Document:

Exhibit
10.5

    

    FORM OF
DIRECTOR’S VOTING AGREEMENT

    

    December
__, 2008

    

    Carpenter
Fund Manager GP, LLC

    5 Park
Plaza, Suite 950

    Irvine,
CA  92614

    

    Ladies
and Gentlemen:

    

    We
understand that Carpenter Fund Manager GP, LLC (the “Manager”) on behalf of and
as General Partner of each of the following investment-related limited
partnerships: Carpenter Community BancFund, L.P.; Carpenter Community
BancFund-A, L.P.; and Carpenter Community BancFund-CA, L.P. (collectively, the
“Investors”),
and Bridge Capital Holdings (the “Company”) intend to enter into a Stock
Purchase Agreement (the “Stock Purchase Agreement”) providing for the purchase
by the Investors of $30,000,000 of Series B Mandatorily Convertible Preferred
Stock of the Company (“Series B Preferred
Stock”) and Series B-1 Mandatorily Convertible Preferred Stock of the
Company (“Series B-1
Preferred Stock”)(the “Investment”).  The
Series B Preferred Stock and the Series B-1 Preferred Stock is convertible into
Common Stock of the Company (“Common Stock” or the
“Conversion
Shares”).

    

    The
undersigned is a shareholder of the Company and is entering into this letter
agreement to induce the Manager to enter into the Stock Purchase Agreement and
consummate the proposed transactions.

    

    The
undersigned confirms its agreement with you as follows:

    

    1.           The
undersigned represents, warrants and agrees that Schedule I attached hereto sets
forth the shares of the Company's capital stock of which the undersigned is the
record or beneficial owner and that the undersigned is on the date hereof the
lawful owner of the number of shares set forth therein, free and clear of all
voting agreements and commitments of any kind and free and clear of all liens
and encumbrances except as set forth in Schedule I.  Except as set
forth in Schedule I, the undersigned does not own or hold any rights to acquire
any additional shares of the Company's capital stock (by exercise of stock
options, warrants or otherwise) or any interest therein or any voting rights
with respect to any additional shares.

    

    2.           The
undersigned agrees that all shares of the Company's capital stock beneficially
owned by the undersigned for which it has voting rights at the record date for
any meeting of shareholders of the Company called to consider and vote on the
Investment and the Conversion Shares will be voted by the undersigned in favor
of (A) the approval of the springing voting rights of the Preferred Stock and
the authorization and issuance of the Conversion Shares issuable upon conversion
of the Preferred Stock for purposes of Rule 4350 of the NASDAQ Listed Company
Manual, (B) any increase in the size of the Board of Directors as required by
Section 6.2 of the Stock Purchase Agreement, and (B) any other proposals
necessary to permit the Company to issue the Preferred Stock and the Conversion
Shares.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3.           Nothing
contained herein is intended to prevent the undersigned from performing his or
her duties as officer or director in exercising the Company’s rights or
performing the Company’s obligations under the Stock Purchase
Agreement.

    

    Please
confirm that the foregoing correctly states the understanding between us by
signing and returning to us a counterpart hereof.

    

    
      
        
          
            
              
                
                  
                    	
                            Very
      truly yours,

                          
	 
	  
        
	
                            [Name]

                          

                  

                

              

            

          

        

      

    

    

    Confirmed:
December __, 2008

    

    Carpenter
Fund Manager GP, LLC

    

    
      
        
          	
                  By:

                	      
        

        

      

    

    
      
        
          	
                  Its: 

                	     
        

        

      

    

    

    
      
         

      

      
        2Exhibit
4.2

     

    AMENDED
AND RESTATED SMART BALANCE, INC.

     

    INDUCEMENT
AWARD PLAN

     

    Section 1.    Purpose and
Construction.

