights in the Inventions or in any or all United States patents and
      in
      any or all patents in any country foreign to the United States, so as to secure
      to the Company the full benefits of the Inventions or discoveries and otherwise
      to carry into full force and effect the text and the intent of the assignment
      set out in this Section, Proprietary Information And Inventions.

    (c)
      Notwithstanding any provision of this Agreement to the contrary, the Company
      shall have the royalty-free right to use in its business, and to make, have
      made, use, and sell products, processes, and services to make, have made, use,
      and sell products, processes, and services derived from any inventions,
      discoveries, concepts, and ideas, whether or not patentable, including, but
      not
      limited to, processes, methods, formulas, and techniques, as well as
      improvements thereof and know-how related thereto, that are not inventions
      as
      defined herein, but which are made or conceived by the Employee during his
      employment by the Company or with the use or assistance of the Company's
      facilities, materials, or personnel. If the Company determines that it has
      no
      present or future interest in any invention or discovery made by the Employee
      under this paragraph, the Company shall release such invention or discovery
      to
      the Employee within Sixty (60) days after the Employee's notice in writing
      is
      received by the Company requesting such release. If the Company determines
      that
      it does or may in the future have an interest in any such invention or
      discovery, such information will be communicated to the Employee within the
      60-day period described above.

    (d)
      For
      purposes of this Section, Proprietary Information And Inventions, "Inventions"
      means inventions, discoveries, concepts, and ideas, whether patentable or not,
      including, but not limited to, processes, methods, formulas, and techniques,
      as
      well as improvements thereof or know-how related thereto, concerning any present
      or prospective activities of the Company with which the Employee becomes
      acquainted as a result of her employment by the Company.

    

    6. The
      Employee acknowledges that the agreements provided in this Section, Proprietary
      Information And Inventions, were an inducement to the Company entering into
      this
      Agreement and that the remedy at law for breach of Employee's covenants under
      this Section, Proprietary Information And Inventions, will be inadequate and,
      accordingly, in the event of any breach or threatened breach by the Employee
      of
      any provision of this Section, Proprietary Information And Inventions, the
      Company shall be entitled, in addition to all other remedies, to an injunction
      restraining any such breach.

    

    TRUST.
      Employee's employment creates a relationship of confidence and trust between
      Employee and the Company with respect to certain information applicable to
      the
      business of the Company, its subsidiaries, if any, (collectively, the "Group")
      or applicable to the business of any franchisee, vendor or customer of any
      of
      the Group, which may be made known to Employee by the Group or by any
      franchisee, vendor or customer of any of the Group or learned by Employee during
      the employment Period.

    

    REMEDIES.
      Employee acknowledges and agrees that the Company's remedy at law for a breach
      or a threatened breach of the provisions herein would be inadequate, and in
      recognition of this Fact, in the event of a breach or threatened breach by
      Employee of any of the provisions of this Employment Agreement, it is agreed
      that the Company shall be entitled to, equitable relief in the form of specific
      performance, a temporary restraining order, a temporary or permanent injunction
      or any other equitable remedy which may then be available, without posting
      bond
      or other security. Employee acknowledges that the granting of a temporary
      injunction, a temporary restraining order or other permanent injunction merely
      prohibiting Employee from engaging in any Business Activities would not be
      an
      adequate remedy upon breach or threatened breach of this Employment Agreement,
      and consequently agrees upon any such breach or threatened breach to the
      granting of injunctive relief prohibiting Employee from engaging in any
      activities prohibited by this Employment Agreement. No remedy herein conferred
      is intended to be exclusive of any other remedy, and each and every such remedy
      shall be cumulative and shall be in addition to any other remedy given hereunder
      now or hereinafter existing at law or in equity or by statute or
      otherwise.

    

    INDEMNIFICATION
      AGREEMENT. Upon the execution of this Employment Agreement, the Company and
      employee shall each execute and deliver to the other an Indemnification
      Agreement dated as of the date hereof.

    

    BINDING
      EFFECT. This Employment Agreement shall inure to the benefit of and be
      enforceable by Employee's personal and legal representatives, executors,
      administrators, successors, heirs, distributees, devisees and legatees. If
      Employee should die while any amounts would still be payable to him hereunder
      if
      he had continued to live, all such amounts, unless otherwise provided herein,
      shall be paid in accordance with the terms of this Employment Agreement to
      Employee's estate.

    MODIFICATION
      AND WAIVER. No provision of this Employment Agreement may be modified, waived
      or
      discharged unless such waiver, modification or discharge is agreed to in writing
      and signed by Employee and such officer as may be specifically designated by
      the
      Board. No waiver by either party hereto at any time of any breach by the other
      party hereto of, or compliance with, any condition or provision of this
      Employment Agreement to be performed by such other party shall be deemed a
      waiver of similar or dissimilar provisions or conditions at the same or at
      any
      prior or subsequent time.

    

    HEADINGS.
      Headings used in this Agreement are for convenience only and shall not be used
      to interpret or construe its provisions.

    

    WAIVER
      OF
      BREACH. The waiver of either the Company or Employee of a breach of any
      provision of this Employment Agreement shall not operate or be construed as
      a
      waiver of any subsequent breach by either the Company or Employee.

    

    AMENDMENTS.
      No amendments or variations of the terms and conditions of this Employment
      Agreement shall be valid unless the same is in writing and signed by all of
      the
      parties hereto.

    

    SEVERABILITY.
      The invalidity or unenforceability of any provision of this Employment
      Agreement, whether in whole or in part, shall not in any way affect the validity
      and/or enforceability of any other provision contained herein. Any invalid
      or
      unenforceable provision shall be deemed severable to the extent of any such
      invalidity or unenforceability. It is expressly understood and agreed that
      while
      the Company and Employee consider the restrictions contained in this Employment
      Agreement reasonable for the purpose of preserving for the Company the good
      will, other proprietary rights and intangible business value of the Company,
      if
      a final judicial determination is made by a court having jurisdiction that
      the
      time or territory or any other restriction contained in this Employment
      Agreement is an unreasonable or otherwise unenforceable restriction against
      Employee, the provisions of such clause shall not be rendered void but shall
      be
      deemed amended to apply as to maximum time and territory and to such other
      extent as such court may judicially determine or indicate to be
      reasonable.

    

    GOVERNING
      LAW. This Employment Agreement shall be construed and enforced pursuant to
      the
      laws of the State of California.

