Document:

SJW-6.30.12-EX10.1 Belhumeur

EXHIBIT 10.1

SEPARATION AGREEMENT AND RELEASE

This Separation Agreement and Release (the “Agreement”) is made by and between San Jose Water Company (the “Company”), and George J. Belhumeur (“Employee”) dated as of May 25, 2012.

RECITALS

A.    Employee is an employee of the Company, serving as Senior Vice President of Operations.

B.    Employee serves as an Officer of San Jose Water Company and SJW Corp.

C.    The Company and Employee have agreed to a voluntary retirement for Employee by which he shall cease employment with the Company and will cease to serve as an Officer of San Jose Water Company and SJW Corp.

D.    Employee was presented with a copy of this Agreement for review on April 26, 2012.

NOW THEREFORE, in consideration of the mutual promises made herein, the Company and Employee (each, a “Party” and collectively, the “Parties”) hereby agree as follows:

AGREEMENT

1.Separation.  The Parties agree that Employee’s employment with the Company will cease as of May 25, 2012(the “Separation Date”). By that same date, Employee shall cease to serve as an Officer of San Jose Water Company and SJW Corp. and will no longer perform any further duties with such companies or render services in any other capacity to them.  Accordingly on the Separation Date, Employee shall incur a separation from service for purposes of Section 409A of the Internal Revenue Code (“Section 409A”).  Employee acknowledges that Company has paid all salary, wages, bonuses, accrued vacation, commissions and any and all other benefits due to Employee through the Separation Date.  However, Employee’s existing account balance under the San Jose Water Company’s Special Deferral Election Plan will be paid to Employee in accordance with the payment elections Employee has in effect under that plan, subject to any required six-month holdback of one or more of those payments as required under Section 409A and the provisions of such plan.  
2.Consideration.  If and only if this Agreement is timely executed by the Employee and not revoked by the Employee as set forth below, the Company agrees to pay Employee the following amounts which Employee hereby acknowledges and agrees would not otherwise be payable to him in the absence of the general release required of him under this Agreement:
a.Separation Payment.  A separation payment in the amount of Fifteen Thousand Dollars ($15,000.00), less applicable withholdings, payable in a lump sum on the first day of the seventh month following his Separation Date; and
b.Termination Payment.  A termination payment equal to four weeks of Employee’s 2012 base salary, less applicable withholdings, payable in a lump sum on the first day of the seventh month following his Separation Date.   Such termination payment shall qualify as the termination payment referred to in paragraph (h) of Exhibit A to the Company’s Executive Supplemental Retirement Plan (the “SERP”).  Accordingly, a dollar amount equal to one thirty-sixth (1/36th) of the gross amount of such termination payment shall be added to Employee’s Final Average Compensation under the SERP for purposes of determining his normal retirement benefit under the formula provisions of Section 3.1 of the SERP, even though such payment will not be made prior to the Separation Date. 

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3.Outstanding Equity Awards.  Employee has been granted options in accordance with the SJW Corp. Long-Term Incentive Plan.  Employee’s cessation of service pursuant to this Agreement will, for purposes of the “Cessation of Service” provisions of his outstanding stock option agreements, be considered as a “Normal Retirement.” All other terms and conditions of those options will be governed by the Long-Term Incentive Plan and relevant Stock Option Agreements.  Any restricted stock unit awards granted to Employee that remain unvested on his Separation Date shall be immediately cancelled, and Employee shall cease to have any further right or entitlement to receive any shares of SJW Corp. common stock or other consideration under those cancelled awards.
4.Return of Property.  Employee shall promptly return to the Company all property of SJW Corp. or its subsidiaries, including, without limitation, keys, pass cards, lap tops, cellular phones, company vehicle, all other company equipment, tangible proprietary information, documents, books, records, reports, contracts, lists, computer disks (or other computer-generated files or data), or copies thereof, created on any medium, prepared or obtained by Employee in the course of or incident to his employment with the Company.
5.Confidential Information.  Employee shall continue to maintain the confidentiality of all confidential and proprietary information of SJW Corp. or its subsidiaries and as required in the San Jose Water Company Employee Policies and Procedures, of which Employee acknowledged receipt. Specifically, Employee agrees that both during employment by the Company and after termination, Employee shall keep in confidence and trust all Confidential Information and proprietary information of SJW Corp. or its subsidiaries and of any client, customer, licensor or vendor of SJW Corp. or its subsidiaries (collectively “the Proprietary Information”), and shall not disclose such Proprietary Information or anything relating to such Proprietary Information without the prior written consent of the Company.
a.    “Confidential Information” includes any information and documents relating to or concerning business information, business plans, revenue plans or projections, business methodology, financial plans, technical information, strategic planning, actual or intended product features, know-how, show-how, processes, formulas, data, techniques, statistics, specifications, service design, rate plans and pricing, financial information, financial projections, trade secrets, ideas, sketches, drawings, models, software programs, improvements, inventions, techniques, source code, engineering information, strategies, forecasts, computer programs, copyrightable material, customer lists, clients, methodology, market research, market surveys, distribution plans, patentable inventions, current, future and proposed services or products and marketing strategies conceived by, owned, created, designed by, or pertaining to the Company, SJW Corp. or SJW Corp.’s subsidiaries, or any client, customer, licensor or vendor of the Company. 
b.    At all times, both during the remaining duration of employment and after termination Employee shall not use any Proprietary Information or anything relating to such Proprietary Information without the prior written consent of the Company, except as strictly necessary to perform the services required by the Company prior to the effective date of Employee’s termination from the Company. All documents, records, magnetic storage media and information thereon, apparatus, equipment and other physical property, whether or not pertaining to Proprietary Information, furnished by the Company or produced by the Employee or others in connection with the employment with the Company shall be and remain the sole property of the Company and shall be returned to it immediately as and when requested by the Company.
c.    Employee shall return and deliver all such property upon termination of employment and Employee will not retain, remove or take any such property or any reproduction of such property upon such termination. Without limiting the foregoing, Employee shall return all of Proprietary Information, and all copies of any Proprietary Information, including without limitation notes, memoranda and other documents concerning the Proprietary Information, to the Company, upon termination of employment and within five business days after request therefore by the Company.
6.Release of Claims.  In consideration of the covenants and promises set forth in this Agreement, Employee forever releases and discharges the Company and the Company’s officers, directors, employees, agents, parents, investors, stockholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations, and assigns, the Company’s parent corporation, SJW Corp., and its officers, directors, employees, agents, 