     

    (a)    Purpose.  Smart
Balance, Inc. has implemented the Amended and Restated Smart Balance, Inc.
Inducement Award Plan (the “Plan”) in order to promote the long-term growth and
financial success of Smart Balance, Inc. and increase shareholder value by
attracting outstanding officers and other employees. The Plan is designed to
accomplish these goals by providing stock option incentives for Participants to
leave current employment and commence employment relationships with Smart
Balance, Inc.

     

    (b)    Construction.  Capitalized
terms used in this Plan shall have the meanings set forth in Section 11, unless
the context clearly requires otherwise. Awards made under this Plan and the
accompanying Award Agreements are intended to (i) be performance based
compensation which satisfies the requirements of Code Section 162(m)(4)(C) and
(ii) not constitute non-qualified deferred compensation for purposes of Code
Section 409A.  The Committee shall have authority to interpret and
apply the terms of the Plan or any Award Agreement consistent with such
intentions.

     

    (c)    Deemed
Amendment.  Any non-complying provision of the Plan and any
Award Agreement issued under the Plan shall be deemed amended to the extent
necessary to preserve the intended tax consequences set forth in paragraph (b)
above.  Nothing in this Plan shall be construed, interpreted or
applied in any way that would conflict with any provision of the Company’s
Restated Certificate of Incorporation.

     

    (d)    Effective
Date.  This Plan was originally effective January 4, 2008
(“Effective Date”).  The Plan was amended and restated in the form of
this Amended and Restated Plan by action of the Board of Directors effective
August 7, 2008 in order to bring the Plan into full compliance with the
requirements of Section 409A of the Code and the final Treasury Regulations
issued thereunder.

     

    Section
2.    Shares Reserved Under
this Plan.

     

    (a)    Plan
Reserve.  An aggregate of 1,375,000 Shares are reserved for
issuance under this Plan.  The number of Shares covered by an Award
under the Plan shall be counted on the date of grant of such Award against the
number of Shares available for granting Awards under the Plan. Any Shares
delivered pursuant to the exercise of an Award may consist, in whole or in part,
of authorized and unissued Shares or of treasury shares.  Under no
circumstances may any Award be made effective prior to the date such Award is
approved by the Committee.

     

    (b)    Share
Adjustment.  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
(collectively referred to as “Events”) 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 may, in such manner as it may
deem equitable, adjust any or all of: (i) the number and type of Shares subject
to the Plan and which thereafter may be made the subject of Awards under the
Plan; (ii) the number and type of Shares subject to outstanding Awards; and
(iii) the exercise price with respect to any Option (collectively referred to as
“Adjustments”); provided, however, that Awards subject to grant or previously
granted to Participants under the Plan at the time of any such Event shall be
subject only to such Adjustments as shall be necessary to maintain the
proportionate interest of the Participants and preserve, without exceeding, the
value of such Awards; and provided further that the number of Shares subject to
any Award shall always be a whole number.  All such adjustments shall
be made so that the adjustments do not result in grants of new Awards for
purposes of Section 409A of the Code or cause the Company to record a new
compensation charge for financial reporting purposes.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c)    Replenishment of Shares
Under this Plan.  The number of Shares reserved for issuance
under this Plan shall be reduced only by the number of Shares actually delivered
in payment or settlement of Awards. If an Award lapses, expires, terminates or
is cancelled without the issuance of Shares under the Award, then the Shares
subject to, reserved for or delivered in payment in respect of such Award may
again be used for new Awards under this Plan.  If Shares are issued
under any Award and the Company subsequently reacquires them pursuant to rights
reserved upon the issuance of the Shares or if Shares, including previously
owned or newly issued Shares, are delivered by a Participant to the Company in
satisfaction of any employment or income tax withholding obligation or in
payment of the exercise price of an Award, then the Shares subject to, reserved
for or delivered in payment in respect of such Award may again be used for new
Awards under this Plan.

     

    Section
3.    Plan
Administration and Operation.

