Document:

exv10w107

 

Exhibit 10.107

INTERMUNE, INC.

AMENDED AND RESTATED 2000 EQUITY INCENTIVE PLAN

Adopted January 31, 2000

Approved by Stockholders: March 20, 2000

Termination Date: January 30, 2010

Amended on: April 4, 2002 and June 19, 2002

Approved by Stockholders: June 19, 2002

Amended and Restated on: April 2, 2004

Approved by Stockholders: May 27, 2004

1. Purposes.

     (a) The Plan amends and restates the InterMune, Inc. 2000 Equity Incentive Plan adopted
January 31, 2000 (the “Prior Plan”). All outstanding Stock Awards granted under the Prior
Plan shall remain subject to the terms of the Prior Plan. All Stock Awards granted subsequent to
the effective date of this Plan shall be subject to the terms of this Plan (as amended and restated
hereby).

     (b) The persons eligible to receive Stock Awards are the Employees, Directors and Consultants
of the Company and its Affiliates.

     (c) The purpose of the Plan is to provide a means by which eligible recipients of Stock Awards
may be given an opportunity to benefit from increases in value of the Common Stock through the
granting of the following Stock Awards: (i) Incentive Stock Options, (ii) Non-Statutory Stock
Options, (iii) Stock Purchase Awards, and (v) Stock Bonus Awards.

     (d) The Company, by means of the Plan, seeks to retain the services of the group of persons
eligible to receive Stock Awards, to secure and retain the services of new members of this group
and to provide incentives for such persons to exert maximum efforts for the success of the Company
and its Affiliates.

2. Definitions.

     (a) “Affiliate” means any parent corporation or subsidiary corporation of the Company,
whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f),
respectively, of the Code.

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

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

     (d) “Committee” means a committee of one or more members of the Board to administer
the Plan as appointed by the Board. The term Committee shall apply to any person or persons to
whom such authority has been delegated.

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

 

 

     (f) “Company” means InterMune, Inc., a Delaware corporation.

     (g) “Consultant” means any person, including an advisor, (i) engaged by the Company or
an Affiliate to render consulting or advisory services and who is compensated for such services or
(ii) who is a member of the Board of Directors of an Affiliate. However, the term “Consultant”
shall not include either Directors who are not compensated by the Company for their services as
Directors or Directors who are merely paid a director’s fee by the Company for their services as
Directors.

     (h) “Continuous Service” means that the Participant’s service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. The
Participant’s Continuous Service shall not be deemed to have terminated merely because of a change
in the capacity in which the Participant renders service to the Company or an Affiliate as an
Employee, Consultant or Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the Participant’s service. For
example, a change in status without interruption from an Employee of the Company to a Consultant of
an Affiliate or a Director will not constitute an interruption of Continuous Service. The Board or
the Chief Executive Officer of the Company, in that party’s sole discretion, may determine whether
Continuous Service shall be considered interrupted in the case of any leave of absence approved by
that party, including sick leave, military leave or any other personal leave.

     (i) “Covered Employee” means the chief executive officer and the four (4) other
highest compensated officers of the Company for whom total compensation is required to be reported
to Stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code.

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

     (k) “Disability” means the permanent and total disability of a person within the
meaning of Section 22(e)(3) of the Code.

     (l) “Employee” means any person employed by the Company or an Affiliate. Mere service
as a Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient
to constitute “employment” by the Company or an Affiliate.

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

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

          (i) If the Common Stock is listed on any established stock exchange or traded on the Nasdaq
National Market system or the Nasdaq Small Cap Market, the Fair Market Value of a share of Common
Stock shall be the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or market (or the exchange or market with the greatest volume
of trading in the Common Stock) on the last market trading day prior to the day of determination,
as reported in The Wall Street Journal or such other source as the Board deems reliable.

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          (ii) In the absence of such markets for the Common Stock, the Fair Market Value shall be
determined in good faith by the Board.

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

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

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

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

     (s) “Option” means an Incentive Stock Option or a Non-Statutory Stock Option granted
pursuant to the Plan.

     (t) “Option Agreement” means a written agreement (including a Notice of Grant of Stock
Option) between the Company and an Optionholder evidencing the terms and conditions of an
individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the
Plan.

     (u) “Optionholder” means a person to whom an Option is granted pursuant to the Plan
or, if applicable, such other person who holds an outstanding Option.

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

     (w) “Participant” means a person to whom a Stock Award is granted pursuant to the Plan
or, if applicable, such other person who holds an outstanding Stock Award.

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     (x) “Plan” means this InterMune, Inc. Amended and Restated 2000 Equity Incentive Plan.

     (y) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor
to Rule 16b-3, as in effect from time to time.

     (z) “Securities Act” means the Securities Act of 1933, as amended.

     (aa) “Share Reserve” shall have the meaning ascribed in Section 4(a).

     (bb) “Stock Award” means any right granted under the Plan, including an Option, a
Stock Purchase Award and a Stock Bonus Award.

     (cc) “Stock Award Agreement” means a written agreement between the Company and a
Participant evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement
shall be subject to the terms and conditions of the Plan.

     (dd) “Stock Bonus Award” means an award of shares of Common Stock which is granted
pursuant to Section 7(a).

     (ee) “Stock Bonus Award Agreement” means a written agreement between the Company and a
holder of a Stock Bonus Award evidencing the terms and conditions of a Stock Bonus Award grant.
Each Stock Bonus Award Agreement shall be subject to the terms and conditions of the Plan.

     (ff) “Stockholder” means a stockholder of the Company.

     (gg) “Stock Purchase Award” means an award of shares of Common Stock which is granted
pursuant to Section 7(b).

     (hh) “Stock Purchase Award Agreement” means a written agreement between the Company
and a holder of a Stock Purchase Award evidencing the terms and conditions of a Stock Purchase
Award grant. Each Stock Purchase Award Agreement shall be subject to the terms and conditions of
the Plan.

     (ii) “Ten Percent Stockholder” means a person who owns (or is deemed to own pursuant
to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any of its Affiliates.

3. Administration.

     (a) Administration by Board. The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c).

     (b) Powers of Board. The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:

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          (i) To determine from time to time which of the persons eligible under the Plan shall be
granted Stock Awards; when and how each Stock Award shall be granted; the exercise price and
acceptable types of consideration for payment of the exercise price for each Stock Award; what type
or combination of types of Stock Award shall be granted; the provisions of each Stock Award granted
(which need not be identical), including the time or times when a person shall be permitted to
receive Common Stock pursuant to a Stock Award; and the number of shares of Common Stock with
respect to which a Stock Award shall be granted to each such person.

          (ii) To construe and interpret the Plan and Stock Awards granted under it, and to establish,
amend and revoke rules and regulations for its administration. The Board, in the exercise of this
power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award
Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.

          (iii) Subject to the provisions of Section 14, to amend the Plan or a Stock Award as provided
in Section 12.

          (iv) To terminate or suspend the Plan as provided in Section 13.

          (v) Generally, to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company which are not in conflict with the
provisions of the Plan.

     (c) Delegation to Committee.

          (i) General. The Board may delegate administration of the Plan to a Committee or Committees of
one (1) or more members of the Board. If administration is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers theretofore possessed by
the Board, including the power to delegate to a subcommittee any of the administrative powers the
Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be
to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the
Committee at any time and revest in the Board the administration of the Plan.

