Document:

Exhibit 10.1

 

NAVTEQ CORPORATION

AMENDED & RESTATED 2001 STOCK INCENTIVE PLAN

 

(As Amended and Restated,
Effective as of May 9, 2006)

 

1.                                       Purposes
of the Plan. The purposes of this Plan are:

 

•                                          to
attract and retain the best available personnel for positions of substantial
responsibility,

 

•                                          to
provide additional incentive to Employees and Consultants, and

 

•                                          to
promote the success of the Company’s business.

 

The Plan permits the granting of stock options (including incentive
stock options qualifying under Section 422 of the Code and non-qualified
stock options), stock appreciation rights, restricted or unrestricted stock
awards, phantom stock, performance awards, stock purchase rights, other stock-based
awards, or any combination of the foregoing. This amended and restated Plan
will become effective upon its approval by the shareholders of the Company in
accordance with Section 16 hereof and will not affect awards granted prior
to its amendment and restatement.

 

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

 

(a)                                  “Administrator”
means the Board or, if appointed by the Board, a Committee.

 

(b)                                 “Affiliate”
shall mean any entity, whether now or hereafter existing, which controls, is
controlled by, or is under common control with, the Company (including, but not
limited to, joint ventures, limited liability companies, and partnerships). For
this purpose, “control” shall mean ownership of 50% or more of the total
combined voting power or value of all classes of stock or interests of the entity.

 

(c)                                  “Applicable
Laws” means the legal requirements relating to the administration of stock
option plans and the issuance of Shares thereunder pursuant to U. S. state
corporate laws, U.S. federal and state securities laws, the Code and the
applicable laws of any foreign country or jurisdiction where Awards are, or
will be, granted under the Plan.

 

(d)                                 “Award”
shall mean any stock option, stock appreciation right, stock award, stock
purchase right, phantom stock award, performance award, or other stock-based
award.

 

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

 

(f)                                    “Change
in Control” means:  (i) the acquisition (other than from the
Company) by any Person, as defined in this Section 2(f), of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended) of 50% or more of (A) the
then outstanding shares of the securities of the Company, or (B) the

 

 

combined voting power of the then outstanding
securities of the Company entitled to vote generally in the election of
directors (the “Company Voting Stock”); (ii) the closing of a sale or
other conveyance of all or substantially all of the assets of the Company; or (iii) the
effective time of any merger, share exchange, consolidation, or other business
combination of the Company if immediately after such transaction persons who
hold a majority of the outstanding voting securities entitled to vote generally
in the election of directors of the surviving entity (or the entity owning 100%
of such surviving entity) are not persons who, immediately prior to such
transaction, held the Company Voting Stock; provided, however, that a Change in
Control shall not include a public offering of capital stock of the Company. For
purposes of this Section 2(f), a “Person” means any individual, entity or
group within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act, other than: employee benefit plans sponsored or maintained by the
Company and corporations controlled by the Company.

 

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

 

(h)                                 “Committee”
means a Committee appointed by the Board in accordance with Section 4 of
the Plan.

 

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

 

(j)                                     “Company”
means Navigation Technologies Corporation, a Delaware corporation.

 

(k)                                  “Consultant”
means any person, including an advisor, engaged by the Company or an Affiliate
to render services and who is compensated for such services. The term “Consultant”
shall not include Directors who are paid only a director’s fee by the Company
or who are not compensated by the Company for their services as Directors for
the purpose of raising capital.

 

(l)                                     “Continuous
Status” means that the employment, consulting or other service relationship
with the Company or any Affiliate is not interrupted or terminated. Continuous
Status shall not be considered interrupted 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 Affiliate, or any successor. A leave of
absence approved by the Company shall include sick leave, military leave, or
any other personal leave approved by an authorized representative of the
Company. For purposes of Incentive Stock Options, such leave may not exceed
ninety (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, the employment
relationship will be deemed to have terminated on the 91st day of
such leave solely for purposes of eligibility to obtain favorable tax treatment
of Incentive Stock Options upon exercise.

 

(m)                               “Covered
Employee” means the chief executive officer and the four other highest
compensated Officers of the Company for whom total compensation is required to
be reported to shareholders under the Exchange Act, as determined for purposes
of Section 162(m) of the Code.

 

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

 

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

 

(p)                                 “Eligible
Participant” means a person who is eligible to receive an Award under the
Plan.

 

(q)                                 “Employee”
means any person, including Officers and Directors, employed by the Company or
any Parent or Subsidiary of the Company. Neither service as a Director nor
payment of a director’s fee by the Company shall be sufficient to constitute “employment”
by the Company.

 

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

 

(s)                                  “Fair
Market Value” means, as of any date, the value 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 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;

 

(ii)                                  If
the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a Share of Common Stock shall
be the mean between the high bid and low asked prices for the Common Stock on
the last market trading day prior to the day of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

 

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

 

(t)                                    “Grant
Agreement” shall mean a written document memorializing the terms and
conditions of an Award granted pursuant to the Plan and shall incorporate the
terms of the Plan and any Notice of Grant.

 

(u)                                 “Grantee”
means an Eligible Participant who has been granted an Award under the Plan.

 

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

 

(w)                               “Misconduct”
means the commission of any act affecting employment which involves (1) dishonesty,
fraud or criminal conduct by Grantee, (2) Grantee’s knowing and willful
violation of a material Company written policy or a lawful direction by an
authorized executive officer or the Board, (3) Grantee’s engaging in any
activity in competition with the Company or its subsidiaries in a material
manner (excluding a less than 5% investment in any public company), or

 

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(4) Grantee’s knowing unauthorized disclosure of
confidential material, proprietary information or trade secrets of the Company.

 

(x)                                   “Non-Employee
Director” means a Director who either (i) is not a current Employee or
Officer of the Company or its Parent or a Subsidiary, does not receive
compensation (directly or indirectly) from the Company or its Parent or a
Subsidiary for services rendered as a Consultant or in any capacity other than
as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act (“Regulation S-K”)), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a “non-employee director” for purposes of Rule 16b-3.

 

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

 

(z)                                   “Notice
of Grant” means a written notice evidencing certain terms and conditions of
an individual Award. The Notice of Grant is part of the Grant Agreement.

 

(aa)                            “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.

 

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

 

(cc)                            “Optioned
Stock” means the Common Stock subject to an Award.

 

(dd)                          “Optionee”
means an Employee, Director or Consultant who holds an outstanding Option.

 

(ee)                            “Outside
Director” means a Director who either (i) is not a current Employee of
the Company or an “affiliated corporation” (within the meaning of Treasury
Regulations promulgated under Section 162(m) of the Code), is not a former
employee of the Company or an “affiliated corporation” receiving compensation
for prior services (other than benefits under a tax-qualified pension plan),
was not an officer of the Company or an “affiliated corporation” at any time
and is not currently receiving direct or indirect remuneration from the Company
or an “affiliated corporation” for services in any capacity other than as a
Director or (ii) is otherwise considered an “outsider director” for
purposes of Section 162(m) of the Code.

 

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

 

(gg)                          “Performance
Criteria” has the meaning set forth in Exhibit E.

 

(hh)                          “Performance
Goal” means the performance goals established by the Administrator and, if
desirable for purposes of Section 162(m) of the Code, based on one or more
Performance Criteria.

