Document:

Exhibit 10.1

 

CONCEPTUS, INC.

 

FIFTH AMENDED AND
RESTATED

2001 EQUITY INCENTIVE PLAN

 

2001 Equity Incentive Plan

Adopted by the Board: March 21, 2001

Approved by Stockholders: May 16, 2001

 

Amended and Restated Equity Incentive Plan

Adopted by the Board: March 2002

Approved by Stockholders: May 30, 2002

 

Second Amended and Restated Equity Incentive Plan

Adopted by the Board: April 2003

Approved by Stockholders: June 10, 2003

 

Third Amended and Restated Equity Incentive Plan

Adopted by the Board: March 2004

Approved by Stockholders: April 19, 2004

 

Amendment to Third Amended and Restated Equity
Incentive Plan

Adopted by the Board: March 2004

Approved by Stockholders: April 19, 2004

 

Fourth Amended and Restated Equity Incentive Plan

Adopted by the Executive Committee: November 30,
2004

 

Fifth Amended and Restated Equity Incentive Plan

Adopted by the Executive Committee: January 5,
2005

 

 

TABLE OF CONTENTS

 

	
  1.

  	
   

  	
  PURPOSES
  OF THE PLAN

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  STOCK SUBJECT TO THE PLAN

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  ADMINISTRATION OF THE PLAN

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  ELIGIBILITY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  LIMITATIONS.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  TERM OF PLAN

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  TERM OF AWARDS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  OPTION
  EXERCISE PRICE AND CONSIDERATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  EXERCISE
  OF OPTION;

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  NON-TRANSFERABILITY
  OF OPTIONS AND STOCK PURCHASE RIGHTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  GRANTING
  OF AWARDS TO INDEPENDENT DIRECTORS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  TERMS
  OF AWARDS GRANTED TO INDEPENDENT DIRECTORS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  STOCK
  PURCHASE RIGHTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  RESTRICTED
  STOCK UNITS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  STOCK APPRECIATION RIGHTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  OTHER AWARDS.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  ADJUSTMENTS
  UPON CHANGES IN CAPITALIZATION, MERGER OR ASSET SALE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  TIME
  OF GRANTING AWARDS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  AMENDMENT AND
  TERMINATION OF THE PLAN

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  STOCKHOLDER
  APPROVAL

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  INABILITY TO OBTAIN
  AUTHORITY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  RESERVATION
  OF SHARES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
   

  	
  INVESTMENT
  INTENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  25.

  	
   

  	
  GOVERNING LAW

  	
   

  

 

 

CONCEPTUS, INC.

 

FIFTH AMENDED AND
RESTATED 2001 EQUITY INCENTIVE PLAN

 

1.                                       Purposes of the Plan.  The purposes of the Conceptus, Inc. Fifth
Amended and Restated 2001 Equity Incentive Plan are to attract and retain the
best available personnel for positions of substantial responsibility, to
provide additional incentive to Employees, Directors and Consultants and to
promote the success of the Company’s business. 
Options granted under the Plan may be Incentive Stock Options or
Non-Qualified Stock Options, as determined by the Administrator at the time of
grant.  Other Awards may also be granted
under the Plan.

 

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

 

(a)                                  “Acquisition”
means (i) any consolidation or merger of the Company with or into any other
corporation or other entity or person in which the stockholders of the Company
prior to such consolidation or merger own less than fifty percent (50%) of the
Company’s voting power immediately after such consolidation or merger,
excluding any consolidation or merger effected exclusively to change the
domicile of the Company; or (ii) a sale of all or substantially all of the
assets of the Company.

 

(b)                                 “Administrator”
means the Board or the Committee responsible for conducting the general
administration of the Plan, as applicable, in accordance with Section 4
hereof.

 

(c)                                  “Applicable
Laws” means the requirements relating to the administration of stock option
plans under U.S. state corporate laws, U.S. federal and state securities laws,
the Code, any stock exchange or quotation system on which the Common Stock is
listed or quoted and the applicable laws of any foreign country or jurisdiction
where Options or Stock Purchase Rights are granted under the Plan.

 

(d)                                 “Audit
Committee” shall mean the Audit Committee of the Board.

 

(e)                                  “Award”
shall mean an Option, a Restricted Stock award, a Stock Appreciation Right
award, a Performance Share award, a Dividend Equivalents award, a Stock Payment
award, a Stock Purchase Right or a Restricted Stock Unit award granted to an
eligible individual under the Plan.

 

(f)                                    “Award
Agreement” means any written agreement, contract, or other instrument or
document evidencing an Award.

 

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

 

(h)                                 “Code”
means the Internal Revenue Code of 1986, as amended, or any successor statute
or statutes thereto.  Reference to any
particular Code section shall include any successor section.

 

1

 

(i)                                     “Committee”
means a committee appointed by the Board in accordance with Section 4
hereof.

 

(j)                                     “Common
Stock” means the Common Stock of the Company, par value $0.003 per share.

 

(k)                                  “Company”
means Conceptus, Inc., a Delaware corporation.

 

(l)                                     “Compensation
Committee” shall mean the Compensation Committee of the Board.

 

(m)                               “Consultant”
means any consultant or adviser if: (i) the consultant or adviser renders
bona fide services to the Company or any Parent or Subsidiary of the Company;
(ii) the services rendered by the consultant or adviser are not in
connection with the offer or sale of securities in a capital-raising
transaction and do not directly or indirectly promote or maintain a market for
the Company’s securities; and (iii) the consultant or adviser is a natural
person who has contracted directly with the Company or any Parent or Subsidiary
of the Company to render such services.

 

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

 

(o)                                 “Employee”
means any person, including an Officer or Director, who is an employee (as
defined in accordance with Section 3401(c) of the Code) of the Company or any
Parent or Subsidiary of the Company.  A
Service Provider 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 (90) days, unless reemployment
upon expiration of such leave is guaranteed by statute or contract.  Neither service as a Director nor payment of
a director’s fee by the Company shall be sufficient, by itself, to constitute “employment”
by the Company.

 

(p)                                 “Exchange
Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute or statutes thereto. 
Reference to any particular Exchange Act section shall include any
successor section.

 

(q)                                 “Executive
Committee” shall mean the Executive Committee of the Board.

 

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

 

(i)                                     If
the Common Stock is listed on any established stock exchange or a national
market system, including, without limitation, the Nasdaq National Market or The
Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall
be the closing sales price for a share of such stock (or the closing bid, if no
sales were reported) as quoted on such exchange or system for the last market
trading day prior to the time of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;

 

2

 

(ii)                                  If
the Common Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported, its Fair Market Value shall be the mean
between the high bid and low asked prices for a share of the Common Stock on
the last market trading day prior to the day of determination; or

 

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

 

(s)                                  “Holder”
means a person who has been granted or awarded an Award or who holds Shares
acquired pursuant to the exercise of an Award.

 

(t)                                    “Incentive
Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and which is
designated as an Incentive Stock Option by the Administrator.

 

(u)                                 “Independent
Director” means a Director who is not an Employee of the Company.

 

(v)                                 “Lead Director” shall mean the Lead
Independent Director appointed by the Board.

 

(w)                               “Non-Qualified
Stock Option” means an Option (or portion thereof) that is not designated
as an Incentive Stock Option by the Administrator, or which is designated as an
Incentive Stock Option by the Administrator but fails to qualify as an
incentive stock option within the meaning of Section 422 of the Code.

 

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

 

(y)                                 “Option”
means a stock option granted pursuant to the Plan.

 

(z)                                   “Option
Agreement” means a written agreement between the Company and a Holder
evidencing the terms and conditions of an individual Option grant.  The Option Agreement is subject to the terms
and conditions of the Plan.

 

(aa)                            “Parent”
means any corporation, whether now or hereafter existing (other than the
Company), in an unbroken chain of corporations ending with the Company if each
of the corporations other than the last corporation in the unbroken chain owns
stock possessing more than fifty percent of the total combined voting power of
all classes of stock in one of the other corporations in such chain.

 

(bb)                           “Performance Share”
means a right granted to a Holder pursuant to Section 17, to receive cash,
Stock, or other Awards, the payment of which is contingent upon achieving
certain performance goals established by the Committee.

 

(cc)                            “Plan”
means the Conceptus, Inc. Fifth Amended and Restated 2001 Equity Incentive
Plan.

 

3

 

(dd)                          “Restricted
Stock” means Shares (i) acquired pursuant to the exercise of an unvested
Option in accordance with Section 10(h) below or pursuant to a Stock Purchase
Right granted under Section 14 below or (ii) issued to Independent
Directors pursuant to Section 12 below.

 

(ee)                            “Restricted
Stock Unit” means a right to receive a specified number of shares of Common
Stock during specified time periods pursuant to Section 15.

 

(ff)                                “Rule
16b-3” means that certain Rule 16b-3 under the Exchange Act, as such Rule
may be amended from time to time.

 

(gg)                          “Securities
Act” means the Securities Act of 1933, as amended, or any successor statute
or statutes thereto.  Reference to any
particular Securities Act section shall include any successor section.

 

(hh)                          “Service
Provider” means an Employee, Director or Consultant.

 

(ii)                                  “Share”
means a share of Common Stock, as adjusted in accordance with Section 18 below.

 

(jj)                                  “Stock
Appreciation Right” or “SAR” means a right granted pursuant to Section 16
to receive a payment equal to the excess of the Fair Market Value of a
specified number of shares of Common Stock on the date the SAR is exercised
over the Fair Market Value on the date the SAR was granted as set forth in the
applicable Award Agreement.

 

(kk)                            “Stock Payment”
means (a) a payment in the form of Shares, or (b) an option or other right to
purchase Shares, as part of any bonus, deferred compensation or other
arrangement, made in lieu of all or any portion of the compensation, granted
pursuant to Section 17.

 

(ll)                                  “Stock
Purchase Right” means a right to purchase Common Stock pursuant to
Section 14 below.

 

(mm)                      “Subsidiary”
means any corporation, whether now or hereafter existing (other than the
Company), in an unbroken chain of corporations beginning with the Company if
each of the corporations other than the last corporation in the unbroken chain
owns stock possessing more than fifty percent of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

 

3.                                       Stock Subject to the Plan.  Subject to the provisions of Section 15 of
the Plan, the shares of stock subject to Awards shall be Common Stock,
initially shares of the Company’s Common Stock, par value $0.003 per
share.  Subject to the provisions of
Section 15 of the Plan, the maximum aggregate number of Shares which may
be issued upon exercise of Options or Stock Purchase Rights or issued in the
form of Restricted Stock is 2,500,000 Shares. 
Shares issued pursuant to an Award may be authorized but unissued, or
reacquired Common Stock.  If an Option or
Stock Purchase Right expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated).  Shares which are delivered 

 

4

 

by the Holder or withheld by the Company upon the exercise of an Option
or Stock Purchase Rights under the Plan, in payment of the exercise price
thereof or tax withholding thereon, may again be optioned, granted or awarded
hereunder, subject to the limitations of this Section 3.  If Shares of Restricted Stock are repurchased
by the Company at their original purchase price, if any, such Shares shall
become available for future grant under the Plan.  Notwithstanding the provisions of this
Section 3, no Shares may again be optioned, granted or awarded if such action
would cause an Incentive Stock Option to fail to qualify as an Incentive Stock
Option under Section 422 of the Code.

 

4.                                       Administration of the Plan.

 

(a)                                  Administrator.
 Either the Board or a Committee of the
Board delegated administrative authority hereunder shall administer the Plan
and, in the case of a Committee, the Committee shall consist solely of two or
more Independent Directors each of whom is both an “outside director,” within
the meaning of Section 162(m) of the Code, and a “non-employee director” within
the meaning of Rule 16b-3.  Within the
scope of such authority, the Board or the Committee may (i) delegate to a
committee of one or more members of the Board who are not Independent Directors
the authority to grant awards under the Plan to eligible persons who are either
(1) not then “covered employees,” within the meaning of Section 162(m) of the
Code and are not expected to be “covered employees” at the time of recognition
of income resulting from such award or (2) not persons with respect to whom the
Company wishes to comply with Section 162(m) of the Code and/or (ii) delegate
to a committee of one or more members of the Board who are not “non-employee
directors,” within the meaning of Rule 16b-3, the authority to grant awards
under the Plan to eligible persons who are not then subject to Section 16 of
the Exchange Act.  The Board may abolish
the Committee at any time and revest in the Board the administration of the
Plan.  Appointment of Committee members
shall be effective upon acceptance of appointment. Committee members may resign
at any time by delivering written notice to the Board.  Vacancies in the Committee may be filled only
by the Board.

 

(b)                                 Powers
of the Administrator.  Subject to the
provisions of the Plan and the specific duties delegated by the Board to such
Committee, and subject to the approval of any relevant authorities, the
Administrator shall have the authority in its sole discretion:

 

(i)                                     to
determine the Fair Market Value;

 

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

 

(iii)                               to
determine the number of Shares to be covered by each such Award granted
hereunder;

 

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

 

(v)                                 to
determine the terms and conditions of any Award granted hereunder (such terms
and conditions include, but are not limited to, the exercise price, the time or
times when Awards may vest or be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation

 

5

 

regarding any Award or
the Common Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine);

 

(vi)                              to
determine whether to offer to buyout a previously granted Option as provided in
subsection 10(i) and to determine the terms and conditions of such offer
and buyout (including whether payment is to be made in cash or Shares);

 

(vii)                           to
prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans established for the
purpose of qualifying for preferred tax treatment under foreign tax laws;

 

(viii)                        to allow
Holders to satisfy withholding tax obligations by electing to have the Company
withhold from the Shares to be issued pursuant to an Award that number of
Shares having a Fair Market Value equal to the minimum amount required to be
withheld based on the statutory withholding rates for federal and state tax
purposes that apply to supplemental taxable income.  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.  All elections by
Holders to have Shares withheld for this purpose shall be made in such form and
under such conditions as the Administrator may deem necessary or advisable;

 

(ix)                                to
amend the Plan or any Award granted under the Plan as provided in Section 21;
and

 

(x)                                   to
construe and interpret the terms of the Plan and Awards granted pursuant to the
Plan and to exercise such powers and perform such acts as the Administrator
deems necessary or desirable to promote the best interests of the Company which
are not in conflict with the provisions of the Plan.

 

(c)                                  Effect
of Administrator’s Decision.  All
decisions, determinations and interpretations of the Administrator shall be
final and binding on all Holders.