          (ii) Committee Composition when Common Stock is Publicly Traded. At such time as the Common
Stock is publicly traded, in the discretion of the Board, a Committee may consist solely of two (2)
or more Outside Directors, in accordance with Section 162(m) of the Code, and/or solely of two (2)
or more Non-Employee Directors, in accordance with Rule 16b-3. Within the scope of such authority,
the Board or the Committee may (1) delegate to a Committee of one (1) or more members of the Board
who are not Outside Directors the authority to grant Stock Awards to eligible persons who are
either (a) not then Covered Employees and are not expected to be Covered Employees at the time of
recognition of income resulting from such Stock Award or (b) not persons with respect to whom the
Company wishes to comply with Section 162(m) of the Code and/or (2) delegate to a committee of one
or more

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members of the Board who are not Non-Employee Directors the authority to grant Stock Awards to
eligible persons who are not then subject to Section 16 of the Exchange Act.

     (d) Delegation to an Authorized Officer. The Board may delegate to one or more officers of
the Company the authority to do one or both of the following: (1) designate Eligible Participants
to be recipients of Stock Awards, and (2) determine the number of shares of Common Stock subject to
such Stock Awards granted to such Eligible Participants; provided, however, that the resolution so
authorizing such officer or officers shall specify the total number of shares of Common Stock that
may be subject to Stock Awards granted by such officer or officers and in no event may the Board
authorize an officer to designate himself or herself as a recipient of any Stock Award hereunder.
Notwithstanding anything to the contrary in this Section 3(d), the Board may not delegate to an
officer the authority to determine the Fair Market Value of the Common Stock pursuant to Section
2(n)(ii) above. Solely for the purposes of this Section 3(d), “Eligible Participants”
shall mean officers and Employees of the Company who (1) are not then subject to Section 16 of the
Exchange Act and/or (2) are either (a) not then Covered Employees and are not expected to be
Covered Employees at the time of recognition of income resulting from such Stock Award, or (b) not
persons with respect to whom the Company wishes to comply with Section 162(m) of the Code.

     (e) Effect of Board’s Decision. All determinations, interpretations and constructions made by
the Board in good faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.

4. Shares Subject to the Plan.

     (a) Share Reserve. Subject to the provisions of Section 11 relating to adjustments upon
changes in Common Stock, the Common Stock that may be issued pursuant to Stock Awards shall not
exceed in the aggregate seven million two hundred seventy-eight thousand two hundred twenty-six
(7,278,226) shares (the “Share Reserve”), which is comprised of 1,000,000 shares that were
approved by the Stockholders on May 27, 2004; 2,500,000 shares that were approved by the
Stockholders on June 19, 2002; and 3,778,226 shares that were in the Share Reserve prior to June
19, 2002.

     (b) Reversion of Shares to the Share Reserve. If any Stock Award shall for any reason expire
or otherwise terminate, in whole or in part, without having been exercised in full, or if any
shares of Common Stock issued to a Participant pursuant to a Stock Award are forfeited to or
repurchased by the Company, including, but not limited to, any repurchase or forfeiture caused by
the failure to meet a contingency or condition required for the vesting of such shares, then the
shares of Common Stock not issued under such Stock Award, or forfeited to or repurchased by the
Company, shall revert to and again become available for issuance under the Plan. If any shares
subject to a Stock Award are not delivered to a Participant because such shares are withheld for
the payment of taxes or the Stock Award is exercised through a reduction of shares subject to the
Stock Award (“Net Exercise”), the number of shares that are not delivered to the
Participant shall remain available for issuance under the Plan. If the exercise price of any Stock
Award is satisfied by tendering shares of Common Stock held by the Participant (either by actual
delivery or attestation), then the number of shares so tendered shall remain available for issuance
under the Plan.

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     (c) Source of Shares. The shares of Common Stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.

     (d) Incentive Stock Option Shares. Subject to the provisions of Section 11 relating to
adjustments upon changes in Common Stock, the aggregate number of shares of Common Stock issued
under the Plan pursuant to the exercise of all Incentive Stock Options granted under the Plan shall
not exceed ten million (10,000,000) shares of Common Stock.

5. Eligibility.

     (a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to
Employees. Stock Awards other than Incentive Stock Options may be granted to Employees, Directors
and Consultants.

     (b) Ten Percent Stockholders. A Ten Percent Stockholder shall not be granted an Incentive
Stock Option unless the exercise price of such Incentive Stock Option is at least one hundred ten
percent (110%) of the Fair Market Value of the Common Stock at the date of grant and the Incentive
Stock Option is not exercisable after the expiration of five (5) years from the date of grant.

     (c) Section 162(m) Limitation. Subject to the provisions of Section 11 relating to adjustments
upon changes in Common Stock, no Employee shall be eligible to be granted Options covering more
than one million (1,000,000) shares of Common Stock during any calendar year.

     (d) Consultants.

          (i) A Consultant shall not be eligible for the grant of a Stock Award if, at the time of
grant, a Form S-8 Registration Statement under the Securities Act (“Form S-8”) is not
available to register either the offer or the sale of the Company’s securities to such Consultant
because of the nature of the services that the Consultant is providing to the Company, or because
the Consultant is not a natural person, or as otherwise provided by the rules governing the use of
Form S-8, unless the Company determines both (i) that such grant (A) shall be registered in another
manner under the Securities Act (e.g., on a Form S-3 Registration Statement) or (B) does not
require registration under the Securities Act in order to comply with the requirements of the
Securities Act, if applicable, and (ii) that such grant complies with the securities laws of all
other relevant jurisdictions.

          (ii) Form S-8 generally is available to consultants and advisors only if (i) they are natural
persons; (ii) they provide bona fide services to the issuer, its parents, its majority-owned
subsidiaries or majority-owned subsidiaries of the issuer’s parent; and (iii) the services are not
in connection with the offer or sale of securities in a capital-raising transaction, and do not
directly or indirectly promote or maintain a market for the issuer’s securities.

6. Option Provisions.

     Each Option shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. All Options shall be separately designated Incentive Stock

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Options or Non-Statutory Stock Options at the time of grant, and, if certificates are issued,
a separate certificate or certificates will be issued for shares of Common Stock purchased on
exercise of each type of Option. The provisions of separate Options need not be identical, but each
Option shall include (through incorporation of provisions hereof by reference in the Option or
otherwise) the substance of each of the following provisions:

     (a) Term. Subject to the provisions of subsection 5(b) regarding Ten Percent Stockholders, no
Option shall be exercisable after the expiration of ten (10) years from the date it was granted.

     (b) Exercise Price of an Option. Subject to the provisions of subsection 5(b) regarding Ten
Percent Stockholders, the exercise price of each Option shall be not less than one hundred percent
(100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is
granted. Notwithstanding the foregoing, an Option may be granted with an exercise price lower than
that set forth in the preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section 424(a) of the
Code.

