Document:

Form of Contingent Value Rights Agreement

 EXHIBIT 10.1 
 CONTINGENT VALUE RIGHTS AGREEMENT 
 THIS CONTINGENT VALUE RIGHTS AGREEMENT, dated as of [—], 200[—] (this “Agreement”), is entered into by and among LIGAND PHARMACEUTICALS INCORPORATED, a Delaware corporation
(“Buyer”), PHARMACOPEIA, INC., a Delaware corporation (“Target”), and [—], a [—], as Rights Agent (the
“Rights Agent”) and as initial CVR Registrar (as defined herein). 
 Preamble 
 Buyer, Margaux Acquisition Corp., a Delaware corporation (“Sub”), Latour Acquisition, LLC, a Delaware limited liability company,
and Target have entered into an Agreement and Plan of Merger dated as of September 24, 2008 (the “Merger Agreement”), pursuant to which Sub will merge with and into Target (the “Merger”), with
Target (or a successor entity) surviving the Merger as a subsidiary of Buyer. 
 Pursuant to the Merger Agreement, Buyer agreed to create and
issue to Target’s stockholders of record immediately prior to the effective time of the Merger and other securityholders of Target, contingent value rights as hereinafter described. 
 The parties have done all things necessary to make the contingent value rights, when issued pursuant to the Merger Agreement and hereunder, the valid
obligations of Buyer and to make this Agreement a valid and binding agreement of Buyer, in accordance with its terms. 
 NOW, THEREFORE, for
and in consideration of the premises and the consummation of the transactions referred to above, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders (as hereinafter defined), as follows: 
 ARTICLE I 
 DEFINITIONS

 Section 1.1 Definitions. 
 (a)
For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: 
 (i)
the terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular; 
 (ii) all accounting terms used herein and not expressly defined herein shall have the meanings assigned to such terms in accordance with U.S. generally accepted accounting principles, as in effect on the date hereof;

 (iii) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular Article, Section or other subdivision; 
 (iv) unless the context
otherwise requires, words describing the singular number shall include the plural and vice versa, words denoting any gender shall include all genders and words denoting natural Persons shall include corporations, partnerships and other Persons and
vice versa; and 
 (v) all references to “including” shall be deemed to mean including without limitation.

 (b) Capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Merger Agreement. The
following terms shall have the meanings ascribed to them as follows: 
 “Achievement Certificate” has the meaning set forth
in Section 2.4(a). 
 “Board of Directors” means the board of directors of Buyer. 
  

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 “Board Resolution” means a copy of a resolution certified by the secretary or an
assistant secretary of Buyer to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Rights Agent. 
 “Business Day” means any day other than a Saturday, Sunday or a day on which banking institutions in New York, New York are authorized
or obligated by law or executive order to remain closed. 
 “CVR Payment Amount” means an amount equal to $15 million,
payable in cash. 
 “CVR Payment Date” means the date that the CVR Payment Amount is payable by Buyer to the Holders, which
date shall be established pursuant to Section 2.4. 
 “CVR Payment Event” means the entry by Buyer or any of its
subsidiaries into a license or sale agreement related to DARA, or any other agreement for the development, marketing or sale of DARA, or any option to enter into any such agreements, with any third party, other than Bristol-Myers Squibb Company or
any of its Affiliates, on or prior to December 31, 2011. 
 “CVR Register” has the meaning set forth in
Section 2.3(b). 
 “CVR Registrar” has the meaning set forth in Section 2.3(b). 
 “CVRs” means the contingent value rights issued by Buyer pursuant to the Merger Agreement and this Agreement. 
 “DARA” means any product candidate from Target’s dual-acting angiotensin and endothelin receptor antagonist program (including
Target’s Phase 2 product candidate identified by code PS433540), including related back-up compounds, research data, Intellectual Property and any other related rights or assets. 
 “Holder” means a Person in whose name a CVR is registered in the CVR Register. 
 “Non-Achievement Certificate” has the meaning set forth in Section 2.4(d). 
 “Notice of Objection” has the meaning set forth in Section 2.4(d). 
 “Objection Period” has the meaning set forth in Section 2.4(d). 
 “Officer’s Certificate” means a certificate signed by the chief executive officer, president, chief financial officer, any vice
president, the controller, the treasurer or the secretary, in each case of Buyer, in his or her capacity as such an officer, and delivered to the Rights Agent. 
 “Permitted Transfer” means: (i) the transfer of any or all of the CVRs (upon the death of the Holder) by will or intestacy; (ii) transfer by instrument to an inter vivos or testamentary
trust in which the CVRs are to be passed to beneficiaries upon the death of the trustee; (iii) transfers made pursuant to a court order of a court of competent jurisdiction (such as in connection with divorce, bankruptcy or liquidation);
(iv) if the Holder is a partnership or limited liability company, a distribution by the transferring partnership or limited liability company to its partners or members, as applicable; or (v) a transfer made by operation of law (including
a consolidation or merger) or in connection with the dissolution, liquidation or termination of any corporation, limited liability company, partnership or other entity. 
 “Rights Agent” means the Rights Agent named in the first paragraph of this Agreement, until a successor Rights Agent shall have become such pursuant to the applicable provisions of this Agreement, and
thereafter “Rights Agent” shall mean such successor Rights Agent. 
  

