Document:

Exhibit 10.12

Exhibit 10.12

PATENT LICENSE AGREEMENT

This PATENT LICENSE AGREEMENT
(this “Agreement”) is entered into, as of the Effective Date
(defined below), by and between Irvine Sensors Corporation, a Delaware corporation, with an office
at 3001 Redhill Ave., Bldg. 4, Suite 108, Costa Mesa, CA 92672 (“Seller”)
and Aprolase Development
Co., LLC, a Delaware limited liability company, with an address at 2711 Centerville Road, Suite
400, Wilmington, DE 19808 (“Purchaser”). The parties hereby agree as follows:

1. BACKGROUND

1.1 Seller (“Seller”) sold to Purchaser
certain pending patent applications, patents, and/or
related foreign patents and applications (“Patents”) pursuant to a Patent Purchase Agreement
(“PPA”) entered into by the parties on December 11, 2008, and as amended in the Second Amendment to
the Patent Purchase Agreement dated March 18, 2009.

1.2 Purchaser desires to grant a license to the Patents to Seller in accordance with the terms of
this Agreement.

2. DEFINITIONS

All capitalized used but not defined herein shall have the meanings set forth in the PPA.

3. LICENSE

3.1 License. Upon the Closing, Purchaser hereby grants to Seller,
under the Patents, and
for the lives thereof, a royalty-free, non-exclusive, non-sublicensable, non-transferable right and
license (“Seller License”) to practice the methods and to make, have made, use, distribute, lease,
sell, offer for sale, import, export, develop and otherwise dispose of and exploit any Seller
products covered by the Patents (“Covered Products). The Seller License shall apply to the
reproduction and subsequent distribution of Covered Products under Seller’s trademarks and brands,
in substantially identical form as they are distributed by the Seller, by authorized agents of the
Seller such as a distributor, replicator, VAR or OEM. The Seller acknowledges and agrees that the
Seller License is not intended to cover foundry or contract manufacturing activities that the
Seller may undertake on behalf of any person that is not the Seller. As a result, Covered Products
shall exclude any products or services manufactured, produced or provided by the Seller on behalf
of any person that is not the Seller (a) from designs received in substantially completed form from
a source other than the Seller and (b) for resale to such person that is not the Seller (or to
customers of, or as directed by, any person that is not the Seller) on essentially an exclusive
basis. The Seller License is nontransferable (by operation of law or otherwise), except as set
forth in paragraph 3.2.

 

 

 

3.2 Limitation on Transferability of Subsidiary License.
The Seller License ***.
In the event of such a transfer (a “Transfer”), the ***, and the ***. Seller shall, within thirty
(30) days after a Transfer, provide Purchaser with written notice of such Transfer, which notice
will contain: (i) the effective date of the Transfer, ***, as of the effective date of the
Transfer, and the Seller License will immediately terminate in the event that Seller fails to
provide such notice as and when set forth above. The *** may not *** the Seller License ***. The
Seller License will immediately terminate upon any attempted transfer *** that is not in strict
conformance with this paragraph 3.2, and any such attempted transfer will be void.

3.3 Reservation of Rights.
Except as set forth in paragraph 3.1 above, Purchaser reserves
all right, title and interest in and to the Assigned Patent rights.

4. MISCELLANEOUS 

4.1 Limitation on Consequential Damages.
NEITHER PARTY WILL HAVE ANY OBLIGATION OR
LIABILITY (WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, AND
NOTWITHSTANDING ANY FAULT, NEGLIGENCE (WHETHER ACTIVE, PASSIVE OR IMPUTED), REPRESENTATION, STRICT
LIABILITY OR PRODUCT LIABILITY), FOR COVER OR FOR ANY INCIDENTAL, INDIRECT OR CONSEQUENTIAL,
MULTIPLIED, PUNITIVE, SPECIAL, OR EXEMPLARY DAMAGES OR LOSS OF REVENUE, PROFIT, SAVINGS OR BUSINESS
ARISING FROM OR OTHERWISE RELATED TO THIS AGREEMENT, EVEN IF A PARTY OR ITS REPRESENTATIVES HAVE
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE PARTIES ACKNOWLEDGE THAT THESE EXCLUSIONS OF
POTENTIAL DAMAGES WERE AN ESSENTIAL ELEMENT IN SETTING CONSIDERATION UNDER THIS AGREEMENT.

4.2 Compliance With Laws. Notwithstanding anything contained in this Agreement to the
contrary, the obligations of the parties with respect to the consummation of the transactions
contemplated by this Agreement shall be subject to all laws, present and future, of any government
having jurisdiction over the parties and this transaction, and to orders, regulations, directions
or requests of any such government.

4.3 Confidentiality of Terms. The parties hereto will keep the terms and existence of this
Agreement and the identities of the parties hereto and their affiliates confidential and will not
now or hereafter divulge any of this information to any third party except (a) with the prior
written consent of the other party; (b) as otherwise may be required by law or legal process; (c)
during the course of litigation, so long as the disclosure of such terms and conditions is
restricted in the same manner as is the confidential information of other litigating parties; (d)
in confidence to its legal counsel, accountants, banks, and financing sources and their advisors
solely in connection with complying with or administering its obligations with respect to this
Agreement; or (e) by Purchaser, to potential purchasers or licensees of the Assigned Patent Rights
or the Abandoned Assets; provided that, in (b) and (c) above, (i) to the extent permitted by law,
the disclosing party will use all legitimate and legal means available to minimize the disclosure to third parties, including, without limitation, seeking
a confidential treatment request or protective order whenever appropriate or available; and (ii)
the disclosing party will provide the other party with at least ten (10) days’ prior written notice
of such disclosure. Without limiting the foregoing, Seller will cause Subsidiary and agents of
Subsidiary and Seller involved in this transaction to abide by the terms of this paragraph,
including, without limitation, ensuring that such agents do not disclose or otherwise publicize the
existence of this transaction with actual or potential clients in marketing materials, or industry
conferences.

 

	 	 	 
	*	 	Confidential treatment requested pursuant to Rule 24b-2
under the Securities Exchange Act of 1934. In accordance with Rule 24b-2, these
confidential portions have been omitted from this exhibit and filed separately
with the Securities and Exchange Commission.

 

 

 

4.4 Governing Law. This Agreement will be interpreted, construed, and enforced in all
respects in accordance with the laws of the State of Delaware, without reference to its choice of
law principles to the contrary. Seller will not commence or prosecute any action, suit, proceeding
or claim arising under or by reason of this Agreement other than in the state or federal courts
located in Delaware. Seller irrevocably consents to the jurisdiction and venue of the courts
identified in the preceding sentence in connection with any action, suit, proceeding, or claim
arising under or by reason of this Agreement.

4.5 Notices. All notices given hereunder will be given in writing (in English or with an
English translation), will refer to Purchaser and to this Agreement and will be delivered to the
address set forth below by (i) personal delivery or (ii) delivery postage prepaid by an
internationally-recognized express courier service:

	 	 	 	 
	 	If to Purchaser	 	If to Seller
	 
	 	Aprolase Development Co., LLC 

2711 Centerville Road, Suite 400 

Wilmington, DE 19808 

	 	Irvine Sensors Corporation

3001 Redhill Ave.

Bldg. 4, Suite 108

Costa Mesa, CA 92672
	 	 
	 	 
	 	Attn: Managing Director

	 	Attn: Eric Boyd

Notices are deemed given on (a) the date of receipt if delivered personally or by express courier
or (b) if delivery is refused, the date of refusal. Notice given in any other manner will be
deemed to have been given only if and when received at the address of the person to be notified.
Either party may from time to time change its address for notices under this Agreement by giving
the other party written notice of such change in accordance with this paragraph.

