Document:

Exhibit 10.1

 

AGREEMENT REGARDING

PORTION OF SALARY PAYABLE IN PHANTOM
STOCK UNITS

 

AGREEMENT dated as of the
     day of
                        ,
2010 (this “Agreement”) by and between Comerica Incorporated (the “Corporation”)
and                                         
                                
(the “Executive”).

 

WHEREAS, the Governance,
Compensation and Nominating Committee (the “Committee”) of the board of
directors of the Corporation (the “Board”) has determined that beginning with
the biweekly pay period commencing on February 5, 2010 and ending on the
first to occur of (i) the pay date occurring on January 7, 2011 and (ii) the
date the Committee otherwise determines (such date, the “Final Payroll Date”),
the Executive’s base salary will be payable partly in cash and partly in
phantom stock units, with each such phantom stock unit representing the right
to receive an amount of cash based on the value of one share of the Corporation’s
common stock (the “Phantom Stock Units”).

 

NOW, THEREFORE, IT IS
HEREBY AGREED AS FOLLOWS:

 

1.
Beginning with the biweekly pay period commencing on February 5, 2010
until the Final Payroll Date, in addition to the Executive’s regular biweekly
cash base salary, the Executive will be paid a biweekly base salary of $            
(the “Phantom Stock Unit Salary”) in the form of Corporation Phantom Stock
Units. Once awarded, the Phantom Stock Units will be fully vested and not
subject to the risk of forfeiture or any requirement of future service.

 

2. The
number of Phantom Stock Units to be awarded to the Executive as part of the
Executive’s biweekly base salary will be calculated as follows:

 

First, subtract from the
Phantom Stock Unit Salary the amount of then required payroll tax withholdings
and other deductions, as applicable, to generate the net salary payable in
Phantom Stock Units. Then, divide the net salary amount payable in Phantom
Stock Units by the reported closing price on the New York Stock Exchange (“NYSE”)
for a share of the Corporation’s common stock on the pay date for such biweekly
pay period (or, if not a NYSE trading day, on the NYSE trading day immediately
preceding such pay date).

 

Each such biweekly
Phantom Stock Unit Salary payment will be an “Other Stock-Based Award” under Section 6(F) of
the Corporation’s 2006 Amended and Restated Long-Term Incentive Plan or its
successor plan (the “Plan”), with a grant date for such award being the pay
date for such biweekly salary payment and will be subject to the terms and
conditions of this Agreement and the Plan. The Executive will have no rights as
a shareholder of the Corporation (including the right to vote or to receive
dividends or dividend equivalent amounts) by virtue of the award of Phantom
Stock Units.

 

3.
Each such biweekly Phantom Stock Unit award will be settled at the time set
forth below by the payment to the Executive of cash in an amount equal to the
number of Phantom Stock Units being settled multiplied by the reported closing
price on the NYSE for a share of Corporation common stock on the settlement
date (or, if not a NYSE trading day, on the NYSE trading day immediately
preceding such settlement date).

 

Payment will be made to
the Executive with respect to the settlement of Phantom Stock Units as soon as
practicable, but in no event later than 30 days, following the settlement date,
which shall be the earliest to occur of the following:

 

(i)     February 5, 2011; and

 

(ii)    the date of the Executive’s death.

 

To the extent not
previously satisfied, the Corporation will, at the time the income or any other
applicable tax withholding obligation arises in connection with the Phantom
Stock Units, retain an amount sufficient to satisfy the minimum amount of taxes
then required to be withheld by the Corporation from the payment in settlement
of the Phantom Stock Units or from other compensation then payable to the
Executive or as otherwise determined by the Corporation.

 

 

4.
Phantom Stock Units may not be sold, assigned, transferred, exchanged, pledged,
hypothecated or otherwise encumbered. If the Executive is deceased at the time
the Phantom Stock Units are settled, the Corporation will make such payment to
the executor or administrator of the Executive’s estate or to the Executive’s
other legal representative as determined in good faith by the Corporation.

 

5. In the event of (i) a
stock dividend, stock split, reverse stock split, share combination, or
recapitalization or similar event affecting the capital structure of the
Corporation, or (ii) a merger, consolidation, acquisition of property or
shares, separation, spinoff, reorganization, stock rights offering,
liquidation, disaffiliation, or similar event affecting the Corporation or any
of its subsidiaries, the Committee or the Board shall, in accordance with the
Plan, make such substitutions or adjustments as it deems appropriate and
equitable, if any, to the Phantom Stock Units then outstanding that were
awarded pursuant to this Agreement. All determinations hereunder shall be made
by the Committee or its delegate in its sole discretion and shall be final,
binding and conclusive for all purposes on all parties, including without
limitation the Executive.

 

6. The
Executive and the Corporation acknowledge that, except as may otherwise be
provided under any other written agreement between the Executive and the
Corporation, the employment of the Executive by the Corporation is “at will”
and may be terminated by either the Executive or the Corporation at any time.

 

7. It
is the intention of the parties that this Agreement and the awards made
pursuant to this Agreement comply with the provisions of Section 409A of
the Internal Revenue Code to the extent, if any, that such provisions are
applicable to this Agreement, or that they satisfy an exception to Section 409A,
and this Agreement will be administered by the Corporation in a manner
consistent with this intent.

 

If any payments or
benefits hereunder may be deemed to constitute deferred compensation subject to
the provisions of Section 409A, the Executive agrees that the Corporation
may, without the consent of the Executive, modify this Agreement and the awards
made pursuant to this Agreement to the extent and in the manner the Corporation
deems necessary or advisable or take such other action or actions, including an
amendment or action with retroactive effect, that the Corporation deems
appropriate in order either to attempt to preclude any such payments or
benefits from being deemed “deferred compensation” within the meaning of Section 409A
or to attempt to provide such payments or benefits in a manner that complies
with the provisions of Section 409A.

 

8.
This Agreement is subject to the provisions of the Plan.  Interpretations of the Plan and this
Agreement by the Committee are binding on the Executive and the Corporation.

 

9.
Notwithstanding anything in this Agreement, the Corporation will not be
required to comply with any term or condition of this Agreement if and to the
extent prohibited by law, including but not limited to federal banking and
securities regulations, or as otherwise directed by one or more regulatory
agencies having jurisdiction over the Corporation or any of its
subsidiaries.  The Phantom Stock Units
provided under this Agreement are intended to comply with Section 111 of
the Emergency Economic Stabilization Act of 2008, as amended, including by the
American Recovery and Reinvestment Act of 2009, and the Interim Final Rule issued
by the U.S. Department of the Treasury and other guidance thereunder
(collectively, the “EESA Guidance”) and the applicable requirements of the
agreement between the Corporation and the U.S. Department of the Treasury dated
November 14, 2008 (the “CPP Agreement”), as the same are in effect from
time to time.  The Executive may receive the Phantom Stock Units
under this Agreement only to the extent that such compensation is consistent
with the EESA Guidance and the CPP Agreement. In
the event that the provision of the Phantom Stock Unit Salary or grant,
settlement or accrual of the Phantom Stock Units in respect thereof, or any
term of the Phantom Stock Units is restricted or prohibited or otherwise
conflicts with any applicable statute (including, without limitation, the EESA
Guidance), in each case, as determined by the Committee in its sole discretion,
then the Committee may unilaterally modify the terms of this Agreement in such
manner as the Committee determines in its sole discretion to be necessary to
avoid such restriction or prohibition or eliminate such conflict, all without
the further consent of the Executive, such consent being given through the
Executive’s execution of this Agreement.

