Document:

Exhibit 10.1

 

ALEXANDRIA REAL ESTATE EQUITIES,
INC.

 

AMENDED AND RESTATED

1997 STOCK AWARD AND INCENTIVE
PLAN

 

 

TABLE OF CONTENTS

 

	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  PURPOSE; TYPES OF
  AWARDS; CONSTRUCTION

  	
  1

  
	
  2.

  	
  DEFINITIONS

  	
  1

  
	
   

  	
  2.1

  	
  Affiliate

  	
  1

  
	
   

  	
  2.2

  	
  Award

  	
  1

  
	
   

  	
  2.3

  	
  Award Agreement

  	
  1

  
	
   

  	
  2.4

  	
  Beneficiary

  	
  1

  
	
   

  	
  2.5

  	
  Board

  	
  2

  
	
   

  	
  2.6

  	
  Change of Control

  	
  2

  
	
   

  	
  2.7

  	
  Code

  	
  3

  
	
   

  	
  2.8

  	
  Committee

  	
  3

  
	
   

  	
  2.9

  	
  Company

  	
  3

  
	
   

  	
  2.10

  	
  Disability

  	
  3

  
	
   

  	
  2.11

  	
  Effective Date

  	
  3

  
	
   

  	
  2.12

  	
  Exchange Act

  	
  3

  
	
   

  	
  2.13

  	
  Fair Market Value

  	
  3

  
	
   

  	
  2.14

  	
  Grantee

  	
  4

  
	
   

  	
  2.15

  	
  Non-Employee Director

  	
  4

  
	
   

  	
  2.16

  	
  Option

  	
  4

  
	
   

  	
  2.17

  	
  Other Cash-Based Award

  	
  4

  
	
   

  	
  2.18

  	
  Other Stock-Based Award

  	
  4

  
	
   

  	
  2.19

  	
  Plan

  	
  4

  
	
   

  	
  2.20

  	
  Restricted Stock

  	
  4

  
	
   

  	
  2.21

  	
  Retirement

  	
  4

  
	
   

  	
  2.22

  	
  Rule 16b-3

  	
  4

  
	
   

  	
  2.23

  	
  Securities Act

  	
  4

  
	
   

  	
  2.24

  	
  Stock

  	
  4

  
	
   

  	
  2.25

  	
  Stock Appreciation Right or “SAR”

  	
  4

  
	
   

  	
  2.26

  	
  Subsidiary

  	
  5

  
	
  3.

  	
  ADMINISTRATION

  	
  5

  

 

i.

 

 

TABLE OF CONTENTS

(CONTINUED)

 

	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  4.

  	
  ELIGIBILITY

  	
  6

  
	
  5.

  	
  STOCK SUBJECT TO THE
  PLAN

  	
  6

  
	
  6.

  	
  SPECIFIC TERMS OF
  AWARDS

  	
  7

  
	
   

  	
  6.1

  	
  General

  	
  7

  
	
   

  	
  6.2

  	
  Options

  	
  7

  
	
   

  	
  6.3

  	
  SARs

  	
  8

  
	
   

  	
  6.4

  	
  Restricted Stock

  	
  9

  
	
   

  	
  6.5

  	
  Stock Awards in Lieu of Cash Awards

  	
  10

  
	
   

  	
  6.6

  	
  Other Stock-Based or Cash-Based Awards

  	
  10

  
	
   

  	
  6.7

  	
  Change in Service Capacity and Leaves of Absence

  	
  11

  
	
  7.

  	
  CHANGE OF CONTROL
  PROVISIONS

  	
  11

  
	
   

  	
  7.1

  	
  Change of Control

  	
  11

  
	
  8.

  	
  GENERAL PROVISIONS

  	
  12

  
	
   

  	
  8.1

  	
  Effective Date; Approval by Stockholders

  	
  12

  
	
   

  	
  8.2

  	
  Nontransferability

  	
  12

  
	
   

  	
  8.3

  	
  No Right to Continued Employment, etc.

  	
  12

  
	
   

  	
  8.4

  	
  Taxes

  	
  12

  
	
   

  	
  8.5

  	
  Amendment and Termination of the Plan

  	
  12

  
	
   

  	
  8.6

  	
  No Rights to Awards; No Stockholder Rights

  	
  13

  

 

ii.

 

TABLE OF CONTENTS

(CONTINUED)

 

	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
   

  	
  8.7

  	
  Unfunded Status of Awards

  	
  13

  
	
   

  	
  8.8

  	
  No Fractional Shares

  	
  13

  
	
   

  	
  8.9

  	
  Regulations and Other Approvals

  	
  13

  
	
   

  	
  8.10

  	
  Compliance with Section 409A of the Code

  	
  13

  
	
   

  	
  8.11

  	
  Governing Law

  	
  14

  

 

iii.

 

ALEXANDRIA REAL ESTATE EQUITIES,
INC.

 

AMENDED AND RESTATED

1997 STOCK AWARD AND INCENTIVE
PLAN

 

AMENDED AND RESTATED:
                ,
2008

APPROVED BY STOCKHOLDERS:
                ,
2008

 

1.             PURPOSE;
TYPES OF AWARDS; CONSTRUCTION.

 

The
purpose of the Alexandria Real Estate Equities, Inc. Amended and Restated
1997 Stock Award and Incentive Plan (the “Plan”) is to afford an incentive to
selected officers, employees and independent contractors (including
non-employee directors) of Alexandria Real Estate Equities, Inc. (the “Company”),
or any Subsidiary or Affiliate that now exists or hereafter is organized or
acquired, to acquire a proprietary interest in the Company, to continue as
employees or independent contractors (including non-employee directors), as the
case may be, to increase their efforts on behalf of the Company and to promote
the success of the Company’s business. 
Pursuant to Section 6 of the Plan, there may be granted Options,
Stock Appreciation Rights, Restricted Stock, and Other Stock-Based Awards or
Other Cash-Based Awards.  The Plan is
designed to comply with the requirements for “performance-based compensation”
under Section 162(m) of the Code and the conditions for exemption
from short-swing profit recovery rules under Rule 16b-3 of the Exchange
Act, and shall be interpreted in a manner consistent with the requirements
thereof.

 

2.             DEFINITIONS.

 

For
purposes of the Plan, the following terms shall be defined as set forth below:

 

2.1          “Affiliate”
means, at the time of determination, any entity if, at the time of
determination, (i) the Company, directly or indirectly, owns at least
fifty percent (50%) of the combined voting power of all classes of stock of
such entity or at least fifty percent (50%) of the ownership interests in such
entity or (ii) such entity, directly or indirectly, owns at least fifty
percent (50%) of the combined voting power of all classes of stock of the
Company.  The Board or Committee shall
have the authority to determine the time or times at which “Affiliate” status
is determined within the foregoing definition.

 

2.2          “Award”
means any Option, SAR, Restricted Stock, or Other Stock-Based Award or Other
Cash-Based Award granted under the Plan.

 

2.3          “Award
Agreement” means any written agreement, contract, or other instrument or
document evidencing an Award.

 

2.4          “Beneficiary”
means the person, persons, trust or trusts that have been designated by a
Grantee in his or her most recent written beneficiary designation filed with
the Company to receive the benefits specified under the Plan upon his or her
death, or, if there is no 

 

1.

 

designated
Beneficiary or surviving designated Beneficiary, then the person, persons,
trust or trusts entitled by will or the laws of descent and distribution to
receive such benefits.

 

2.5          “Board”
means the Board of Directors of the Company.