4.6 Relationship of Parties. The parties hereto are independent contractors. Nothing in
this Agreement will be construed to create a partnership, joint venture, franchise, fiduciary,
employment or agency relationship between the parties. Neither party has any express or implied
authority to assume or create any obligations on behalf of the other or to bind the other to any
contract, agreement or undertaking with any third party.

4.7 Severability. If any provision of this Agreement is found to be invalid or
unenforceable, then the remainder of this Agreement will have full force and effect, and the
invalid provision will be modified, or partially enforced, to the maximum extent permitted to
effectuate the original objective.

 

 

 

4.8 Waiver. Failure by either party to enforce any term of this Agreement will not be
deemed a waiver of future enforcement of that or any other term in this Agreement or any other
agreement that may be in place between the parties.

4.9 Miscellaneous. This Agreement and the PPA constitute
the entire agreement between the
parties with respect to the subject matter hereof and merge and supersede all prior and
contemporaneous agreements, understandings, negotiations, and discussions. Neither of the parties
will be bound by any conditions, definitions, warranties, understandings, or representations with
respect to the subject matter hereof other than as expressly provided herein. The section headings
contained in this Agreement are for reference purposes only and will not affect in any way the
meaning or interpretation of this Agreement. This Agreement is not intended to confer any right or
benefit on any third party (including, but not limited to, any employee or beneficiary of any
party), and no action may be commenced or prosecuted against a party by any third party claiming as
a third-party beneficiary of this Agreement or any of the transactions contemplated by this
Agreement. No oral explanation or oral information by either party hereto will alter the meaning
or interpretation of this Agreement. No amendments or modifications will be effective unless in a
writing signed by authorized representatives of both parties. The terms and conditions of this
Agreement will prevail notwithstanding any different, conflicting or additional terms and
conditions that may appear on any letter, email or other communication or other writing not
expressly incorporated into this Agreement.

4.10 Counterparts; Electronic Signature; Delivery Mechanics.
This Agreement may be
executed in counterparts, each of which will be deemed an original, and all of which together
constitute one and the same instrument. Each party will execute and promptly deliver to the other
parties a copy of this Agreement bearing the original signature. Prior to such delivery, in order
to expedite the process of entering into this Agreement, the parties acknowledge that a Transmitted
Copy of this Agreement will be deemed an original document. “Transmitted Copy” means a copy
bearing a signature of a party that is reproduced or transmitted via email of a .pdf file,
photocopy, facsimile, or other process of complete and accurate reproduction and transmission.

In witness whereof, intending to be legally bound, the parties have executed this Patent
License Agreement as of the Effective Date.

	 	 	 	 	 	 	 	 	 	 	 
	SELLER:	 	 	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	IRVINE SENSORS CORPORATION	 	 	 	APROLASE DEVELOPMENT CO., LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ JOHN J. STUART, JR.
 

Name: John J. Stuart, Jr. 

Title:   Sr. VP & Chief Financial Officer
	 	 
	 	By:
	 	/s/ MELISSA COLEMAN
 

Name: Melissa Coleman

Title:   Authorized Person
	 	 

Effective Date: March 18, 2009Exhibit 10.13

Exhibit 10.13

 

 

 

    IRVINE
    SENSORS CORPORATION

    AMENDED AND RESTATED

    2006 OMNIBUS INCENTIVE PLAN

    (AMENDED AND RESTATED AS
    OF MARCH 31, 2009)

 

 

    Table of
    Contents

 

	 	 	 	 	 	 	 
	

    Section 1.

	
 
	
    Purpose
	
 
	 
	
    A-1
	 

	

    Section 2.

	
 
	
    Definitions
	
 
	 
	
    A-1
	 

	

    Section 3.

	
 
	
    Administration
	
 
	 
	
    A-3
	 

	

    (a)

	
 
	
    Power and Authority of the Committee
	
 
	 
	
    A-3
	 

	

    (b)

	
 
	
    Power and Authority of the Board
	
 
	 
	
    A-4
	 

	

    Section 4.

	
 
	
    Shares Available for Awards
	
 
	 
	
    A-4
	 

	

    (a)

	
 
	
    Shares Available
	
 
	 
	
    A-4
	 

	

    (b)

	
 
	
    Accounting for Awards
	
 
	 
	
    A-4
	 

	

    (c)

	
 
	
    Adjustments
	
 
	 
	
    A-4
	 

	

    (d)

	
 
	
    Section 162(m) Award Limitations Under the Plan
	
 
	 
	
    A-4
	 

	

    Section 5.

	
 
	
    Eligibility
	
 
	 
	
    A-5
	 

	

    Section 6.

	
 
	
    Awards
	
 
	 
	
    A-5
	 

	

    (a)

	
 
	
    Options
	
 
	 
	
    A-5
	 

	

    (b)

	
 
	
    Stock Appreciation Rights
	
 
	 
	
    A-6
	 

	

    (c)

	
 
	
    Restricted Stock and Restricted Stock Units
	
 
	 
	
    A-6
	 

	

    (d)

	
 
	
    Performance Awards
	
 
	 
	
    A-7
	 

	

    (e)

	
 
	
    Dividend Equivalents
	
 
	 
	
    A-7
	 

	

    (f)

	
 
	
    Other Stock Grants
	
 
	 
	
    A-7
	 

	

    (g)

	
 
	
    Other Stock-Based Awards
	
 
	 
	
    A-7
	 

	

    (h)

	
 
	
    General
	
 
	 
	
    A-7
	 

	

    Section 7.

	
 
	
    Amendment and Termination; Adjustments
	
 
	 
	
    A-9
	 

	

    (a)

	
 
	
    Amendments to the Plan
	
 
	 
	
    A-9
	 

	

    (b)

	
 
	
    Amendments to Awards
	
 
	 
	
    A-9
	 

	

    (c)

	
 
	
    Correction of Defects, Omissions and Inconsistencies
	
 
	 
	
    A-9
	 

	

    Section 8.

	
 
	
    Income Tax Withholding
	
 
	 
	
    A-9
	 

	

    Section 9.

	
 
	
    General Provisions
	
 
	 
	
    A-10
	 

	

    (a)

	
 
	
    No Rights to Awards
	
 
	 
	
    A-10
	 

	

    (b)

	
 
	
    Award Agreements
	
 
	 
	
    A-10
	 

	

    (c)

	
 
	
    Plan Provisions Control
	
 
	 
	
    A-10
	 

	

    (d)

	
 
	
    No Rights of Stockholders
	
 
	 
	
    A-10
	 

	

    (e)

	
 
	
    No Limit on Other Compensation Arrangements
	
 
	 
	
    A-10
	 

	

    (f)

	
 
	
    No Right to Employment
	
 
	 
	
    A-10
	 

	

    (g)

	
 
	
    Governing Law
	
 
	 
	
    A-10
	 

	

    (h)

	
 
	
    Severability
	
 
	 
	
    A-11
	 

	

    (i)

	
 
	
    No Trust or Fund Created
	
 
	 
	
    A-11
	 

	

    (j)

	
 
	
    Other Benefits
	
 
	 
	
    A-11
	 

	

    (k)

	
 
	
    No Fractional Shares
	
 
	 
	
    A-11
	 

	

    (l)

	
 
	
    Headings
	
 
	 
	
    A-11
	 

	

    (m)

	
 
	
    Section 16 Compliance; Section 162(m) Administration
	
 
	 
	
    A-11
	 

	

    (n)

	
 
	
    Conditions Precedent to Issuance of Shares
	
 
	 
	
    A-11
	 

	

    Section 10.