     (c) [Intentionally Omitted]

     (d) Consideration. The purchase price of Common Stock acquired pursuant to an Option shall be
paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the
time the Option is exercised or (ii) at the discretion of the Board (1) by delivery to the Company
of other Common Stock (either by actual delivery or attestation), (2) by a Net Exercise of the
Option (as further described below), (3) to the extent permissible under Section 13(k) of the
Exchange Act, according to a deferred payment or other similar arrangement with the Optionholder,
(4) to the extent permissible under Section 13(k) of the Exchange Act, pursuant to a program
developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the
issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the
receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the
sales proceeds, or (5) in any other form of legal consideration that may be acceptable to the
Board. Unless otherwise specifically provided in the Option, the purchase price of Common Stock
acquired pursuant to an Option that is paid by delivery to the Company of other Common Stock
acquired, directly or indirectly from the Company, shall be paid only by shares of the Common Stock
of the Company that have been held for more than six (6) months (or such longer or shorter period
of time required to avoid a charge to the Company’s earnings for financial accounting purposes). At
any time that the Company is incorporated in Delaware, payment of the Common Stock’s par value, as
defined in the Delaware General Corporation Law, shall not be made by deferred payment.

     In the case of any deferred payment arrangement, interest shall be compounded at least
annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as
interest, under any applicable provisions of the Code, of any amounts other than amounts stated to
be interest under the deferred payment arrangement.

     In the case of a Net Exercise of an Option, the Company will not require a payment of the
exercise price of the Option from the Optionholder but will reduce the number of shares of

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Common Stock issued upon the exercise by the largest number of whole shares that has a Fair
Market Value that does not exceed the aggregate exercise price. With respect to any remaining
balance of the aggregate exercise price, the Company shall accept a cash payment from the
Optionholder. Shares of Common Stock will no longer be outstanding under an Option (and will
therefore not thereafter be exercisable) following the exercise of such Option to the extent of (i)
shares used to pay the exercise price of an Option under a Net Exercise, (ii) shares actually
delivered to the Optionholder as a result of such exercise and (iii) shares withheld for purposes
of tax withholding.

     (e) Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing,
the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.

     (f) Transferability of a Non-Statutory Stock Option. A Non-Statutory Stock Option shall be
transferable to the extent provided in the Option Agreement. If the Option Agreement does not
provide for transferability, then the Non-Statutory Stock Option shall not be transferable except
by will or by the laws of descent and distribution and shall be exercisable during the lifetime of
the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by
delivering written notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise
the Option.

     (g) Vesting Generally. The total number of shares of Common Stock subject to an Option may,
but need not, vest and therefore become exercisable in periodic installments that may, but need
not, be equal. The Option may be subject to such other terms and conditions on the time or times
when it may be exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The provisions of this
subsection 6(g) are subject to any Option provisions governing the minimum number of shares of
Common Stock as to which an Option may be exercised.

     (h) Termination of Continuous Service. In the event an Optionholder’s Continuous Service
terminates (other than upon the Optionholder’s death or Disability), the Optionholder may exercise
his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of
the date of termination) but only within such period of time ending on the earlier of (i) the date
three (3) months following the termination of the Optionholder’s Continuous Service (or such longer
or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the
Option as set forth in the Option Agreement. If, after termination, the Optionholder does not
exercise his or her Option within the time specified in the Option Agreement, the Option shall
terminate.

     (i) Extension of Termination Date. An Optionholder’s Option Agreement may also provide that if
the exercise of the Option following the termination of the Optionholder’s Continuous Service
(other than upon the Optionholder’s death or Disability) would be prohibited at any time solely
because the issuance of shares of Common Stock would violate the

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registration requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in the Option Agreement or (ii)
the expiration of a period of three (3) months after the termination of the Optionholder’s
Continuous Service during which the exercise of the Option would not be in violation of such
registration requirements.

     (j) Disability of Optionholder. In the event that an Optionholder’s Continuous Service
terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of
termination), but only within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in the Option
Agreement) or (ii) the expiration of the term of the Option as set forth in the Option Agreement.
If, after termination, the Optionholder does not exercise his or her Option within the time
specified herein, the Option shall terminate.

     (k) Death of Optionholder. In the event (i) an Optionholder’s Continuous Service terminates as
a result of the Optionholder’s death or (ii) the Optionholder dies within the period (if any)
specified in the Option Agreement after the termination of the Optionholder’s Continuous Service
for a reason other than death, then the Option may be exercised (to the extent the Optionholder was
entitled to exercise such Option as of the date of death) by the Optionholder’s estate, by a person
who acquired the right to exercise the Option by bequest or inheritance or by a person designated
to exercise the Option upon the Optionholder’s death pursuant to subsection 6(e) or 6(f), but only
within the period ending on the earlier of (1) the date eighteen (18) months following the date of
death (or such longer or shorter period specified in the Option Agreement) or (2) the expiration of
the term of such Option as set forth in the Option Agreement. If, after death, the Option is not
exercised within the time specified herein, the Option shall terminate.

     (l) Early Exercise. The Option may, but need not, include a provision whereby the Optionholder
may elect at any time before the Optionholder’s Continuous Service terminates to exercise the
Option as to any part or all of the shares of Common Stock subject to the Option prior to the full
vesting of the Option. Any unvested shares of Common Stock so purchased may be subject to a
repurchase option in favor of the Company or to any other restriction the Board determines to be
appropriate. At the Board’s election, the repurchase right may be at the lesser of: (i) the Fair
Market Value on the relevant date and (ii) the Optionholder’s original cost. The Company will not
exercise its repurchase option until at least six (6) months (or such longer or shorter period of
time required to avoid a charge to earnings for financial accounting purposes) have elapsed
following exercise of the Option unless the Board otherwise specifically provides in the Option.

7. Provisions of Stock Awards other than Options.

     (a) Stock Bonus Awards. Each Stock Bonus Award Agreement shall be in such form and shall
contain such terms and conditions as the Board shall deem appropriate. At the Board’s election,
shares of Common Stock may be (i) held in book entry form subject to the Company’s instructions
until any restrictions relating to the Stock Bonus Award lapse; or (ii) evidenced by a certificate,
which certificate shall be held in such form and manner as

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determined by the Board. The terms and conditions of Stock Bonus Award Agreements may change
from time to time, and the terms and conditions of separate Stock Bonus Award Agreements need not
be identical, but each Stock Bonus Award Agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of each of the
following provisions:

          (i) Consideration. A Stock Bonus Award may be awarded in consideration for past services
actually rendered to the Company or an Affiliate.

          (ii) Vesting. Shares of Common Stock awarded under the Stock Bonus Award Agreement may be
subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the
Board.

          (iii) Termination of Participant’s Continuous Service. In the event a Participant’s Continuous
Service terminates, the Company may receive pursuant to a forfeiture condition, any or all of the
shares of Common Stock held by the Participant which have not vested as of the date of termination
of Continuous Service under the terms of the Stock Bonus Award Agreement.

          (iv) Transferability. Rights to acquire shares of Common Stock under the Stock Bonus Award
Agreement shall be transferable by the Participant only upon such terms and conditions as are set
forth in the Stock Bonus Award Agreement, as the Board shall determine in its sole discretion, so
long as Common Stock awarded under the Stock Bonus Award Agreement remains subject to the terms of
the Stock Bonus Award Agreement.