 

5.                                       Eligibility. 
Awards other than Incentive Stock Options may be granted to Service
Providers.  Incentive Stock Options may
be granted only to Employees.  If
otherwise eligible, an Employee or Consultant who has been granted an Award may
be granted additional Awards.  Each
Independent Director shall be eligible to be granted Restricted Stock and
Options at the times and in the manner set forth in Section 12.

 

6.                                       Limitations.

 

(a)                                  Each
Option shall be designated by the Administrator in the Option Agreement as
either an Incentive Stock Option or a Non-Qualified Stock Option.  However, notwithstanding such designations,
to the extent that the aggregate Fair Market Value of Shares subject to a
Holder’s Incentive Stock Options and other incentive stock options granted by the
Company, any Parent or Subsidiary, which 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 or other options shall be
treated as Non-Qualified Stock Options.

 

6

 

For purposes of
this Section 6(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)                                 Neither
the Plan nor any Award shall confer upon a Holder any right with respect to
continuing the Holder’s employment or consulting relationship with the Company,
nor shall they interfere in any way with the Holder’s right or the Company’s
right to terminate such employment or consulting relationship at any time, with
or without cause.

 

(c)                                  The
maximum number of shares of Common Stock with respect to one or more Awards
that may be granted to any one Service Provider during a calendar year shall be
800,000. The foregoing limitation shall be adjusted proportionately in
connection with any change in the Company’s capitalization as described in Section
18.  For purposes of this Section 6(c),
if an Option is canceled in the same calendar year it was granted (other than
in connection with a transaction described in Section 18), the canceled Option
will be counted against the limit set forth in this Section 6(c).  For this purpose, if the exercise price of an
Option is reduced, the transaction shall be treated as a cancellation of the
Option and the grant of a new Option.

 

7.                                       Term of Plan. 
The Plan became effective upon its initial adoption by the Board on
March 21, 2001 and shall continue in effect until it is terminated under
Section 21 of the Plan.  No Awards
may be issued under the Plan after March 21, 2011, the tenth (10th) anniversary
of the date upon which the Plan was initially adopted by the Board.

 

8.                                       Term of Awards. 
The term of each Award shall be stated in the Award Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. 
In the case of an Incentive Stock Option granted to a Holder who, at the
time the Option is granted, owns (or is treated as owning under Code Section
424) 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
Option shall be five (5) years from the date of grant or such shorter term as
may be provided in the Option Agreement.

 

9.                                       Option Exercise Price and
Consideration.

 

(a)                                  Except
as provided in Section 13, the per share exercise price for the Shares to be
issued upon exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:

 

(i)                                     In
the case of an Incentive Stock Option

 

(A)                              granted
to an Employee who, at the time of grant of such Option, owns (or is treated as
owning under Code Section 424) 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 one hundred ten
percent (110%) of the Fair Market Value per Share on the date of grant.

 

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

 

7

 

(b)                                 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.  Such consideration may
consist of (1) cash, (2) check, (3) with the consent of the
Administrator, a full recourse promissory note bearing interest (at a market rate
of interest determined as of the date of exercise) and payable upon such terms
as may be prescribed by the Administrator, (4) with the consent of the
Administrator, other Shares which (x) in the case of Shares acquired from
the Company, have been owned by the Holder for more than six (6) months on the
date of surrender, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which such
Option shall be exercised, (5) with the consent of the Administrator,
surrendered Shares then issuable upon exercise of the Option having a Fair
Market Value on the date of exercise equal to the aggregate exercise price of
the Option or exercised portion thereof, (6) property of any kind which
constitutes good and valuable consideration, (7) with the consent of the
Administrator, delivery of a notice that the Holder has placed a market sell
order with a broker with respect to Shares then issuable upon exercise of the
Options and that the broker has been directed to pay a sufficient portion of
the net proceeds of the sale to the Company in satisfaction of the Option
exercise price, provided, that payment of such
proceeds is then made to the Company upon settlement of such sale, or
(8) with the consent of the Administrator, any combination of the
foregoing methods of payment.

 

10.                                 Exercise of Option; Vesting; Fractional
Exercises.  Except as provided in
Section 13, Options granted hereunder shall be vested and exercisable according
to the terms hereof at such times and under such conditions as determined by
the Administrator and set forth in the Option Agreement.  An Option may not be exercised for a fraction
of a Share.

 

(a)                                  All
Options shall be subject to such additional terms and conditions as determined
by the Administrator and shall be evidenced by a written Option Agreement.  In the event that the exercise price of an
Option is intended to be below the Fair Market Value per Share on the date of
grant, such Option Agreement may also include limitations regarding the exercise
of such Option and may provide that such exercise is subject to certain terms
and restrictions, including but not limited to, an election, by specified date,
of the Holder, regarding such Option, to the extent such terms and restrictions
are required so as not cause the Option or the shares of Common Stock issuable
pursuant to the exercise of such Option to be includable in the gross income of
the Holder under Section 409A of the Code prior to such times or occurrence of
such events, as permitted by the Code and the regulations and other guidance
thereunder (including, without limitation, Section 409A of the Code, and the
regulations and other guidance issued by the Secretary of the Treasury
thereunder).

 

(b)                                 Deliveries
upon Exercise.  All or a portion of
an exercisable Option shall be deemed exercised upon delivery of all of the
following to the Secretary of the Company or his or her office:

 

(i)                                     A
written or electronic notice complying with the applicable rules established by
the Administrator stating that the Option, or a portion thereof, is
exercised.  The notice shall be signed by
the Holder or other person then entitled to exercise the Option or such portion
of the Option;

 

8

 

(ii)                                  Such
representations and documents as the Administrator, in its sole discretion,
deems necessary or advisable to effect compliance with Applicable Laws.  The Administrator may, in its sole
discretion, also take whatever additional actions it deems appropriate to
effect such compliance, including, without limitation, placing legends on share
certificates and issuing stop transfer notices to agents and registrars;

 

(iii)                               Upon
the exercise of all or a portion of an unvested Option pursuant to Section
10(h), a Restricted Stock purchase agreement in a form determined by the
Administrator and signed by the Holder or other person then entitled to
exercise the Option or such portion of the Option; and

 

(iv)                              In
the event that the Option shall be exercised pursuant to Section 10(f) by any
person or persons other than the Holder, appropriate proof of the right of such
person or persons to exercise the Option.

 

(c)                                  Conditions
to Delivery of Share Certificates. 
The Company shall not be required to issue or deliver any certificate or
certificates for Shares purchased upon the exercise of any Option or portion
thereof prior to fulfillment of all of the following conditions:

 

(i)                                     The
admission of such Shares to listing on all stock exchanges on which such class
of stock is then listed;

 

(ii)                                  The
completion of any registration or other qualification of such Shares under any
state or federal law, or under the rulings or regulations of the Securities and
Exchange Commission or any other governmental regulatory body which the
Administrator shall, in its sole discretion, deem necessary or advisable;

 

(iii)                               The
obtaining of any approval or other clearance from any state or federal
governmental agency which the Administrator shall, in its sole discretion,
determine to be necessary or advisable;

 

(iv)                              The
lapse of such reasonable period of time following the exercise of the Option as
the Administrator may establish from time to time for reasons of administrative
convenience; and

 

(v)                                 The
receipt by the Company of full payment for such Shares, including payment of
any applicable withholding tax, which in the sole discretion of the
Administrator may be in the form of consideration used by the Holder to pay for
such Shares under Section 9(b).

 

(d)                                 Termination
of Relationship as a Service Provider. 
If a Holder ceases to be a Service Provider other than by reason of the
Holder’s disability or death, such Holder may exercise his or her Option within
such period of time as is specified in the Option Agreement to the extent that
the Option is vested on the date of termination.  In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for three (3) months
following the Holder’s termination.  If,
on the date of termination, the Holder is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option immediately cease to
be issuable under the Option and shall again become available for issuance
under the Plan.  If, after

 

9

 

termination, the Holder
does not exercise his or her Option within the time period specified herein,
the Option shall terminate, and the Shares covered by such Option shall again
become available for issuance under the Plan.

 

(e)                                  Disability
of Holder.  If a Holder ceases to be
a Service Provider as a result of the Holder’s disability, the Holder may
exercise his or her Option within such period of time as is specified in the
Option Agreement to the extent the Option is vested on the date of
termination.  In the absence of a specified
time in the Option Agreement, the Option shall remain exercisable for twelve
(12) months following the Holder’s termination.  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 cease to
be treated as an Incentive Stock Option and shall be treated for tax purposes
as a Non-Qualified Stock Option from and after the day which is three (3)
months and one (1) day following such termination.  If, on the date of termination, the Holder is
not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall immediately cease to be issuable under the Option
and shall again become available for issuance under the Plan.  If, after termination, the Holder does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall again become available
for issuance under the Plan.

 

(f)                                    Death
of Holder.  If a Holder dies while a
Service Provider, the Option may be exercised within such period of time as is
specified in the Option Agreement, by the Holder’s estate or by a person who
acquires the right to exercise the Option by bequest or inheritance, but only
to the extent that the Option is vested on the date of death.  In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for twelve (12) months
following the Holder’s termination.  If,
at the time of death, the Holder is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately
cease to be issuable under the Option and shall again become available for
issuance under the Plan.  The Option may
be exercised by the executor or administrator of the Holder’s estate or, if
none, by the person(s) entitled to exercise the Option under the Holder’s will
or the laws of descent or distribution. 
If the Option is not so exercised within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall again
become available for issuance under the Plan.

 

(g)                                 Regulatory
Extension.  A Holder’s Option
Agreement may provide that if the exercise of the Option following the
termination of the Holder’s status as a Service Provider (other than upon the
Holder’s death or Disability) would be prohibited at any time solely because
the issuance of shares would violate the registration requirements under the
Securities Act, then the Option shall terminate on the earlier of (i) the
expiration of the term of the Option set forth in Section 8 or (ii) the
expiration of a period of three (3) months after the termination of the Holder’s
status as a Service Provider during which the exercise of the Option would not
be in violation of such registration requirements.

 

(h)                                 Early
Exercisability.  The Administrator
may provide in the terms of a Holder’s Option Agreement that the Holder may, at
any time before the Holder’s status as a Service Provider terminates, exercise
the Option in whole or in part prior to the full vesting of the Option; provided, however, that Shares acquired upon exercise of an
Option which has not

 

10

 

fully vested may be
subject to any forfeiture, transfer or other restrictions as the Administrator
may determine in its sole discretion.

 

(i)                                     Buyout
Provisions.  Subject to the
provisions of Section 18(d), the Administrator may at any time offer to buyout
for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to
the Holder at the time that such offer is made.

 

11.                                 Non-Transferability of Options and Stock Purchase Rights.  Options and Stock Purchase Rights may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Holder, only by the Holder.

 

12.                                 Granting of Awards to Independent
Directors.

 

(a)                                  Initial
and Subsequent Grants.  During the
term of the Plan, (i) a person who is initially elected to the Board as an Independent Director
automatically shall be granted on the date of such initial election (A) an
Option to purchase twenty thousand (20,000) shares of Common Stock (subject to
adjustment as provided in Section 18) (“Initial Option”) and (B) six
thousand six hundred seventy (6,670) shares of Restricted Stock (subject to
adjustment as provided in Section 18) (“Initial Restricted Stock Grant”)
and (ii) each person who is an Independent Director immediately following an
annual meeting of stockholders (provided
that, on such date, he or she shall have served on the Board for at least six
(6) months prior to the date of such annual meeting) automatically shall be
granted on the date of such annual meeting (A) an Option to purchase seven
thousand five hundred (7,500) shares of Common Stock (subject to adjustment as
provided in Section 18) (“Subsequent Option”) and (B) two thousand (2,000)
shares of Restricted Stock (subject to adjustment as provided in Section 18) (“Subsequent
Restricted Stock Grant”).    Members of the Board who are employees of the
Company who subsequently retire from the Company and remain on the Board will
not receive an Initial Option grant or Initial Restricted Stock Grant pursuant
to clause (i) of the preceding sentence, but to the extent that they are
otherwise eligible, will receive, after retirement from employment with the
Company, Subsequent Options and Subsequent Restricted Stock Grants as described
in clause (ii) of the preceding sentence (with the date of retirement being
deemed to be his or her date of initial election to the Board).

 

(b)                                 Committee
Grants.  In addition to the grants in
Section 12(a), during the term of the Plan:

 

(i)                                     the
Independent Director who is serving as the Lead Director immediately following
an annual meeting of stockholders automatically shall be granted on the date of
such annual meeting five hundred (500) shares of Restricted Stock (subject to
adjustment as provided in Section 18);

 

(ii)                                  the
Independent Director who is serving as the Chair of the Audit Committee
immediately following an annual meeting of stockholders automatically shall be
granted on the date of such annual meeting (A) an Option to purchase five
thousand (5,000)

 

11

 

shares of Common Stock
(subject to adjustment as provided in Section 18) and (B) five hundred (500)
shares of Restricted Stock (subject to adjustment as provided in Section 18);

 

(iii)                               each
Independent Director who is serving as a member of the Audit Committee (other
than the Chair of the Audit Committee) immediately following an annual meeting
of stockholders automatically shall be granted on the date of such annual
meeting an Option to purchase two thousand (2,000) shares of Common Stock
(subject to adjustment as provided in Section 18);

 

(iv)                              the
Independent Director who is serving as the Chair of the Compensation Committee
immediately following an annual meeting of stockholders automatically shall be
granted on the date of such annual meeting (A) an Option to purchase two
thousand (2,000) shares of Common Stock (subject to adjustment as provided in
Section 18) and (B) five hundred (500) shares of Restricted Stock (subject to
adjustment as provided in Section 18); and

 

(v)                                 each
Independent Director who is serving as a member of the Compensation Committee
(other than the Chair of the Compensation Committee) immediately following an
annual meeting of stockholders automatically shall be granted on the date of
such annual meeting an Option to purchase one thousand (1,000) shares of Common
Stock (subject to adjustment as provided in Section 18).

 

The Options granted pursuant to this Section 12(b)
shall each be referred to as an “Additional Option” and the shares of
Restricted Stock granted pursuant to this Section 12(b) shall each be referred
to as an “Additional Restricted Stock Grant.”