 

2.6          “Change of
Control” shall mean the occurrence of any of the following events:

 

(a)            Any
Person (as such term is used in section 3(a)(9) of the Exchange Act, as
modified and used in sections 13(d) and 14(d) thereof, except that
such term shall not include (A) the Company or any of its subsidiaries, (B) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any of its affiliates, (C) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (D) a
corporation owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company) becomes the Beneficial Owner, as such term is defined in Rule 13d-3
under the Exchange Act, directly or indirectly, of securities of the Company
(not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its affiliates other than in
connection with the acquisition by the Company or its affiliates of a business)
representing twenty-five percent (25%) or more of the combined voting power of
the Company’s then outstanding securities; or

 

(b)            The
following individuals cease for any reason to constitute a majority of the
number of directors then serving: 
individuals who, on the date hereof, constitute the Board and any new
director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of the
Company) whose appointment or election by the Board or nomination for election
by the Company’s stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors on the date hereof or whose appointment, election or nomination for
election was previously so approved or recommended; or

 

(c)            There
is consummated a merger or consolidation of the Company with any other
corporation, other than (A) a merger or consolidation in which the
stockholders of the Company immediately prior to such merger or consolidation,
continue to own, in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
any subsidiary of the Company, at least seventy-five percent (75%) of the
combined voting power of the securities of the Company (or the surviving entity
or any parent thereof) outstanding immediately after such merger or
consolidation in substantially the same proportions as their ownership of the
Company immediately prior to such merger or consolidation, or (B) a merger
or consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired directly
from the Company or its affiliates other than in connection with the
acquisition by the Company or its affiliates of a business) representing
twenty-five percent (25%) or more of the combined voting power of the Company’s
then outstanding securities; or

 

2.

 

(d)            The
stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or there is consummated an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets,
other than a sale or disposition by the Company of all or substantially all of
the Company’s assets to an entity, at least seventy-five (75%) of the combined
voting power of the voting securities of which are owned by stockholders of the
Company in substantially the same proportions as their ownership of the Company
immediately prior to such sale.

 

2.7          “Code”
means the Internal Revenue Code of 1986, as amended from time to time, and the
regulations promulgated thereunder.

 

2.8          “Committee”
means the Board or the committee designated or established by the Board to
administer the Plan, the composition of which shall at all times satisfy the
provisions of Rule 16b-3 and may satisfy the provisions of Section 162(m)(4)(C)(i) of
the Code.

 

2.9          “Company” means
Alexandria Real Estate Equities, Inc., a corporation organized under the
laws of the State of Maryland, or any successor corporation.

 

2.10        “Disability”
means, with respect to a Grantee, the inability of such Grantee 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 can
be expected to last for a continuous period of not less than twelve (12)
months, as provided in 409A(a)(2)(c)(i) of the Code.

 

2.11        “Effective
Date” means the date of the annual meeting of stockholders of the Company
held in 2008.

 

2.12        “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to
time, and as now or hereafter construed, interpreted and applied by
regulations, rulings and cases.

 

2.13        “Fair Market
Value” means, with respect to Stock or other property, the fair market
value of such Stock or other property determined by such methods or procedures
as shall be established from time to time by the Committee.  Unless otherwise determined by the Committee
in good faith, the per share Fair Market Value of Stock as of a particular date
shall mean (i) the closing sales price per share of Stock on the national
securities exchange on which the Stock is principally traded on the date the
Award is granted (or if the Stock is not traded on the exchange on the date the
award is granted, the closing sales price per share of Stock for the last
preceding date on which there was a sale of such Stock on such exchange), or (ii) if
the shares of Stock are then traded in an over-the-counter market, the average
of the closing bid and ask prices for the shares of Stock in such
over-the-counter market for the last preceding date on which there was a sale
of such Stock in such market, or (iii) if the shares of Stock are not then
listed on a national securities exchange or traded in an over-the-counter
market, such value as the Committee, in its sole discretion, shall determine.

 

3.

 

2.14        “Grantee”
means a person who, as an employee or independent contractor of the Company, a
Subsidiary or an Affiliate, has been granted an Award under the Plan.

 

2.15        “Non-Employee
Director” means any director who is not an employee of the Company or any
of its subsidiaries or affiliates.  For
purposes of this Plan, such non-employee director shall be treated as an
independent contractor.

 

2.16        “Option”
means a right, granted to a Grantee under Section 6.2, to purchase shares
of Stock.  Options shall be nonstatutory
stock options that are not intended to qualify as “incentive stock options”
within the meaning of Section 422 of the Code.

 

2.17        “Other
Cash-Based Award” means cash awarded to a Grantee under Section 6.6,
including cash awarded as a bonus or upon the attainment of specified
performance objectives or otherwise as permitted under the Plan.

 

2.18        “Other
Stock-Based Award” means a right or other interest granted to a Grantee
under Section 6.6 that may be denominated or payable in, valued in whole
or in part by reference to, or otherwise based on, or related to, Stock,
including, but not limited to (1) unrestricted Stock awarded as a bonus or
upon the attainment of specified performance objectives or otherwise as
permitted under the Plan and (2) a right granted to a Grantee to acquire
Stock from the Company for cash.

 

2.19        “Plan”
means this Alexandria Real Estate Equities, Inc. Amended and Restated 1997
Stock Award and Incentive Plan, as amended from time to time.

 

2.20        “Restricted
Stock” means an Award of shares of Stock to a Grantee under Section 6.4
that may be subject to certain restrictions and to a risk of forfeiture.

 

2.21        “Retirement”
means the termination of a Grantee’s service with the Company or a Subsidiary
or Affiliate by retirement, as determined in accordance with the Company’s then
current employment policies and guidelines.

 

2.22        “Rule 16b-3”
means Rule 16b-3, as from time to time in effect promulgated by the
Securities and Exchange Commission under Section 16 of the Exchange Act,
including any successor to such Rule.

 

2.23        “Securities
Act” means the Securities Act of 1933, as amended from time to time, and as
now or hereafter construed, interpreted and applied by the regulations, rulings
and cases.

 

2.24        “Stock”
means shares of the common stock, par value $.01 per share, of the Company.

 

2.25        “Stock
Appreciation Right” or “SAR” means the right, granted to a Grantee under Section 6.3,
to be paid an amount measured by the appreciation in the Fair Market Value of
Stock from the date of grant to the date of exercise of the right, with payment
to be made in cash, Stock, or property as specified in the Award or determined
by the Committee.

 

4.

 

2.26        “Subsidiary”
means, at the time of determination, any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if, at the time
of determination, each of the corporations (other than the last corporation in
the unbroken chain) owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain.  The Board or Committee
shall have the authority to determine the time or times at which “Subsidiary”
status is determined within the foregoing definition.

 

3.             ADMINISTRATION.

 

The
Plan shall be administered by the Committee. 
The Committee shall have the authority in its discretion, subject to and
not inconsistent with the express provisions of the Plan, to administer the
Plan and to exercise all the powers and authorities either specifically granted
to it under the Plan or necessary or advisable in the administration of the
Plan including, without limitation, the authority (i) to grant Awards; (ii) to
determine the persons to whom and the time or times at which Awards shall be
granted; (iii) to determine the type and number of Awards to be granted,
the number of shares of Stock to which an Award may relate and the terms,
conditions, restrictions and performance criteria relating to any Award; (iv) to
determine whether, to what extent, and under what circumstances an Award may be
settled, cancelled, forfeited, exchanged, or surrendered; (v) to make
adjustments in the terms and conditions of Awards in recognition of unusual or
non-recurring events affecting the Company or any Subsidiary or Affiliate or
the financial statements of the Company or any Subsidiary or Affiliate, or in
response to changes in applicable laws, regulations, or accounting principles; provided, however, that any such adjustments with respect to
any Awards subject to the attainment of performance objectives shall be subject
to Section 6.6; (vi) to designate Affiliates; (vii) to construe
and interpret the Plan and any Award; (viii) to prescribe, amend and
rescind rules and regulations relating to the Plan; (ix) to determine
the terms and provisions of the Award Agreements (which need not be identical
for each Grantee); (x) to accelerate the time at which an Award may first
be exercised or the time during which an Award or any part thereof will vest in
accordance with the Plan, notwithstanding the provisions in an Award Agreement
stating the time at which it may first be exercised or the time during which it
will vest; provided, however, that the
exercisability or vesting of any Award may only be accelerated in the event of
a Grantee’s death, Disability or Retirement or upon a Change of Control; provided further, however, that up to 10% of the total
number of shares reserved for issuance under the Plan pursuant to Section 5
may be subject to Awards granted after the Effective Date which do not meet the
preceding acceleration limitations; and (x) to make all other
determinations deemed necessary or advisable for the administration of the
Plan.

