Document:

Exhibit 10.1

 

 

 

DEFERRED COMPENSATION PLAN

OF

ARRAY BIOPHARMA INC.

 

 

(Effective as of August 1, 2004)

 

 

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE
  1 PURPOSE

  	
  1

  
	
   

  	
   

  
	
  ARTICLE 2 ELIGIBILITY AND PARTICIPATION

  	
  1

  
	
   

  	
   

  
	
  2.1.

  	
  Eligibility

  	
  1

  
	
  2.2.

  	
  Participation

  	
  1

  
	
  2.3.

  	
  Elective Deferrals

  	
  1

  
	
  2.4.

  	
  Matching Contributions

  	
  3

  
	
  2.5.

  	
  Discretionary Contributions

  	
  3

  
	
  2.6.

  	
  Elective Deferral Form

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 VESTING

  	
  4

  
	
   

  	
   

  	
   

  
	
  3.1.

  	
  Elective Deferrals

  	
  4

  
	
  3.2.

  	
  Matching Contributions

  	
  4

  
	
  3.3.

  	
  Discretionary Contributions

  	
  5

  
	
  3.4.

  	
  Early Retirement, Retirement, Death or
  Disability

  	
  5

  
	
  3.5.

  	
  Termination for Cause

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 PAYMENT OF DEFERRED COMPENSATION

  	
  5

  
	
   

  	
   

  
	
  4.1.

  	
  Distribution Commencement Date

  	
  5

  
	
  4.2.

  	
  Form of Distribution

  	
  6

  
	
  4.3.

  	
  Termination of Service

  	
  6

  
	
  4.4.

  	
  Disability

  	
  6

  
	
  4.5.

  	
  Change of Form or Timing of Election

  	
  7

  
	
  4.6.

  	
  Financial Hardship Distributions

  	
  7

  
	
  4.7.

  	
  Effect on this Plan of a 401(k) Plan
  Hardship Withdrawal

  	
  7

  
	
  4.8.

  	
  In-Service Distribution

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 PLAN ACCOUNTS

  	
  8

  
	
   

  	
   

  
	
  5.1.

  	
  Accounts

  	
  8

  
	
  5.2.

  	
  Investment Performance

  	
  8

  
	
  5.3.

  	
  Valuation Date

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 SURVIVOR AND DEATH BENEFITS

  	
  9

  
	
   

  	
   

  
	
  6.1.

  	
  Death Benefit

  	
  9

  
	
  6.2.

  	
  Beneficiary Designation

  	
  9

  
	
  6.3.

  	
  Changing a Beneficiary

  	
  10

  
	
  6.4.

  	
  Change in Marital Status

  	
  10

  
	
  6.5.

  	
  No Beneficiary Designation

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 CLAIMS PROCEDURE

  	
  10

  

 

i

 

	
  7.1.

  	
  Initial Claim

  	
  10

  
	
  7.2.

  	
  Claims Appeal

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 MANAGEMENT AND ADMINISTRATION

  	
  12

  
	
   

  	
   

  
	
  8.1.

  	
  Administration

  	
  12

  
	
  8.2.

  	
  Amendment and Termination of the Plan

  	
  12

  
	
  8.3

  	
  Plan Expenses

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 GENERAL PROVISIONS

  	
  13

  
	
   

  	
   

  
	
  9.1.

  	
  Alienation of Benefits

  	
  13

  
	
  9.2.

  	
  Overpayments

  	
  13

  
	
  9.3.

  	
  Withholding Taxes

  	
  13

  
	
  9.4.

  	
  Distributions to Minors and Incompetents

  	
  14

  
	
  9.5.

  	
  No Right to Employment

  	
  14

  
	
  9.6.

  	
  Unfunded Plan

  	
  14

  
	
  9.7.

  	
  Trust Fund

  	
  14

  
	
  9.8

  	
  Insurable Interest

  	
  15

  
	
  9.9.

  	
  Business Transaction or Change in Control

  	
  15

  
	
  9.9

  	
  Parachute Limitations

  	
  15

  
	
  9.10.

  	
  Miscellaneous

  	
  16

  
	
  9.11.

  	
  Governing Law

  	
  17

  
	
   

  	
   

  
	
  ARTICLE 10 DEFINITIONS

  	
  17

  

 

ii

 

ARTICLE 1

PURPOSE

 

Array BioPharma Inc. (“Array”) establishes
this Deferred Compensation Plan (the “Plan”) with the intention of retaining
executives whose skills and talents are important to Array.  To this end, the principal objective of the
Plan is to permit a select group of management or highly compensated employees
of Array to defer the receipt of income which would otherwise become payable to
them.  The Plan is effective August 1, 2004, and the Plan Year in the calendar year.  The Plan is intended to qualify as a “top
hat” plan within the meaning of ERISA Section 201(2).

 

ARTICLE 2

ELIGIBILITY AND PARTICIPATION

 

2.1.          Eligibility

 

Eligibility to participate in the Plan is
limited to those members of management or highly compensated Employees who are
designated from time to time as eligible to participate in the Plan by the
Committee.

 

2.2.          Participation

 

An Eligible Person on whose behalf a deferral
is made to the Plan pursuant to Section 2.3, or on whose behalf any other
contributions have been made pursuant to Sections 2.4 or 2.5, is a Participant
in the Plan.  Upon becoming a
Participant, the Plan Administrator will establish an Account into which all
deferrals or contributions made on the behalf of the Participant will be held.