     (b) Stock Purchase Awards. Each Stock Purchase Award Agreement shall be in such form and shall
contain such terms and conditions as the Board shall deem appropriate. At the Board’s election,
shares of Common Stock may be (i) held in book entry form subject to the Company’s instructions
until any restrictions relating to the Stock Purchase Award lapse; or (ii) evidenced by a
certificate, which certificate shall be held in such form and manner as determined by the Board.
The terms and conditions of Stock Purchase Award Agreements may change from time to time, and the
terms and conditions of separate Stock Purchase Award Agreements need not be identical, provided,
however, that each Stock Purchase Award Agreement shall include (through incorporation of the
provisions hereof by reference in the agreement or otherwise) the substance of each of the
following provisions:

          (i) Purchase Price. At the time of the grant of a Stock Purchase Award, the Board will
determine the price to be paid by the Participant for each share subject to the Stock Purchase
Award. To the extent required by applicable law, the price to be paid by the Participant for each
share of the Stock Purchase Award will not be less than the par value of a share of Common Stock.

          (ii) Consideration. At the time of the grant of a Stock Purchase Award, the Board will
determine the consideration permissible for the payment of the purchase price of the Stock Purchase
Award. The purchase price of Common Stock acquired pursuant to the Stock Purchase Award shall be
paid either: (i) in cash at the time of purchase, (ii) at the discretion of the Board, according to
a deferred payment or other similar arrangement with the Participant (to

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the extent permissible under Section 13(k) of the Exchange Act); or (ii) in any other form of
legal consideration that may be acceptable to the Board and permissible under the Delaware General
Corporation Law; provided, however, that to the extent prohibited by applicable law, payment of the
Common Stock’s par value shall not be made by deferred payment.

          (iii) Vesting. Shares of Common Stock acquired under a Stock Purchase Award may be subject to
a share repurchase right or option in favor of the Company in accordance with a vesting schedule to
be determined by the Board.

          (iv) Termination of Participant’s Continuous Service. In the event that a Participant’s
Continuous Service terminates, the Company shall have the right, but not the obligation, to
repurchase or otherwise reacquire, any or all of the shares of Common Stock held by the Participant
that have not vested as of the date of termination under the terms of the Stock Purchase Award
Agreement. At the Board’s election, the repurchase right may be at the least of: (i) the Fair
Market Value on the relevant date or (ii) the Participant’s original cost. The Company shall not be
required to exercise its repurchase option until at least six (6) months (or such longer or shorter
period of time required to avoid a charge to earnings for financial accounting purposes) have
elapsed following the purchase of the restricted stock unless otherwise determined by the Board or
provided in the Stock Purchase Award Agreement.

          (v) Transferability. Rights to purchase or receive shares of Common Stock granted under a
Stock Purchase Award shall be transferable by the Participant only upon such terms and conditions
as are set forth in the Stock Purchase Award Agreement, as the Board shall determine in its sole
discretion, and so long as Common Stock awarded under the Stock Purchase Award remains subject to
the terms of the Stock Purchase Award Agreement.

     (c) Limitation. The aggregate number of shares that may be issued pursuant to Stock Purchase
Awards and Stock Bonus Awards granted under this Section 7 shall not exceed 30% of the Share
Reserve as determined at the time of each such issuance.

8. Covenants of the Company.

     (a) Availability of Shares. During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of Common Stock required to satisfy such Stock Awards.

     (b) Securities Law Compliance. The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however, that this undertaking shall not require the Company to register under the
Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority which counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and
until such authority is obtained.

9. Use of Proceeds from Stock.

12

 

     Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds
of the Company.

10. Miscellaneous.

     (a) Acceleration of Exercisability and Vesting. The Board shall have the power to accelerate
the time at which a Stock Award may first be exercised or the time during which a Stock Award or
any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock
Award stating the time at which it may first be exercised or the time during which it will vest.

     (b) Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until such Participant has satisfied all requirements for exercise of the Stock Award
pursuant to its terms.

     (c) No Employment or other Service Rights. Nothing in the Plan or any instrument executed or
Stock Award granted pursuant thereto shall confer upon any Participant any right to continue to
serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted
or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the service of a Consultant
pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate or (iii) the
service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable
provisions of the corporate law of the state in which the Company or the Affiliate is incorporated,
as the case may be.

     (d) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market
Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any Optionholder during any calendar year (under all
plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof which exceed such limit (according to the order in which they were
granted) shall be treated as Non-Statutory Stock Options.

     (e) Investment Assurances. The Company may require a Participant, as a condition of exercising
or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the
Company as to the Participant’s knowledge and experience in financial and business matters and/or
to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable
and experienced in financial and business matters and that he or she is capable of evaluating,
alone or together with the purchaser representative, the merits and risks of exercising the Stock
Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant
is acquiring Common Stock subject to the Stock Award for the Participant’s own account and not with
any present intention of selling or otherwise distributing the Common Stock. The foregoing
requirements, and any assurances given pursuant to such requirements, shall be inoperative if (1)
the issuance of the shares of Common Stock upon the exercise or acquisition of Common Stock under
the Stock Award has been registered under a then currently effective registration statement under
the Securities Act or (2) as to any particular requirement, a determination is made by counsel for
the Company that such

13

 

requirement need not be met in the circumstances under the then applicable securities laws.
The Company may, upon advice of counsel to the Company, place legends on stock certificates issued
under the Plan as such counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer of the Common
Stock.

     (f) Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement,
the Participant may satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under a Stock Award by any of the following means (in
addition to the Company’s right to withhold from any compensation paid to the Participant by the
Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the
Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to
the Participant as a result of the exercise or acquisition of Common Stock under the Stock Award,
provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum
amount of tax required to be withheld by law; or (iii) delivering to the Company owned and
unencumbered shares of Common Stock of the Company that have been held for more than six (6) months
(or such longer or shorter period of time required to avoid a charge to the Company’s earnings for
financial accounting purposes).

11. Adjustments upon Changes in Stock.

     (a) Capitalization Adjustments. If any change is made in the Common Stock subject to the Plan,
or subject to any Stock Award, without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of securities subject to the Plan pursuant to subsection 4(a), the maximum aggregate number
of securities that may be issued pursuant to the exercise of Incentive Stock Options under
subsection 4(d), the maximum number of securities subject to award to any person pursuant to
subsection 5(c), and the outstanding Stock Awards will be appropriately adjusted in the class(es)
and number of securities and price per share of Common Stock subject to such outstanding Stock
Awards. The Board shall make such adjustments, and its determination shall be final, binding and
conclusive. (The conversion of any convertible securities of the Company shall not be treated as a
transaction “without receipt of consideration” by the Company.)

     (b) Dissolution or Liquidation. In the event of a dissolution or liquidation of the Company,
then all outstanding Stock Awards shall terminate immediately prior to such event.