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 “Rights Agent Fee” means the fee of the Rights Agent to act in such capacity pursuant to
the terms of this Agreement. 
 “Surviving Person” has the meaning set forth in Section 6.1(a)(i). 
 ARTICLE II 
 CONTINGENT VALUE RIGHTS

 Section 2.1 Issuance of CVRs; Appointment of Rights Agent. 
 (a) The CVRs shall be issued pursuant to the Merger Agreement at the time and in the manner set forth in the Merger Agreement. 
 (b) Buyer hereby appoints [—] as the Rights Agent to act as rights agent for Buyer in accordance with the instructions hereinafter set forth in this Agreement, and the Rights Agent
hereby accepts such appointment. 
 Section 2.2 Nontransferable. 
 The CVRs shall not be sold, assigned, transferred, pledged, encumbered or in any other manner transferred or disposed of, in whole or in part, other than through a Permitted Transfer. 
 Section 2.3 No Certificate; Registration; Registration of Transfer; Change of Address. 
 (a) The CVRs shall not be evidenced by a certificate or other instrument. 
 (b) The Rights Agent shall keep a register (the “CVR Register”) for the registration of CVRs. The Rights Agent is hereby initially appointed “CVR Registrar” for the
purpose of registering CVRs and transfers of CVRs as herein provided. 
 (c) Subject to the restriction on transferability set forth in
Section 2.2, every request made to transfer a CVR must be in writing and accompanied by a written instrument or instruments of transfer and any other requested documentation in form reasonably satisfactory to Buyer and the CVR Registrar, duly
executed by the registered Holder or Holders thereof or by the duly appointed legal representative thereof or by a duly authorized attorney, such signature to be guaranteed by a participant in a recognized Signature Guarantee Medallion Program. A
request for a transfer of a CVR shall be accompanied by such documentation establishing satisfaction that the transfer is a Permitted Transfer as may be reasonably requested by Buyer and the CVR Registrar (including opinions of counsel), if
appropriate. Upon receipt of such written notice, the CVR Registrar shall, subject to its reasonable determination that the transfer instrument is in proper form and the transfer otherwise complies with the other terms and conditions herein,
register the transfer of the CVRs in the CVR Register. All duly transferred CVRs registered in the CVR Register shall be the valid obligations of Buyer, evidencing the same right and shall entitle the transferee to the same benefits and rights under
this Agreement, as those held by the transferor. No transfer of a CVR shall be valid until registered in the CVR Register, and any transfer not duly registered in the CVR Register will be void ab initio. Any transfer or assignment of the CVRs shall
be without charge (other than the cost of any transfer tax which shall be the responsibility of the transferor) to the Holder. 
 (d) A
Holder may make a written request to the CVR Registrar to change such Holder’s address of record in the CVR Register. The written request must be duly executed by the Holder. Upon receipt of such written notice, the CVR Registrar shall promptly
record the change of address in the CVR Register. 
  