 

2.3.          Elective
Deferrals

 

An Eligible Person may elect to defer a
portion of his or her Base Compensation or a portion of any Bonus payable to
him or her with respect to an upcoming calendar year by making an Elective
Deferral.  The content of any Elective
Deferral is governed by Section 2.6, and is subject to any guidelines
established by the Plan Administrator.

 

(a)           Base Compensation Elective
Deferral

 

An Eligible Person may elect to defer up to
100% of his or her Base Compensation that is payable during a calendar year by
filing a completed Elective Deferral Form with the Plan Administrator during
the enrollment period established by the Plan Administrator for the deferral of
that Base Compensation.  The enrollment
period may not exceed a period of 30 calendar days in length and may 

 

 

commence
no later than November 1 of the year prior to the calendar year in which the
Base Compensation will be paid.   A Base
Compensation Elective Deferral becomes irrevocable as of the close of the
enrollment period applicable to that Base Compensation; provided, however,
a Base Compensation Elective Deferral may be revoked after the close of the
enrollment period if such revocation acts to discontinue an Eligible Person’s
deferral of both Base Compensation and Bonuses for the remainder of the
calendar year.  The Base Compensation
Elective Deferral may be revoked at any time prior to the end of the applicable
enrollment period by the submission of a written revocation of the Base
Compensation Elective Deferral to the Plan Administrator.

 

(b)           Bonus
Elective Deferral

 

An Eligible Person may elect to defer up to
100% of any Bonus payable to him or her during a calendar year by filing a
completed Elective Deferral Form with the Plan Administrator during the
enrollment period established by the Plan Administrator for the deferral of the
Bonus payment.  The enrollment period may
not exceed a period of 30 calendar days in length and may commence no later
than November 1 of the year prior to the upcoming calendar year in which the
Bonus will be paid; provided, however, that the enrollment period
must conclude before the Bonus is determinable. 
A Bonus Elective Deferral becomes irrevocable as of the close of the
enrollment period applicable to that Bonus; provided, however,
that a Bonus Elective Deferral may be revoked after the close of the enrollment
period if such revocation acts to discontinue an Eligible Person’s deferral of
both Base Compensation and Bonuses for the remainder of the calendar year.  The Bonus Elective Deferral may be revoked at
any time prior to the end of the applicable enrollment period by the submission
of a written revocation of the Bonus Elective Deferral to the Plan
Administrator.

 

(c)           First-Year Participation

 

If an Eligible Person first becomes eligible
to participate in the Plan during a calendar year, notwithstanding the
requirements of Sections 2.3(a) and 2.3(b), he or she may elect to defer his or
her Base Compensation or Bonuses for the remainder of that calendar year if he
or she submits an Elective Deferral to the Plan Administrator within 30 days
after first becoming an Eligible Person. 
The Elective Deferral will be effective only with respect to Base
Compensation or Bonuses earned and payable following the submission of the
Elective Deferral to the Plan Administrator; provided, however,
that, in the case of a Bonus, the amount of such Bonus remains substantially
uncertain at the time that the election is submitted to the Plan Administrator.

 

2

 

(d)           Effect of Eligibility Status
Change

 

If a Participant ceases to be an Eligible
Person, his or her Elective Deferrals terminate immediately with respect to any
amounts not yet paid to the Eligible Person at the time he or she ceases to be
an Eligible Person.  Amounts already
deferred into the Participant’s Account remain so credited and will be
distributed in accordance with the terms of the Plan.

 

2.4.          Matching Contributions

 

The Committee may elect to make a Matching
Contribution to any Participant’s Account at any time.  The amount and calculation of any Matching
Contribution, the timing of any Matching Contribution and to whom any Matching
Contribution is to be made is determined at the sole discretion of the
Committee.

 

2.5.          Discretionary Contributions

 

The Committee may elect to make a Discretionary
Contribution to any Participant’s Account at any time.  The amount of any Discretionary Contribution,
the timing of any Discretionary Contribution and to whom any Discretionary
Contribution is to be made is determined at the sole discretion of the Committee.

 

2.6.          Elective Deferral Form

 

(a)           Content
of Elective Deferral Form

 

The Eligible Person’s Elective Deferral Form
must be submitted in writing on a form approved by the Plan Administrator.  A completed Elective Deferral Form must set
forth (i) the amount of Base Compensation to be deferred as a full percentage
or dollar amount of the Eligible Person’s Base Compensation payable during the
calendar year, (ii) the amount of any Bonuses to be deferred as a full
percentage or dollar amount of the Eligible Person’s Bonuses payable during the
calendar year and (iii) the allocation of the aggregate deferrals and
contributions for the calendar year among the available Investment Indices.

 

(b)           Yearly
Submission of Elective Deferral Forms

 

For each calendar year, a new Elective
Deferral Form must be submitted with respect to any Base Compensation or
Bonuses to be paid during such calendar year. 
Unless a separate election is in place for the item of compensation to
be paid in the upcoming calendar year, the Participant will not be treated as
having a valid Elective Deferral with respect to that item of compensation for
the upcoming calendar year.  If a
Participant does not submit an Elective Deferral Form, he or she may still
receive any Matching Contributions and Discretionary Contributions made at the
discretion of the Committee during the calendar year.  All such Matching and 

 

3

 

Discretionary Contributions
will be allocated among the available Investment Indices in the same manner as
elected by the Participant in his or her most recently submitted Elective
Deferral Form.