     (c) Change in Control. In the event of (i) a sale, lease or other disposition of all or
substantially all of the securities or assets of the Company, (ii) a merger or consolidation in
which the Company is not the surviving corporation or (iii) a reverse merger in which the Company
is the surviving corporation but the shares of Common Stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise, then any surviving corporation or acquiring corporation may assume
any Stock Awards outstanding under the Plan or may substitute similar stock awards (including an
award to acquire the same consideration paid to the Stockholders in the

14

 

transaction described in this subsection 11(c)) for those outstanding under the Plan. In the
event any surviving corporation or acquiring corporation does not assume such Stock Awards or
substitute similar stock awards for those outstanding under the Plan, then with respect to Stock
Awards held by Participants whose Continuous Service has not terminated, the vesting of such Stock
Awards (and, if applicable, the time during which such Stock Awards may be exercised) shall be
accelerated in full, and the Stock Awards shall terminate if not exercised (if applicable) at or
prior to such event. With respect to any other Stock Awards outstanding under the Plan, such Stock
Awards shall terminate if not exercised (if applicable) prior to such event.

12. Amendment of the Plan and Stock Awards.

     (a) Amendment of Plan. The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 11 relating to adjustments upon changes in Common Stock, no
amendment shall be effective unless approved by the Stockholders of the Company to the extent
Stockholder approval is necessary to satisfy the requirements of Section 422 of the Code, Rule
16b-3 or any Nasdaq or securities exchange listing requirements.

     (b) Stockholder Approval. The Board may, in its sole discretion, submit any other amendment to
the Plan for Stockholder approval, including, but not limited to, amendments to the Plan intended
to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder regarding
the exclusion of performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.

     (c) Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide eligible Employees with the maximum
benefits provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.

     (d) No Impairment of Rights. Rights under any Stock Award granted before amendment of the Plan
shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent of
the Participant and (ii) the Participant consents in writing.

     (e) Amendment of Stock Awards. Subject to the provisions of Section 14 hereof, the Board at
any time, and from time to time, may amend the terms of any one or more Stock Awards; provided,
however, that the rights under any Stock Award shall not be impaired by any such amendment unless
(i) the Company requests the consent of the Participant and (ii) the Participant consents in
writing.

13. Termination or Suspension of the Plan.

     (a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the
Plan is approved by the Board or the Stockholders, whichever is earlier. No Stock Awards may be
granted under the Plan while the Plan is suspended or after it is terminated.

15

 

     (b) No Impairment of Rights. Suspension or termination of the Plan shall not impair rights and
obligations under any Stock Award granted while the Plan is in effect except with the written
consent of the Participant.

14. Prior Stockholder Approval of Option Repricings.

     Notwithstanding anything to the contrary herein, the Board shall not, without first obtaining
the approval of the Stockholders, (i) reduce the exercise price of any outstanding Option under the
Plan, (ii) cancel any outstanding Option under the Plan and replace it with an Option with a lower
exercise price, (iii) accept any outstanding Option in exchange for a new Option with a lower
exercise price, or (iv) take any other action that is treated as a repricing under generally
accepted accounting principles.

15. Effective Date of Plan and Amendments.

     (a) The Prior Plan became effective upon the effective date of the Company’s first registered
offering of its Common Stock to the public. The Plan (as amended and restated hereby) became
effective as of April 2, 2004.

     (b) No Stock Award that has been granted under an amendment adopted by the Board which is
subject to Stockholder approval shall be exercised (or, in the case of a Stock Bonus Award, shall
be granted) unless and until such amendment has been approved by the Stockholders, which approval
shall be within twelve (12) months after the date such amendment is adopted by the Board.

16. Choice of Law.

     The law of the State of Delaware shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to such state’s conflict of laws rules.

16exv10w108

 

Exhibit 10.108

INTERMUNE, INC.

AMENDED AND RESTATED 2000 NON-EMPLOYEE DIRECTORS’

STOCK OPTION PLAN

ADOPTED FEBRUARY 8, 2000

APPROVED BY STOCKHOLDERS MARCH 20, 2000

AMENDED ON JUNE 19, 2002

AMENDED ON MARCH 5, 2003

APPROVED BY STOCKHOLDERS MAY 29, 2003

AMENDED AND RESTATED ON APRIL 2, 2004

APPROVED BY STOCKHOLDERS MAY 27, 2004

1. Purposes.

     (a) Amendment and Restatement. The Plan amends and restates the InterMune, Inc. 2000
Non-Employee Directors’ Stock Option Plan adopted January 31, 2000 (the “Prior Plan”). All
outstanding Options granted under the Prior Plan shall remain subject to the terms of the Prior
Plan. All Options granted subsequent to the effective date of this Plan shall be subject to the
terms of this Plan (as amended and restated hereby).

     (b) Eligible Option Recipients. The persons eligible to receive Options are the Non-Employee
Directors of the Company.

     (c) Available Options. The purpose of the Plan is to provide a means by which Non-Employee
Directors may be given an opportunity to benefit from increases in value of the Common Stock
through the granting of Nonstatutory Stock Options.

     (d) General Purpose. The Company, by means of the Plan, seeks to retain the services of its
Non-Employee Directors, to secure and retain the services of new Non-Employee Directors and to
provide incentives for such persons to exert maximum efforts for the success of the Company and its
Affiliates.

2. Definitions.

     (a) “Affiliate” means any parent corporation or subsidiary corporation of the Company,
whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f),
respectively, of the Code.

     (b) “Annual Grant” means a Director Annual Grant or a Chairman Annual Grant.

     (c) “Annual Meeting” means the annual meeting of the stockholders of the Company.

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

     (e) “Chairman” means the Chairman of the Board, if such person is also a Non-Employee
Director. If such person is not a Non-Employee Director, then such person shall not be considered a
“Chairman” for purposes of the Plan.

 

 

     (f) “Chairman Annual Grant” shall have the meaning ascribed in Section 6(c)(i).

     (g) “Chairman Partial Grant” shall have the meaning ascribed in Section 6(c)(ii).

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

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

     (j) “Company” means InterMune, Inc., a Delaware corporation.

     (k) “Consultant” means any person, including an advisor, (i) engaged by the Company or
an Affiliate to render consulting or advisory services and who is compensated for such services or
(ii) who is a member of the Board of Directors of an Affiliate. However, the term “Consultant”
shall not include either Directors of the Company who are not compensated by the Company for their
services as Directors or Directors of the Company who are merely paid a director’s fee by the
Company for their services as Directors.

     (l) “Continuous Service” means (i) with respect to Options granted to an Optionholder
in his or her capacity as Chairman, that the Optionholder’s service as Chairman is not interrupted
or terminated; and (ii) with respect to Options granted to an Optionholder in his or her capacity
as a Director, that the Optionholder’s service with the Company or an Affiliate, whether as an
Employee, Director or Consultant, is not interrupted or terminated. Solely with respect to
subclause (ii) above, the Optionholder’s Continuous Service shall not be deemed to have terminated
merely because of a change in the capacity in which the Optionholder renders service to the Company
or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the
Optionholder renders such service, provided that there is no interruption or termination of the
Optionholder’s service. For example, a change in status without interruption from a Non-Employee
Director of the Company to a Consultant of an Affiliate or an Employee of the Company will not
constitute an interruption of Continuous Service. The Board or the chief executive officer of the
Company, in that party’s sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of any leave of absence approved by that party, including sick
leave, military leave or any other personal leave.

     (m) “Director” means a member of the Board of Directors of the Company.

     (n) “Director Annual Grant” shall have the meaning ascribed in Section 6(b)(i).

     (o) “Disability” means the permanent and total disability of a person within the
meaning of Section 22(e)(3) of the Code.