    

    ARBITRATION.
      Any controversy or claim arising out of or relating to this Employment Agreement
      or any transactions provided for herein, or the breach thereof, other than
      a
      claim for injunctive relief shall be settled by arbitration in accordance with
      the commercial Arbitration Rules of the American Arbitration Association (the
      "Rules") in effect at the time demand for arbitration is made by any party.
      The
      evidentiary and procedural rules in such proceedings shall be kept to the
      minimum level of formality that is consistent with the Rules. One arbitrator
      shall be named by the Company, a second shall be named by Employee and the
      third
      arbitrator shall be named by the two arbitrators so chosen. In the event that
      the third arbitrator is not agreed upon, he or she shall be named by the
      American Arbitration Association. Arbitration shall occur in San Diego,
      California or such other location agreed to by the Company and Employee. The
      award made by all or a majority of the panel of arbitrators shall be final
      and
      binding, and judgment may be entered in any court of law having competent
      jurisdiction. The award is subject to confirmation, modification, correction,
      or
      vacation only as explicitly provided in Title 9 of the United States Code.
      The
      prevailing party shall be entitled to an award of pre- and post-award interest
      as well as reasonable attorneys' fees incurred in connection with the
      arbitration and any judicial proceedings related thereto.

    

    EXECUTIVE
      OFFICER STATUS. Employee acknowledges that he may be deemed to be an "executive
      officer" of the Company for purposes of the Securities Act of 1993, as amended
      (the "1933 Act"), and the Securities Exchange Act of 1934, as amended (the
      "1934
      Act") and, if so, he shall comply in all respects with all the rules and
      regulations under the 1933 Act and the 1934 Act applicable to him in a timely
      and non-delinquent manner. In order to assist the Company in complying with
      its
      obligations under the 1933 Act and 1934 Act, Employee shall provide to the
      Company such information about Employee as the Company shall reasonably request
      including, but not limited to, information relating to personal history and
      stockholdings. Employee shall report to the General Counsel of the Company
      or
      other designated officer of the Company all changes in beneficial ownership
      of
      any shares of the Company Common Stock deemed to be beneficially owned by
      Employee and/or any members of Employee's immediate family.

    

    PRONOUNS.
      All pronouns and any variations thereof shall be deemed to refer to the
      masculine, feminine, neuter, singular, or plural, as the identity of the person
      or entity may require. As used in this agreement: (1) words of the masculine
      gender shall mean and include corresponding neuter words or words of the
      feminine gender, (2) words in the singular shall mean and include the plural
      and
      vice versa, and (3) the word "may" gives sole discretion without any obligation
      to take any action.

    

    COUNTERPARTS.
      This Employment Agreement may be executed in one or more counterparts, each
      of
      which shall be deemed to be an original, but all of which together shall
      constitute but one document.

    

    EXHIBITS.
      Any Exhibits attached hereto are incorporated herein by reference and are an
      integral part of this Employment Agreement.

    

    IN
      WITNESS WHEREOF, this Employment Agreement has been duly executed by the Company
      and the Employee as of the date first above written.

    

    Company:
      _____________________________________

    

    Employee:
      _____________________________________  Date:
      ____________ 

    

    Accepted
      by: ___________________________________  

    

    Name/Title:
      ____________________________________ Date:____________EX-10.1

Exhibit 10.1

JUNIPER NETWORKS, INC.

2006 EQUITY INCENTIVE PLAN

Effective May 18, 2006

1. Purposes of the Plan. The purposes of this Equity Incentive Plan are to attract and
retain the best available personnel for positions of substantial responsibility, to provide
additional incentive to Service Providers and Outside Directors and to promote the success of the
Company’s business.

Awards to Service Providers granted hereunder may be Incentive Stock Options, Nonstatutory
Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance
Shares, Performance Units, Deferred Stock Units or Dividend Equivalents, at the discretion of the
Administrator and as reflected in the terms of the written option agreement. This Equity Incentive
Plan also provides for the automatic, non-discretionary award of Nonstatutory Stock Options to
Outside Directors.

2. Definitions. As used herein, the following definitions shall apply:

(a) “Administrator” shall mean the Board or any of its Committees as shall be
administering the Plan, in accordance with Section 4 of the Plan.

(b) “Annual Revenue” shall mean the Company’s or a business unit’s net sales for the
Fiscal Year, determined in accordance with generally accepted accounting principles.

(c) “Applicable Laws” shall mean the legal requirements relating to the administration
of equity incentive plans under California corporate and securities laws and the Code.

(d) “Award” shall mean, individually or collectively, a grant under the Plan of
Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units,
Stock Appreciation Rights, Performance Shares, Performance Units, Deferred Stock Units or Dividend
Equivalents.

(e) “Award Agreement” shall mean the written or electronic agreement setting forth the
terms and provisions applicable to each Award granted under the Plan. The Award Agreement is
subject to the terms and conditions of the Plan.

(f) “Awarded Stock” shall mean the Common Stock subject to an Award.

(g) “Board” shall mean the Board of Directors of the Company.

(h) “Cash Position” shall mean the Company’s level of cash and cash equivalents.

(i) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(j) “Common Stock” shall mean the Common Stock of the Company.

(k) “Committee” shall mean the Committee appointed by the Board of Directors or a
sub-committee appointed by the Board’s designated committee in accordance with Section 4(a) of the
Plan, if one is appointed.

(l) “Company” shall mean Juniper Networks, Inc.

(m) “Consultant” shall mean any person, including an advisor, engaged by the Company
or a Parent or Subsidiary to render services and who is compensated for such services; provided,
however, that the term “Consultant” shall not include Outside Directors, unless such Outside
Directors are compensated for services to the Company other than through payment of director’s fees
and Option grants under Section 11 hereof.

(n) “Continuous Status as a Director” means that the Director relationship is not
interrupted or terminated.

(o) “Deferred Stock Unit” means a deferred stock unit Award granted to a Participant
pursuant to Section 16.

(p) “Director” shall mean a member of the Board.

(q) “Disability” means total and permanent disability as defined in
Section 22(e)(3) of the Code.

(r) “Dividend Equivalent” shall mean a credit, payable in cash, made at the discretion
of the Administrator, to the account of a Participant in an amount equal to the cash dividends paid
on one Share for each Share represented by an Award held by such Participant. Dividend Equivalents
may be subject to the same vesting restrictions as the related Shares subject to an Award, at the
discretion of the Administrator.

(s) “Earnings Per Share” shall mean as to any Fiscal Year, the Company’s or a business
unit’s Net Income, divided by a weighted average number of common shares outstanding and dilutive
common equivalent shares deemed outstanding, determined in accordance with generally accepted
accounting principles.

(t) “Employee” shall mean any person, including Officers and Directors, employed by
the Company or any Parent or Subsidiary of the Company. An Employee shall not cease to be an
Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between
locations of the Company or between the Company, its Parent, any Subsidiary, or any successor. For
purposes of Incentive Stock Options, no such leave may exceed ninety days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of
a leave of absence approved by the Company is not so guaranteed, then three (3) months following
the 91st day of such leave any Incentive Stock Option held by the Participant shall
cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option.