 

(c)           Effect
of FICA/FUTA Obligation

 

If the Eligible Person selects a deferral
percentage to be applied to his or her Base Compensation or Bonuses, the
percentage will be applied after withholding has been made from his or her Base
Compensation and Bonuses for any taxes payable by the Eligible Person under the
Federal Insurance Contribution Act (“FICA”) and the Federal Unemployment Tax
Act (“FUTA”).  If the Eligible Person
selects a dollar amount of deferral, the amount must be less than or equal to
the net deferral after withholding for FICA and FUTA.  If the dollar amount selected is greater than
the net deferral just described, the Elective Deferral will automatically be
treated as an election to defer the net deferral amount and will be adjusted
accordingly.  If the net deferral amount
is less than any minimum deferral amount established by the Plan Administrator,
the Elective Deferral is void and no deferral will be made.

 

ARTICLE
3 

VESTING

 

3.1.          Elective Deferrals

 

Participants are 100% vested in all Elective
Deferrals and any earnings thereon at all times.

 

3.2.          Matching Contributions

 

Each
Participant vests in all Matching Contributions and any earnings thereon
according to the following schedule.

 

	
  Years of Service

  	
   

  	
  Vesting Percentage

  	
   

  
	
  Less than 1

  	
   

  	
  0

  	
  %

  
	
  1 year, but
  less than 2 years

  	
   

  	
  25

  	
  %

  
	
  2 years, but
  less than 3 years

  	
   

  	
  50

  	
  %

  
	
  3 years, but
  less than 4 years

  	
   

  	
  75

  	
  %

  
	
  4 years or
  more

  	
   

  	
  100

  	
  %

  

 

4

 

3.3.          Discretionary Contributions

 

The vesting of all Discretionary
Contributions made on the behalf of Participants and any earning thereon is
determined at the sole discretion of the Committee.  The vesting schedule shall be determined by
the Committee prior to or in conjunction with the grant of any such
Discretionary Contribution.  Different
Discretionary Contributions may have different vesting schedules.

 

3.4.                              Early Retirement, Retirement, Death or
Disability

 

A Participant becomes 100% vested in the
entirety of his or her Account upon the first to occur of Early Retirement,
Retirement, death or Disability.

 

3.5.          Termination for Cause

 

A Participant whose
Service terminates for Cause will immediately forfeit all of his or her
Matching Contributions and Discretionary Contributions and any earnings
thereon.

 

ARTICLE 4

PAYMENT OF DEFERRED COMPENSATION

 

4.1.          Distribution Commencement Date

 

A Participant must designate in each Elective
Deferral Form the date upon which the payment of all of the deferrals and
contributions and earnings thereon that are subject to that Elective Deferral
Form should commence.  Deferrals and
contributions are only subject to the commencement date set forth in the
Elective Deferral Form applicable thereto. 
Deferrals and contributions made in different years may be subject to
different commencement dates if the respective Elective Deferral Forms so
provide.  A Participant may elect in his
or her Elective Deferral Form to commence the distribution of his or her
deferrals and contributions:

 

(a)           Within 30 days after the
Participant’s Retirement, Early Retirement, or as soon as practicable
thereafter; or

 

(b)           Either on January 1 of the fourth
year following the calendar year in which the contributions and deferrals were
made or any January 1 thereafter.

 

If a Participant fails to designate a
distribution commencement date with respect to any deferrals or contributions
made during a calendar year, all of the Participant’s deferrals and contributions
made during that year will commence 

 

5

 

distribution
within 30 days of his or her Retirement, or as soon as practicable thereafter.

 

4.2.          Form of Distribution

 

A Participant must designate on each Elective
Deferral Form the distribution form to be applied to the payment of all of the
deferrals and contributions and earnings thereon that are subject to that
Elective Deferral Form.  Deferrals and
contributions are only distributed in the form set forth in the Elective
Deferral Form applicable thereto. 
Deferrals and contributions made in different years may be distributed
in different forms if the respective Elective Deferral Forms so provide.  A Participant may elect in his or her
Elective Deferral Form the distribution of his or her deferrals and
contributions in the following forms:

 

(a)           A single lump sum; or

 

(b)           Equal annual installments of up to 10
years if the value of the Participant’s Account equals or exceeds $10,000.

 

If a Participant fails to designate a
distribution form with respect to any deferrals or contributions made during a
calendar year, all of the Participant’s deferrals and contributions during that
year will be distributed in the form of a single lump sum.

 

4.3.          Termination of Service

 

Notwithstanding any other provisions of the
Plan, the Plan Administrator will distribute the entire vested balance of a
Participant’s Account in a single lump sum within 90 days, or as soon as
practicable thereafter, of a Participant’s termination of Service if the
Participant terminates his or her Service for any reason other than Early
Retirement, Retirement, death or Disability.

 

4.4.          Disability

 

Notwithstanding any other provisions of the
Plan, the Plan Administrator will distribute the entire vested balance of a
Participant’s Account in a single lump sum within 30 days, or as soon as
practicable thereafter, of his or her termination of Service if the Participant
terminates Service due to Disability; provided, however, that the
Plan Administrator, at its sole discretion, may elect to alter the timing or
form of the distribution in order to coordinate the payment of any additional
employee benefit payments.

