Document:

exv10w3

 

Exhibit 10.3

AMENDMENT AND WAIVER

     AMENDMENT AND WAIVER, dated as of May 20, 2005 (this “Amendment and Waiver”), to the
Five-Year Revolving Loan Credit Agreement, dated as of June 20, 2002 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among Visteon Corporation, a
Delaware corporation (the “Company”), the several banks and other financial institutions or
entities from time to time party thereto (the “Banks”), JPMorgan Chase Bank, N.A., as
administrative agent (in such capacity, the “Administrative Agent”), and Bank of America,
N.A., as syndication agent.

W I T N E S S E T H:

     WHEREAS, the Company has requested that the Banks amend and waive the Credit Agreement in the
manner provided for herein; and

     WHEREAS, the Required Banks are willing to provide the requested amendments and waivers but
only on the terms and conditions set forth herein;

     NOW, THEREFORE, the parties hereto hereby agree as follows:

     1.      Defined Terms. Unless otherwise defined herein, capitalized terms which are
defined in the Credit Agreement are used herein as therein defined.

     2.      Amendment. Section 1 of the Credit Agreement is hereby amended by deleting the
references to “100” and “25” basis points (under the headings “Eurocurrency Margin” and “Base Rate
Margin”, respectively) in the final row of the table in the definition of “Pricing Grid” appearing
in such Section and substituting in lieu thereof references to “250” and “150” basis points,
respectively.

     3.      Waiver. The Required Banks hereby waive compliance, until July 29, 2005, by the
Company with the requirements of Section 7.1(b) of the Credit Agreement with respect to the
quarterly period ended March 31, 2005.

     4.      Conditions to Effectiveness. This Amendment and Waiver shall become effective (the
“Effective Date”) on the date on which the Administrative Agent shall have received: (a)
this Amendment and Waiver, executed and delivered by the Administrative Agent, the Company and the
Required Banks, (b) evidence satisfactory to the Administrative Agent that amendments and waivers
to each of the Five-Year Term Loan Agreement and the 364-Day Credit Agreement shall have become
effective, which amendments and waivers shall contain substantially the same terms and conditions
as this Amendment and Waiver (other than with respect to the duration of the Waiver set forth
herein), (c) an officer’s certificate of the Company certifying compliance with Section 5 of this
Amendment and Waiver and (d) for the account of each Bank that executes and delivers this Amendment
and Waiver to the Administrative Agent on or before 3:00 P.M., New York City time, on 
May 20, 2005,
an amendment and waiver fee equal to the Applicable Amendment and Waiver Fee Rate of the amount of such Bank’s Aggregate
Exposure as of the Effective Date. As used herein, the “Applicable Amendment and Waiver Fee Rate”
means the applicable rate separately disclosed to the Banks by the Administrative Agent in
connection with this Amendment and Waiver.

 

 

     5.      Representation and Warranties. The Company hereby confirms, reaffirms and restates
that the representations and warranties set forth in Section 6 of the Credit Agreement are true and
correct in all material respects on and as of the Effective Date as if made on and as of such date,
except to the extent such representations and warranties expressly relate to an earlier date. The
Company represents and warrants that, after giving effect to this Amendment and Waiver, no Default
or Event of Default has occurred and is continuing.

     6.      Continuing Effect of the Credit Agreement. This Amendment and Waiver shall not
constitute an amendment or waiver of any other provision of the Credit Agreement not expressly
referred to herein and shall not be construed as a waiver or consent to any further or future
action on the part of the Company that would require a waiver or consent of the Banks or the
Administrative Agent. Except as expressly waived hereby, the provisions of the Credit Agreement
are and shall remain in full force and effect.

     7.      Counterparts. This Amendment and Waiver may be executed by the parties hereto in
any number of separate counterparts (including facsimiled counterparts), each of which shall be
deemed to be an original, and all of which taken together shall be deemed to constitute one and the
same instrument.

     8.      GOVERNING LAW. THIS AMENDMENT AND WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AMENDMENT AND WAIVER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     9.      Credit Document. This Amendment and Waiver is executed pursuant to the Credit
Agreement and shall be construed, administered and applied in accordance with all of the terms and
provisions of the Credit Agreement. Any breach of any representation, warranty, covenant or
agreement contained in this Amendment and Waiver shall be deemed to be an Event of Default for all
purposes of the Credit Agreement.

[The remainder of this page is intentionally left blank.]

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment and Waiver to be duly
executed and delivered by their proper and duly authorized officers as of the day and year first
above written.

