Document:

Exhibit
10.1

 

CONFIDENTIAL TREATMENT

 

AMENDMENT NO. 2

 

Cardinal
Health PTS, LLC (“Cardinal Health”) and Cubist Pharmaceuticals, Inc., (“Cubist”)
are parties to a Processing Services Agreement dated August 11, 2004, as
amended by Amendment No. 1 dated May 23, 2005 (the “Agreement”).

 

The
parties now desire to amend the Agreement pursuant to the terms of this
Amendment No. 2 to set forth the terms and conditions upon which Cardinal
Health would move the manufacture of the Product primarily to a second facility.

 

Cardinal
Health and Cubist have executed a December 1, 2006 Quotation QTE-2006-0361.00 (“Tech
Transfer Feasibility Quote”) pursuant to which Cardinal Health will produce a
Process Transfer Feasibility Report and a Plant Certification Document pursuant
to the terms of the Tech Transfer Feasibility Quote.  Cubist will pay Cardinal Health $13,900 for
the work performed under the Tech Transfer Feasibility Quote.  The Process Transfer Feasibility Report and
the Plant Certification Document will detail how Cardinal Health’s second
facility will be validated and the costs and responsibilities of each of the
Parties associated with such validation.

 

Now
therefore, in consideration of the mutual conditions and covenants set forth
herein, Cardinal Health and Cubist agree as follows:

 

1.                     Cardinal Health shall
perform the activities described in the Plant Certification Document (“Certification
Activities”) in accordance with the terms and the schedules contained in the
Plant Certification Document.

 

2.                     Provided that Cardinal
Health performs the Certification Activities in accordance with the Plant
Certification Document, Cubist shall use diligent and commercially reasonable
efforts to achieve the approval of the Cardinal Health facility located at 8900
Capital Blvd, Raleigh, NC for the Processing of the commercial supplies of the
Product (“FDA Approval”) as soon as reasonably possible.

 

3.                     Effective upon FDA Approval,

 

a.               Section 1.20 of the
Agreement shall be amended by adding “(“NM Facility”) and at 8900 Capital Blvd,
Raleigh, NC (“NC Facility”) immediately after “Albuquerque, New Mexico.”

 

b.              The Agreement shall be
amended by adding the following sentence to the end of Section 2.1:

 

* Confidential
Treatment Requested.  Omitted portions
filed with the Securities and Exchange Commission (the “Commission”).

 

 

Upon
approval of the NC Facility, Cardinal Health shall Process Product in a
quantity not more than []* batches []*, and not more than []* batch []* during
the Term at the NM Facility without Cubist’s prior written consent.

 

c.               The Agreement shall be
amended by adding the following sentence to the end of Section 3.3:

 

All
Product Processed (other than packaging) at the NC Facility shall be packaged
by Cardinal Health at its packaging facility located at 3001 Red Lion Road,
Philadelphia, PA.

 

d.              The first sentence of
Section 15.1 of the Agreement shall be deleted in its entirety and replaced
with the following:

 

This
Agreement shall commence on the Effective Date and shall continue until August
11, 2010, unless earlier terminated under Section 15.2 below (the “Term”).

 

e.               A new Section 4.8 shall be
added to the Agreement, as follows:

 

4.8             Minimum
Requirement. Upon regulatory approval of the NC Facility, Cubist shall
order a minimum of []* of Product to be Processed (“Minimum Requirement”)
during []* commencing on []* and Cardinal Health shall accept Cubist’s Purchase
Orders including such minimum number of units and shall Process and Deliver at
least such minimum number of units according to such Purchase Orders. Notwithstanding
the foregoing, Cardinal Health may propose alternative delivery date(s) that
are within []* of what is requested in Cubist’s Purchase Order in order to
permit Cardinal Health to manage its available manufacturing capacity in
respect of commitments previously made to its clients; in such cases, the
parties shall reasonably agree to the revised delivery date(s).    The Minimum Requirement shall be pro-rated
in any partial []*. If Cubist does not order such Minimum Requirement during
[]*, within []* after the end of []*, Cubist shall pay Cardinal Health the
difference between []*.  Notwithstanding
anything herein to the contrary, if at any time during the initial term but
following the first []* batches of Product produced under this Agreement, if Cubist
appropriately rejects Product due to Cardinal Health’s breach of its
obligations hereunder to provide Product conforming to the Specifications and
Applicable Laws []* or more times in []*, Cubist shall have the right, at
Cubist’s sole discretion, to withdraw any or all Purchase Orders which have
been submitted at the time of []*, and any remaining Minimum Requirement during
the Term shall no longer apply.

 

f.                 The Agreement shall be
amended by inserting the following sentence after the first sentence of Section
7.1:

 

Cubist shall pay []* for the []* of Product purchased from Cardinal
Health under this Agreement []*.

 

* Confidential
Treatment Requested.  Omitted portions
filed with the Commission.

 

 

4.                     Termination
Prior to FDA Approval.

 

a.               If FDA Approval does not
occur by December 31, 2008, the provisions set forth in Sections 2, 3 and 7 of
this Amendment No. 2 shall have no further force or effect unless otherwise
agreed to by the parties in writing.

 

b.              If Cubist elects to cease
efforts to transfer the Product to the NC Facility or otherwise fails to
support or elects to abandon its pursuit of FDA Approval for any reason other
than a Cardinal Reason, as defined below, then []*.

 

c.               If a Cardinal Reason occurs,
then []*.

 

d.              .  As used in this Amendment No. 2, a “Cardinal
Reason” shall mean: (i) Cardinal Health’s failure to completely perform the
Certification Activities in accordance with the Plant Certification Document;
(ii) Cardinal Health’s election to abandon its pursuit of FDA Approval for any
reason; or (iii) the NC Facility’s failure to comply with FDA requirements or
Cardinal Health’s failure to satisfactorily address any FDA documented
observations at the NC Facility.

 

5.                     The first sentence of
Section 7.2 of the Agreement is hereby amended to delete the phrase “,effective
on the anniversary date of this Agreement” in its entirety and to replace such
language with “commencing on January 1, 2008”.

 

6.                     Section 16.1 of the
Agreement is hereby amended by adding []* within the parenthetical, immediately
before []*.

 

7.                     Effective as of October 1,
2006, Exhibit B-1 of the Agreement shall be deleted in its entirety and
replaced with Exhibit B-1 attached to this Amendment No. 2.

 

Any
conflict between the provisions of this Amendment No. 2 and the Agreement shall
be resolved in favor of this Amendment No. 2 and capitalized terms used in this
Amendment No. 2 shall have the same meaning given to them in the Agreement,
unless otherwise defined in this Amendment No. 2.

 

This
Amendment No. 2 shall be effective April 18, 2007 (“Amendment No. 2 Effective
Date”).  Unless otherwise expressly set
forth herein, all other terms and conditions set forth in the Agreement shall
remain in full force and effect. 
Following the Amendment No. 2 Effective Date, the term “Agreement” shall
be deemed a reference to the Agreement as amended by this Amendment No. 2.

 

This
Amendment No. 2 may be signed in counterparts, each of which shall be deemed to
be an original and all of which together shall constitute but one and the same
instrument, and such counterparts may be exchanged by facsimile.

 

In
witness whereof, this Amendment No. 2 has been executed by the Parties to be
effective as of the Amendment No. 2 Effective Date.

 

* Confidential
Treatment Requested.  Omitted portions filed
with the Commission.

 

 

	
  CARDINAL HEALTH PTS, LLC

  	
   

  	
  CUBIST
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Shawn L. Gallagher

  	
   

  	
  By:

  	
  /s/
  Lindon M. Fellows

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Shawn
  L. Gallagher

  	
   

  	
  Name:

  	
  Lindon
  M. Fellows

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  VP
  and General Manager

  	
   

  	
  Title:

  	
  Senior
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
  Technical
  Operations

  

 

*Confidential
Treatment Requested.  Omitted portions
filed with the Commission.

 

 

EXHIBIT B-1

 

[]*

 

*Confidential
Treatment Requested.  Omitted portions
filed with the Commission.Exhibit 10.3

 

CUBIST PHARMACEUTICALS, INC.