 

6

 

4.5.          Change of Form or Timing of Election

 

Subject to approval of the Plan
Administrator, a Participant may elect to change the form or timing of his or
her distribution elections as set forth on an Elective Deferral Form if the
following requirements are met:

 

(a)           the change must be made in writing and in the form
designated by the Plan Administrator;

 

(b)           the change must be made at a time when the Participant is
still an Employee, and it must be consistent with Sections 4.1 and 4.2;

 

(c)           the
change will not be permitted if either (i) the change is made less than 6
months prior to the date on which the distribution of his or her deferrals and
contributions is to commence under the applicable Elective Deferral Form or
(ii) the change is made in the same calendar year as the date on which the
distribution of his or her deferrals and contributions is to commence under the
applicable Elective Deferral Form;

 

(d)           the change will not be permitted if the Plan Administrator,
in its sole discretion, determines that the change would result in an
acceleration of the distribution of the deferrals and contributions in any
manner; and

 

(e)           a Participant may not elect to delay the distribution
commencement date of an election provided for under Section 4.1(b) more than
once.

 

4.6.          Financial Hardship Distributions

 

The Plan Administrator may, in its sole
discretion, make a lump sum distribution to a Participant from the vested
portion of his or her Account prior to the date that any such amount would
otherwise become payable if the Plan Administrator determines that the
Participant has incurred a Financial Hardship. 
The amount of any such distribution shall be limited to the amount
reasonably necessary to meet the Participant’s needs created by the Financial
Hardship.  Upon the receipt of a
Financial Hardship Distribution, a Participant shall not be permitted to make
Elective Deferrals or receive Matching or Discretionary Contributions for a
period of six months thereafter.

 

4.7.          Effect on this Plan of a 401(k) Plan
Hardship Withdrawal

 

To the extent required to comply with
Treasury Regulation § 1.401(k)-1(d)(2)(iv)(B)(4),
or any amendment or successor thereto, a Participant’s “elective and employee
contributions” (within the meaning of such Treasury Regulation) under this Plan
will be suspended for a period of 12 months following the Participant’s receipt
of a hardship distribution made in reliance on such Treasury

 

7

 

Regulation
from any plan containing a cash or deferred arrangement under Section 401(k) of
the Code maintained by Array within the provisions of Code Sections 414(b),
(c), (m) or (o).

 

4.8.          In-Service
Distribution

 

A Participant may request a lump sum
distribution from the vested portion of his or her Account at any time prior to
the date that any such amount would otherwise become payable if upon such
distribution the Participant immediately forfeits 10% of the value of the
requested distribution; provided, however, that a Participant
shall not be entitled to receive any Matching Contributions in such distribution
unless the Participant is 100% vested in the Matching Contributions pursuant to
the vesting schedule set forth in Section 3.2. 
A Participant may only receive one In-Service Distribution per calendar
year.  Upon the receipt of an In-Service
Distribution, a Participant will not be permitted to make Elective Deferrals or
receive Matching or Discretionary Contributions for a period of six months
thereafter.

 

ARTICLE 5

PLAN ACCOUNTS

 

5.1.          Accounts

 

The Plan Administrator must establish and
maintain a bookkeeping Account on the behalf of each Participant in which will
be recorded all amounts deferred by the Participant and all amounts contributed
on the behalf of the Participant.  The
Plan Administrator may establish any sub-accounts it deems necessary for the
administration of the Plan.

 

5.2.          Investment
Performance

 

A Participant’s Account is adjusted to
reflect increases or decreases based on the allocation of the Account made by
the Participant amongst the Investment Indices. 
An Eligible Person or Participant designates an allocation for his or
her deferrals and contributions when he or she completes his or her Elective
Deferral Form.  The allocation must be
made in whole percentages totaling 100% of the deferred and contributed
amounts, and will be subject to any rules established by the Plan Administrator
limiting the percentage or dollar amount of a Participant’s Account that may be
allocated to a particular Investment Index. 
The allocation represents an election to have the amounts increased or
decreased based on the rate of return or loss on the Investment Indices.  Subject to rules established by the Plan
Administrator, a Participant is permitted to reallocate amounts credited to his
or her Account after designating the initial investment allocation.  The Plan Administrator

 

8

 

is
authorized to replace or otherwise modify the Investment Indices used under the
Plan.

 

5.3.          Valuation
Date

 

A Participant’s Account is valued at the
close of each business day.

 

ARTICLE 6

SURVIVOR AND DEATH BENEFITS

 

6.1.          Death Benefit

 

Upon the death of a Participant prior to the
commencement of payment of his or her Account under this Plan, the Plan
Administrator will pay the Participant’s Account to the Participant’s Beneficiary
in a single lump-sum within 30 days of the Participant’s death or as soon as
practicable thereafter. In the event of the death of the Participant after the
commencement of installment payments from his or her Account, the remaining
payments from the Account will be paid to the Participant’s Beneficiary in a
single lump-sum within 30 days of the Participant’s death or as soon as
practicable thereafter.  Notwithstanding
the preceding, the Plan Administrator may elect, at its sole discretion, to
alter the timing or form of any distribution following a Participant’s death in
order to coordinate the payment of any employee benefit payments to the
Participant’s Beneficiary.

 

6.2.          Beneficiary
Designation

 

Except as provided in this Section 6.2,
each Participant has the right to designate one or more natural persons as a
Beneficiary (both primary as well as secondary) to whom the Participant’s
Account will be paid in the event of the Participant’s death prior to the
commencement of payment or complete distribution of the Participant’s
Account.  Each Beneficiary designation
must be made pursuant to a written form prescribed by the Plan Administrator
and will be effective only when it is filed with the Plan Administrator during
the Participant’s lifetime.  A married Participant
may only designate someone other than his or her spouse as a Beneficiary if the
spouse executes a written consent that acknowledges the effect of the
designation or if it is established that the spouse’s consent cannot be
obtained because the spouse cannot be located. 
Unless the designation of a non-spouse Beneficiary satisfies the
requirement of the preceding sentence, a married Participant’s Beneficiary is
his or her Surviving Spouse.  An
individual will only be treated as a Beneficiary under this Plan if he or she
satisfies the definition of Beneficiary under Section 10.4.