 

The
Committee may appoint a chairperson and a secretary and may make such rules and
regulations for the conduct of its business as it shall deem advisable, and
shall keep minutes of its meetings.  All
determinations of the Committee shall be made by a majority of its members
either present in person or participating by conference telephone at a meeting
or by written consent. The Committee may delegate to one or more of its members
or to one or more agents such administrative duties as it may deem advisable,
and the Committee or any person to whom it has delegated duties as aforesaid
may employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan; provided, however, that any Award granted to a Non-Employee
Director shall be granted by the 

 

5.

 

Committee,
without any such delegation.  All
decisions, determinations and interpretations of the Committee shall be final
and binding on all persons, including the Company, and any Subsidiary,
Affiliate or Grantee (or any person claiming any rights under the Plan from or
through any Grantee) and any stockholder.

 

No
member of the Board or Committee shall be liable for any action taken or
determination made in good faith with respect to the Plan or any Award granted
hereunder.

 

Notwithstanding
any provision of the Plan to the contrary, neither the Board nor the Committee
shall have the authority to take any of the following actions, unless the
stockholders of the Company have approved such an action within twelve (12)
months prior to such an event: (i) the reduction of the exercise price of
any outstanding Option or Stock Appreciation Right under the Plan; (ii) the
cancellation of any outstanding Option or Stock Appreciation Right under the
Plan and the grant in substitution therefor of (1) a new Option or Stock
Appreciation Right under the Plan or another equity plan of the Company
covering the same or a different number of shares of Stock, (2) Restricted
Stock (including a stock bonus), (3) an Other Stock-Based or Cash-Based
Award, (4) cash and/or (5) other valuable consideration (as
determined by the Board, in its sole discretion); or (iii) any other
action that is treated as a repricing under generally accepted accounting
principles.

 

4.             ELIGIBILITY.

 

Subject
to the provisions set forth below, Awards may be granted to selected employees,
officers and independent contractors (including Non-Employee Directors) of the
Company and its present or future Subsidiaries and Affiliates, in the
discretion of the Committee.  In
determining the persons to whom Awards shall be granted and the type (including
the number of shares to be covered) of any Award, the Committee shall take into
account such factors as the Committee shall deem relevant in connection with
accomplishing the purposes of the Plan.

 

5.             STOCK
SUBJECT TO THE PLAN.

 

The
maximum number of shares of Stock reserved for the grant of Awards under the
Plan shall be, subject to adjustment as provided herein, four million thirty
thousand five hundred sixty-three 
(4,030,563) shares.(1)  Such shares may, in
whole or in part, be authorized but unissued shares or shares that shall have
been or may be reacquired by the Company in the open market, in private
transactions or otherwise.

 

No
more than five hundred thousand (500,000)  shares may be
awarded pursuant to Options or Stock Appreciation Rights, in the aggregate, to
a single individual in a single calendar year. 
No Covered Employee shall receive Other Stock-Based Awards or Other
Cash-Based Awards pursuant to Section 6.6 in excess of five hundred
thousand (500,000) shares or five million dollars ($5,000,000), respectively,
in a single calendar year.

 

(1)  As
of March 31, 2008, 69,437 shares remained available for the grant of
Awards under the Plan.  Accordingly,
based on such March 31, 2008 number, as of May 22, 2008, 1,100,000
shares are available for the future grant of Awards under the Plan.

 

6.

 

If any
shares subject to an Award are forfeited, cancelled, exchanged or surrendered,
or if an Award otherwise terminates or expires without a distribution of shares
to the Grantee, the shares of stock with respect to such Award shall, to the
extent of any such forfeiture, cancellation, exchange, surrender, termination
or expiration, again be available for Awards under the Plan; provided that, in the case of forfeiture, cancellation,
exchange or surrender of shares of Restricted Stock with respect to which
dividends have been paid or accrued, the number of shares with respect to such
Awards shall not be available again for Awards hereunder unless, in the case of
shares with respect to which dividends were accrued but unpaid, such dividends
are also forfeited, cancelled, exchanged or surrendered.  Upon the exercise of any Award granted in
tandem with any other Awards or awards, such related Awards or awards shall be
cancelled to the extent of the number of shares of Stock as to which the Award
is exercised and, notwithstanding the foregoing, such number of shares shall no
longer be available for Awards under the Plan. 
Shares may be issued in connection with a merger or acquisition as
permitted by NYSE Listed Company Manual Section 303A.08 or, if applicable,
NASD Rule 4350(i)(1)(A)(iii), or AMEX Company Guide Section 711, and
such issuance shall not reduce the number of shares available for issuance
under the Plan.

 

In the
event that the Committee shall determine that any dividend or other
distribution (whether in the form of cash, Stock, or other property),
recapitalization, stock split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Grantees under the Plan, then the Committee shall make such equitable
changes or adjustments as it deems necessary or appropriate to any or all of (a) the
number and kind of shares of Stock which may thereafter be issued in connection
with Awards, (b) the number and kind of shares of Stock issued or issuable
in respect of outstanding Awards, and (c) the exercise price, grant price,
or purchase price relating to any Award.

 

6.             SPECIFIC
TERMS OF AWARDS.

 

6.1                               General.  The term of each Award shall be for such
period as may be determined by the Committee. 
Subject to the terms of the Plan and any applicable Award Agreement,
payments to be made by the Company or a Subsidiary or Affiliate upon the grant,
maturation, or exercise of an Award may be made in such forms as the Committee
shall determine at the date of grant or thereafter, including, without
limitation, cash, Stock, or other property, and may be made in a single payment
or transfer, in installments, or on a deferred basis.  The Committee may make rules relating to
installment or deferred payments with respect to Awards, including the rate of
interest to be credited with respect to such payments.  In addition to the foregoing, the Committee
may impose on any Award or the exercise thereof, at the date of grant or
thereafter, such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine.

 

6.2                               Options.  The Committee is authorized to grant Options
to Grantees on the following terms and conditions:

 

(a)           Exercise
Price.  The exercise
price per share of Stock purchasable under an Option shall be determined by the
Committee; provided that, such exercise price shall

 

7.

 

be
not less than the Fair Market Value of a share of Stock on the date of grant of
such Option.  The exercise price for
Stock subject to an Option may be paid in cash or subject to the approval of
the Committee, by an exchange of Stock previously owned by the Grantee, or a
combination of both, in an amount having a combined value equal to such
exercise price.  Subject to the approval
of the Committee, a Grantee may pay all or a portion of the aggregate exercise
price by having shares of Stock with a Fair Market Value on the date of
exercise equal to the aggregate exercise price withheld by the Company or sold
by a broker-dealer under circumstances meeting the requirements of 12 C.F.R. §
220 or any successor thereof, or in any other form of legal consideration that
may be acceptable to the Committee.

 

(b)           Term
and Exercisability of Options.  Options shall be exercisable over the
exercise period (which shall not exceed ten years from the date of grant), at
such times and upon such conditions as the Committee may determine, as
reflected in the Award Agreement. The Committee shall have the authority to
accelerate the exercisability or vesting of any outstanding Option at such time
and under such circumstances as it, in its sole discretion, deems appropriate; provided, however, that such exercisability and vesting may
only be accelerated in the event of a Grantee’s death, Disability or Retirement
or upon a Change of Control; provided further, however,
that up to 10% of the total number of shares reserved for issuance under the
Plan pursuant to Section 5 may be subject to Awards granted after the
Effective Date which do not meet the preceding acceleration limitations.  An Option may be exercised to the extent of
any or all full shares of Stock as to which the Option has become exercisable,
by giving written notice of such exercise to the Committee or its designated
agent.

 

(c)           Termination
of Employment, etc.  An
Option may not be exercised unless the Grantee is then in the employ of, or
then maintains an independent contractor relationship with, the Company,
Subsidiary, or an Affiliate (or a company, a parent, or Subsidiary company of
such company issuing or assuming the Option in a transaction to which Section 424(a) of
the Code applies); provided that,
the Award Agreement may contain provisions extending the exercisability of
Options, in the event of specified terminations, to a date not later than the
expiration date of such Option.