 

2010 EQUITY INCENTIVE PLAN

 

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  1.
  PURPOSE

  	
  1

  
	
   

  	
   

  
	
  2.
  DEFINITIONS

  	
  1

  
	
   

  	
   

  
	
  3.
  TERM OF THE PLAN

  	
  5

  
	
   

  	
   

  
	
  4.
  STOCK SUBJECT TO THE PLAN

  	
  5

  
	
   

  	
   

  
	
  5.
  ADMINISTRATION

  	
  6

  
	
   

  	
   

  
	
  6.
  AUTHORIZATION OF GRANTS

  	
  6

  
	
   

  	
   

  
	
  7.
  SPECIFIC TERMS OF AWARDS

  	
  8

  
	
   

  	
   

  
	
  8.
  ADJUSTMENT PROVISIONS

  	
  14

  
	
   

  	
   

  
	
  9.
  SETTLEMENT OF AWARDS

  	
  15

  
	
   

  	
   

  
	
  10.
  LIMITATION OF RIGHTS IN STOCK; NO SPECIAL SERVICE RIGHTS

  	
  17

  
	
   

  	
   

  
	
  11.
  UNFUNDED STATUS OF PLAN AND SECTION 409A

  	
  18

  
	
   

  	
   

  
	
  12.
  NONEXCLUSIVITY OF THE PLAN

  	
  18

  
	
   

  	
   

  
	
  13.
  TERMINATION AND AMENDMENT OF THE PLAN

  	
  18

  
	
   

  	
   

  
	
  14.
  CORPORATE ARTICLES AND BYLAWS; OTHER COMPANY POLICIES

  	
  19

  
	
   

  	
   

  
	
  15.
  NOTICES AND OTHER COMMUNICATIONS

  	
  20

  
	
   

  	
   

  
	
  16.
  GOVERNING LAW

  	
  20

  

 

i

 

CUBIST PHARMACEUTICALS, INC.

 

2010 EQUITY INCENTIVE PLAN

 

1.             Purpose

 

This
Plan is intended to encourage ownership of Stock by employees, consultants and
directors of the Company and its Affiliates and to provide additional incentive
for them to promote the success of the Company’s business through the grant of
Awards of or pertaining to shares of the Company’s Stock.  The Plan is intended to be an incentive stock
option plan within the meaning of Section 422 of the Code, but not all
Awards are required to be Incentive Options.

 

2.             Definitions

 

As
used in this Plan, the following terms shall have the following meanings:

 

2.1.          Accelerate, Accelerated, and Acceleration,
means: (a) when used with respect to an Option or Stock Appreciation
Right, that as of the time of reference the Option or Stock Appreciation Right
will become exercisable with respect to some or all of the shares of Stock for
which it was not then otherwise exercisable by its terms; (b) when used
with respect to Restricted Stock or Restricted Stock Units, that the Risk of
Forfeiture otherwise applicable to the Restricted Stock or Restricted Stock
Units shall expire with respect to some or all of the shares of Restricted
Stock or Restricted Stock Units then still otherwise subject to the Risk of
Forfeiture; and (c) when used with respect to Performance Units, that the
applicable Performance Goals shall be deemed to have been met as to some or all
of the Units.

 

2.2.          Affiliate means any
corporation, partnership, limited liability company, business trust, or other
entity controlling, controlled by or under common control with the Company.

 

2.3.          Award means any
grant or sale pursuant to the Plan of Options, Stock Appreciation Rights,
Performance Units, Restricted Stock, Restricted Stock Units, or Stock Grants.

 

2.4.          Award Agreement
means an agreement between the Company and the recipient of an Award, setting
forth the terms and conditions of the Award.

 

2.5.          Board means the
Company’s Board of Directors.

 

2.6.          Change of Control
means (1) the closing of (A) any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of Stock would be converted into cash, securities or
other property, other than a merger or consolidation in which the holders of Stock
immediately prior to the merger or consolidation will have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger or consolidation as before the merger or
consolidation, or (B) any sale, lease, exchange or other transfer in a
single transaction or a series of related transactions of all or substantially
all of the assets of the Company, or (2) the date on which any “person”
(as defined in Section 13(d) of the Exchange Act), other than the
Company or a Subsidiary or employee benefit plan or trust maintained by the
Company or any of its Subsidiaries shall become (together with its “affiliates”
and “associates,” as defined in Rule 12b-2 

 

 

under
the Exchange Act) the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 50% of the Stock outstanding at
the time, with the prior approval of the Board, or (3) a Hostile Change of
Control.

 

2.7.          Code means the
Internal Revenue Code of 1986, as amended from time to time, or any successor
statute thereto, and any regulations issued from time to time thereunder.

 

2.8.          Committee means the
Compensation Committee of the Board, which in general is responsible for the
administration of the Plan, as provided in Section 5.  For any period during which no such committee
is in existence “Committee” shall mean the Board and all authority and
responsibility assigned to the Committee under the Plan shall be exercised, if
at all, by the Board.

 

2.9.          Company means Cubist
Pharmaceuticals, Inc., a corporation organized under the laws of the State
of Delaware.

 

2.10.        Covered Employee means an employee who is a “covered
employee” within the meaning of Section 162(m) of the Code.

 

2.11.        Exchange Act means the Securities and Exchange Act of
1934.

 

2.12.        For Cause means
dishonesty with respect to the Company or any Affiliate, insubordination,
substantial malfeasance or non-feasance of duty, intentional and unauthorized
disclosure of confidential information, material breach by a Participant of any
provision of any employment, nondisclosure, non-competition or similar
agreement between the Participant and the Company or any Affiliate, conduct
substantially prejudicial to the business of the Company or an Affiliate, and
any other type of conduct that is similar to that described in this sentence.
The determination of the Company as to the existence of circumstances
warranting a termination For Cause shall be conclusive. Notwithstanding the
foregoing, in the event that the Participant is a party to an effective
employment, retention or similar agreement with the Company or an Affiliate
which contains a “cause” definition, such definition shall be controlling for
purposes of the Plan.

 

2.13         Grant Date
means the date as of which an Award is granted, as determined under Section 6.2.

 

2.14         Hostile Change of Control means (1) the date on which any “person”
(as defined in Section 13(d) of the Exchange Act), other than the
Company or a Subsidiary or employee benefit plan or trust maintained by the
company of any of its Subsidiaries shall become (together with its “affiliates”
and “associates,” as defined in Rule 12b-2 under the Exchange Act) the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of more than 25% of the Stock outstanding at the time, without the
prior approval of the Board; or (2) over a period of 36 consecutive months
or less, there is a change in the composition of the Board such that a majority
of the Board members (rounded up to the next whole number, if a fraction)
ceases, by reason of one or more proxy contests for the election of Board
members, to be composed of individuals who either (i) have been Board
members continuously since the beginning of that period, or (ii) have been
elected or nominated for election as Board members during such period by at
least a majority of the Board members described in the preceding clause (i) who
were still in office at the time that election or nomination was approved by
the Board.

 

2

 

2.15         Incentive Option
means an Option which by its terms is to be treated as an “incentive stock
option” within the meaning of Section 422 of the Code.

 

2.16         Incumbent Directors means, following a Hostile Change of
Control, those Board members who were members of the Board immediately prior to
such Hostile Change of Control.

 

2.17         Market Value
means the value of a share of Stock on a particular date determined by such
methods or procedures as may be established by the Committee.  Unless otherwise determined by the Committee,
the Market Value of Stock as of any date is the closing price for the Stock as
reported on the NASDAQ Stock Market (or on any other national securities
exchange on which the Stock is then listed) for that date or, if no closing
price is reported for that date, the closing price on the next preceding date
for which a closing price was reported.

 

2.18         Nonstatutory Option
means any Option that is not an Incentive Option.

 

2.19         Officer means any
employee of the Company who, from time to time, is subject to the reporting
requirements of Section 16 of the Exchange Act.

 

2.20         Option means an
option to purchase shares of Stock.

 

2.21         Optionee means a
Participant to whom an Option shall have been granted under the Plan.

 

2.22         Participant means any
holder of an outstanding Award under the Plan.

 

2.23         Performance Criteria means the criteria that the Committee
selects for purposes of establishing the Performance Goal or Performance Goals
under an Award for the Performance Period applicable to such Award.  Performance Goals will be based on
objectively determinable measures of performance relating to any of or to any
combination of the following (measured either absolutely or by reference to an
index or indices and determined either on a consolidated basis or, as the
context permits, on a divisional, functional, subsidiary, line of business,
project or geographical basis or in combinations thereof) and will be limited
to: sales; revenues; assets; expenses; earnings or earnings per share; return
on equity, investment, capital or assets; one or more operating ratios;
borrowing levels, leverage ratios or credit rating; market share; capital
expenditures; cash flow; stock price; stockholder return; income, pre-tax
income, net income, operating income, pre-tax profit, operating profit, net
operating profit or economic profit; gross margin, operating margin, profit
margin, return on operating revenue, return on operating assets, cash from
operations, operating ratio or operating revenue; market capitalization;
expenses or certain types of expenses; sales of particular products or
services; customer acquisition, expansion or retention; acquisitions and
divestitures (in whole or in part) and/or integration activities related
thereto; joint ventures, collaborations, licenses and strategic alliances,
and/or the management and performance of such relationships; spin-offs,
split-ups or similar transactions; reorganizations; recapitalizations,
restructurings, financings (issuance of debt or equity) or refinancings;
achievement of clinical trial or research objectives; achievement of
manufacturing and/or supply chain objectives; achievement of litigation-related
objectives and/or objectives related to litigation expenses; achievement of
human resource, organizational and/or personnel objectives; achievement of
information technology or information services objectives; or achievement of
real estate, facilities or space planning objectives.