 

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(ii)                                  “Performance
Period” means three consecutive fiscal years of the Company, or such shorter
period as determined by the Administrator in its discretion.

 

(jj)                                  “Plan”
means this 2001 Stock Incentive Plan, as amended from time to time.

 

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

 

(ll)                                  “Section 16(b)”
means Section 16(b) of the Exchange Act.

 

(mm)                      “Share”
means a share of the Common Stock, as adjusted in accordance with Section 11
of the Plan.

 

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

 

3.                                       Stock
Subject to the Plan. Subject to the provisions of Section 11 of the
Plan, the maximum aggregate number of Shares which may be sold under the
Plan is 16,428,571; provided, however, after May 9, 2006,
restricted or unrestricted stock awards, stock-settled phantom stock or other
similar “full-value” awards will not be issued hereunder with respect to more
than 2,500,000 Shares. For avoidance of doubt, all Shares reserved for issuance
hereunder are available for issuance upon the exercise of Incentive Stock
Options. The Shares issued hereunder may be authorized, but unissued, or
reacquired Common Stock.

 

To the extent an Option or SAR expires, terminates or is canceled or
forfeited for any reason without having been exercised in full, the Shares
subject to that Option or SAR will again become available for grant under the
Plan. Similarly, to the extent any other type of Award is terminated, canceled
or forfeited for any reason, the Shares subject to that Award will again become
available for grant under the Plan. Finally, to the extent an Award is settled in cash,
the Shares subject to that Award will again become available for issuance under
the Plan. However, for avoidance of doubt, the exercise of a stock-settled SAR
or net-cashless exercise of an Option (or portion thereof) will reduce the
number of Shares available for issuance hereunder by the entire number of
Shares subject to that SAR or Option (or applicable portion thereof), even
though a smaller number of Shares will be issued upon such an exercise. Also, Shares
tendered to pay the exercise price of an Option or to satisfy a tax withholding
obligation arising in connection with an Award will not become available for
grant or sale under the Plan.

 

4.                                       Administration
of the Plan.

 

(a)                                  Administration
of the Plan. The Plan shall be administered by the Board. The Board may delegate
administration of the Plan to a Committee or Committees of one or more members
of the Board from time to time (the Board, Committee or Committees hereinafter
referred to as the “Administrator”). If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board, including the power to
delegate to a subcommittee any of the administrative powers such Committee is
authorized to exercise, subject, however, to such resolutions, not inconsistent
with the provisions of the Plan, as may be adopted from time to time by
the Board. The Board may increase the size of

 

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any Committee and appoint additional members, remove
members (with or without cause) and substitute new members, fill vacancies (however
caused), and remove all members of the Committee, thereby revesting in the
Board the administration of the Plan.

 

(b)                                 Administration
With Respect to Directors and Officers Subject to Section 16(b). At
such time as an officer or director of the Company is subject to Section 16
of the Securities Exchange Act of 1934, as amended, all grants of Awards to
individuals subject to Rule 16b-3 may be made by the Board or a
Committee appointed by the Board that is comprised of two or more Non-Employee
Directors. At such time as any equity security of the Company is registered
pursuant to the provisions of Section 12 of the Securities Exchange Act of
1934, as amended, grants of Awards to Covered Employees or persons who are
expected to be Covered Employees at the time of recognition of income resulting
from such Award shall be made by a Committee appointed by the Board that is
comprised of two or more Outside Directors unless the Board determines that the
Company does not wish to comply with Code Section 162(m) with respect to
such Awards.

 

(c)                                  Powers
of the Administrator. The Administrator shall have full power and
authority, subject to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board, to take all
other actions necessary to carry out the purpose and intent of the Plan,
including, but not limited to, the authority to:

 

(i)                                     determine
the Fair Market Value of the Common Stock, in accordance with Section 2(s)
of the Plan;

 

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

 

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

 

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

 

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

 

(vi)                              determine
the terms and conditions, not inconsistent with the terms of the Plan, of any
award granted hereunder;

 

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

 

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

 

(ix)                                for
any purpose including, but not limited to, qualifying for preferred tax
treatment under foreign laws or otherwise complying with the statutory or
regulatory requirements of local or foreign jurisdictions, establish, amend,
modify, administer or terminate sub-plans, and prescribe, amend and rescind rules and
regulations relating to such sub-plans;

 

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(x)                                   modify
or amend outstanding Awards (provided, however, that except as provided in Section 11
of the Plan or as required to ensure compliance with Applicable Laws, any
modification that would materially adversely affect any outstanding Award shall
not be made without the consent of the holder);

 

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

 

(xii)                             make
all other determinations deemed necessary or advisable under or for
administering the Plan.

 

(d)                                 Non-Uniform Determinations.
The Administrator’s determinations under the Plan (including without
limitation, determinations of the persons to receive Awards, the form, amount
and timing of such Awards, the terms and provisions of such Awards and the
Grant Agreements evidencing such Awards) need not be uniform and may be
made by the Administrator selectively among persons who receive, or are
eligible to receive, Awards under the Plan, whether or not such persons are
similarly situated.

 

(e)                                  Limited
Liability. To the maximum extent permitted
by law, no member of the Administrator shall be liable for any action taken or
decision made in good faith relating to the Plan or any Award thereunder.

 

(f)                                    Indemnification.
To the maximum extent permitted by law and by the Company’s charter and
by-laws, the Administrator shall be indemnified by the Company in respect of
all their activities under the Plan.

 

(g)                                 Effect
of Administrator’s Decision. All actions taken and decisions and
determinations made by the Administrator on all matters relating to the Plan
pursuant to the powers vested in it hereunder shall be in the Administrator’s
sole and absolute discretion and shall be conclusive and binding on all parties
concerned, including the Company, its stockholders, any participants in the
Plan and any other Employee, Consultant, or Director of the Company, and their
respective successors in interest.

 

5.                                       Eligibility.
Participation in the Plan shall be open to all Employees, Officers, and
Directors of, and Consultants to or for, the Company, or of any Affiliate of
the Company, as may be selected by the Administrator from time to time. The
Administrator may also grant Awards to individuals in connection with
hiring, retention or otherwise, prior to the date the individual first performs
services for the Company or an Affiliate provided that such Awards shall not
become vested or exercisable prior to the date the individual first commences
performance of such services.

 

6.                                       Limitations.
Subject to adjustments as provided under Section 11 of the Plan, the
maximum number of shares of Common Stock subject to Awards of any combination
that may be granted during any one fiscal year of the Company to any one individual under this Plan shall be limited to
2,000,000 shares of Common Stock. Moreover, with respect to any Performance
Award that is denominated in cash and intended to constitute “qualified
performance-based compensation”

 

7

 

under Section 162(m) of the Code, the maximum
amount of compensation paid with respect to that Award will not exceed
$5,000,000.

 

7.                                       Term
of Plan. Subject to Section 16 of the Plan, the Plan became effective
upon its approval by the shareholders of the Company as described in Section 16
of the Plan. It shall continue in effect until terminated, provided that no
Incentive Stock Option will be granted hereunder later than the tenth (10th)
anniversary of the approval by the Company’s shareholders of the Plan, as
amended and restated (or, if shareholders approve an amendment to the Plan
increasing the number of Shares subject hereto, the tenth (10th)
anniversary of such approval).