 

(d)           Other
Provisions.  Options
may be subject to such other conditions including, but not limited to,
restrictions on transferability of the shares acquired upon exercise of such
Options, as the Committee may prescribe in its discretion or as may be required
by applicable law.

 

6.3                               SARs.  The Committee is authorized to grant SARs to
Grantees on the following terms and conditions:

 

(a)           In
General.  An SAR shall
confer on the Grantee a right to receive an amount with respect to each share
subject thereto, upon exercise thereof, equal to the excess of (i) the
Fair Market Value of one share of Stock on the date of exercise over (ii) the
grant price of the SAR (which shall be not less than the Fair Market Value of a
share of Stock on the date of grant of such SAR).

 

8.

 

(b)           Tandem
Arrangements.  An SAR
granted in tandem with an Option may be granted at the time of grant of the
related Option.  An SAR granted in tandem
with an Option shall be exercisable only to the extent the underlying Option is
exercisable.

 

6.4                               Restricted
Stock.  The Committee is authorized
to grant Restricted Stock to Grantees on the following terms and conditions:

 

(a)           Issuance
and Restrictions. 
Restricted Stock shall be subject to such restrictions on
transferability and other restrictions, if any, as the Committee may impose at
the date of grant or thereafter, which restrictions may lapse separately or in
combination at such times, under such circumstances, in such installments, or
otherwise, as the Committee may determine. 
Such restrictions may include factors relating to the increase in the
value of the Stock or to individual or Company performance such as the
attainment of certain specified individual or Company-wide performance goals or
earnings per share.  Notwithstanding the
foregoing or any other provision of the Plan to the contrary, (i) any such
restrictions which may lapse on the basis of a Grantee’s service with the
Company or a Subsidiary or Affiliate shall not lapse any more rapidly than pro
rata over a three (3) year period, and any such restrictions which may
lapse on the basis of factors such as an increase in the value of the Stock or
individual or Company performance shall not lapse any earlier than one (1) year
following the date of grant of the Restricted Stock, and (ii) the lapsing
of any such restrictions may be accelerated only in the event of a Grantee’s
death, Disability or Retirement or upon a Change of Control; provided, however, that up to 10% of the total number of
shares reserved for issuance under the Plan pursuant to Section 5 may be
subject to Awards granted after the Effective Date which do not meet the
preceding vesting or acceleration limitations. 
Except to the extent restricted under the Award Agreement relating to
the Restricted Stock, a Grantee granted Restricted Stock shall have all of the
rights of a stockholder including, without limitation, the right to vote
Restricted Stock and the right to receive dividends thereon.

 

(b)           Forfeiture.  Upon termination of employment with or service
to the Company and any Subsidiary or Affiliate, or upon termination of the
independent contractor relationship, as the case may be, during the applicable
restriction period, Restricted Stock and any accrued but unpaid dividends that
are at that time subject to restrictions shall be forfeited; provided that, the Committee may provide, by rule or
regulation or in any Award Agreement, or may determine in any individual case,
that restrictions or forfeiture conditions relating to Restricted Stock will be
waived in whole or in part in the event of a Grantee’s death, Disability or
Retirement or upon a Change of Control.

 

(c)           Certificates
for Stock.  Restricted
Stock granted under the Plan may be evidenced in such manner as the Committee
shall determine.  If certificates
representing Restricted Stock are registered in the name of the Grantee, such
certificates shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock, and the
Company shall retain physical possession of the certificate.

 

(d)           Dividends.  Dividends paid on Restricted Stock shall
either be paid at the dividend payment date, or be deferred for payment to such
date as determined by the Committee, in cash or in shares of unrestricted Stock
having a Fair Market Value equal to the amount of such dividends.  Stock distributed in connection with a stock
split or stock dividend, 

 

9.

 

and
other property distributed as a dividend, shall be subject to restrictions and
a risk of forfeiture to the same extent as the Restricted Stock with respect to
which such Stock or other property has been distributed.

 

6.5                               Stock
Awards in Lieu of Cash Awards.  The
Committee is authorized to grant Stock to Grantees as a bonus, or to grant
other Awards, in lieu of Company commitments to pay cash under other plans or
compensatory arrangements.  Stock or
Awards granted hereunder shall have such other terms as shall be determined by
the Committee.  Notwithstanding the
foregoing or any other provision of the Plan to the contrary, (i) any
Stock or Award granted hereunder which vests on the basis of a Grantee’s
service with the Company or a Subsidiary or Affiliate shall not vest any more
rapidly than pro rata vesting over a three (3) year period, and any Stock
or Award granted hereunder which vests on the basis of performance shall
provide for a performance period of at least one (1) year, and (ii) vesting
may be accelerated only in the event of a Grantee’s death, Disability or Retirement
or upon a Change of Control; provided, however,
that (i) up to 10% of the total number of shares reserved for issuance
under the Plan pursuant to Section 5 may be subject to Awards granted
after the Effective Date which do not meet the preceding vesting or
acceleration limitations, and (ii) any Stock or Award granted hereunder
that is granted in lieu of compensation that has been earned by the Grantee and
that is otherwise payable in cash shall not be subject to the preceding vesting
limitations.

 

6.6                               Other
Stock-Based or Cash-Based Awards. 
The Committee is authorized to grant to Grantees Other Stock-Based
Awards or Other Cash-Based Awards alone or in addition to any other Award under
the Plan, as deemed by the Committee to be consistent with the purposes of the
Plan.  Such Awards may be granted with
value and payment contingent upon performance of the Company or any other
factors designated by the Committee, or valued by reference to the performance
of specified Subsidiaries or Affiliates. 
Notwithstanding the foregoing or any other provision of the Plan to the
contrary, (i) any Other Stock-Based Award which vests on the basis of a
Grantee’s service with the Company or a Subsidiary or Affiliate shall not vest
any more rapidly than pro rata vesting over a three (3) year period, and
any Other Stock-Based Award which vests on the basis of performance shall
provide for a performance period of at least one (1) year, and (ii) vesting
may be accelerated only in the event of a Grantee’s death, Disability or Retirement
or upon a Change of Control; provided, however,
that up to 10% of the total number of shares reserved for issuance under the
Plan pursuant to Section 5 may be subject to Awards granted after the
Effective Date which do not meet the preceding vesting or acceleration
limitations.

 

The Committee shall determine the terms and conditions
of such Awards at the date of grant or thereafter; provided,
however, that with respect to any such Awards that are granted to
Grantees who are, at the time of grant of such Awards, or in the future may be,
at the time of payment, exercise or issuance (as applicable) of such Awards, “covered
employees” (as such term is defined in Section 162(m) of the Code),
as determined by the Committee in its discretion, (i) the performance
objectives for each year shall be established by the Committee not later than
the latest date permissible under Section 162(m) of the Code, and (ii) the
performance objectives to be used shall be expressed in terms of one or more of
the following: earnings per share; stock price; return on equity; net earnings;
related return ratios; cash flow; net earnings growth; earnings before
interest, taxes, depreciation and amortization (EBITDA); return on assets;
total stockholder return; increase in revenues; decrease in expenses; increase
in funds 

 

10.

 

from
operations (FFO); increase in FFO per share; and the Company’s published
ranking against its peer group of office real estate investment trusts based on
total stockholder return, increase in FFO per share and/or FFO current and
forward multiples.

 

Performance objectives established by the Committee
may be (but need not be) different from year-to-year, and different performance
objectives may be applicable to different Grantees.  Performance objectives may be established on
a Company-wide basis or with respect to one or more business units, divisions,
Affiliates, or business segments, and in either absolute terms or relative to
the performance of one or more comparable companies or the performance of one
or more relevant indices.  At the time of
the grant of any Award, the Committee is authorized to determine whether, when
calculating the attainment of performance objectives for a certain period: (i) to
exclude restructuring and/or other specific or objectively determinable
nonrecurring charges; (ii) to exclude exchange rate effects, as
applicable, for non-U.S. dollar denominated net sales and operating earnings; (iii) to
exclude the effects of changes to generally accepted accounting principles; (iv) to
exclude the effects of any statutory adjustments to corporate tax rates; and (v) to
exclude the effects of any “extraordinary items” as determined under generally
accepted accounting principles.  In
addition, the Committee retains the discretion to reduce or eliminate the
compensation or economic benefit due upon attainment of performance objectives.