	 	 	 	 	 
	 	VISTEON CORPORATION

 

 	 
	 	By:  	/s/ Peter Look
 	 
	 	 	Name:  	Peter Look 	 
	 	 	Title:  	Vice President and Treasurer
 	 
	 
	 
	 	 JPMORGAN CHASE BANK, N.A., as

Administrative Agent and as a Bank

 

 	 
	 	By:  	/s/ Robert P. Kellas
 	 
	 	 	Name:  	Robert P. Kellas 	 
	 	 	Title:  	Vice Presidentexv4w1

 

Exhibit 4.1

WESTCORP 2001 STOCK INCENTIVE PLAN

     
1.     Purpose.

     
The Westcorp 2001 Stock Incentive Plan (the “Plan”) is
an amendment and restatement of the Westcorp 2001 Stock Option
Plan that adds a restricted stock feature to the Plan. The
purpose of the Plan is to provide incentives to, and to
encourage the ownership of Westcorp, a California corporation,
common stock (hereinafter “Common Stock”), by certain
employees and directors of the Company and its subsidiaries
(collectively, unless the context indicates otherwise, the
“Company”). The Plan provides for stock options which
qualify as Incentive Stock Options (“ISOs”) under
Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”), Non-Statutory Stock Options
(“NSOs”) which are not intended to be ISOs, and
Restricted Stock Awards (“Stock Awards”). ISOs and
NSOs are collectively referred to in the Plan as
“Options” and ISOs, NSOs and Stock Awards are
collectively referred to in the Plan as “Awards”. The
Plan is not a qualified plan under Section 401(a) of the
Code and is not subject to the provisions of the Employee
Retirement Income Security Act of 1974 (“ERISA”).

     
2.     Administration.

		
	 	     
    2.1 The Plan shall be administered by the Board of
    Directors of the Company (the “Board”) or, if so
    designated by the Board, by the Compensation Committee of the
    Board, consisting of not less than two members of the Board. The
    administrator of the Plan is hereinafter referred to as the
    “Committee”. In addition, the composition of the
    Committee shall be made in an attempt to satisfy:

		
	 	     
    (a) Such requirements as the Securities and Exchange
    Commission may establish for administrators acting under plans
    intended to qualify for exemption under Rule 16b-3 (or its
    successor) under the Securities Exchange Act, and
	 
	 	     
    (b) Such requirements as the Internal Revenue Service may
    establish for outside directors acting under plans intended to
    qualify for exemption under Internal Revenue Code
    §162(m)(4)(C).

		
	 	     
    2.2 Subject to the limitations of the Plan, the Committee
    shall have the sole and complete authority (a) to select
    those directors or employees (who may also be officers or
    directors of the Company or any subsidiary of the Company) who
    shall be eligible to receive Awards under the Plan
    (“Participants”), (b) to determine the type and
    amount of Awards to be granted to each Participant in conformity
    with the Plan, (c) to impose such limitations,
    restrictions, and conditions upon Awards as it shall deem
    appropriate, (d) to interpret the Plan, adopt agreements,
    and to adopt, amend, and rescind administrative guidelines and
    other rules and regulations relating to the Plan, and
    (e) to make all other determinations and to take all other
    actions necessary or advisable for the proper administration of
    the Plan. Determinations of fair market value under the Plan
    shall be made in accordance with the methods and procedures
    established by the Committee. The Committee’s
    determinations on matters within its authority shall be
    conclusive and binding on the Company and all other parties. No
    member of the Board or the Committee shall be liable for any
    action or determination made in good faith with respect to the
    Plan or any Award made under it. The Committee may select one of
    its members as its Chairman, and shall hold meetings at such
    times and places as it may determine. Acts by a majority of the
    Committee, or acts reduced to or approved in writing by a
    majority of the members of the Committee without a meeting,
    shall be the valid acts of the Committee.
	 
	 	     
    2.3 The “fair market value” on a specified date
    shall mean the closing price for a share of Common Stock on the
    stock exchange, if any, on which Common Stock is primarily
    traded, but if no Common Stock were traded on such date, then on
    the last previous date on which a share of Common Stock was so
    traded, or, if Common Stock is not primarily traded on a stock
    exchange, the average of the bid and asked closing prices at
    which one share of Common Stock is traded on the
    over-the-counter market, as reported on the National Association
    of Securities Dealers Automated Quotation System, or, if none of
    the above

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    is applicable, the value of a share of Common Stock as
    established by the Board of Directors for such date using any
    reasonable method of valuation.

     
3.     Type of Award.

     
Awards under the Plan shall be based on Common Stock and shall
be issued as Options, qualifying as either NSOs or ISOs, or as
Stock Awards. No Awards shall be granted under the Plan after
ten years from the date the Plan is approved by the shareholders
of the Company (or, if earlier, the date the Plan is adopted by
the Board), which expiration date shall be February 13,
2011.