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parents, investors, stockholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations, and assigns, and any affiliated entities of the Company and/or SJW Corp., including but not limited to SJW Land Company, SJWTX, Inc., and Texas Water Alliance Limited and those entities’ officers, directors, employees, agents, parents, investors, stockholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations, and assigns (the “Releasees”), from, and agree not to sue or otherwise initiate legal or dispute resolution proceedings against the Releasees concerning, any claim, duty, obligation or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that the Employee may possess arising from any omissions, acts or facts that have occurred up until and including the Separation Date of this Agreement, including but not limited to: 
a.    any and all claims relating to or arising from Employee's employment relationship with the Company and the termination of that relationship; 
b.    any and all claims relating to, or arising from, Employee's right to purchase, or actual purchase of shares of stock of the parent Company, SJW Corp. whether pursuant to stock options or otherwise, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law; 
c.    any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; harassment;  breach of contract, both express and implied; breach of a covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; disparaging statements; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; conversion; and workers compensation and disability;
d.    any and all claims for violation of any federal, state or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967 (the “ADEA”), the Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, The Worker Adjustment and Retraining Notification Act, Older Workers Benefit Protection Act; the Family and Medical Leave Act; the California Family Rights Act; the California Fair Employment and Housing Act, and the California Labor Code, including, but not limited to, California Labor Code Sections 1400 – 1408;
e.    any and all claims for violation of the federal, or any state, constitution; 
f.    any and all claims arising out of any other laws and regulations relating to employment or employment discrimination; and
g.    any and all claims for attorneys' fees and costs.

The Parties agree that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released.  This release does not extend to any obligations incurred pursuant to the terms and provisions of this Agreement. This release also does not release claims that cannot be released as a matter of law, including, but not limited to: (1) Employee's right to file a charge with or participate in a charge by the Equal Employment Opportunity Commission, or any other local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, against the Company(with the understanding that any such filing or participation does not give Employee the right to recover any monetary damages against the Company, and Employee's release of claims herein bars Employee from recovering such monetary relief from the Company); (2) claims under Division 3, Article 2 of the California Labor Code (which includes California Labor Code section 2802 regarding indemnity for necessary expenditures or losses by employee);  (3) claims prohibited from release as set forth in California Labor Code section 206.5 (specifically "any claim or right on account of wages due, or to become due, or made as an advance on wages to be earned, unless payment of such wages has been made"), (4) claims relating to payments and benefits to be provided Employee pursuant to the express terms of this Agreement, (5) claims for workers’ 

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compensation benefits or unemployment compensation, (6) health insurance benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA) and (7) claims that, as a matter of applicable law, are not waivable or otherwise subject to release.
7.Acknowledgment of Waiver of Claims under ADEA.  Employee acknowledges that he is waiving and releasing any rights he may have under the ADEA and that this waiver and release is knowing and voluntary.  Employee and the Company agree that this waiver and release does not apply to any rights or claims that may arise under ADEA after the Effective Date of this Agreement.  Employee acknowledges that the consideration given for this waiver and release Agreement is in addition to anything of value to which Employee was already entitled.  Employee further acknowledges that he has been advised by this writing that:
a.    He should consult with an attorney prior to executing this Agreement; 
b.    He has twenty-one (21) days from the later of (i) the April 26, 2012 date on which he was presented with this Agreement or (ii) his Separation Date within which to consider this Agreement before executing it and delivering it to the Company; 
c.    He has seven (7) days following his execution of this Agreement to revoke this Agreement; 
d.    This Agreement shall not be effective until after the revocation period has expired; 
e.    Nothing in this Agreement prevents or precludes Employee from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law. 
In the event Employee signs this Agreement and returns it to the Company in less than the applicable 21-day period identified above, Employee hereby acknowledges that he has freely and voluntarily chosen to waive the time period allotted for considering this Agreement.

If Employee revokes this Agreement within the applicable seven (7)-day revocation period, this Agreement shall not be effective or enforceable, and Employee will not receive the items of consideration for this Agreement set forth in section 2 above. 
8.Civil Code Section 1542.  The Parties represent that they are not aware of any claim they have against each other, other than the claims that are released by this Agreement.  The Parties acknowledge that they have been advised by legal counsel and are familiar with the provisions of California Civil Code Section 1542, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

Employee, being aware of said code section, agrees to expressly waive any rights he may have thereunder, as well as under any other statutory or common law principles of similar effect.
9.No Pending or Future Lawsuits.  Each Party represents that it/he has no lawsuits, claims, or actions pending in its/his name, or on behalf of any other person or entity, against the other Party or any other person or entity referred to herein.  Each Party also represents that it/he does not intend to bring any claims on its/his own behalf or on behalf of any other person or entity against the other Party or any other person or entity referred to herein.  Employee further agrees to waive any right to re-employment with the Company. 