 

 

10.
This Agreement will be effective upon execution and delivery of the Agreement
by both the Corporation and the Executive.

 

 

	
  COMERICA INCORPORATED

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  [Insert
  Title]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  EXECUTIVE

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  [Insert Name]Unassociated Document

    

     

    EXHIBIT 10.1

     

     

    WAFERGEN
BIO-SYSTEMS, INC.

     

    2008
STOCK INCENTIVE PLAN (as amended)

     

    1. Purposes of the Plan. The
purposes of this Plan are to attract and retain the best available personnel, to
provide additional incentives to Employees, Directors and Consultants and to
promote the success of the Company’s business.

     

    2. Definitions. The following
definitions shall apply as used herein and in the individual Award Agreements
except as defined otherwise in an individual Award Agreement. In the event a
term is separately defined in an individual Award Agreement, such definition
shall supersede the definition contained in this Section 2.

     

    (a)
“Administrator” means
the Board or any of the Committees appointed to administer the
Plan.

     

    (b)
“Affiliate” and “Associate” shall have the
respective meanings ascribed to such terms in Rule 12b-2 promulgated under the
Exchange Act.

     

    (c)
“Applicable Laws” means
the legal requirements relating to the Plan and the Awards under applicable
provisions of federal and state securities laws, the corporate laws of
California and, to the extent other than California, the corporate law of the
state of the Company’s incorporation, the Code, the rules of any applicable
stock exchange or national market system, and the rules of any non-U.S.
jurisdiction applicable to Awards granted to residents therein.

     

    (d)
“Assumed” means that
pursuant to a Corporate Transaction either (i) the Award is expressly affirmed
by the Company or (ii) the contractual obligations represented by the Award are
expressly assumed (and not simply by operation of law) by the successor entity
or its Parent in connection with the Corporate Transaction with appropriate
adjustments to the number and type of securities of the successor entity or its
Parent subject to the Award and the exercise or purchase price thereof which at
least preserves the compensation element of the Award existing at the time of
the Corporate Transaction as determined in accordance with the instruments
evidencing the agreement to assume the Award.

     

    (e)
“Award” means the grant
of an Option, SAR, Dividend Equivalent Right, Restricted Stock, Restricted Stock
Unit or other right or benefit under the Plan.

     

    (f)
“Award Agreement” means
the written agreement evidencing the grant of an Award executed by the Company
and the Grantee, including any amendments thereto.

     

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

     

    (h)
“Cause” means, with
respect to the termination by the Company or a Related Entity of the Grantee’s
Continuous Service, that such termination is for “Cause” as such term (or word
of like import) is expressly defined in a then-effective written agreement
between the Grantee and the Company or such Related Entity, or in the absence of
such then-effective written agreement and definition, is based on, in the
determination of the Administrator, the Grantee’s: (i) performance of any act or
failure to perform any act in bad faith and to the detriment of the Company or a
Related Entity; (ii) dishonesty, intentional misconduct or material breach of
any agreement with the Company or a Related Entity; or (iii) commission of a
crime involving dishonesty, breach of trust, or physical or emotional harm to
any person; provided, however, that with regard to any agreement that defines
“Cause” on the occurrence of or in connection with a Corporate Transaction or a
Change in Control, such definition of “Cause” shall not apply until a Corporate
Transaction or a Change in Control actually occurs.

     

    
      
         

      

      
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    (i)
“Change in Control”
means a change in ownership or control of the Company affected through either of
the following transactions:

     

    (i) the
direct or indirect acquisition by any person or related group of persons (other
than an acquisition from or by the Company or by a Company-sponsored employee
benefit plan or by a person that directly or indirectly controls, is controlled
by, or is under common control with, the Company) of beneficial ownership
(within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing
more than fifty percent (50%) of the total combined voting power of the
Company’s outstanding securities pursuant to a tender or exchange offer made
directly to the Company’s stockholders which a majority of the Continuing
Directors who are not Affiliates or Associates of the offer or do not recommend
such stockholders accept, or

     

    (ii) a
change in the composition of the Board over a period of twelve (12) months or
less such that a majority of the Board members (rounded up to the next whole
number) ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who are Continuing
Directors.

     

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

     

    (k)
“Committee” means any
committee composed of members of the Board appointed by the Board to administer
the Plan.

     

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

     

    (m)
“Company” means WaferGen Bio-systems, Inc. a Nevada corporation, or any
successor entity that adopts the Plan in connection with a Corporate
Transaction.

     

    (n)
“Consultant” means any
person (other than an Employee or a Director, solely with respect to rendering
services in such person’s capacity as a Director) who is engaged by the Company
or any Related Entity to render consulting or advisory services to the Company
or such Related Entity.

     

    (o)
“Continuing Directors”
means members of the Board who either (i) have been Board members continuously
for a period of at least twelve (12) months or (ii) have been Board members for
less than twelve (12) months and were elected or nominated for election as Board
members by at least a majority of the Board members described in clause (i) who
were still in office at the time such election or nomination was approved by the
Board.

     

    (p)
“Continuous Service”
means that the provision of services to the Company or a Related Entity in any
capacity of Employee, Director or Consultant is not interrupted or terminated.
In jurisdictions requiring notice in advance of an effective termination as an
Employee, Director or Consultant, Continuous Service shall be deemed terminated
upon the actual cessation of providing services to the Company or a Related
Entity notwithstanding any required notice period that must be fulfilled before
a termination as an Employee, Director or Consultant can be effective under
Applicable Laws. A Grantee’s Continuous Service shall be deemed to have
terminated either upon an actual termination of Continuous Service or upon the
entity for which the Grantee provides services ceasing to be a Related Entity.
Continuous Service shall not be considered interrupted in the case of (i) any
approved leave of absence, (ii) transfers among the Company, any Related Entity,
or any successor, in any capacity of Employee, Director or Consultant, or (iii)
any change in status as long as the individual remains in the service of the
Company or a Related Entity in any capacity of Employee, Director or Consultant
(except as otherwise provided in the Award Agreement). An approved leave of
absence shall include sick leave, military leave, or any other authorized
personal leave. For purposes of each Incentive Stock Option granted under the
Plan, if such leave exceeds three (3) months, and reemployment upon expiration
of such leave is not guaranteed by statute or contract, then the Incentive Stock
Option shall be treated as a Non-Qualified Stock Option on the day three (3)
months and one (1) day following the expiration of such three (3) month
period.