 

8.                                       Date
of Grant. The date of grant of an Award shall be, for all purposes, the
date on which the Administrator makes the determination granting such Award, or
such other later date as is determined by the Administrator. Notice of the
determination shall be provided to each Grantee within a reasonable time after
the date of such grant.

 

9.                                       Awards.
The Administrator, in its sole discretion, establishes the terms of all Awards
granted under the Plan. This includes fixing the period within which the Award may be
exercised and any conditions which must be met before the Award may be
exercised. Awards may be granted individually or in tandem with other
types of Awards. All Awards are subject to the terms and conditions provided in
the Grant Agreement. The Administrator may permit or require a recipient
of an Award to defer such individual’s receipt of the payment of cash or the
delivery of Common Stock that would otherwise be due to such individual by
virtue of the exercise of, payment of, or lapse or waiver of restrictions
respecting, any Award. If any such payment deferral is required or permitted,
the Administrator shall, in its sole discretion, establish rules and
procedures for such payment deferrals.

 

(a)                                  Stock
Options.

 

(i)                                     Types
of Options Available Under the Plan. The Administrator may from time
to time grant to Eligible Participants Awards of Incentive Stock Options or
Non-Qualified Stock Options; provided, however, that Awards of Incentive Stock
Options shall be limited to employees of the Company or of any current or
hereafter existing Parent or Subsidiary of the Company. No Option shall be an
Incentive Stock Option unless so designated by the Administrator at the time of
grant or in the Grant Agreement evidencing such Option. Notwithstanding
designation by the Administrator as Incentive Stock Options or Non-Qualified Stock
Options, to the extent that the aggregate Fair Market Value of the Shares with
respect to which Incentive Stock Options are exercisable for the first time by
the Optionee during any calendar year (under all plans of the Company and any
Parent or Subsidiary) exceeds $100,000, such Options shall be treated as
Non-Qualified Stock Options.

 

(ii)                                  Exercise
Price. Options must have an exercise price at least equal to Fair Market
Value as of the date of grant. If an Incentive Stock Option is granted to an
Optionee who, at the time the Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary corporation, 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.

 

8

 

(iii)                               Order
of Exercisability. For purposes of this Section 9(a), Incentive Stock
Options shall be taken into account in the order in which they were granted. If
an Option is granted hereunder that is part Incentive Stock Option and part Non-Qualified
Stock Option due to becoming first exercisable in any calendar year in excess
of $100,000, the Incentive Stock Option portion of such Option shall become
exercisable first in such calendar year, and the Non-Qualified Stock Option
portion shall commence becoming exercisable once the $100,000 limit has been
reached.

 

(iv)                              Term
of the Option. The term of each Option shall be stated in the Notice of
Grant, but will not in any case exceed eight (8) years from the date of
grant. Moreover, in the case of an Incentive Stock Option granted to an
Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Incentive
Stock Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Notice of Grant.

 

(b)                                 Stock
Appreciation Rights. The
Administrator may from time to time grant to Eligible Participants Awards
of Stock Appreciation Rights (“SAR”). An SAR entitles the grantee to receive,
subject to the provisions of the Plan and the Grant Agreement, a payment having
an aggregate value equal to the product of (i) the excess of (A) the
Fair Market Value on the exercise date of one share of Common Stock over (B) the
exercise price per share specified in the Grant Agreement, times (ii) the
number of shares specified by the SAR, or portion thereof, which is exercised. An
SAR must have an exercise price at least equal to Fair Market Value as of the
date of grant. Payment by the Company of the amount receivable upon any
exercise of an SAR may be made by the delivery of Common Stock or cash, or
any combination of Common Stock and cash, as determined in the sole discretion
of the Administrator. If upon settlement of the exercise of an SAR a grantee is
to receive a portion of such payment in shares of Common Stock, the number of
shares shall be determined by dividing such portion by the Fair Market Value of
a share of Common Stock on the exercise date. No fractional shares shall be
used for such payment and the Administrator shall determine whether cash shall
be given in lieu of such fractional shares or whether such fractional shares
shall be eliminated. The term of each SAR will be stated in the Notice of
Grant, but will not in any case exceed eight (8) years from the date of
the grant.

 

(c)                                  Stock
Awards. The Administrator may from time
to time grant restricted or unrestricted stock Awards to Eligible Participants
in such amounts, on such terms and conditions, and for such consideration,
including no consideration or such minimum consideration as may be
required by law, as it shall determine. A stock Award may be paid in
Common Stock, in cash, or in a combination of Common Stock and cash, as
determined in the sole discretion of the Administrator.

 

(d)                                 Phantom
Stock. The Administrator may from time
to time grant Awards to Eligible Participants denominated in stock-equivalent
units (“phantom stock”) in such amounts and on such terms and conditions as it
shall determine. Phantom stock units granted to a Grantee shall be credited to
a bookkeeping reserve account solely for accounting purposes and shall not
require a segregation of any of the Company’s assets. An Award of phantom stock
may be settled in Common Stock, in cash, or in a combination of Common
Stock and cash, as determined in the sole discretion of the Administrator. Except
as otherwise provided in the applicable Grant Agreement, the grantee

 

9

 

shall not have the rights of a stockholder with
respect to any shares of Common Stock represented by a phantom stock unit solely
as a result of the grant of a phantom stock unit to the grantee.

 

(e)                                  Performance
Awards. The Administrator may, in its discretion, grant performance awards
which become payable on account of attainment of one or more Performance Goals
established by the Administrator (in addition to such other conditions, such as
the satisfaction of service conditions, as the Administrator may establish).
Performance awards may be paid by the delivery of Common Stock or cash, or
any combination of Common Stock and cash, as determined in the sole discretion
of the Administrator. Except as provided in the last sentence of this
paragraph, the Administrator will select one or more Performance Goals for
measuring performance and the measurement may be stated in absolute terms
or relative to other companies or groups of companies. Performance Goals based
on criteria other than the Performance Criteria may be utilized, to the
extent a performance award is not intended to satisfy the requirements for
exemption under Section 162(m) of the Code.

 

At the expiration of the Performance Period applicable to any
performance award, the Administrator shall determine and certify in writing the
extent to which the Performance Goals have been achieved. At that time, the
Administrator will have the discretion to adjust the size or amount of any
performance award; provided, however, that with respect to any performance
award intended to satisfy the requirements for exemption under Section 162(m)
of the Code, the Administrator may exercise its discretion only to reduce
the size or amount of any such performance award.

 

(f)                                    Other
Stock-Based Awards. The
Administrator may from time to time grant other stock-based awards to
Eligible Participants in such amounts, on such terms and conditions, and for
such consideration, including no consideration or such minimum consideration as
may be required by law, as it shall determine. Other stock-based awards may be
denominated in cash, in Common Stock or other securities, in stock-equivalent
units, in stock appreciation units, in securities or debentures convertible
into Common Stock, or in any combination of the foregoing and may be paid
in Common Stock or other securities, in cash, or in a combination of Common
Stock or other securities and cash, all as determined in the sole discretion of
the Administrator.

 

10.                                 Non-Transferability
Of Awards. Unless otherwise specified by the Administrator in the Grant
Agreement, Awards may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Grantee.