 

13.                                 Terms of Awards Granted to Independent
Directors.

 

(a)                                  Options.  The per Share price of each Option granted to
an Independent Director shall equal one-hundred percent (100%) of the Fair
Market Value of a share of Common Stock on the date the Option is granted.  Initial Options (as defined in Section 12)
granted to Independent Directors shall vest and become exercisable as
follows:  twenty-five percent (25%) of
the shares subject to each Initial Option shall vest on the one year
anniversary of the date of the Initial Option grant and one forty-eighth
(1/48th) of the shares subject to each Initial Option (rounded down to the next
whole number of shares) shall vest on the first day of each full month
thereafter, such that each Initial Option shall be one-hundred percent (100%)
vested on the on the first day of the forty-eighth (48th) month following its
date of grant.  Subsequent Options and
Additional Options (both as defined in Section 12) granted to Independent
Directors shall vest and become exercisable as follows:  one twelfth (1/12th) of the shares subject to
each Subsequent Option and each Additional Option (rounded down to the next
whole number of shares) shall vest on each monthly anniversary of the date of
the Subsequent Option and Additional Option grants, such that each Subsequent
Option and each Additional Option shall be one-hundred percent (100%) vested on
the one year anniversary of its date of grant. 
Subject to Section 10, the term of each Option granted to an Independent
Director shall be ten (10) years from the date the Option is granted.  No portion of an Option which is
unexercisable at the time of an Independent Director’s termination of
membership on the Board shall thereafter become exercisable.

 

12

 

(b)                                 Restricted
Stock.  The Initial Restricted Stock
Grant, Subsequent Restricted Stock Grant, and Additional Restricted Stock Grant
shall be pursuant to the terms of a restricted stock agreement, which shall
grant the Company the right to repurchase Shares issued pursuant to the Initial
Restricted Stock Grant, Subsequent Restricted Stock Grant and Additional
Restricted Stock Grant upon the termination of the director’s status as a
Director for any reason (including death or disability).  The purchase price for Shares repurchased by the
Company pursuant to such repurchase right shall be at par value of the Shares,
and the repurchase right shall lapse as to 1/3 of the Shares subject to the Initial
Restricted Stock Grant, Subsequent Restricted Stock Grant, or Additional
Restricted Stock Grant, as applicable, on each annual anniversary of the date
of grant, until such time as the repurchase right shall lapse on the third
anniversary of the date of grant.  The
Restricted Stock agreement shall contain such other terms, provisions and
conditions not inconsistent with the Plan as may be determined by the
Administrator in its sole discretion. 
The Director shall have rights equivalent to those of a shareholder and
shall be a shareholder when his or her Initial Restricted Stock Grant,
Subsequent Restricted Stock Grant, or Additional Restricted Stock Grant, as
applicable, is entered upon the records of the duly authorized transfer agent
of the Company.

 

14.                                 Stock Purchase Rights.  

 

(a)                                  Rights
to Purchase.  Stock Purchase Rights
may be issued either alone, in addition to, or in tandem with Options granted
under the Plan and/or cash awards made outside of the Plan.  After the Administrator determines that it
will offer Stock Purchase Rights under the Plan, it shall advise the offeree in
writing of the terms, conditions and restrictions related to the offer,
including the number of Shares that such person shall be entitled to purchase,
the price to be paid, if any, and the time within which such person must accept
such offer.  The offer shall be accepted by execution of a
Restricted Stock purchase agreement in the form determined by the
Administrator.

 

(b)                                 Repurchase
Right.  Unless the Administrator
determines otherwise, the Restricted Stock purchase agreement shall grant the
Company the right to repurchase Shares acquired upon exercise of a Stock
Purchase Right upon the termination of the purchaser’s status as a Service
Provider for any reason.  The purchase
price for Shares repurchased by the Company pursuant to such repurchase right,
if any, and the rate at which such repurchase right shall lapse shall be
determined by the Administrator in its sole discretion, and shall be set forth
in the Restricted Stock purchase agreement.

 

(c)                                  Other
Provisions.  The Restricted Stock
purchase agreement shall contain such other terms, provisions and conditions
not inconsistent with the Plan as may be determined by the Administrator in its
sole discretion.

 

(d)                                 Rights
as a Shareholder.  Once the Stock
Purchase Right is exercised, the purchaser shall have rights equivalent to
those of a shareholder and shall be a shareholder when his or her purchase is
entered upon the records of the duly authorized transfer agent of the
Company.  No adjustment shall be made for
a dividend or other right for which the record date is prior to the date the
Stock Purchase Right is exercised, except as provided in Section 18 of the
Plan.

 

13

 

15.                                 Restricted Stock Units.  

 

Any Holder selected by the Administrator may be
granted an award of Restricted Stock Units in the manner determined from time
to time by the Administrator.

 

(a)                                  The
vesting of Restricted Stock Units shall be determined by the Administrator and
may be linked to specific performance criteria determined to be appropriate by
the Administrator, in each case on a specified date or dates or over any period
or periods determined by the Administrator. 
Common Stock underlying a Restricted Stock Unit award will not be issued
until the Restricted Stock Unit award has vested, pursuant to a vesting
schedule or performance criteria set by the Administrator.

 

(b)                                 Unless
otherwise provided by the Administrator, a Holder awarded Restricted Stock
Units shall have no rights as a Company stockholder with respect to such
Restricted Stock Units until such time as the Restricted Stock Units have
vested and the Common Stock underlying the Restricted Stock Units has been
issued.

 

(c)                                  All
Restricted Stock Units shall be subject to such additional terms and conditions
as determined by the Administrator and shall be evidenced by a written Award
Agreement.  Such Award Agreement may also
include limitations regarding the distribution of payments due pursuant to such
Restricted Stock Units and may provide that such payments are subject to an
election, by a certain date, of the Holder to whom such payment is to be
awarded, to the extent such limitations and elections are required so as not
cause any Restricted Stock Unit Award or the shares of Common Stock or cash
issuable pursuant to any Restricted Stock Unit Award (or other amounts issuable
or distributable) to be includable in the gross income of the Holder under
Section 409A of the Code prior to such times or occurrence of such events, as
permitted by the Code and the regulations and other guidance thereunder (including,
without limitation, Section 409A of the Code, and the regulations and other
guidance issued by the Secretary of the Treasury thereunder).

 

16.                                 Stock Appreciation Rights.  

 

A Stock Appreciation Right may be granted to any
Holder selected by the Administrator.  A
Stock Appreciation Right may be granted (a) in connection and
simultaneously with the grant of an Option, (b) with respect to a
previously granted Option, or (c) independent of an Option.  A Stock Appreciation Right shall be subject
to such terms and conditions not inconsistent with the Plan as the
Administrator shall impose and shall be evidenced by an Award Agreement.

 

(a)                                  Coupled
Stock Appreciation Rights.  A Coupled
Stock Appreciation Right (“CSAR”) shall be related to a particular Option
and shall be exercisable only when and to the extent the related Option is
exercisable.

 

(i)                                     A
CSAR may be granted to a Holder for no more than the number of shares subject
to the simultaneously or previously granted Option to which it is coupled.

 

(ii)                                  A
CSAR shall entitle the Holder (or other person entitled to exercise the Option
pursuant to the Plan) to surrender to the Company unexercised a portion of 

 

14

 

the Option to which the
CSAR relates (to the extent then exercisable pursuant to its terms) and to
receive from the Company in exchange therefor an amount determined by
multiplying the difference obtained by subtracting the Option exercise price
from the Fair Market Value of a share of Common Stock on the date of exercise
of the CSAR by the number of shares of Common Stock with respect to which the
CSAR shall have been exercised, subject to any limitations the Administrator
may impose.

 

(b)                                 Independent
Stock Appreciation Rights.  An
Independent Stock Appreciation Right (“ISAR”) shall be unrelated to any
Option and shall have a term set by the Administrator.  An ISAR shall be exercisable in such
installments as the Administrator may determine.  An ISAR shall cover such number of shares of
Common Stock as the Administrator may determine.  The exercise price per share of Common Stock
subject to each ISAR shall be set by the Administrator; provided, however, that, the Administrator in its sole and absolute discretion may
provide that the ISAR may be exercised subsequent to a termination of
employment or service, as applicable, or following an Acquisition of the
Company, or because of the Holder’s retirement, death or disability, or
otherwise.  An ISAR shall entitle
the Holder (or other person entitled to exercise the ISAR pursuant to the Plan)
to exercise all or a specified portion of the ISAR (to the extent then
exercisable pursuant to its terms) and to receive from the Company an amount
determined by multiplying the difference obtained by subtracting the exercise
price per share of the ISAR from the Fair Market Value of a share of Common
Stock on the date of exercise of the ISAR by the number of shares of Common
Stock with respect to which the ISAR shall have been exercised, subject to any
limitations the Administrator may impose.

 

(c)                                  Payment
and Limitations on Exercise, Distribution. 
Payment of the amounts determined under Section 16(a) and 16(b) above
shall be in cash, in Common Stock (based on its Fair Market Value as of the
date the Stock Appreciation Right is exercised) or a combination of both, as
determined by the Administrator.

 

(i)                                     The
Administrator shall determine the terms and procedures regarding the payment of
amounts determined under Section 16(a) and 16(b) above, and may provide that
such payments are subject to an election by the Holder to whom such payment is
to be awarded, in accordance with this Section 16(c).  Specifically, the Committee may provide for
the deferral of the payment issuable pursuant to a Stock Appreciation Right at
the election of the Holder to whom such award is to be awarded in accordance
with the terms of this Section 16(c).

 

(A)                              Subject
to the paragraph (B) below, any election of a Holder to defer the issuance of
payment pursuant to Stock Appreciation Right shall be made not later than the
close of the taxable year preceding the first taxable year in which such Holder
performs services for such Stock Appreciation Right or related Option, in the
case of a CSAR.

 

(B)                                In
the case of the first year in which a Holder becomes eligible to participate in
the Plan, any election of such Holder to defer the payment pursuant to a Stock
Appreciation Right may be made with respect to services to be performed
subsequent to the election within thirty (30) days after the date such Holder
becomes eligible to participate in the Plan.

 

15

 

(C)                                A
Holder, under such terms as the Administrator shall determine in its sole
discretion, may elect to receive the shares of Common Stock or cash issuable pursuant
to a Stock Appreciation Right upon one or more of the following events:

(i)                                     a
date specified in such election,

 

(ii)                                  the
termination of Holder,

 

(iii)                               an Unforeseeable
Emergency of such Holder;

 

(iv)                              a
Change in Control;

 

(v)                                 death;
or

 

(vi)                              Qualified
Disability;

 

provided, however, in the case of a Holder who is a
“key employee” as defined in Code Section 416(i) (determined without regard to
paragraph (5) thereof) of the Company, the payment issuable pursuant to
Holder’s termination shall not be made before the date which is six (6) months
after the date of such termination.

 

(D)                               A
deferral election made by a Holder shall be irrevocable and shall not be
amended, modified or terminated by such Holder.

 

(E)                                 Prohibition
on Acceleration of Distributions.  The
terms regarding the issuance of payments pursuant to a Stock Appreciation Right
shall not be amended, modified or terminated in any manner which permits the
acceleration of the time or schedule of such issuance of shares of Common Stock
or cash.

 

(F)                                 Limitation
of Distributions.  Notwithstanding the
provisions of this section, shares of Common Stock or cash shall be issuable
pursuant to a Stock Appreciation Right at such times or upon such events as are
specified in Section 16(c)(i)(C) above and the terms of the Award Agreement
only to the extent the issuance or distribution at such times or upon such
events under such terms will not cause the Award or the shares of Common Stock
or cash issuable pursuant to the Award (or other amounts issuable or distributable)
to be includable in the gross income of the Holder under Section 409A of the
Code prior to such times or occurrence of such events, as permitted by the Code
and the regulations and other guidance thereunder (including, without
limitation, Section 409A of the Code, and the regulations and other guidance
issued by the Secretary of the Treasury thereunder).

 

(G)                                For
purposes of this Section 16, the “Unforeseeable Emergency” of a Holder shall
mean a severe financial hardship to such Holder resulting from:  (i) an illness or accident of such Holder, or
the spouse or a dependent (as defined in Code Section 152(a)) of such Holder,
(ii) the loss of such Holder property due to casualty, or (iii) other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of such Holder.  For
purposes of this Section 16, “Qualified Disability” shall mean the Holder is
“disabled,” as such term is defined in Section 409A of the Code, and the
regulations and other guidance issued by the Secretary of the Treasury
thereunder.  For purposes of this

 

16

 

Section 16, “Change in Control” shall mean a change in control as
defined as in Section 409A of the Code, and the regulations and other guidance
issued by the Secretary of the Treasury thereunder.

 

17.                                 Other Awards.

 

(a)                                  Performance
Share Awards.  Any Holder selected by
the Committee may be granted one or more Performance Share awards which may be
denominated in a number of Shares or in a dollar value of Shares and which may
be linked to any one or more specific performance criteria determined
appropriate by the Committee, in each case on a specified date or dates or over
any period or periods determined by the Committee.  In making such determinations, the Committee
shall consider (among such other factors as it deems relevant in light of the
specific type of award) the contributions, responsibilities and other
compensation of the particular Holder.

 

(b)                                 Dividend
Equivalents.  Any Holder selected by
the Committee may be granted Dividend Equivalents based on the dividends
declared on the shares of Stock that are subject to any Award, to be credited
as of dividend payment dates, during the period between the date the Award is
granted and the date the Award is exercised, vests or expires, as determined by
the Committee.  Such Dividend Equivalents
shall be converted to cash or additional Shares by such formula and at such
time and subject to such limitations as may be determined by the Committee.

 

(c)                                  Stock
Payments.

 

Any Holder selected by the Committee may receive Stock
Payments in the manner determined from time to time by the Committee.  The number of shares shall be determined by
the Committee and may be based upon specific performance criteria determined
appropriate by the Committee, determined on the date such Stock Payment is made
or on any date thereafter.

 

18.                                 Adjustments upon Changes in
Capitalization, Merger or Asset Sale.

 

(a)                                  In
the event that the Administrator determines that any dividend or other
distribution (whether in the form of cash, Common Stock, other securities, or
other property), recapitalization, reclassification, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company, or
exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event, in the Administrator’s
sole discretion, affects the Common Stock such that an adjustment is determined
by the Administrator to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended by the Company to be
made available under the Plan or with respect to any Award, then the
Administrator shall, in such manner as it may deem equitable, adjust any or all
of:

 

(i)                                     the
number and kind of shares of Common Stock (or other securities or property)
with respect to which Awards may be granted or awarded (including, but

 

17

 

not limited to, adjustments of the limitations in Section 3 on the
maximum number and kind of shares which may be issued and adjustments of the
maximum number of Shares that may be purchased by any Holder in any calendar
year pursuant to Section 6(c));

 

(ii)                                  the
number and kind of shares of Common Stock (or other securities or property)
subject to outstanding Awards; and

 

(iii)                               the
grant or exercise price with respect to any Award.