     

    
      
         

      

      
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    (q)
“Corporate Transaction”
means any of the following transactions, provided, however, that the
Administrator shall determine under parts (iv) and (v) whether multiple
transactions are related, and its determination shall be final, binding and
conclusive:

     

    (i) a
merger or consolidation in which the Company is not the surviving entity, except
for a transaction the principal purpose of which is to change the state in which
the Company is incorporated;

     

    (ii) the
sale, transfer or other disposition of all or substantially all of the assets of
the Company;

     

    (iii) the
complete liquidation or dissolution of the Company;

     

    (iv) any
reverse merger or series of related transactions culminating in a reverse merger
(including, but not limited to, a tender offer followed by a reverse merger) in
which the Company is the surviving entity but (A) the shares of Common Stock
outstanding immediately prior to such merger are converted or exchanged by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise, or (B) in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Company’s outstanding securities
are transferred to a person or persons different from those who held such
securities immediately prior to such merger or the initial transaction
culminating in such merger; or

     

    (v)
acquisition in a single or series of related transactions by any person or
related group of persons (other than the Company or by a Company-sponsored
employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3
of the Exchange Act) of securities possessing more than fifty percent (50%) of
the total combined voting power of the Company’s outstanding securities but
excluding any such transaction or series of related transactions that the
Administrator determines shall not be a Corporate Transaction.

     

    (r)
“Covered Employee”
means an Employee who is a “covered employee” under Section 162(m)(3) of the
Code.

     

    (s)
“Director” means a
member of the Board or the board of directors of any Related
Entity.

     

    (t)
“Disability” means as
defined under the long-term disability policy of the Company or the Related
Entity to which the Grantee provides services regardless of whether the Grantee
is covered by such policy. If the Company or the Related Entity to which the
Grantee provides service does not have a long-term disability plan in place,
“Disability” means that a Grantee is unable to carry out the responsibilities
and functions of the position held by the Grantee by reason of any medically
determinable physical or mental impairment for a period of not less than ninety
(90) consecutive days. A Grantee will not be considered to have incurred a
Disability unless he or she furnishes proof of such impairment sufficient to
satisfy the Administrator in its discretion.

     

    (u)
“Dividend Equivalent
Right” means a right entitling the Grantee to compensation measured by
dividends paid with respect to Common Stock.

     

    (v)
“Employee” means any
person, including an Officer or Director, who is in the employ of the Company or
any Related Entity, subject to the control and direction of the Company or any
Related Entity as to both the work to be performed and the manner and method of
performance. The payment of a director’s fee by the Company or a Related Entity
shall not be sufficient to constitute “employment” by the Company.

     

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

     

    
      
         

      

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

     

    (i) If
the Common Stock is listed on one or more established stock exchanges or
national market systems, including without limitation The NASDAQ Global Select
Market, The NASDAQ Global Market or The NASDAQ Capital Market of The NASDAQ
Stock Market LLC, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on the
principal exchange or system on which the Common Stock is listed (as determined
by the Administrator) on the date of determination (or, if no closing sales
price or closing bid was reported on that date, as applicable, on the last
trading date such closing sales price or closing bid was reported), as reported
in The Wall Street Journal or such other source as the Administrator deems
reliable;

     

    (ii) If
the Common Stock is regularly quoted on an automated quotation system (including
the OTC Bulletin Board) or by a recognized securities dealer, its Fair Market
Value shall be the closing sales price for such stock as quoted on such system
or by such securities dealer on the date of determination, but if selling prices
are not reported, the Fair Market Value of a share of Common Stock shall be the
mean between the high bid and low asked prices for the Common Stock on the date
of determination (or, if no such prices were reported on that date, on the last
date such prices were reported), as reported in The Wall Street Journal or such
other source as the Administrator deems reliable; or

     

    (iii) In
the absence of an established market for the Common Stock of the type described
in (i) and (ii), above, the Fair Market Value thereof shall be determined by the
Administrator in good faith and in a manner consistent with Applicable
Laws.

     

    (y)
“Grantee” means an
Employee, Director or Consultant who receives an Award under the
Plan.

     

    (z)
“Immediate Family”
means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the Grantee’s household (other than a tenant
or employee), a trust in which these persons (or the Grantee) have more than
fifty percent (50%) of the beneficial interest, a foundation in which these
persons (or the Grantee) control the management of assets, and any other entity
in which these persons (or the Grantee) own more than fifty percent (50%) of the
voting interests.

     

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

     

    (bb)
“Non-Qualified Stock
Option” means an Option not intended to qualify as an Incentive Stock
Option.

     

    (cc)
“Officer” means a
person who is an officer of the Company or a Related Entity within the meaning
of Section 16 of the Exchange Act and the rules and regulations promulgated
there under.

     

    (dd)
“Option” means an
option to purchase Shares pursuant to an Award Agreement granted under the
Plan.

     

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

     

    (ff)
“Performance-Based
Compensation” means compensation qualifying as “performance-based
compensation” under Section 162(m) of the Code.

     

    (gg)
“Plan” means this 2008
Stock Incentive Plan.

     

    (hh)
“Post-Termination Exercise
Period” means the period specified in the Award Agreement and to the
extent required by Applicable Laws, shall be a period of not less than thirty
(30) days commencing on the date of termination (other than termination by the
Company or any Related Entity for Cause) of the Grantee’s Continuous Service, or
such longer period as may be required by Applicable Laws upon death or
Disability.

     

    (ii)
“Related Entity” means
any Parent or Subsidiary of the Company.

     

    (jj)
“Replaced” means that
pursuant to a Corporate Transaction the Award is replaced with a comparable
stock award or a cash incentive program of the Company, the successor entity (if
applicable) or Parent of either of them which preserves the compensation element
of such Award existing at the time of the Corporate Transaction and provides for
subsequent payout in accordance with the same (or a more favorable) vesting
schedule applicable

     

    
      
         

      

      
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    to such
Award. The determination of Award comparability shall be made by the
Administrator and its determination shall be final, binding and
conclusive.

     

    (kk)
“Restricted Stock”
means Shares issued under the Plan to the Grantee for such consideration, if
any, and subject to such restrictions on transfer, rights of first refusal,
repurchase provisions, forfeiture provisions, and other terms and conditions as
established by the Administrator.

     

    (ll)
“Restricted Stock
Units” means an Award which may be earned in whole or in part upon the
passage of time or the attainment of performance criteria established by the
Administrator and which may be settled for cash, Shares or other securities or a
combination of cash, Shares or other securities as established by the
Administrator.