 

3

 

2.24         Performance Goals means, for a Performance Period, the
written goal or goals established by the Committee for the Performance Period
based upon the Performance Criteria selected by the Committee.  The Performance Goals may be expressed in
terms of overall Company performance or the performance of a division, business
unit, subsidiary, or an individual, either individually, alternatively or in
any combination, applied to either the Company as a whole or to a business unit
or Affiliate, either individually, alternatively or in any combination, and
measured either quarterly, annually or cumulatively over a period of years, on
an absolute basis or relative to a pre-established target, to previous years’
results or to a designated comparison group, in each case as specified by the
Committee. The Committee will, in the manner and within the time prescribed by Section 162(m) of
the Code in the case of Qualified Performance-Based Awards, objectively define
the manner of calculating the Performance Goal or Goals it selects to use for
such Performance Period for such Participant. 
To the extent consistent with the requirements of the performance-based
compensation exception under Section 162(m) of the Code, the
Committee may determine that one or more of the Performance Goals applicable to
such Award will be adjusted in an objectively determinable manner to reflect
events (for example, but without limitation, acquisitions or dispositions)
occurring during the Performance Period that affect the applicable Performance
Goal or Goals.

 

2.25         Performance Period means one or more periods of time,
which may be of varying and overlapping durations, selected by the Committee,
over which the attainment of one or more Performance Goals or other business
objectives will be measured for purposes of determining a Participant’s right
to, and the payment of, a Qualified Performance-Based Award.

 

2.26         Performance Unit means a right granted to a Participant,
to receive cash, Stock or other Awards, the payment of which is contingent on
achieving Performance Goals or other business objectives established by the
Committee.

 

2.27         Plan means this
2010 Equity Incentive Plan of the Company, as amended from time to time, and
including any attachments or addenda hereto.

 

2.28         Qualified Performance-Based Awards means Awards intended to qualify as “performance-based
compensation” under Section 162(m) of the Code.

 

2.29         Restricted Stock means shares of Stock that are subject
to a Risk of Forfeiture.

 

2.30         Restricted Stock Unit
means a right to receive shares of Stock at the close of a Restriction
Period, subject to a Risk of Forfeiture.

 

2.31         Restriction Period means the period of time, established
by the Committee in connection with an Award of Restricted Stock or Restricted
Stock Units, during which the shares of Restricted Stock or Restricted Stock
Units are subject to a Risk of Forfeiture described in the applicable Award
Agreement.

 

2.32         Retirement or Retire
means, (a) with respect to any Participant who is an employee of the
Company or any of its Affiliates, such person’s termination of employment with
the Company and its Affiliates after reaching age 65 with at least five
(5) years of service as an employee of the Company or its Affiliates, but
not including any termination of employment For Cause or for insufficient
performance, as determined by the Company; and (b) with respect to any
Participant who is a director of the Company, such person’s retirement from the
Board after reaching age 65 and serving the number of full terms that are
specified from time to time by the 

 

4

 

Board
in writing, and in effect at the time of such termination, as being the number
of full terms that a Director should serve before being considered retired,

 

2.33         Risk of Forfeiture
means a limitation on the right of the Participant to retain Restricted Stock
or Restricted Stock Units, including a right of the Company to reacquire shares
of Restricted Stock at less than their then Market Value, arising because of
the occurrence or non-occurrence of specified events or conditions.

 

2.34         Stock means common
stock, par value $0.001  per share, of
the Company, and such other securities as may be substituted for Stock pursuant
to Section 8.

 

2.35         Stock Appreciation Right means a right to receive any excess in the Market Value of
shares of Stock over a specified exercise price.

 

2.36         Stock Grant means the grant of shares of Stock not
subject to restrictions or other forfeiture conditions.

 

2.37         Subsidiary means any
corporation which qualifies as a subsidiary of the Company under the definition
of “subsidiary corporation” in Section 424(f) of the Code.

 

2.38         Ten Percent Owner
means a person who owns, or is deemed within the meaning of Section 422(b)(6) of
the Code to own, stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company (or any parent corporation of the
Company, as defined in Section 424(e) of the Code, or any
Subsidiary).  Whether a person is a Ten
Percent Owner shall be determined with respect to an Option based on the facts
existing immediately prior to the Grant Date of the Option.

 

3.             Term of
the Plan

 

Unless
the Plan shall have been earlier terminated by the Board, Awards may be granted
under this Plan at any time in the period commencing on the date of approval of
the Plan by the Board and ending on December 31, 2020, provided, however, that in no event may an Incentive Option
be granted under this Plan after the date immediately prior to the tenth
anniversary of the adoption of the Plan by the Board.  Awards granted pursuant to the Plan during
its term shall not expire solely by reason of the termination of the Plan.

 

4.             Stock
Subject to the Plan

 

At
no time shall the number of shares of Stock issued pursuant to outstanding
Awards granted under the Plan (including Incentive Options) exceed six million
(6,000,000) plus the number of shares of Stock subject to stock options and
restricted stock units granted under the Company’s Amended and Restated 2000
Equity Incentive Plan (the “2000 Plan”) which become available for
additional awards thereunder by reason of the forfeiture, cancellation,
expiration or termination of those awards, subject, however,
to the provisions of this Section 4 and Section 8 of the Plan.  Each Stock Grant Award and each Award of
Restricted Stock, Restricted Stock Units and Performance Units shall reduce the
number of shares of Stock available for Awards by two shares for every one
share of Stock underlying the Award; each other Award shall reduce the number
of shares of Stock available for Awards by one share for every one share of
Stock underlying the Award.  When a Stock Appreciation Right is settled
for shares of Stock upon exercise, the total number of shares of Stock
underlying the Award shall be counted against the 

 

5

 

number of shares of Stock available for issuance
under the Plan, regardless of the number of shares of Stock used to settle the
Stock Appreciation Right upon exercise.  Except for Stock Appreciation Rights that are
settled for shares of Stock upon exercise prior to expiration, termination or
cancellation, in which case the terms of the preceding sentence shall apply, if
any Option or Stock Appreciation Right expires, terminates or is cancelled for
any reason without having been exercised in full, or if any other Award is
forfeited by the recipient, the shares of Stock underlying such Award which are
not purchased by the Participant or which are forfeited by the Participant
shall again be available for Awards to be granted under the Plan to the same
extent that the grant of such Award reduced the number of shares of Stock
available for Awards under the Plan. If any stock option granted under the 2000
Plan expires, terminates, or is cancelled for any reason without having been
exercised in full, or if any award of restricted stock units under the 2000
plan is forfeited by the recipient, the shares of Stock underlying such award
not purchased by the Participant or which are forfeited by the Participant
shall become available for Awards to be granted under the Plan to the same
extent that the grant of such award reduced the number of shares of Stock
available for awards under the 2000 Plan. 
Shares of Stock issued pursuant to the Plan may be either authorized but
unissued shares or shares held by the Company in its treasury.