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10.Non-Disparagement.  The Parties agree that it/he shall make no negative statements to third parties concerning, or take any action that disparages or denigrates the other Party, or its services, products, reputation, administration, employees, financial status, or operations, or take any action that damages or interferes with any of the other Party’s existing or prospective business relationships. 
11.No Cooperation.  The Parties agree that they will not counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against the other Party to this Agreement and/or any officer, director, employee, agent, representative, stockholder or attorney of the other Party, unless under a subpoena or other court order to do so. 
12.Nondisclosure Agreement by the Company.  Unless authorized in writing by Employee, Company agrees that it will make no disclosures concerning the Employee’s employment or other information regarding the Employee except for confirming employment, job title, dates of service, and rate of pay, plus additional information as, and only as, required pursuant to subpoena or otherwise required by law.
13.No Admission of Liability.  The Parties understand and acknowledge that this Agreement constitutes a compromise and settlement of disputed claims.  No action taken by the Parties hereto, or either of them, either previously or in connection with this Agreement shall be deemed or construed to be (a) an admission of the truth or falsity of any claims heretofore made or (b) an acknowledgment or admission by either party of any fault or liability whatsoever to the other party or to any third party.
14.Arbitration.  
a.    The Parties agree that any and all disputes arising out of, relating to, or in connection with this Agreement, the interpretation, validity, construction, performance, breach, or termination hereof or any of the matters herein released, shall be subject to binding arbitration in Santa Clara County, California in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the “Rules”).  The Parties agree that the prevailing party in any arbitration shall be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award.  The Parties agree that each party in any arbitration shall be responsible for such party’s costs.  
b.    EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION 14, WHICH DISCUSSES ARBITRATION.  EMPLOYEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EMPLOYEE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF, OR ANY OF THE MATTERS HEREIN TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EMPLOYEE'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THIS SEVERANCE AGREEMENT AND RELEASE OF ALL CLAIMS.
15.Authority.  The Company represents and warrants that the undersigned has the authority to act on behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement.  Employee represents and warrants that he has the capacity to act on his own behalf and on behalf of all who might claim through him to bind them to the terms and conditions of this Agreement.  Each Party warrants and represents that there are no liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released herein.
16.Successors and Assigns.  Any references to the Company shall be interpreted to include a reference to any successor or resultant company in the event of a merger or acquisition or sale of substantially all of the Company’s assets. Any such successor or resultant company shall be and remain liable for all of Company’s responsibilities and obligations hereunder.

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17.No Representations.  Each party represents that it has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement.  Neither party has relied upon any representations or statements made by the other party hereto which are not specifically set forth in this Agreement.
18.Severability.  In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision.
19.Entire Agreement.  This Agreement represents the entire agreement and understanding between the Company and Employee concerning Employee's employment with, and separation from the Company, and supersedes and replaces any and all prior agreements and understandings concerning Employee's relationship with the Company and his compensation by the Company.  This Agreement supersedes in its entirety any offer letter or any employment agreement which shall be of no further force or effect.  
20.No Oral Modification.  This Agreement may only be amended in writing signed by Employee and the President or Chief Executive Officer of the Company following approval of such amendment by the Company's Board of Directors or the Compensation Committee thereof.
21.Governing Law.  This Agreement shall be governed by the internal substantive laws, but not the choice of law rules of the State of California.
22.Effective Date.  If Employee timely signs the Agreement within the applicable twenty-one (21) day period provided in section 7 above, Employee has seven (7) days after he signs the Agreement to revoke it. In order to revoke the acceptance of the agreement effectively, Employee must provide written notice to W. Richard Roth, President and CEO, on or before that date, and in that event, Employee shall not become entitled to any of the items of consideration set forth in section 2 above. This Agreement will become effective on the eighth (8th) day after Employee signed this Agreement, so long as it has been signed by the Employee and has not been revoked by Employee before that date (the "Effective Date").
23.Expiration of Agreement.  This Agreement is executable until June 15, 2012 (the "Expiration Date"). This Agreement is null and void if the Company has not received a copy of the Agreement executed by the Employee on or before the Expiration Date. 
24.Counterparts.  This Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.
25.Voluntary Execution of Agreement.  This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto, with the full intent of releasing all claims.  The Parties acknowledge that:
a.    They have read this Agreement;
b.    They have been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of their own choice or that they have voluntarily declined to seek such counsel;
c.    They understand the terms and consequences of this Agreement and of the releases it contains;
d.    They are fully aware of the legal and binding effect of this Agreement; and 
e.    This release offer will expire on June 15, 2012 if the Company has not received a copy of the Agreement executed by Employee as of that date.

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.

	
			
	 
	 
	SAN JOSE WATER COMPANY

	 
	 
	 

	 
	 
	 

	Dated:  June 19, 2012
	By:
	/s/ W. RICHARD ROTH

	 
	 
	W. Richard Roth, President,

	 
	 
	Chief Executive Officer and

	 
	 
	Chairman of the Board

	 
	 
	 

	 
	 
	 

	 
	 
	EMPLOYEE

	 
	 
	 

	Dated:  June 14, 2012
	 
	/s/ GEORGE J. BELHUMEUR

	 
	 
	George J. Belhumeur

7XTREMIO LTD 2010 AMENDED AND RESTATED US SHARE OPTION PLAN-EX 10.1

Exhibit 10.1

XTREMIO LTD.

Amended and Restated 2010 US SHARE OPTION PLAN
        
Approved by the Board of Directors on January 29, 2012

Approved by the Shareholders on January 29, 2012

1.Purposes of the Plan.  The purposes of this 2010 US Share Option Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentives to Employees, Directors and Consultants of the Company and its Subsidiaries, and to promote the success of the Company’s business.  Options granted hereunder may be either Incentive Stock Options or Nonstatutory Stock Options at the discretion of the Committee, subject to the applicable provisions of Section 422 of the Code and the regulations promulgated thereunder.