(u) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

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

(i) If the Common Stock is listed on a stock exchange, the fair market value per Share shall
be the closing price on such exchange, as reported in the Wall Street Journal on the date of
determination or, if the date of determination is not a trading day, the immediately preceding
trading day;

(ii) If there is a public market for the Common Stock, the fair market value per Share shall
be the mean of the bid and asked prices, or closing price in the event quotations for the Common
Stock are reported on the National Market System, of the Common Stock on the date of determination,
as reported in the Wall Street Journal (or, if not so reported, as otherwise reported by the
National Association of Securities Dealers Automated Quotation (NASDAQ) System); or

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

(w) “Fiscal Year” shall mean a fiscal year of the Company.

(x) “Incentive Stock Option” shall mean an Option intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code.

(y) “Net Income” shall mean as to any Fiscal Year, the income after taxes of the
Company for the Fiscal Year determined in accordance with generally accepted accounting principles.

(z) “Nonstatutory Stock Option” shall mean an Option not intended to qualify as an
Incentive Stock Option.

(aa) “Officer” shall mean 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.

(bb) “Operating Cash Flow” shall mean the Company’s or a business unit’s sum of Net
Income plus depreciation and amortization less capital expenditures plus changes in working capital
comprised of accounts receivable, inventories, other current assets, trade accounts payable,
accrued expenses, product warranty, advance payments from customers and long-term accrued expenses,
determined in accordance with generally acceptable accounting principles.

(cc) “Operating Income” shall mean the Company’s or a business unit’s income from
operations determined in accordance with generally accepted accounting principles.

	 	 	 
	(dd)

	 	“Option” shall mean a stock option granted pursuant to the Plan.
	
 
	 	 
	(ee)

	 	“Optioned Stock” shall mean the Common Stock subject to an Option.
	
 
	 	 

(ff) “Outside Director” means a Director who is not an Employee or Consultant.

(gg) “Parent” shall mean a “parent corporation”, whether now or hereafter existing, as
defined in Section 424(e) of the Code.

(hh) “Participant” shall mean an Employee or Consultant who receives an Award.

(ii) “Performance Goals” shall mean the goal(s) (or combined goal(s)) determined by
the Committee (in its discretion) to be applicable to a Participant with respect to an Award. As
determined by the Committee, the Performance Goals applicable to an Award may provide for a
targeted level or levels of achievement using one or more of the following measures: (a) Annual
Revenue, (b) Cash Position, (c) Earnings Per Share, (d) Net Income, (e) Operating Cash Flow,
(f) Operating Income, (g) Return on Assets, (h) Return on Equity, (i) Return on Sales, and
(j) Total Stockholder Return. The Performance Goals may differ from Participant to Participant and
from Award to Award. The Administrator shall appropriately adjust any evaluation of performance
under a Performance Goal to exclude (i) any extraordinary non-recurring items as described in
Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of
financial conditions and results of operations appearing in the Company’s annual report to
shareholders for the applicable year, or (ii) the effect of any changes in accounting principles
affecting the Company’s or a business units’ reported results.

(jj) “Performance Share” shall mean a performance share Award granted to a Participant
pursuant to Section 14.

(kk) “Performance Unit” means a performance unit Award granted to a Participant
pursuant to Section 15.

(ll) “Plan” shall mean this 1986 Equity Incentive Plan, as amended.

(mm) “Restricted Stock” shall mean a restricted stock Award granted to a Participant
pursuant to Section 11.

(nn) “Restricted Stock Unit” shall mean a bookkeeping entry representing an amount
equal to the Fair Market Value of one Share, granted pursuant to Section 13. Each Restricted Stock
Unit represents an unfunded and unsecured obligation of the Company.

(oo) “Return on Assets” shall mean the percentage equal to the Company’s or a business
unit’s Operating Income before incentive compensation, divided by average net Company or business
unit, as applicable, assets, determined in accordance with generally accepted accounting
principles.

(pp) “Return on Equity” shall mean the percentage equal to the Company’s Net Income
divided by average shareholder’s equity, determined in accordance with generally accepted
accounting principles.

(qq) “Return on Sales” shall mean the percentage equal to the Company’s or a business
unit’s Operating Income before incentive compensation, divided by the Company’s or the business
unit’s, as applicable, revenue, determined in accordance with generally accepted accounting
principles.

(rr) “Rule 16b-3” shall mean Rule 16b-3 of the Exchange Act or any successor to Rule
16b-3, as in effect when discretion is being exercised with respect to the Plan.

	 	 	 
	(ss)

	 	“Section 16(b)” shall mean Section 16(b) of the Exchange Act.
	
 
	 	 
	(tt)

	 	“Service Provider” means an Employee or Consultant.
	
 
	 	 

(uu) “Share” shall mean a share of the Common Stock, as adjusted in accordance with
Section 21 of the Plan.

(vv) “Stock Appreciation Right” or “SAR” shall mean a stock appreciation right granted
pursuant to Section 9 below.

(ww) “Subsidiary” shall mean a “subsidiary corporation”, whether now or hereafter
existing, as defined in Section 424(f) of the Code.

(xx) “Total Stockholder Return” shall mean the total return (change in share price
plus reinvestment of any dividends) of a share of the Company’s common stock.

3. Stock Subject to the Plan. Subject to the provisions of Section 21 of the Plan, the
maximum aggregate number of shares which may be optioned and sold under the Plan is 64,500,000
shares of Common Stock plus any Shares subject to any options under the Company’s 2000 Nonstatutory
Stock Option Plan and 1996 Stock Incentive Plan that are outstanding on the date this Plan becomes
effective and that subsequently expire unexercised, up to a maximum of an additional 75,000,000
Shares. All of the shares issuable under the Plan may be authorized, but unissued, or reacquired
Common Stock.

Any Shares subject to Options or SARs shall be counted against the numerical limits of this
Section 3 as one Share for every Share subject thereto. Any Shares subject to Performance Shares,
Restricted Stock or Restricted Stock Units with a per share or unit purchase price lower than 100%
of Fair Market Value on the date of grant shall be counted against the numerical limits of this
Section 3 as two and one-tenth Shares for every one Share subject thereto. To the extent that a
Share that was subject to an Award that counted as two and one-tenth Shares against the Plan
reserve pursuant to the preceding sentence is recycled back into the Plan under the next paragraph
of this Section 3, the Plan shall be credited with two and one-tenth Shares.

If an Award expires or becomes unexercisable without having been exercised in full, or, with
respect to Restricted Stock, Performance Shares or Restricted Stock Units, is forfeited to or
repurchased by the Company at its original purchase price due to such Award failing to vest, the
unpurchased Shares (or for Awards other than Options and SARs, the forfeited or repurchased shares)
which were subject thereto shall become available for future grant or sale under the Plan (unless
the Plan has terminated). With respect to SARs, when an SAR is exercised, the shares subject to a
SAR grant agreement shall be counted against the numerical limits of Section 3 above, as one share
for every share subject thereto, regardless of the number of shares used to settle the SAR upon
exercise (i.e., shares withheld to satisfy the exercise price of an SAR shall not remain available
for issuance under the Plan). Shares that have actually been issued under the Plan under any Award
shall not be returned to the Plan and shall not become available for future distribution under the
Plan; provided, however, that if Shares of Restricted Stock, Performance Shares or Restricted Stock
Units are repurchased by the Company at their original purchase price or are forfeited to the
Company due to such Awards failing to vest, such Shares shall become available for future grant
under the Plan. Shares used to pay the exercise price of an Option shall not become available for
future grant or sale under the Plan. Shares used to satisfy tax withholding obligations shall not
become available for future grant or sale under the Plan. To the extent an Award under the Plan is
paid out in cash rather than stock, such cash payment shall not reduce the number of Shares
available for issuance under the Plan. Any payout of Dividend Equivalents or Performance Units,
because they are payable only in cash, shall not reduce the number of Shares available for issuance
under the Plan. Conversely, any forfeiture of Dividend Equivalents or Performance Units shall not
increase the number of Shares available for issuance under the Plan.