 

6.7                               Change
in Service Capacity and Leaves of Absence.  Notwithstanding anything in the
Plan to the contrary, for purposes of any Award or Award Agreement under the Plan, (i) the
term “employment” shall mean service provided to the Company, Subsidiary, or an
Affiliate as an employee or independent contractor and (ii) a change in the capacity
in which a Grantee renders service to the Company, Subsidiary, or Affiliate,
whether as an employee or independent contractor, or a change in the entity for
which the Grantee renders such service, provided that there is no interruption
or termination of the Grantee’s service with the Company, Subsidiary or
Affiliate, shall not be deemed to be a termination of employment.  The Committee or the chief executive officer
of the Company, in that party’s sole discretion, may determine whether service
shall be considered interrupted in the case of any leave of absence approved by
that party, including sick leave, military leave or any other personal
leave.  Notwithstanding the foregoing,
for purposes of vesting in an Award, service shall not be considered
interrupted in the case of a leave of absence only to such extent as may be
provided in the Company’s leave of absence policy or in the written terms of
the Grantee’s leave of absence.

 

7.             CHANGE
OF CONTROL PROVISIONS.

 

7.1                               Change
of Control.  The following provisions
shall apply in the event of a Change of Control, unless otherwise determined by
the Committee or the Board in writing at or after grant (including under any
individual agreement), but prior to the occurrence of such Change of Control:

 

(a)           any
Award carrying a right to exercise that was not previously exercisable and
vested shall become fully exercisable and vested;

 

(b)           the
restrictions, deferral limitations, payment conditions, and forfeiture
conditions applicable to any other Award granted under the Plan shall lapse and
such 

 

11.

 

Awards
shall be deemed fully vested, and any performance conditions imposed with
respect to Awards shall be deemed to be fully achieved; and

 

(c)           any
surviving corporation or acquiring corporation (or its parent company) may
assume or continue any Awards outstanding under the Plan or may substitute
similar awards (including an award to acquire the same consideration paid to
the stockholders in the Change of Control) for those outstanding under the
Plan.

 

8.             GENERAL
PROVISIONS.

 

8.1                               Effective
Date; Approval by Stockholders.  The
Plan, as amended and restated effective as of the date of the annual meeting of
stockholders of the Company held in 2008, shall take effect on the Effective
Date, provided that this Plan is approved by the Company’s stockholders at such
meeting.

 

8.2                               Nontransferability.  Awards shall not be transferable by a Grantee
except by will or the laws of descent and distribution; provided,
however, that the Committee may, in its sole discretion, permit
transfer of an Award in a manner consistent with applicable securities laws
upon the Grantee’s request; provided, further, however,
that no Awards may be transferred for consideration.

 

8.3                               No
Right to Continued Employment, etc. 
Nothing in the Plan or in any Award granted or any Award Agreement or
other agreement entered into pursuant hereto shall confer upon any Grantee the
right to continue in the employ of or to continue as an independent contractor
of the Company, any Subsidiary or any Affiliate, or to be entitled to any
remuneration or benefits not set forth in the Plan or such Award Agreement or
other agreement or to interfere with or limit in any way the right of the
Company or any such Subsidiary or Affiliate to terminate such Grantee’s employment
or independent contractor relationship.

 

8.4                               Taxes.  The Company or any Subsidiary or Affiliate is
authorized to withhold from any Award granted, any payment relating to an Award
under the Plan, including from a distribution of Stock, or any other payment to
a Grantee, amounts of withholding and other taxes due in connection with any
transaction involving an Award, and to take such other action as the Committee
may deem advisable to enable the Company and Grantees to satisfy obligations
for the payment of withholding taxes and other tax obligations relating to any
Award.  This authority includes the
authority to withhold or receive Stock or other property and to make cash
payments in respect thereof in satisfaction of a Grantee’s tax
obligations.  Notwithstanding the
foregoing, no shares of Stock shall be withheld to satisfy withholding and
other tax obligations with a value exceeding the minimum amount of tax required
to be withheld by law.

 

8.5                               Amendment
and Termination of the Plan.  The
Board may at any time and from time to time alter, amend, suspend, or terminate
the Plan in whole or in part; provided that,
if the Committee determines that stockholder approval of an amendment is
necessary or desirable in order for the Plan to comply or continue to comply
with any applicable law, such amendment shall not be effective unless the same
shall be approved by the requisite vote of the stockholders of the Company
entitled to vote thereon. Notwithstanding the foregoing but subject to Section 8.10,
no amendment shall affect adversely any of the rights of any Grantee, without 

 

12.

 

such
Grantee’s consent, under any Award theretofore granted under the Plan.  Unless terminated sooner by the Board, the
Plan automatically shall terminate on the day immediately preceding the tenth
anniversary of the Effective Date.

 

8.6                               No
Rights to Awards; No Stockholder Rights. 
No Grantee shall have any claim to be granted any Award under the Plan,
and there is no obligation for uniformity of treatment of Grantees.   Except as provided specifically herein, a
Grantee or a transferee of an Award shall have no rights as a stockholder with
respect to any shares covered by the Award until the date of the issuance of a
stock certificate to him for such shares.

 

8.7                               Unfunded
Status of Awards.  The Plan is
intended to constitute an “unfunded” plan for incentive and deferred
compensation.  With respect to any
payments not yet made to a Grantee pursuant to an Award, nothing contained in
the Plan or any Award shall give any such Grantee any rights that are greater
than those of a general creditor of the Company.

 

8.8                               No
Fractional Shares.  No fractional
shares of Stock shall be issued or delivered pursuant to the Plan or any
Award.  The Committee shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu
of such fractional shares or whether such fractional shares or any rights
thereto shall be forfeited or otherwise eliminated.

 

8.9                               Regulations
and Other Approvals.

 

(a)           The
obligation of the Company to sell or deliver Stock with respect to any Award
granted under the Plan shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state securities laws, and
the obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Committee.

 

(b)           Each
Award is subject to the requirement that, if at any time the Committee
determines, in its absolute discretion, that the listing, registration or
qualification of Stock issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Award or the issuance of
Stock, no such Award shall be granted or payment made or Stock issued, in whole
or in part, unless listing, registration, qualification, consent or approval
has been effected or obtained free of any conditions not acceptable to the
Committee.

 

(c)           In
the event that the disposition of Stock acquired pursuant to the Plan is not
covered by a then current registration statement under the Securities Act and
is not otherwise exempt from such registration, such Stock shall be restricted
against transfer to the extent required by the Securities Act or regulations
thereunder, and the Committee may require a Grantee receiving Stock pursuant to
the Plan, as a condition precedent to receipt of such Stock, to represent to the
Company in writing that the Stock acquired by such Grantee is acquired for
investment only and not with a view to distribution.

 

8.10                        Compliance
with Section 409A of the Code. 
To the extent that the Committee determines that any Award granted under
the Plan is subject to Section 409A of the Code, the Award Agreement
evidencing such Award shall incorporate the terms and conditions necessary to avoid the consequences specified
in Section 409A(a)(1) of the Code.  To the extent 

 

13.

 

applicable,
the Plan and Award Agreements shall be interpreted in accordance with Section 409A
of the Code and other interpretive guidance issued thereunder.  Notwithstanding any provision of the Plan to
the contrary, in the event that the Committee determines that any Award may be
subject to Section 409A of the Code and related Department of Treasury
guidance, the Board may adopt such amendments to the Plan and the applicable
Award Agreement or adopt other policies and procedures (including amendments,
policies and procedures with retroactive effect), or take any other actions,
that the Board determines are necessary or appropriate to (i) exempt the
Award from Section 409A of the Code and/or preserve the intended tax
treatment of the benefits provided with respect to the Award, or (ii) comply
with the requirements of Section 409A of the Code and other interpretive
guidance issued thereunder.

 

8.11                        Governing
Law.  The Plan and all determinations
made and actions taken pursuant hereto shall be governed by the laws of the
State of Maryland without giving effect to the conflict of laws principles
thereof.