 

11.                                 Adjustments
for Corporate Transactions and Other Events.

 

(a)                                  Stock
Dividend, Stock Split and Reverse Stock Split. In
the event of a stock dividend of, or stock split or reverse stock split
affecting, the Common Stock, (A) the maximum number of shares of such
Common Stock as to which Awards may be granted under this Plan and the
maximum number of shares with respect to which Awards may be granted
during any one fiscal year of the Company to any individual, as provided in Section 6
of the Plan, and (B) the number of shares covered by and the exercise
price and other terms of outstanding Awards, shall, without further action of
the Board, be adjusted to reflect such event. The Administrator may make
adjustments, in

 

10

 

its discretion, to address the treatment of fractional
shares and fractional cents that arise with respect to outstanding Awards as a
result of the stock dividend, stock split or reverse stock split.

 

(b)                                 Non-Change
in Control Transactions. Except with
respect to the transactions set forth in Section 11(a), in the event of
any change affecting the Common Stock, the Company or its capitalization, by
reason of a spin-off, split-up, dividend, recapitalization, merger,
consolidation or share exchange, other than any such change that is part of
a transaction resulting in a Change in Control of the Company, the
Administrator, in its discretion and without the consent of the holders of the
Awards, may make (A) appropriate adjustments to the maximum number
and kind of shares reserved for issuance or with respect to which Awards may be
granted under the Plan, in the aggregate and with respect to any individual
during any one fiscal year of the Company, as provided in Sections 3
and 6 of the Plan; and (B) any adjustments in outstanding Awards,
including but not limited to modifying the number, kind and price of securities
subject to Awards.

 

(c)                                  Change
in Control Transactions. Except as
otherwise specifically set forth in a Grant Agreement, in the event of any
transaction resulting in a Change in Control of the Company, outstanding
Options and SAR’s under this Plan will terminate upon the effective time of
such Change in Control unless provision is made in connection with the
transaction for the continuation or assumption of such Awards by, or for the
substitution of the equivalent awards of, the surviving or successor entity or
a parent thereof. In the event of such termination, (A) the outstanding
Options and SAR’s that will terminate upon the effective time of the Change in
Control shall become fully vested immediately before the effective time of the
Change in Control and (B) the holders of Options and SAR’s under the Plan
will be permitted, for a period of at least fifteen days prior to the effective
time of the Change in Control, to exercise all portions of such Awards that are
then exercisable or which become exercisable upon or before the effective time
of the Change in Control; provided, however, that any such exercise of any
portion of such an Award which becomes exercisable as a result of such Change
in Control shall be deemed to occur immediately before the effective time of
such Change in Control.

 

(d)                                 Unusual
or Nonrecurring Events. The
Administrator is authorized to make, in its discretion and without the consent
of holders of Awards, adjustments in the terms and conditions of, and the
criteria included in, Awards in recognition of unusual or nonrecurring events
affecting the Company, or the financial statements of the Company or any
Affiliate, or of changes in applicable laws, regulations, or accounting
principles, whenever the Administrator determines that such adjustments are appropriate
in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan.

 

(e)                                  Dissolution
or Liquidation. In the event of the proposed dissolution or liquidation of
the Company, the Administrator shall notify each Optionee or SAR holder as soon
as practicable prior to the effective date of such proposed transaction. The
Administrator in its discretion may provide for an Optionee or SAR holder
to have the right to exercise his or her Option or SAR until ten (10) days
prior to such transaction as to all of the Shares covered thereby, including
Shares as to which the Option or SAR would not otherwise be exercisable. In
addition, the Administrator may provide by Plan rule that any Company
repurchase option applicable to any Shares purchased upon exercise of an Option
or SAR shall lapse as to all such Shares, provided the proposed dissolution or
liquidation takes place at the time and in the manner contemplated. To the

 

11

 

extent it has not been previously exercised, each
Option and each SAR will terminate immediately prior to the consummation of
such proposed action.

 

(f)                                    Other
Agreements. As a condition precedent to the grant of any Award under the Plan,
the exercise pursuant to such an Award, or to the delivery of certificates for
shares issued pursuant to any Award, the Administrator may require the
grantee or the grantee’s successor or permitted transferee, as the case may be,
to become a party to a stock restriction agreement, shareholders’ agreement or
other agreements regarding the Common Stock of the Company in such form(s) as
the Administrator may determine from time to time.

 

12.                                 Amendment
and Termination of the Plan.

 

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

 

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

 

(c)                                  Repricing
of Options. Notwithstanding any provision in the Plan to the contrary, the
Board may not, without obtaining prior approval by the Company’s
shareholders, reduce the option price of any outstanding Option at any time
during the term of such Option (other than by adjustment pursuant to Section 11).
This Section 12(c) may not be repealed, modified or amended
without the prior approval of the Company’s shareholders. Such shareholder
approval, if required, shall be obtained in such a manner and to such a degree
as is required by the applicable law, rule or regulation.

 

(d)                                 Effect
of Amendment or Termination. Except as provided in Section 11, no amendment,
alteration, suspension or termination of the Plan shall impair the rights of
any Grantee, unless mutually agreed otherwise between the Grantee and the
Administrator, which agreement must be in writing and signed by the Grantee and
the Company. Notwithstanding the forgoing, any amendment, alteration,
suspension or termination of the Plan undertaken for the purpose of complying
with Applicable Laws will not require the consent of the Grantee.

 

13.                                 Conditions
Upon Issuance of Shares.

 

(a)                                  Legal
Compliance. Shares shall not be issued pursuant to the exercise of an Award
unless the exercise of such Award and the issuance and delivery of such Shares
shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, Applicable Laws, and the requirements of
any stock exchange or quotation system upon which the Shares may then be
listed or quoted, and shall be further subject to the approval of counsel for
the Company with respect to such compliance.

 

12

 

(b)                                 Investment
Representations. As a condition to the exercise of an Award, the Company may require
the person exercising such Award to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.

 

14.                                 Liability
of Company.

 

(a)                                  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.

 

(b)                                 Grants
Exceeding Allotted Shares. If the Shares covered by an Award exceeds, as of
the date of grant, the number of Shares which may be issued under the Plan
without additional shareholder approval, such Award shall be void with respect
to such excess Shares, unless shareholder approval of an amendment sufficiently
increasing the number of Shares subject to the Plan is timely obtained in
accordance with Section 16 of the Plan.

 

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

 

16.                                 Shareholder
Approval. This amended and restated Plan is subject to approval by the
shareholders of the Company within twelve (12) months after the date it is
adopted. Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws and the rules of any stock exchange
upon which the Common Stock is listed.

 

17.                                 Tax
Withholding. No later than the date as of which an amount first becomes
includible in the gross income of the Grantee for federal income tax purposes
with respect to any Award under the Plan, the Grantee will pay to the Company,
or make arrangements satisfactory to the Board regarding the payment of, taxes
of any kind required by law to be withheld with respect to such amount. The
obligations of the Company under the Plan will be conditioned on such payment
or arrangements and the Company will have the right to deduct any such taxes
from any payment of any kind otherwise due to the Grantee. Unless otherwise
determined by the Administrator, the minimum required withholding obligation
with respect to an Award may be settled in Shares, including the Shares
that are subject to that Award.

 

18.                                 Non-Guarantee
of Employment, Service or Pension. Neither the Plan nor the granting of any
Award shall confer upon a Grantee any right with respect to continuing the
Grantee’s employment, consulting or other service relationship with the
Company, nor shall they interfere in any way with the Grantee’s right or the
Company’s right to terminate such employment, consulting or other service
relationship at any time, with or without cause. No benefits under the Plan
shall be pensionable or otherwise increase the obligation of the Company or its
Affiliates to provide retirement benefits to any Employee.