4. Administration of the Plan.

(a) Procedure.

(i) Multiple Administrative Bodies. If permitted by Applicable Laws, the Plan may be
administered by different bodies with respect to Directors, Officers who are not Directors, and
Employees who are neither Directors nor Officers.

(ii) Section 162(m). To the extent that the Administrator 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 Plan shall be administered by a Committee consisting
solely of two or more “outside directors” within the meaning of Section 162(m) of the Code.

(iii) Administration With Respect to Officers Subject to Section 16(b). With respect
to Option grants made to Employees who are also Officers subject to Section 16(b) of the Exchange
Act, the Plan shall be administered by (A) the Board, if the Board may administer the Plan in
compliance with Rule 16b-3, or (B) a committee designated by the Board to administer the Plan,
which committee shall be constituted to comply with Rule 16b-3. Once appointed, such Committee
shall continue to serve in its designated capacity until otherwise directed by the Board. From
time to time the Board may increase the size of the Committee and appoint additional members,
remove members (with or without cause) and substitute new members, fill vacancies (however caused),
and remove all members of the Committee and thereafter directly administer the Plan, all to the
extent permitted by Rule 16b-3.

(iv) Administration With Respect to Other Persons. With respect to Award grants made
to Employees or Consultants who are not Officers of the Company, the Plan shall be administered by
(A) the Board, (B) a committee designated by the Board, or (C) a sub-committee designated by the
designated committee, which committee or sub-committee shall be constituted to satisfy Applicable
Laws. Once appointed, such Committee shall serve in its designated capacity until otherwise
directed by the Board. The Board may increase the size of the Committee and appoint additional
members, remove members (with or without cause) and substitute new members, fill vacancies (however
caused), and remove all members of the Committee and thereafter directly administer the Plan, all
to the extent permitted by Applicable Laws.

(v) Administration With Respect to Automatic Grants to Outside Directors. Automatic
Grants to Outside Directors shall be pursuant to a non-discretionary formula as set forth in
Section 11 hereof and therefore shall not be subject to any discretionary administration.

(b) Powers of the Administrator. Subject to the provisions of the Plan (including the
non-discretionary automatic grant to Outside Director provisions of Section 11), and in the case of
a Committee, subject to the specific duties delegated by the Board to such Committee, the
Administrator shall have the authority, in its discretion:

(i) to determine the Fair Market Value in accordance with Section 2(v) of the Plan;

(ii) to select the Service Providers to whom Awards may be granted hereunder;

(iii) to determine whether and to what extent Awards are granted hereunder;

(iv) to determine the number of shares of Common Stock to be covered by each Award granted
hereunder;

(v) to approve forms of agreement for use under the Plan;

(vi) to determine the terms and conditions, not inconsistent with the terms of the Plan, of
any Award granted hereunder. Such terms and conditions include, but are not limited to, the
exercise price, the time or times when Awards vest or may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture restrictions (subject to
compliance with applicable laws, including Code Section 409A), and any restriction or limitation
regarding any Award or the shares of Common Stock relating thereto, based in each case on such
factors as the Administrator, in its sole discretion, shall determine; provided, however, that
with respect to Restricted Stock, Performance Shares or Restricted Stock Units or Deferred Stock
Units vesting solely based on continuing as a Service Provider, they will vest in full no earlier
(except if accelerated pursuant to Section 21 hereof) than the three (3) year anniversary of the
grant date; provided, further, that if vesting is not solely based on continuing as a Service
Provider, they will vest in full no earlier (except if accelerated pursuant to Section 21 hereof)
than the one (1) year anniversary of the grant date;

(vii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;

(viii) to prescribe, amend and rescind rules and regulations relating to the Plan;

(ix) to modify or amend each Award (subject to Section 7 and Section 24(c) of the Plan);

(x) to authorize any person to execute on behalf of the Company any instrument required to
effect the grant of an Award previously granted by the Administrator;

(xi) to determine the terms and restrictions applicable to Awards;

(xii) to determine whether Awards will be adjusted for Dividend Equivalents and whether such
Dividend Equivalents shall be subject to vesting; and

(xiii) to make all other determinations deemed necessary or advisable for administering the
Plan.

(c) Effect of Administrator’s Decision. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all Participants and any other
holders of any Awards granted under the Plan.

5. Eligibility. Awards may be granted only to Service Providers. Incentive Stock Options
may be granted only to Employees. A Service Provider who has been granted an Award may, if he or
she is otherwise eligible, be granted an additional Award or Awards. Outside Directors may only be
granted Awards as specified in Section 11 hereof.

6. Code Section 162(m) Provisions.

(a) Option and SAR Annual Share Limit. Subject to Section 7 below, no Participant
shall be granted, in any Fiscal Year, Options and Stock Appreciation Rights to purchase more than
2,000,000 Shares; provided, however, that such limit shall be 4,000,000 Shares in the Participant’s
first Fiscal Year of Company service.

(b) Restricted Stock, Performance Share and Restricted Stock Unit Annual Limit. No
Participant shall be granted, in any Fiscal Year, more than 1,000,000 Shares in the aggregate of
the following: (i) Restricted Stock, (ii) Performance Shares, or (iii) Restricted Stock Units;
provided, however, that such limit shall be 2,000,000 Shares in the Participant’s first Fiscal Year
of Company service.

(c) Performance Units Annual Limit. No Participant shall receive Performance Units,
in any Fiscal Year, having an initial value greater than $2,000,000, provided, however, that such
limit shall be $4,000,000 in the Participant’s first Fiscal Year of Company service.

(d) Section 162(m) Performance Restrictions. For purposes of qualifying grants of
Restricted Stock, Performance Shares, Performance Units or Restricted Stock Units as
“performance-based compensation” under Section 162(m) of the Code, the Administrator, in its
discretion, may set restrictions based upon the achievement of Performance Goals. The Performance
Goals shall be set by the Administrator on or before the latest date permissible to enable the
Restricted Stock, Performance Shares, Performance Units or Restricted Stock Units to qualify as
“performance-based compensation” under Section 162(m) of the Code. In granting Restricted Stock,
Performance Shares, Performance Units or Restricted Stock Units which are intended to qualify under
Section 162(m) of the Code, the Administrator shall follow any procedures determined by it from
time to time to be necessary or appropriate to ensure qualification of the Award under
Section 162(m) of the Code (e.g., in determining the Performance Goals).