 

(b)                                 In
the event of any transaction or event described in Section 18(a), the
Administrator, in its sole discretion, and on such terms and conditions as it
deems appropriate, and to the extent allowed by Section 409A of the Code and
any applicable regulations thereunder, to the extent applicable, either by the
terms of the Award or by action taken prior to the occurrence of such transaction
or event and either automatically or upon the Holder’s request, is hereby
authorized to take any one or more of the following actions whenever the
Administrator determines that such action is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended by the
Company to be made available under the Plan or with respect to any Award
granted or issued under the Plan or to facilitate such transaction or event:

 

(i)                                     To
provide for either the purchase of any such Award for an amount of cash equal
to the amount that could have been obtained upon the exercise of such Award or
realization of the Holder’s rights had such Award been currently exercisable or
payable or fully vested or the replacement of such Award with other rights or
property selected by the Administrator in its sole discretion;

 

(ii)                                  To
provide that such Award shall be exercisable as to all shares covered thereby,
notwithstanding anything to the contrary in the Plan or the provisions of such
Award;

 

(iii)                               To
provide that such Award be assumed by the successor or survivor corporation, or
a parent or subsidiary thereof, or shall be substituted for by similar options,
rights or awards covering the stock of the successor or survivor corporation,
or a parent or subsidiary thereof, with appropriate adjustments as to the
number and kind of shares and prices;

 

(iv)                              To
make adjustments in the number and type of shares of Common Stock (or other
securities or property) subject to outstanding Awards, and/or in the terms and
conditions of (including the grant or exercise price), and the criteria
included in, outstanding Awards or Awards which may be granted in the future;
and

 

(v)                                 To
provide that immediately upon the consummation of such event, such Award shall
not be exercisable and shall terminate; provided, that
for a specified period of time prior to such event, such Award shall be
exercisable as to all Shares covered thereby, and the restrictions imposed
under an Award Agreement upon some or all Shares may be terminated and, in the
case of Restricted Stock, some or all shares of such Restricted Stock may cease
to be subject to repurchase, notwithstanding anything to the contrary in the
Plan or the provisions of such Award Agreement.

 

18

 

(c)                                  Subject
to Section 3, the Administrator may, in its sole discretion, include such
further provisions and limitations in any Award Agreement or Common Stock
certificate, as it may deem equitable and in the best interests of the Company.

 

(d)                                 If
the Company undergoes an Acquisition, then any surviving corporation or entity
or acquiring corporation or entity, or affiliate of such corporation or entity,
may assume any Awards outstanding under the Plan or may substitute similar
stock awards (including an award to acquire the same consideration paid to the
stockholders in the transaction described in this subsection 18(d)) for those
outstanding under the Plan.  In the event
any surviving corporation or entity or acquiring corporation or entity in an
Acquisition, or affiliate of such corporation or entity, does not assume such
Awards or does not substitute similar stock awards for those outstanding under
the Plan, then with respect to (i) Awards held by Holders in the Plan whose
status as a Service Provider has not terminated prior to such event, the
vesting of such Awards (and, if applicable, the time during which such awards
may be exercised) shall be accelerated and made fully exercisable and all
restrictions thereon shall lapse at least ten (10) days prior to the closing of
the Acquisition (and the Awards terminated if not exercised prior to the
closing of such Acquisition), and (ii) any other Awards outstanding under the
Plan, such rights shall be terminated if not exercised prior to the closing of
the Acquisition.  Notwithstanding the
assumption or substitution of Options granted to Service Providers other than
Independent Directors pursuant to the foregoing provisions, any Options or
shares of Restricted Stock granted to Independent Directors pursuant to Section
12 which are outstanding immediately prior to the closing of the Acquisition
shall not be assumed or substituted for, shall be accelerated and made fully
vested and/or exercisable, as applicable, at least ten (10) days prior to the
closing of the Acquisition and shall terminate if not exercised prior to the
closing of such Acquisition.

 

(e)                                  The
existence of the Plan or any Award Agreement and the Awards granted hereunder
shall not affect or restrict in any way the right or power of the Company or
the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any
issue of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to
or affect the Common Stock or the rights thereof or which are convertible into
or exchangeable for Common Stock, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.

 

19.                                 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, or such other date as is determined by the
Administrator.  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.

 

20.                                 Amendment and Termination of the
Plan.

 

(a)                                  Amendment
and Termination.  The Board may at
any time wholly or partially amend, alter, suspend or terminate the Plan.  However, without approval of the 

 

19

 

Company’s stockholders
given within twelve (12) months before or after the action by the Board, no
action of the Board may, except as provided in Section 18, increase the limits
imposed in Section 3 on the maximum number of Shares which may be issued
under the Plan or extend the term of the Plan under Section 7.

 

(b)                                 Savings Clause.  Notwithstanding
anything to the contrary in the Plan or any Award Agreement relating to an
outstanding Award, if and to the extent the Administrator shall determine that
the terms of any Award may result in the failure of the such Award to comply
with the requirements of Section 409A of the Code, or any applicable
regulations or guidance promulgated by the Secretary of the Treasury in
connection therewith, the Administrator shall have authority to take such
action to amend, modify, cancel or terminate the Plan or any Award as it deems
necessary or advisable, including without limitation:

 

(i)                                     Any
amendment or modification of the Plan or any Award to conform the Plan or such
Award to the requirements of Section 409A of the Code or any regulations or
other guidance thereunder (including, without limitation, any amendment or
modification of the terms of any Award regarding vesting, exercise, or the
timing or form of payment).

 

(ii)                                  Any
cancellation or termination of any unvested Award, or portion thereof, without
any payment to the Holder holding such Award.

 

(iii)                               Any
cancellation or termination of any vested Award, or portion thereof, with
immediate payment to the Holder holding such Award of the amount otherwise
payable upon the immediate exercise of any such Award, or vested portion
thereof, by such Holder.

 

(iv)                              Any
such amendment, modification, cancellation, or termination of the Plan or any
Award may adversely affect the rights of a Holder with respect to such Award
without the Holder’s consent.

 

(c)                                  Stockholder
Approval.  The Board shall obtain
stockholder approval of any Plan amendment to the extent necessary and
desirable to comply with Applicable Laws.

 

(d)                                 Effect
of Amendment or Termination.  Except
as provided in Section 18(b), above, no amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Holder, unless mutually
agreed otherwise between the Holder and the Administrator, which agreement must
be in writing and signed by the Holder and the Company.  Termination of the Plan shall not affect the
Administrator’s ability to exercise the powers granted to it hereunder with
respect to Options, Stock Purchase Rights or Restricted Stock granted or
awarded under the Plan prior to the date of such termination.

 

(e)                                  Repricing
Prohibited.  Notwithstanding any
provision in this Plan to the contrary, absent approval of the stockholders of
the Company no Award may be amended to reduce the per Share exercise price of
the Shares subject to such Award below the per Share exercise price as of the
date the Award is granted.  In addition,
absent approval of the stockholders of the Company no Award may be granted in
exchange for, or in connection with, the cancellation or surrender of an Award
having a higher per Share exercise price.

 

20

 

21.                                 Stockholder Approval.  The Plan will be submitted for the approval
of the Company’s stockholders within twelve (12) months after the date of the
Board’s adoption of the Plan.  Options,
Stock Purchase Rights or Restricted Stock may be granted or awarded prior to
such stockholder approval, provided that Options, Stock Purchase Rights and
Restricted Stock not previously authorized under the Plan shall not be
exercisable, shall not vest and the restrictions thereon shall not lapse prior
to the time when the Plan is approved by the stockholders, and provided further
that if such approval has not been obtained at the end of said twelve-month
period, any Options, Stock Purchase Rights and Restricted Stock previously
granted or awarded but not previously authorized under the Plan shall thereupon
be canceled and become null and void.

 

22.                                 Inability to Obtain Authority.  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.

 

23.                                 Reservation of Shares.  The Company, during the term of this Plan,
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

 

24.                                 Investment Intent.  The Company may require a Plan Holder, as a
condition of exercising or acquiring stock under any Award, (i) to give written
assurances satisfactory to the Company as to the Holder’s knowledge and
experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and
risks of exercising rights under any Award; and (ii) to give written assurances
satisfactory to the Company stating that the Holder is acquiring the stock
subject to the Award for the Holder’s own account and not with any present
intention of selling or otherwise distributing the stock.  The foregoing requirements, and any
assurances given pursuant to such requirements, shall be inoperative if (A) the
issuance of the shares upon the exercise or acquisition of stock under the
applicable Award has been registered under a then currently effective
registration statement under the Securities Act or (B) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws.  The Company may, upon
advice of counsel to the Company, place legends on stock certificates issued
under the Plan as such counsel deems necessary or appropriate in order to
comply with applicable securities laws, including, but not limited to, legends
restricting the transfer of the stock.

 

25.                                 Governing Law. 
The validity and enforceability of this Plan shall be governed by and
construed in accordance with the laws of the State of Delaware without regard
to otherwise governing principles of conflicts of law.

 

21EXHIBIT 10.60

 

MICRON TECHNOLOGY, INC.

2004 EQUITY INCENTIVE PLAN

 

ARTICLE 1

PURPOSE

 

1.1.          GENERAL.  The purpose of the Micron Technology, Inc.
2004 Equity Incentive Plan (the “Plan”) is to promote the success, and enhance
the value, of Micron Technology, Inc. (the “Company”), by linking the personal
interests of employees, officers, directors and consultants of the Company or
any Affiliate (as defined below) to those of Company stockholders and by
providing such persons with an incentive for outstanding performance.  The Plan is further intended to provide
flexibility to the Company in its ability to motivate, attract, and retain the
services of employees, officers, directors and consultants upon whose judgment,
interest, and special effort the successful conduct of the Company’s operation
is largely dependent.  Accordingly, the
Plan permits the grant of incentive awards from time to time to selected
employees, officers, directors and consultants of the Company and its
Affiliates.

 

ARTICLE 2

DEFINITIONS

 

2.1.          DEFINITIONS.  When a word or phrase appears in this Plan
with the initial letter capitalized, and the word or phrase does not commence a
sentence, the word or phrase shall generally be given the meaning ascribed to
it in this Section or in Section 1.1 unless a clearly different
meaning is required by the context.  The
following words and phrases shall have the following meanings:

 

(a)           “Affiliate”
means (i) any Subsidiary or Parent, or (ii) an entity that directly or through
one or more intermediaries controls, is controlled by or is under common
control with, the Company, as determined by the Committee.

 

(b)           “Award”
means any Option, Stock Appreciation Right, Restricted Stock Award, Restricted
Stock Unit Award, Deferred Stock Unit Award, Performance Share, Dividend
Equivalent Award, or Other Stock-Based Award granted to a Participant under the
Plan.

 

(c)           “Award
Certificate” means a written document, in such form as the Committee prescribes
from time to time, setting forth the terms and conditions of an Award.  Award Certificates may be in the form of
individual award agreements or certificates or a program document describing
the terms and provisions of an Awards or series of Awards under the Plan.

 

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

 

(e)           “Change
in Control” means and includes the occurrence of any one of the following
events:

 

(i)            individuals
who, on the Effective Date, constitute the Board of Directors of the Company
(the “Incumbent Directors”) cease for any reason to constitute at least a
majority of such Board, provided that any person becoming a director after the
Effective Date and whose election or nomination for election was approved by a
vote of at least a majority of the Incumbent Directors then on the Board shall
be an Incumbent Director; provided, however, that no individual
initially elected or nominated as a director of the Company as a result of an
actual or threatened election contest with respect to the election or removal
of directors (“Election Contest”) or other actual or threatened solicitation of
proxies or consents by or on behalf of any Person other than the Board (“Proxy
Contest”), including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest, shall be deemed an Incumbent Director; or

 

(ii)           any person
is or becomes a “beneficial owner” (as defined in Rule 13d-3 under the 1934
Act), directly or indirectly, of either (A) 35% or more of the then-outstanding
shares of common stock of the Company (“Company Common Stock”) or (B) securities
of the Company

 

1

 

representing 35% or more of the combined voting power
of the Company’s then outstanding securities eligible to vote for the election
of directors (the “Company Voting Securities”); provided, however,
that for purposes of this subsection (ii), the following acquisitions
shall not constitute a Change in Control: (w) an acquisition directly from the
Company, (x) an acquisition by the Company or a Subsidiary of the Company, (y)
an acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Subsidiary of the Company, or (z) an
acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection (iii)
below); or

 

(iii)          the
consummation of a reorganization, merger, consolidation, statutory share
exchange or similar form of corporate transaction involving the Company or a
Subsidiary (a “Reorganization”), or the sale or other disposition of all or
substantially all of the Company’s assets (a “Sale”) or the acquisition of
assets or stock of another corporation (an “Acquisition”), unless immediately
following such Reorganization, Sale or Acquisition: (A) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the outstanding Company Common Stock and outstanding Company
Voting Securities immediately prior to such Reorganization, Sale or Acquisition
beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation resulting from such
Reorganization, Sale or Acquisition (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets or stock either directly or through
one or more subsidiaries, the “Surviving Corporation”) in substantially the same
proportions as their ownership, immediately prior to such Reorganization, Sale
or Acquisition, of the outstanding Company Common Stock and the outstanding
Company Voting Securities, as the case may be, and (B) no person (other than
(x) the Company or any Subsidiary of the Company, (y) the Surviving Corporation
or its ultimate parent corporation, or (z) any employee benefit plan or related
trust) sponsored or maintained by any of the foregoing is the beneficial owner,
directly or indirectly, of 35% or more of the total common stock or 35% or more
of the total voting power of the outstanding voting securities eligible to
elect directors of the Surviving Corporation, and (C) at least a majority of
the members of the board of directors of the Surviving Corporation were
Incumbent Directors at the time of the Board’s approval of the execution of the
initial agreement providing for such Reorganization, Sale or Acquisition (any
Reorganization, Sale or Acquisition which satisfies all of the criteria
specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying
Transaction”); or

 

(iv)          approval by
the stockholders of the Company of a complete liquidation or dissolution of the
Company.