     

    (mm)
“Rule 16b-3” means Rule
16b-3 promulgated under the Exchange Act or any successor thereto.

     

    (nn)
“SAR” means a stock
appreciation right entitling the Grantee to Shares or cash compensation, as
established by the Administrator, measured by appreciation in the value of
Common Stock.

     

    (oo)
“Share” means a share
of the Common Stock.

     

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

     

    3. Stock Subject to the
Plan.

     

    (a)
Subject to the provisions of Section 10 below, the maximum aggregate number of
Shares which may be issued pursuant to all Awards (including Incentive Stock
Options) is Three Million Five Hundred Thousand (3,500,000) Shares.
Notwithstanding the foregoing, the maximum aggregate number of Shares which may
be issued pursuant to all Awards of Restricted Stock and Restricted Stock Units
is One Million Seven Hundred Fifty Thousand (1,750,000) Shares. The Shares may
be authorized, but unissued, or reacquired Common Stock.

     

    (b) Any
Shares covered by an Award (or portion of an Award) which is forfeited, canceled
or expires (whether voluntarily or involuntarily) shall be deemed not to have
been issued for purposes of determining the maximum aggregate number of Shares
which may be issued under the Plan. Shares that actually have been issued under
the Plan pursuant to an Award shall not be returned to the Plan and shall not
become available for future issuance under the Plan, except that if unvested
Shares are forfeited or repurchased by the Company, such Shares shall become
available for future grant under the Plan. To the extent not prohibited by the
listing requirements of The NASDAQ Stock Market LLC (or other established stock
exchange or national market system on which the Common Stock is traded) and
Applicable Law, any Shares covered by an Award which are surrendered (i) in
payment of the Award exercise or purchase price or (ii) in satisfaction of tax
withholding obligations incident to the exercise of an Award shall be deemed not
to have been issued for purposes of determining the maximum number of Shares
which may be issued pursuant to all Awards under the Plan, unless otherwise
determined by the Administrator.

     

    4. Administration of the
Plan.

     

    (a) Plan
Administrator.

     

    (i) Administration with Respect to
Directors and Officers. With respect to grants of Awards to Directors or
Employees who are also Officers or Directors of the Company, the Plan shall be
administered by (A) the Board or (B) a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy the Applicable
Laws and to permit such grants and related transactions under the Plan to be
exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3.
Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board.

     

    (ii)
Administration With Respect to
Consultants and Other Employees. With respect to grants of Awards to
Employees or Consultants who are neither Directors nor Officers of the Company,
the Plan shall be administered by (A) the Board or (B) a Committee designated by
the Board, which Committee shall be constituted in such a manner as to satisfy
the Applicable Laws. Once appointed, such Committee shall continue to serve in
its designated capacity until otherwise directed by the Board. The Board may
authorize one or more Officers to grant such Awards and may limit such authority
as the Board determines from time to time.

     

    
      
         

      

      
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    (iii)
Administration With Respect to
Covered Employees. Notwithstanding the foregoing, grants of Awards to any
Covered Employee intended to qualify as Performance-Based Compensation shall be
made only by a Committee (or subcommittee of a Committee) which is comprised
solely of two or more Directors eligible to serve on a committee making Awards
qualifying as Performance-Based Compensation. In the case of such Awards granted
to Covered Employees, references to the “Administrator” or to a “Committee”
shall be deemed to be references to such Committee or subcommittee.

     

    (iv)
Administration Errors.
In the event an Award is granted in a manner inconsistent with the provisions of
this subsection (a), such Award shall be presumptively valid as of its grant
date to the extent permitted by the Applicable Laws.

     

    (b) Powers of the Administrator.
Subject to Applicable Laws and the provisions of the Plan (including any other
powers given to the Administrator hereunder), and except as otherwise provided
by the Board, the Administrator shall have the authority, in its
discretion:

     

    (i) to
select the Employees, Directors and Consultants to whom Awards may be granted
from time to time hereunder;

     

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

     

    (iii) to
determine the number of Shares or the amount of other consideration to be
covered by each Award granted hereunder;

     

    (iv) to
approve forms of Award Agreements for use under the Plan;

     

    (v) to
determine the terms and conditions of any Award granted hereunder;

     

    (vi) to
establish additional terms, conditions, rules or procedures to accommodate the
rules or laws of applicable non-U.S. jurisdictions and to afford Grantees
favorable treatment under such rules or laws; provided, however, that no Award
shall be granted under any such additional terms, conditions, rules or
procedures with terms or conditions which are inconsistent with the provisions
of the Plan;

     

    (vii) to
amend the terms of any outstanding Award granted under the Plan, provided that
(A) any amendment that would adversely affect the Grantee’s rights under an
outstanding Award shall not be made without the Grantee’s written consent,
provided, however, that an amendment or modification that may cause an Incentive
Stock Option to become a Non-Qualified Stock Option shall not be treated as
adversely affecting the rights of the Grantee (B) the reduction of the exercise
price of any Option awarded under the Plan and the base appreciation amount of
any SAR awarded under the Plan shall be subject to stockholder approval and (C)
canceling an Option or SAR at a time when its exercise price or base
appreciation amount (as applicable) exceeds the Fair Market Value of the
underlying Shares, in exchange for another Option, SAR, Restricted Stock, or
other Award shall be subject to stockholder approval, unless the cancellation
and exchange occurs in connection with a Corporate Transaction. Notwithstanding
the foregoing, canceling an Option or SAR in exchange for another Option, SAR,
Restricted Stock, or other Award with an exercise price, purchase price or base
appreciation amount (as applicable) that is equal to or greater than the
exercise price or base appreciation amount (as applicable) of the original
Option or SAR shall not be subject to stockholder approval;

     

    (viii) to
construe and interpret the terms of the Plan and Awards, including without
limitation, any notice of award or Award Agreement, granted pursuant to the
Plan; and

     

    (ix) to
take such other action, not inconsistent with the terms of the Plan, as the
Administrator deems appropriate.

     

    The
express grant in the Plan of any specific power to the Administrator shall not
be construed as limiting any power or authority of the Administrator; provided
that the Administrator may not exercise any right or power reserved to the
Board. Any decision made, or action taken, by the Administrator or in connection
with the administration of this Plan shall be final, conclusive and binding on
all persons having an interest in the Plan.

     

    (c) Indemnification. In addition
to such other rights of indemnification as they may have as members of the Board
or as Officers or Employees of the Company or a Related Entity, members of the
Board and any Officers

     

    
      
         

      

      
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    or
Employees of the Company or a Related Entity to whom authority to act for the
Board, the Administrator or the Company is delegated shall be defended and
indemnified by the Company to the extent permitted by law on an after-tax basis
against all reasonable expenses, including attorneys’ fees, actually and
necessarily incurred in connection with the defense of any claim, investigation,
action, suit or proceeding, or in connection with any appeal therein, to which
they or any of them may be a party by reason of any action taken or failure to
act under or in connection with the Plan, or any Award granted hereunder, and
against all amounts paid by them in settlement thereof (provided such settlement
is approved by the Company) or paid by them in satisfaction of a judgment in any
such claim, investigation, action, suit or proceeding, except in relation to
matters as to which it shall be adjudged in such claim, investigation, action,
suit or proceeding that such person is liable for gross negligence, bad faith or
intentional misconduct; provided, however, that within thirty (30) days after
the institution of such claim, investigation, action, suit or proceeding, such
person shall offer to the Company, in writing, the opportunity at the Company’s
expense to defend the same.