     
4.     Shares Subject to Plan and
Eligible Employees.

		
	 	     
    4.1 At the time of original adoption of the Plan,
    3,000,000 shares of Common Stock of the Company were
    available for Option grants under the Plan. At the time of
    amendment and restatement of the Plan, an additional
    1,840,622 shares of Common Stock of the Company are being
    made available for Awards under the Plan, so that the total
    number of shares of Common Stock available for Awards under the
    Plan will equal 4,840,622. All such amounts are subject to
    adjustment as provided in Section 8 below. In the future,
    if another company is acquired by the Company or any of its
    subsidiaries, any Common Stock covered by or issued as a result
    of the assumption or substitution of outstanding grants or
    awards of the acquired company shall not be deemed issued under
    the Plan and shall not be subtracted from the Common Stock
    available for grant under the Plan. The Common Stock deliverable
    under the Plan shall consist in whole or in part of authorized
    and unissued shares of the Company. Notwithstanding the
    foregoing, if any Award is forfeited, or an Award is terminated
    or expires without issuance of Common Stock or other
    consideration, the Common Stock subject to such Award shall
    again be available for grant pursuant to the Plan. The maximum
    number of shares of Common Stock with respect to which an Award
    or Awards may be granted to any Participant in any one taxable
    year of the Company (the “Maximum Annual Participant
    Award”) shall not exceed 500,000 shares for Options or
    500,000 shares for Stock Awards.
	 
	 	     
    4.2 The class eligible to receive Awards under the Plan
    shall all be employees and directors of the Company and its
    subsidiaries who are selected by the Committee. In general,
    Participants shall be selected by the Committee from the
    directors, executive officers and other key employees of the
    Company and its subsidiaries who occupy responsible managerial
    or professional positions and/or who have the capacity to or who
    have already shown their ability to make a substantial
    contribution to the success of the Company.
	 
	 	     
    4.3 The form of an Award shall be determined from time to
    time by the Committee. The terms and provisions of an Option
    shall be set forth in writing in a Stock Option Certificate
    Agreement (the “Stock Option Agreement”), signed by
    the Option holder and on behalf of the Company by the Chairman
    of the Board or an authorized officer. The Agreement shall state
    whether or not the Option is an Incentive Stock Option. The
    terms and provisions of a Stock Award shall be set forth in
    writing in a Restricted Stock Agreement (the “Stock Award
    Agreement”), signed by the recipient and on behalf of the
    Company by the Chairman of the Board or an authorized officer.
    The Committee may establish such other condition(s) as it may
    determine provided that, with respect to a grant of Incentive
    Stock Options, such condition(s) are not inconsistent with
    Section 422 of the Internal Revenue Code.

     
5.     Stock Options.

     
All Options granted under the Plan shall be subject to the
following terms and conditions:

		
	 	     
    5.1 The Committee may, from time to time, subject to the
    provisions of the Plan and such other terms and conditions as
    the Committee may prescribe, grant to any Participant Options to
    purchase Common Stock, which Options may, but need not, be ISOs.
    As more fully set forth in Section 14, the grant of an
    Option shall be evidenced by a signed written Stock Option
    Agreement containing such terms and conditions, not inconsistent
    with this Plan, as the Committee may from time to time
    prescribe. Options granted under the Plan as ISOs shall be
    designated as ISOs in the Stock Option Agreement covering such
    Options.

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    5.2 Each Stock Option Agreement shall specify the exercise
    price of each Option. The price per share of the shares subject
    to each Option shall be set by the Committee; provided, however,
    that with respect to ISOs, such price shall not be less than one
    hundred percent (100%) of the fair market value of a share of
    Common Stock as of the date the Option is granted; and provided
    further, that such price shall be no less than one hundred ten
    percent (110%) of the fair market value of a share of Common
    Stock as of the date the Option is granted if such Option is
    granted to a person who owns ten percent (10%) or more of the
    issued and outstanding Common Stock of the Company as of such
    date. The exercise price under an NSO shall in no event be less
    than 85% of the fair market value of a share of Common Stock as
    of the date the Option is granted. In the case of an NSO, a
    Stock Option Agreement may specify an exercise price that varies
    in accordance with a predetermined formula while the NSO is
    outstanding.
	 
	 	     
    5.3 The term of an Option shall be set by the Committee in
    its discretion; provided, however, that the term shall not be
    more than seven years from the date an ISO is granted, or, in
    the case of an Option granted to a person who owns ten percent
    (10%) or more of the issued and outstanding Common Stock of the
    Company as of the date the Option is granted, the term shall not
    be more than five years from the date an ISO is granted.
	 
	 	     
    5.4 At any time after grant of an Option, the Committee
    may, in its sole discretion, subject to whatever terms and
    conditions it selects, and to the extent applicable, accelerate
    the period during which an Option vests.
	 
	 	     
    5.5 No portion of an Option which is unexercisable at the
    time a Participant terminates employment with the Company or a
    subsidiary of the Company shall thereafter become exercisable.
    However, for purposes of understanding the previous sentence, an
    Option shall not be considered unexercisable if at that time a
    Participant terminates the only impediment to his or her
    exercise of the Option is the fact that the Participant is
    subject to a closed window period which restricts the exercise
    of the Option as a matter of law. Further, the existence of a
    closed window period will not extend the time within which
    Options hereunder may be exercised.
	 