	
 
	
    Effective Date of the Plan
	
 
	 
	
    A-11
	 

	

    Section 11.

	
 
	
    Term of the Plan
	
 
	 
	
    A-11
	 

    

    A-i

 

    IRVINE
    SENSORS CORPORATION

    

    AMENDED AND RESTATED

    2006 OMNIBUS INCENTIVE PLAN

    (AMENDED AND RESTATED AS
    OF MARCH 31, 2009)

 

    Section 1.  Purpose

 

    The purpose of the Plan is to promote the interests of the
    Company and its stockholders by aiding the Company in attracting
    and retaining employees, officers, consultants, advisors and
    directors capable of assuring the future success of the Company,
    to offer such persons incentives to continue in the
    Company’s employ or service and to afford such persons an
    opportunity to acquire a proprietary interest, or otherwise
    increase their proprietary interest, in the Company.

 

    Section 2.  Definitions

 

    As used in the Plan, the following terms shall have the meanings
    set forth below:

 

    (a) “Affiliate” shall mean (i) any
    entity that, directly or indirectly through one or more
    intermediaries, is controlled by the Company and (ii) any
    entity in which the Company has a significant equity interest,
    in each case as determined by the Committee.

 

    (b) “Award” shall mean any Option, Stock
    Appreciation Right, Restricted Stock, Restricted Stock Unit,
    Performance Award, Dividend Equivalent, Other Stock Grant or
    Other Stock-Based Award granted under the Plan.

 

    (c) “Award Agreement” shall mean any
    written agreement, contract or other instrument or document
    evidencing an Award granted under the Plan. Each Award Agreement
    shall be subject to the applicable terms and conditions of the
    Plan and any other terms and conditions (not inconsistent with
    the Plan) determined by the Committee.

 

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

 

    (e) “Code” shall mean the Internal Revenue
    Code of 1986, as amended from time to time, and any regulations
    promulgated thereunder.

 

    (f) “Committee” shall mean one or more
    committees of Directors designated by the Board to administer
    the Plan, of which the Company’s compensation committee
    shall initially be the primary committee. The primary Committee
    shall be comprised of at least two Directors but not less than
    such number of Directors as shall be required to permit Awards
    granted under the Plan to qualify under
    Rule 16b-3
    and Section 162(m) of the Code, and each member of the
    primary Committee shall be a “Non-Employee
    Director” and an “Outside Director.”
    Any secondary Committee shall be comprised of at least two
    Directors.

 

    (g) “Company” shall mean Irvine Sensors
    Corporation, a Delaware corporation, and any successor
    corporation.

 

    (h) “Director” shall mean a member of the
    Board, including any Non-Employee Director.

 

    (i) “Dividend Equivalent” shall mean any
    right granted under Section 6(e) of the Plan.

 

    (j) “Eligible Person” shall mean any
    employee, officer, consultant, advisor or director providing
    services to the Company or any Affiliate who the Committee
    determines to be an Eligible Person. An Eligible Person must be
    a natural person.

 

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

 

    (l) “Fair Market Value” shall mean, with
    respect to any property (including, without limitation, any
    Shares or other securities), the fair market value of such
    property determined by such methods or procedures as shall be
    established from time to time by the Committee. Notwithstanding
    the foregoing, and unless otherwise determined by the Committee,
    the Fair Market Value of a Share as of a given date shall be, if
    the Shares are then listed on the Nasdaq Capital Market, the
    last closing sales price of one Share as reported on the Nasdaq
    Capital

    

    A-1

 

    Market on such date or, if the Nasdaq Capital Market is not open
    for trading on such date, on the most recent preceding date when
    it is open for trading.

 

    (m) “Incentive Stock Option” shall mean an
    option granted under Section 6(a) of the Plan that is
    intended to qualify as an “incentive stock option” in
    accordance with the terms of Section 422 of the Code or any
    successor provision.

 

    (n) “Misconduct” shall mean (i) the
    commission of any act of fraud, embezzlement or dishonesty by
    Participant, (ii) any unauthorized use or disclosure by
    such person of confidential information or trade secrets of the
    Company (or of any Affiliate), or (iii) any other
    intentional misconduct by such person adversely affecting the
    business or affairs of the Company (or any Affiliate) in a
    material manner. However, if the term or concept has been
    defined in an employment agreement between the Company and
    Participant, then Misconduct shall have the definition set forth
    in such employment agreement. The foregoing definition shall not
    in any way preclude or restrict the right of the Company (or any
    Affiliate) to discharge or dismiss any Participant or other
    person in the Service of the Company (or any Affiliate) for any
    other acts or omissions but such other acts or omissions shall
    not be deemed, for purposes of the Plan, to constitute grounds
    for termination for Misconduct.

 

    (o) “Non-Employee Director” shall mean any
    Director who is not also an employee of the Company or an
    Affiliate within the meaning of
    Rule 16b-3
    (which term “Non-Employee Director” is defined in this
    paragraph for purposes of the definition of
    “Committee” only and is not intended to define such
    term as used elsewhere in the Plan).

 

    (p) “Non-Qualified Stock Option” shall
    mean an option granted under Section 6(a) of the Plan that
    is not an Incentive Stock Option.

 

    (q) “Option” shall mean an Incentive Stock
    Option or a Non-Qualified Stock Option.

 

    (r) “Other Stock Grant” shall mean any
    right granted under Section 6(f) of the Plan.

 

    (s) “Other Stock-Based Award” shall mean
    any right granted under Section 6(g) of the Plan.

 

    (t) “Outside Director” shall mean any
    Director who is an “outside director” within the
    meaning of Section 162(m) of the Code.

 

    (u) “Participant” shall mean an Eligible
    Person designated to be granted an Award under the Plan.

 

    (v) “Performance Award” shall mean any
    right granted under Section 6(d) of the Plan.

 

    (w) “Performance Goal” shall mean one or
    more of the following performance goals, either individually,
    alternatively or in any combination, applied on a corporate,
    subsidiary or business unit basis: revenue, cash flow, gross
    profit, earnings before interest and taxes, earnings before
    interest, taxes, depreciation and amortization and net earnings,
    earnings per share, margins (including one or more of gross,
    operating and net income margins), returns (including one or
    more of return on assets, equity, investment, capital and
    revenue and total stockholder return), stock price, economic
    value added, working capital, market share, cost reductions,
    workforce satisfaction and diversity goals, employee retention,
    customer satisfaction, completion of key projects and strategic
    plan development and implementation. Such goals may reflect
    absolute entity or business unit performance or a relative
    comparison to the performance of a peer group of entities or
    other external measure of the selected performance criteria.
    Pursuant to rules and conditions adopted by the Committee on or
    before the 90th day of the applicable performance period
    for which Performance Goals are established, the Committee may
    appropriately adjust any evaluation of performance under such
    goals to exclude the effect of certain events, including any of
    the following events: asset write-downs; litigation or claim
    judgments or settlements; changes in tax law, accounting
    principles or other such laws or provisions affecting reported
    results; severance, contract termination and other costs related
    to exiting certain business activities; and gains or losses from
    the disposition of businesses or assets or from the early
    extinguishment of debt.

    

    A-2

 

    (x) “Permanent Disability” shall mean the
    inability of Participant to engage in any substantial gainful
    activity by reason of any medically determinable physical or
    mental impairment which can be expected to result in death or
    has lasted or can be expected to last for a continuous period of
    twelve months or more.