     

    (a)    Administrative
Authority.  Subject to any limitations or restrictions under
the Company’s Restated Certificate of Incorporation, the Plan shall be
administered by, and the Committee has full authority to administer this Plan,
including the authority to (i) interpret the provisions of this Plan, (ii)
prescribe, amend and rescind rules and regulations relating to this Plan, (iii)
correct any defect, supply any omission, or reconcile any inconsistency in any
Award or agreement covering an Award in the manner and to the extent it deems
desirable to carry this Plan into effect, and (iv) make all other determinations
necessary or advisable for the administration of this Plan.

     

    (b)    Awards.  The
Committee has full authority to designate from time to time which new employees
shall receive Awards under this Plan.  All awards under the Plan shall
be in the form of Options.  The Committee may consider such factors as
it deems pertinent in determining the number of Shares subject to an Award under
this Plan and in determining any Performance Goals, vesting periods, or other
conditions or limitations on the Award.  Awards under this Plan must
be approved by the Committee prior to the date the Participant commences
employment with the Company.

     

    (c)    Committee Action and
Delegation.  A majority of the members of the Committee will
constitute a quorum, and a majority of the Committee’s members present at a
meeting at which a quorum is present must make all determinations of the
Committee. The Committee may make any determination under this Plan without
notice or meeting of the Committee by a writing that a majority of the Committee
members have signed.  To the extent applicable law permits, the Board
may delegate to another committee of the Board or the Committee may delegate to
specified officers of the Company any or all of the authority and responsibility
of the Committee.  In the event of any such delegation, then all
references to the Committee in this Plan include such other committee or one or
more officers to the extent of such delegation.  Except to the extent
prohibited by applicable law, the Committee may also authorize any one or more
of their number or the Secretary or any other officer of the Company to execute
and deliver documents previously approved by the Committee.

     

    (d)    Review of Committee
Decisions.  All Committee determinations are final and binding
upon all interested parties and no reviewing court, agency or other tribunal
shall overturn a decision of the Committee unless it first determines that the
Committee acted in an arbitrary and capricious manner with respect to such
decision.

     

    (e)    Committee
Indemnification.  No member of the Committee will be liable for
any act done, or determination made, by the individual in good faith with
respect to the Plan or any Award. The Company will indemnify and hold harmless
all Committee members to the maximum extent that the law and the Company’s
bylaws and Restated Certificate of Incorporation permit.

     

    Section
4.    Discretionary
Awards.

     

    Subject
to the terms of this Plan, including Section 3(b) above and Section 6 below, the
Committee has full power and authority to determine: (a) the number of Shares
with respect to which an Award is granted to a Participant; and (b) any other
terms and conditions of any Award granted to a Participant.  Awards
under this Plan may be granted either alone or in addition to, in tandem with,
or in substitution for any other award granted under another plan of the Company
or any Company Entity).  All Awards shall be evidenced by written
Awards Agreements.

     

    Section
5.    Options.

     

    (a)    Exercise Price of
Options.  For each Option, the Committee will establish (i) the
exercise price, which may not be less than the Fair Market Value of the Shares
subject to the Option on the Grant Date and (ii) the method or methods by which
a Participant may pay the exercise price or his or her Tax Obligation with
respect to the Award, including net or cashless payment procedures.

     

    (b)    Terms and Conditions of
Options.  The Award Agreement shall also set forth all other
terms and conditions of the Option, including the term of the Option and any
vesting schedule or Performance Goals.  Subject to the terms of the
Plan, an Option will be exercisable at such times and subject to such conditions
as the Committee specifies.  Notwithstanding the preceding, each
Option must terminate no later than ten (10) years after the date of
grant.

     

    
      
         

      

      
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    Section
6.    Effect of Termination
of Employment.