     (p) “Employee” means any person employed by the Company or an Affiliate. Mere service
as a Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient
to constitute “employment” by the Company or an Affiliate.

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

     (r) “Initial Grant” shall have the meaning ascribed in Section 6(a)(i).

2

 

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

          (i) If the Common Stock is listed on any established stock exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of Common Stock
shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or market (or the exchange or market with the greatest volume of trading in
the Common Stock) on the last market trading day prior to the day of determination, as reported in
The Wall Street Journal or such other source as the Board deems reliable.

          (ii) In the absence of such markets for the Common Stock, the Fair Market Value shall be
determined in good faith by the Board.

     (t) “New Director Partial Grant” shall have the meaning ascribed in Section 6(a)(ii).

     (u) “Non-Employee Director” means a Director who is not an Employee.

     (v) “Nonstatutory Stock Option” means an Option not intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.

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

     (x) “Option” means a Nonstatutory Stock Option granted pursuant to the Plan.

     (y) “Option Agreement” means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an individual Option grant. Each Option
Agreement shall be subject to the terms and conditions of the Plan.

     (z) “Optionholder” means a person to whom an Option is granted pursuant to the Plan
or, if applicable, such other person who holds an outstanding Option.

     (aa) “Partial Annual Grant” shall have the meaning ascribed in Section 6(b)(ii).

     (bb) “Partial Grant” shall mean a New Director Partial Grant, a Partial Annual Grant
or a Chairman Partial Grant.

     (cc) “Plan” means this InterMune, Inc. Amended and Restated 2000 Non-Employee
Directors’ Stock Option Plan.

     (dd) “Prior Annual Grant” shall have the meaning ascribed in Section 6(b)(ii).

     (ee) “Prior Grant Vest Date” shall have the meaning ascribed in Section 6(b)(ii).

     (ff) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor
to Rule 16b-3, as in effect from time to time.

3

 

     (gg) “Securities Act” means the Securities Act of 1933, as amended.

3. Administration.

     (a) Administration By Board. The Board shall administer the Plan. The Board may not delegate
administration of the Plan to a committee.

     (b) Powers Of Board. The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:

          (i) To determine the provisions of each Option to the extent not specified in the Plan.

          (ii) To construe and interpret the Plan and Options granted under it, and to establish, amend
and revoke rules and regulations for its administration. The Board, in the exercise of this power,
may correct any defect, omission or inconsistency in the Plan or in any Option Agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.

          (iii) To amend the Plan or an Option as provided in Section 12.

          (iv) To terminate or suspend the Plan as provided in Section 13.

          (v) Generally, to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company that are not in conflict with the
provisions of the Plan.

     (c) Effect Of Board‘s Decision. All determinations, interpretations and constructions made by
the Board in good faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.

4. Shares Subject to the Plan.

     (a) Share Reserve. Subject to the provisions of Section 11 relating to adjustments upon
changes in the Common Stock, the Common Stock that may be issued pursuant to Options shall not
exceed in the aggregate one million two hundred seventy thousand (1,270,000) shares of Common
Stock.

     (b) Reversion Of Shares To The Share Reserve. If any Option shall for any reason expire or
otherwise terminate, in whole or in part, without having been exercised in full, the shares of
Common Stock not acquired under such Option shall revert to and again become available for issuance
under the Plan.

     (c) Source Of Shares. The shares of Common Stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.

     5. Eligibility.

4

 

     The Options as set forth in Sections 6(a) and 6(b) automatically shall be granted under the
Plan to all Non-Employee Directors. The Options as set forth in Sections 6(c) automatically shall
be granted under the Plan to each Chairman.

6. Non-Discretionary Grants.

     (a) New Director Grants.

          (i) Without any further action of the Board, each person who, after the date of the Annual
Meeting in 2004, is elected or appointed for the first time to be a Non-Employee Director shall
automatically be granted, upon the date of his or her initial election or appointment to be a
Non-Employee Director, an Option to purchase thirty thousand (30,000) shares of Common Stock (an
“Initial Grant”).

          (ii) In addition to the Initial Grant, without any further action of the Board, each person
who, after the date of the Annual Meeting in 2004, is elected or appointed for the first time to be
a Non-Employee Director on a date other than an Annual Meeting date shall automatically be granted,
upon the date of his or her initial election or appointment to be a Non-Employee Director, an
Option to purchase the number of shares of Common Stock equal to the product of (A) 1,667 and (B)
the number of consecutive 30-day periods included in the period commencing on the date of such
appointment and ending on the date of the next Annual Meeting, provided, however, that if the last
consecutive 30-day period ends on a date that is not the date of the next Annual Meeting or there
are fewer than 30 days between such appointment and the date of the next Annual Meeting, then the
number of consecutive 30-day periods determined pursuant to this clause (B) shall be increased by
one (1) (a “New Director Partial Grant”). For example, if a Non-Employee Director was
appointed on April 15, 2005 and the next Annual Meeting was scheduled for May 27, 2005, the
Non-Employee Director would receive an Option to purchase 3,334 shares of Common Stock pursuant to
this Section 6(a)(ii) (1,667 shares for the 30-day period from April 15, 2005 to May 14, 2005 and
1,667 shares for the period beginning on May 15, 2005 and ending on May 27, 2005). If at the time
of the New Director Partial Grant the date of the next Annual Meeting has not been set by
resolution of the Board, the date of the next Annual Meeting shall be deemed to be the first
anniversary of the date of the immediately preceding Annual Meeting. In no event, however, shall
the maximum number of shares subject to a New Director Partial Grant exceed twenty thousand
(20,000) shares.

(b) Director Annual Grants.

          (i) Without any further action of the Board, on the day following each Annual Meeting,
commencing with the Annual Meeting in 2004, each person who is then a Non-Employee Director (and
who is not otherwise entitled to receive a Director Partial Grant on that day) shall, subject to
the provisions of Section 6(b)(ii), automatically be granted an Option to purchase twenty thousand
(20,000) shares of Common Stock (a “Director Annual Grant”).

          (ii) Notwithstanding the provisions of Section 6(b)(i), if any person who is a Non-Employee
Director on May 28, 2004 and received, in his or her capacity as a Non-Employee Director, an Option
to purchase twenty-five thousand (25,000) shares of Common Stock under the terms of the Prior Plan
at any time during the one year period prior to May 27,

5

 

2004 (a “Prior Annual Grant”), then such Non-Employee Director shall not receive a
Director Annual Grant on May 28, 2004 pursuant to the provisions of Section 6(b)(i) above and, in
lieu thereof, such Non-Employee Director shall automatically be granted, on the date such Prior
Annual Grant vests in full (the “Prior Grant Vest Date”), if such Non-Employee Director is
a Non-Employee Director on the Prior Grant Vest Date, an Option to purchase the number of shares of
Common Stock equal to the product of (A) 1,667 and (B) the number of consecutive 30-day periods
included in the period commencing on the Prior Grant Vest Date and ending on May 27, 2005,
provided, however, that if the last consecutive 30-day period ends on a date other than May 27,
2005 or there are fewer than 30 days between the Prior Grant Vest Date and May 27, 2005, then the
number of consecutive 30-day periods determined pursuant to this clause (B) shall be increased by
one (1) (a “Partial Annual Grant”). For example, if a Non-Employee Director has a Prior
Grant Vest Date of March 15, 2005, and if such person remains a Non-Employee Director on March 15,
2005, such Non-Employee Director would receive an Option to purchase 5,001 shares of Common Stock
pursuant to this Section 6(b)(ii) on March 15, 2005 (1,667 shares for the 30-day period from March
15, 2005 to April 13, 2005, 1,667 shares for the 30-day period beginning on April 14, 2005 and
ending on May 13, 2005, and 1,667 shares for the period beginning on May 14, 2005 and ending on May
27, 2005). In no event, however, shall the maximum number of shares subject to a Partial Annual
Grant exceed twenty thousand (20,000) shares.