2.Definitions.  As used herein, and in any Option granted hereunder, the following definitions shall apply:

(a)“Affiliate” shall mean any corporation or other entity (including, but not limited to, partnerships and joint ventures) controlling, controlled by, or under common control with, the Company.

(b)“Applicable Laws” shall mean the requirements applicable to the administration of stock option plans under the State of Israel, U.S. state corporate laws, U.S. federal and state securities laws, the Code, any applicable stock exchange or quotation system on which the Ordinary Shares are listed or quoted and applicable laws of any other country or jurisdiction where Options or Stock Purchase Rights are granted under the Plan.

(c)“Board” shall mean the Board of Directors of the Company.

(d)“Cause” means, when used in connection with the termination of employment with, or service to the Company or an Affiliate, as a result of a basis for termination, including, but not limited to:  dishonesty toward the Company or Affiliate, insubordination, substantial malfeasance or nonfeasance of duty, unauthorized disclosure of confidential information, and conduct substantially prejudicial to the business of the Company or Affiliate; or, any substantial breach by the Optionee of (i) his or her employment or service agreement or (ii) any other obligations toward Company or Affiliate.

(e)“Code” shall mean the Internal Revenue Code of 1986, as now in effect or as hereafter amended

(f)“Company” shall mean XtremIO Ltd., an Israeli company.

(g)“Committee” shall mean the Committee appointed by the Board in accordance with Section 4(a) of the Plan.  If the Board does not appoint or ceases to maintain a Committee, the term Committee shall refer to the Board.

(h)“Consultant” shall mean any independent contractor retained to perform services for the Company and Subsidiaries (held directly or indirectly by the Company).

(i)“Continuous Employment” shall mean the absence of any interruption or termination of service as an Employee, Director or Consultant by the Company or any Subsidiary.  Continuous Employment shall not be considered interrupted during any period of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company and any Parent, Subsidiary or successor of the 

Company.  A leave of absence approved by the Company shall include sick leave, military leave or any other personal leave approved by an authorized representative of the Company.  For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days, unless re-employment upon expiration of such leave is guaranteed by statute or contract.

(j)“Director” shall mean a director of the Company.

(k)“Effective Date” shall mean the date on which the Plan is initially approved by the Board or by the shareholders in accordance with Section 19 of the Plan.

(l)“Employee” shall mean any person, including officers (whether or not they are directors), employed by the Company or any Subsidiary.

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

(n)“Fair Market Value” means as of any date the value of Share determined as follows: (i) the closing price of a Share on the national securities exchange on which the Shares are traded, or (ii) if the Shares are not traded on a national securities exchange but are quoted on the NASDAQ SmallCap Market or a regional stock exchange or an automated quotation system or over-the-counter market, the closing price on the NASDAQ SmallCap Market or regional stock exchange, automated quotation system or over-the-counter market, or (iii) if the Shares are not traded on a national securities or quoted on the NASDAQ SmallCap Market or regional stock exchange, automated quotation system or over-the-counter market, the fair market value of a Share as determined by the Company’s Board of Directors in good faith, based upon such factors as they deem relevant.  Notwithstanding the preceding, for federal, state, and local income tax reporting purposes, fair market value shall be determined by the Committee in accordance with uniform and nondiscriminatory standards adopted by it from time to time.  Such determination shall be conclusive and binding on all persons.

(o)“Grant Date” means, with respect to an Option, the date on which the Option is granted by the Committee; as set forth in the Option Agreement.

(p)“Incentive Stock Option” shall mean any Option granted under this Plan in accordance with the provisions of Section 422 of the Code, and the Treasury Regulations promulgated thereunder, as amended from time to time.

(q)“M&A Event” shall mean: (i) a sale of all or substantially all of the assets of the Company; or (ii) a sale (including an exchange) of all or substantially all of the shares of the capital stock of the Company; or (iii) a merger, consolidation or like transaction of the Company with or into another corporation.

(r)“Non-Employee Director” shall mean a director of the Company who qualifies as a Non-Employee Director as such term is defined in Section 240.16b-3(b)(3) of the General Rules and Regulations promulgated under the Exchange Act (the “General Rules and Regulations”).

(s)“Nonstatutory Stock Option” shall mean an Option granted under the Plan that is subject to the provisions of Section 1.83-7 of the Treasury Regulations promulgated under Section 83 of the Code.

(t)“Option” shall mean an option to purchase one Ordinary Share, which grant is made pursuant to the Plan.

(u)“Option Agreement” shall mean a written agreement between the Company and the Optionee regarding the grant and exercise of Options to purchase Shares and the terms and conditions thereof as determined by the Committee pursuant to the Plan.

(v)“Option Shares” shall mean the Ordinary Shares subject to an Option.

(w)“Optionee” shall mean any person who receives or holds an Option under the Plan.

(x)“Parent” shall mean a parent corporation, whether now or hereafter existing, as defined by Section 424(e) of the Code.

(y)“Plan” shall mean this 2010 US Share Option Plan.

(z)“Registration Date” shall mean the effective date of the first registration of any class of the Company’s equity securities pursuant to Section 12 of the Exchange Act.

(aa)“Securities Act” shall mean the Securities Act of 1933, as now in effect or as hereafter amended.

(bb)    “Share” or “Ordinary Share” shall mean one Ordinary Share, par value NIS0.01 per share, of the Company, as adjusted in accordance with Section 12 of the Plan.

(cc)    “Service Provider” means a director, consultant or adviser to the Company or its Subsidiary

(dd)    “Subsidiary” shall mean a direct or indirect subsidiary corporation, whether now or hereafter existing, as defined in Section 424(f) of the Code.