	 	     
    5.6 For those Participants who are employees of the Company
    or any of its subsidiaries, an Option shall be exercisable by a
    Participant only while he or she is an employee and up to three
    months following the cessation or termination of employment with
    the Company and any and all subsidiaries or no later than three
    months after the Participant ceases to be a Director. The
    preceding notwithstanding, the Committee may determine that an
    Option may be exercised subsequent to a Participant’s
    termination of employment or directorship, subject to the
    following limitations:

		
	 	     
    (a) An Option, to the extent not previously exercised,
    shall terminate no later than seven (7) years from the
    grant date (the “Option Term”). If Participant ceases
    to be employed by the Company because of Participant’s
    retirement, disability or death, the option may, to the extent
    it was outstanding and exercisable on the date of such
    retirement, disability or death, be exercised only during the
    following periods: (i) if the termination was due to
    Participant’s disability (within the meaning of
    Section 22(e)(3) of the Code), the one-year period
    following the date of such termination; (ii) if the
    termination was due to Participant’s death, the six-month
    period following the date of issuance of letters testamentary or
    letters of administration to the executor or administrator of
    Participant’s estate, but not later than one year after
    Participant’s death; and (iii) if the termination was
    due to Participant’s retirement after attaining
    age 65, or to Participant’s disability other than as
    described in (i) above, the three-month period following
    the date of such termination. In no event, however, shall any
    such period set forth in the previous sentence extend beyond the
    Option Term.
	 
	 	     
    (b) In the event of Participant’s death, an Option may
    be exercised by Participant’s legal representative(s), but
    only to the extent that the Option would otherwise have been
    exercisable by Participant.

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    (c) A transfer of Participant’s employment between the
    Company and any subsidiary of the Company, or between any
    subsidiaries of the Company, shall not be deemed to be a
    termination of Participant’s employment.
	 
	 	     
    (d) Notwithstanding any other provisions set forth herein
    or in any Stock Option Agreement, if a Participant shall
    (i) commit any act of malfeasance or wrongdoing affecting
    the Company or any subsidiary or affiliate of the Company,
    (ii) breach any covenant not to compete, or employment
    contract, with the Company or any subsidiary or affiliate of the
    Company, or (iii) engage in conduct that would warrant
    Participant’s discharge for cause (excluding general
    dissatisfaction with the performance of Participant’s
    duties, but including any act of disloyalty or any conduct
    clearly tending to bring discredit upon the Company or any
    subsidiary or affiliate of the Company), any unexercised portion
    of the Option shall immediately terminate and be void.

		
	 	     
    5.7 An exercisable Option may be exercised in whole or in
    part. However, an Option shall not be exercisable with respect
    to fractional shares and the Committee may require that, by the
    terms of the Option, a partial exercise only be with respect to
    a minimum number of shares.
	 
	 	     
    5.8 All or a portion of an exercisable Option shall be
    deemed exercised upon:

		
	 	     
    (a) Delivery of all of the following to the Secretary of
    the Company or his or her office:

		
	 	     
    (i) A written notice complying with the applicable rules
    established by the Committee or the Company stating that the
    Option, or a portion thereof, is exercised. The notice shall be
    signed by the Participant or other person then entitled to
    exercise the Option or such portion;
	 
	 	     
    (ii) Such representations and documents as the Committee,
    in its absolute discretion, deems necessary or advisable to
    effect compliance with all applicable federal or state
    securities laws or regulations. The Committee may, in its
    absolute discretion, also take whatever additional actions it
    deems appropriate to effect such compliance, including, without
    limitation, placing legends on share certificates and issuing
    stop-transfer notices to agents and registrars; and
	 
	 	     
    (iii) In the event that the Option shall be exercised
    pursuant to Section 5.6(b) by any person or persons other
    than the Participant, appropriate proof of the right of such
    person or persons to exercise the Option; and

		
	 	     
    (b) Full cash payment to the Secretary of the Company for
    the shares with respect to which the Option, or portion thereof,
    is exercised. However, at the discretion of the Committee, the
    terms of the Option may allow, or provide the Committee with the
    continuous discretion to allow: (i) a delay in payment up
    to thirty days from the date the Option, or portion thereof, is
    exercised, (ii) payment, in whole or in part, through the
    delivery of Common Stock owned by the Participant for at least
    six months, (iii) delivery (in a form prescribed or
    approved by the Committee or the Company) of an irrevocable
    direction to a securities broker to sell all or part of the
    Common Stock being purchased under the Plan and to deliver all
    or part of the sales proceeds to the Company to cover the
    exercise price and any applicable withholding taxes; or
    (iv) payment, in whole or in part, through the delivery of
    property of any kind which constitutes good and valuable
    consideration.
	 
	 	     
    (c) If Participant fails to pay for any or all of the
    Option shares specified in the notice of exercise or fails to
    accept delivery thereof, Participant’s right to purchase
    such Option shares may be terminated by the Company, without
    notice. The date specified in Participant’s notice of
    exercise as the date of exercise shall be deemed the date of
    exercise of the Option, provided that payment in full for the
    Option shares to be purchased upon such exercise shall have been
    received by such date.