     

    5. Eligibility. Awards other
than Incentive Stock Options may be granted to Employees, Directors and
Consultants. Incentive Stock Options may be granted only to Employees of the
Company or a Parent or a Subsidiary of the Company. An Employee, Director or
Consultant who has been granted an Award may, if otherwise eligible, be granted
additional Awards. Awards may be granted to such Employees, Directors or
Consultants who are residing in non-U.S. jurisdictions as the Administrator may
determine from time to time.

     

    6. Terms and Conditions of
Awards.

     

    (a) Types of Awards. The
Administrator is authorized under the Plan to award any type of arrangement to
an Employee, Director or Consultant that is not inconsistent with the provisions
of the Plan and that by its terms involves or might involve the issuance of (i)
Shares, (ii) cash or (iii) an Option, a SAR, or similar right with a fixed or
variable price related to the Fair Market Value of the Shares and with an
exercise or conversion privilege related to the passage of time, the occurrence
of one or more events, or the satisfaction of performance criteria or other
conditions. Such awards include, without limitation, Options, SARs, sales or
bonuses of Restricted Stock, Restricted Stock Units or Dividend Equivalent
Rights, and an Award may consist of one such security or benefit, or two (2) or
more of them in any combination or alternative.

     

    (b) Designation of Award. Each
Award shall be designated in the Award Agreement. In the case of an Option, the
Option shall be designated as either an Incentive Stock Option or a
Non-Qualified Stock Option. However, notwithstanding such designation, an Option
will qualify as an Incentive Stock Option under the Code only to the extent the
$100,000 dollar limitation of Section 422(d) of the Code is not exceeded. The
$100,000 limitation of Section 422(d) of the Code is calculated based on the
aggregate Fair Market Value of the Shares subject to Options designated as
Incentive Stock Options which become exercisable for the first time by a Grantee
during any calendar year (under all plans of the Company or any Parent or
Subsidiary of the Company). For purposes of this calculation, 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 grant date of
the relevant Option. In the event that the Code or the regulations promulgated
there under are amended after the date the Plan becomes effective to provide for
a different limit on the Fair Market Value of Shares permitted to be subject to
Incentive Stock Options, then such different limit will be automatically
incorporated herein and will apply to any Options granted after the effective
date of such amendment.

     

    (c) Conditions of Award. Subject
to the terms of the Plan, the Administrator shall determine the provisions,
terms, and conditions of each Award including, but not limited to, the Award
vesting schedule, repurchase provisions, rights of first refusal, forfeiture
provisions, form of payment (cash, Shares, or other consideration) upon
settlement of the Award, payment contingencies, and satisfaction of any
performance criteria. The performance criteria established by the Administrator
may be based on any one of, or combination of, the following: (i) increase in
share price, (ii) earnings per share, (iii) total stockholder return, (iv)
operating margin, (v) gross margin, (vi) return on equity, (vii) return on
assets, (viii) return on investment, (ix) operating income, (x) net operating
income, (xi) pre-tax profit, (xii) cash flow, (xiii) revenue, (xiv) expenses,
(xv) earnings before interest, taxes and depreciation, (xvi) economic value
added and (xvii) market share. The performance criteria may be applicable to the
Company, Related Entities and/or any individual business units of the Company or
any Related Entity. Partial achievement of the specified criteria may result in
a payment or vesting corresponding to the degree of achievement as specified in
the Award Agreement. In addition, the performance criteria shall be

     

    
      
         

      

      
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    calculated
in accordance with generally accepted accounting principles, but excluding the
effect (whether positive or negative) of any change in accounting standards and
any extraordinary, unusual or nonrecurring item, as determined by the
Administrator, occurring after the establishment of the performance criteria
applicable to the Award intended to be performance-based compensation. Each such
adjustment, if any, shall be made solely for the purpose of providing a
consistent basis from period to period for the calculation of performance
criteria in order to prevent the dilution or enlargement of the Grantee’s rights
with respect to an Award intended to be performance-based
compensation.

     

    (d) Acquisitions and Other
Transactions. The Administrator may issue Awards under the Plan in
settlement, assumption or substitution for, outstanding awards or obligations to
grant future awards in connection with the Company or a Related Entity acquiring
another entity, an interest in another entity or an additional interest in a
Related Entity whether by merger, stock purchase, asset purchase or other form
of transaction.

     

    (e) Deferral of Award Payment.
The Administrator may establish one or more programs under the Plan to permit
selected Grantees the opportunity to elect to defer receipt of consideration
upon exercise of an Award, satisfaction of performance criteria, or other event
that absent the election would entitle the Grantee to payment or receipt of
Shares or other consideration under an Award. The Administrator may establish
the election procedures, the timing of such elections, the mechanisms for
payments of, and accrual of interest or other earnings, if any, on amounts,
Shares or other consideration so deferred, and such other terms, conditions,
rules and procedures that the Administrator deems advisable for the
administration of any such deferral program.

     

    (f) Separate Programs. The
Administrator may establish one or more separate programs under the Plan for the
purpose of issuing particular forms of Awards to one or more classes of Grantees
on such terms and conditions as determined by the Administrator from time to
time.

     

    (g) Individual Limitations on
Awards.

     

    (i) Individual Option and SAR
Limit. The maximum number of Shares with respect to which Options and
SARs may be granted to any Grantee in any calendar year shall be One Million
(1,000,000) Shares. The foregoing limitation shall be adjusted proportionately
in connection with any change in the Company’s capitalization pursuant to
Section 10, below. To the extent required by Section 162(m) of the Code or the
regulations there under, in applying the foregoing limitation with respect to a
Grantee, if any Option or SAR is canceled, the canceled Option or SAR shall
continue to count against the maximum number of Shares with respect to which
Options and SARs may be granted to the Grantee. For this purpose, the repricing
of an Option (or in the case of a SAR, the base amount on which the stock
appreciation is calculated is reduced to reflect a reduction in the Fair Market
Value of the Common Stock) shall be treated as the cancellation of the existing
Option or SAR and the grant of a new Option or SAR.