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 Section 2.4 Payment Procedures. 
 (a) Promptly following the occurrence of the CVR Payment Event, but in no event later than five Business Days after such event, Buyer shall deliver to the Rights Agent a certificate (the “Achievement
Certificate”), certifying that the Holders are entitled to receive the CVR Payment Amount. No transaction in compliance with Section 6.1 hereof shall give the Holders the right to receive the CVR Payment Amount. 
 (b) If a CVR Payment Event has not occurred on or prior to December 31, 2011, then, within five Business Days after such date, Buyer shall deliver
to the Rights Agent a certificate (the “Non-Achievement Certificate”), stating that a CVR Payment Event did not occur. 
 (c) Except as otherwise requested by any Holder, the Rights Agent shall promptly (and in no event later than five Business Days after receipt thereof) send each Holder a copy of any Achievement Certificate or Non-Achievement Certificate at
its registered address. 
 (d) Upon demand by any Holder or Holders of at least 20% in the aggregate of the outstanding CVRs, within 45
calendar days after distribution by the Rights Agent of a Non-Achievement Certificate (the “Objection Period”), the Rights Agent shall deliver a written notice to Buyer prepared by such Holder or Holders specifying that such
Holder or Holders object to the determination of Buyer that a CVR Payment Event did not occur (a “Notice of Objection”) and stating the reason upon which such Holder or Holders have determined that a CVR Payment Event has
occurred on or prior to December 31, 2011. Any dispute arising from a Notice of Objection shall be resolved in accordance with the procedure set forth in Section 7.12, which decision shall be binding on the parties hereto and the Holders.

 (e) If a Notice of Objection has not been delivered to Buyer within the Objection Period, then the Holders shall have no right to receive
the CVR Payment Amount, and Buyer and the Rights Agent shall have no further obligations with respect to the CVR Payment Amount. 
 (f) If
Buyer delivers an Achievement Certificate to the Rights Agent or if the CVR Payment Amount is determined to be payable pursuant to Section 2.4(d) above, Buyer shall establish a CVR Payment Date that is within 15 calendar days of the date of the
Achievement Certificate or the date of final determination pursuant to Section 2.4(d) above, as applicable. At least five Business Days prior to such CVR Payment Date, Buyer shall cause the CVR Payment Amount to be delivered to the Rights
Agent, who will in turn, on the CVR Payment Date, distribute the CVR Payment Amount to the Holders (each Holder being entitled to receive its pro rata share of the CVR Payment Amount based on the number of CVRs held by such Holder as
reflected on the CVR Register) (i) by check mailed to the address of each Holder as reflected in the CVR Register as of the close of business on the last Business Day prior to such CVR Payment Date, or, (ii) with respect to any Holder that
is due payment pursuant to this Agreement in excess of $1,000,000 who has provided the Rights Agent with wire transfer instructions, by wire transfer of immediately available funds to such account. 
 (g) Buyer shall be entitled to deduct and withhold, or cause to be deducted or withheld, from each CVR Payment Amount otherwise payable pursuant to this
Agreement, such amounts as Buyer or the applicable subsidiary of Buyer is required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code, or any provision of state, local or foreign tax law. To the extent
that amounts are so withheld or paid over to or deposited with the relevant governmental entity, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Holder in respect of which such deduction and
withholding was made. 
 (h) Buyer shall promptly furnish to the Rights Agent all information and documentation in connection with this
Agreement and the CVRs that the Rights Agent or any Holder or Holders of at least 5% in the aggregate of the outstanding CVRs may reasonably request in connection with the determination of whether the CVR Payment Event has occurred. The Rights Agent
shall forward any information and documentation it receives to the Holders who request such information. 
  