(ee)    “Termination of Service” means (a) in the case of an Employee, a cessation of the employee-employer relationship between an employee and the Company or an Affiliate for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, disability, or the disaffiliation of an Affiliate, but excluding any such termination where there is a simultaneous re-employment by the Company or an Affiliate; and (b) in the case of a Consultant, a cessation of the service relationship between a Consultant and the Company or an Affiliate for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, disability, or the disaffiliation of an Affiliate, but excluding any such termination where there is a simultaneous re-engagement of the Consultant by the Company or an Affiliate.

3.Shares Subject to the Plan; Restriction Thereon.  Subject to the provisions of Section 12 of the Plan, the maximum aggregate number of Shares, which may be optioned and sold under this Plan and any other share option plan of the Company, shall be determined by the Board of Directors of the Company from time to time.  The Shares may be authorized but unissued or reacquired Shares.  If an Option expires or becomes unexcercisable for any reason without having been exercised in full (the aforesaid applies to any unexercised portion of the options), or is surrendered pursuant to an Option exchange program, such unissued or retained Shares shall become available for other Option grants under the Plan, unless the Plan shall have been terminated.

Subject to any applicable law, an Optionee who purchased Shares hereunder upon exercise of Options shall have no voting rights as a shareholder (in any and all matters whatsoever) until the consummation of an IPO.  Until the IPO, such Shares shall be voted by an irrevocable proxy (the “Proxy”), such Proxy to be assigned to representatives designated by Board (the “Representatives”). Such Representatives shall be indemnified and held harmless by the Company against any cost or expense (including counsel fees) reasonably incurred by him/her, or any liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the voting of the Proxy unless arising out of such Representative’s own fraud or bad faith, to the extent permitted by applicable law.  Such indemnification shall be in addition to any rights of indemnification the Representative(s) may have as a director or otherwise under the Company’s incorporation documents, any agreement, any vote of shareholders or disinterested directors, insurance policy or otherwise.

		
	4.
	Administration of the Plan.

(a)Procedure.  The Plan shall be administered by the Board.  The Board may appoint a Committee consisting of not less than two (2) members of the Board to administer the Plan, subject to such terms and conditions as the Board may prescribe.  Once appointed, the Committee shall continue to serve until otherwise directed by the Board.  From time to time, the Board may increase the size of the Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies, however caused, and remove all members of the Committee and, thereafter, directly administer the Plan.  Members of the Board or Committee who are either eligible for Options or have been granted Options may vote on any matters affecting the administration of the Plan or the grant of Options pursuant to the Plan, except that no such member shall act upon the granting of an Option to himself, but any such member may be counted in determining the existence of a quorum at any meeting of the Board or the Committee during which action is taken with respect to the granting of an Option to him or her.

The Committee shall meet at such times and places and upon such notice as the chairperson determines.  A majority of the Committee shall constitute a quorum.  Any acts by the Committee may be taken at any meeting at which a quorum is present and shall be by majority vote of those members entitled to vote.  Additionally, any acts reduced to writing or approved in writing by all of the members of the Committee shall be valid acts of the Committee.

(b)Powers of the Committee.  Subject to the provisions of the Plan, and except as otherwise provided by the Board, the Committee shall have the authority:  (i) to determine, upon review of relevant information, the Fair Market Value of the Ordinary Shares; (ii) to determine the exercise price of Options to be granted, the Employees, Service Providers or Consultants to whom and the time or times at which Options shall be granted, and the number of Shares to be represented by each Option; (iii) to interpret the Plan; (iv) to prescribe, amend and rescind rules and regulations relating to the Plan; (v) to determine the terms and provisions of each Option granted under the Plan (which need not be identical) and, with the consent of the holder thereof, to modify or amend any Option; (vi) to authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Option previously granted by the Committee; (vii) to accelerate or (with the consent of the Optionee) defer an exercise date of any Option, subject to the provisions of Section 9(a) of the Plan; (viii) to determine whether Options granted under the Plan will be Incentive Stock Options or Nonstatutory Stock Options; (ix) to make all other determinations deemed necessary or advisable for the administration of the Plan (x) to recommend to the Board to approve the extension of a loan to Optionees for the purpose of exercising Stock Options .  Notwithstanding anything to the contrary in the Plan and without derogating from the generality of the foregoing, the Committee, in its sole and absolute discretion, may decide: (i) if and how the unvested Options shall be canceled, exchanged, assumed, replaced, repurchased or accelerated; (ii) if and how vested Options (including Options with respect to which the vesting period has been accelerated) shall be exercised, exchanged, assumed, replaced and/or sold, including, without limitation, determining that all un-exercised vested Options shall be cancelled for no consideration upon a Merger Transaction; (iii) how any treatment of Options may be made subject to any payment or escrow arrangement, or any other arrangement determined within the scope of the Merger Transaction in relation to the Shares of the Company.

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

(d)At the Company’s discretion, each member of the Board or the Committee may be indemnified and held harmless by the Company against any cost or expense (including counsel fees) reasonably incurred by him, or any liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the Plan unless arising out of such member’s own fraud or bad faith, to the extent permitted by applicable law.  Such indemnification shall be in addition to any rights of indemnification the member may have as a director or otherwise under the Company’s incorporation documents, any agreement, any vote of shareholders or disinterested directors, insurance policy or otherwise.

		
	5.
	Eligibility.

(a)Persons Eligible for Options.  Nonstatutory Stock Options under the Plan may be granted to Employees, Directors or Consultants whom the Committee, in its sole discretion, may designate from time to time.  Incentive Stock Options may be granted only to Employees.  An Employee, Director or Consultant who has been granted an Option, if he or she is otherwise eligible, may be granted an additional Option or Options.  However, if the aggregate Fair Market Value of the Shares (determined as of the Grant Date) subject to one or more Incentive Stock Options that are exercisable for the first time by an Optionee during any calendar year (under all stock option plans of the Company and its Parents and Subsidiaries) exceeds $100,000 such Options shall be treated as Nonstatutory Stock Options.