 

9

 

6.3.          Changing
a Beneficiary

 

Any Beneficiary designation may be changed by
an unmarried Participant without the consent of the previously named
Beneficiary by the filing of a new Beneficiary designation with the Plan
Administrator.  A married Participant’s
Beneficiary designation may only be changed by the Participant with the consent
of the Participant’s spouse as provided for in Section 6.2.

 

6.4.          Change
in Marital Status

 

If a Participant’s marital status changes
after he or she has designated a Beneficiary, the following applies:

 

(a)           If
the Participant is married at death but was unmarried when the designation was
made, the designation is void unless the spouse has consented to it in the
manner prescribed in Section 6.2; and

 

(b)           If
the Participant was married when the designation was made and he or she is
married to a different spouse at death, the designation is void unless the new
spouse has consented to it in the manner prescribed in Section 6.2.

 

6.5.          No
Beneficiary Designation

 

If a Participant fails to properly designate
a Beneficiary, if a designation is void, or if the Beneficiary designated by a
deceased Participant dies before the Participant or before complete
distribution of the Participant’s Account, the Participant’s Beneficiary is the
Participant’s Surviving Spouse and, if there is no Surviving Spouse or if the
Surviving Spouse dies before all remaining payments are made, payment will be
made in a single lump sum to the Beneficiary’s estate.

 

ARTICLE 7

CLAIMS PROCEDURE

 

7.1.          Initial Claim

 

If a Participant believes he or she is
entitled to payments under the Plan which have not been paid or have been paid
in a lesser amount, the Participant may submit a written claim to the Plan
Administrator.  If the Plan Administrator
determines that the claim should be denied, written notice of the decision will
be furnished to the Participant within a reasonable period of time.  This notice will set forth in clear and
precise terms (a) the specific reasons for the denial, (b) specific references
to pertinent Plan provisions on which the denial is based, (c) a description of
any additional material or information necessary for the Participant to perfect
the

 

10

 

claim,
together with an explanation of why such material or information is necessary,
and (d) an explanation of the Plan’s review procedures and the time limits
applicable to such procedures, including a statement of the Participant’s right
to bring civil action under ERISA Section 502(a) following a denial on
review.  The written notice must be given
to the Participant within 90 days after receipt of the claim, unless special
circumstances require an extension of time for processing the claim, in which
case, a decision will be rendered and written notice furnished within 180 days
after receipt of the claim.  A written
notice of such extension of time indicating the special circumstances and
expected date of decision will be furnished to the Participant within the
initial 90 day period.

 

7.2.          Claims Appeal

 

The Participant may, within 60 days after
receiving notice denying the claim, request a review of the decision by written
application to the Plan Administrator.  
In connection with the Participant’s appeal, (a) he or she may submit
written comments, documents, records, and other information relating to the
claim, (b) he or she must be provided, upon request and free of charge,
reasonable access to, and copies of, all documents, records, and other
information relevant to the claim, and (c) the Plan Administrator must
provide for a review that takes into account all comments, documents, records,
and other information submitted by the Participant relating to the claim,
without regard to whether such information was submitted or considered in the
initial benefit determination.

 

If the Plan Administrator determines that the
claim on review should be denied, written notice of the decision must be
furnished to the Participant within a reasonable period of time.  This notice will set forth in clear and
precise terms (w) the specific reasons for the denial, (x) specific references
to pertinent Plan provisions on which the denial is based, (y) a statement that
the Participant is entitled to receive, upon request and free of charge,
reasonable access to, and copies of, all documents, records, and other
information relevant to the claim for benefits, and (z) a statement of the
Participant’s right to bring a civil action under ERISA Section 502(a)
following a denial on review.  The
written notice must be given to the Participant within 60 days after receipt of
the Participant’s request for review, unless special circumstances require an extension
of time for processing the review, in which case, a decision will be rendered
and written notice furnished within 120 days after receipt of the request for
review.  A written notice of such
extension of time, indicating the special circumstances and expected date of
decision will be furnished to the Participant within the initial 60 day
period.  The decision will be final.  The Participant’s Surviving Spouse or Beneficiary
also may use the claim procedures set forth in this Article 7.

 

11

 

ARTICLE 8

MANAGEMENT AND ADMINISTRATION

 

8.1.          Administration

 

Array is the Plan Administrator.  The Plan Administrator has the full power and
authority to control and manage the operation and administration of the Plan,
including the authority, in its sole discretion: (a) to promulgate and enforce
any rules and regulations it deems necessary or appropriate for the
administration of the Plan; (b) to interpret the Plan consistent with its terms
and intent; and (c) to resolve any possible ambiguities, inconsistencies and
omissions in the Plan.  All such actions
must be in accordance with the Plan’s terms and intent.

 

Array may designate one or more persons to
carry out its fiduciary responsibilities as Plan Administrator.  To the extent of any such delegation, the
delegate shall become the Plan Administrator responsible for the matters
assigned by Array, and references to Array in such capacity shall apply instead
to the delegate.  Additionally, Array may
assign any of its responsibilities to specific persons who are directors,
officers, or employees of Array, or a Committee composed of such persons, in
order to execute its actions as the Plan Administrator.  Any action by Array in assigning any of its
responsibilities to specific persons who are directors, officers, or employees
of Array, or a Committee composed of such persons, does not constitute
delegation of Array’s responsibility as Plan Administrator, but rather shall be
treated as the manner in which Array has determined internally to discharge
such responsibility.