		
	 	     
    5.9 As soon as practicable after receipt by the Company,
    pursuant to Section 5.8(b), of full cash payment for the
    shares with respect to which an Option, or portion thereof, is
    exercised by a Participant,

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    with respect to each such exercise, the Company shall transfer
    to the Participant the number of shares equal to the quotient of:
	 
	 	     
    (a) The amount of the payment made by the Participant to
    the Company pursuant to Section 5.8(b), and
	 
	 	     
    (b) The price per share of the shares subject to the Option
    as determined pursuant to Section 5.2.
	 
	 	     
    5.10 The Company shall not be required to issue or to
    deliver any certificate or certificates for shares of stock
    purchased upon the exercise of any Option or portion thereof
    prior to fulfillment of all of the following conditions:

		
	 	     
    (a) The completion of any registration or other
    qualification of such shares under any state or federal law, or
    under the rulings or regulations of the Securities and Exchange
    Commission or any other governmental regulatory body which the
    Committee shall, in its absolute discretion, deem necessary or
    advisable;
	 
	 	     
    (b) Obtaining any approval or other clearance from any
    state or federal governmental agency that the Committee shall,
    in its absolute discretion, determine to be necessary or
    advisable;
	 
	 	     
    (c) The lapse of such reasonable period of time following
    the exercise of the Option as the Committee may establish from
    time to time for reasons of administrative convenience;
	 
	 	     
    (d) The receipt by the Company of full payment for such
    shares, including payment of any applicable withholding
    tax; and
	 
	 	     
    (e) The execution and delivery by Participant of a
    counterpart Stock Option Agreement between the Company and
    Participant.

		
	 	     
    5.11 To the extent that the aggregate fair market value of
    Common Stock with respect to which any ISOs are exercisable for
    the first time by a Participant during any calendar year (under
    the Plan and all other incentive stock option plans of the
    Company or any Company subsidiary) exceeds $100,000, such
    Options shall be treated as NSOs to the extent required by
    Section 422 of the Code. For purposes of this
    Section 5.11, the fair market value of stock shall be
    determined as of the time the Option, with respect to such
    stock, is granted.
	 
	 	     
    5.12 Within the limitations of the Plan, the Committee may
    modify, extend or assume outstanding Options or may accept the
    cancellation of outstanding Options (whether granted by the
    Company or by another issuer) in return for the grant of new
    Options for the same or a different number of shares and at the
    same or a different exercise price. The foregoing
    notwithstanding, no modification of an Option shall, without the
    consent of the Participant, alter or impair his or her rights or
    obligations under such Option.

     
6.     Restricted Stock Awards.

		
	 	     
    6.1 Stock Awards may be granted either alone, in addition
    to, or in tandem with other Awards granted under the Plan. After
    the Committee determines that it will offer a Stock Award, it
    will advise the Participant in writing, by means of a Stock
    Award Agreement, of the terms, conditions and restrictions,
    including vesting, if any, related to the offer, including the
    number of shares of Common Stock that the Participant shall be
    entitled to receive or purchase, the price to be paid, if any,
    and, if applicable, the time within which the Participant must
    accept the offer. The offer shall be accepted by execution of a
    Stock Award Agreement in the manner determined by the Committee.
	 
	 	     
    6.2 Unless the Committee determines otherwise, the Stock
    Award Agreement shall provide for the forfeiture of the
    nonvested shares of Common Stock underlying such Stock Award
    when the Participant ceases to be an employee or director of the
    Company. To the extent that the Participant purchased the shares
    of Common Stock granted under such Stock Award and any such
    shares remain nonvested at the time the Participant ceases to be
    an employee or director, the termination of employment or status
    as a director shall cause an immediate sale of such nonvested
    shares to the Company at the original price per

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    share paid by the Participant. The Stock Award Agreement shall
    contain such other terms, provisions and conditions not
    inconsistent with the Plan as may be determined by the Committee
    in its sole discretion.
	 
	 	     
    6.3 The vesting period of a Stock Award shall be set by the
    Committee in its discretion; provided, however, that the vesting
    period shall not be more than seven years from the date a Stock
    Award is granted. At any time after grant of a Stock Award, the
    Committee may, in its sole discretion, subject to whatever terms
    and conditions it selects, and to the extent applicable,
    accelerate the period during which a Stock Award vests.
	 
	 	     
    6.4 No portion of a Stock Award which is unvested at the
    time a Participant terminates employment with the Company or
    ceases to be a director of the Company shall thereafter become
    vested.
	 
	 	     
    6.5 Notwithstanding any other provisions set forth herein
    or in any Stock Award Agreement, if a Participant shall
    (i) commit any act of malfeasance or wrongdoing affecting
    the Company or any subsidiary or affiliate of the Company,
    (ii) breach any covenant not to compete, or employment
    contract, with the Company or any subsidiary or affiliate of the
    Company, or (iii) engage in conduct that would warrant
    Participant’s discharge for cause (excluding general
    dissatisfaction with the performance of Participant’s
    duties, but including any act of disloyalty or any conduct
    clearly tending to bring discredit upon the Company or any
    subsidiary or affiliate of the Company), any nonvested portion
    of the Stock Award shall immediately be forfeited. To the extent
    that the Participant purchased the shares granted under such
    Stock Award and any such shares remain nonvested at the time of
    any action described in the prior sentence, such action shall
    cause an immediate sale of such nonvested shares to the Company
    at the original price per share paid by the Participant.
	 