(b)No Right to Continuing Employment, Consulting or Director Relationship.  Neither the establishment nor the operation of the Plan nor the Option Agreement with the Optionee shall confer upon any Optionee or any other person any right with respect to continuation of employment or other service with the Company or any Subsidiary, nor shall the Plan interfere in any way with the right of the Optionee or the right of the Company (or any Parent or Subsidiary) to terminate such employment or service at any time.

6.    Term of Plan.  The Plan shall become effective upon its adoption by the Board and its approval by vote of the holders of the outstanding shares of the Company entitled to vote on the adoption of the Plan (in accordance with the provisions of Section 19 hereof).  It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 14 of the Plan.

7.    Term of Option.  Subject to the terms and conditions of the Plan, the term of the Option shall be set forth in the Option Agreement; provided, however, that the term shall be no more than ten (10) years from the Grant Date.  In the case of an Incentive Stock Option granted to an Optionee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Option shall be five (5) years from the Grant Date or such shorter term as may be provided in the Option Agreement.

8.    Option Exercise Price and Consideration.

(a)    Option Price.  Except as provided in subsections (b) and (c) below, the exercise price for the Shares to be issued pursuant to any Option shall be such price as is determined by the Committee in accordance with applicable law, which (i) in the case of Incentive Stock Options granted to an Employee, shall in no event be less than 100% of the Fair Market Value of such Shares on the Grant Date or (ii) in the case of Nonstatutory Stock Options, 100% of the Fair Market Value of such Shares on the Grant Date.  Each Option Agreement will contain the exercise price determined for each Optionee on the Grant Date.

(b)    Ten Percent Stockholder.  No Option shall be granted to any Employee who, at the date such Option is granted, owns more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, computed as set forth in Sections 422(b)(6) and 424(d) of the Code, unless the exercise price for the Shares to be issued pursuant to such Option is at least equal to 110% of the Fair Market Value of such Shares on the Grant Date.

(b)    Consideration  The consideration to be paid for the Option Shares shall be payment in cash or by check, cashier’s check, certified check, wire transfer, or such other method of payment approved by the Committee, provided that a period of at least six months and one day has lapsed from the day the Optionee exercised his/her Options into Shares, or such other consideration and method of payment for the issuance of Option Shares is authorized by the Committee at the time of the grant of the Option.  Any cash or other property received by the Company from the sale of Shares pursuant to the Plan shall constitute part of the general assets of the Company.

9.    Exercise of Option.

(a)    Vesting Period.  Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Committee and as shall be permissible under the terms of the Plan, which shall be specified in the Option Agreement evidencing the Option.  Unless otherwise determined by the Committee, all Options granted hereunder shall, subject to Continuous Employment by an Optionee, become vested and exercisable, in accordance with the following vesting periods:

1.    25% of the Options shall vest on the first anniversary of the commencement date of the vesting schedule (the “First Anniversary”), which, unless otherwise determined by the Committee, shall be the date on which such Options shall be granted) (the “Commencement Date”);

2.    Additional 6.25% of the Options shall vest on each subsequent quarter following the First Anniversary over a period of 3 years; and 

3.    In accordance with the above, all Options and or Shares, as the case may be, shall become fully vested by the fourth anniversary of the Commencement Date

The minimum number of Options that an Optionee may exercise in every exercise event shall be no less then the greater number of: (1) 500 Options; or (2) 5% of the Options granted to such Optionee under that grant; unless the Optionee is exercising all of his/her remaining vested Options.

(b)    Exercise Procedures.  An Option shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to exercise the Option and full payment for the Shares with respect to which the Option is exercised has been received by the Company.  After the Registration Date, in lieu of delivery of a cash payment for the purchase price of the Option Shares with respect to which the Option is exercised, the Optionee may deliver to the Company a sell order to a broker for the Shares being purchased and an agreement to pay (or have the broker remit payment for) the purchase price for the Shares being purchased on or before the settlement date for the sale of such shares to the broker.  As soon as practicable following the exercise of an Option in the manner set forth above, the Company shall issue or cause its transfer agent to issue stock certificates representing the Shares purchased.  Until the issuance of such stock certificates (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Option Shares notwithstanding the exercise of the Option.  No adjustment will be made for a dividend or other rights for which the record date is prior to the date of the transfer by the Optionee of the consideration for the purchase of the Shares, except as provided in Section 12 of the Plan.

(c)    Termination of Status as Employee, Director or Consultant.  If an Optionee ceases to be an Employee, Director or Consultant for any reason other than permanent disability (as defined in Section 9(f) below) or death, he or she may, within ninety (90) days (or such other period of time as is determined by the Committee) after the date of Termination of Service, exercise his or her vested Option to the extent that he or she was entitled to exercise it at the date of Termination of Service, subject to the condition that no Option shall be exercised after the expiration of the Option period.

(d)    For avoidance of doubt, if termination of employment or service is for Cause, any outstanding unexercised Option, will immediately expire and terminate, and the Optionee shall not have any right in connection to such outstanding Options.

(e)    The Committee may authorize an extension of the terms of all or part of the vested Options beyond the date of such Termination of Service for a period not to exceed the period during which the Options by their terms would otherwise have been exercisable.