 

13

 

APPENDIX A

 

2001 STOCK OPTION
PLAN FOR CALIFORNIA EMPLOYEES

 

With respect to Awards
granted to California residents prior to a public offering of capital stock of
the Company that is effected pursuant to a registration statement filed with,
and declared effective by, the Securities and Exchange Commission under the
Securities Act of 1933 and only to the extent required by applicable law, the
following provisions shall apply notwithstanding anything in the Plan or a
Grant Agreement to the contrary:

 

1.                                       No
such persons shall be entitled to receive Awards in the form of any stock
appreciation rights or phantom stock.

 

2.                                       With
respect to any Award granted in the form of a stock option pursuant to Section 9(a) of
the Plan:

 

(a)                                  The
Award shall provide an exercise price which is not less than 85% of the Fair
Market Value of the stock at the time the option is granted, except that the
price shall be 110% of the Fair Market Value in the case of any person who owns
stock possessing more than 10% of the total combined voting power of all
classes of stock of the issuing corporation or its parent or subsidiary
corporations.

 

(b)                                 The
exercise period shall be no more than 120 months from the date the option is
granted.

 

(c)                                  The
options shall be non-transferable other than by will, by the laws of descent
and distribution, by instrument to an inter vivos or testamentary trust in
which the options are to be passed to beneficiaries upon the death of the
trustor (settlor), or by gift to “immediate family” as that term is defined in
17 C.F.R. 240.16a-1(e).

 

(d)                                 The
Award recipient shall have the right to exercise at the rate of at least 20%
per year over 5 years from the date the option is granted, subject to
reasonable conditions such as continued employment. However, if an option is
granted to officers, directors, or Consultants of the Company or the issuer of
the underlying security or any of its affiliates, the option may become
fully exercisable, subject to reasonable conditions such as continued
employment, at any time or during any period established by the issuer of the
option or the issuer of the underlying security or any of its affiliates.

 

(e)                                  Unless
employment is terminated for “cause” as defined by applicable law, the terms of
the Plan or Grant Agreement or a contract of employment, the right to exercise
the option in the event of termination of employment, to the extent that the
Award recipient is otherwise entitled to exercise on the date employment
terminates, will be as follows:

 

A-1

 

(1)                                  At
least 6 months from the date of termination if termination was caused by death
or disability.

 

(2)                                  At
least 30 days from the date of termination if termination was caused by other
than death or disability.

 

3.                                       The
Company’s shareholders must approve the Plan within 12 months before or after
the date the Plan is adopted. Any option exercised before shareholder approval
is obtained must be rescinded if shareholder approval is not obtained within 12
months before or after the Plan is adopted. Such shares shall not be counted in
determining whether such approval is obtained.

 

4.                                       At
the discretion of the Administrator, the Company may reserve to itself
and/or its assignee(s) in the Grant Agreement or Stock Restriction Agreement a
right to repurchase shares held by an Award recipient following such Award
recipient’s termination at any time within 90 days after such Award recipient’s
termination date (or in the case of securities issued upon exercise of an
option after the termination date, within 90 days after the date of such
exercise) for cash and/or cancellation of purchase money indebtedness, at:  (A) with respect to vested shares, the
Fair Market Value of such shares on the Award recipient’s termination date;
provided that such right to repurchase vested shares terminates when the
Company’s securities have become publicly traded; or (B) with respect to
unvested shares, the Award recipient’s exercise price, provided, that to the
extent the Award recipient is not an officer, director or Consultant of the
Company or of a Parent or Subsidiary of the Company such right to repurchase
unvested shares at the exercise price lapses at the rate of at least 20% per
year over 5 years from the date of the grant of the option

 

5.                                       The
Company will provide financial statements to each Award recipient annually
during the period such individual has Awards outstanding, or as otherwise
required under Section 260.146.46 of Title 10 of the California Code of
Regulations. Notwithstanding the foregoing, the Company will not be required to
provide such financial statements to Award recipients when issuance is limited
to key employees whose services in connection with the Company assure them
access to equivalent information.

 

6.                                       The
Company will comply with Section 260.140.1 of Title 10 of the California
Code of Regulations with respect to the voting rights of Common Stock.

 

7.                                       The
Plan is intended to comply with Section 25102(o) of the California
Corporations Code. Any provision of this Plan which is inconsistent with Section 25102(o),
including without limitation any provision of this Plan that is more
restrictive than would be permitted by Section 25102(o) as amended from
time to time, shall, without further act or amendment by the Board, be reformed
to comply with the provisions of Section 25102(o). If at any time the
Administrator determines that the delivery of Common Stock under the Plan is or
may be unlawful under the laws of any applicable jurisdiction, or federal
or state securities laws, the right to exercise an Award or receive shares of
Common Stock pursuant to an Award shall be suspended until the Administrator
determines that such delivery is lawful. The Company shall have no obligation
to effect any registration or qualification of the Common Stock under federal
or state laws.

 

A-2

 

APPENDIX B

 

2001 STOCK OPTION
PLAN FOR FRENCH EMPLOYEES

 

The following provisions shall apply with respect to French Employees,
as defined below.

 

1.                                       Purposes.
This 2001 Stock Option Plan For French Employees (“Plan”) is a sub-plan created
under and pursuant to the Navigation Technologies Corporation 2001 Stock
Incentive Plan (“U.S. Plan”), which is subject to the approval by the
shareholders of Navigation Technologies Corporation (the “Company”), and which
provides persons resident or ordinarily resident in France (“French Employees”)
may benefit under this Plan. Options may be granted to Employees
under the Plan at the discretion of the Administrator. All Options shall be
issued pursuant to the terms, conditions and limitations of written option
agreements, and are intended to qualify for preferred treatment under French
tax laws. Unless otherwise defined herein, the terms defined in the U.S. Plan
shall have the same defined meanings in this Plan. The following provisions
shall replace any contrary provisions in the U.S. Plan; provided,
however, that all provisions of the U.S. Plan shall apply in the absence of any
contradiction.

 

2.                                       Definitions.
Under this Plan, the following definitions shall apply:

 

(a)                                  “Employee”
means any person employed by the Company’s French Subsidiary in a salaried
position, who does not own more than 10% of the voting power of all classes of
stock of the Company, or any Parent or Subsidiary and who is a resident of the
Republic of France, except as specifically provided in a grant agreement for
non-U.S. employees.

 

(b)                                 “Fair
Market Value”  For purposes of this
Plan, but only in the absence of an established market for the Common Stock,
Fair Market Value means the value of the Common Stock as determined by
reference to the “objective methods” usually used to value shares; and, in
particular, the amount of the net assets of the Company, its profitability and
its economic forecasts shall be taken into account.

 

3.                                       Reporting.
As part of the Company’s annual report to its shareholders, the Board
shall report the following information to the Company’s shareholders:

 

•                                          the
number, expiration date and price of the Options granted hereunder; and

 

•                                          the
number and price of the Shares subscribed upon exercise of such Options.

 

4.                                       Term of Plan.
The Plan shall become effective as of the date of its adoption by the Board;
provided, however, that the Company’s shareholders must re-approve the
Administrator’s authority to issue Options more than 38 months after the
adoption of the Plan.