	 	     
    6.6 The Participant shall make such representations and
    provide such documents as the Committee, in its absolute
    discretion, deems necessary or advisable to effect compliance
    with all applicable federal or state securities laws or
    regulations. The Committee may, in its absolute discretion, also
    take whatever additional actions it deems appropriate to effect
    such compliance, including, without limitation, placing legends
    on share certificates and issuing stop-transfer notices to
    agents and registrars.
	 
	 	     
    6.7 The Participant shall make full cash payment to the
    Secretary of the Company of the purchase price, if any, for the
    shares subject to the Stock Award. However, at the discretion of
    the Committee, the terms of the Stock Award may allow, or
    provide the Committee with the continuous discretion to allow:
    (i) a delay in payment up to thirty days from the date the
    Stock Award is granted, or (ii) payment, in whole or in
    part, through the delivery of property of any kind which
    constitutes good and valuable consideration. If Participant
    fails to pay the amount, if any, specified for the shares
    specified in the Stock Award Agreement or fails to accept
    delivery thereof, Participant’s right to acquire such
    shares may be terminated by the Company, without notice. The
    date specified in Participant’s Stock Award Agreement as
    the date of acquisition shall be deemed the date of acquisition
    of the shares, provided that any payment required by the Stock
    Award Agreement shall have been received by such date.
	 
	 	     
    6.8 As soon as practicable after Participant executes the
    Stock Award Agreement and provides the Company, pursuant to
    Section 6.7, with full payment of any purchase price
    required under the terms of a Stock Award Agreement, the Company
    shall transfer to the Participant the number of shares
    purchased. If no purchase price is required under the Stock
    Award Agreement, the Company shall transfer to the Participant
    the number of shares issued under the Stock Award Agreement
    after the Participant executes the Stock Award Agreement.
	 
	 	     
    6.9 Notwithstanding the foregoing, the Company shall not be
    required to issue or to deliver any certificate or certificates
    for shares of stock purchased under a Stock Award Agreement
    prior to fulfillment of all of the following conditions:

		
	 	     
    (a) The completion of any registration or other
    qualification of such shares under any state or federal law, or
    under the rulings or regulations of the Securities and Exchange
    Commission or any other governmental regulatory body which the
    Committee shall, in its absolute discretion, deem necessary or
    advisable; and

6

 

		
	 	     
    (b) Obtaining any approval or other clearance from any
    state or federal governmental agency that the Committee shall,
    in its absolute discretion, determine to be necessary or
    advisable.

     
7.     Nonassignability of
Awards.

     
No Award granted under the Plan shall be assigned, transferred,
pledged, or otherwise encumbered by a Participant, otherwise
than by will or by the laws of descent and distribution and, in
the case of NSOs only, by instrument to an inter vivos or
testamentary trust in which the Option is to be passed to
beneficiaries upon the death of the Participant, or by gift to a
member of Participant’s immediate family (as such term is
defined in Rule 16a-1(e) of the Exchange Act) or pursuant
to a qualified domestic relations order. Each Award shall be
exercisable during the Participant’s lifetime only by the
Participant. Any attempt to assign, transfer, pledge or
otherwise encumber any such Award or of any right or privilege
conferred thereby, contrary to this Section 7, or the sale
or levy or similar process upon the rights and privileges
conferred thereby, shall be null and void.

     
8.     Protection Against
Dilution.

		
	 	     
    8.1 Reorganizations. In the event of any change affecting
    the Common Stock by reason of any sale, merger, consolidation,
    spin-off, or other reorganization of the Company or any
    subsidiary or affiliated company, the Committee may, but shall
    not be obligated to, make such substitution or adjustment in the
    aggregate number or class of shares which may be distributed
    under the Plan and in the number, class, and price of shares
    subject to the outstanding Awards granted under the Plan or in
    any vesting schedule as the Committee in its sole discretion
    deems to be appropriate in order to maintain the purpose of the
    original grant. Any determination of the Committee as to any
    question that may arise with respect to any adjustment or lack
    of adjustment of shares or vesting shall be final. The Committee
    shall be authorized to make adjustments in the terms and
    conditions of other Awards in recognition of unusual or
    non-recurring events affecting the Company or its financial
    statements or changes in applicable laws, regulations, or
    accounting principles. The Committee may correct any defect,
    supply any omission or reconcile any inconsistency in the Plan
    or any Award in the manner and to the extent it shall deem
    desirable to carry it into effect.
	 