     

    (a)    Award
Limitations.  Subject to the limitations set forth in Section
6(b) below, the Committee shall, in its discretion, determine the consequences
under any Option of the Participant’s Separation From Service for any
reason.  The restrictions under Section 6(b) and any other limitations
imposed by the Committee under this Section 6(a) shall be included in the Award
Agreement.  Unless otherwise stated under the Award Agreement, if a
Participant has a Separation From Service, all non-vested Options shall
immediately terminate and be forfeited and all vested Options shall terminate
and be forfeited if not exercised within ninety (90) days of such Separation
From Service.  The foregoing notwithstanding, if the event the
Separation From Service is due to the Participant’s death or Disability, all
non-vested Options shall vest upon such death or Disability termination and all
Options shall thereafter terminate and be forfeited if not exercised within one
(1) year of the Separation From Service or prior to the expiration of the term
of the Option, if sooner.  When a Participant has a Separation From
Service, the Committee in its sole discretion, is authorized to (i) accelerate
vesting of non-vested Options, (ii) grant the Participant a longer period
post-separation to exercise the Options consistent with the requirements of
Treas. Reg. § 1.409A-1(b)(5)(v)(C), or (iii) allow continued vesting of the
Options on such terms and conditions as the Committee may deem reasonable and
appropriate.

     

    (b)    For Cause
Termination.  Notwithstanding any provision in this Plan or in
any Award Agreement, if a Participant’s employment is terminated by the Company
for Cause, then all Awards previously granted to such Participant shall
immediately terminate and be forfeited retroactively to the date the Participant
first engaged in the conduct which was the basis for such
termination.

     

    Section
7.    Non-Transferability.

     

    (a)    Awards.  Except
as otherwise provided in this Section or as the Committee otherwise provides in
the Award Agreement, Awards granted under this Plan are not transferable by a
Participant other than by will or the applicable laws of descent or
distribution.  During the lifetime of the Participant such Awards may
be exercised only by the Participant.  Following the death of a
Participant, Awards may be exercised, consistent with the terms of the Award, by
the Participant’s legal representative or transferee of such Participant by will
or applicable law of descent or distribution.

     

    (b)    Shares.  Shares
received in connection with the exercise of an Award shall be transferable,
subject to any restrictions on transfer imposed by applicable securities
laws.

     

    Section
8.    Amendment and
Termination of the Plan and Awards.

     

    (a)    Term of
Plan.  This Plan will terminate on, and no Award may be granted
after, the ten (10) year anniversary of the Effective Date, unless the Company
earlier terminates this Plan pursuant to Section 8(b).

     

    (b)    Termination and
Amendment.  The Company may amend, alter, suspend, discontinue
or terminate this Plan at any time, subject to shareholder approval if: (i)
shareholder approval of such amendment(s) is required under the Exchange Act; or
(ii) shareholder approval of such amendment(s) is required under the listing
requirements of principal securities exchange or market on which the Shares are
then traded (to maintain the listing or quotation of the Shares on that
exchange).

     

    (c)    Amendment, Modification or
Cancellation of Awards.  Except as provided in Section 8(e) and
subject to the requirements of this Plan, the Committee may waive any
restrictions or conditions applicable to any Award or the exercise of the Award,
and the Committee may modify, amend, or cancel any of the other terms and
conditions applicable to any Awards by mutual agreement between the Committee
and the Participant or any other persons as may then have an interest in the
Award, but the Committee need not obtain the Participant’s (or other interested
party’s) consent for the cancellation of an Award pursuant to the provisions of
Section 2(b).  Notwithstanding anything to the contrary in this Plan,
the Committee shall have the sole discretion to alter the selected Performance
Goals.  The foregoing notwithstanding, no modification, extension,
amendment or cancellation of any terms or conditions of any Award shall be made
to the extent such action would violate the requirements of Section 409A of the
Code or would result in such action being treated as a new Option grant pursuant
to Treas. Reg. §1.409A-1(b)(5)(v).