 

    (y) “Person” shall mean any individual or
    entity, including a corporation, partnership, limited liability
    company, association, joint venture or trust.

 

    (z) “Plan” shall mean the Irvine Sensors
    Corporation 2006 Omnibus Incentive Plan, as amended from time to
    time, the provisions of which are set forth herein.

 

    (aa) “Qualified Performance Based Award”
    shall have the meaning set forth in Section 6(d) of the
    Plan.

 

    (bb) “Restricted Stock” shall mean any
    Share granted under Section 6(c) of the Plan.

 

    (cc) “Restricted Stock Unit” shall mean
    any unit granted under Section 6(c) of the Plan evidencing
    the right to receive a Share (or evidencing the right to receive
    a cash payment equal to the Fair Market Value of a Share if
    explicitly so provided in the Award Agreement) at some future
    date.

 

    (dd) “Rule 16b-3”
    shall mean
    Rule 16b-3
    promulgated by the Securities and Exchange Commission under the
    Exchange Act, or any successor rule or regulation.

 

    (ee) “Section 162(m)” shall mean
    Section 162(m) of the Code and the applicable Treasury
    Regulations promulgated thereunder.

 

    (ff) “Securities Act” shall mean the
    Securities Act of 1933, as amended.

 

    (gg) “Service” shall mean the performance
    of services for the Company (or any Affiliate) by a person in
    the capacity of an employee, a member of the board of directors
    or a consultant, except to the extent otherwise specifically
    provided in the Award Agreement.

 

    (hh) “Share” or “Shares”
    shall mean a share or shares of common stock, $0.01 par
    value per share, of the Company or such other securities or
    property as may become subject to Awards pursuant to an
    adjustment made under Section 4(c) of the Plan.

 

    (ii) “Stock Appreciation Right” shall mean
    any right granted under Section 6(b) of the Plan.

 

    Section 3.  Administration

 

    (a) Power and Authority of the
    Committee.  The Plan shall be administered by
    the Board and the primary Committee. The Board may designate a
    secondary Committee to have concurrent authority to administer
    the Plan, provided that the secondary Committee shall not have
    any authority (i) with regard to grants of Options to be
    made to officers or directors of the Company or any Affiliate
    who are subject to Section 16 of the Exchange Act,
    (ii) in such a manner as would cause the Plan not to comply
    with the requirements of Section 162(m) of the Code or
    (iii) in such a manner as would contravene Section 157
    of the Delaware General Corporation Law. Any Awards made to
    members of the Committee, however, should be authorized by a
    disinterested majority of the Board. Subject to the express
    provisions of the Plan and to applicable law, the Committee
    shall have full power and authority to: (i) designate
    Participants; (ii) determine the type or types of Awards to
    be granted to each Participant under the Plan;
    (iii) determine the number of Shares to be covered by (or
    the method by which payments or other rights are to be
    determined in connection with) each Award; (iv) determine
    the terms and conditions of any Award or Award Agreement;
    (v) amend the terms and conditions of any Award or Award
    Agreement and accelerate the exercisability of any Option or
    waive any restrictions relating to any Award;
    (vi) determine whether, to what extent and under what
    circumstances Awards may be exercised in cash, Shares, other
    securities, other Awards or other property, or canceled,
    forfeited or suspended; (vii) interpret and administer the
    Plan and any instrument or agreement, including an Award
    Agreement, relating to the Plan; (viii) establish, amend,
    suspend or waive such rules and regulations and appoint such
    agents as it shall deem appropriate for the proper
    administration of the Plan; and (ix) make any other
    determination and take any other action that the Committee deems
    necessary or desirable for the administration of the Plan.
    Unless otherwise expressly provided in the Plan, all
    designations, determinations, interpretations and other
    decisions under or with respect to the Plan or any Award or
    Award Agreement shall be within the sole discretion of

    

    A-3

 

    the Committee, may be made at any time and shall be final,
    conclusive and binding upon any Eligible Person and any holder
    or beneficiary of any Award.

 

    (b) Power and Authority of the
    Board.  Notwithstanding anything to the
    contrary contained herein, the Board may, at any time and from
    time to time, without any further action of the Committee,
    exercise the powers and duties of the Committee under the Plan.

 

    Section 4.  Shares
    Available for Awards

 

    (a) Shares Available.  Subject to
    adjustment as provided in Section 4(c) of the Plan, the
    aggregate number of Shares that may be issued under the Plan
    shall be 990,000, plus an automatic annual increase on the first
    day of each of the Company’s fiscal years beginning on
    September 28, 2009 equal to the lesser of
    (i) 1,250,000 Shares or (ii) a number of Shares
    equal to five percent (5%) of the number of Shares outstanding
    on the last day of the preceding fiscal year. Shares to be
    issued under the Plan may be either authorized but unissued
    Shares or Shares re-acquired and held in treasury. Any Shares
    that are used by a Participant as full or partial payment to the
    Company of the purchase price relating to an Award, or in
    connection with the satisfaction of tax obligations relating to
    an Award, shall again be available for granting Awards (other
    than Incentive Stock Options) under the Plan. In addition, if
    any Shares covered by an Award or to which an Award relates are
    not purchased or are forfeited, or if an Award otherwise
    terminates without delivery of any Shares, then the number of
    Shares counted against the aggregate number of Shares available
    under the Plan with respect to such Award, to the extent of any
    such forfeiture or termination, shall again be available for
    granting Awards under the Plan. Notwithstanding the foregoing,
    (i) the number of Shares available for granting Incentive
    Stock Options under the Plan shall not exceed 990,000, plus the
    automatic annual increase described above, subject to adjustment
    as provided in Section 4(c) of the Plan and subject to the
    provisions of Section 422 or 424 of the Code or any
    successor provision and (ii) the number of Shares available
    for granting Restricted Stock and Restricted Stock Units shall
    not exceed 990,000, plus the automatic annual increase described
    above, subject to adjustment as provided in Section 4(c) of
    the Plan.

 

    (b) Accounting for Awards.  For
    purposes of this Section 4, if an Award entitles the holder
    thereof to receive or purchase Shares, the number of Shares
    covered by such Award or to which such Award relates shall be
    counted on the date of grant of such Award against the aggregate
    number of Shares available for granting Awards under the Plan.
    Any Shares that are used by a Participant as full or partial
    payment to the Company of the purchase price relating to an
    Award or in connection with the satisfaction of tax obligations
    relating to an Award, shall again be available for granting
    Awards under the Plan. In addition, if any Shares covered by an
    Award or to which an Award relates are not purchased or are
    forfeited, or if an Award otherwise terminates without delivery
    of any Shares, then the number of Shares counted against the
    aggregate number of Shares available under the Plan with respect
    to such Award, to the extent of any such forfeiture or
    termination, shall again be available for granting Awards under
    the Plan.

 

    (c) Adjustments.  In the event that
    the Committee shall determine that any dividend or other
    distribution (whether in the form of cash, Shares, other
    securities or other property), recapitalization, stock split,
    reverse stock split, reorganization, merger, consolidation,
    split-up,
    spin-off, combination, repurchase or exchange of Shares or other
    securities of the Company, issuance of warrants or other rights
    to purchase Shares or other securities of the Company or other
    similar corporate transaction or event affects the Shares such
    that an adjustment is determined by the Committee to be
    appropriate in order to prevent dilution or enlargement of the
    benefits or potential benefits intended to be made available
    under the Plan, then the Committee shall, in such manner as it
    may deem equitable, adjust any or all of (i) the number and
    type of Shares (or other securities or other property) that
    thereafter may be made the subject of Awards, (ii) the
    number and type of Shares (or other securities or other
    property) subject to outstanding Awards, (iii) the purchase
    price or exercise price with respect to any Award and
    (iv) the limitations contained in Section 4(d) of the
    Plan; provided, however, that the number of Shares
    covered by any Award or to which such Award relates shall always
    be a whole number.