 

5.             Administration

 

The
Plan shall be administered by the Committee; provided,
however, that at any time and on any one or more occasions the Board
may itself exercise any of the powers and responsibilities assigned to the
Committee under the Plan and when so acting, the Board shall have the benefit
of all of the provisions of the Plan pertaining to the Committee’s exercise of
its authorities hereunder; and provided further, however,
that the Committee may delegate to the Company’s Chief Executive Officer the
authority to grant Awards hereunder to employees who are not Officers, and to
consultants, in accordance with such guidelines as the Committee shall set
forth at any time or from time to time (but in no event to any non-employee
member of the Board or of any board of directors (or similar governing
authority) of any Affiliate). Subject to the provisions of the Plan, the
Committee shall have complete authority, in its discretion, to make or to select
the manner of making all determinations with respect to each Award to be
granted by the Company under the Plan including the employee, consultant or
director to receive the Award and the form of Award.  In making such determinations, the Committee
may take into account the nature of the services rendered by the respective
employee, consultant, and director, their present and potential contributions
to the success of the Company and its Affiliates, and such other factors as the
Committee in its discretion shall deem relevant.  Subject to the provisions of the Plan, the
Committee shall also have complete authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, to
determine the terms and provisions of the respective Award Agreements (which
need not be identical), and to make all other determinations necessary or
advisable, in the Committee’s discretion, for the administration of the
Plan.  The Committee’s determinations
made in good faith on matters referred to in the Plan shall be final, binding
and conclusive on all persons having or claiming any interest under the Plan or
an Award made pursuant hereto.

 

6.             Authorization
of Grants

 

6.1.          Eligibility.  The Committee may grant from time to time and
at any time prior to the termination of the Plan one or more Awards, either
alone or in combination with any other Awards, to any employee of or consultant
to one or more of the Company and its Affiliates or to any non-employee member
of the Board or of any board of directors (or similar governing 

 

6

 

authority)
of any Affiliate. However, only employees of the Company and of any parent
corporation of the Company, as defined in Section 424(e) of the Code,
or any Subsidiary, shall be eligible for the grant of an Incentive Option.  Further, in no event shall the number of
shares of Stock issued pursuant to Options and other Awards granted to any one
person in any one calendar year exceed 750,000 shares of Stock (subject to the
provisions of Section 8 of the Plan, but only to the extent consistent
with Section 162(m) of the Code).

 

6.2.          Date of Grant.  The granting of an Award shall take place at
the time specified in the Award Agreement. 
Only if expressly so provided in the applicable Award Agreement shall
the Grant Date be the date on which the Award Agreement shall have been duly
executed and delivered by the Company and the Participant.

 

6.3.          General Terms of Awards. 
Each grant of an Award shall be subject to all applicable terms and
conditions of the Plan (including but not limited to any specific terms and
conditions applicable to that type of Award set out in the following Sections),
and such other terms and conditions, not inconsistent with the terms of the
Plan, as the Committee may prescribe.  No
Participant shall have any rights with respect to an Award, unless and until
such Participant shall have complied with the applicable terms and conditions
of such Award (including if applicable delivering to the Company or its
designated broker a fully executed copy of an Award Agreement evidencing an
Award).  In addition, a Participant will
forfeit an Award if the receipt of the Award is subject to the Participant
accepting an Award Agreement and the Participant does not accept the Award
Agreement in the manner and within the time period after the Award date that
the Company and/or its designated broker specifies in writing.

 

6.4.          Effect of Termination of Employment, Etc.

 

(a)           Unless the Committee shall
provide otherwise with respect to any Award, and except as otherwise provided
in this Section 6.4, if the Participant’s employment or other association
with the Company and its Affiliates ends for any reason other than Retirement
or death of such Participant, including because of the Participant’s employer
ceasing to be an Affiliate, (a) any outstanding Option or Stock
Appreciation Right of the Participant shall cease to be exercisable in any
respect not later than ninety (90) days following that event and, for the
period it remains exercisable following that event, shall be exercisable only
to the extent exercisable at the date of that event, and (b) any other
outstanding Award of the Participant shall, to the extent subject to a Risk of
Forfeiture, vesting requirements or other similar restrictions, be forfeited or
otherwise subject to return to or repurchase by the Company on the terms
specified in the applicable Award Agreement. 
Military or sick leave or other bona fide leave shall not be deemed a
termination of employment or other association for purposes of the Plan, provided that it does not exceed the longer of ninety (90)
days or the period during which the absent Participant’s reemployment rights,
if any, are guaranteed by statute or by contract.

 

(b)           Unless the Committee shall
provide otherwise with respect to any Award, and except as otherwise provided
in this Section 6.4, if a Participant Retires or dies, any Option or Stock
Appreciation Right held by such Participant or such Participant’s legal
representative may be exercised by the Participant or such Participant’s legal
representative at any time within the shorter of the applicable option period,
as defined in the Award Agreement consistent with Section 7.1(b), or 12
months after the date of the Participant’s Retirement or death, but only to the
extent exercisable at the time of such Participant’s Retirement or death.

 

7

 

(c)           Solely with respect to an
Incentive Option, (i) if a Participant’s employment or other association
with the Company and its Affiliates ends because the Participant dies, such
Incentive Option held by such Participant may be exercised by such Participant’s
legal representative at any time within the shorter of the applicable option
period, as defined in the Award Agreement consistent with Section 7.1(b),
or 12 months after the date of the Participant’s death, but only to the extent
exercisable at the time of such Participant’s death, and (ii) if the
Participant’s employment or other association with the Company and its
Affiliates ends for any reason other than death, including Retirement or
because of the Participant’s employer ceasing to be an Affiliate, such
Incentive Option shall cease to be exercisable in any respect not later than
ninety (90) days following that event and, for the period it remains
exercisable, shall be exercisable only to the extent exercisable at the date of
that event.

 

6.5.          Non-Transferability of Awards.  Except as otherwise provided in this Section 6.5,
Awards shall not be transferable, and no Award or interest therein may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution.  All of a Participant’s rights in any Award
may be exercised during the life of the Participant only by the Participant or
the Participant’s legal representative. 
However, the Committee may, at or after the grant of an Award other than
an Incentive Option, provide that such Award may be transferred by the
recipient to a “family member” (as defined below); provided,
however, that any such transfer is without payment of any
consideration whatsoever and that no transfer shall be valid unless first
approved by the Committee, acting in its sole discretion.  For this purpose, “family member” means any
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships,
any person sharing the employee’s household (other than a tenant or employee),
a trust in which the foregoing persons have more than 50% of the beneficial
interests, a foundation in which the foregoing persons (or the Participant)
control the management of assets, and any other entity in which these persons
(or the Participant) own more than 50% of the voting interests.

 

7.             Specific
Terms of Awards

 

7.1.          Options.

 

(a)           Exercise Price. 
The price at which shares of Stock may be acquired under each Option
shall be not less than 100% of the Market Value of Stock on the Grant Date, or
not less than 110% of the Market Value of Stock on the Grant Date in the case
of an Incentive Option if the Optionee is a Ten Percent Owner.

 

(b)           Option Period. 
No Option may be exercised on or after the earlier of (a) the
Option expiration date, as specified in Section 6.4, or (b) the tenth
anniversary of the Grant Date, or on or after the fifth anniversary of the
Grant Date in the case of an Incentive Option if the Optionee is a Ten Percent
Owner.  In the event that the last date
to exercise an Option by its terms falls on a date when the primary stock
exchange or national market on which the Company’s Stock is listed (the “Primary
Stock Exchange”) is closed, then the expiration date and time for the Option
shall be the closing time of the regular market hours for the Primary Stock
Exchange on the last date prior to the expiration date that the Primary Stock
Exchange is open.

 

8

 

(c)           Exercisability.  An Option may be immediately exercisable or
become exercisable in such installments, cumulative or non-cumulative, as the
Committee may determine.  In the case of
an Option not otherwise immediately exercisable in full, the Committee may
Accelerate such Option in whole or in part at any time; provided,
however, that in the case of an Incentive Option, any such
Acceleration of the Option would not cause the Option to fail to comply with
the provisions of Section 422 of the Code or the Optionee consents to the
Acceleration.

 

(d)           Method of Exercise.  An Option may be exercised by the Optionee
giving written notice, in the manner provided in Section 15.2, specifying
the number of shares of Stock with respect to which the Option is then being
exercised.  The notice shall be
accompanied by payment in the form of cash or check payable to the order of the
Company in an amount equal to the exercise price of the shares of Stock to be
purchased or, subject in each instance to the Committee’s prior approval,
acting in its sole discretion, and to such conditions, if any, as the Committee
may deem necessary to avoid adverse accounting effects to the Company,

 

(i) by delivery to the Company of shares of
Stock having a Market Value equal to the exercise price of the shares to be
purchased, or

 

(ii) by surrender of
the Option as to all or part of the shares of Stock for which the Option is
then exercisable in exchange for shares of Stock having an aggregate Market
Value equal to the difference between (1) the
aggregate Market Value of the surrendered portion of the Option, and (2) the aggregate exercise price
under the Option for the surrendered portion of the Option, or

 

(iii) if the Stock is
traded on an established market, payment through and under the terms and
conditions of a formal cashless exercise program, if any, authorized by the
Company entailing the sale of the Stock subject to an Option in a brokered
transaction (other than to the Company).