 

IN WITNESS WHEREOF, the Plan is
hereby adopted by a duly authorized officer of Alexandria Real Estate Equities,
Inc. on this 22 day of May, 2008.

 

 

	
   

  	
  ALEXANDRIA REAL ESTATE
  EQUITIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dean Shigenaga

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Dean Shigenaga

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
					

 

14.EXHIBIT 10.1

 

NPS PHARMACEUTICALS, INC.

 

1998 STOCK OPTION PLAN(1)

 

1.             GENERAL.

 

1.1           Purpose.
The 1998 Stock Option Plan has been established by the Company to provide a
means by which employees, directors, and consultants of the Company and its
Affiliates may be given the opportunity to benefit from increases in value of
NPS stock through the granting of Options. NPS seeks to (a) retain the
services of present employees, directors, and consultants; (b) secure and
retain the services of new employees, directors, and consultants; and (c) provide
incentives for such persons to exert maximum efforts for the success of the
Company and thereby promote the long-term interest of the Company, including
the growth in value of the Company’s equity and enhancement of long-term
stockholder return.

 

1.2           Types
of Options. The Company intends
that the Options issued under the Plan shall, in the discretion of the Board or
any Board Committee (see paragraph 3.2), be either Incentive Stock Options or
Nonstatutory Stock Options (defined below).

 

1.3           Definitions.
Unless otherwise defined, capitalized terms shall have the meaning set forth in
Section 2.

 

2.             DEFINITIONS.

 

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

 

2.2           Board
means the Board of Directors of the Company.

 

2.3           Code
means the Internal Revenue Code of 1986, as amended.

 

2.4           Committee
means a Committee appointed by the Board in accordance with paragraph 3.2
herein.

 

2.5           Company
means NPS Pharmaceuticals, Inc., a Delaware corporation.

 

2.6           Consultant
means any person (including an advisor) engaged by the Company or an Affiliate
to render consulting services under arrangements intended to compensate such
person for such services. The term “Consultant” shall not include a Director
who is paid only a director’s fee by the Company or who is not compensated by
the Company for services as a Director.

 

2.7           Continuous
Status as an Employee, Director, or Consultant
means the employment or relationship as an Employee, Director, or Consultant is
not interrupted or terminated by the Company or any Affiliate. The Board, in
its sole discretion, may determine whether Continuous Status as an Employee,
Director, or Consultant shall be considered interrupted in the case of:

 

2.7.1        any
leave of absence approved by the Board, including sick leave, military leave,
or any other personal leave; provided, however, that for purposes of Incentive Stock
Options, any such leave may not exceed 90 days unless reemployment upon the
expiration of such leave is guaranteed by contract (including certain Company
policies) or statute; or

 

2.7.2        transfers
between locations of the Company or between the Company, Affiliates or its
successor.

 

(1)   As Amended by the Board of
Directors and ratified by the Stockholders in May, 2008.

 

 

2.8           Day
of Determination means the date of the
occurrence of an event that requires the determination of the Fair Market Value
of an award made hereunder.

 

2.9           Director
means a member of the Board.

 

2.10         Disability
means total and permanent disability as defined in Section 22(e)(3) of the Code.

 

2.11         Employee
means any person, including Officers and Directors, employed by the Company or
any Affiliate. Neither service as a Director nor payment of a director’s fee by
the Company shall be sufficient to constitute “employment” by the Company.

 

2.12         Exchange
Act means the Securities
Exchange Act of 1934, as amended.

 

2.13         Fair
Market Value means, as of any date,
the value of the common stock of the Company as determined as follows:

 

2.13.1      If
the common stock is listed on any established stock exchange or a national
market system, including without limitation, the National Market System of the
National Association of Securities Dealers, Inc. Automated Quotation (“Nasdaq”)
System, the Fair Market Value of a share of common stock shall be the closing
price for such stock on the Day of Determination as quoted on such system as
reported in the Wall Street Journal or such other source as the Board deems
reliable. In the event the Day of Determination falls on a date that the Nasdaq
system is closed, then the Fair Market Value shall be the closing sales price
for such stock on the last market trading day prior to the Day of Determination
as quoted on such system as reported in the Wall Street Journal or such other
source as the Board deems reliable.

 

2.13.2      If
the common stock is quoted on Nasdaq (but not on the National Market System
thereof) or is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a share of common stock shall
be the mean between the bid and asked prices for the common stock on the last
market trading day prior to the day of determination, as reported in the Wall
Street Journal or such other source as the Board deems reliable;

 

2.13.3      In
the absence of an established market for the common stock, the Fair Market
Value shall be determined in good faith by the Board.

 

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

 

2.15         Non-Employee
Director means a Director who is
considered to be a “Non-Employee Director” in accordance with Rule 16b-3(b)(3), or any other applicable rules, regulations or
interpretations of the Securities and Exchange Commission.

 

2.16         Nonstatutory
Stock Option (or “NSO”) means an Option not
intended to qualify or not eligible to qualify as an ISO or an ISO which,
subsequent to its date of grant, no longer qualifies as an ISO under Section 422
of the Code.

 

2.17         Officer
means a person who is an officer of the Company within the meaning of Section 16a-1(f) of
the Exchange Act and the rules and regulations promulgated thereunder.

 

2.18         Option
means a stock option granted pursuant to the Plan.

 

2.19         Option
Agreement means a written
agreement between the Company and an Optionee evidencing the terms and
conditions of an individual Option grant.

 

2.20         Optionee
means an Employee, Director, or Consultant who holds an outstanding Option.

 

 

2.21         Outside
Director means a Director who is
considered to be an “Outside Director” in accordance with Section 162(m) of
the Code, or any other applicable Code sections, regulations, or
interpretations of the IRS.

 

2.22         Plan
means this 1998 Stock Option Plan.

 

2.23         Rule 16b-3
means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3,
as in effect when discretion is being exercised with respect to the Plan.

 

2.24         Securities
Act means the Securities
Act of 1933, as amended.

 

3.             ADMINISTRATION.

 

3.1           Powers
and Authority. The Plan shall be
administered by or under the direction of the Board unless and until the Board
delegates administration to a Committee, as provided in paragraph 3.2. The
Board shall have the power subject to and within the limitations of the express
provisions of the Plan:

 

3.1.1        To
determine from time to time: (a) which of the persons eligible under the
Plan shall be granted Options; (b) when and how Options shall be granted; (c) whether
an Option shall be intended to qualify as an ISO; (d) the provisions of
each Option granted (which need not be identical) including the time or times
when a person shall be permitted to receive stock pursuant to the exercise of
such Option; (e) whether a person shall be permitted to exercise such
Option; and (f) the number of shares with respect to which Options shall
be granted to each such person.

 

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

 

3.1.3        To
amend the Plan as provided in Section 12.

 

3.1.4        Generally,
to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company.

 

3.2           Delegation.
The Board may delegate administration of the Plan to a Board committee composed
of not fewer than two members (the “Committee”). All members of the Committee
shall be Outside Directors or Non-Employee Directors, to the extent necessary
to comply with the applicable provisions of Rule 16b-3 and Section 162(m).
If administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore
possessed by the Board (and references in this Plan to the Board shall in such
event, be to the Committee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may abolish the Committee at any time and revest
in the Board the administration of the Plan. The Board or the Committee may
delegate to the Chief Executive Officer of the Company the authority to make
grants to eligible persons who are not subject to Section 16 of the
Exchange Act, provided such authority is limited as to time, aggregate and
individual award amounts and/or such other terms as the Board or the Committee
deems necessary or desirable.

 

3.3           Director
Status. Any requirement that
an administrator of the Plan be a Non-Employee Director or an Outside Director
shall not apply if the Board or the Committee expressly declares that such
requirement shall not apply.

 

 

4.             SHARES
SUBJECT TO THE PLAN.

 

4.1           Available
Shares. Subject to the provisions
of Section 11, the number of shares that may be issued pursuant to Options
granted hereunder shall not exceed in the aggregate six million five hundred
thousand (6,500,000) shares of the Company’s common stock.