 

    (d) Section 162(m) Award Limitations Under the
    Plan.

 

    Notwithstanding any other provision of the Plan other than
    Section 4(c), if the Committee provides that this
    Section 4(d) is applicable to a particular Award, no
    Participant receiving such an Award shall be granted:
    (i) Options or SARs with respect to more than
    500,000 Shares in the aggregate within any fiscal year of
    the Company; or

    

    A-4

 

    (ii) Qualified Performance Based Awards which could result
    in such Participant receiving more than $1,500,000 in cash or
    the equivalent Fair Market Value of Shares determined at the
    date of grant for each full or partial fiscal year of the
    Company contained in the performance period of a particular
    Qualified Performance Based Award, provided, however, that, if
    any other Qualified Performance Based Awards are outstanding for
    such Participant for a given fiscal year, such dollar limitation
    shall be reduced for each such given fiscal year by the amount
    that could be received by the Participant under all such
    Qualified Performance Based Awards, divided, for each such
    Qualified Performance Based Award, by the number of full or
    partial fiscal years of the Company contained in the performance
    period of each such outstanding Qualified Performance Based
    Award; provided, however, that the limitations set forth in this
    Section 4(d) shall be subject to adjustment under
    Section 4(c) of the Plan only to the extent that such
    adjustment does not affect the status of any Award intended
    under Section 6(d) to qualify as “performance based
    compensation” under Section 162(m) of the Code.

 

    Section 5.  Eligibility

 

    Any Eligible Person shall be eligible to be designated a
    Participant. In determining which Eligible Persons shall receive
    an Award and the terms of any Award, the Committee may take into
    account the nature of the services rendered by the respective
    Eligible Persons, their present and potential contributions to
    the success of the Company or such other factors as the
    Committee, in its discretion, shall deem relevant.
    Notwithstanding the foregoing, an Incentive Stock Option may
    only be granted to full-time or part-time employees (which term
    as used herein includes, without limitation, officers and
    directors who are also employees), and an Incentive Stock Option
    shall not be granted to an employee of an Affiliate unless such
    Affiliate is also a “subsidiary corporation” of the
    Company within the meaning of Section 424(f) of the Code or
    any successor provision.

 

    Section 6.  Awards

 

    (a) Options.  The Committee is
    hereby authorized to grant Options to Eligible Persons with the
    following terms and conditions and with such additional terms
    and conditions not inconsistent with the provisions of the Plan
    as the Committee shall determine:

 

    (i) Exercise Price.  The purchase
    price per Share purchasable under an Option shall be determined
    by the Committee; provided, however, that such
    purchase price shall not be less than 100% of the Fair Market
    Value of a Share on the date of grant of such Option.

 

    (ii) Option Term.  The term of each
    Option shall be fixed by the Committee at the time of grant, but
    shall not be longer than 10 years from the date of grant.

 

    (iii) Time and Method of
    Exercise.  The Committee shall determine the
    time or times at which an Option may be exercised in whole or in
    part and the method or methods by which, and the form or forms
    (including, without limitation, cash, Shares, other securities,
    other Awards or other property, or any combination thereof,
    having a Fair Market Value on the exercise date equal to the
    applicable exercise price) in which, payment of the exercise
    price with respect thereto may be made or deemed to have been
    made. The Committee shall have the discretion to grant Options
    that are exercisable for unvested Shares. Should the
    Participant’s Service cease while the Shares issued upon
    the early exercise of the Participant’s Options are still
    unvested, the Company shall have the right to repurchase any or
    all of those unvested Shares at a price per share determined by
    the Committee. The terms upon which such repurchase right shall
    be exercisable (including the period and procedure for exercise
    and the appropriate vesting schedule for the purchased shares)
    shall be established by the Committee and set forth in the Award
    Agreement. Any repurchases must be made in compliance with the
    relevant provisions of Delaware law.

 

    (iv) Incentive Stock
    Options.  Notwithstanding anything in the Plan
    to the contrary, the following additional provisions shall apply
    to the grant of stock options which are intended to qualify as
    Incentive Stock Options:

 

    (A) The Committee will not grant Incentive Stock Options in
    which the aggregate Fair Market Value (determined as of the time
    the option is granted) of the Shares with respect to which
    Incentive Stock Options are exercisable for the first time by
    any Participant during any calendar year (under this Plan and
    all other plans of the Company and its Affiliates) shall exceed
    $100,000.

    

    A-5

 

    (B) All Incentive Stock Options must be granted within ten
    years from the earlier of the date on which this Plan was
    adopted by the Board or the date this Plan was approved by the
    stockholders of the Company.

 

    (C) Unless sooner exercised, all Incentive Stock Options
    shall expire and no longer be exercisable no later than
    10 years after the date of grant; provided, however,
    that in the case of a grant of an Incentive Stock Option to a
    Participant who, at the time such Option is granted, owns
    (within the meaning of Section 422 of the Code) stock
    possessing more than 10% of the total combined voting power of
    all classes of stock of the Company or of its Affiliate, such
    Incentive Stock Option shall expire and no longer be exercisable
    no later than 5 years from the date of grant.

 

    (D) The purchase price per Share for an Incentive Stock
    Option shall be not less than 100% of the Fair Market Value of a
    Share on the date of grant of the Incentive Stock Option;
    provided, however, that, in the case of the grant of an
    Incentive Stock Option to a Participant who, at the time such
    Option is granted, owns (within the meaning of Section 422
    of the Code) stock possessing more than 10% of the total
    combined voting power of all classes of stock of the Company or
    of its Affiliate, the purchase price per Share purchasable under
    an Incentive Stock Option shall be not less than 110% of the
    Fair Market Value of a Share on the date of grant of the
    Inventive Stock Option.

 

    (E) Any Incentive Stock Option authorized under the Plan
    shall contain such other provisions as the Committee shall deem
    advisable, but shall in all events be consistent with and
    contain all provisions required in order to qualify the Option
    as an Incentive Stock Option.

 

    (b) Stock Appreciation Rights.  The
    Committee is hereby authorized to grant Stock Appreciation
    Rights to Eligible Persons subject to the terms of the Plan and
    any applicable Award Agreement. Each Stock Appreciation Right
    granted under the Plan shall confer on the holder upon exercise
    the right to receive a number of Shares equal to the excess of
    (a) the Fair Market Value of one Share on the date of
    exercise (or, if the Committee shall so determine, at any time
    during a specified period before or after the date of exercise)
    over (b) the grant price of the Stock Appreciation Right as
    determined by the Committee, which grant price shall not be less
    than 100% of the Fair Market Value of one Share on the date of
    grant of the Stock Appreciation Right. Subject to the terms of
    the Plan, the grant price, term, methods of exercise, dates of
    exercise and any other terms and conditions (including
    conditions or restrictions on the exercise thereof) of any Stock
    Appreciation Right shall be as determined by the Committee.