 

The Plan Administrator may engage the
services of accountants, attorneys, actuaries, consultants and such other
professional personnel as deemed necessary or advisable to assist it in
fulfilling the responsibilities of the Plan Administrator.  The Plan Administrator is entitled to act on
the basis of all tables, valuations, certificates, opinions and reports
furnished by such professional personnel.

 

8.2.          Amendment and Termination of the Plan

 

Array may, in its sole discretion, amend this
Plan at any time by action of the Board; provided, however, no amendment will
reduce the amount accrued in any Accounts as of the date of such
amendment.   Array may terminate the Plan
as follows:

 

(a)           Partial
Termination

 

The Board may partially terminate the Plan by
instructing the Plan Administrator not to accept any additional Elective
Deferral Forms under this Plan.  

 

12

 

If such a partial termination
occurs, the Plan will continue to operate and be effective with regard to
Elective Deferral Forms properly completed and filed prior to the effective
date of such partial termination.

 

(b)           Complete
Termination

 

The Board may completely terminate the Plan
by instructing the Plan Administrator to terminate all existing Elective
Deferral Forms and to no longer accept any additional Elective Deferral
Forms.  In the event of a complete
termination, the Plan shall cease to operate and the Plan Administrator shall
distribute each Account to the appropriate Participant as soon as
administratively possible.

 

8.3           Plan Expenses

 

All expenses of administering the Plan are
paid by Array.

 

ARTICLE 9

GENERAL PROVISIONS

 

9.1.          Alienation
of Benefits

 

No Account may be subject to alienation, sale,
transfer, assignment, pledge, attachment, garnishment, lien, levy
or like encumbrance.  Neither Array nor
the Plan is liable in any manner for or subject to the debts or liabilities of
any person entitled to payment under the Plan.

 

9.2.          Overpayments

 

If any overpayment of an Account is made
under the Plan, the Plan Administrator may require that either (a) the
amount of the overpayment may be set off against further amounts payable to or
on account of the person who received the overpayment until the overpayment has
been recovered in full, or (b) the recipient may be required to return the
amount of the overpayment to the Plan Administrator.  The foregoing remedies are not intended to be
exclusive.

 

9.3.          Withholding
Taxes

 

Array and the Plan Administrator may withhold
such taxes and make such reports to governmental authorities as they reasonably
believe to be required by law.

 

13

 

9.4.          Distributions to Minors and
Incompetents

 

If the Plan Administrator determines that any
Participant or Beneficiary receiving or entitled to receive payment of an
Account under the Plan is incompetent to care for his or her affairs, and in
the absence of the appointment of a legal guardian of the property of the
incompetent, payments due under the Plan (unless prior claim thereto has been
made by a duly qualified guardian, committee or other legal representative) may
be made to the spouse, parent, brother or sister or other person, including a
hospital or other institution, deemed by the Plan Administrator to have
incurred or to be liable for expenses on behalf of such incompetent.

 

In the absence of the appointment of a legal
guardian of the property of a minor, any minor’s share of an Account under the
Plan may be paid to such adult or adults as in the opinion of the Plan
Administrator have assumed the custody and principal support of such minor.

 

The Plan Administrator, in its sole
discretion, may require that a legal guardian for the property of any
incompetent or minor be appointed before authorizing the payment of an
Account.  Benefit payments made under the
Plan in accordance with determinations of the Plan Administrator pursuant to
this Section 9.4 completely discharge any obligation arising under the Plan
with respect to such Benefit payments.

 

9.5.          No
Right to Employment

 

Nothing contained in this Plan gives any
Employee the right to be retained in the service of Array or to interfere with
the right of Array to demote, discharge or discipline any Employee at any time
without regard to the effect that such demotion, discharge or discipline may
have upon the Employee under the Plan.

 

9.6.          Unfunded Plan

 

The Plan is an unfunded, unsecured obligation
of Array.  Array is not required to
segregate any assets in order to provide payment of Accounts, and the Plan
shall not be construed as providing for such segregation.  Any liability of Array to any Participant or
Beneficiary with respect to the payment of Accounts is based solely upon contractual
obligations created by the Plan.  Any
such obligation is not secured by any pledge or other encumbrance or any
property of Array.

 

9.7.          Trust Fund

 

At its sole discretion, Array may establish
one or more trusts for the purpose of assisting in the payment of
Accounts.  To the extent payments
provided for under the Plan are made from any trust, Array will not have any
further obligation to 

 

14

 

make
such payments.  The establishment and
maintenance of any trust will not alter the nature of Accounts under the Plan
as unfunded and unsecured.

 

9.8           Insurable
Interest

 

At its sole discretion, Array may elect to
purchase life insurance on the lives of Participants in conjunction with the
administration of the Plan.  The terms of
the life insurance will be determined at the sole discretion of Array, and the
purchase of life insurance will not alter the nature of the Accounts under the
Plan as unfunded and unsecured.  If Array
elects to purchase life insurance, Eligible Persons and Participants will be required
to execute and return to the Plan Administrator a “Consent
to Insure” as a condition of their continued participation in the Plan.

 

9.9.          Business Transaction or Change in
Control

 

(a)           Business
Transaction

 

Array may assign its obligations under this
Plan to a successor, whether by merger, consolidation, asset sale or other
business reorganization or transaction (“Business Transaction”).  Array’s obligations also may transfer to a
successor in a Business Transaction by operation of law.  If Array assigns its obligations under this
Plan to a successor or if the obligations are assigned by operation of law, the
transfer of any Employee to a successor in connection with a Business
Transaction will not result in the Employee being treated as terminating employment
or ceasing to be an Employee.  Upon any
assignment or transfer of Array’s obligations, this Plan shall be binding upon
and shall inure to the benefit of any successor of Array resulting from the
Business Transaction.