(e) Changes in Capitalization. The numerical limitations in Sections 6(a) and (b)
shall be adjusted proportionately in connection with any change in the Company’s capitalization as
described in Section 16(a).

7. No Repricing. The exercise price for an Option or SAR may not be reduced without the
consent of the Company’s stockholders. This shall include, without limitation, a repricing of the
Option or SAR as well as an Option or SAR exchange program whereby the Participant agrees to cancel
an existing Option in exchange for an Option, SAR or other Award. If an Option or SAR is cancelled
in the same Fiscal Year in which it was granted (other than in connection with a transaction
described in Section 14), the cancelled Option or SAR as well as any replacement Option or SAR will
be counted against the limits set forth in section 6(a) above.  Moreover, if the exercise price of
an Option or SAR is reduced, the transaction will be treated as a cancellation of the Option or SAR
and the grant of a new Option or SAR.

8. Stock Options.

(a) Type of Option. Each Option shall be designated in the Award Agreement as either
an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such
designations, to the extent that the aggregate Fair Market Value of Shares subject to a
Participant’s incentive stock options granted by the Company, any Parent or Subsidiary, that become
exercisable for the first time during any calendar year (under all plans of the Company or any
Parent or Subsidiary) exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock
Options. For purposes of this Section 8(a), incentive stock options shall be taken into account in
the order in which they were granted, and the Fair Market Value of the Shares shall be determined
as of the time of grant.

(b) Term of Option. The term of each Option shall be stated in the Notice of Grant;
provided, however, that the term shall be seven (7) years from the date of grant or such shorter
term as may be provided in the Notice of Grant. Moreover, in the case of an Incentive Stock Option
granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of stock of the Company
or any Parent or Subsidiary, the term of the Incentive Stock Option shall be five (5) years from
the date of grant or such shorter term as may be provided in the Notice of Grant.

(c) Exercise Price and Consideration.

(i) The per Share exercise price for the Shares to be issued pursuant to exercise of an Option
shall be such price as is determined by the Administrator, but shall be subject to the following:

(A) In the case of an Incentive Stock Option

(1) granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of stock of the Company
or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.

(2) granted to any Employee, the per Share exercise price shall be no less than 100% of the
Fair Market Value per Share on the date of grant.

(B) In the case of a Nonstatutory Stock Option, the per Share exercise price shall be no less
than 100% of the Fair Market Value per Share on the date of grant.

(ii) Except with respect to automatic stock option grants to Outside Directors, the
consideration to be paid for the Shares to be issued upon exercise of an Option, including the
method of payment, shall be determined by the Administrator and may consist entirely of cash;
check;; delivery of a properly executed exercise notice together with such other documentation as
the Committee and the broker, if applicable, shall require to effect an exercise of the option and
delivery to the Company of the sale proceeds required; or any combination of such methods of
payment, or such other consideration and method of payment for the issuance of Shares to the extent
permitted under Applicable Law.

9. Stock Appreciation Rights. 

(a) Grant of SARs. Subject to the terms and conditions of the Plan, SARs may be
granted to Participants at any time and from time to time as shall be determined by the
Administrator, in its sole discretion. Subject to Section 6(a) hereof, the Administrator shall
have complete discretion to determine the number of SARs granted to any Participant.

(b) Exercise Price and other Terms. The per share exercise price for the Shares to be
issued pursuant to exercise of an SAR shall be determined by the Administrator and shall be no less
than 100% of the Fair Market Value per share on the date of grant. Otherwise, subject to Section
6(a) of the Plan, the Administrator, subject to the provisions of the Plan, shall have complete
discretion to determine the terms and conditions of SARs granted under the Plan; provided, however,
that no SAR may have a term of more than seven(=7) years from the date of grant.

(c) Payment of SAR Amount. Upon exercise of a SAR, a Participant shall be entitled to
receive payment from the Company in an amount determined by multiplying:

(i) The difference between the Fair Market Value of a Share on the date of exercise over the
exercise price; times

(ii) The number of Shares with respect to which the SAR is exercised.

(d) Payment upon Exercise of SAR. At the discretion of the Administrator, but only as
specified in the Award Agreement, payment for a SAR may be in cash, Shares or a combination
thereof. If the Award Agreement is silent as to the form of payment, payment of the SAR may only be
in Shares.

(e) SAR Agreement. Each SAR grant shall be evidenced by an Award Agreement that shall
specify the exercise price, the term of the SAR, the conditions of exercise, whether it may be
settled in cash, Shares or a combination thereof, and such other terms and conditions as the
Administrator, in its sole discretion, shall determine.

(f) Expiration of SARs. A SAR granted under the Plan shall expire upon the date
determined by the Administrator, in its sole discretion, and set forth in the Award Agreement.

10. Exercise of Option or SAR.

(a) Procedure for Exercise; Rights as a Shareholder. Any Option or SAR granted
hereunder shall be exercisable at such times and under such conditions as determined by the
Administrator, including performance criteria with respect to the Company and/or the Participant,
and as shall be permissible under the terms of the Plan.

An Option or SAR may not be exercised for a fraction of a Share.

An Option or SAR shall be deemed to be exercised when written notice of such exercise has been
given to the Company in accordance with the terms of the Option or SAR by the person entitled to
exercise the Option or SAR and, with respect to Options only, full payment for the Shares with
respect to which the Option is exercised has been received by the Company. With respect to Options
only, full payment may, as authorized by the Administrator, consist of any consideration and method
of payment allowable under Section 8(d) of the Plan. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer agent of the
Company) of the stock certificate evidencing such Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding
the exercise of the Option. No adjustment will be made for a dividend or other right for which the
record date is prior to the date the stock certificate is issued, except as provided in Section 21
of the Plan.

(b) Termination of Status as a Service Provider. If an Employee or Consultant ceases
to serve as a Service Provider, he or she may, but only within 90 days (or such other period of
time as is determined by the Administrator and as set forth in the Option or SAR Agreement) after
the date he or she ceases to be a Service Provider, exercise his or her Option or SAR to the extent
that he or she was entitled to exercise it at the date of such termination. To the extent that he
or she was not entitled to exercise the Option or SAR at the date of such termination, or if he or
she does not exercise such Option or SAR (which he or she was entitled to exercise) within the time
specified herein, the Option or SAR shall terminate.

(c) Disability. If a Participant ceases to be a Service Provider as a result of the
Participant’s Disability, the Participant may exercise his or her Option or SAR within such period
of time as is specified in the Award Agreement to the extent the Option or SAR is vested on the
date of termination (but in no event later than the expiration of the term of such Option or SAR as
set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the
Option or SAR shall remain exercisable for twelve (12) months following the Participant’s
termination. If, on the date of termination, the Participant is not vested as to his or her entire
Option or SAR, the Shares covered by the unvested portion of the Option or SAR shall revert to the
Plan. If, after termination, the Participant does not exercise his or her Option or SAR within the
time specified herein, the Option shall terminate, and the Shares covered by such Option or SAR
shall revert to the Plan.