 

Receipt
by the Company or its designated broker of such notice and payment in any
authorized or combination of authorized means shall constitute the exercise of
the Option.  Within thirty (30) days
thereafter but subject to the remaining provisions of the Plan, the Company
shall deliver or cause to be delivered to the Optionee or his agent a
certificate or certificates for the number of shares then being purchased, or
shall cause its transfer agent to register such shares in book entry form in
the name of the Optionee.  Such shares of
Stock shall be fully paid and nonassessable.

 

(e)           Limit on Incentive Option Characterization.  An Incentive Option shall be considered to be
an Incentive Option only to the extent that the number of shares of Stock for
which the Option first becomes exercisable in a calendar year do not have an
aggregate Market Value (as of the date of the grant of the Option) in excess of
the “current limit”.  The current limit
for any Optionee for any calendar year shall be $100,000 minus
the aggregate Market Value at the date of grant of the number of shares of
Stock available for purchase for the first time in the same year under each
other Incentive Option previously granted to the Optionee under the Plan, and
under each other incentive stock option previously granted to the Optionee
under any other incentive stock option plan of the Company and its Affiliates,
after December 31, 1986.  Any shares
of Stock which would cause the foregoing limit to be violated shall be deemed
to have 

 

9

 

been
granted under a separate Nonstatutory Option, otherwise identical in its terms
to those of the Incentive Option.

 

(f)            Notification of Disposition.  Each person exercising any Incentive Option
granted under the Plan shall be deemed to have covenanted with the Company to
report to the Company any disposition of the shares of Stock issued upon such
exercise prior to the expiration of the holding periods specified by Section 422(a)(1) of
the Code and, if and to the extent that the realization of income in such a disposition
imposes upon the Company federal, state, local or other withholding tax
requirements, or any such withholding is required to secure for the Company an
otherwise available tax deduction, to remit to the Company an amount in cash
sufficient to satisfy those requirements.

 

7.2.          Stock Appreciation Rights.

 

(a)           Tandem or Stand-Alone.  Stock Appreciation Rights may be granted in
tandem with an Option (at or, in the case of a Nonstatutory Option, after the
award of the Option), or alone and unrelated to an Option.  Stock Appreciation Rights in tandem with an
Option shall terminate to the extent that the related Option is exercised, and
the related Option shall terminate to the extent that the tandem Stock
Appreciation Rights are exercised.

 

(b)           Exercise Price.  Stock Appreciation Rights shall have an
exercise price of not less than 100% of the Market Value of the Stock on the
Grant Date, or in the case of Stock Appreciation Rights awarded in tandem with
Options, the exercise price of the related Option.

 

(c)           Period.  No Stock Appreciation Right may be exercised
on or after the earlier of (i) the tenth anniversary of the Grant Date, (ii) the
date set forth in the Award Agreement, or (iii) in the case of Stock
Appreciation Rights awarded in tandem with Options, the expiration date of the
related Option.  In the event that the
last date to exercise a Stock Appreciation Right, whether issued alone or in
tandem with an Option, by its terms falls on a date when the Primary Stock
Exchange is closed, then the expiration date and time for the Stock
Appreciation Right shall be the closing time of the regular market hours for
the Primary Stock Exchange on the last date prior to the expiration date that
the Primary Stock Exchange is open.

 

(d)           Other Terms.  Except as the Committee may deem
inappropriate or inapplicable in the circumstances, Stock Appreciation Rights
shall be subject to terms and conditions substantially similar to those
applicable to a Nonstatutory Option.

 

7.3.          Restricted Stock.

 

(a)           Purchase Price. 
Shares of Restricted Stock shall be issued under the Plan for such
consideration, in cash, other property or services, or any combination thereof,
as is determined by the Committee.

 

(b)           Issuance of Shares.  Each Participant receiving a Restricted Stock
Award, subject to subsection (c) below, shall be issued, in the Company’s
discretion, in either certificate or book entry form, the shares of Restricted
Stock underlying such Award.  Such shares
shall be registered in the name of such Participant, and, if applicable, shall
bear an appropriate legend or a notation on the records of the Company’s
transfer agent referring to the terms, conditions, and restrictions applicable
to such Award

 

10

 

(c)           Escrow of Shares.  The Committee may require that the stock
certificates evidencing shares (if any) of Restricted Stock be held in custody
by a designated escrow agent (which may but need not be the Company) until the
restrictions thereon shall have lapsed, and that the Participant deliver a
stock power, endorsed in blank, relating to the Stock underlying such Award.

 

(d)           Restrictions and Restriction Period. 
During the Restriction Period applicable to shares of Restricted Stock,
such shares shall be subject to limitations on transferability and a Risk of
Forfeiture arising on the basis of such conditions related to the performance
of services, Company or Affiliate performance or otherwise as the Committee may
determine and provide for in the applicable Award Agreement.  Any such Risk of Forfeiture may be waived or
terminated, or the Restriction Period shortened, at any time by the Committee
on such basis as it deems appropriate.

 

(e)           Rights Pending Lapse of Risk of Forfeiture or Forfeiture of Award.  Except as otherwise provided in the Plan or
the applicable Award Agreement, at all times prior to the lapse of any Risk of
Forfeiture applicable to, or forfeiture of, an Award of Restricted Stock, the
Participant shall have all of the rights of a stockholder of the Company,
including the right to vote and the right to receive any dividends with respect
to the shares of Restricted Stock (but any dividends or other distributions
payable in shares of Stock or other securities of the Company shall constitute
additional Restricted Stock, subject to the same Risk of Forfeiture as the
shares of Restricted Stock in respect of which such shares of Stock or other
securities are paid), provided, however that with respect to Awards that vest
or have a Risk of Forfeiture that lapses  based on
achievement of pre-established performance goals, any dividends otherwise
payable during the Restriction Period shall be paid only if, as, and to the
extent the Award vests or the Risk of Forfeiture lapses.  Unless the Committee shall have provided
otherwise, any such dividend shall be paid, if at all, without interest or other
earnings.

 

(f)            Lapse of Restrictions.  If and when the Restriction Period expires
without a prior forfeiture of the Restricted Stock, the Risk of Forfeiture
shall be removed from the shares of Stock underlying the Award of Restricted
Stock and the shares of Stock shall be delivered to the Participant promptly if
not theretofore so delivered.

 

7.4.          Restricted Stock Units.

 

(a)           Character.  Each Restricted Stock Unit shall entitle the
recipient to such shares of Stock at a close of such Restriction Period as the
Committee may establish and subject to a Risk of Forfeiture arising on the
basis of such conditions relating to the performance of services, Company or
Affiliate performance or otherwise as the Committee may determine and provide
for in the applicable Award Agreement. 
Any such Risk of Forfeiture may be waived or terminated, or the
Restriction Period shortened, at any time by the Committee on such basis as it
deems appropriate.

 

(b)           Form and Timing of Payment.  Settlement of earned Restricted Stock Units
shall be made in a single lump sum following the close of the applicable
Restriction Period.  At the discretion of
the Committee, Participants may be entitled to receive payments equivalent to
any dividends declared with respect to Stock underlying the Awards of
Restricted Stock Units but only following the close of the applicable
Restriction Period and then only if the underlying Stock shall have been
earned.  Unless the Committee shall provide
otherwise, any such dividend equivalents shall be paid, if at all, without
interest or other earnings.

 

11

 

 

7.5.          Performance Units.

 

(a)           Character. Each
Performance Unit shall entitle the recipient to the value of a specified number
of shares of Stock, over the initial value for such number of shares, if any,
established by the Committee as of the Grant Date, at the close of a specified
Performance Period to the extent specified business objectives, including but
not limited to Performance Goals, shall have been achieved.

 

(b)           Earning of Performance Units. The Committee shall set Performance
Goals or other business objectives in its discretion which, depending on the
extent to which they are met within the applicable Performance Period, will
determine the number of shares of Stock underlying the Performance Units that
the increase of value of which will be paid out to the Participant after the
applicable Performance Period has ended.