     

    (d)    Survival of Committee
Authority and Awards.  Notwithstanding the foregoing, the
authority of the Committee to administer this Plan and modify or amend an Award
shall extend beyond the date this Plan is terminated. In addition, termination
of this Plan will not affect the rights of Participants with respect to Awards
previously granted to them, and all unexpired Awards will continue in force and
effect after termination of this Plan except as they may lapse or be terminated
by their own terms and conditions.

     

    (e)    Repricing
Prohibited.  Notwithstanding anything in this Plan to the
contrary, and except for the adjustments provided in Section 2(b), neither the
Committee nor any other person may decrease the exercise price for any
outstanding Option granted under this Plan after the date of grant nor allow a
Participant to surrender an outstanding Option granted under this Plan to the
Company as consideration for the grant of a new Option with a lower exercise
price.

     

    Section
9.    Change of
Control.

     

    To the
extent not prohibited under the Restated Certificate of Incorporation and except
to the extent the Committee provides a result more favorable to holders of
Awards or as otherwise set forth in an Award Agreement covering an Award, in the
event of a Change of Control, all non-vested Options shall vest and become fully
exercisable upon the occurrence of such Change of Control without regard to any
Performance Goal or vesting schedule set forth in the applicable Award
Agreement.

     

    
      
         

      

      
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    Section
10.    General
Provisions.

     

    (a)    Other Terms and
Conditions.  The grant of any Award under this Plan may also be
subject to such other provisions or include other tandem rights or features
(whether or not applicable to the Award awarded to any other Participant) as the
Committee determines appropriate.  The foregoing notwithstanding, no
Award shall include any additional deferral feature or other provision that
would cause the Award to be subject to Section 409A of the Code.

     

    (b)    No Fractional
Shares.  No fractional Shares or other securities may be issued
or delivered pursuant to this Plan, and the Committee may determine whether
cash, other securities or other property will be paid or transferred in lieu of
any fractional Shares or other securities, or whether such fractional Shares or
other securities or any rights to fractional Shares or other securities will be
canceled, terminated or otherwise eliminated.

     

    (c)    Requirements of
Law.  The granting of Awards under this Plan and the issuance
of Shares in connection with an Award are subject to all applicable laws, rules
and regulations and to such approvals by any governmental agencies or national
securities exchanges as may be required. Notwithstanding any other provision of
this Plan or any Award Agreement, the Company has no liability to deliver any
Shares under this Plan or make any payment unless such delivery or payment would
comply with all applicable laws and the applicable requirements of any
securities exchange or similar entity.

     

    (d)    Governing
Law.  This Plan, and all agreements under this Plan, should be
construed in accordance with and governed by the laws of the State of Delaware,
without reference to any conflict of law principles. Any legal action or
proceeding with respect to this Plan, any Award or any Award Agreement, or for
recognition and enforcement of any judgment in respect of this Plan, any Award
or any Award Agreement, may only be brought and determined in a court sitting in
the County of Bergen, or the Federal District Court for the Third District of
New Jersey sitting in Third District, in the State of New Jersey.

     

    (e)    Severability.  If
any provision of this Plan or any Award Agreement or any Award (i) is or becomes
or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or as
to any person or Award, or (ii) would disqualify this Plan, any Award Agreement
or any Award under any law the Committee deems applicable, then such provision
should 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 intent of this Plan, Award Agreement or
Award, then such provision should be stricken as to such jurisdiction, person or
Award, and the remainder of this Plan, such Award Agreement and such Award will
remain in full force and effect.

     

    (f)    Other
Arrangements.  Nothing contained in the Plan shall prevent the
Company or any Company Entity from adopting or continuing in effect other or
additional compensation arrangements for Participants, and such arrangements may
be either generally applicable or applicable only in specific
cases.

     

    (g)    No Right to Remain
Employed.  The grant of an Award to a Participant pursuant to
the Plan shall confer no right on such Participant to continue as an officer,
employee, consultant, advisor or other similar position relative to the Company
or any Company Entity. Except for rights accorded under the Plan, Participants
shall have no rights as holders of Shares as a result of the granting of Awards
hereunder.