(d) Death of Participant. If a Participant dies while a Service Provider, the Option
or SAR may be exercised following the Participant’s death within such period of time as is
specified in the Award Agreement (but in no event may the option be exercised later than the
expiration of the term set forth in the Award Agreement), by the Participant’s designated
beneficiary, provided such beneficiary has been designated prior to Participant’s death in a form
acceptable to the Administrator. If no such beneficiary has been designated by the Participant,
then such Option or SAR may be exercised by the personal representative of the Participant’s estate
or by the person(s) to whom the Option or SAR is transferred pursuant to the Participant’s will or
in accordance with the laws of descent and distribution. In the absence of a specified time in the
Award Agreement, the Option or SAR shall remain exercisable for twelve (12) months following
Participant’s death. If the Option or SAR is not so exercised within the time specified herein,
the Option or SAR shall terminate, and the Shares covered by such Option or SAR shall revert to the
Plan.

11. Automatic Stock Option Grants to Outside Directors.

(a) Procedure for Grants. All grants of Options to Outside Directors under this Plan
shall be automatic and non-discretionary and shall be made strictly in accordance with the
following provisions:

(i) No person shall have any discretion to select which Outside Directors shall be granted
Options or to determine the number of Shares to be covered by Options granted to Outside Directors.

(ii) Each Outside Director shall be automatically granted an Option to purchase 50,000 Shares
(the “First Option”) upon the date on which such person first becomes a Director, whether through
election by the stockholders of the Company or appointment by the Board of Directors to fill a
vacancy.

(iii) At each of the Company’s annual stockholder meetings (A) each Outside Director who was
an Outside Director on the date of the prior year’s annual stockholder meeting shall be
automatically granted an Option to purchase 20,000 Shares, and (B) each Outside Director who was
not an Outside Director on the date of the prior year’s annual stockholder meeting shall receive an
option covering the number of Shares determined by multiplying 20,000 Shares by a fraction, the
numerator of which is the number of days since the Outside Director received their First Option,
and the denominator of which is 365, rounded down to the nearest whole Share (the “Annual Option”).

(iv) Notwithstanding the provisions of subsections (ii) and (iii) hereof, in the event that an
automatic grant hereunder would cause the number of Shares subject to outstanding Options plus the
number of Shares previously purchased upon exercise of Options to exceed the number of Shares
available for issuance under the Plan, then each such automatic grant shall be for that number of
Shares determined by dividing the total number of Shares remaining available for grant by the
number of Outside Directors on the automatic grant date. Any further grants shall then be deferred
until such time, if any, as additional Shares become available for grant under the Plan.

(v) The terms of an Option granted hereunder shall be as follows:

(A) the term of the Option shall be seven (7) years.

(B) the Option shall be exercisable only while the Outside Director remains a Director of the
Company, except as set forth in subsection (c) hereof.

(C) the exercise price per Share shall be 100% of the Fair Market Value on the date of grant
of the Option.

(D) the First Option shall vest and become exercisable as to 1/36th of the covered
Shares each month following the grant date, with the last 1/36th vesting on the day
prior to the Company’s annual stockholder meeting in the third calendar year following the date of
grant, so as to become 100% vested on the approximately three-year anniversary of the grant date,
subject to the Participant maintaining Continuous Status as a Director on each vesting date.

(E) the Annual Option shall vest and become exercisable at to 1/12th of the covered
Shares each month following the grant date, with the last 1/12th vesting on the day
prior to the Company’s annual stockholder meeting in the calendar year following the date of grant,
so as to become 100% vested on the approximately one year anniversary of the grant date, subject to
the Participant maintaining Continuous Status as a Director on each vesting date.

(b) Consideration for Exercising Outside Director Stock Options. The consideration to
be paid for the Shares to be issued upon exercise of an automatic Outside Director Option shall
consist entirely of cash, check, and to the extent permitted by Applicable Laws, delivery of a
properly executed exercise notice together with such other documentation as the Administrator and
the broker, if applicable, shall require to effect an exercise of the Option and delivery to the
Company of the sale proceeds required to pay the exercise price, or any combination of such methods
of payment.

(c) Post-Directorship Exercisability. If an Outside Director ceases to serve as a
Director, (including pursuant to his or her death or Disability) he or she may, but only within
within 90 days, after the date he or she ceases to be a Director of the Company, exercise his or
her Option to the extent that he or she was entitled to exercise it at the date of such
termination. To the extent that he or she was not entitled to exercise an Option at the date of
such termination, or if he or she does not exercise such Option (which he was entitled to exercise)
within the time specified herein, the Option shall terminate.

12. Restricted Stock.

(a) Grant of Restricted Stock. Subject to the terms and conditions of the Plan
(including the minimum vesting periods specified in Section 4(b)(vi)), Restricted Stock may be
granted to Participants at any time as shall be determined by the Administrator, in its sole
discretion. Subject to Section 6(b) hereof, the Administrator shall have complete discretion to
determine (i) the number of Shares subject to a Restricted Stock award granted to any Participant,
and (ii) the conditions that must be satisfied, which typically will be based principally or solely
on continued provision of services but may include a performance-based component, upon which is
conditioned the grant, vesting or issuance of Restricted Stock.

(b) Other Terms. The Administrator, subject to the provisions of the Plan, shall have
complete discretion to determine the terms and conditions of Restricted Stock granted under the
Plan; provided that Restricted Stock may only be issued in the form of Shares. Restricted Stock
grants shall be subject to the terms, conditions, and restrictions determined by the Administrator
at the time the stock or the restricted stock unit is awarded. The Administrator may require the
recipient to sign a Restricted Stock Award agreement as a condition of the award. Any certificates
representing the Shares of stock awarded shall bear such legends as shall be determined by the
Administrator.

(c) Restricted Stock Award Agreement. Each Restricted Stock grant shall be evidenced
by an agreement that shall specify the purchase price (if any) and such other terms and conditions
as the Administrator, in its sole discretion, shall determine; provided; however, that if the
Restricted Stock grant has a purchase price, such purchase price must be paid no more than seven
(7) years following the date of grant.

13. Restricted Stock Units.

(a) Grant. Restricted Stock Units may be granted at any time and from time to time as
determined by the Administrator. After the Administrator determines that it will grant Restricted
Stock Units under the Plan, it shall advise the Participant in writing or electronically of the
terms, conditions, and restrictions related to the grant, including the number of Restricted Stock
Units and the form of payout, which, subject to Section 6(b) hereof, may be left to the discretion
of the Administrator.