 

(f)            “Code”
means the Internal Revenue Code of 1986, as amended from time to time, and
includes a reference to the underlying final regulations.

 

(g)           “Committee”
means the committee of the Board described in Article 4.

 

(h)           “Company”
means Micron Technology, Inc., a Delaware corporation, or any successor
corporation.

 

(i)            “Continuous
Status as a Participant” means the absence of any interruption or termination
of service as an employee, officer, consultant or director of the Company or
any Affiliate, as applicable; provided, however, that for purposes of an
Incentive Stock Option, or a Stock Appreciation Right issued in tandem with an
Incentive Stock Option, “Continuous Status as a Participant” means the absence
of any interruption or termination of service as an employee of the Company or
any Parent or Subsidiary, as applicable, pursuant to applicable tax
regulations.  Continuous Status as a
Participant shall continue to the extent provided in a written severance or
employment agreement during any period for which severance compensation
payments are made to an employee, officer, consultant or director and shall not
be considered interrupted in the case of any leave of absence authorized in
writing by the Company prior to its commencement; provided, however, that for
purposes of Incentive Stock Options, no such leave may

 

2

 

exceed 90 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, on 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.

 

(j)            “Covered
Employee” means a covered employee as defined in Code Section 162(m)(3).

 

(k)           “Disability”
or “Disabled” has the same meaning as provided in the long-term disability plan
or policy maintained by the Company or if applicable, most recently maintained,
by the Company or if applicable, an Affiliate, for the Participant, whether or
not such Participant actually receives disability benefits under such plan or
policy.  If no long-term disability plan
or policy was ever maintained on behalf of Participant or if the determination
of Disability relates to an Incentive Stock Option, or a Stock Appreciation
Right issued in tandem with an Incentive Stock Option, Disability means
Permanent and Total Disability as defined in Section 22(e)(3) of the
Code.  In the event of a dispute, the
determination whether a Participant is Disabled will be made by the Committee
and may be supported by the advice of a physician competent in the area to
which such Disability relates.

 

(l)            “Deferred
Stock Unit” means a right granted to a Participant under Article 11.

 

(m)          “Dividend
Equivalent” means a right granted to a Participant under Article 12.

 

(n)           “Effective
Date” has the meaning assigned such term in Section 3.1.

 

(o)           “Eligible
Participant” means an employee, officer, consultant or director of the Company
or any Affiliate.

 

(p)           “Exchange”
means the New York Stock Exchange or any other national securities exchange or
national market system on which the Stock may from time to time be listed or
traded.

 

(q)           “Fair
Market Value” of the Stock, on any date, means: (i) if the Stock is listed or
traded on any Exchange, the average closing price for such Stock (or the
closing bid, if no sales were reported) as quoted on such Exchange (or the
Exchange with the greatest volume of trading in the Stock) for the last market
trading day prior to the day of determination, as reported by Bloomberg L.P. or such other source as the
Committee deems reliable; (ii) if the Stock is quoted on the over-the-counter
market or is regularly quoted by a recognized securities dealer, but selling
prices are not reported, the Fair Market Value of the Stock shall be the mean
between the high bid and low asked prices for the Stock on the last market
trading day prior to the day of determination, as reported by Bloomberg L.P. or such other source as the
Committee deems reliable, or (iii) in the absence of an established market for
the Stock, the Fair Market Value shall be determined in good faith by the
Committee.

 

(r)            “Full
Value Award”  means an Award other than in the
form of an Option or SAR, and which is settled by the issuance of Stock.

 

(s)           “Grant
Date” of an Award means the first date on which all necessary corporate action
has been taken to approve the grant of the Award as provided in the Plan, or
such later date as is determined and specified as part of that authorization
process.  Notice of the grant shall be
provided to the grantee within a reasonable time after the Grant Date.

 

(t)            “Incentive
Stock Option” means an Option that is intended to be an incentive stock option
and meets the requirements of Section 422 of the Code or any successor
provision thereto.

 

(u)           “Non-Employee
Director” means a director of the Company who is not a common law employee of
the Company or an Affiliate.

 

(v)           “Nonstatutory
Stock Option” means an Option that is not an Incentive Stock Option.

 

3

 

(w)          “Option”
means a right granted to a Participant under Article 7 of the Plan to
purchase Stock at a specified price during specified time periods.  An Option may be either an Incentive Stock
Option or a Nonstatutory Stock Option.

 

(x)            “Other
Stock-Based Award” means a right, granted to a Participant under Article 13
that relates to or is valued by reference to Stock or other Awards relating to
Stock.

 

(y)           “Parent”
means a corporation, limited liability company, partnership or other entity
which owns or beneficially owns a majority of the outstanding voting stock or
voting power of the Company. Notwithstanding the above, with respect to an
Incentive Stock Option, Parent shall have the meaning set forth in Section 424(e)
of the Code.

 

(z)            “Participant”
means a person who, as an employee, officer, director or consultant of the
Company or any Affiliate, has been granted an Award under the Plan; provided
that in the case of the death of a Participant, the term “Participant” refers
to a beneficiary designated pursuant to Section 14.5 or the legal guardian
or other legal representative acting in a fiduciary capacity on behalf of the
Participant under applicable state law and court supervision.

 

(aa)         “Performance
Share” means any right granted to a Participant under Article 9 to a unit
to be valued by reference to a designated number of Shares to be paid upon
achievement of such performance goals as the Committee establishes with regard
to such Performance Share.

 

(bb)         “Person”
means any individual, entity or group, within the meaning of Section 3(a)(9)
of the 1934 Act and as used in Section 13(d)(3) or 14(d)(2) of the 1934
Act.

 

(cc)         “Plan”
means the Micron Technology, Inc. 2004 Equity Incentive Plan, as amended from
time to time.

 

(dd)         “Public
Offering” shall occur on closing date of a public offering of any class or
series of the Company’s equity securities pursuant to a registration statement
filed by the Company under the 1933 Act.

 

(ee)         “Qualified
Performance-Based Award” means an Award that is either (i) intended to qualify
for the Section 162(m) Exemption and is made subject to performance goals
based on Qualified Business Criteria as set forth in Section 14.10(b), or
(ii) an Option or SAR.

 

(ff)           “Qualified
Business Criteria” means one or more of the Business Criteria listed in Section 14.10(b)
upon which performance goals for certain Qualified Performance-Based Awards may
be established by the Committee.

 

(gg)         “Restricted
Stock Award” means Stock granted to a Participant under Article 10 that is
subject to certain restrictions and to risk of forfeiture.

 

(hh)         “Restricted
Stock Unit Award” means the right granted to a Participant under Article 10
to receive shares of Stock (or the equivalent value in cash or other property
if the Committee so provides) in the future, which right is subject to certain
restrictions and to risk of forfeiture.

 

(ii)           “Section 162(m)
Exemption” means the exemption from the limitation on deductibility imposed by Section 162(m)
of the Code that is set forth in Section 162(m)(4)(C) of the Code or any
successor provision thereto.

 

(jj)           “Shares”
means shares of the Company’s Stock.  If
there has been an adjustment or substitution pursuant to Section 15.1, the
term “Shares” shall also include any shares of stock or other securities that
are substituted for Shares or into which Shares are adjusted pursuant to Section 15.1.

 

(kk)         “Stock”
means the $.10 par value common stock of the Company and such other

 

4

 

securities of the Company as may be substituted for
Stock pursuant to Article 15.

 

(ll)           “Stock
Appreciation Right” or “SAR” means a right granted to a Participant under Article 8
to receive a payment equal to the difference between the Fair Market Value of a
Share as of the date of exercise of the SAR over the base price of the SAR, all
as determined pursuant to Article 8.

 

(mm)       “Subsidiary”
means any corporation, limited liability company, partnership or other entity
of which a majority of the outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Company. Notwithstanding the
above, with respect to an Incentive Stock Option, Subsidiary shall have the
meaning set forth in Section 424(f) of the Code.

 

(nn)         “1933
Act” means the Securities Act of 1933, as amended from time to time.

 

(oo)         “1934
Act” means the Securities Exchange Act of 1934, as amended from time to time.

 

ARTICLE 3

EFFECTIVE TERM OF PLAN

 

3.1.          EFFECTIVE
DATE.  The Plan shall be effective as
of the date it is approved by both the Board and the stockholders of the
Company (the “Effective Date”).

 

3.2.          TERMINATION
OF PLAN.  The Plan shall terminate on
the tenth anniversary of the Effective Date unless earlier terminated as
provided herein.  The termination of the
Plan on such date shall not affect the validity of any Award outstanding on the
date of termination.

 

ARTICLE 4

ADMINISTRATION

 

4.1.          COMMITTEE.  The Plan shall be administered by a Committee
appointed by the Board (which Committee shall consist of at least two
directors) or, at the discretion of the Board from time to time, the Plan may
be administered by the Board.  It is
intended that at least two of the directors appointed to serve on the Committee
shall be “non-employee directors” (within the meaning of Rule 16b-3 promulgated
under the 1934 Act) and “outside directors” (within the meaning of Code Section 162(m))
and that any such members of the Committee who do not so qualify shall abstain
from participating in any decision to make or administer Awards that are made
to Eligible Participants who at the time of consideration for such Award (i)
are persons subject to the short-swing profit rules of Section 16 of the
1934 Act, or (ii) are reasonably anticipated to become Covered Employees during
the term of the Award.  However, the mere
fact that a Committee member shall fail to qualify under either of the
foregoing requirements or shall fail to abstain from such action shall not
invalidate any Award made by the Committee which Award is otherwise validly
made under the Plan.  The members of the
Committee shall be appointed by, and may be changed at any time and from time
to time in the discretion of, the Board. 
The Board may reserve to itself any or all of the authority and
responsibility of the Committee under the Plan or may act as administrator of
the Plan for any and all purposes.  To
the extent the Board has reserved any authority and responsibility or during
any time that the Board is acting as administrator of the Plan, it shall have
all the powers of the Committee hereunder, and any reference herein to the
Committee (other than in this Section 4.1) shall include the Board.  To the extent any action of the Board under
the Plan conflicts with actions taken by the Committee, the actions of the
Board shall control.

 

4.2.          ACTION
AND INTERPRETATIONS BY THE COMMITTEE. 
For purposes of administering the Plan, the Committee may from time to
time adopt rules, regulations, guidelines and procedures for carrying out the
provisions and purposes of the Plan and make such other determinations, not
inconsistent with the Plan, as the Committee may deem appropriate.  The Committee’s interpretation of the Plan,
any Awards granted under the Plan, any Award Certificate and all decisions and
determinations by the Committee with respect to the Plan are final, binding,
and conclusive on all parties.  Each
member of the Committee is entitled to, in good faith, rely or act upon any
report or other information furnished to that member by any officer or other
employee of the Company or any Affiliate, the Company’s or an Affiliate’s
independent certified public accountants, Company counsel or any executive
compensation consultant or other professional retained by the Company to assist
in the administration of the Plan.

 

5

 

4.3.          AUTHORITY
OF COMMITTEE.  Except as provided
below, the Committee has the exclusive power, authority and discretion to:

 

(a)           Grant
Awards;

 

(b)           Designate
Participants;

 

(c)           Determine
the type or types of Awards to be granted to each Participant;

 

(d)           Determine
the number of Awards to be granted and the number of Shares or dollar amount to
which an Award will relate;

 

(e)           Determine
the terms and conditions of any Award granted under the Plan, including but not
limited to, the exercise price, base price, or purchase price, any restrictions
or limitations on the Award, any schedule for lapse of forfeiture
restrictions or restrictions on the exercisability of an Award, and
accelerations or waivers thereof, based in each case on such considerations as
the Committee in its sole discretion determines;

 

(f)            Accelerate
the vesting, exercisability or lapse of restrictions of any outstanding Award,
in accordance with Article 14, based in each case on such considerations
as the Committee in its sole discretion determines;

 

(g)           Determine
whether, to what extent, and under what circumstances an Award may be settled
in, or the exercise price of an Award may be paid in, cash, Stock, other
Awards, or other property, or an Award may be canceled, forfeited, or
surrendered;

 

(h)           Prescribe
the form of each Award Certificate, which need not be identical for each
Participant;

 

(i)            Decide
all other matters that must be determined in connection with an Award;

 

(j)            Establish,
adopt or revise any rules, regulations, guidelines or procedures as it may deem
necessary or advisable to administer the Plan;

 

(k)           Make all
other decisions and determinations that may be required under the Plan or as
the Committee deems necessary or advisable to administer the Plan;

 

(l)            Amend the
Plan or any Award Certificate as provided herein; and

 

(m)          Adopt such
modifications, procedures, and subplans as may be necessary or desirable to
comply with provisions of the laws of non-U.S. jurisdictions in which the
Company or any Affiliate may operate, in order to assure the viability of the
benefits of Awards granted to participants located in such other jurisdictions
and to meet the objectives of the Plan.

 

Notwithstanding the foregoing, grants of Awards to
Non-Employee Directors hereunder shall be made only in accordance with the
terms, conditions and parameters of a plan, program or policy for the
compensation of Non-Employee Directors as in effect from time to time, and the
Committee may not make discretionary grants hereunder to Non-Employee
Directors.

 

Notwithstanding the above, the Board or the Committee
may, by resolution, expressly delegate to a special committee, consisting of
one or more directors who are also officers of the Company, the authority,
within specified parameters, to (i) designate officers, employees and/or
consultants of the Company or any of its Affiliates to be recipients of Awards
under the Plan, and (ii) to determine the number of such Awards to be received
by any such Participants; provided, however, that such delegation of duties and
responsibilities to an officer of the Company may not be made with respect to
the grant of Awards to eligible participants (a) who are subject to Section 16(a)
of the

 

6

 

1934
Act at the Grant Date, or (b) who as of the Grant Date are reasonably
anticipated to be become Covered Employees during the term of the Award.  The acts of such delegates shall be treated
hereunder as acts of the Board and such delegates shall report regularly to the
Board and the Compensation Committee regarding the delegated duties and
responsibilities and any Awards so granted.

 

4.4.          AWARD
CERTIFICATES.  Each Award shall be
evidenced by an Award Certificate.  Each
Award Certificate shall include such provisions, not inconsistent with the
Plan, as may be specified by the Committee.