 

4.2           Forfeited
or Canceled Shares. Any shares of stock
for which an Option has been granted under the Plan that are forfeited because
of the failure to meet an Option grant contingency or condition shall again be
available for delivery pursuant to new grants under the Plan. To the extent any
shares of stock covered by an Option are not delivered to an Optionee or
beneficiary because the award is forfeited or canceled, or the shares of stock
are not delivered because the award is settled in cash, such shares shall not
be deemed to have been delivered for purposes of determining the maximum number
of shares of stock available for delivery under the Plan.

 

4.3           Payment
with Shares. If the exercise price
of any Option granted under the Plan is satisfied by tendering shares of stock
to the Company (by either actual delivery or by attestation), only the number
of shares of stock issued net of the shares of stock tendered shall be deemed
delivered for purposes of determining the maximum number of shares of stock
available for delivery under the Plan.

 

4.4           Plan
Limits. Shares of stock
delivered under the Plan in settlement, assumption, or substitution of
outstanding awards (or obligations to grant future awards) under the plans or
arrangements of another entity shall not reduce the maximum number of shares of
stock available for delivery under the Plan, to the extent that such
settlement, assumption, or substitution is a result of the Company or Affiliate
acquiring another entity (or an interest in another entity). Subject to the
provisions of Section 11, the maximum number of shares that may be covered
by grants to any one individual shall be 750,000 shares during any three
consecutive calendar years.

 

5.             ELIGIBILITY.

 

5.1           Option
Type. ISOs may be granted
only to Employees. NSOs may be granted to Employees, Directors, or Consultants.

 

5.2           Section 16 Compliance.
No Officer or Director shall be eligible for the benefits of the Plan unless at
the time discretion is exercised in the selection of an Officer or Director as
a person to whom Options may be granted, or in the determination of the number
of shares which may be covered by Options granted to the Officer or Director,
the Plan otherwise complies with the requirements of Rule 16b-3. This
paragraph 5.2 shall not apply if the Board or Committee expressly declares that
it shall not apply.

 

6.             OPTION
PROVISIONS. Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

 

6.1           Term.
No Option shall be exercisable after the expiration of ten years from the date
it was granted.

 

6.2           Price.
The exercise price of each Option shall be not less than 100% of the Fair
Market Value of the stock subject to the Option on the date the Option is
granted.

 

6.3           Consideration.
The purchase price of stock acquired pursuant to an Option shall be paid, to the
extent permitted by applicable statutes and regulations:

 

6.3.1        in
cash; or

 

6.3.2        by
delivery of already-owned shares of common stock of the Company, held by the
Optionee for at least six months, or a combination of cash and already-owned
shares of common stock of the Company; or

 

 

6.3.3        according
to a deferred payment or other arrangement (which may include, without limiting
the generality of the foregoing, the use of other common stock of the Company)
with the person to whom the Option is granted or to whom the Option is
transferred pursuant to paragraph 6.4; or

 

6.3.4        pursuant
to a broker assisted exercise same-day sales program; or

 

6.3.5        as
required in the discretion of the Board or the Committee, either at the time of
the grant or exercise of the Option; or

 

6.3.6        any
combination of 6.3.1 through 6.3.5  above.

 

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

 

6.4           Transferability.

 

6.4.1        Incentive Stock Options.
In order for an Option to qualify for treatment as an ISO, it may not be
transferable except by will or by the laws of descent and distribution. In the
event an Optionee transfers such Option, such transfer shall constitute a
disqualifying event and the Option shall no longer qualify as an ISO but shall
be considered a NSO under the terms of this Plan.

 

6.4.2        Nonstatutory Stock Option.
The Board or Committee may, in its discretion, authorize all or a portion of
the NSOs to be granted to an Optionee to be on terms that permit transfer by
such Optionee to (a) the spouse, children, or grandchildren of the
Optionee (“Immediate Family Members”), (b) a trust or trusts for the
exclusive benefit of such Immediate Family Members, or (c) a partnership
in which such Immediate Family Members are the only partners, provided that (i) there
may be no consideration for any such transfer, (ii) the Option Agreement
pursuant to which such Options are granted must expressly provide for
transferability in a manner consistent with this Section, (iii) subsequent
transfers of transferred Options shall be prohibited except those occurring by
will or the laws of descent and distribution, and (iv) the Options shall
continue to be subject to all the terms and conditions that applied prior to
transfer in the same manner and to the same extent as non-transferred Options,
including paragraphs 6.5 through 6.9. The Options shall be exercisable by the
transferee only to the extent, and for the periods specified in such sections.
The Company expressly disclaims any obligation to provide notice to a transferee
of the termination of the Option.

 

6.4.3        Unless
transfer by an Optionee is specifically provided for in an Option Agreement, a
NSO shall not be transferable except by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined by
the Code or Title I of the Employee Retirement Income Security Act, or the rules thereunder
(a “QDRO”), and shall be exercisable during the lifetime of the person to whom
the NSO is granted only by such person or any transferee pursuant to a QDRO.

 

6.5           Vesting.
The total number of shares of stock subject to an Option may, but need not, be
allotted in periodic installments (which may, but need not, be equal). The
Option Agreement may provide that from time to time during each of such
installment periods, the Option may become exercisable (“vest”) with respect to
some or all of the shares allotted to that period, and may be exercised with
respect to some or all of the shares allotted to such period and/or any prior
period as to which the Option became vested but was not fully exercised. The
Option may be subject to such other terms and conditions on the time or times
when it may be exercised (which may be based on performance criteria) as the
Board may deem appropriate. The provisions of this paragraph 6.5 are subject to
any Option provisions governing the minimum number of shares as to which an
Option may be exercised.

 

 

6.6           Securities
Law Compliance. The Company may
require any Optionee, or any person to whom an Option is transferred under
paragraph 6.4, as a condition of exercising any such Option, (a) to give
written assurances satisfactory to the Company as to the Optionee’s knowledge
and experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters, and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Option; and (b) to give written assurances
satisfactory to the Company stating that such person is acquiring the stock
subject to the Option for such person’s own account and not with any present
intention of selling or otherwise distributing the stock. These requirements,
and any assurances given pursuant to such requirements, shall be inoperative if
(i) the issuance of the shares upon the exercise of the Option has been
registered under a then currently effective registration statement under the
Securities Act, or (ii) as to any particular requirement, a determination
is made by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws.

 

6.7           Termination
of Employment or Relationship as an Employee, Director, or Consultant.
In the event an Optionee’s Continuous Status as an Employee, Director, or
Consultant terminates (other than upon the Optionee’s death or Disability), the
Optionee may exercise his or her Option, but only within such period of time as
is determined by the Board, and only to the extent that the Optionee was
entitled to exercise at the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement). In
the case of an ISO, the Board shall determine such period of time (in no event
to exceed three months from the date of termination) when the Option is
granted. If, at the date of termination, the Optionee is not entitled to
exercise his or her entire Option, the shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified in the
Option Agreement, the Option shall terminate, and the shares covered by such Option
shall revert to the Plan. Provided, however, that in the event an employee is a
Covered Employee as defined under the Company’s Severance Plan, and such
employee’s status as an employee is terminated as a result of a
change-in-control as defined in the Severance Plan and such employee has
elected to receive the severance benefit provided for in the Severance Plan
then all employee’s vested options shall remain exercisable for a period of two
years from the date of termination of such employee’s employment with the
Company.

 

6.8           Retirement
of Optionee. Notwithstanding any
contrary Plan provision, in the event an Optionee’s employment as an Employee,
Director, or Consultant terminates due to Optionee’ s Retirement, the Optionee
shall vest in that number of shares subject to the Option that would have
vested had the Optionee remained an Employee, Director or Consultant for an
additional two (2) years from the date of Retirement. In addition, the
Option shall remain exercisable until the expiration of its term. For purposes
of this paragraph, Retirement shall mean the termination of service with the
Company or an Affiliate of an Optionee on or after the date on which the
Optionee’s number of completed years of service with the Company or Affiliate
and age equal or exceed seventy (70) (including termination due to death or
Disability after such time).