     

    (ii)
Individual Limit for
Restricted Stock and Restricted Stock Units. For awards of Restricted
Stock and Restricted Stock Units that are intended to be Performance-Based
Compensation, the maximum number of Shares with respect to which such Awards may
be granted to any Grantee in any calendar year shall be Five Hundred Thousand
(500,000) Shares. The foregoing limitation shall be adjusted proportionately in
connection with any change in the Company’s capitalization pursuant to Section
10, below.

     

    
      
         

      

      
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    (h) Early Exercise. The Award
Agreement may, but need not, include a provision whereby the Grantee may elect
at any time while an Employee, Director or Consultant to exercise any part or
all of the Award prior to full vesting of the Award. Any unvested Shares
received pursuant to such exercise may be subject to a repurchase right in favor
of the Company or a Related Entity or to any other restriction the Administrator
determines to be appropriate.

     

    (i) Term of Award. The term of
each Award shall be no more than seven (7) years from the date of grant thereof.
However, in the case of an Incentive Stock Option granted to a Grantee who, at
the time the 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 of the Company, the term of the Incentive Stock Option shall be
five (5) years from the date of grant thereof or such shorter term as may be
provided in the Award Agreement. Notwithstanding the foregoing, the specified
term of any Award shall not include any period for which the Grantee has elected
to defer the receipt of the Shares or cash issuable pursuant to the
Award.

     

    (j) Transferability of Awards.
Incentive Stock Options 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
Grantee, only by the Grantee. Other Awards shall be transferable (i) by will and
by the laws of descent and distribution and (ii) during the lifetime of the
Grantee, to the extent and in the manner authorized by the Administrator by gift
or pursuant to a domestic relations order to members of the Grantee’s Immediate
Family. Notwithstanding the foregoing, the Grantee may designate one or more
beneficiaries of the Grantee’s Award in the event of the Grantee’s death on a
beneficiary designation form provided by the Administrator.

     

    (k) 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 to grant such Award, or such other later
date as is determined by the Administrator.

     

    7. Award Exercise or Purchase Price,
Consideration and Taxes.

     

    (a) Exercise or Purchase Price.
The exercise or purchase price, if any, for an Award shall be as
follows:

     

    (i) In
the case of an Incentive Stock Option:

     

    (A)
granted to an Employee who, at the time of the grant of such Incentive Stock
Option 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 of the
Company, the per Share exercise price shall be not less than one hundred ten
percent (110%) of the Fair Market Value per Share on the date of grant;
or

     

    (B)
granted to any Employee other than an Employee described in the preceding
paragraph, the per Share exercise price shall be not less than one hundred
percent (100%) of the Fair Market Value per Share on the date of
grant.

     

    (ii) In
the case of a Non-Qualified Stock Option, the per Share exercise price shall be
such price as is determined by the Administrator.

     

    (iii) In
the case of SARs, the base appreciation amount shall not be less than one
hundred percent (100%) of the Fair Market Value per Share on the date of
grant.

     

    (iv) In
the case of Awards intended to qualify as Performance-Based Compensation, the
exercise or purchase price, if any, shall be not less than one hundred percent
(100%) of the Fair Market Value per Share on the date of grant.

     

    (v) In
the case of the sale of Shares, the per Share purchase price, if any, shall be
such price as is determined by the Administrator.

     

    (vi) In
the case of other Awards, such price as is determined by the
Administrator.

     

    (vii)
Notwithstanding the foregoing provisions of this Section 7(a), in the case of an
Award issued pursuant to Section 6(d), above, the exercise or purchase price for
the Award shall be determined in accordance with the provisions of the relevant
instrument evidencing the agreement to issue such Award.

     

    
      
         

      

      
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    (b) Consideration. Subject to
Applicable Laws, the consideration to be paid for the Shares to be issued upon
exercise or purchase of an Award including the method of payment, shall be
determined by the Administrator. In addition to any other types of consideration
the Administrator may determine, the Administrator is authorized to accept as
consideration for Shares issued under the Plan the following:

     

    (i)
cash;

     

    (ii)
check;

     

    (iii)
delivery of Grantee’s promissory note with such recourse, interest, security,
and redemption provisions as the Administrator determines as appropriate (but
only to the extent that the acceptance or terms of the promissory note would not
violate an Applicable Law);

     

    (iv)
surrender of Shares or delivery of a properly executed form of attestation of
ownership of Shares as the Administrator may require which have a Fair Market
Value on the date of surrender or attestation equal to the aggregate exercise
price of the Shares as to which said Award shall be exercised;

     

    (v) with
respect to Options, payment through a broker-dealer sale and remittance
procedure pursuant to which the Grantee (A) shall provide written instructions
to a Company designated brokerage firm to effect the immediate sale of some or
all of the purchased Shares and remit to the Company sufficient funds to cover
the aggregate exercise price payable for the purchased Shares and (B) shall
provide written directives to the Company to deliver the certificates for the
purchased Shares directly to such brokerage firm in order to complete the sale
transaction;

     

    (vi) with
respect to Options, payment through a “net exercise” such that, without the
payment of any funds, the Grantee may exercise the Option and receive the net
number of Shares equal to (i) the number of Shares as to which the Option is
being exercised, multiplied by (ii) a fraction, the numerator of which is the
Fair Market Value per Share (on such date as is determined by the Administrator)
less the Exercise Price per Share, and the denominator of which is such Fair
Market Value per Share (the number of net Shares to be received shall be rounded
down to the nearest whole number of Shares); or

     

    (vii) any
combination of the foregoing methods of payment.

     

    The
Administrator may at any time or from time to time, by adoption of or by
amendment to the standard forms of Award Agreement described in Section
4(b)(iv), or by other means, grant Awards which do not permit all of the
foregoing forms of consideration to be used in payment for the Shares or which
otherwise restrict one or more forms of consideration.

     

    (c) Taxes. No Shares shall be
delivered under the Plan to any Grantee or other person until such Grantee or
other person has made arrangements acceptable to the Administrator for the
satisfaction of any non-U.S., federal, state, or local income and employment tax
withholding obligations, including, without limitation, obligations incident to
the receipt of Shares. Upon exercise or vesting of an Award the Company shall
withhold or collect from the Grantee an amount sufficient to satisfy such tax
obligations, including, but not limited to, by surrender of the whole number of
Shares covered by the Award sufficient to satisfy the minimum applicable tax
withholding obligations incident to the exercise or vesting of an Award (reduced
to the lowest whole number of Shares if such number of Shares withheld would
result in withholding a fractional Share with any remaining tax withholding
settled in cash).

     

    8. Exercise of
Award.

     

    (a) Procedure for Exercise; Rights as a
Stockholder.

     

    (i) Any
Award granted hereunder shall be exercisable at such times and under such
conditions as determined by the Administrator under the terms of the Plan and
specified in the Award Agreement.

     

    (ii) An
Award 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 Award by the
person entitled to exercise the Award and full payment for the Shares with
respect to which the Award is exercised has been made, including, to the extent
selected, use of the broker-dealer sale and remittance procedure to pay the
purchase price as provided in Section 7(b)(v).