	 	     
    8.2 Adjustments. If any change is made to the Common Stock
    as a result of a subdivision of the outstanding Common Stock, a
    declaration of a dividend payable in Common Stock, a combination
    or consolidation of the outstanding Common Stock (by
    reclassification or otherwise) into a lesser number of shares of
    Common Stock, a recapitalization, or a similar occurrence or
    change in the capitalization of the Company which occurrence or
    change is neither a rights offering nor related to a merger,
    sale or other reorganization set forth in Section 8.1,
    appropriate adjustments shall be made to (i) the maximum
    number and/or class of securities issuable under the Plan,
    (ii) the number and/or class of securities and/or the price
    per share covered by outstanding Awards under the Plan, and
    (iii) the Maximum Annual Participant Award. Any fractional
    shares shall be payable in cash.
	 
	 	     
    8.3 Certain Corporate Events.
	 
	 	     
    (a) Corporate Reorganizations. Upon the dissolution or
    liquidation of the Company, or upon a reorganization, merger or
    consolidation of the Company as a result of which the
    outstanding securities of the class then subject to Awards
    hereunder are changed into or exchanged for cash or property or
    securities not of the Company’s issue, or any combination
    thereof, or upon a sale of substantially all the property of the
    Company to, or the acquisition of stock representing both
    (i) more than fifty percent (50%) of the voting power of
    the stock of the Company then outstanding by, another
    corporation or person and (ii) a change in the
    “Effective Control” (as defined below) of the Company
    (any of which being a “Corporate Event”), the Plan
    shall terminate, and all Awards theretofore granted hereunder
    shall terminate, unless provision is made in writing in
    connection with such transaction for the continuance of the Plan
    and/or for the assumption of Awards covering the stock of a
    successor corporation, or a parent or a subsidiary thereof (such
    successor corporation or parent or subsidiary, as the case may
    be, being the “successor corporation”), with
    appropriate adjustments as to the number and kind of shares and
    prices, in which event the Plan and Awards theretofore granted
    shall continue in the manner and under the terms so provided. If
    the Plan and Awards shall terminate pursuant to the foregoing
    sentence, all outstanding

7

 

		
	 	
    Stock Awards shall become fully vested immediately prior to the
    consummation of such transaction and all persons entitled to
    exercise any unexercised portions of Options then outstanding
    shall have the right, at such time prior to the consummation of
    the transaction causing such termination as the Company shall
    designate, to exercise the unexercised portions of their
    Options, including the portions thereof which would, but for
    this Section entitled “Corporate Reorganizations,” not
    yet be exercisable. For purposes of this paragraph, the term
    “Effective Control” shall mean a change in share
    ownership such that the person or persons in Control (as defined
    in Rule 405 under the Securities Act of 1933, as amended
    (the “Securities Act”)) of the Company before the
    Corporate Event are not in Control of the Company after the
    Corporate Event.
	 
	 	     
    (b) Termination of Employment Following Corporate Event. If
    a Participant’s employment is terminated (other than for
    reasons set forth in Section 5.6(d) herein) by the Company
    or a successor employer corporation (or a parent or a subsidiary
    of either of them) within two (2) years following the
    effective date of a Corporate Event (as defined in
    subparagraph (a) above) in which Awards are assumed,
    such Participant’s Options (or replacement options) will
    immediately become exercisable, including the portions thereof
    which would, but for this Section entitled “Termination of
    Employment Following Corporate Event,” not yet be
    exercisable, and such Participant’s Stock Awards will
    immediately become fully vested. Any such Option will remain
    exercisable until the expiration of the Option or earlier
    termination of the Option in accordance with its terms.
	 
	 	     
    (c) Termination of Plan or Options Following Corporate
    Event. If either the Plan is continued by a successor
    corporation (as defined in subparagraph (a) above) to
    the Company or Awards are assumed by such successor corporation,
    or both, as provided in subparagraph (a) above, and
    thereafter within two (2) years following the effective
    date of a Corporate Event (as described under
    subparagraph (a) above), the Plan and unexercised
    Options (or replacement options) or unvested Stock Awards are
    proposed to be terminated for any reason (including but not
    limited to a successor corporation’s Corporate Event), then
    all such Stock Awards shall become fully vested immediately
    prior to termination of the Plan or Stock Awards and all persons
    entitled to exercise any unexercised portions of Options then
    outstanding shall have the right, until seven (7) days
    prior to the termination of the Plan and unexercised Options (or
    replacement options), or such later time as the successor
    corporation shall designate, to exercise the unexercised
    portions of their Options (or replacement options), including
    the portions thereof which would, but for this Section entitled
    “Termination of Plan or Options Following Corporate
    Event,” not yet be exercisable.

     
Notwithstanding the foregoing, a transaction shall not
constitute a Corporate Event if its sole purpose is to change
the state of the Company’s incorporation or to create a
holding company that will be owned in substantially the same
proportions by the persons who held the Company’s
securities immediately before such transaction.