     

    Section
11.    Definitions.

     

    (a)    “Award” means
any grant of Options under this Plan.

     

    (b)    “Award
Agreement” means a written agreement, in such form (consistent with the terms of
this Plan) as approved by the Committee.

     

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

     

    (d)    “Cause” means
with respect to a Participant any of the following as determined by the Board,
in its sole discretion, (a) fraud or intentional misrepresentation, (b)
embezzlement, misappropriation or conversion of assets or opportunities of the
Company or any Company Entity, (c) acts or omissions that are in bad faith or
constitute gross negligence, or willful or reckless misconduct, or (d)
conviction, plea of guilty or nolo contendere, or judicial
determination of civil liability, based on a federal or state felony or serious
criminal or civil offense.

     

    (e)    “Change of
Control” means the occurrence of any of the following: events with respect to
the Company::

     

    
      
         

      

      
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    a.    any Person
(other than an Exempt Person) acquires securities of the Company representing
fifty percent (50%) or more of the combined voting power of the Company’s then
outstanding voting securities;

     

    b.    any Person
acquires, during the twelve (12) month period ending on the date of the most
recent acquisition, securities of Company representing thirty percent (30%) of
Company’s then outstanding voting securities;

     

    c.    a majority of
the members of the  Board is replaced during any twelve (12) month
period by directors whose appointment or election is not endorsed by a majority
of the members of the Board serving immediately prior to such appointment or
election; or

     

    d.    any Person,
during the twelve (12) month period ending on the date of the most recent
acquisition, acquires assets of Company having a total gross fair market value
equal to or more than forty percent (40%) of the total gross fair market value
of Company’s assets immediately before such acquisition or
acquisitions;

     

    but only
if the applicable transaction otherwise constitutes a “change in control event”
for purposes of Section 409A of the Code and Treas. Reg.
§1.409A-3(i)(5).

     

    (f)    “Code” shall
mean the Internal Revenue Code of 1986, as amended from time to time, and as
interpreted by applicable regulations, rulings, notices and other similar
guidance. Any reference to a specific provision of the Code includes any
successor provision and any guidance issued under such provision.

     

    (g)    “Committee”
means the Compensation Committee of the Board or any subcommittee
thereof.

     

    (h)    “Common
Stock” means the $.0001 par value common stock of the Company.

     

    (i)    “Company”
shall mean Smart Balance, Inc., a Delaware corporation, together with any
successor thereto.

     

    (j)    “Company
Entity” means a corporation or other entity in which the Company holds a
controlling interest under Treas. Reg. § 1.414(c)-2(b)(2)(i), but determined by
applying the phrase “at least 50 percent” in the place of the phrase “at least
80 percent” each place that it appears in such Treasury Regulation or Section
1563(a) of the Code  and each other entity so designated by the
Committee as an Affiliate for “legitimate business reasons” (within the meaning
of Treas. Reg. § 1.409A-1(b)(5)(iii)(E)) in which the Company holds a
controlling interest under Treasury Regulation §1.414(c)-2(b)(2)(i), but
determined by applying the phrase “at least 20 percent” in the place of the
phrase “at least 80 percent” in each place it appears in such Treasury
Regulation or Section 1563(a) of the Code.

     

    (k)    “Disability”
means a determination by the Company to terminate the service relationship
between the Company and all Company Entities and a Participant based on the
inability of a Participant to perform a material portion of his or her duties
and responsibilities on behalf of the Company or a Company Entity due to a
physical or mental condition that is expected to last indefinitely.

     

    (l)    “Effective
Date” means the date that the Company approved this Plan.

     

    (m)    “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time, and as interpreted by applicable regulations, rulings, notices and other
similar guidance. Any reference to a specific provision of the Exchange Act
includes any successor provision and any guidance issued under such
provision.