 

ARTICLE 5

SHARES SUBJECT TO THE PLAN

 

5.1.          NUMBER
OF SHARES.  Subject to adjustment as
provided in Sections 5.2 and 15.1, the aggregate number of Shares reserved and
available for issuance pursuant to Awards granted under the Plan shall be 14,000,000;
provided, however, that each Share issued under the Plan pursuant to a Full
Value Award shall reduce the number of available Shares by two (2) shares.  The maximum number of Shares that may be
issued upon exercise of Incentive Stock Options granted under the Plan shall be
2,000,000.

 

5.2.          SHARE
COUNTING.

 

(a)           To the
extent that an Award is canceled, terminates, expires, is forfeited or lapses
for any reason, any unissued Shares subject to the Award will again be
available for issuance pursuant to Awards granted under the Plan.

 

(b)           Shares
subject to Awards settled in cash will again be available for issuance pursuant
to Awards granted under the Plan.

 

(c)           If the
exercise price of an Option is satisfied by delivering Shares to the Company
(by either actual delivery or attestation), only the number of Shares issued in
excess of the delivery or attestation (less any shares delivered by the
optionee to satisfy an applicable tax withholding obligation) shall be
considered for purposes of determining the number of Shares remaining available
for issuance pursuant to Awards granted under the Plan.

 

(d)           To the
extent that the full number of Shares subject to an Option is not issued upon
exercise of the Option for any reason, only the number of Shares issued and
delivered upon exercise of the Option shall be considered for purposes of
determining the number of Shares remaining available for issuance pursuant to
Awards granted under the Plan.  Nothing
in this subsection shall imply that any particular type of cashless
exercise of an Option is permitted under the Plan, that decision being reserved
to the Committee or other provisions of the Plan.

 

5.3.          STOCK
DISTRIBUTED.  Any Stock distributed
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Stock, treasury Stock or Stock purchased on the open market.

 

5.4.          LIMITATION
ON AWARDS.  Notwithstanding any
provision in the Plan to the contrary (but subject to adjustment as provided in
Section 15.1), the maximum number of Shares with respect to one or more
Options and/or SARs that may be granted during any one calendar year under the
Plan to any one Participant shall be 2,000,000. 
The maximum aggregate grant with respect to Awards of Restricted Stock,
Restricted Stock Units, Deferred Stock Units, Performance Shares or other
Stock-Based Awards (other than Options or SARs) granted in any one calendar
year to any one Participant shall be 2,000,000.

 

ARTICLE 6

ELIGIBILITY

 

6.1.          GENERAL.  Awards may be granted only to Eligible
Participants; except that Incentive Stock Options may be granted to only to
Eligible Participants who are employees of the Company or a Parent or
Subsidiary as defined in Section 424(e) and (f) of the Code.

 

7

 

ARTICLE 7

STOCK OPTIONS

 

7.1.          GENERAL.  The Committee is authorized to grant Options
to Participants on the following terms and conditions:

 

(a)           EXERCISE
PRICE.  The exercise price per Share
under an Option shall be determined by the Committee; provided that the
exercise price for any Option shall not be less than the Fair Market Value as
of the Grant Date.

 

(b)           TIME
AND CONDITIONS OF EXERCISE.  The
Committee shall determine the time or times at which an Option may be exercised
in whole or in part, subject to Section 7.1(d).  The Committee shall also determine the
performance or other conditions, if any, that must be satisfied before all or
part of an Option may be exercised or vested. 
The Committee may waive any exercise or vesting provisions at any time
in whole or in part based upon factors as the Committee may determine in its
sole discretion so that the Option becomes exercisable or vested at an earlier
date.  The Committee may permit an
arrangement whereby receipt of Stock upon exercise of an Option is delayed
until a specified future date.

 

(c)           PAYMENT.  The Committee shall determine the methods by
which the exercise price of an Option may be paid, the form of payment, including,
without limitation, cash, Shares, or other property (including “cashless
exercise” arrangements), and the methods by which Shares shall be delivered or
deemed to be delivered to Participants; provided, however, that if Shares are
used to pay the exercise price of an Option, such Shares must have been held by
the Participant for at least such period of time, if any, as necessary to avoid
the recognition of an expense under generally accepted accounting principles as
a result of the exercise of the Option.

 

(d)           EXERCISE
TERM.  In no event may any Option be
exercisable for more than ten years from the Grant Date.

 

(e)           SUSPENSION.  Any Participant who is also a participant in the Retirement at Micron (“RAM”)
Section 401(k) Plan and who requests and receives a hardship distribution
from the RAM Plan, is prohibited from making, and must suspend, his or her
employee elective contributions and employee contributions including, without
limitation on the foregoing, the exercise of any Option granted from the date of
receipt by that employee of the RAM hardship distribution.

 

7.2.          INCENTIVE
STOCK OPTIONS.  The terms of any
Incentive Stock Options granted under the Plan must comply with the following
additional rules:

 

(a)           EXERCISE
PRICE.  The exercise price of an Incentive
Stock Option shall not be less than the Fair Market Value as of the Grant Date.

 

(b)           LAPSE
OF OPTION.  Subject to any earlier
termination provision contained in the Award Certificate, an Incentive Stock
Option shall lapse upon the earliest of the following circumstances; provided,
however, that the Committee may, prior to the lapse of the Incentive Stock
Option under the circumstances described in subsections (3), (4) or (5) below,
provide in writing that the Option will extend until a later date, but if an
Option is so extended and is exercised after the dates specified in subsections
(3) and (4) below, it will automatically become a Nonstatutory Stock Option:

 

(1)           The
expiration date set forth in the Award Certificate.

 

(2)           The tenth
anniversary of the Grant Date.

 

(3)           Three
months after termination of the Participant’s Continuous Status as a
Participant for any reason other than the Participant’s Disability or death.

 

8

 

(4)           One year
after the Participant’s Continuous Status as a Participant by reason of the
Participant’s Disability.

 

(5)           One year
after the termination of the Participant’s death if the Participant dies while
employed, or during the three-month period described in paragraph (3) or during
the one-year period described in paragraph (4) and before the Option otherwise
lapses.

 

Unless the exercisability of the Incentive Stock
Option is accelerated as provided in Article 14, if a Participant
exercises an Option after termination of employment, the Option may be
exercised only with respect to the Shares that were otherwise vested on the
Participant’s termination of employment. 
Upon the Participant’s death, any exercisable Incentive Stock Options
may be exercised by the Participant’s beneficiary, determined in accordance
with Section 14.5.

 

(c)           INDIVIDUAL
DOLLAR LIMITATION.  The aggregate
Fair Market Value (determined as of the Grant Date) of all Shares with respect
to which Incentive Stock Options are first exercisable by a Participant in any
calendar year may not exceed $100,000.00.

 

(d)           TEN
PERCENT OWNERS.  No Incentive Stock
Option shall be granted to any individual who, at the Grant Date, owns stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary unless the exercise
price per share of such Option is at least 110% of the Fair Market Value per
Share at the Grant Date and the Option expires no later than five years after
the Grant Date.

 

(e)           EXPIRATION
OF AUTHORITY TO GRANT INCENTIVE STOCK OPTIONS.  No Incentive Stock Option may be granted
pursuant to the Plan after the day immediately prior to the tenth anniversary
of the date the Plan was adopted by the Board, or the termination of the Plan,
if earlier.

 

(f)            RIGHT
TO EXERCISE.  During a Participant’s
lifetime, an Incentive Stock Option may be exercised only by the Participant
or, in the case of the Participant’s Disability, by the Participant’s guardian
or legal representative.

 

(g)           ELIGIBLE
GRANTEES.  The Committee may not
grant an Incentive Stock Option to a person who is not at the Grant Date an
employee of the Company or a Parent or Subsidiary.

 

ARTICLE 8

STOCK APPRECIATION RIGHTS

 

8.1.          GRANT OF
STOCK APPRECIATION RIGHTS.  The
Committee is authorized to grant Stock Appreciation Rights to Participants on
the following terms and conditions:

 

(a)           RIGHT
TO PAYMENT.  Upon the exercise of a
Stock Appreciation Right, the Participant to whom it is granted has the right
to receive the excess, if any, of:

 

(1)             The Fair
Market Value of one Share on the date of exercise; over

 

(2)             The base
price of the Stock Appreciation Right as determined by the Committee, which
shall not be less than the Fair Market Value of one Share on the Grant Date.

 

(b)           OTHER
TERMS.  All awards of Stock
Appreciation Rights shall be evidenced by an Award Certificate.  The terms, methods of exercise, methods of
settlement, form of consideration payable in settlement, and any other terms
and conditions of any Stock Appreciation Right shall be determined by the
Committee at the time of the grant of the Award and shall be reflected in the
Award Certificate.

 

9

 

ARTICLE 9

PERFORMANCE SHARES

 

9.1.          GRANT OF
PERFORMANCE SHARES.  The Committee is
authorized to grant Performance Shares to Participants on such terms and
conditions as may be selected by the Committee. 
The Committee shall have the complete discretion to determine the number
of Performance Shares granted to each Participant, subject to Section 5.4,
and to designate the provisions of such Performance Shares as provided in Section 4.3.  All Performance Shares shall be evidenced by
an Award Certificate or a written program established by the Committee,
pursuant to which Performance Shares are awarded under the Plan under uniform
terms, conditions and restrictions set forth in such written program.

 

9.2.          PERFORMANCE
GOALS.  The Committee may establish
performance goals for Performance Shares which may be based on any criteria
selected by the Committee.  Such
performance goals may be described in terms of Company-wide objectives or in
terms of objectives that relate to the performance of the Participant, an
Affiliate or a division, region, department or function within the Company or
an Affiliate.  If the Committee
determines that a change in the business, operations, corporate structure or
capital structure of the Company or the manner in which the Company or an
Affiliate conducts its business, or other events or circumstances render
performance goals to be unsuitable, the Committee may modify such performance
goals in whole or in part, as the Committee deems appropriate.  If a Participant is promoted, demoted or
transferred to a different business unit or function during a performance
period, the Committee may determine that the performance goals or performance
period are no longer appropriate and may (i) adjust, change or eliminate the
performance goals or the applicable performance period as it deems appropriate
to make such goals and period comparable to the initial goals and period, or
(ii) make a cash payment to the participant in amount determined by the
Committee.  The foregoing two sentences
shall not apply with respect to an Award of Performance Shares that is intended
to be a Qualified Performance-Based Award.

 

9.3.          RIGHT TO
PAYMENT.  The grant of a Performance
Share to a Participant will entitle the Participant to receive at a specified
later time a specified number of Shares, or the equivalent value in cash or
other property, if the performance goals established by the Committee are
achieved and the other terms and conditions thereof are satisfied.  The Committee shall set performance goals and
other terms or conditions to payment of the Performance Shares in its
discretion which, depending on the extent to which they are met, will determine
the number of the Performance Shares that will be earned by the Participant.

 

9.4.          OTHER
TERMS.  Performance Shares may be
payable in cash, Stock, or other property, and have such other terms and
conditions as determined by the Committee and reflected in the Award
Certificate.

 

ARTICLE 10

RESTRICTED STOCK AND RESTRICTED STOCK
UNIT AWARDS

 

10.1.        GRANT
OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS.  The Committee is authorized to make Awards of
Restricted Stock or Restricted Stock Units to Participants in such amounts and
subject to such terms and conditions as may be selected by the Committee.  An Award of Restricted Stock or Restricted
Stock Units shall be evidenced by an Award Certificate setting forth the terms,
conditions, and restrictions applicable to the Award.

 

10.2.        ISSUANCE
AND RESTRICTIONS.  Restricted Stock
or Restricted Stock Units shall be subject to such restrictions on
transferability and other restrictions as the Committee may impose (including,
without limitation, limitations on the right to vote Restricted Stock or the
right to receive dividends on the Restricted Stock).  These restrictions may lapse separately or in
combination at such times, under such circumstances, in such installments, upon
the satisfaction of performance goals or otherwise, as the Committee determines
at the time of the grant of the Award or thereafter.  Except as otherwise provided in an Award
Certificate or any special Plan document governing an Award, the Participant
shall have all of the rights of a stockholder with respect to the Restricted
Stock, and the Participant shall have none of the rights of a stockholder with
respect to Restricted Stock Units until such time as Shares of Stock are paid
in settlement of the Restricted Stock Units.

 

10.3.        FORFEITURE.  Except as otherwise determined by the
Committee at the time of the grant of the

 

10

 

Award
or thereafter, upon termination of Continuous Status as a Participant during
the applicable restriction period or upon failure to satisfy a performance goal
during the applicable restriction period, Restricted Stock or Restricted Stock
Units that are at that time subject to restrictions shall be forfeited;
provided, however, that the Committee may provide in any Award Certificate that
restrictions or forfeiture conditions relating to Restricted Stock or
Restricted Stock Units will be waived in whole or in part in the event of
terminations resulting from specified causes, and the Committee may in other
cases waive in whole or in part restrictions or forfeiture conditions relating
to Restricted Stock or Restricted Stock Units.

 

10.4.        DELIVERY
OF RESTRICTED STOCK.  Shares of
Restricted Stock shall be delivered to the Participant at the time of grant
either by book-entry registration or by delivering to the Participant, or a
custodian or escrow agent (including, without limitation, the Company or one or
more of its employees) designated by the Committee, a stock certificate or
certificates registered in the name of the Participant.  If physical certificates representing shares
of Restricted Stock are registered in the name of the Participant, such
certificates must bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock.

 

ARTICLE 11

DEFERRED STOCK UNITS

 

11.1.        GRANT
OF DEFERRED STOCK UNITS.  The
Committee is authorized to grant Deferred Stock Units to Participants subject
to such terms and conditions as may be selected by the Committee.  Deferred Stock Units shall entitle the
Participant to receive Shares of Stock (or the equivalent value in cash or
other property if so determined by the Committee) at a future time as
determined by the Committee, or as determined by the Participant within
guidelines established by the Committee in the case of voluntary deferral
elections.  An Award of Deferred Stock
Units shall be evidenced by an Award Certificate setting forth the terms and
conditions applicable to the Award.

 

ARTICLE 12

DIVIDEND EQUIVALENTS

 

12.1.        GRANT
OF DIVIDEND EQUIVALENTS.  The
Committee is authorized to grant Dividend Equivalents to Participants subject
to such terms and conditions as may be selected by the Committee.  Dividend Equivalents shall entitle the
Participant to receive payments equal to dividends with respect to all or a
portion of the number of Shares subject to an Award, as determined by the
Committee.  The Committee may provide
that Dividend Equivalents be paid or distributed when accrued or be deemed to
have been reinvested in additional Shares, or otherwise reinvested.