 

(c)           Form and Timing of Payment.  Payment of the value of earned Performance
Units shall be made in a single lump sum following the close of the applicable
Performance Period.  At the discretion of
the Committee, Participants may be entitled to receive any dividends declared
with respect to Stock which has been earned in connection with grants of
Performance Units which have been earned, but not yet distributed to
Participants.  The Committee may permit
or, if it so provided as of the Grant Date, require a Participant to defer such
Participant’s receipt of the payment of cash or the delivery of Stock  that would otherwise be due to such Participant by virtue
of the satisfaction of any requirements or goals with respect to Performance
Units, to the extent consistent with Section 409A of the Code, if
applicable.  If any such deferral
election is required or permitted, the Committee shall establish rules and
procedures for such payment deferrals.

 

7.6.          Stock Grants. Stock Grants shall be awarded solely
in recognition of significant prior or expected contributions to the success of
the Company or its Affiliates, as an inducement to employment, in lieu of
compensation otherwise already due and in such other limited circumstances as
the Committee deems appropriate.  Stock
Grants shall be made without forfeiture conditions of any kind.  A Stock Grant shall be issued in exchange for
such consideration as the Committee shall deem satisfactory pursuant to the
Delaware General Corporation Law.

 

7.7.          Qualified Performance-Based Awards.

 

(a)           Purpose.  The purpose of this Section 7.7 is to
provide the Committee the ability to qualify Awards as “performance-based
compensation” under Section 162(m) of the Code.  If the Committee, in its discretion, decides
to grant an Award as a Qualified Performance-Based Award, the provisions of
this Section 7.7 will control over any contrary provision contained in the
Plan.  In the course of granting any
Award, the Committee may specifically designate the Award as intended to
qualify as a Qualified Performance-Based Award. 
However, no Award shall be considered to have failed to qualify as a
Qualified Performance-Based Award solely because the Award is not expressly
designated as a Qualified Performance-Based Award, if the Award otherwise
satisfies the provisions of this Section 7.7 and the requirements of
Section 162(m) of the Code and the regulations promulgated thereunder
applicable to “performance-based compensation.”

 

(b)           Authority.  All grants of Awards intended to qualify as
Qualified Performance-Based Awards and determination of terms applicable
thereto shall be made by the 

 

12

 

Committee
or, if not all of the members thereof qualify as “outside directors” within the
meaning of applicable IRS regulations under Section 162 of the Code, a
subcommittee of the Committee consisting of such of the members of the
Committee as do so qualify.  Any action
by such a subcommittee shall be considered the action of the Committee for
purposes of the Plan.

 

(c)           Applicability.  This Section 7.7 will apply only to
those Covered Employees, or to those persons who the Committee determines are
reasonably likely to become Covered Employees in the period covered by an
Award, selected by the Committee to receive Qualified Performance-Based
Awards.  The Committee may, in its
discretion, grant Awards to Covered Employees that do not satisfy the requirements
of this Section 7.7.

 

(d)           Discretion of Committee with Respect to Qualified Performance-Based Awards.  Options may be
granted as Qualified Performance-Based Awards in accordance with Section 7.1,
except that the exercise price of any Option intended to qualify as a Qualified
Performance-Based Award shall in no event be less that the Market Value of the
Stock on the Grant Date.  Each Award
intended to qualify as a Qualified Performance-Based Award, such as Restricted
Stock, Restricted Stock Units, or Performance Units, shall be subject to satisfaction
of one or more Performance Goals.  The
Committee will have full discretion to select the length of any applicable
Restriction Period or Performance Period, the kind and/or level of the
applicable Performance Goal, and whether the Performance Goal is to apply to
the Company, a subsidiary of the Company or any division or business unit or to
the individual.  Any Performance Goal or
Goals applicable to Qualified Performance-Based Awards shall be objective,
shall be established not later than ninety (90) days after the beginning of any
applicable Performance Period (or at such other date as may be required or
permitted for “performance-based compensation” under Section 162(m) of
the Code) and shall otherwise meet the requirements of Section 162(m) of
the Code, including the requirement that the outcome of the Performance Goal or
Goals be substantially uncertain (as defined in the regulations under
Section 162(m) of the Code) at the time established.

 

(e)           Payment of Qualified Performance-Based Awards.  A Participant will be
eligible to receive payment under a Qualified Performance-Based Award which is
subject to achievement of a Performance Goal or Goals only if the applicable
Performance Goal or Goals are achieved within the applicable Performance Period,
as determined by the Committee.  In
determining the actual size of an individual Qualified Performance-Based Award,
the Committee may reduce or eliminate the amount of the Qualified
Performance-Based Award earned for the Performance Period if the Committee
determines, in its sole and absolute discretion, that such reduction or
elimination is appropriate.

 

(f)            Maximum Award Payable.  The maximum Qualified Performance-Based Award
payment to any one Participant under the Plan for a Performance Period is the number
of shares of Stock set forth in the last sentence of Section 6.1, or if
the Qualified Performance-Based Award is paid in cash, that number of shares
multiplied by the Market Value of the Stock as of the Grant Date of the
Qualified Performance-Based Award.

 

(g)           Limitation on Adjustments for Certain Events. 
No adjustment of any Qualified Performance-Based Award pursuant to Section 8
shall be made except on such basis, if any, as will not cause such Award to
provide other than “performance-based compensation” within the meaning of Section 162(m) of
the Code.

 

13

 

7.8.          Awards to Participants Outside the United States.  The Committee may modify the terms of any
Award under the Plan granted to a Participant who is, as of the Grant Date or
during the term of the Award, resident or primarily employed outside of the
United States in any manner deemed by the Committee to be necessary or
appropriate in order that the Award shall conform to laws, regulations, and customs
of the country in which the Participant is then resident or primarily employed
or so that the value and other benefits of the Award to the Participant, as
affected by foreign tax laws and other restrictions applicable as a result of
the Participant’s residence or employment abroad, shall be comparable to the
value that such an Award would have to a Participant who is resident or
primarily employed in the United States. 
The Committee may establish supplements to, or amendments, restatements,
or alternative versions of the Plan for the purpose of granting and
administrating any such modified Award. 
No such modification, supplement, amendment, restatement or alternative
version may increase the share limit of Section 4.

 

8.             Adjustment
Provisions

 

8.1.          Adjustment for Corporate Actions. All of the share numbers set forth in
the Plan reflect the capital structure of the Company as of March 24,
2010.  If subsequent to that date the
outstanding shares of Stock (or any other securities covered by the Plan by reason
of the prior application of this Section) are increased, decreased, or
exchanged for a different number or kind of shares or other securities, or if
additional shares or new or different shares or other securities are
distributed with respect to shares of Stock, as a result of a reorganization,
recapitalization, reclassification, extraordinary dividend of cash or other
property, stock dividend, stock split, reverse stock split, or other similar
distribution with respect to such shares of Stock, an appropriate and
proportionate adjustment will be made in (i) the maximum numbers and kinds
of shares of Stock provided in Section 4, (ii) the numbers and kinds
of shares of Stock or other securities underlying the then outstanding Awards,
(iii) the exercise price for each share or other unit of any other
securities subject to then outstanding Options and Stock Appreciation Rights
(without change in the aggregate purchase price for the shares of Stock as to
which such Options or Stock Appreciation Rights remain exercisable), and (iv) the
repurchase price of each share of Restricted Stock  then
subject to a Risk of Forfeiture in the form of a Company repurchase right.

 

8.2.          Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. In the event of any corporate action
not specifically covered by the preceding Section, including but not limited to
an extraordinary cash distribution on Stock, a corporate separation or other
reorganization or liquidation, the Committee may make such adjustment of
outstanding Awards and their terms, if any, as it, in its sole discretion, may
deem equitable and appropriate in the circumstances.  The Committee shall make adjustments in the
terms and conditions of, and the criteria included in, Awards in recognition of
unusual or nonrecurring events (including, without limitation, the events
described in this Section) affecting the Company or the financial statements of
the Company or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee 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.

 

8.3.          Related Matters. 
Any adjustment in Awards made pursuant to Sections 8.1 or 8.2  shall be determined and made, if at all, by
the Committee, acting in its sole discretion, and shall include any correlative
modification of terms, including of Option exercise prices, rates of vesting or
exercisability, Risks of Forfeiture, applicable repurchase prices for
Restricted Stock, and Performance Goals and other financial objectives which
the Committee may deem necessary or 

 

14

 

appropriate
so as to ensure the rights of the Participants in their respective Awards are
not substantially diminished nor enlarged as a result of the adjustment and
corporate action other than as expressly contemplated in this Section 8.  The Committee, in its discretion, may
determine that no fraction of a share of Stock shall be purchasable or
deliverable upon exercise, and in that event if any adjustment hereunder of the
number of shares of Stock underlying an Award would cause such number to
include a fraction of a share of Stock, such number of shares of Stock shall be
adjusted to the nearest smaller whole number of shares. No adjustment of an
Option exercise price per share pursuant to Sections 8.1 or 8.2 shall result in
an exercise price which is less than the par value of the Stock.