     (c) Chairman Grants.

          (i) Without any further action of the Board, on the day following each Annual Meeting,
commencing with the Annual Meeting in 2004, the Chairman shall automatically be granted, in
addition to a Director Annual Grant, an Option to purchase ten thousand (10,000) shares of Common
Stock (the “Chairman Annual Grant”).

          (ii) Additionally, without any further action of the Board, each person who, after the date of
the Annual Meeting in 2004, is appointed by the Board for the first time (and who was not Chairman
on the day following the immediately preceding Annual Meeting) shall automatically be granted, upon
the date of his or her initial appointment as Chairman, an Option to purchase the number of shares
of Common Stock equal to the product of (A) 834 and (B) the number of consecutive 30-day periods
included in the period commencing on the date of such appointment and ending on the date of the
next Annual Meeting, provided, however, that if the last consecutive 30-day period ends on a date
that is not the date of the next Annual Meeting or there are fewer than 30 days between such
appointment and the date of the next Annual Meeting, then the number of consecutive 30-day periods
determined pursuant to this clause (B) shall be increased by one (1) (a “Chairman Partial
Grant”). For example, if the Chairman was appointed on April 15, 2005 and the next Annual
Meeting was scheduled for May 27, 2005, the Chairman would receive an Option to purchase 1,668
shares of Common Stock pursuant to this Section 6(c)(ii) (834 shares for the 30-day period from
April 15, 2005 to May 14, 2005 and 834 shares for the period beginning on May 15, 2005 and ending
on May 27, 2005). If at the time of the Chairman Partial Grant the date of the next Annual Meeting
has not been set by resolution of the Board, the date of the next Annual Meeting shall be deemed to
be the first anniversary of the date of the immediately preceding Annual Meeting. In no event,
however, shall the maximum number of shares subject to a Chairman Partial Grant exceed ten thousand
(10,000) shares.

6

 

7. Option Provisions.

     Each Option shall be in such form and shall contain such terms and conditions as required by
the Plan. Each Option shall contain such additional terms and conditions, not inconsistent with the
Plan, as the Board shall deem appropriate. Each Option shall include (through incorporation of
provisions hereof by reference in the Option or otherwise) the substance of each of the following
provisions:

     (a) Term. No Option shall be exercisable after the expiration of ten (10) years from the date
it was granted.

     (b) Exercise Price. The exercise price of each Option shall be one hundred percent (100%) of
the Fair Market Value of the stock subject to the Option on the date the Option is granted.
Notwithstanding the foregoing, an Option may be granted with an exercise price lower than that set
forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution
for another option in a manner satisfying the provisions of Section 424(a) of the Code.

     (c) Consideration. The purchase price of stock acquired pursuant to an Option may be paid, to
the extent permitted by applicable statutes and regulations, in any combination of the following
methods:

          (i) By cash or check.

          (ii) Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in THE WALL STREET JOURNAL, by delivery of already-owned shares of Common Stock either
that the Optionholder has held for the period required to avoid a charge to the Company’s reported
earnings (generally six months) or that the Optionholder did not acquire, directly or indirectly
from the Company, that are owned free and clear of any liens, claims, encumbrances or security
interests, and that are valued at Fair Market Value on the date of exercise. “Delivery” for
these purposes shall include delivery to the Company of the Optionholder’s attestation of ownership
of such shares of Common Stock in a form approved by the Company. Notwithstanding the foregoing,
the Optionholder may not exercise the Option by tender to the Company of Common Stock to the extent
such tender would violate the provisions of any law, regulation or agreement restricting the
redemption of the Company’s stock.

          (iii) Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in THE WALL STREET JOURNAL, pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in
either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales proceeds.

     (d) Transferability. An Option is transferable by will or by the laws of descent and
distribution. An Option also is transferable (i) by instrument to an inter vivos or testamentary
trust, in a form accepted by the Company, in which the Option is to be passed to beneficiaries upon
the death of the trustor (settlor) and (ii) by gift, in a form accepted by the Company, to a member
of the “immediate family” of the Optionholder as that term is defined in the general

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instructions to Form S-8 (promulgated under the Securities Act). An Option shall be
exercisable during the lifetime of the Optionholder only by the Optionholder and a permitted
transferee as provided herein. However, the Optionholder may, by delivering written notice to the
Company, in a form satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the Option.

     (e) Exercise Schedule. An Option shall be exercisable only for whole shares and then only as
the shares of Common Stock subject to the Option vest.

     (f) Vesting Schedule. Options shall vest as follows:

          (i) An Initial Grant shall vest in consecutive monthly installments at a rate of one
thirty-sixth (1/36th) of the total number of shares subject to such Option. The first such
installment shall vest one month from the date of grant of such Option and each subsequent
installment shall vest one month from the vesting date of the prior installment until such Option
has fully vested; provided, however, that vesting shall cease on termination of the Optionholder’s
Continuous Service.

          (ii) An Annual Grant shall vest in consecutive monthly installments at a rate of one twelfth
(1/12th) of the total number of shares subject to such Option. The first such installment shall
vest one month from the date of grant of such Option and each subsequent installment shall vest one
month from the vesting date of the prior installment until such Option has fully vested; provided,
however, that vesting shall cease on termination of the Optionholder’s Continuous Service.

          (iii) A Partial Grant shall vest in consecutive monthly installments from the date of grant of
such Option. Each vesting installment shall be equal, as nearly as possible, to each other vesting
installment. The first such installment shall vest one month from the date of grant of such Option
(or on the date of the next Annual Meeting if it is to occur within one month of the date of grant)
and such vesting installments shall continue until the date of the next Annual Meeting occurring
after the date of grant of such Option, at which time such Option shall be fully vested; provided,
however, that such vesting shall cease on termination of the Optionholder’s Continuous Service.

     (g) Termination Of Continuous Service. In the event an Optionholder’s Continuous Service
terminates (other than due to the Optionholder’s death or Disability), the Optionholder may
exercise his or her Option (to the extent that the Optionholder was entitled to exercise it as of
the date of termination) but only within such period of time ending on the earlier of (i) the date
that is three (3) months after the date of such termination, or (ii) the expiration of the term of
the Option as set forth in the Option Agreement. If, after termination, the Optionholder does not
exercise his or her Option within the time specified in the Option Agreement, the Option shall
terminate.