 

ARTICLE 13

STOCK OR OTHER STOCK-BASED AWARDS

 

13.1.        GRANT
OF STOCK OR OTHER STOCK-BASED AWARDS. 
The Committee is authorized, subject to limitations under applicable
law, to grant to Participants such other Awards that are payable in, valued in
whole or in part by reference to, or otherwise based on or related to Shares,
as deemed by the Committee to be consistent with the purposes of the Plan,
including without limitation Shares awarded purely as a “bonus” and not subject
to any restrictions or conditions, convertible or exchangeable debt securities,
other rights convertible or exchangeable into Shares, and Awards valued by
reference to book value of Shares or the value of securities of or the performance
of specified Parents or Subsidiaries. 
The Committee shall determine the terms and conditions of such Awards.

 

ARTICLE 14

PROVISIONS APPLICABLE TO AWARDS

 

14.1.        STAND-ALONE
AND TANDEM AWARDS.  Awards granted
under the Plan may, in the discretion of the Committee, be granted either alone
or in addition to, in tandem with, any other Award granted under the Plan.  Subject to Section 16.2, awards granted
in addition to or in tandem with other Awards may be granted either at the same
time as or at a different time from the grant of such other Awards.

 

11

 

14.2.        TERM
OF AWARD.  The term of each Award
shall be for the period as determined by the Committee, provided that in no
event shall the term of any Incentive Stock Option or a Stock Appreciation
Right granted in tandem with the Incentive Stock Option exceed a period of ten
years from its Grant Date (or, if Section 7.2(d) applies, five years from
its Grant Date).

 

14.3.        FORM
OF PAYMENT FOR AWARDS.  Subject to the
terms of the Plan and any applicable law or Award Certificate, payments or
transfers to be made by the Company or an Affiliate on the grant or exercise of
an Award may be made in such form as the Committee determines at or after the
Grant Date, including without limitation, cash, Stock, other Awards, or other
property, or any combination, and may be made in a single payment or transfer,
in installments, or on a deferred basis, in each case determined in accordance
with rules adopted by, and at the discretion of, the Committee.

 

14.4.        LIMITS
ON TRANSFER.  No right or interest of
a Participant in any unexercised or restricted Award may be pledged,
encumbered, or hypothecated to or in favor of any party other than the Company
or an Affiliate, or shall be subject to any lien, obligation, or liability of
such Participant to any other party other than the Company or an
Affiliate.  No unexercised or restricted
Award shall be assignable or transferable by a Participant other than by will
or the laws of descent and distribution or, except in the case of an Incentive
Stock Option, pursuant to a domestic relations order that would satisfy Section 414(p)(1)(A)
of the Code if such Section applied to an Award under the Plan; provided,
however, that the Committee may (but need not) permit other transfers where the
Committee concludes that such transferability (i) does not result in
accelerated taxation, (ii) does not cause any Option intended to be an
Incentive Stock Option to fail to be described in Code Section 422(b), and
(iii) is otherwise appropriate and desirable, taking into account any factors
deemed relevant, including without limitation, state or federal tax or
securities laws applicable to transferable Awards.

 

14.5.        BENEFICIARIES.  Notwithstanding Section 14.4, a
Participant may, in the manner determined by the Committee, designate a
beneficiary to exercise the rights of the Participant and to receive any
distribution with respect to any Award upon the Participant’s death.  A beneficiary, legal guardian, legal representative,
or other person claiming any rights under the Plan is subject to all terms and
conditions of the Plan and any Award Certificate applicable to the Participant,
except to the extent the Plan and Award Certificate otherwise provide, and to
any additional restrictions deemed necessary or appropriate by the
Committee.  If no beneficiary has been
designated or survives the Participant, payment shall be made to the
Participant’s estate.  Subject to the
foregoing, a beneficiary designation may be changed or revoked by a Participant
at any time provided the change or revocation is filed with the Committee.

 

14.6.        STOCK
CERTIFICATES.  All Stock issuable
under the Plan is subject to any stop-transfer orders and other restrictions as
the Committee deems necessary or advisable to comply with federal or state
securities laws, rules and regulations and the rules of any national securities
exchange or automated quotation system on which the Stock is listed, quoted, or
traded.  The Committee may place legends
on any Stock certificate or issue instructions to the transfer agent to
reference restrictions applicable to the Stock.

 

14.7.        ACCELERATION
UPON A CHANGE IN CONTROL.  Except as
otherwise provided in the Award Certificate or any special Plan document
governing an Award, upon the occurrence of a Change in Control, all outstanding
Options, SARs, and other Awards in the nature of rights that may be exercised
shall become fully exercisable, and all time-based vesting restrictions on
outstanding Awards shall lapse.  Except
as otherwise provided in the Award Certificate or any special Plan document
governing an Award, upon the occurrence of a Change in Control, the target
payout opportunities attainable under all outstanding performance-based Awards
shall be deemed to have been fully earned as of the effective date of the
Change in Control based upon an assumed achievement of all relevant performance
goals at the “target” level and there shall be prorata payout to Participants
within thirty (30) days following the effective date of the Change in Control
based upon the length of time within the performance period that has elapsed
prior to the Change in Control.

 

14.8         ACCELERATION
UPON DEATH OR DISABILITY.  Except as
otherwise provided in the Award Certificate or any special Plan document
governing an Award, upon the Participant’s death or Disability during his or
her Continuous Status as a Participant, (i) all of such Participant’s
outstanding Options, SARs, and other Awards in the nature of rights that may be
exercised shall become fully exercisable, (ii) all time-based vesting

 

12

 

restrictions
on the Participant’s outstanding Awards shall lapse, and (iii) the target
payout opportuhnit8ies attainable under all of such Participant’s outstanding
performance-based Awards shall be deemed to have been fully earned as of the
date of termination based upon an assumed achievement of all relevant performance
goals at the “target” level and there shall be a prorata payout to the Participant
or his or her estate within thirty (30) days following the date of termination
based upon the length of time within the performance period that has elapsed
prior to the date of termination.  Any
Awards shall thereafter continue or lapse in accordance with the other
provisions of the Plan and the Awards Certificate.  To the extent that this provision causes
Incentive Stock Options to exceed the dollar limitation set forth in Section 7.2(c),
the excess Options shall be deemed to be Nonstatutory Stock Options.

 

14.9.        ACCELERATION
FOR ANY OTHER REASON.  Regardless of
whether an event has occurred as described in Section 14.7 or 14.8 above,
and subject to Section 14.11 as to Qualified Performance-Based Awards, the
Committee may in its sole discretion at any time determine that all or a
portion of a Participant’s Options, SARs, and other Awards in the nature of
rights that may be exercised shall become fully or partially exercisable, that
all or a part of the time-based vesting restrictions on all or a portion of the
outstanding Awards shall lapse, and/or that any performance-based criteria with
respect to any Awards shall be deemed to be wholly or partially satisfied, in
each case, as of such date as the Committee may, in its sole discretion,
declare.  The Committee may discriminate
among Participants and among Awards granted to a Participant in exercising its
discretion pursuant to this Section 14.9.

 

14.10.      EFFECT
OF ACCELERATION.  If an Award is
accelerated under Section 14.7, Section 14.8 or Section 14.9,
the Committee may, in its sole discretion, provide (i) that the Award will
expire after a designated period of time after such acceleration to the extent
not then exercised, (ii) that the Award will be settled in cash rather than
Stock, (iii) that the Award will be assumed by another party to a transaction
giving rise to the acceleration or otherwise be equitably converted or
substituted in connection with such transaction, (iv) that the Award may be
settled by payment in cash or cash equivalents equal to the excess of the Fair
Market Value of the underlying Stock, as of a specified date associated with
the transaction, over the exercise price of the Award, or (v) any combination
of the foregoing.  The Committee’s
determination need not be uniform and may be different for different
Participants whether or not such Participants are similarly situated.  To the extent that such acceleration causes
Incentive Stock Options to exceed the dollar limitation set forth in Section 7.2(c),
the excess Options shall be deemed to be Nonstatutory Stock Options.

 

14.11.      QUALIFIED
PERFORMANCE-BASED AWARDS.

 

(a)           The
provisions of the Plan are intended to ensure that all Options and Stock
Appreciation Rights granted hereunder to any Covered Employee shall qualify for
the Section 162(m) Exemption; provided that the exercise or base price of
such Award is not less than the Fair Market Value of the Shares on the Grant
Date.

 

(b)           When
granting any other Award, the Committee may designate such Award as a Qualified
Performance-Based Award, based upon a determination that the recipient is or
may be a Covered Employee with respect to such Award, and the Committee wishes
such Award to qualify for the Section 162(m) Exemption.  If an Award is so designated, the Committee
shall establish performance goals for such Award within the time period
prescribed by Section 162(m) of the Code based on one or more of the
following Qualified Business Criteria, which may be expressed in terms of
Company-wide objectives or in terms of objectives that relate to the
performance of an Affiliate or a unit, division, region, department or function
within the Company or an Affiliate:

 

•              Gross
and/or net revenue (including whether in the aggregate or attributable to
specific products)

•              Cost
of Goods Sold and Gross Margin

•              Costs
and expenses, including Research & Development and Selling, General &
Administrative

•              Income
(gross, operating, net, etc.)

•              Earnings,
including before interest, taxes, depreciation and amortization (whether in the
aggregate or on a per share basis

•              Cash
flows and share price

•              Return
on investment, capital, equity

 

13

 

•              Manufacturing
efficiency (including yield enhancement and cycle time reductions), quality
improvements and customer satisfaction

•              Product
life cycle management (including product and technology design, development,
transfer, manufacturing introduction, and sales price optimization and
management)

•              Economic
profit or loss

•              Market
share

•              Employee
retention, compensation, training and development, including succession
planning

•              Objective
goals consistent with the Participant’s specific officer duties and
responsibilities, designed to further the financial, operational and other
business interests of the Company, including goals and objectives with respect
to regulatory compliance matters.

 

Performance goals
with respect to the foregoing Qualified Business Criteria may be specified in
absolute terms (including completion of pre-established projects, such as the
introduction of specified products), in percentages, or in terms of growth from
period to period or growth rates over time as well as measured relative to an
established or specially-created performance index of Company competitors,
peers or other members of high tech industries. 
Any member of an index that disappears during a measurement period shall
be disregarded for the entire measurement period.  Performance Goals need not be based upon an
increase or positive result under a business criterion and could include, for
example, the maintenance of the status quo or the limitation of economic losses
(measured, in each case, by reference to a specific business criterion).

 

(c)           Each
Qualified Performance-Based Award (other than an Option or SAR) shall be
earned, vested and payable (as applicable) only upon the achievement of
performance goals established by the Committee based upon one or more of the
Qualified Business Criteria, together with the satisfaction of any other
conditions, including the condition as to continued employment as set forth in
subsection (g) below, as the Committee may determine to be appropriate;
provided, however, that the Committee may provide, in its sole and absolute
discretion, either in connection with the grant thereof or by amendment
thereafter, that achievement of such performance goals will be waived upon the
death or Disability of the Participant, or upon a Change in Control.
Performance periods established by the Committee for any such Qualified
Performance-Based Award may be as short as ninety (90) days and may be any
longer period.

 

(d)           The
Committee may provide in any Qualified Performance-Based Award that any
evaluation of performance may include or exclude any of the following events
that occurs during a performance period: (a) asset write-downs or impairment
charges; (b) litigation or claim judgments or settlements; (c) the effect of
changes in tax laws, accounting principles or other laws or provisions
affecting reported results; (d) accruals for reorganization and restructuring
programs; (e) extraordinary nonrecurring items as described in Accounting
Principles Board Opinion No. 30 and/or in management’s discussion and analysis
of financial condition and results of operations appearing in the Company’s
annual report to stockholders for the applicable year; (f) acquisitions or
divestitures; and (g) foreign exchange gains and losses. To the extent such
inclusions or exclusions affect Awards to Covered Employees, they shall be
prescribed in a form and at a time that meets the requirements of Code Section 162(m)
for deductibility.

 

(e)           Any
payment of a Qualified Performance-Based Award granted with performance goals
pursuant to subsection (c) above shall be conditioned on the written
certification of the Committee in each case that the performance goals and any
other material conditions were satisfied. Written certification may take the
form of a Committee resolution passed by a majority of the Committee at a
properly convened meeting or through unanimous action by the Committee via
action by written consent.  The
certification requirement also may be satisfied by a separate writing executed
by the Chairman of the Committee, acting in his capacity as such, following the
foregoing Committee action or by the Chairman executing approved minutes of the
Committee in which such determinations were made.  Except as specifically provided in subsection (c),
no Qualified Performance-Based Award held by a Covered Employee or an employee
who in the reasonable judgment of the Committee may be a Covered Employee on
the date of payment, may be amended, nor may the Committee exercise any
discretionary authority it may otherwise have under the Plan with respect to a
Qualified Performance-Based Award under the Plan, in any manner to waive the

 

14

 

achievement of the
applicable performance goal based on Qualified Business Criteria or to increase
the amount payable pursuant thereto or the value thereof, or otherwise in a
manner that would cause the Qualified Performance-Based Award to cease to
qualify for the Section 162(m) Exemption.

 

(f)            Section 5.4
sets forth the maximum number of Shares or dollar value that may be granted in
any one-year period to a Participant in designated forms of Qualified
Performance-Based Awards.

 

(g)           With
respect to a Participant who is an officer of the Company, any payment of a
Qualified Performance-Based Award granted with performance goals pursuant to
subsection (c) above shall be conditioned on the officer having remained continuously
employed by the Company or an Affiliate for the entire performance or measurement
period, including, as well, through the date of determination and certification
of the payment of any such Award pursuant to subsection (e) above (the “Certification
Date”).  For purposes of the Plan, with
respect to any given performance or measurement period, an officer of the
Company who (i) terminates employment (regardless of cause) or who otherwise
ceases to be an officer, prior to the Certification Date and (ii) who, pursuant
to a separate contractual arrangement with the Company is entitled to receive
payments from the Company thereunder extending to or beyond such Certification
Date as a result of such termination or cessation in officer status, shall be
deemed to have been employed by the Company as an officer through the
Certification Date for purposes of payment eligibility.