(b) Vesting Criteria and Other Terms. The Administrator shall set vesting criteria in
its discretion, which, depending on the extent to which the criteria are met, will determine the
number of Restricted Stock Units that will be paid out to the Participant. The Administrator may
set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals
(including, but not limited to, continued employment), or any other basis determined by the
Administrator in its discretion.

(c) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the
Participant shall be entitled to receive a payout as specified in the Restricted Stock Unit Award
Agreement. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units,
the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be
met to receive a payout.

(d) Form and Timing of Payment. Payment of earned Restricted Stock Units shall be
made as soon as practicable after the date(s) set forth in the Restricted Stock Unit Award
Agreement. The Administrator, in its sole discretion, but only as specified in the Award
Agreement, may pay earned Restricted Stock Units in cash, Shares, or a combination thereof. If the
Award Agreement is silent as to the form of payment, payment of the Restricted Stock Units may only
be in Shares.

(e) Cancellation. On the date set forth in the Restricted Stock Unit Award Agreement,
all unearned Restricted Stock Units shall be forfeited to the Company.

14. Performance Shares.

(a) Grant of Performance Shares. Subject to the terms and conditions of the Plan,
Performance Shares may be granted to Participants at any time as shall be determined by the
Administrator, in its sole discretion. Subject to Section 6(b) hereof, the Administrator shall
have complete discretion to determine (i) the number of Shares subject to a Performance Share award
granted to any Participant, and (ii) the conditions that must be satisfied, which typically will be
based principally or solely on achievement of performance milestones but may include a
service-based component, upon which is conditioned the grant or vesting of Performance Shares.
Performance Shares shall be granted in the form of units to acquire Shares. Each such unit shall
be the equivalent of one Share for purposes of determining the number of Shares subject to an
Award. Until the Shares are issued, no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the units to acquire Shares.

(b) Other Terms. The Administrator, subject to the provisions of the Plan, shall have
complete discretion to determine the terms and conditions of Performance Shares granted under the
Plan. Performance Share grants shall be subject to the terms, conditions, and restrictions
determined by the Administrator at the time the stock is awarded, which may include such
performance-based milestones as are determined appropriate by the Administrator. The Administrator
may require the recipient to sign a Performance Shares Award Agreement as a condition of the award.
Any certificates representing the Shares of stock awarded shall bear such legends as shall be
determined by the Administrator.

(c) Performance Share Award Agreement. Each Performance Share grant shall be
evidenced by an Award Agreement that shall specify such other terms and conditions as the
Administrator, in its sole discretion, shall determine.

15. Performance Units.

(a) Grant of Performance Units. Performance Units are similar to Performance Shares,
except that they shall be settled in a cash equivalent to the Fair Market Value of the underlying
Shares, determined as of the vesting date. Subject to the terms and conditions of the Plan,
Performance Units may be granted to Participants at any time and from time to time as shall be
determined by the Administrator, in its sole discretion. The Administrator shall have complete
discretion to determine the conditions that must be satisfied, which typically will be based
principally or solely on achievement of performance milestones but may include a service-based
component, upon which is conditioned the grant or vesting of Performance Units. Performance Units
shall be granted in the form of units to acquire Shares. Each such unit shall be the cash
equivalent of one Share of Common Stock. No right to vote or receive dividends or any other rights
as a stockholder shall exist with respect to Performance Units or the cash payable thereunder.

(b) Number of Performance Units. Subject to Section 6(c) hereof, the Administrator
will have complete discretion in determining the number of Performance Units granted to any
Participant.

(c) Other Terms. The Administrator, subject to the provisions of the Plan, shall have
complete discretion to determine the terms and conditions of Performance Units granted under the
Plan. Performance Unit grants shall be subject to the terms, conditions, and restrictions
determined by the Administrator at the time the grant is awarded, which may include such
performance-based milestones as are determined appropriate by the Administrator. The Administrator
may require the recipient to sign a Performance Unit agreement as a condition of the award. Any
certificates representing the units awarded shall bear such legends as shall be determined by the
Administrator.

(d) Performance Unit Award Agreement. Each Performance Unit grant shall be evidenced
by an agreement that shall specify such terms and conditions as the Administrator, in its sole
discretion, shall determine.

16. Deferred Stock Units.

(a) Description. Deferred Stock Units shall consist of a Restricted Stock, Restricted
Stock Unit, Performance Share or Performance Unit Award that the Administrator, in its sole
discretion permits to be paid out in installments or on a deferred basis, in accordance with rules
and procedures established by the Administrator. Deferred Stock Units shall remain subject to the
claims of the Company’s general creditors until distributed to the Participant.

(b) 162(m) Limits. Deferred Stock Units shall be subject to the annual 162(m) limits
applicable to the underlying Restricted Stock, Restricted Stock Unit, Performance Share or
Performance Unit Award as set forth in Section 6 hereof.

17. Leaves of Absence. If as a condition to be granted an unpaid leave of absence by the
Company, a Participant agrees that vesting shall be suspended during all or a portion of such leave
of absence, (except as otherwise required by Applicable Laws) vesting of Awards granted hereunder
shall cease during such agreed upon portion of the unpaid leave of absence and shall only
recommence upon return to active service.

18. Part-Time Service. Unless otherwise required by Applicable Laws, if as a condition to
being permitted to work on a less than full-time basis, the Participant agrees that any
service-based vesting of Awards granted hereunder shall be extended on a proportionate basis in
connection with such transition to a less than a full-time basis, vesting shall be adjusted in
accordance with such agreement. Such vesting shall be proportionately re-adjusted prospectively
in the event that the Employee subsequently becomes regularly scheduled to work additional hours of
service.

19. Non-Transferability of Awards. Except as determined otherwise by the Administrator in
its sole discretion (but never a transfer in exchange for value), Awards may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws
of descent or distribution and may be exercised, during the lifetime of the Participant, only by
the Participant, without the prior written consent of the Administrator.

20. Stock Withholding to Satisfy Withholding Tax Obligations. When a Participant incurs
tax liability in connection with the exercise, vesting or payout, as applicable, of an Award, which
tax liability is subject to tax withholding under applicable tax laws, and the Participant is
obligated to pay the Company an amount required to be withheld under applicable tax laws, the
Participant may satisfy the withholding tax obligation by electing to have the Company withhold
from the Shares to be issued upon exercise of the Option or SAR or the Shares to be issued upon
payout or vesting of the other Award, if any, that number of Shares having a Fair Market Value
equal to the amount required to be withheld. The Fair Market Value of the Shares to be withheld
shall be determined on the date that the amount of tax to be withheld is to be determined (the “Tax
Date”).

All elections by a Participant to have Shares withheld for this purpose shall be made in
writing in a form acceptable to the Administrator and shall be subject to the following
restrictions:

(a) the election must be made on or prior to the applicable Tax Date; and

(b) all elections shall be subject to the consent or disapproval of the Administrator.