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (b) Exercise of Award Following
Termination of Continuous Service. To the extent required under
Applicable Laws, in the event of termination of a Grantee’s Continuous Service
for any reason other than Disability or death (but not in the event of a
Grantee’s change of status from Employee to Consultant or from Consultant to
Employee), such Grantee may, but only during the Post-Termination Exercise
Period (but in no event later than the expiration date of the term of such Award
as set forth in the Award Agreement), exercise the portion of the Grantee’s
Award that was vested at the date of such termination or such other portion of
the Grantee’s Award as may be determined by the Administrator. The Grantee’s
Award Agreement may provide that upon the termination of the Grantee’s
Continuous Service for Cause, the Grantee’s right to exercise the Award shall
terminate concurrently with the termination of Grantee’s Continuous Service. In
the event of a Grantee’s change of status from Employee to Consultant, an
Employee’s Incentive Stock Option shall convert automatically to a Non-Qualified
Stock Option on the day three (3) months and one day following such change of
status. To the extent that the Grantee’s Award was unvested at the date of
termination, or if the Grantee does not exercise the vested portion of the
Grantee’s Award within the Post-Termination Exercise Period, the Award shall
terminate. If Applicable Laws allow for a shorter or longer Post-Termination
Exercise Period, the Award may be exercised following the termination of a
Grantee’s Continuous Service only to the extent provided in the Award
Agreement.

     

    (c) Disability of Grantee. To the
extent required under Applicable Laws, in the event of termination of a
Grantee’s Continuous Service as a result of his or her Disability, such Grantee
may, but only within twelve (12) months from the date of such termination (or
such longer period as specified in the Award Agreement but in no event later
than the expiration date of the term of such Award as set forth in the Award
Agreement), exercise the portion of the Grantee’s Award that was vested at the
date of such termination; provided, however, that if such Disability is not a
“disability” as such term is defined in Section 22(e)(3) of the Code, in the
case of an Incentive Stock Option such Incentive Stock Option shall
automatically convert to a Non-Qualified Stock Option on the day three (3)
months and one day following such termination. To the extent that the Grantee’s
Award was unvested at the date of termination, or if Grantee does not exercise
the vested portion of the Grantee’s Award within the time specified herein, the
Award shall terminate. If Applicable Laws allow for a shorter or longer
Post-Termination Exercise Period upon a Grantee’s Continuous Service as a result
of Disability, the Award may be exercised following the termination of a
Grantee’s Continuous Service only to the extent provided in the Award
Agreement.

     

    (d) Death of Grantee. To the
extent required under Applicable Laws, in the event of a termination of the
Grantee’s Continuous Service as a result of his or her death, or in the event of
the death of the Grantee during the Post-Termination Exercise Period or during
the twelve (12) month period following the Grantee’s termination of Continuous
Service as a result of his or her Disability, the Grantee’s estate or a person
who acquired the right to exercise the Award by bequest or inheritance may
exercise the portion of the Grantee’s Award that was vested as of the date of
termination, within twelve (12) months from the date of death (or such longer
period as specified in the Award Agreement but in no event later than the
expiration of the term of such Award as set forth in the Award Agreement). To
the extent that, at the time of death, the Grantee’s Award was unvested, or if
the Grantee’s estate or a person who acquired the right to exercise the Award by
bequest or inheritance does not exercise the vested portion of the Grantee’s
Award within the time specified herein, the Award shall terminate. If Applicable
Laws allow for a shorter or longer Post-Termination Exercise Period upon a
termination of the Grantee’s Continuous Service as a result of his or her death,
the Award may be exercised following the termination of a Grantee’s Continuous
Service only to the extent provided in the Award Agreement.

     

    (e) Extension if Exercise Prevented by
Law. Notwithstanding the foregoing, if the exercise of an Award within
the applicable time periods set forth in this Section 8 is prevented by the
provisions of Section 9 below, the Award shall remain exercisable until one (1)
month after the date the Grantee is notified by the Company that the Award is
exercisable, but in any event no later than the expiration of the term of such
Award as set forth in the Award Agreement.

     

    
      
         

      

      
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    9. Conditions Upon Issuance of
Shares.

     

    (a) If at
any time the Administrator determines that the delivery of Shares pursuant to
the exercise, vesting or any other provision of an Award is or may be unlawful
under Applicable Laws, the vesting or right to exercise an Award or to otherwise
receive Shares pursuant to the terms of an Award shall be suspended until the
Administrator determines that such delivery is lawful and shall be further
subject to the approval of counsel for the Company with respect to such
compliance. The Company shall have no obligation to affect any registration or
qualification of the Shares under federal or state laws.

     

    (b) As a
condition to the exercise of an Award, the Company may require the person
exercising such Award to represent and warrant at the time of any such exercise
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 by any Applicable
Laws.

     

    10. Adjustments Upon Changes in
Capitalization. Subject to any required action by the stockholders of the
Company and Section 11 hereof, the number of Shares covered by each outstanding
Award, and the number of Shares 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, the exercise or purchase price of each such outstanding
Award, the maximum number of Shares with respect to which Awards may be granted
to any Grantee in any calendar year, as well as any other terms that the
Administrator determines require adjustment shall be proportionately adjusted
for (i) any increase or decrease in the number of issued Shares resulting from a
stock split, reverse stock split, stock dividend, combination or
reclassification of the Shares, or similar transaction affecting the Shares,
(ii) any other increase or decrease in the number of issued Shares effected
without receipt of consideration by the Company, or (iii) any other transaction
with respect to Common Stock including a corporate merger, consolidation,
acquisition of property or stock, separation (including a spin-off or other
distribution of stock or property), reorganization, liquidation (whether partial
or complete) or any similar transaction; provided, however that conversion of
any convertible securities of the Company shall not be deemed to have been
“effected without receipt of consideration.” In the event of any distribution of
cash or other assets to stockholders other than a normal cash dividend, the
Administrator shall also make such adjustments as provided in this Section 10 or
substitute, exchange or grant Awards to effect such adjustments (collectively
“adjustments”). Any such adjustments to outstanding Awards will be effected in a
manner that precludes the enlargement of rights and benefits under such Awards.
In connection with the foregoing adjustments, the Administrator may, in its
discretion, prohibit the exercise of Awards or other issuance of Shares, cash or
other consideration pursuant to Awards during certain periods of time. Except as
the Administrator determines, no issuance by the Company of shares of any class,
or securities convertible into shares of any class, shall affect, and no
adjustment by reason hereof shall be made with respect to, the number or price
of Shares subject to an Award.

     

    11. Corporate Transactions and Changes
in Control.

     

    (a) Termination of Award to Extent Not
Assumed in Corporate Transaction. Effective upon the consummation of a
Corporate Transaction, all outstanding Awards under the Plan shall terminate.
However, all such Awards shall not terminate to the extent they are Assumed in
connection with the Corporate Transaction.