 

14.12.      TERMINATION
OF EMPLOYMENT.  Whether military,
government or other service or other leave of absence shall constitute a
termination of employment shall be determined in each case by the Committee at
its discretion, and any determination by the Committee shall be final and
conclusive.  A Participant’s Continuous
Status as a Participant shall not be deemed to terminate (i) in a circumstance
in which a Participant transfers from the Company to an Affiliate, transfers
from an Affiliate to the Company, or transfers from one Affiliate to another
Affiliate, or (ii) in the discretion of the Committee as specified at or prior
to such occurrence, in the case of a spin-off, sale or disposition of the
Participant’s employer from the Company or any Affiliate.  To the extent that this provision causes
Incentive Stock Options to extend beyond three months from the date a
Participant is deemed to be an employee of the Company, a Parent or Subsidiary
for purposes of Sections 424(e) and 424(f) of the Code, the Options held by
such Participant shall be deemed to be Nonstatutory Stock Options.

 

14.13.      DEFERRAL.  Subject to applicable law, the Committee may
permit or require a Participant to defer such Participant’s receipt of the
payment of cash or the delivery of Shares that would otherwise be due to such
Participant by virtue of the exercise of an Option or SAR, the lapse or waiver
of restrictions with respect to Restricted Stock or Restricted Stock Units, or
the satisfaction of any requirements or goals with respect to Performance
Shares, and Other Stock-Based Awards. If any such deferral election is required
or permitted, the Board shall, in its sole discretion, establish rules and
procedures for such payment deferrals.

 

14.14.      FORFEITURE
EVENTS.  The Committee may specify in
an Award Certificate that the Participant’s rights, payments and benefits with
respect to an Award shall be subject to reduction, cancellation, forfeiture or
recoupment upon the occurrence of certain specified events, in addition to any
otherwise applicable vesting or performance conditions of an Award. Such events
shall include, but shall not be limited to, termination of employment for cause,
violation of material Company or Affiliate policies, breach of noncompetition,
confidentiality or other restrictive covenants that may apply to the
Participant, or other conduct by the Participant that is detrimental to the
business or reputation of the Company or any Affiliate.

 

14.15.      SUBSTITUTE
AWARDS.  The Committee may grant
Awards under the Plan in substitution for stock and stock-based awards held by
employees of another entity who become employees of the Company or an Affiliate
as a result of a merger or consolidation of the former employing entity with
the Company or an Affiliate or the acquisition by the Company or an Affiliate
of property or stock of the former employing corporation.  The Committee may direct that the substitute
awards be granted on such terms and conditions as the Committee considers
appropriate in the circumstances.

 

ARTICLE 15

CHANGES IN CAPITAL STRUCTURE

 

15.1.        GENERAL.  In the
event of a corporate event or transaction involving the Company (including,

 

15

 

without limitation, any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares), the
authorization limits under Section 5.1 and 5.4 shall be adjusted
proportionately, and the Committee may
adjust the Plan and Awards to preserve the benefits or potential benefits of
the Awards.  Action by the Committee may
include: (i) adjustment of the number and kind of shares which may be delivered
under the Plan; (ii) adjustment of the number and kind of shares subject to
outstanding Awards; (iii) adjustment of the exercise price of outstanding
Awards or the measure to be used to determine the amount of the benefit payable
on an Award; and (iv) any other adjustments that the Committee determines to be
equitable.  In addition, the
Committee may, in its sole discretion, provide (i) that Awards will be settled
in cash or other property rather than Stock, (ii) that Awards will become immediately
vested and exercisable and will expire after a designated period of time to the
extent not then exercised, (iii) that Awards will be assumed by another party
to a transaction or otherwise be equitably converted or substituted in
connection with such transaction, (iv) that outstanding Awards may be settled
by payment in cash or cash equivalents equal to the excess of the Fair Market
Value of the underlying Stock, as of a specified date associated with the
transaction, over the exercise price of the Award, (v) that applicable
performance targets and performance periods for Awards will be modified,
consistent with Code Section 162(m) where applicable, or (vi) any
combination of the foregoing.  The
Committee’s determination need not be uniform and may be different for
different Participants whether or not such Participants are similarly
situated.  Without limiting the foregoing, in the event of a subdivision of
the outstanding Stock (stock-split), a declaration of a dividend payable in
Shares, or a combination or consolidation of the outstanding Stock into a
lesser number of Shares, the authorization limits under Section 5.1 and
5.4 shall automatically be adjusted proportionately, and the Shares then
subject to each Award shall automatically be adjusted proportionately without
any change in the aggregate purchase price therefor.  To the extent that any adjustments made
pursuant to this Article 15 cause Incentive Stock Options to cease to
qualify as Incentive Stock Options, such Options shall be deemed to be
Nonstatutory Stock Options.

 

ARTICLE 16

AMENDMENT, MODIFICATION AND TERMINATION

 

16.1.        AMENDMENT,
MODIFICATION AND TERMINATION.  The
Board or the Committee may, at any time and from time to time, amend, modify or
terminate the Plan without stockholder approval; provided, however, that if an
amendment to the Plan would, in the reasonable opinion of the Board or the
Committee, either (i) materially increase the number of Shares available under
the Plan, (ii) expand the types of awards under the Plan, (iii) materially
expand the class of participants eligible to participate in the Plan, (iv)
materially extend the term of the Plan, or (v) otherwise constitute a material
change requiring stockholder approval under applicable laws, policies or
regulations or the applicable listing or other requirements of an Exchange,
then such amendment shall be subject to stockholder approval; and provided,
further, that the Board or Committee may condition any other amendment or
modification on the approval of stockholders of the Company for any reason,
including by reason of such approval being necessary or deemed advisable to (i)
permit Awards made hereunder to be exempt from liability under Section 16(b)
of the 1934 Act, (ii) to comply with the listing or other requirements of an
Exchange, or (iii) to satisfy any other tax, securities or other applicable
laws, policies or regulations.

 

16.2.        AWARDS
PREVIOUSLY GRANTED.  At any time and
from time to time, the Committee may amend, modify or terminate any outstanding
Award without approval of the Participant; provided, however:

 

(a)           Subject
to the terms of the applicable Award Certificate, such amendment, modification
or termination shall not, without the Participant’s consent, reduce or diminish
the value of such Award determined as if the Award had been exercised, vested,
cashed in or otherwise settled on the date of such amendment or termination
(with the per-share value of an Option or Stock Appreciation Right for this
purpose being calculated as the excess, if any, of the Fair Market Value as of
the date of such amendment or termination over the exercise or base price of
such Award);

 

(b)           The
original term of an Option may not be extended without the prior approval of
the stockholders of the Company;

 

(c)           Except as
otherwise provided in Article 15, the exercise price of an Option may not
be reduced, directly or indirectly, without the prior approval of the
stockholders of the Company; and

 

16

 

(d)           No
termination, amendment, or modification of the Plan shall adversely affect any
Award previously granted under the Plan, without the written consent of the
Participant affected thereby.  An
outstanding Award shall not be deemed to be “adversely affected” by a Plan
amendment if such amendment would not reduce or diminish the value of such
Award determined as if the Award had been exercised, vested, cashed in or
otherwise settled on the date of such amendment (with the per-share value of an
Option or Stock Appreciation Right for this purpose being calculated as the
excess, if any, of the Fair Market Value as of the date of such amendment over
the exercise or base price of such Award).

 

ARTICLE 17

GENERAL PROVISIONS

 

17.1.        NO
RIGHTS TO AWARDS; NON-UNIFORM DETERMINATIONS.  No Participant or any Eligible Participant
shall have any claim to be granted any Award under the Plan.  Neither the Company, its Affiliates nor the
Committee is obligated to treat Participants or Eligible Participants
uniformly, and determinations made under the Plan may be made by the Committee
selectively among Eligible Participants who receive, or are eligible to
receive, Awards (whether or not such Eligible Participants are similarly
situated).

 

17.2.        NO
STOCKHOLDER RIGHTS.  No Award gives a
Participant any of the rights of a stockholder of the Company unless and until
Shares are in fact issued to such person in connection with such Award.

 

17.3.        WITHHOLDING.  The Company or any Affiliate shall have the
authority and the right to deduct or withhold, or require a Participant to
remit to the Company, an amount sufficient to satisfy federal, state, and local
taxes (including the Participant’s FICA obligation) required by law to be
withheld with respect to any exercise, lapse of restriction or other taxable
event arising as a result of the Plan. 
If Shares are surrendered to the Company to satisfy withholding
obligations in excess of the minimum withholding obligation, such Shares must
have been held by the Participant as fully vested shares for such period of
time, if any, as necessary to avoid the recognition of an expense under
generally accepted accounting principles. 
The Company shall have the authority to require a Participant to remit
cash to the Company in lieu of the surrender of Shares for tax withholding
obligations if the surrender of Shares in satisfaction of such withholding
obligations would result in the Company’s recognition of expense under
generally accepted accounting principles. 
With respect to withholding required upon any taxable event under the
Plan, the Committee may, at the time the Award is granted or thereafter,
require or permit that any such withholding requirement be satisfied, in whole
or in part, by withholding from the Award Shares having a Fair Market Value on
the date of withholding equal to the minimum amount (and not any greater
amount) required to be withheld for tax purposes, all in accordance with such
procedures as the Committee establishes.

 

17.4.        NO
RIGHT TO CONTINUED SERVICE.  Nothing
in the Plan, any Award Certificate or any other document or statement made with
respect to the Plan, shall interfere with or limit in any way the right of the
Company or any Affiliate to terminate any Participant’s employment or status as
an officer, director or consultant at any time, nor confer upon any Participant
any right to continue as an employee, officer, director or consultant of the
Company or any Affiliate, whether for the duration of a Participant’s Award or
otherwise.

 

17.5.        UNFUNDED
STATUS OF AWARDS.  The Plan is
intended to be an “unfunded” plan for incentive and deferred compensation.  With respect to any payments not yet made to
a Participant pursuant to an Award, nothing contained in the Plan or any Award
Certificate shall give the Participant any rights that are greater than those
of a general creditor of the Company or any Affiliate.  This Plan is not intended to be subject to
ERISA.

 

17.6.        RELATIONSHIP
TO OTHER BENEFITS.  No payment under
the Plan shall be taken into account in determining any benefits under any
pension, retirement, savings, profit sharing, group insurance, welfare or
benefit plan of the Company or any Affiliate unless provided otherwise in such
other plan.

 

17.7.        EXPENSES.  The expenses of administering the Plan shall
be borne by the Company and its Affiliates.

 

17.8.        TITLES
AND HEADINGS.  The titles and
headings of the Sections in the Plan are for convenience of reference only, and
in the event of any conflict, the text of the Plan, rather than such titles or
headings, shall control.

 

17

 

17.9.        GENDER
AND NUMBER.  Except where otherwise
indicated by the context, any masculine term used herein also shall include the
feminine; the plural shall include the singular and the singular shall include
the plural.

 

17.10.      FRACTIONAL
SHARES.  No fractional Shares shall
be issued and the Committee shall determine, in its discretion, whether cash
shall be given in lieu of fractional Shares or whether such fractional Shares
shall be eliminated by rounding up or down.

 

17.11.      GOVERNMENT
AND OTHER REGULATIONS.

 

(a)           Notwithstanding
any other provision of the Plan, no Participant who acquires Shares pursuant to
the Plan may, during any period of time that such Participant is an affiliate
of the Company (within the meaning of the rules and regulations of the
Securities and Exchange Commission under the 1933 Act), sell such Shares,
unless such offer and sale is made (i) pursuant to an effective registration
statement under the 1933 Act, which is current and includes the Shares to be
sold, or (ii) pursuant to an appropriate exemption from the registration
requirement of the 1933 Act, such as that set forth in Rule 144 promulgated
under the 1933 Act.

 

(b)           Notwithstanding
any other provision of the Plan, if at any time the Committee shall determine
that the registration, listing or qualification of the Shares covered by an
Award upon any Exchange or under any foreign, federal, state or local law or
practice, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting
of such Award or the purchase or receipt of Shares thereunder, no Shares may be
purchased, delivered or received pursuant to such Award unless and until such
registration, listing, qualification, consent or approval shall have been
effected or obtained free of any condition not acceptable to the
Committee.  Any Participant receiving or
purchasing Shares pursuant to an Award shall make such representations and
agreements and furnish such information as the Committee may request to assure
compliance with the foregoing or any other applicable legal requirements.  The Company shall not be required to issue or
deliver any certificate or certificates for Shares under the Plan prior to the
Committee’s determination that all related requirements have been
fulfilled.  The Company shall in no event
be obligated to register any securities pursuant to the 1933 Act or applicable
state or foreign law or to take any other action in order to cause the issuance
and delivery of such certificates to comply with any such law, regulation or
requirement.

 

17.12.      GOVERNING
LAW.  To the extent not governed by
federal law, the Plan and all Award Certificates shall be construed in
accordance with and governed by the laws of the State of Delaware.

 

17.13.      ADDITIONAL
PROVISIONS.  Each Award Certificate
may contain such other terms and conditions as the Committee may determine;
provided that such other terms and conditions are not inconsistent with the
provisions of the Plan.

 

17.14.      NO
LIMITATIONS ON RIGHTS OF COMPANY. 
The grant of any Award shall not in any way affect the right or power of
the Company to make adjustments, reclassification or changes in its capital or
business structure or to merge, consolidate, dissolve, liquidate, sell or
transfer all or any part of its business or assets.  The Plan shall not restrict the authority of
the Company, for proper corporate purposes, to draft or assume awards, other
than under the Plan, to or with respect to any person.  If the Committee so directs, the Company may
issue or transfer Shares to an Affiliate, for such lawful consideration as the
Committee may specify, upon the condition or understanding that the Affiliate
will transfer such Shares to a Participant in accordance with the terms of an
Award granted to such Participant and specified by the Committee pursuant to
the provisions of the Plan.

 

17.15.      INDEMNIFICATION.  Each person who is or shall have been a
member of the Committee, or of the Board, or an officer of the Company to whom
authority was delegated in accordance with Article 4 shall be indemnified
and held harmless by the Company against and from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit, or proceeding to
which he or she may be a party or in which he or she may be involved by reason
of any action taken or

 

18

 

failure
to act under the Plan and against and from any and all amounts paid by him or
her in settlement thereof, with the Company’s approval, or paid by him or her
in satisfaction of any judgment in any such action, suit, or proceeding against
him or her, provided he or she shall give the Company an opportunity, at its
own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf, unless such loss, cost,
liability, or expense is a result of his or her own willful misconduct or
except as expressly provided by statute. 
The foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such persons may be entitled under the
Company’s Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold
them harmless.

 

19

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