 

8.4.          Change of Control.  Subject to any provisions of then outstanding
Awards granting greater rights to the holders thereof, in the event of a Change
of Control any then outstanding Awards shall Accelerate in full.  For the purposes of the preceding sentence (i) in
the case of a Change of Control that is not a Hostile Change of Control, the
Board (and not the Committee, notwithstanding the responsibilities assigned to
the Committee pursuant to Section 5) shall have the discretion to exclude
any such Change of Control from the application of the provisions of the
immediately preceding sentence, and (ii) in the case of a Hostile Change
of Control, a majority of the Incumbent Directors shall have the discretion to
exclude any such Change of Control from the application of the provisions of
the immediately preceding sentence.  To
the extent Awards are not assumed, substituted or replaced upon a Change of
Control that is not a Hostile Change of Control, the Board (and not the
Committee, notwithstanding the responsibilities assigned to the Committee
pursuant to Section 5) shall have the discretion to terminate such
outstanding Awards to the extent not exercised prior to or simultaneously with
such Change of Control and to terminate such other outstanding Awards to the
extent not vested prior to or simultaneously with such Change of Control.  Upon a Change of Control, each outstanding
Award will be appropriately adjusted simultaneously with such Change of Control
in accordance with Section 8.1.

 

9.             Settlement
of Awards

 

9.1.          In General. 
Options and Restricted Stock shall be settled in accordance with the
terms of the applicable Award Agreement. 
All other Awards may be settled in cash, Stock, or other Awards, or a
combination thereof, as determined by the Committee at or after grant and
subject to any contrary Award Agreement. 
The Committee may not require settlement of any Award in Stock pursuant
to the immediately preceding sentence to the extent issuance of such Stock
would be prohibited or unreasonably delayed by reason of any other provision of
the Plan.

 

9.2.          Violation of Law.  Notwithstanding any other provision of the
Plan or the relevant Award Agreement, if, at any time, in the reasonable
opinion of the Company, the issuance of shares of Stock underlying an Award may
constitute a violation of law, then the Company may delay such issuance and the
delivery of a certificate for such shares until (i) approval of the Award
shall have been obtained from such governmental agencies, other than the
Securities and Exchange Commission, as may be required under any applicable
law, rule, or regulation and (ii) in the case where such issuance would
constitute a violation of a law administered by or a regulation of the
Securities and Exchange Commission, one of the following conditions shall have
been satisfied:

 

(a)           the shares of Stock are at
the time of the issue of such shares effectively registered under the
Securities Act of 1933, as amended; or

 

15

 

(b)           the Company shall have
determined, on such basis as it deems appropriate (including an opinion of
counsel in form and substance satisfactory to the Company) that the sale,
transfer, assignment, pledge, encumbrance or other disposition of such shares
does not require registration under the Securities Act of 1933, as amended, or
any applicable state securities laws.

 

9.3.          Corporate Restrictions on Rights in Stock.
Any Stock to be issued pursuant to Awards granted under the Plan shall be
subject to all restrictions upon the transfer thereof which may be now or
hereafter imposed by the charter, certificate or articles, and by-laws, of the
Company.

 

9.4.          Investment Representations.  The Company shall be under no obligation to
issue any shares of Stock underlying any Award unless the shares to be issued
pursuant to Awards granted under the Plan have been effectively registered
under the Securities Act of 1933, as amended, or the Participant shall have
made such written representations to the Company (upon which the Company
believes it may reasonably rely) as the Company may deem necessary or
appropriate for purposes of confirming that the issuance of such shares will be
exempt from the registration requirements of that Act and any applicable state
securities laws and otherwise in compliance with all applicable laws, rules and
regulations, including but not limited to that the Participant is acquiring the
shares for his or her own account for the purpose of investment and not with a
view to, or for sale in connection with, the distribution of any such shares.

 

9.5.          Registration.  If the Company shall deem it necessary or
desirable to register under the Securities Act of 1933, as amended, or other
applicable statutes any shares of Stock issued or to be issued pursuant to
Awards granted under the Plan, or to qualify any such shares of Stock for
exemption from the Securities Act of 1933, as amended or other applicable
statutes, then the Company shall take such action at its own expense.  The Company may require from each recipient
of an Award, or each holder of shares of Stock acquired pursuant to the Plan,
such information in writing for use in any registration statement, prospectus,
preliminary prospectus or offering circular as is reasonably necessary for that
purpose and may require reasonable indemnity to the Company and its Officers
and directors from that holder against all losses, claims, damage and
liabilities arising from use of the information so furnished and caused by any
untrue statement of any material fact therein or caused by the omission to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made.  In addition, the Company
may require of any such person that he or she agree that, without the prior
written consent of the Company or the managing underwriter in any public
offering of shares of Stock, he or she will not sell, make any short sale of,
loan, grant any option for the purchase of, pledge or otherwise encumber, or
otherwise dispose of, any shares of Stock during the one hundred eighty (180)
day period commencing on the effective date of the registration statement
relating to the underwritten public offering of securities. Without limiting
the generality of the foregoing provisions of this Section 9.5, if in
connection with any underwritten public offering of securities of the Company
the managing underwriter of such offering requires that the Company’s directors
and Officers enter into a lock-up agreement containing provisions that are more
restrictive than the provisions set forth in the preceding sentence, then (a) each
holder of shares of Stock acquired pursuant to the Plan (regardless of whether
such person has complied or complies with the provisions of clause (b) below)
shall be bound by, and shall be deemed to have agreed to, the same lock-up
terms as those to which the Company’s directors and Officers are required to
adhere; and (b) at the request of the Company or such managing
underwriter, each such person shall execute and deliver a lock-

 

16

 

up
agreement in form and substance equivalent to that which is required to be
executed by the Company’s directors and Officers.

 

9.6.          Placement of Legends; Stop Orders; etc. 
Each share of Stock to be issued pursuant to Awards granted under the
Plan may bear a reference to the investment representation made in accordance
with Section 9.4 in addition to any other applicable restriction under the
Plan, and the terms of the Award, and to the fact that no registration
statement has been filed with the Securities and Exchange Commission in respect
to such shares of Stock.  All shares of
Stock or other securities delivered under the Plan (in book entry form or
otherwise) shall be subject to such stock transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations,
and other requirements of any stock exchange upon which the Stock is then
listed, and any applicable federal or state securities law, and the Committee
may cause a legend or legends to be put on any such certificates or a notation
to be on the books of the Company’s transfer agent to make appropriate
reference to such restrictions.

 

9.7.          Tax Withholding. Whenever shares of Stock are
issued or to be issued pursuant to Awards granted under the Plan, the Company
shall have the right to require the recipient to remit to the Company an amount
sufficient to satisfy federal, state, local or other withholding tax
requirements if, when, and to the extent required by law (whether so required
to secure for the Company an otherwise available tax deduction or otherwise)
prior to the delivery of any such shares. 
The obligations of the Company under the Plan shall be conditional on
satisfaction of all such withholding obligations and the Company shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the recipient of an Award.  However, in such cases Participants may
elect, subject to the approval of the Committee, acting in its sole discretion,
to satisfy an applicable withholding requirement, in whole or in part, by
having the Company withhold shares of Stock to satisfy their tax
obligations.  Participants may only elect
to have shares of Stock withheld having a Market Value on the date the tax is
to be determined equal to the minimum statutory total tax which could be
imposed on the transaction.  All
elections shall be irrevocable, made in writing, signed by the Participant, and
shall be subject to any restrictions or limitations that the Committee deems
appropriate.

 

10.          Limitation
of Rights in Stock; No Special Service Rights

 

A
Participant shall not be deemed for any purpose to be a stockholder of the
Company with respect to any of the shares of Stock subject to an Award, unless
and until a certificate shall have been issued therefor and delivered to the
Participant or his agent, or such shares shall have been registered in the
Participant’s name in book entry form by the Company’s transfer agent
(including for these purposes shares of Stock held for the benefit of the
Participant by an escrow agent).  Nothing
contained in the Plan or in any Award Agreement shall confer upon any recipient
of an Award any right with respect to the continuation of his or her employment
or other association with the Company (or any Affiliate), or interfere in any
way with the right of the Company (or any Affiliate), subject to the terms of
any separate employment or consulting agreement or provision of law or corporate
articles or by-laws to the contrary, at any time to terminate such employment
or consulting agreement or to increase or decrease, or otherwise adjust, the
other terms and conditions of the recipient’s employment or other association
with the Company and its Affiliates.