 

    (c) Restricted Stock and Restricted Stock
    Units.  The Committee is hereby authorized to
    grant Restricted Stock and Restricted Stock Units to Eligible
    Persons with the following terms and conditions and with such
    additional terms and conditions not inconsistent with the
    provisions of the Plan as the Committee shall determine:

 

    (i) Restrictions.  Shares of
    Restricted Stock and Restricted Stock Units shall be subject to
    such restrictions as the Committee may impose (including,
    without limitation, a restriction on or prohibition against the
    right to receive any dividend or other right or property with
    respect thereto), which restrictions may lapse separately or in
    combination at such time or times, in such installments or
    otherwise as the Committee may deem appropriate.

 

    (ii) Issuance of Shares.  Any
    Restricted Stock granted under the Plan may be evidenced in such
    manner as the Board may deem appropriate, including book-entry
    registration or issuance of a stock certificate or certificates
    which certificate or certificates shall be held by the Company.
    Such certificate or certificates shall be registered in the name
    of the Participant and shall bear an appropriate legend
    referring to the restrictions applicable to such Restricted
    Stock.

 

    (iii) Forfeiture.  Except as
    otherwise determined by the Committee, upon a Participant’s
    termination of Service (as determined under criteria established
    by the Committee) during the applicable restriction period, all
    Shares of Restricted Stock and Restricted Stock Units at such
    time subject to restriction shall be forfeited and reacquired by
    the Company; provided, however, that the Committee may,
    when it finds that a waiver would be in the best interest of the
    Company, waive in whole or in part any or all remaining
    restrictions with respect to Shares of Restricted Stock or
    Restricted Stock Units.

    

    A-6

 

    (d) Performance Awards.  The
    Committee is hereby authorized to grant Performance Awards to
    Eligible Persons subject to the terms of the Plan. A Performance
    Award granted under the Plan (i) may be denominated or
    payable in cash, Shares (including, without limitation,
    Restricted Stock and Restricted Stock Units), other securities,
    other Awards or other property and (ii) shall confer on the
    holder thereof the right to receive payments, in whole or in
    part, upon the achievement of such performance goals during such
    performance periods as the Committee shall establish. Subject to
    the terms of the Plan, the performance goals to be achieved
    during any performance period, the length of any performance
    period, the amount of any Performance Award granted, the amount
    of any payment or transfer to be made pursuant to any
    Performance Award and any other terms and conditions of any
    Performance Award shall be determined by the Committee. From
    time to time, the Committee may designate an Award granted
    pursuant to the Plan as an award of “qualified
    performance-based compensation” within the meaning of
    Section 162(m) of the Code (a “Qualified
    Performance Based Award”). Qualified Performance Based
    Awards shall, to the extent required by Section 162(m), be
    conditioned solely on the achievement of one or more objective
    Performance Goals, and such Performance Goals shall be
    established by the Committee within the time period prescribed
    by, and shall otherwise comply with the requirements of,
    Section 162(m). The Committee shall also certify in writing
    that such Performance Goals have been met prior to payment of
    the Qualified Performance Based Awards to the extent required by
    Section 162(m).

 

    (e) Dividend Equivalents.  The
    Committee is hereby authorized to grant Dividend Equivalents to
    Eligible Persons under which the Participant shall be entitled
    to receive payments (in cash, Shares, other securities, other
    Awards or other property as determined in the discretion of the
    Committee) equivalent to the amount of cash dividends paid by
    the Company to holders of Shares with respect to a number of
    Shares determined by the Committee. Subject to the terms of the
    Plan, such Dividend Equivalents may have such terms and
    conditions as the Committee shall determine.

 

    (f) Other Stock Grants.  The
    Committee is hereby authorized, subject to the terms of the
    Plan, to grant to Eligible Persons Shares without restrictions
    thereon as are deemed by the Committee to be consistent with the
    purpose of the Plan. Subject to the terms of the Plan and any
    applicable Award Agreement, such Other Stock Grant may have such
    terms and conditions as the Committee shall determine.

 

    (g) Other Stock-Based Awards.  The
    Committee is hereby authorized to grant to Eligible Persons,
    subject to the terms of the Plan, such other Awards that are
    denominated or payable in, valued in whole or in part by
    reference to, or otherwise based on or related to, Shares
    (including, without limitation, securities convertible into
    Shares), as are deemed by the Committee to be consistent with
    the purpose of the Plan. Shares or other securities delivered
    pursuant to a purchase right granted under this
    Section 6(g) shall be purchased for such consideration,
    which may be paid by such method or methods and in such form or
    forms (including, without limitation, cash, Shares, other
    securities, other Awards or other property or any combination
    thereof), as the Committee shall determine, the value of which
    consideration, as established by the Committee, shall not be
    less than 100% of the Fair Market Value of such Shares or other
    securities as of the date such purchase right is granted.

 

    (h) General.

 

    (i) Consideration for
    Awards.  Awards may be granted for no cash
    consideration or for any cash or other consideration as
    determined by the Committee and required by applicable law.

 

    (ii) Awards May Be Granted Separately or
    Together.  Awards may, in the discretion of
    the Committee, be granted either alone or in addition to, in
    tandem with or in substitution for any other Award or any award
    granted under any plan of the Company or any Affiliate. Awards
    granted in addition to or in tandem with other Awards or in
    addition to or in tandem with awards granted under any such
    other plan of the Company or any Affiliate may be granted either
    at the same time as or at a different time from the grant of
    such other Awards or awards.

 

    (iii) Forms of Payment under
    Awards.  Subject to the terms of the Plan and
    of any applicable Award Agreement, payments or transfers to be
    made by the Company or an Affiliate upon the grant, exercise or
    payment of an Award may be made in such form or forms as the
    Committee shall determine (including, without limitation, cash,
    Shares, other securities, other Awards or other property or any
    combination thereof), and may be made in a single payment or
    transfer, in installments or on a deferred basis, in each case
    in accordance with rules and procedures established by the
    Committee. Such rules and procedures may include, without
    limitation, provisions for the

    

    A-7

 

    payment or crediting of reasonable interest on installment or
    deferred payments or the grant or crediting of Dividend
    Equivalents with respect to installment or deferred payments.

 

    (iv) Limits on Transfer of
    Awards.  No Award (other than Other Stock
    Grants) and no right under any such Award shall be transferable
    by a Participant other than by will or by the laws of descent
    and distribution and the Company shall not be required to
    recognize any attempted assignment of such rights by any
    Participant; provided, however, that, if so determined by
    the Committee, a Participant may, in the manner established by
    the Committee, designate a beneficiary or beneficiaries to
    exercise the rights of the Participant and receive any property
    distributable with respect to any Award upon the death of the
    Participant; provided, further, that, if so determined by
    the Committee, a Participant may, at any time that such
    Participant holds such Option, transfer a Non-Qualified Stock
    Option to any “Family Member” (as such term is defined
    in the General Instructions to
    Form S-8
    (or any successor to such Instructions or such Form) under the
    Securities Act), or to an inter vivos or testamentary
    trust in which Family Members have a beneficial interest of more
    than 50% and which provides that such Option is to be
    transferred to the beneficiaries upon Participant’s death,
    provided that the Participant may not receive any
    consideration for such transfer, the Family Member may not make
    any subsequent transfers other than by will or by the laws of
    descent and distribution and the Company receives written notice
    of such transfer, provided, further, that, if so
    determined by the Committee and except in the case of an
    Incentive Stock Option, Awards may be transferable as determined
    by the Committee. Except as otherwise determined by the
    Committee, each Award (other than an Incentive Stock Option) or
    right under any such Award shall be exercisable during the
    Participant’s lifetime only by the Participant or, if
    permissible under applicable law, by the Participant’s
    guardian or legal representative. Except as otherwise determined
    by the Committee, no Award (other than an Incentive Stock
    Option) or right under any such Award may be pledged, alienated,
    attached or otherwise encumbered, and any purported pledge,
    alienation, attachment or other encumbrance thereof shall be
    void and unenforceable against the Company or any Affiliate.