 

(b)           Change
of Control

 

In the event of a Change of Control, all
Participants become fully vested in their Accounts.  Notwithstanding any other provision of the
Plan, all Participants will receive a distribution of their entire Account in
the form of a single lump sum if the Plan is not assumed by a successor in
connection with a Change of Control. If the Plan is assumed by a successor in
connection with a Change of Control, then the distribution of the Participant’s
Account will continue to be governed by Articles 4 and 6.

 

9.9           Parachute
Limitations

 

Notwithstanding any other provision of this
Plan or of any other agreement, contract, or understanding heretofore or
hereafter entered into by a Participant with Array, except an agreement,
contract, or understanding entered into that expressly modifies or excludes
application of this paragraph (an “Other Agreement”), and notwithstanding any
formal or informal plan or other arrangement

 

15

 

for the direct or indirect
provision of compensation to the Participant (including groups or classes of
Participants of which the Participant is a member), whether or not such
compensation is deferred, is in cash, or is in the form of a benefit to or for
the Participant (a “Benefit Arrangement”), if the Participant is a
“disqualified individual,” as defined in Code Section 280G(c), any right to
receive any payment or other benefit under this Plan shall not become vested or
payable (a) to the extent that such right to vesting or payment, taking
into account all other rights or payments to or for the Participant under all
Other Agreements and all Benefit Arrangements, would cause any vesting or
payment to the Participant under this Plan to be considered a “parachute
payment” within the meaning of Code Section 280G(b)(2) (a “Parachute Payment”)
and (b) if, as a result of receiving a Parachute Payment, the aggregate
after-tax amounts received by the Participant from Array under this Plan, all
Other Agreements, and all Benefit Arrangements would be less than the minimum
after-tax amount that could be received by the Participant without causing any
such vesting or payment to be considered a Parachute Payment.  In the event that the receipt of any such
right to vesting or payment under this Plan, in conjunction with all other
rights, payments, or benefits to or for the Participant under any Other
Agreement or any Benefit Arrangement would cause the Participant to be
considered to have received a Parachute Payment under this Plan, that would
have the effect of decreasing the after-tax amount received by the Participant
as described in clause (b) of the preceding sentence, then the Participant will
have the right, in the Participant’s sole discretion, to designate those
rights, payments, or benefits under this Plan, any Other Agreements, and any
Benefit Arrangements that should be reduced or eliminated so as to avoid having
the payment or benefit to the Participant under this Plan be deemed to be a
Parachute Payment.

 

9.10.        Miscellaneous

 

(a)           Construction

 

Unless the contrary is plainly required by
the context, wherever any words are used in the masculine, they shall be
construed as though they were also used in the feminine, and vice versa, and
wherever any words are used in the singular, they shall be construed as though they
were also used in the plural, and vice versa.

 

(b)           Severability

 

If any provision of the Plan is held illegal
or invalid for any reason, such illegality or invalidity will not affect the
remaining parts of the Plan, and the Plan will be construed and enforced as if
such illegal or invalid provision had never been included in it.

 

16

 

(c)           Titles and Headings Not to Control

 

The titles to Articles and the headings of
Sections are for convenience of reference only, and, in the event of any
conflict, the text of the Plan, rather than the titles or headings, controls.

 

(d)           Complete
Statement of Plan

 

This document is a complete statement of the
Plan.  The Plan may be amended, modified
or terminated only in writing and then only as provided herein.

 

9.11.        Governing Law

 

The Plan is be
governed by ERISA, and, to the extent not preempted by ERISA, by the laws of
the State of Colorado, without regard to its choice of law provisions.

 

ARTICLE 10

DEFINITIONS

 

In addition to those definitions set forth in
Article 1 or otherwise in the text of this Plan, the following terms have the
following meaning:

 

10.1.        “Account” means the book entry account
established under the Plan for each Participant in which is reflected amounts
deferred or contributed under the Plan and allocable returns and losses under
Article 5 of the Plan.

 

10.2.        “Array” means Array BioPharma Inc.

 

10.3.         “Base Compensation” means an Employee’s
base pay, payable with respect to services rendered during the calendar year.

 

10.4.        “Beneficiary” means the Participant’s
beneficiary identified pursuant to Article 6 to receive payment of the
Participant’s Account or remaining Account balance at the time of his or her
death; provided, however, that such person survives the Participant by at least
30 days.

 

10.5.        “Board” means the Board of Directors of
Array.

 

10.6.        “Bonus” means any bonus or other cash
non-Base Compensation paid during the calendar year.

 

10.7.        “Cause” means, as determined by the Plan
Administrator, unless otherwise provided in an applicable employment agreement
with Array, (a) gross negligence or willful misconduct in connection with the
performance of duties; (b) conviction of a criminal offense (other than
minor traffic offenses); or (c) material breach of any term of any
employment, consulting or other services, confidentiality, 

 

17

 

intellectual
property or non-competition agreements, if any, between the Participant and
Array.

 

10.8.        “Change in Control” means (a) the
dissolution or liquidation of Array or a merger, consolidation, or
reorganization of Array with one or more other entities in which Array is not
the surviving entity, (b) a sale of substantially all of the assets of Array to
another person or entity, or (c) any transaction (including, without
limitation, a merger or reorganization in which Array is the surviving entity)
which results in any person or entity (other than persons who are shareholders
or affiliates immediately prior to the transaction) owning 50% or more of the
combined voting power of all classes of Array stock.