 

5.                                       Option
Price. The Option Price for the shares of Common Stock to be issued
pursuant to exercise of an Option under the Plan shall be determined by the
Administrator upon the date of grant of the Option and stated in the Option
Agreement, but in no event shall be lower than one hundred percent (100%) of
the Fair Market Value on the date the Option is granted. This Option Price
cannot be modified while the Option is outstanding.

 

B-1

 

6.                                       Death of Optionee.
In the event of the death of an Optionee while an Employee, the Option may be
exercised at any time within six (6) months following the date of death,
in compliance with Article L 225-183 of the Applicable Laws, by the
heirs or representative of the deceased or by a person who acquired the right
to exercise the Option by bequest or inheritance, but only to the extent that
the Optionee was entitled to exercise the Option at the date of death. If, at
the time of death, the Optionee was not entitled to exercise his or her entire
Option, the Shares covered by the unexercisable portion of the Option shall
revert to the Plan. If, after death, the Optionee’s estate or a person who
acquired the right to exercise the Option by bequest or inheritance does not
exercise the Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall immediately revert to
the Plan.

 

7.                                       Limitation
on Exercise Price Adjustments. In the event of a change in the Company’s
capitalization, and only as required by Applicable Laws, the exercise price for
an Option shall not be changed. However, should any change be made to the share
capital by reason of any capital increase by issuing new shares or capitalizing
available reserves, stock dividend, reduction in capital following losses or
issuance of bonds convertible into shares, the number of Shares under option
and the exercise price shall be adjusted in accordance with the provisions of Article L
225-181 of the Applicable Laws. In no event shall any such adjustment result in
an exercise price lower than the nominal value of the Shares.

 

8.                                       Registration.
The Shares issued upon the exercise of an Option shall be issued pursuant to
issuance of registered stock certificates if the Applicable Laws so permit, or
pursuant to book-entry of the Shares in a specific account held by the Company
or an agent thereof.

 

9.                                       Transfer.
The Shares issued upon the exercise of an Option may not be subject to any
transfer restriction that exceeds the period prescribed in Article 163 bis
C of the French Tax Code. All Shares issued upon the exercise of an Option
shall be held for a period of four (4) years from the grant date; provided,
however, that such Shares may be transferred within such period upon the
occurrence of the following events in accordance with the terms of the
applicable Grant Agreement:  (1) termination
of Employee’s employment; (2) the Employee’s retirement; (3) the
Employee’s disability, as defined in the French Social Security Code; or (4) the
Employee’s death.

 

B-2

 

APPENDIX C

 

2001 STOCK OPTION
PLAN FOR NETHERLANDS’S RESIDENTS AND

BELGIAN RESIDENTS EMPLOYED IN THE NETHERLANDS

 

This 2001 Stock Option Plan For Netherlands’ Residents and Belgian
Residents Employed in The Netherlands (“Plan”) is a sub-plan created under and
pursuant to the Navigation Technologies Corporation 2001 Stock Incentive Plan (“U.S.
Plan”). With respect to Awards granted to persons resident and ordinarily
resident in (i) The Netherlands and (ii) Belgium but employed in The
Netherlands, the provisions of the Plan shall apply subject always to the
following provisions which shall apply to such Awards notwithstanding anything
to the contrary in the U.S. Plan or any Grant Agreement. Unless otherwise
defined herein, the terms defined in the U.S. Plan shall have the same defined
meanings in this Plan. The following provisions shall replace any contrary
provisions in the U.S. Plan; provided, however, that all provisions of
the U.S. Plan shall apply in the absence of any contradiction.

 

A.                                   With
respect to Awards granted to (a) Netherlands’ residents and (b) Belgian
residents employed in The Netherlands, the following provisions shall apply
notwithstanding anything in the Plan or a Grant Agreement to the contrary:

 

1.                                       (a)                                  Neither the Plan nor
any Award or Grant Agreement forms part or creates any rights under the
employment agreement concluded between the Grantee and the Company, Parent,
Subsidiary or Affiliate as the case may be, nor adds or creates any
additional employment conditions (secundaire
arbeidsvoorwaarden), and neither the Plan, nor any Award or Grant
Agreement creates any other rights than those laid down in the Plan and the
Grant Agreement. In particular, if the undertaking of the Company, Parent,
Subsidiary or Affiliate will be taken over by a third party within the meaning
of article 7:662 et seq. of the Dutch Civil Code (Burgerlijk
Wetboek), (the rights and obligations pertaining to) the Awards will
not be transferred to such third party.

 

(b)                                 The
grant of Awards and/or the acquisition of any Shares and/or rights and/or
assets upon exercise of such Awards under the Plan will have no effect on the
entitlement of the Grantee to pension rights, pension schemes, additional
employment conditions or on the entitlement to grants of future Awards.

 

(c)                                  The
Grantee has no right to any recourse and is not entitled to any compensation
for any losses occurred by the lapse of any Award upon or after termination of
the Grantee’s employment agreement with the Company, Parent, Subsidiary or
Affiliate as the case may be. In particular, but without limitation, the
Grantee is not entitled to any compensation on the basis of article 7:685
(ontbinding wegens gewichtige redenen)
and/or article 7:681 (kennelijk onredelijke
beëindiging) of the Dutch Civil Code (and for the Grantee to whom
these articles of the Dutch Civil Code for any reason do not apply: such
Grantee is not entitled to any compensation other than expressly provided for
in the Plan and/or the Grant Agreement and in particular not entitled to any
compensation on the basis of any

 

C-1

 

applicable provision of law that is similar or comparable to these
articles of the Dutch Civil Code).

 

2.                                       Grantees shall
be subject to and bound by the terms and conditions of Dutch provisions on
insider trading applicable to the Company, Parent, any Subsidiary or Affiliate
after the Shares, or other securities issued by the Company, Parent, any
Subsidiary or Affiliate, are quoted on any officially recognized securities
exchange or as soon as it may reasonably be expected that Shares or such
other securities be soon, within the meaning of article 46 of the
Securities Markets Supervision Act 1995 (Wet toezicht
effectenverkeer 1995), quoted at such securities exchange, and by
signing the Grant Agreement the Grantee declares to understand and acknowledge
that such insider trading provisions may restrict the Grantees’ rights
under the Plan including, but not limited to, timing of exercise of Awards,
timing of acquisition of any Shares and/or rights and/or assets upon exercise
of such Awards and timing of the sale and transfer of any Shares and/or rights
and/or assets so acquired.

 

B.                                     With
respect to Awards granted to Netherlands’ residents only, the following
provisions shall apply notwithstanding anything in the Plan or a Grant
Agreement to the contrary:

 

1.                                       No other persons
than Covered Employees, Directors, Employees, Non-Employee Directors, Officers
and Outside Directors, all as defined in Section 2 of the Plan, are
eligible to receive Awards. The Administrator may, however, decide in
individual circumstances to grant Awards to other persons residing in The
Netherlands provided that such other person forms part of a ‘restricted
circle of persons’ in relation to the Company within the meaning of article 3.1
of the Securities Markets Supervision Act 1995.