     (h) Disability Of Optionholder. In the event an Optionholder’s Continuous Service terminates
due to the Optionholder’s Disability, the Optionholder may exercise his or her Option (to the
extent that the Optionholder was entitled to exercise it as of the date of termination), but only
within such period of time ending on the earlier of (i) the date that is twelve (12) months

8

 

after the date of such termination, or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, after termination, the Optionholder does not exercise his or her
Option within the time specified herein, the Option shall terminate.

     (i) Death Of Optionholder. In the event (i) an Optionholder’s Continuous Service terminates as
a result of the Optionholder’s death or (ii) the Optionholder dies within the three-month period
after the termination of the Optionholder’s Continuous Service for a reason other than death, then
the Option may be exercised (to the extent the Optionholder was entitled to exercise the Option as
of the date of death) by the Optionholder’s estate, by a person who acquired the right to exercise
the Option by bequest or inheritance or by a person designated to exercise the Option upon the
Optionholder’s death, but only within the period ending on the earlier of (1) the date that is
eighteen (18) months following the date of death or (2) the expiration of the term of such Option
as set forth in the Option Agreement. If, after death, the Option is not exercised within the time
specified herein, the Option shall terminate.

     (j) Extension Of Termination Date. If exercise of the Option following the termination of the
Optionholder’s Continuous Service would be prohibited at any time solely because the issuance of
shares would violate the registration requirements under the Securities Act, then the Option shall
terminate on the earlier of: (i) the expiration of the term of the Option set forth in subsection
7(a), or (ii) the expiration of the applicable period of time after the termination of the
Optionholder’s Continuous Service during which the exercise of the Option would not be in violation
of such registration requirements.

8. Covenants of the Company.

     (a) Availability Of Shares. During the terms of the Options, the Company shall keep available
at all times the number of shares of Common Stock required to satisfy such Options.

     (b) Securities Law Compliance. The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Options and to issue and sell shares of Common Stock upon exercise of the Options; provided,
however, that this undertaking shall not require the Company to register under the Securities Act
the Plan, any Option or any stock issued or issuable pursuant to any such Option. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency
the authority which counsel for the Company deems necessary for the lawful issuance and sale of
stock under the Plan, the Company shall be relieved from any liability for failure to issue and
sell stock upon exercise of such Options unless and until such authority is obtained.

9. Use of Proceeds from Stock.

     Proceeds from the sale of stock pursuant to Options shall constitute general funds of the
Company.

10. Miscellaneous.

     (a) Stockholder Rights. No Optionholder shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such Option unless and

9

 

until such Optionholder has satisfied all requirements for exercise of the Option pursuant to
its terms.

     (b) No Service Rights. Nothing in the Plan or any instrument executed or Option granted
pursuant thereto shall confer upon any Optionholder any right to continue to serve the Company as a
Non-Employee Director or as Chairman or shall affect the right of the Company or an Affiliate to
terminate (i) the employment of an Employee with or without notice and with or without cause, (ii)
the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company
or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the Company or an
Affiliate, and any applicable provisions of the corporate law of the state in which the Company or
the Affiliate is incorporated, as the case may be.

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

     (d) Withholding Obligations. The Optionholder may satisfy any federal, state or local tax
withholding obligation relating to the exercise or acquisition of stock under an Option by any of
the following means (in addition to the Company’s right to withhold from any compensation paid to
the Optionholder by the Company) or by a combination of such means: (i) tendering a cash payment;
(ii) authorizing the Company to withhold shares from the shares of the Common Stock otherwise
issuable to the Optionholder as a result of the exercise or acquisition of stock under the Option,
provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum
amount of tax required to be withheld by law; or (iii) delivering to the Company owned and
unencumbered shares of the Common Stock.

11. Adjustments upon Changes in Stock.

     (a) Capitalization Adjustments. If any change is made in the stock subject to the Plan, or
subject to any Option, without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of shares, exchange of

10

 

shares, change in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of securities subject both to the Plan pursuant to subsection 4(a) and to the
non-discretionary Options specified in Section 6, and the outstanding Options will be appropriately
adjusted in the class(es) and number of securities and price per share of stock subject to such
outstanding Options. The Board shall make such adjustments, and its determination shall be final,
binding and conclusive. (The conversion of any convertible securities of the Company shall not be
treated as a transaction “without receipt of consideration” by the Company.)

     (b) Dissolution Or Liquidation. In the event of a dissolution or liquidation of the Company,
then all outstanding Options shall terminate immediately prior to such event.

     (c) Change In Control. In the event of (i) a sale, lease or other disposition of all or
substantially all of the securities or assets of the Company, (ii) a merger or consolidation in
which the Company is not the surviving corporation or (iii) a reverse merger in which the Company
is the surviving corporation but the shares of Common Stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise, then any surviving corporation or acquiring corporation may assume
any Options outstanding under the Plan or may substitute similar Options (including an option to
acquire the same consideration paid to the stockholders in the transaction described in this
subsection 11(c)) for those outstanding under the Plan, and the vesting of Options held by
Non-Employee Directors shall accelerate in full on the date immediately preceding the date of such
event. In the event no surviving corporation or acquiring corporation assumes such Options or
substitutes similar Options for those outstanding under the Plan, then with respect to Options held
by Optionholders whose Continuous Service has not terminated, the vesting of such Options (and the
time during which such Options may be exercised) shall accelerate in full on the date immediately
preceding the date of such event, and the Options shall terminate if not exercised at or prior to
such event. With respect to any other Options outstanding under the Plan, such Options shall
terminate if not exercised prior to such event.

12. Amendment of the Plan and Options.

     (a) Amendment Of Plan. The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 11 relating to adjustments upon changes in stock, no
amendment shall be effective unless approved by the stockholders of the Company to the extent
stockholder approval is necessary to satisfy the requirements of Rule 16b-3 or any Nasdaq or
securities exchange listing requirements.

     (b) Stockholder Approval. The Board may, in its sole discretion, submit any other amendment to
the Plan for stockholder approval.

     (c) No Impairment Of Rights. Rights under any Option granted before amendment of the Plan
shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent of
the Optionholder and (ii) the Optionholder consents in writing.

11

 

     (d) Amendment Of Options. The Board at any time, and from time to time, may amend the terms of
any one or more Options; provided, however, that the rights under any Option shall not be impaired
by any such amendment unless (i) the Company requests the consent of the Optionholder and (ii) the
Optionholder consents in writing.

13. Termination or Suspension of the Plan.

     (a) Plan Term. The Board may suspend or terminate the Plan at any time. No Options may be
granted under the Plan while the Plan is suspended or after it is terminated.

     (b) No Impairment Of Rights. Suspension or termination of the Plan shall not impair rights and
obligations under any Option granted while the Plan is in effect except with the written consent of
the Optionholder.

14. Effective Date of Plan and Amendments.

     (a) The Prior Plan became effective on March 29, 2000. The Plan (as amended and restated
hereby) became effective as of April 2, 2004.

     (b) No Option that has been granted under an amendment adopted by the Board which is subject
to stockholder approval shall be exercised unless and until such amendment has been approved by the
stockholders, which approval shall be within twelve (12) months after the date such amendment is
adopted by the Board.

15. Choice of Law.

     All questions concerning the construction, validity and interpretation of this Plan shall be
governed by the law of the State of Delaware, without regard to such state’s conflict of laws
rules.

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