In the event the election to have Shares subject to an Award withheld is made by a Participant
and the Tax Date is deferred under Section 83 of the Code because no election is filed under
Section 83(b) of the Code, the Participant shall receive the full number of Shares with respect to
which the Option or SAR is exercised or other Award is vested but such Participant shall be
unconditionally obligated to tender back to the Company the proper number of Shares on the Tax
Date.

21. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale.

(a) Changes in Capitalization. Subject to any required action by the shareholders of
the Company, the number of shares of Common Stock covered by each outstanding Award, and the number
of shares of Common Stock which have been authorized for issuance under the Plan but as to which no
Awards have yet been granted or which have been returned to the Plan upon cancellation or
expiration of an Award, as well as the price per share of Common Stock covered by each such
outstanding Award, the annual share limitations under Sections 6(a) and (b) hereof, and the number
of Shares subject to ongoing automatic First Option and Annual Option grants to Outside Directors
under Section 11 hereof shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of the Company shall not
be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made
by the Board, whose determination in that respect shall be final, binding and conclusive. 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 or price of shares of Common Stock subject to an
Award.

(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Participant as soon as practicable
prior to the effective date of such proposed transaction. The Administrator in its discretion (but
not with respect to Options granted to Outside Directors)  may provide for a Participant
to have the right to exercise his or her Option or SAR until ten (10) days prior to such
transaction as to all of the Awarded Stock covered thereby, including Shares as to which the Award
would not otherwise be exercisable. In addition, the Administrator may provide that any Company
repurchase option or forfeiture rights applicable to any Award shall lapse 100%, and that any Award
vesting shall accelerate 100%, provided the proposed dissolution or liquidation takes place at the
time and in the manner contemplated. To the extent it has not been previously exercised (with
respect to Options and SARs) or vested (with respect to other Awards), an Award will terminate
immediately prior to the consummation of such proposed action.

(c) Merger or Asset Sale.

(i) Stock Options and SARs. In the event of a merger of the Company with or into
another corporation, or the sale of substantially all of the assets of the Company, each
outstanding Option and SAR shall be assumed or an equivalent option or SAR substituted by the
successor corporation or a Parent or Subsidiary of the successor corporation. In the event that
the successor corporation refuses to assume or substitute for the Option or SAR, the Participant
shall fully vest in and have the right to exercise the Option or SAR as to all of the Awarded
Stock, including Shares as to which it would not otherwise be vested or exercisable. If an Option
or SAR becomes fully vested and exercisable in lieu of assumption or substitution in the event of a
merger or asset sale, the Administrator shall notify the Participant in writing or electronically
that the Option or SAR shall be fully vested and exercisable for a period of thirty (30) days from
the date of such notice, and the Option or SAR shall terminate upon the expiration of such period.
With respect to Options granted to Outside Directors, in the event that the Outside Director is
required to terminate his or her position as an Outside Director at the request of the acquiring
entity within 12 months following such merger or asset sale, each outstanding Option held by such
Outside Director shall become fully vested and exercisable, including as to Shares as to which it
would not otherwise be exercisable, unless the Board, in its discretion, determines otherwise.

(ii) Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units,
Deferred Stock Units and Dividend Equivalents. In the event of a merger of the Company with or
into another corporation, or the sale of substantially all of the assets of the Company, each
outstanding Restricted Stock, Restricted Stock Unit, Performance Share, Performance Unit, Dividend
Equivalent and Deferred Stock Unit award (and any related Dividend Equivalent) shall be assumed or
an equivalent Restricted Stock, Restricted Stock Unit, Performance Share, Performance Unit,
Dividend Equivalent and Deferred Stock Unit award (and any related Dividend Equivalent) substituted
by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Restricted Stock, Restricted
Stock Unit, Performance Share, Performance Unit, Dividend Equivalent and Deferred Stock Unit award
(and any related Dividend Equivalent), the Participant shall fully vest in the Restricted Stock,
Restricted Stock Unit, Performance Share, Performance Unit, Dividend Equivalent and Deferred Stock
Unit award (and any related Dividend Equivalent), including as to Shares (or with respect to
Dividend Equivalents and Performance Units, the cash equivalent thereof) which would not otherwise
be vested. For the purposes of this paragraph, a Restricted Stock, Restricted Stock Unit,
Performance Share, Performance Unit, Dividend Equivalent and Deferred Stock Unit award (and any
related Dividend Equivalent) shall be considered assumed if, following the merger or asset sale,
the award confers the right to purchase or receive, for each Share (or with respect to Dividend
Equivalents and Performance Units, the cash equivalent thereof) subject to the Award immediately
prior to the merger or asset sale, the consideration (whether stock, cash, or other securities or
property) received in the merger or asset sale by holders of the Company’s common stock for each
Share held on the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger or asset sale is not
solely common stock of the successor corporation or its Parent, the Administrator may, with the
consent of the successor corporation, provide for the consideration to be received, for each Share
and each unit/right to acquire a Share subject to the Award (other than Dividend Equivalents and
Performance Units) to be solely common stock of the successor corporation or its Parent equal in
fair market value to the per share consideration received by holders of the Company’s common stock
in the merger or asset sale.

22. Time of Granting Awards. The date of grant of an Award shall, for all purposes, be the
date on which the Administrator makes the determination granting such Award. Notice of the
determination shall be given to each Employee or Consultant to whom an Award is so granted within a
reasonable time after the date of such grant.

23. Term of Plan. The Plan shall continue in effect until March 1, 2016 .

24. Amendment and Termination of the Plan.

(a) Amendment and Termination. The Board may at any time amend, alter, suspend or
terminate the Plan.

(b) Shareholder Approval. The Company shall obtain shareholder approval of any Plan
amendment to the extent necessary and desirable to comply with Rule 16b-3 or with Section 422 of
the Code (or any successor rule or statute or other applicable law, rule or regulation, including
the requirements of any exchange or quotation system on which the Common Stock is listed or
quoted). Such shareholder approval, if required, shall be obtained in such a manner and to such a
degree as is required by the applicable law, rule or regulation.

(c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Participant, unless mutually agreed
otherwise between the Participant and the Administrator, which agreement must be in writing and
signed by the Participant and the Company.

25. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and delivery of such
Shares pursuant thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act, the Exchange Act, the rules and regulations promulgated thereunder,
state securities laws, and the requirements of any stock exchange upon which the Shares may then be
listed, and shall be further subject to the approval of counsel for the Company with respect to
such compliance.

As a condition to the exercise or payout, as applicable, of an Award, the Company may require
the person exercising such Option or SAR, or in the case of another Award (other than a Dividend
Equivalent or Performance Unit), the person receiving the Shares upon vesting, to render to the
Company a written statement containing such representations and warranties as, in the opinion of
counsel for the Company, may be required to ensure compliance with any of the aforementioned
relevant provisions of law, including a representation that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares, if, in the opinion
of counsel for the Company, such a representation is required.

26. Reservation of Shares. The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements
of the Plan. Inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of
the failure to issue or sell such Shares as to which such requisite authority shall not have been
obtained.

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