(f)    Disability of Optionee.  If an Optionee shall cease to be an Employee, Director or Consultant due to “permanent disability” as such term is defined in Section 22(e)(3) of the Code, and such Optionee 

was in Continuous Employment as an Employee, Director or Consultant from the Grant Date until the date of Termination of Service, any vested Option may be exercised at any time within twelve (12) months following the date of Termination of Service, but only to the extent of the accrued right to exercise at the time of Termination of Service, subject to the condition that no option shall be exercised after the expiration of the Option period.  All remaining Shares covered by the unexercisable portion of the Option shall immediately revert to the Plan.

(g)    Death of Optionee.  In the event of the death during the Option period of an Optionee who is at the time of his or her death, an Employee, Non-Employee Director or Consultant and who was in Continuous Employment as such from the Grant Date until the date of death, the Option may be exercised at any time within twelve (12) months following the date of death by the Optionee’s estate or by a person who acquired the right to exercise the Option by bequest, inheritance or otherwise as a result of the Optionee’s death, but only to the extent of the accrued right to exercise at the time of death, subject to the condition that no option shall be exercised after the expiration of the Option period.  All remaining Shares covered by the unexercisable portion of the Option shall immediately revert to the Plan.  If, after the Optionee’s death, the Optionee’s estate or a person who acquires the right to exercise the Option by bequest or inheritance does not exercise the Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

(h)    Tax Withholding.

(i)    Any tax consequences arising from the grant or exercise of any Option, from the payment for Shares covered thereby or from any other event or act (of the Company and/or its Subsidiaries or the Optionee) hereunder shall be borne solely by the Optionee.  The Company and/or its Subsidiaries shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source.  Furthermore, the Optionee shall agree to indemnify the Company and/or its Subsidiaries and hold them harmless against and from any and all liability for any tax that is borne on the Optionee or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Optionee.

(ii)    The Company shall not be required to release any Share certificate to an Optionee until all required payments have been fully made.

(iii)    Any adverse consequences incurred by the Optionee with respect to the use of Shares to pay any part of the Option Price or of any tax in connection with the exercise of an Option, including, without limitation, any adverse tax consequences arising as a result of a disqualifying disposition within the meaning of Section 422 of the Code, shall be the sole responsibility of the Optionee (hereinafeter: “Disqualifying Disposition”).

10.    Transfer of Options.  No Option or any right with respect thereto shall be assignable, transferable, or given as collateral to any third party whatsoever by operation of law or otherwise, except by will or by the laws of descent and distribution.  During the lifetime of the Optionee, all of such Optionee’s rights to purchase Shares upon the exercise of his or her Options shall be exercisable only by the Optionee.

11.    Exercise of Unvested Options.  The Committee may grant any Optionee the right to exercise any Option prior to the complete vesting of such Option.

12.    Adjustments upon Changes in Capitalization.

(a)    Subject to any required action by the shareholders of the Company, the number of Option Shares covered by each outstanding Option, and the number of Shares which have been authorized for issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan, and the per share exercise price of each such Option, shall be proportionately and equitably adjusted for any increase or decrease in the number of issued Ordinary Shares resulting from a stock split, reverse stock split, combination, reclassification, the payment of a stock dividend on the Ordinary Shares or any other increase or decrease in the number of such Ordinary Shares effected without receipt of consideration by the Company without changing the aggregate exercise price, provided, however, that conversion of any convertible securities of the Company shall not 

be deemed to have been effected without receipt of consideration.  Such adjustment shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive.  Except as expressly provided herein, no issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option.

(b)    The Committee may, if it so determines in the exercise of its sole discretion, also make provision for proportionately adjusting the number or class of securities covered by any Option, as well as the price to be paid therefor, in the event that the Company effects one or more reorganizations, recapitalizations, rights offerings, or other increases or reductions of its outstanding Ordinary Shares, and in the event of the Company being consolidated with or merged into any other corporation.

13.    Time of Granting Options.  Unless otherwise specified by the Committee, the date of grant of an Option under the Plan shall be the Grant Date.  Notice of the determination shall be given to each Optionee to whom an Option is so granted within a reasonable time after the date of such grant.

14.    Amendment and Termination of the Plan.  The Board may amend or terminate the Plan from time to time in such respects as the Board may deem advisable, execpt that, without approval of the shareholders of the Company, no such revision or amendment shall change the number of Shares subject to the Plan, change the designation of the class of employees eligible to receive Options or add any material benefit to Optionees under the Plan, modify the Plan in any other way if such modification requires shareholders approval in order for the Plan to satisfy the requirements of Section 422 of the Code.  Any such amendment or termination of the Plan shall not affect Options already granted, and such Options shall remain in full force and effect as if the Plan had not been amended or terminated.  Without derogating from the above, no amendment of this Plan shall be effective unless approved by the shareholders of the Company within twelve (12) months before or after the adoption of the amendment by the Board if such approval is required.

15.    Conditions upon Issuance of Shares.  Shares shall not be issued with respect to an Option granted under the Plan unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with Applicable Laws, and shall be further subject to the approval of counsel for the Company with respect to such compliance.  As a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned relevant provisions of law.

16.    Reservation of Shares.  During the term of this Plan the Company will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.  The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the nonissuance or sale of such Shares as to which such requisite authority shall not have been obtained.

17.    Information to Optionee.  During the term of any Option granted under the Plan, the Company shall provide or otherwise make available to each Optionee a copy of its annual financial statement and any other financial information provided to its shareholders in accordance with the provisions of the Company’s Articles of Association and applicable law.  The Company shall not be required to provide such statements to key employees whose duties in connection with the Company assure their access to equivalent information.

18.    Option Agreement.  Options granted under the Plan shall be evidenced by Option Agreements, in such form as the Board or the Committee shall from time to time approve.  Each Option Agreement shall state, inter alia, the number of Shares to which the Option relates, the type of Option granted thereunder (whether an Incentive Stock Option or Nonstatutory Stock Option), the vesting dates, the exercise price per Share, the Grant Date and the expiration date.