 

    (v) Term of Awards.  The term of
    each Award shall be fixed by the Committee at the time of grant,
    but shall not be longer than 10 years from the date of
    grant.

 

    (vi) Restrictions; Securities Exchange
    Listing.  All Shares or other securities
    delivered under the Plan pursuant to any Award or the exercise
    thereof shall be subject to such stop transfer orders and other
    restrictions as the Committee may deem advisable under the Plan,
    applicable federal or state securities laws and regulatory
    requirements, and the Committee may direct appropriate stop
    transfer orders and cause other legends to be placed on the
    certificates for such Shares or other securities to reflect such
    restrictions. If the Shares or other securities are traded on a
    securities exchange, the Company shall not be required to
    deliver any Shares or other securities covered by an Award
    unless and until such Shares or other securities have been and
    continue to be admitted for trading on such securities exchange.
    No Shares or other assets shall be issued or delivered pursuant
    to the Plan unless and until there shall have been compliance
    with all applicable requirements of applicable securities laws,
    including the filing and effectiveness of the
    Form S-8
    registration statement for the Shares issuable pursuant to the
    Plan, and all applicable listing requirements of any stock
    exchange or trading system, including the Nasdaq Stock Market,
    on which Common Stock is then traded. No Shares shall be issued
    or delivered pursuant to the Plan if doing so would violate any
    internal policies of the Company.

 

    (vii) Prohibition on
    Repricing.  Except as provided in
    Section 4(c) of the Plan, no Option or Stock Appreciation
    Right may be amended to reduce its initial exercise or grant
    price and no Option or Stock Appreciation Right shall be
    canceled and replaced with Options or Stock Appreciation Rights
    having a lower exercise or grant price, without the approval of
    the stockholders of the Company.

 

    (viii) Additional California Restrictions on
    Exercise, Minimum Vesting and Transferability; California
    Information Requirements.  If the Award is not
    exempt from California securities laws, the following additional
    provisions shall apply to such Award granted to an Eligible
    Person who resides in the State of California, as the same may
    be amended from time to time by the Commissioner of Corporations
    of the State of California:

 

    (A) With respect to Options, unless Participant’s
    Service is terminated for Misconduct (in which case the Option
    shall terminate immediately), the Option (to the extent it is
    vested and exercisable at the time Optionee’s Service
    ceases) must remain exercisable, following Participant’s
    termination of Service, until the

    

    A-8

 

    earlier of the option expiration date or (a) at least six
    months if Participant’s Service terminates due to death or
    Permanent Disability or (b) at least thirty days in all
    other cases.

 

    (B) Awards shall not be transferable other than by will, by
    the laws of descent and distribution, to a revocable trust, or
    as permitted by Rule 701 of the Securities Act.

 

    (C) At no time shall the total number of securities
    issuable upon exercise of all outstanding options and the total
    number of shares provided for under any stock bonus or similar
    plan or agreement of the Company exceed the applicable
    percentage as calculated in accordance with the conditions and
    exclusions of California Code of Regulations Title 10,
    Section 260.140.45, based
    on the securities of the Company which are outstanding at the
    time the calculation is made, unless a higher percentage is
    approved by at least two-thirds of the outstanding securities
    entitled to vote.
    

 

    (D) Annually, the Company shall deliver or cause to be
    delivered to each Participant, no later than such information is
    delivered to the Company’s security holders, one of the
    following: (i) the Company’s annual report to security
    holders containing the information required by
    Rule 14a-3(b)
    under the Exchange Act for its latest fiscal year; (ii) the
    Company’s annual report on Form
    10-K for its
    latest fiscal year; (iii) the Company’s latest
    prospectus filed pursuant to 424(b) under the Securities Act
    that contains audited financial statements for the latest fiscal
    year, provided that the financial statements are not
    incorporated by reference from another filing, and provided
    further that such prospectus contains substantially the
    information required by Rule
    14a-3(b); or
    (iv) the Company’s effective Exchange Act registration
    statement containing audited financial statements for the latest
    fiscal year.

 

    Section 7.  Amendment
    and Termination; Adjustments

 

    (a) Amendments to the Plan.  The
    Board may amend, alter, suspend, discontinue or terminate the
    Plan at any time; provided, however, that,
    notwithstanding any other provision of the Plan or any Award
    Agreement, without the approval of the stockholders of the
    Company, no such amendment, alteration, suspension,
    discontinuation or termination shall be made that, absent such
    approval:

 

    (i) violates the rules or regulations of the National
    Association of Securities Dealers, Inc. or any other securities
    exchange that are applicable to the Company;

 

    (ii) causes the Company to be unable, under the Code, to
    grant Incentive Stock Options under the Plan;

 

    (iii) increases the number of shares authorized under the
    Plan as specified in Section 4(a);

 

    (iv) permits the award of Options or Stock Appreciation
    Rights at a price less than 100% of the Fair Market Value of a
    Share on the date of grant of such Option or Stock Appreciation
    Right, as prohibited by Sections 6(a)(i) and 6(b) of the
    Plan or the repricing of Options or Stock Appreciation Rights,
    as prohibited by Section 6(h)(vii) of the Plan; or

 

    (v) would prevent the grant of Options or Stock
    Appreciation Rights that would qualify under Section 162(m)
    of the Code.

 

    (b) Amendments to Awards.   The
    Committee may waive any conditions of or rights of the Company
    under any outstanding Award, prospectively or retroactively.
    Except as otherwise provided herein or in an Award Agreement,
    the Committee may not amend, alter, suspend, discontinue or
    terminate any outstanding Award, prospectively or retroactively,
    if such action would adversely affect the rights of the holder
    of such Award, without the consent of the Participant or holder
    or beneficiary thereof.

 

    (c) Correction of Defects, Omissions and
    Inconsistencies.   The Committee may correct
    any defect, supply any omission or reconcile any inconsistency
    in the Plan or in any Award or Award Agreement in the manner and
    to the extent it shall deem desirable to implement or maintain
    the effectiveness of the Plan.

 

    Section 8.  Income
    Tax Withholding

 

    In order to comply with all applicable federal, state or local
    income tax laws or regulations, the Company may take such action
    as it deems appropriate to ensure that all applicable federal,
    state or local payroll, withholding, income or other taxes,
    which are the sole and absolute responsibility of a Participant,
    are withheld or collected from

    

    A-9

 

    such Participant. In order to assist a Participant in paying all
    or a portion of the federal, state and local taxes to be
    withheld or collected upon exercise or receipt of (or the lapse
    of restrictions relating to) an Award, the Committee, in its
    discretion and subject to such additional terms and conditions
    as it may adopt, may permit the Participant to satisfy such tax
    obligation by (i) electing to have the Company withhold a
    portion of the Shares otherwise to be delivered upon exercise or
    receipt of (or the lapse of restrictions relating to) such Award
    with a Fair Market Value equal to the amount of such taxes (but
    only to the extent of the minimum amount required to be withheld
    under applicable laws or regulations) or (ii) delivering to
    the Company Shares other than Shares issuable upon exercise or
    receipt of (or the lapse of restrictions relating to) such Award
    with a Fair Market Value equal to the amount of such taxes (but
    only to the extent of the minimum amount required to be withheld
    under applicable laws or regulations). The election, if any,
    must be made on or before the date that the amount of tax to be
    withheld is determined.