 

6.9           Disability
of Optionee. In the event an
Optionee’s Continuous Status as an Employee, Director, or Consultant terminates
as a result of the Optionee’s Disability, the Optionee may exercise his or her
Option, but only within twelve months from the date of such termination (or
such shorter period specified in the Option Agreement), and only to the extent
that the Optionee was entitled to exercise at the date of such termination (but
in no event later than the expiration of the term of such Option as set forth
in the Option Agreement). If, at the date of termination, the Optionee is not
entitled to exercise his or her entire Option, the shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the shares covered by such Option shall revert
to the Plan.

 

6.10         Death
of Optionee. In the event of the
death of an Optionee, the Option may be exercised, at any time within eighteen
months following the date of death (or such shorter period specified in the
Option Agreement, but in no event later than the expiration of the term of such
Option as set forth

 

 

in
the Option Agreement), by the Optionee’s estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the extent
the Optionee was entitled to exercise the Option at the date of death. If, at
the time of death, the Optionee was not entitled to exercise his or her entire
Option, the shares covered by the unexercisable portion of the Option shall
revert to the Plan. If, after death, the Optionee’s estate or a person who
acquired the right to exercise the Option by bequest or inheritance, or by
assignment as provided herein, does not exercise the Option within the time
specified herein, the Option shall terminate, and the shares covered by such
Option shall revert to the Plan.

 

6.11         Early
Exercise. The Option Agreement
may, but need not, include a provision whereby the Optionee may elect at any
time while an Employee, Director, or Consultant to exercise the Option as to
any part or all of the shares subject to the Option prior to the full vesting
of the Option. Any nonvested shares so purchased may be subject to a repurchase
right in favor of the Company or to any other restriction the Board determines
to be appropriate.

 

6.12         Withholding.
To the extent provided by the terms of an Option Agreement, the Optionee may
satisfy any federal, state, or local tax withholding obligation relating to the
exercise of such Option by any of the following means or by a combination of
such means:

 

6.12.1     cash
payment; or

 

6.12.2     authorizing
the Company to withhold shares from the shares of the common stock otherwise
issuable to the participant as a result of the exercise of the Option; or

 

6.12.3     delivering
to the Company owned and unencumbered shares of the common stock of the
Company.

 

7.             NO
REPRICING, CANCELLATION, OR RE-GRANT OF OPTIONS.  Except for certain adjustments due to
corporate transactions described in Section 11, the exercise price for any
outstanding Option granted under the Plan may not be decreased after the Day of
Determination for such Option grant nor may an outstanding Option granted under
the Plan be surrendered to the Company as consideration in exchange for the
grant of a new Option with a lower exercise price.

 

8.             COVENANTS
OF THE COMPANY.

 

8.1           Stock
Availability. During the terms of
the Option granted under the Plan, the Company shall keep available at all
times the number of shares of stock required to satisfy such grants up to the
number of shares of stock authorized under the Plan.

 

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

 

9.             USE
OF PROCEEDS FROM STOCK.  Proceeds from
the exercise of Options under the Plan shall constitute general funds of the
Company.

 

10.           MISCELLANEOUS.

 

10.1         Acceleration.
The Board or the Committee shall have the power to accelerate the time at which
an Option may first be exercised or the time during which an Option or any part
thereof will vest, notwithstanding the provisions in the Option Agreement
stating the time at which it may first be exercised or the time during which it
will vest.

 

 

10.2         Ownership
Rights. Neither an Optionee
nor any person to whom an Option is transferred under paragraph 6.4 shall be
deemed to be the holder of, or to have any of the rights of a holder with
respect to any shares subject to such Option unless and until such person has
satisfied all requirements for exercise of the Option pursuant to its terms.

 

10.3         Employment
Rights. Nothing in the Plan or
any instrument executed pursuant thereto shall confer upon any Employee,
Director, Consultant, Optionee, or other holder of Options any right to
continue in the employ of the Company or any Affiliate (or to continue acting
as a Director or Consultant) or shall affect the right of the Company or any
Affiliate to terminate the employment or relationship as a Director or
Consultant of any Employee, Director, Consultant, or Optionee with or without
cause.

 

10.4         ISO
Value Limit. To the extent that the
aggregate Fair Market Value (determined at the time of grant) of stock with
respect to which ISOs granted after 1998 are exercisable for the first time by
any Optionee during any calendar year under all plans of the Company and its
Affiliates exceeds $100,000, the Options or portions thereof which exceed such
limit (according to the order in which they were granted) shall be treated as
NSOs.

 

11.           ADJUSTMENTS
UPON CHANGES IN STOCK AND CORPORATE TRANSACTIONS.

 

11.1         Stock
Adjustments. If any change is made
in the stock subject to the Plan, or subject to any Option (through merger,
consolidation, reorganization, recapitalization, stock dividend, dividend in property
other than cash, stock split, liquidating dividend, combination of shares,
exchange of shares, change in corporate structure or otherwise), the Plan and
outstanding Options will be appropriately adjusted in the class(es) and maximum
number of shares subject to the Plan and the class(es) and number of shares and
price per share of stock subject to outstanding Options.

 

11.2         Corporate
Transactions. In the event of: (a) a
merger or consolidation in which the Company is not the surviving corporation; (b) a
reverse merger in which the Company is the surviving corporation but the shares
of the Company’s common stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash, or otherwise; (c) a strategic corporate event, such as a
merger or acquisition, where the Company is technically the surviving entity,
but where other elements of a change of control are present, i.e. change in
management team or board composition; (d) a transaction which the Board
determines in its sole discretion to constitute a change in control of the
Company; or (e) any capital reorganization in which more than fifty
percent (50%) of the shares of the Company entitled to vote are exchanged,
then, the time during which Options outstanding under the Plan become vested
shall be accelerated and all outstanding Options shall become immediately
exercisable upon such event and such Options shall continue to be exercisable
until the later of (i) twenty-four (24) months from the effective date of
such event, or (ii) the time specified in the Option Agreement during
which the Option is exercisable following an Optionee’s termination of service;
provided, however, that in no event shall the Option be exercisable after the
expiration of its term.

 

12.           AMENDMENT
OF THE PLAN.

 

12.1         Amendments.
The Board at any time, and from time to time, may amend the Plan. However, as
provided in Section 11, no amendment shall be effective unless approved by
the stockholders of the Company within twelve months before or after the
adoption of the amendment, where the amendment will:

 

12.1.1      Increase
the number of shares reserved for Options under the Plan;

 

12.1.2      Modify
the requirements as to eligibility for participation in the Plan to the extent
such modification requires stockholder approval in order for the Plan to
satisfy the requirements of Sections 162(m) and 422 of the Code;

 

12.1.3      Modify
the Plan in any other way if such modification requires stockholder approval in
order for the Plan to satisfy the requirements of Section 422 of the Code
or to comply

 

 

with
the requirements of Rule 16b-3 or Nasdaq or other applicable securities
exchange listing requirements;

 

12.1.4     Decrease
the minimum exercise price set forth in paragraph 6.2; or

 

12.1.5     Remove
the limitation provided in Section 7.

 

12.2         Compliance.
It is expressly contemplated that the Board may amend the Plan in any respect
the Board deems necessary or advisable to provide under the provisions of the
Code and the regulations promulgated thereunder relating to ISOs and/or to
bring the Plan and/or ISOs granted under it into compliance therewith.

 

12.3         Consent.
Rights and obligations under any Option granted before amendment of the Plan
shall not be altered or impaired by any amendment of the Plan unless (a) the
Company requests the consent of the person to whom the Option was granted and (b) such
person consents in writing.

 

13.           TERMINATION
OR SUSPENSION OF THE PLAN.

 

13.1         Termination.
The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on midnight, May 31, 2012. No Options
may be granted under the Plan while the Plan is suspended or after it is
terminated.

 

13.2         Rights
and Obligations. Any Options granted
while the Plan is in effect shall not be altered or impaired by suspension or
termination of the Plan, except with the consent of the holder of the Options.

 

14.           EFFECTIVE
DATE OF PLAN. The Plan shall become effective as determined by the Board, but
no Options granted under the Plan shall be exercisable unless and until the
Plan has been approved by the stockholders of the Company.

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