 

17

 

11.          Unfunded
Status of Plan and Section 409A

 

The
Plan is intended to constitute an “unfunded” plan for incentive compensation,
and the Plan is not intended to constitute a plan subject to the provisions of
the Employee Retirement Income Security Act of 1974, as amended.  With respect to any payments not yet made to
a Participant by the Company, nothing contained herein shall give any such Participant
any rights that are greater than those of a general creditor of the
Company.  In its sole discretion, the
Committee may authorize the creation of trusts or other arrangements to meet
the obligations created under the Plan to deliver Stock or payments with
respect to Options, Stock Appreciation Rights and other Awards hereunder, provided, however, that the existence of such trusts or
other arrangements is consistent with the unfunded status of the Plan.

 

This
Plan and Awards granted hereunder are intended to either comply with, or be
exempt from, Section 409A of the Code. 
Notwithstanding anything to the contrary contained in this Plan or in
any Award agreement, to the extent that the Committee determines that the Plan
or any Award is subject to Section 409A of the Code and fails to comply with
the requirements of Section 409A, the Committee reserves the right to
amend or terminate the Plan and/or amend, restructure, terminate or replace the
Award in order to cause the Award to either not be subject to Section 409A
of the Code or to comply with the applicable provisions of such section.  Notwithstanding any provision of this Plan to
the contrary, in no event shall the Company or any Affiliate be liable to a
Participant on account of an Award’s failure to (i) qualify for favorable
federal, state or other tax treatment; or (ii) avoid adverse tax treatment
under federal, state or other law, including, without limitation, Section 409A
of the Code.

 

12.          Nonexclusivity
of the Plan

 

Neither
the adoption of the Plan by the Board nor the submission of the Plan to the
stockholders of the Company shall be construed as creating any limitations on
the power of the Board to adopt such other incentive arrangements as it may
deem desirable, including without limitation, the granting of stock options,
restricted stock and other forms of equity-based compensation other than under
the Plan, and such arrangements may be either applicable generally or only in
specific cases.

 

13.          Termination
and Amendment of the Plan

 

13.1.        Termination or Amendment of the Plan. The Board may at any time terminate the
Plan or make such modifications of the Plan as it shall deem advisable.  Unless the Board otherwise expressly
provides, no amendment of the Plan shall affect the terms of any Award
outstanding on the date of such amendment.

 

13.2.        Termination or Amendment of Outstanding Awards. The Committee may amend the terms of
any Award theretofore granted, prospectively or retroactively, provided that
the Award as amended is consistent with the terms of the Plan.  Also within the limitations of the Plan, the
Committee may modify, extend or assume outstanding Awards or may accept the
cancellation of outstanding Awards or of outstanding stock options or other
equity-based compensation awards granted by another issuer in return for the grant
of new Awards for the same or a different number of shares of Stock and on the
same or different terms and conditions (including but not limited to the
exercise price of any Option). 
Furthermore, subject to the terms of this Plan, the Committee may at any
time (a) offer to buy out for a payment in cash or cash equivalents an
Award previously granted, or (b) authorize the recipient of an Award to
elect to 

 

18

 

cash
out an Award previously granted, in either case at such time and based upon
such terms and conditions as the Committee shall establish.

 

13.3.        Limitations on Amendments, Etc. The Board may not amend the Plan to (i) materially
increase the benefits accruing to Participants under the Plan, (ii) increase
the number of shares of Stock which may be issued under the Plan, except as
necessary to carry out the provisions of Section 8 (concerning certain
adjustments attributable to corporate actions and other events), (iii) change
the description of the persons eligible for Awards under the Plan, or (iv) effect
any other change for which shareholder approval is required by law or the rules of
any relevant stock exchanges, without shareholder approval.  Neither the Board nor the Committee may
reprice any outstanding Award, whether by amendment, by cancellation and
regrant, or by reacquiring any outstanding Award in consideration of the grant
of a new Award or the payment of other compensation without shareholder
approval.  For this purpose, the term “reprice”
shall mean any of the following or any other action that has the same
effect:  (a) to lower the exercise
price of an Option after it is granted, (b) to buy out an outstanding
Option at a time when its exercise price exceeds the Fair Market Value of the Stock
for cash or shares, (c) to take any other action that is treated as a
repricing under generally accepted accounting principles, or (d) to cancel
an Option at a time when its exercise price exceeds the Fair Market Value of
the Stock in exchange for another Option, or any other Award or Company equity,
unless such cancellation and exchange occurs in connection with a Change of
Control.  Notwithstanding the foregoing,
no amendment or modification of the Plan by the Board or of an outstanding
Award by the Committee shall, without the consent of any Participant with an
Award outstanding on the date of such amendment or modification of such Award, (1) reduce
the number of shares of Stock subject to such Award, (2) increase the
exercise price or the purchase price, as the case may be, of such Award, (3) change
the vesting schedule or the Risk of Forfeiture, as the case may be, of such
Award in a manner that adversely affects the rights of the Participant, or (4) otherwise
impair the rights of the Participant; provided,
however, that no such consent shall be required if (A) the
Board or Committee, as the case may be, determines in its sole discretion and
prior to the date of any Change of Control that such amendment or alteration
either is required or advisable in order for the Company, the Plan or the Award
to satisfy any law or regulation, including without limitation the provisions
of Section 409A of the Code, or to meet the requirements of or avoid
adverse financial accounting consequences  under any
accounting standard, or (B) the Board or Committee, as the case may be,
determines in its sole discretion and prior to the date of any Change of
Control that such amendment or alteration is not reasonably likely to
significantly diminish the benefits provided under the Award, or that any such
diminution has been adequately compensated.

 

14.          Corporate
Articles and Bylaws; Other Company Policies.

 

This
Plan and all Awards granted hereunder are subject to the corporate articles and
by-laws of the Company, as they may be amended from time to time, and all other
Company policies duly adopted by the Board, the Committee or any other
committee of the Board and as in effect from time to time regarding the
acquisition, ownership or sale of Stock by employees and other service
providers, including without limitation policies intended to limit the
potential for insider trading and to avoid or recover compensation payable or
paid on the basis of inaccurate financial results or statements, employee
conduct, and other similar events.

 

19

 

15.          Notices
and Other Communications

 

15.1         Notices and Other
Communications (other than notices to the Company under Section 7.1(d) and
in connection with the exercise of Stock Appreciation Rights).  Any notice, demand, request or other
communication hereunder to any party shall be in such form as the Company may
determine from time to time, and if required in writing, shall be deemed to be
sufficient if contained in a written instrument delivered in person or duly
sent by first class registered, certified or overnight mail, postage prepaid,
or sent by facsimile or electronic mail  transmission
with a confirmation copy by regular, certified or overnight mail, addressed or
facsimilied, as the case may be, (i) if to a Participant, at his or her
residence or electronic mail address or facsimile number last filed with the
Company, and (ii) if to the Company, except for written notices required
to be delivered under Section 7.1(d) and in connection with the exercise
of Stock Appreciation Rights, at its principal place of business, addressed to
the attention of its Secretary, or to such other addressee, address, electronic
mail address or facsimile number, as the case may be, as the Company may have
designated by notice in accordance with this Section 15.1.  All such notices, requests, demands and other
communications shall be deemed to have been received: (i) in the case of
personal delivery, on the date of such delivery; (ii) in the case of
mailing, when received by the addressee; and (iii) in the case of
facsimile transmission, when confirmed by facsimile machine report.

 

15.2        Notices to the Company under
Section 7.1(d) and in connection with the exercise of Stock
Appreciation Rights.  Unless
otherwise determined by the Company, notices required under Section 7.1(d) and
in connection with the exercise of Stock Appreciation Rights shall be sent to
the third party broker designated by the Company to administer the Company’s
equity incentive programs (as of the initial effective date of the Plan,
Merrill Lynch).  Notices shall be sent to
the Company’s designated broker in such manner as the broker may designate in
any communications or notifications sent to Participants by mail or electronic
mail and/or as set forth on the Company-dedicated website provided and
maintained by the Company’s designated broker.

 

16.          Governing
Law

 

The
Plan, all Awards and all Award Agreements and actions taken thereunder shall be
governed, interpreted and enforced in accordance with the laws of the State of
Delaware, without regard to the conflict of laws principles thereof.

 

20

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}]]