 

    Section 9.  General
    Provisions

 

    (a) No Rights to Awards.  No
    Eligible Person or other Person shall have any claim to be
    granted any Award under the Plan, and there is no obligation for
    uniformity of treatment of Eligible Persons or holders or
    beneficiaries of Awards under the Plan. The terms and conditions
    of Awards need not be the same with respect to any Participant
    or with respect to different Participants.

 

    (b) Award Agreements.  No
    Participant will have rights under an Award granted to such
    Participant unless and until an Award Agreement shall have been
    duly executed on behalf of the Company and, if requested by the
    Company, signed by the Participant.

 

    (c) Plan Provisions Control.  In
    the event that any provision of an Award Agreement conflicts
    with or is inconsistent in any respect with the terms of the
    Plan as set forth herein or subsequently amended, the terms of
    the Plan shall control.

 

    (d) No Rights of
    Stockholders.  Except with respect to Shares
    of Restricted Stock as to which the Participant has been granted
    the right to vote, neither a Participant nor the
    Participant’s legal representative shall be, or have any of
    the rights and privileges of, a stockholder of the Company with
    respect to any Shares issuable to such Participant upon the
    exercise or payment of any Award, in whole or in part, unless
    and until such Shares have been issued in the name of such
    Participant or such Participant’s legal representative
    without restrictions thereto.

 

    (e) No Limit on Other Compensation
    Arrangements.  Nothing contained in the Plan
    shall prevent the Company or any Affiliate from adopting or
    continuing in effect other or additional compensation
    arrangements, and such arrangements may be either generally
    applicable or applicable only in specific cases.

 

    (f) No Right to Employment.  The
    grant of an Award shall not be construed as giving a Participant
    the right to be retained in the employ, or as giving a director
    of the Company or an Affiliate the right to continue as a
    director or an Affiliate of the Company or any Affiliate, nor
    will it affect in any way the right of the Company or an
    Affiliate to terminate a Participant’s employment or
    Service at any time, with or without cause. In addition, the
    Company or an Affiliate may at any time dismiss a Participant
    from employment, or terminate the term of a director of the
    Company or an Affiliate, free from any liability or any claim
    under the Plan or any Award, unless otherwise expressly provided
    in the Plan or in any Award Agreement. Nothing in this Plan
    shall confer on any person any legal or equitable right against
    the Company or any Affiliate, directly or indirectly, or give
    rise to any cause of action at law or in equity against the
    Company or an Affiliate. The Awards granted hereunder shall not
    form any part of the wages or salary of any Eligible Person for
    purposes of severance pay or termination indemnities,
    irrespective of the reason for termination of employment. Under
    no circumstances shall any person ceasing to be an employee of
    the Company or any Affiliate be entitled to any compensation for
    any loss of any right or benefit under the Plan which such
    employee might otherwise have enjoyed but for termination of
    employment, whether such compensation is claimed by way of
    damages for wrongful or unfair dismissal, breach of contract or
    otherwise. By participating in the Plan, each Participant shall
    be deemed to have accepted all the conditions of the Plan and
    the terms and conditions of any rules and regulations adopted by
    the Committee and shall be fully bound thereby.

 

    (g) Governing Law.  The validity,
    construction and effect of the Plan or any Award, and any rules
    and regulations relating to the Plan or any Award, shall be
    determined in accordance with the internal laws, and not the law
    of conflicts, of the State of Delaware.

    

    A-10

 

    (h) Severability.  If any provision
    of the Plan or any Award is or becomes or is deemed to be
    invalid, illegal or unenforceable in any jurisdiction or would
    disqualify the Plan or any Award under any law deemed applicable
    by the Committee, such provision shall be construed or deemed
    amended to conform to applicable laws, or if it cannot be so
    construed or deemed amended without, in the determination of the
    Committee, materially altering the purpose or intent of the Plan
    or the Award, such provision shall be stricken as to such
    jurisdiction or Award, and the remainder of the Plan or any such
    Award shall remain in full force and effect.

 

    (i) No Trust or
    Fund Created.  Neither the Plan nor any
    Award shall create or be construed to create a trust or separate
    fund of any kind or a fiduciary relationship between the Company
    or any Affiliate and an Eligible Person or any other Person. To
    the extent that any Person acquires a right to receive payments
    from the Company or any Affiliate pursuant to an Award, such
    right shall be no greater than the right of any unsecured
    general creditor of the Company or any Affiliate.

 

    (j) Other Benefits.  No
    compensation or benefit awarded to or realized by any
    Participant under the Plan shall be included for the purpose of
    computing such Participant’s compensation under any
    compensation-based retirement, disability, or similar plan of
    the Company unless required by law or otherwise provided by such
    other plan.

 

    (k) No Fractional Shares.  No
    fractional Shares shall be issued or delivered pursuant to the
    Plan or any Award, and the Committee shall determine whether
    cash shall be paid in lieu of any fractional Shares or whether
    such fractional Shares or any rights thereto shall be canceled,
    terminated or otherwise eliminated.

 

    (l) Headings.  Headings are given
    to the Sections and subsections of the Plan solely as a
    convenience to facilitate reference. Such headings shall not be
    deemed in any way material or relevant to the construction or
    interpretation of the Plan or any provision thereof.

 

    (m) Section 16 Compliance; Section 162(m)
    Administration.  The Plan is intended to
    comply in all respects with
    Rule 16b-3
    or any successor provision, as in effect from time to time, and
    in all events the Plan shall be construed in accordance with the
    requirements of
    Rule 16b-3.
    If any Plan provision does not comply with
    Rule 16b-3
    as hereafter amended or interpreted, the provision shall be
    deemed inoperative. The Board of Directors, in its absolute
    discretion, may bifurcate the Plan so as to restrict, limit or
    condition the use of any provision of the Plan with respect to
    persons who are officers or directors subject to Section 16
    of the Exchange Act without so restricting, limiting or
    conditioning the Plan with respect to other Eligible Persons.
    With respect to Options and Stock Appreciation Rights, the
    Company intends to have the Plan administered in accordance with
    the requirements for the award of “qualified
    performance-based compensation” within the meaning of
    Section 162(m) of the Code.

 

    (n) Conditions Precedent to Issuance of
    Shares.  Shares shall not be issued pursuant
    to the exercise or payment of the purchase price relating to an
    Award unless such exercise or payment and the issuance and
    delivery of such Shares pursuant thereto shall comply with all
    relevant provisions of law, including, without limitation, the
    Securities Act, the Exchange Act, the rules and regulations
    promulgated thereunder, the requirements of any applicable Stock
    Exchange and the Delaware General Corporation Law. As a
    condition to the exercise or payment of the purchase price
    relating to such Award, the Company may require that the person
    exercising or paying the purchase price represent and warrant
    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 and warranty is required by law.

 

    Section 10.  Effective
    Date of the Plan

 

    The Plan shall be effective upon approval by the Company’s
    stockholders.

 

    Section 11.  Term
    of the Plan

 

    No Award shall be granted under the Plan after the tenth
    anniversary of the earlier of the date on which this Plan was
    adopted by the Board or the date this Plan was approved by the
    stockholders of the Company, or any earlier date of
    discontinuation or termination established pursuant to
    Section 7(a) of the Plan. However, unless otherwise
    expressly provided in the Plan or in an applicable Award
    Agreement, any Award theretofore granted may extend beyond such
    date, and the authority of the Committee provided for hereunder
    with respect to the Plan and any Awards, and the authority of
    the Board to amend the Plan, shall extend beyond the termination
    of the Plan.

    

    A-11

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