 

C-2

 

APPENDIX D

 

2001 STOCK OPTION
PLAN FOR UNITED KINGDOM EMPLOYEES

 

This 2001 Stock Option Plan For United Kingdom Employees (“Plan”) is a
sub-plan created under and pursuant to the Navigation Technologies Corporation
2001 Stock Incentive Plan (“U.S. Plan”). With respect to Awards granted to
persons resident and ordinarily resident in the United Kingdom, the provisions
of the Plan shall apply subject always to the following provisions which shall
apply to such Awards notwithstanding anything to the contrary in the U.S. Plan
or any Grant Agreement. Unless otherwise defined herein, the terms defined in
the U.S. Plan shall have the same defined meanings in this Plan. The following
provisions shall replace any contrary provisions in the U.S. Plan; provided,
however, that all provisions of the U.S. Plan shall apply in the absence of any
contradiction.

 

1                                          Nature of Participation

 

1.1.                              The granting of an Award
shall not form part of any Employee’s or Optionee’s entitlement to
remuneration or benefits pursuant to his contract of employment with the
Company or any Parent, Subsidiary or Affiliate. Moreover, the existence of a
contract of employment between any person and any such employer shall not give
such person any right to have an Award granted to him in respect of any number
of Shares either subject to any condition, or at all.

 

1.2                                 Except as otherwise
provide for in this paragraph 1 the rights and obligations of an Employee or an
Optionee under the terms of his office or employment with the Company or any
Parent, Subsidiary or Affiliate shall not be affected by his participation in
this Plan. In particular, no benefits under the Plan shall be pensionable.

 

1.3                                 An Optionee shall have
no rights to seek equitable relief or to receive compensation or damages for
any loss or potential loss which the Optionee may suffer in connection
with any Awards or any rights or entitlements under the Plan which loss or
potential loss arises in consequence of the loss or termination of his office
or employment with the Company or any Parent, Subsidiary or Affiliate for any
reason whatsoever (including, without limitation, wrongful dismissal).

 

1.4                                 The foregoing
provisions of this Section 1 shall not be taken into account for the
purpose of any rule of construction under U.S. law that would be used to
construe the provisions of the U.S. Plan.

 

2                                          Non-transferability of the Option

 

2.1                                 During his lifetime,
only the person to whom an Option is granted may exercise that Option.

 

D-1

 

2.2                                 An Option shall
immediately lapse and cease to be exercisable if:

 

2.2.1                        the
Optionee transfers, or assigns (other than to legally authorized personal
representatives upon the death of the person to whom the option was originally
granted), mortgages, charges or otherwise disposes of the Option, deals with
it, or purports or attempts to do any one or more such thing; or

 

2.2.2                        the
Optionee is adjudicated bankrupt or a bankruptcy order is made against the
Optionee, or the Optionee makes a composition with his creditors or does any
other similar thing in any part of the world.

 

3                                          Life of Options

 

If not
previously exercised by an Optionee each and any Option held by him shall lapse
and cease to be exercisable on the tenth anniversary of its grant.

 

4                                          Non-Qualified Options

 

All Options
granted shall be Non-Qualified Stock Options.

 

D-2

 

APPENDIX E

 

Performance Criteria

 

Performance Goals established for purposes of an Award of
performance-based awards intended to comply with Section 162(m) of the
Code shall be based on one or more of the following performance criteria (the “Performance
Criteria”): (i) the attainment of certain target levels of, or a specified
percentage increase in, revenues, income before taxes and extraordinary items,
net income, operating income, earnings before income tax, earnings before
interest, taxes, depreciation and amoritization or a combination of any or all
of the foregoing; (ii) the attainment of certain target levels of, or a
specified increase in, after-tax or pre-tax profits, including, without
limitation, that attributable to continuing and/or other operations; (iii) the
attainment of certain target levels of, or a specified increase in, operational
cash flow; (iv) the achievement of a certain level of, reduction of, or
other specified objectives with regard to limiting the level of increase in,
all or a portion of, the Company’s bank debt or other long-term or short-term
public or private debt or other similar financial obligations of the Company,
which may be calculated net of such cash balances and/or other offsets and
adjustments as may be established by the Administrator; (v) earnings
per share or the attainment of a specified percentage increase in earnings per
share or earnings per share from continuing operations; (vi) the
attainment of certain target levels of, or a specified increase in return on
capital employed or returned on invested capital; (vii) the attainment of
certain target levels of, or a percentage increase in, after-tax or pre-tax
return on stockholders’ equity; (viii) the attainment of certain target
levels of, or a specified increase in, economic value added targets based on a
cash flow return on investment formula; (ix) the attainment of certain
target levels in the fair market value of the shares of the Company’s common
stock; (x) the growth in the value of an investment in the Company’s
common stock assuming the reinvestment of dividends; (xi) the attainment
of a certain level of, reduction of, or other specified objectives with regard
to limiting the level in or increase in all or a portion of controllable
expenses or costs or other expenses or costs. The measurements of Performance
Criteria shall be determined in accordance with Generally Accepted Accounting
Principles (“GAAP”), except to the extent specified by the Administrator at the
time the Performance Criteria are established or at such later time to the
extent permitted under Section 162(m) of the Code. For purposes of item
(i), above, “extraordinary items” shall mean all items of gain, loss or expense
for the fiscal year determined to be extraordinary or unusual in nature or
infrequent in occurrence or related to a corporate transaction (including,
without limitation, a disposition or acquisition) or related to a change in
accounting principle, all as determined in accordance with standards
established by Opinion No. 30 of the Accounting Principles Board.

 

In addition, such Performance Criteria may be based upon the
attainment of specified levels of Company (or subsidiary, division or other
operational unit of the Company) performance under one or more of the measures
described above relative to the performance of other corporations. To the
extent permitted under Section 162(m) of the Code, the Administrator may: (i) designate
additional business criteria on which the Performance Criteria may be
based or (ii) adjust, modify or amend the aforementioned business
criteria.

 

E-1EXHIBIT 10.7

 

TAPESTRY PHARMACEUTICALS, INC.

2006 EQUITY
INCENTIVE PLAN

 

STOCK OPTION AGREEMENT

(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)

 

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

 

The details of your option are
as follows:

 

1.             VESTING. Subject
to the limitations contained herein, your option will vest as provided in your
Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service.

 

2.             NUMBER OF SHARES AND EXERCISE PRICE.
The number of shares of Common Stock subject to your option
and your exercise price per share referenced in your Grant Notice may be
adjusted from time to time for Capitalization Adjustments.

 

3.             EXERCISE PRIOR TO VESTING (“EARLY
EXERCISE”). If permitted in your Grant Notice (i.e., the “Exercise
Schedule” indicates that “Early Exercise” of your option is permitted) and
subject to the provisions of your option, you may elect at any time that is
both (i) during the period of your Continuous Service and (ii) during the term
of your option, to exercise all or part of your option, including the nonvested
portion of your option; provided, however,
that:

 

(a)           a partial exercise
of your option shall be deemed to cover first vested shares of Common Stock and
then the earliest vesting installment of unvested shares of Common Stock;

 

(b)           any shares of Common
Stock so purchased from installments that have not vested as of the date of
exercise shall be subject to the purchase option in favor of the Company as
described in the Company’s form of Early Exercise Stock Purchase Agreement;

 

(c)           you shall enter into
the Company’s form of Early Exercise Stock Purchase Agreement with a vesting
schedule that will result in the same vesting as if no early exercise had
occurred; and

 

(d)           if your option is
an Incentive Stock Option, then, to the extent that the aggregate Fair Market
Value (determined at the time of grant) of the shares of Common Stock with
respect to which your option plus all other Incentive Stock Options you hold
are exercisable

 

1

 

for the first time by you during any calendar year
(under all plans of the Company and its Affiliates) exceeds one hundred
thousand dollars ($100,000), your option(s) or portions thereof that exceed
such limit (according to the order in which they were granted) shall be treated
as Nonstatutory Stock Options.