     

    (n)    “Fair Market
Value” shall mean with respect to a Share, for purposes of determining the
minimum exercise price of an Option on the Grant Date or otherwise (i) if the
Shares are readily tradable on an established securities market, the closing
price of a Share on such market on the Grant Date or (ii) if the Shares are not
readily tradable on an established securities market, the amount determined by
the Committee as of the Grant Date through the reasonable application of a
reasonable valuation method and otherwise in accordance with Treas. Reg. §
1.409A-1(b)(5)(iv)(B).

     

    (o)    “Grant Date”
means the date on which all corporate action required to duly authorize and
effect the grant of the Award is first completed or the first date on which all
conditions precedent to the effectiveness of the Award are fully satisfied, if
later.

     

    (p)    “Option”
shall mean the right to purchase Shares at a stated price in accordance with the
terms of this Plan and the underlying Award Agreement.

     

    (q)    “Participant”
shall mean an individual who: (i) was not previously an employee or director of
the Company or any Company Entity or who has incurred a bona fide period of
non-employment with the Company and all Company Entities; and (ii) is offered an
Award under this Plan as an inducement to become an officer or employee of the
Company or any Company Entity. Only Participants shall be entitled to receive
Awards under this Plan.

     

    (r)    “Performance
Goals” means any goals the Committee establishes that relate to one or more of
the following with respect to the Company or any one or more Company Entities or
other business units: revenue; cash flow; net cash provided by operating
activities; net cash provided by operating activities less net cash used in
investing activities; cost of goods sold; ratio of debt to debt plus equity;
profit before tax; gross profit; net profit; net sales; earnings before interest
and taxes; earnings before interest, taxes, depreciation and amortization; Fair
Market Value of Shares; basic earnings per share; diluted earnings per share;
return on shareholder equity; average accounts receivable (calculated by taking
the average of accounts receivable at the end of each month); average
inventories (calculated by taking the average of inventories at the end of each
month); return on average total capital employed; return on net assets employed
before interest and taxes; economic value added; return on year-end equity;
length of service; and/or such other goals as the Committee may establish in its
discretion.

     

    
      
         

      

      
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    (s)    “Plan” shall
mean the Amended and Restated Smart Balance, Inc. Inducement Award Plan, as set
forth herein and as amended from time to time.

     

    (t)    “Share” means
a share of Common Stock.

     

    (u)    “Separation
From Service” shall mean with respect to an employee the termination of the
employee’s employment with the Company and all Company Entities, provided that,
notwithstanding such termination of the employment relationship between the
employee and the Company and all Company Entities, the employee shall not be
deemed to have had a Separation from Service where it is reasonably anticipated
that the level of bona fide services that the employee will perform (whether as
an employee or independent contractor) following such termination for the
Company and all Company Entities would be twenty percent (20%) or more of the
average level of bona fide services performed by the employee (whether as an
employee or independent contractor) for the Company and all Company Entities
over the immediately preceding thirty-six (36) month period (or such lesser
period of actual service).  In such event, Separation from Service
shall mean the permanent reduction of the level of bona fide services to be
performed by the employee (whether as an employee or independent contractor) to
a level that is less than twenty percent (20%) of the average level of bona fide
services performed by the employee (whether as an employee or independent
contractor) during the thirty-six (36) month period (or such lesser period of
actual service) immediately prior to the termination of the employee’s
employment relationship.  A Separation from Service shall not be
deemed to have occurred if the employee is absent from active employment due to
military leave, sick leave, or other bona fide leave of absence if the period of
such leave does not exceed the greater of (i) six months or (ii) the period
during which the Employee’s right to reemployment by the Company or any Company
Entity is provided either by statute or contract.

     

    (v)     “Tax
Obligation” means with respect to any period an amount equal to the total
obligation of the Company to withhold and deposit federal, state or local
employment and income taxes with respect to an Award.

     

    
      
         

      

      
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