19.    Shareholder Approval.  The Plan shall be subject to approval by the shareholders of the Company within twelve (12) months before or after the Plan is adopted by the Board.  Such shareholder approval shall be obtained in the degree and manner required under Applicable Laws and no Incentive Stock Option shall be exercised unless and until the Plan has been approved by the shareholders of the Company.

20.    Shares Subject to Right of First Refusal and Tag Along.

(a)    Notwithstanding anything to the contrary in the incorporation documents of the Company, none of the Optionees shall have a right of first refusal in relation with any sale of shares in the Company.

(b)    As a condition for the grant of Options and issuance of shares under the Plan, each Optionee shall acknowledge the terms and provisions of the corporate documents of the Company, including its Articles of Association, as amended from time to time, and shall agree to be bound by the their terms with respect to any restriction applicable to the Ordinary Shares of the Company (including without limitation, any right of first refusal and bring along provisions, as applicable).

(c)    Anything herein to the contrary notwithstanding, if prior to the listing of the Company’s shares on a stock exchange, all or substantially all of the shares of the Company are to be sold, or in case of a M&A Event (as defined in the Articles of Association, as amended from time to time), all or substantially all of the shares of the Company are to be exchanged for securities of another corporation, then each Optionee shall be obliged to sell or exchange, as the case may be, any Shares such Optionee purchased under this Plan, in accordance with the instructions issued by the Board in connection with the M&A Event, whose determination shall be final.

(d)    The Optionee acknowledges that in the event that the Company’s shares shall be registered for trading in any public market, Optionee’s rights to sell the Shares may be subject to certain limitations (including a lock-up period), as will be requested by the Company or its underwriters or as will be required by law, and the Optionee unconditionally agrees and accepts any such limitations.

(e)    Optionee shall not transfer, sell, pledge or otherwise dispose of the Shares exercised under this Plan at any time prior to the lapse of six (6) months from the date in which the Optionee exercised an Option, unless as part of a M&A Event or with the consent of the Board.

21.    Dividends.  With respect to all Shares (but excluding, for avoidance of any doubt, any unexercised Options) allocated or issued upon the exercise of Options purchased by the Optionee, and subject to the Company’s Articles of Association, as amended from time to time and incorporation documents, the Optionee shall be entitled to receive dividends and other distributions in accordance with the quantity of such Shares, and subject to any applicable taxation on distribution of dividends.

22.    Government Regulation.  The Plan, the granting and exercise of Options hereunder, and the obligation of the Company to sell and deliver Shares under such Options, shall be subject to all applicable laws, rules, and regulations, whether of the State of Israel, United States or any other state having jurisdiction over the Company and the Optionee, including the registration of the Shares under the Securities Act, and to such approvals by any governmental agencies or national securities exchanges as may be required.  Nothing herein shall be deemed to require the Company to register the Shares under the securities laws of any jurisdiction.

23.    Govering Law.  The Plan shall be governed by and construed and enforced in accordance with the requirements relating to the administration of stock option plans under the laws of the State of Israel and U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the shares are listed or quoted and the applicable laws of any other country or jurisdiction where Options are granted under the Plan.

24.    Non-Exclusivity of the Plan.  The adoption of the Plan by the Board shall not be construed as amending, modifying or rescinding any previously approved incentive arrangements or 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 Options otherwise then under the Plan, and such arrangements may be either applicable generally or only in specific cases.

For the avoidance of doubt, prior grant of options to Optionees of the Company under their employment agreements, and not in the framework of any previous option plan, shall not be deemed an approved incentive arrangement for the purpose of this section.

25.    Multiple Agreements.  The terms of each Option may differ from other Options granted under the Plan at the same time, or at any other time.  The Board may also grant more than one Option to a given Optionee during the term of the Plan, either in addition to, or in substitution for, one or more Options previously granted to that Optionee.

26.    Conversion of Incentive Stock Option into Nonstatutory Stock Option.  Subject to verification and consideration of any and all implications of any applicable tax law, including, without limitation, the provisions of Section 409A of the Code and the regulations promulgated thereunder as now in effect or as hereafter amended, the Board, at the written request of any U.S. Optionee, may in its discretion take such actions as may be necessary to convert such Optionee’s Incentive Stock Options (or any portions thereof) that have not been exercised on the date of conversion into Nonstatutory Stock Options at any time prior to the expiration of such Incentive Stock Options, regardless of whether the Optionee is an Employee of the Company or a Subsidiary at the time of such conversion.  Such actions may include, but not be limited to, extending the exercise period or reducing the exercise price of the appropriate installments of such Options.  At the time of such conversion, the Board (with the consent of the Optionee) may impose such conditions on the exercise of the resulting Nonstatutory Stock Options as the Board in its discretion may determine, provided that such conditions shall not be inconsistent with the Plan.  Nothing in the Plan shall be deemed to give any Optionee the right to have such Optionee’s Incentive Stock Options converted into Nonstatutory Stock Options, and no such conversion shall occur unless and until the Board takes appropriate action.  The Board, with the consent of the Optionee, may also terminate any portion of any Incentive Stock Option that has not been exercised at the time of such conversion.

27.    Notice to the Company of Disqualifying Disposition.  Each Employee who receives an Incentive Stock Option must agree to notify the Company in writing immediately after the Employee makes a Disqualifying Disposition of any Shares acquired upon the exercise of an Incentive Stock Option.  A Disqualifying Disposition is any disposition (including any sale) of such Shares before a date which is both (a) two (2) years after the date the Employee was granted the Incentive Stock Option, and (b) one (1) year after the date the Employee acquired Shares by exercising the Incentive Stock Option.  If the Employee has died before such Share is sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter.

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