     

    (b) Acceleration of Award Upon Corporate
Transaction or Change in Control.

     

    (i) Corporate Transaction. Except
as provided otherwise in an individual Award Agreement, in the event of a
Corporate Transaction and:

     

    (A) for
the portion of each Award that is Assumed or Replaced, then such Award (if
Assumed), the replacement Award (if Replaced), or the cash incentive program (if
Replaced) automatically shall become fully vested, exercisable and payable and
be released from any repurchase or forfeiture rights (other than repurchase
rights exercisable at Fair Market Value) for all of the Shares (or other
consideration) at the time represented by such Assumed or Replaced portion of
the Award, immediately upon termination of the Grantee’s Continuous Service if
such Continuous Service is terminated by the successor company or the Company
without Cause within twelve (12) months after the Corporate Transaction;
and

     

    
      
         

      

      
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    (B) for
the portion of each Award that is neither Assumed nor Replaced, such portion of
the Award shall automatically become fully vested and exercisable and be
released from any repurchase or forfeiture rights (other than repurchase rights
exercisable at Fair Market Value) for all of the Shares (or other consideration)
at the time represented by such portion of the Award, immediately prior to the
specified effective date of such Corporate Transaction, provided that the
Grantee’s Continuous Service has not terminated prior to such date. For Awards
that have an exercise feature, the portion of the Award that is not Assumed
shall terminate under subsection (a) of this Section 11 to the extent not
exercised prior to the consummation of such Corporate Transaction.

     

    (ii)
Change in Control.
Except as provided otherwise in an individual Award Agreement, following a
Change in Control (other than a Change in Control which also is a Corporate
Transaction) and upon the termination of the Continuous Service of a Grantee if
such Continuous Service is terminated by the Company or Related Entity without
Cause within twelve (12) months after a Change in Control, each Award of such
Grantee which is at the time outstanding under the Plan automatically shall
become fully vested and exercisable and be released from any repurchase or
forfeiture rights (other than repurchase rights exercisable at Fair Market
Value), immediately upon the termination of such Continuous
Service.

     

    (c) Effect of Acceleration on Incentive
Stock Options. Any Incentive Stock Option accelerated under this Section
11 in connection with a Corporate Transaction or Change in Control shall remain
exercisable as an Incentive Stock Option under the Code only to the extent the
$100,000 dollar limitation of Section 422(d) of the Code is not
exceeded.

     

    12. Effective Date and Term of
Plan. The Plan shall become effective upon the earlier to occur of its
adoption by the Board or its approval by the stockholders of the Company. It
shall continue in effect for a term of ten (10) years unless sooner terminated.
Subject to Section 17 below, and Applicable Laws, Awards may be granted under
the Plan upon its becoming effective.

     

    13. Amendment, Suspension or Termination
of the Plan.

     

    (a) The
Board may at any time amend, suspend or terminate the Plan; provided, however,
that no such amendment shall be made without the approval of the Company’s
stockholders to the extent such approval is required by Applicable Laws, or if
such amendment would lessen the stockholder approval requirements of Section
4(b)(vi) or this Section 13(a).

     

    (b) No
Award may be granted during any suspension of the Plan or after termination of
the Plan.

     

    (c) No
suspension or termination of the Plan (including termination of the Plan under
Section 12, above) shall adversely affect any rights under Awards already
granted to a Grantee.

     

    14. Reservation of
Shares.

     

    (a) The
Company, during the term of the Plan, will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

     

    (b) The
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.

     

    15. No Effect on Terms of
Employment/Consulting Relationship. The Plan shall not confer upon any
Grantee any right with respect to the Grantee’s Continuous Service, nor shall it
interfere in any way with his or her right or the right of the Company or a
Related Entity to terminate the Grantee’s Continuous Service at any time, with
or without Cause, and with or without notice. The ability of the Company or any
Related Entity to terminate the employment of a Grantee who is employed at will
is in no way affected by its determination that the Grantee’s Continuous Service
has been terminated for Cause for the purposes of this Plan.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    16. No Effect on Retirement and Other
Benefit Plans. Except as specifically provided in a retirement or other
benefit plan of the Company or a Related Entity, Awards shall not be deemed
compensation for purposes of computing benefits or contributions under any
retirement plan of the Company or a Related Entity, and shall not affect any
benefits under any other benefit plan of any kind or any benefit plan
subsequently instituted under which the availability or amount of benefits is
related to level of compensation. The Plan is not a “Retirement Plan” or
“Welfare Plan” under the Employee Retirement Income Security Act of 1974, as
amended.

     

    17. Stockholder Approval.
Continuance of the Plan shall be subject to approval by the stockholders of the
Company within twelve (12) months before or after the date the Plan is adopted.
Such stockholder approval shall be obtained in the degree and manner required
under Applicable Laws. Any Award exercised before stockholder approval is
obtained shall be rescinded if stockholder approval is not obtained within the
time prescribed, and Shares issued on the exercise of any such Award shall not
be counted in determining whether stockholder approval is obtained.

     

    18. Information to Grantees. To
the extent required by Applicable Laws, the Company shall provide to each
Grantee, during the period for which such Grantee has one or more Awards
outstanding, copies of financial statements at least annually. The Company shall
not be required to provide such information to persons whose duties in
connection with the Company assure them access to equivalent
information.

     

    19. Unfunded Obligation. Grantees
shall have the status of general unsecured creditors of the Company. Any amounts
payable to Grantees pursuant to the Plan shall be unfunded and unsecured
obligations for all purposes, including, without limitation, Title I of the
Employee Retirement Income Security Act of 1974, as amended. Neither the Company
nor any Related Entity shall be required to segregate any monies from its
general funds, or to create any trusts, or establish any special accounts with
respect to such obligations. The Company shall retain at all times beneficial
ownership of any investments, including trust investments, which the Company may
make to fulfill its payment obligations hereunder. Any investments or the
creation or maintenance of any trust or any Grantee account shall not create or
constitute a trust or fiduciary relationship between the Administrator, the
Company or any Related Entity and a Grantee, or otherwise create any vested or
beneficial interest in any Grantee or the Grantee’s creditors in any assets of
the Company or a Related Entity. The Grantees shall have no claim against the
Company or any Related Entity for any changes in the value of any assets that
may be invested or reinvested by the Company with respect to the
Plan.

     

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

     

    21. Nonexclusivity of The Plan.
Neither the adoption of the Plan by the Board, the submission of the Plan to the
stockholders of the Company for approval, nor any provision of the Plan will be
construed as creating any limitations on the power of the Board to adopt such
additional compensation arrangements as it may deem desirable, including,
without limitation, the granting of Awards otherwise than under the Plan, and
such arrangements may be either generally applicable or applicable only in
specific cases.

     

    
      
         

      

      
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