 

10.9.        “Code” means the Internal Revenue Code of
1986, as amended.

 

10.10.      “Committee” means the Compensation
Committee of the Board or such other persons or group as the Board may appoint
to perform the functions of the Committee with respect to the Plan.

 

10.11.      “Disability” means, with respect to an
Employee, that the Participant satisfies either the Occupation Test or the
Earnings Test.  The “Occupation Test”
requires an injury, sickness, or pregnancy that requires the Participant to be
under the regular care and attendance of a doctor, and prevents the Participant
from performing at least one of the material duties of his or her regular
occupation.  The “Earnings Test” requires
that an injury, sickness, or pregnancy, whether past or present, prevents a
Participant from earning more than 80% of his or her Base Compensation in any
occupation for which the Participant’s education, training or experience
qualifies him or her.  Salary, wages,
partnership or proprietorship draw, commissions, bonuses, or similar pay, and
any other income the Participant receives or is entitled to receive will be
included for purposes of the Earnings Test; provided, however, sick pay and salary
continuance for periods not at work will not be included.  Any lump sum payment will be prorated, based
on the time over which it accrued or the period for which it was paid.

 

10.12.      “Early Retirement” means the termination of
Service by an Employee on or after age 591⁄2 and the completion of four years of
Service.

 

10.13.      “Eligible Person” means an Employee who
meets the eligibility requirements of Section 2.1.

 

10.14.      “Employee” means a common law employee of
Array.

 

10.15.      “ERISA” means the Employee Retirement
Income Security Act of l974, as amended.

 

18

 

10.16.      “Financial Hardship” means one or more of
the following events:  (a) a sudden
and unexpected illness or accident of the Participant or of a dependent (as
defined in Code Section 152(a)) of the Participant; (b) a loss of the
Participant’s property due to casualty; or (c) other similar and
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant, as determined by the Plan Administrator.
In no event shall a Financial Hardship include the purchase of a residence or
the payment of tuition.

 

10.17.      “Investment Indices” means the investment
measures selected by the Plan Administrator for use under the Plan.  The Plan Administrator may from time to time
replace or otherwise modify the Investment Indices used under the Plan.

 

10.18.      “Participant” means any individual who has
an Account under the Plan.

 

10.19.      “Plan” means the Deferred Compensation Plan
of Array BioPharma Inc.

 

10.20.      “Plan Administrator” means Array.

 

10.21.      “Retirement” means a termination of Service
by an Employee on or after age 65.

 

10.22.      “Service” means service as an employee or
officer of Array.  A Participant’s change
in position or duties shall not result in interrupted or terminated Service, so
long as the Participant continues to be an employee or officer of Array.  Subject to the preceding sentence, whether a
termination of Service has occurred for purposes of the Plan will be determined
by the Plan Administrator, which determination shall be final, binding and
conclusive.

 

10.23.       “Surviving Spouse” means the person who,
according to the laws of the state of a Participant’s domicile, is the
Participant’s spouse on the date of the Participant’s death.

 

*              *              *              *              *

 

19

 

To reflect the adoption of this Plan by the
Board, effective as of August 1, 2004, the authorized officer hereby executes
this Plan document on behalf of Array.

 

	
   

  	
  ARRAY BIOPHARMA INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R.
  Michael Carruthers

  	
   

  
	
   

  	
  Name: R.
  Michael Carruthers

  
	
   

  	
  Title: Chief
  Financial Officer

  

 

20November 1, 2004

 

Mr. Marvin L. Schmidt

Board Member

c/o Copart, Inc.

4665 Business Center Dr.

Fairfield, CA 94534

 

Re:      Amendment to Stock Option
Agreement

 

Dear Mr. Schmidt:

 

I am pleased to notify you that
the Board of Directors of Copart, Inc. has approved a resolution to amend the
terms of your Stock Option Agreement dated October 6, 2003 under the 2001 Stock
Option Plan.  Pursuant to this amendment,
the vesting schedule for the 20,000 shares granted under the Stock Option
Agreement will be accelerated, such that all 20,000 shares subject to the
option shall be deemed fully vested as of October 29, 2004.

 

Additionally, the Board has
resolved to extend the term during which you may exercise the option to
purchase common stock of the Company. 
Pursuant to such extension, if you elect to exercise your option, you
must do so no later than Friday, October 27, 2006.

 

Except as specifically set
forth herein, your option will continue to be subject to all the terms and
conditions of your option agreement and Copart’s 2001 Stock Plan

 

Should you have any questions
regarding this amendment to the Stock Option Agreement, please call me at (707)
639-5000. Otherwise, please sign the acknowledgement below and return a copy to
me.

 

	
  Very truly
  yours,

  	
  Acknowledged
  and Agreed:

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Gregory
  R. DePasquale

  	
   

  	
  /s/  Marvin L. Schmidt

  	
   

  
	
  Gregory R.
  DePasquale

  	
  Marvin L.
  Schmidt

  
	
  Vice
  President

  	
   

  
	
  Assistant
  General Counsel

  	
   

  
				

 

GRD:kl

 

	
  cc:

  	
  Willis J.
  Johnson – Chief Executive Officer

  
	
   

  	
  Jay Adair –
  President

  
	
   

  	
  Paul A.
  Styer – Senior Vice President, General Counsel

  
	
   

  	
  William
  Franklin – Chief Financial Officer

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