 

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

 

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

 

(b)           In the Company’s
sole discretion at the time your option is granted (or subsequently in the case
of a Nonstatutory Stock Option) and provided that at the time of exercise the
Common Stock is publicly traded and quoted regularly in The Wall
Street Journal, by delivery of already-owned shares of Common Stock
either that you have held for the period required to avoid a charge to the
Company’s reported earnings (generally six (6) months) or that you did not
acquire, directly or indirectly from the Company, that are owned free and clear
of any liens, claims, encumbrances or security interests, and that are valued
at Fair Market Value on the date of exercise. “Delivery” for these purposes, in
the sole discretion of the Company at the time you exercise your option, shall
include delivery to the Company of your attestation of ownership of such shares
of Common Stock in a form approved by the Company. Notwithstanding the
foregoing, you may not exercise your option by tender to the Company of Common
Stock to the extent such tender would violate the provisions of any law,
regulation or agreement restricting the redemption of the Company’s stock.

 

(c)           In the Company’s
sole discretion at the time your option is granted (or subsequently in the case
of a Nonstatutory Stock Option) and provided that at the time of exercise the
Common Stock is publicly traded and quoted regularly in The Wall
Street Journal, through a “net exercise” of your option, pursuant to
which the Company will not require payment of the exercise price of your option
but will reduce the number of shares of Common Stock issued to you upon the
exercise by the largest number of whole shares that has a Fair Market Value
that does not exceed the aggregate exercise price. With respect to any
remaining balance of the aggregate exercise price, you shall make a cash
payment to the Company. The shares of Common Stock so used to pay the exercise
price of your option under a “net exercise” will be considered to have resulted
from the exercise of the option, and accordingly, the option will not again be
exercisable with respect to such shares, the shares actually delivered to you,
and any shares withheld for purposes of tax withholding.

 

2

 

(d)           In the Company’s
sole discretion at the time your option is granted (or subsequently in the case
of a Nonstatutory Stock Option), pursuant to the following deferred payment
alternative:

 

(i)            Not less than one
hundred percent (100%) of the aggregate exercise price, plus accrued interest,
shall be due four (4) years from date of exercise or, at the Company’s
election, upon termination of your Continuous Service.

 

(ii)           Interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid (1) the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement and (2) the treatment of the Option as a
variable award for financial accounting purposes.

 

(iii)         At any time that the
Company is incorporated in Delaware, payment of the Common Stock’s “par value,”
as defined in the Delaware General Corporation Law, shall be made in cash and
not by deferred payment.

 

(iv)          In order to elect
the deferred payment alternative, you must, as a part of your written notice of
exercise, give notice of the election of this payment alternative and, in order
to secure the payment of the deferred exercise price to the Company hereunder,
if the Company so requests, you must tender to the Company a promissory note
and a pledge agreement covering the purchased shares of Common Stock, both in
form and substance satisfactory to the Company, or such other or additional
documentation as the Company may request.

 

5.             WHOLE SHARES. You
may exercise your option only for whole shares of Common Stock.

 

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

 

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

 

(a)           For Eligible Directors. In
the event that an Eligible Director’s Continuous Service terminates (other than
upon the Eligible Director’s removal for cause), the Eligible Director may
exercise his or her Option (to the extent that the Eligible Director was
entitled to exercise such Option as of the date of termination or with respect
to such greater number of shares as determined by the Board) but only within
such period of time ending on the earlier of (i) the date three (3) years
following the termination of the Eligible Director’s

 

3

 

Continuous Service (or such longer or shorter period
specified in the Option Agreement) or (ii) the expiration of the term of the
Option as set forth in the Option Agreement. If, after termination, the
Eligible Director does not exercise his or her Option within the time specified
herein or in the Option Agreement (as applicable), the Option shall terminate. In
the event that an Eligible Director’s Continuous Service terminates upon his or
her removal for cause, all Options held by that Eligible Director shall
immediately terminate;

 

(b)           For Others. In the
event that an Optionholder’s Continuous Service terminates (other than upon the
Optionholder’s death or Disability), the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such
Option as of the date of termination) but only within such period of time
ending on the earlier of (i) the expiration of the term of the Option as set
forth in the Option Agreement or (ii) the date one hundred eighty (180) days
(ninety (90) days in the case of Incentive Stock Options) following the
termination of the Optionholder’s Continuous Service (or such longer or shorter
period specified in the Option Agreement). If, after termination of Continuous
Service, the Optionholder does not exercise his or her Option within the time
specified herein or in the Option Agreement (as applicable), the Option shall
terminate;

 

(c)           in accordance with
the provisions of Section 12 of the Plan; or

 

(d)           the day before the
tenth (10th) anniversary of the Date of Grant (as defined in your Grant Notice).

 

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

 

8.             EXERCISE.

 

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

 

(b)           By exercising your
option you agree that, as a condition to any exercise of your option, the
Company may require you to enter into an arrangement providing for the payment
by you to the Company of any tax withholding obligation of the Company arising
by

 

4

 

reason of (1) the exercise of your option, (2) the
lapse of any substantial risk of forfeiture to which the shares of Common Stock
are subject at the time of exercise, or (3) the disposition of shares of Common
Stock acquired upon such exercise.

 

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

 

9.             TRANSFERABILITY. Your
option is not transferable, except by will or by the laws of descent and
distribution, and is exercisable during your life only by you. Notwithstanding
the foregoing, by delivering written notice to the Company, in a form
satisfactory to the Company, you may designate a third party who, in the event
of your death, shall thereafter be entitled to exercise your option.

 

10.          CHANGE IN CONTROL – ELIGIBLE DIRECTORS.
If a Change in Control occurs and an Eligible Director’s
Continuous Service with the Company has not terminated as of, or immediately
prior to, the effective time of the Change in Control, then, as of the
effective time of such Change in Control (and contingent upon the effectiveness
of the Change in Control), the vesting and exercisability of the Eligible
Director’s Option shall be accelerated in full. In the event that an Eligible
Director is required to resign his or her position as a Non-Employee Director
as a condition of a Change in Control, the outstanding Options of such Eligible
Director shall become fully vested and exercisable immediately prior to the
effectiveness of such resignation (and contingent upon the effectiveness of the
Change in Control).

 

11.          OPTION NOT A SERVICE CONTRACT. Your
option is not an employment or service contract, and nothing in your option
shall be deemed to create in any way whatsoever any obligation on your part to
continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your option
shall obligate the Company or an Affiliate, their respective stockholders,
Boards of Directors, Officers or Employees to continue any relationship that
you might have as a Director or Consultant for the Company or an Affiliate.

 

12.          WITHHOLDING OBLIGATIONS.

 

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

 

(b)           Upon your request
and subject to approval by the Company, in its sole discretion, and compliance
with any applicable legal conditions or restrictions, the Company may withhold
from fully vested shares of Common Stock otherwise issuable to you upon the

 

5

 

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

 

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

 

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

 

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

 

6

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