     
9.     Withholding.

     
At the Committee’s discretion, the recipient of any Award
under the Plan may pay to the Company, in cash, Common Stock
(provided it has been held by the Participant for at least six
months) or other property, or a combination thereof, the amount
of any taxes required to be withheld with respect to such Award
or, in the case of an Award in the form of Common Stock, the
Company shall have the right to retain from such Award a
sufficient number of shares of Common Stock to satisfy the
applicable withholding tax obligation.

     
10.     Subsidiaries.

     
For purposes of the Plan, a “subsidiary” of the
Company means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if
each of the corporations other than the last corporation in the
chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other
corporations in the chain.

8

 

     
11.     Financial Assistance.

     
The Company is vested with authority under this Plan to assist
any employee to whom an Award is granted hereunder (including
any director or officer of the Company or any of its
subsidiaries) in the payment of the purchase price payable with
respect to that Award, by lending the amount of such purchase
price to such employee on such terms and at such rates of
interest and upon such security (or unsecured) as shall have
been authorized by or under authority of the Board.

     
12.     Limitations of Rights of
Participants.

		
	 	     
    12.1 A person to whom an Award is granted under this Plan
    shall not have any interest in the shares available with respect
    to that Award or in any dividends paid thereon, and shall not
    have any of the rights or privileges of a stockholder with
    respect to such shares until the certificates therefor have been
    issued and delivered to him or her.
	 
	 	     
    12.2 No shares of stock issuable under the Plan shall be
    issued and no certificate therefor delivered unless and until,
    in the opinion of legal counsel for the Company, such securities
    may be issued and delivered without causing the Company to be in
    violation of or to incur any liability under any federal, state
    or other securities law, or any other requirement of law or of
    any regulatory body having jurisdiction over the Company.
	 
	 	     
    12.3 The receipt of an Award does not give the Participant
    any right to continued employment by the Company or a subsidiary
    for any period, nor shall the granting of the Award or the
    issuance of shares in accordance with the Award give the Company
    or any subsidiary any right to the continued services of the
    Participant for any period.
	 
	 	     
    12.4 Nothing contained in this Plan shall constitute the
    granting of an Award hereunder, which shall occur only pursuant
    to express authorization by the Committee and under the terms of
    a Stock Option Agreement or Stock Award Agreement.

     
13.     Amendment and
Termination.

     
The Board may alter, amend, suspend or terminate this Plan,
provided that no such action shall, without the consent of a
Participant, alter or impair any rights or obligations under any
Award granted to such Participant. An amendment of the Plan
shall be subject to the approval of the Company’s
shareholders only to the extent required by applicable laws,
regulations or rules.

     
14.     Award Agreements.

     
Each Award granted to a Participant shall be evidenced by a
written Stock Option Agreement or Stock Award Agreement in a
form approved by the Committee, which shall be executed by the
Participant and an authorized officer of the Company and which
shall contain such terms and conditions as the Committee shall
determine, consistent with this Plan. Stock Option Agreements
evidencing ISOs shall contain such terms and conditions as may
be necessary to meet the applicable provisions of
Section 422 of the Code.

     
15.     Governing Law.

     
The place of administration of the Plan and all Stock Option
Agreements and Stock Award Agreements shall be in the State of
California. The corporate law of the Company’s state of
incorporation shall govern issues related to the validity and
issuance of shares. Otherwise, this Plan and each Stock Option
Agreement and Stock Award Agreement shall be construed and
administered in accordance with the laws of the State of
California, without giving effect to principles relating to
conflict of laws.

     
16.     Use of Proceeds.

     
Any cash proceeds received by the Company from the sale of
shares pursuant to grants made under this Plan shall be used for
general corporate purposes.

9

 

     
17.     Regulatory Approvals.

     
The implementation of the Plan, the granting of any Award
hereunder, and the issuance of stock in accordance with any
Award shall be subject to the Company’s procurement of all
approvals and permits required by regulatory authorities having
jurisdiction over the Plan, the Awards granted under it, and the
stock issued pursuant to it.

     
18.     Restrictions on Resale.

     
Certain officers and directors of the Company may be deemed to
be “affiliates” of the Company, as that term is
defined under the Securities Act. Common Stock acquired under
the Plan by an affiliate may only be re-offered or resold
pursuant to an effective registration statement or pursuant to
Rule 144 under the Securities Act or another exemption from
the registration requirements of the Securities Act.

     
19.     Effective Date.

     
This Plan, as amended and restated, shall become effective upon
adoption by the Company’s Board of Directors, subject to
the subsequent approval of the amended and restated Plan by the
stockholders of the Company within 12 months from the date
of said adoption. Awards may be granted prior to such
stockholder approval, provided that any Stock Awards shall not
vest prior to the time that this amended and restated Plan is
approved by the stockholders, and provided further that if such
approval has not been obtained at the end of said 12 month
period, all Stock Awards previously granted under this amended
and restated Plan shall thereupon be cancelled and become null
and void.

     
20.     Financial Statements.

     
Participant shall receive financial statements of the Company at
least annually.

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