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 Section 2.5 No Voting, Dividends or Interest; No Equity or Ownership Interest in Buyer. 
 (a) The CVRs shall not have any voting or dividend rights, and interest shall not accrue on any amounts payable on the CVRs to any Holder. 
 (b) The CVRs shall not represent any equity or ownership interest in Buyer or in any constituent company to the Merger. 
 Section 2.6 Sole Discretion and Decision Making Authority. 
 Notwithstanding anything contained herein to the contrary, the development of pharmaceutical products, such as DARA, is uncertain and expensive and as a result, Buyer shall have sole discretion and decision making
authority over whether to continue to invest, how much to invest in DARA and whether and on what terms, if any, to enter into (i) a license or sale agreement related to DARA, (ii) any other agreement for the development, marketing or sale
of DARA, or (iii) any option to enter into any such agreements. 
 ARTICLE III 
 THE RIGHTS AGENT 
 Section 3.1 Certain Duties
and Responsibilities. 
 (a) The Rights Agent shall not have any liability for any actions taken or not taken in connection with this
Agreement, except to the extent of its willful misconduct, bad faith or gross negligence. No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers. 
 (b) Any Holder or Holders of at least 20% in the aggregate
of the outstanding CVRs may direct the Rights Agent to act on behalf of the Holders in enforcing any of its or their rights hereunder, including, without limitation, the delivery of any Notice of Objection and negotiation or arbitration pursuant to
Section 7.12. The Rights Agent shall be under no obligation to institute any action, suit or legal proceeding or to take any other action likely to involve material expense unless such Holder or Holders shall furnish the Rights Agent with
reasonable security and indemnity for any costs and expenses which may be incurred. All rights of action under this Agreement may be enforced by the Rights Agent, and any action, suit or proceeding instituted by the Rights Agent shall be brought in
its name as Rights Agent, and any recovery of judgment shall be for the ratable benefit of all the Holders, as their respective rights or interests may appear. 
 Section 3.2 Certain Rights of Rights Agent. 
 The Rights Agent undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Rights Agent. In addition: 
 (a) the Rights Agent may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order or other
paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; 
 (b) whenever the
Rights Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Rights Agent may, in the absence of willful misconduct, bad faith or gross negligence on its part, rely upon
an Officer’s Certificate; 
 (c) the Rights Agent may engage and consult with counsel of its selection and the written advice of such
counsel or any opinion of counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; 
  

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 (d) in the event of arbitration, the Rights Agent may engage and consult with tax experts, valuation
firms and other experts and third parties that it, in its sole and absolute discretion, deems appropriate or necessary to enable it to discharge its duties hereunder; 
 (e) the permissive rights of the Rights Agent to do things enumerated in this Agreement shall not be construed as a duty; 
 (f) the Rights Agent shall not be required to give any note or surety in respect of the execution of such powers or otherwise in respect of the premises; and 
 (g) Buyer agrees to indemnify the Rights Agent for, and hold the Rights Agent harmless against, any loss, liability, claim, demands, suits or expense
arising out of or in connection with the Rights Agent’s duties under this Agreement, including the costs and expenses of defending the Rights Agent against any claims, charges, demands, suits or loss, unless such loss shall have been determined
by a court of competent jurisdiction to be a result of the Rights Agent’s willful misconduct, bad faith or gross negligence, provided, however, that the Rights Agent’s aggregate liability with respect to, arising from, or
arising in connection with this Agreement, or from all services provided or omitted to be provided under this Agreement, whether in contract, in tort, or otherwise, is limited to, and shall not exceed, the amounts paid hereunder by Buyer to the
Rights Agent as fees and charges, but not including reimbursable expenses. 
 (h) Buyer agrees (i) to pay the fees and expenses of the
Rights Agent in connection with this Agreement, as set forth on Schedule 1 hereto, and (ii) to reimburse the Rights Agent for all taxes and governmental charges, reasonable expenses and other charges of any kind and nature incurred by
the Rights Agent in the execution of this Agreement (other than taxes measured by the Rights Agent’s net income). The Rights Agent shall also be entitled to reimbursement from Buyer for all reasonable and necessary out-of-pocket expenses
(including reasonable fees and expenses of the Rights Agent’s counsel and agent) paid or incurred by it in connection with the administration by the Rights Agent of its duties hereunder. An invoice for the Rights Agent Fee will be rendered a
reasonable time prior to, and paid on, the effective date of the transaction. An invoice for any out-of-pocket expenses and per item fees realized will be rendered and payable within thirty (30) days after receipt by Buyer, except for postage
and mailing expenses, which funds must be received one (1) Business Day prior to the scheduled mailing date. Buyer agrees to pay to the Rights Agent any amounts, including fees and expenses, payable in favor of the Rights Agent in connection
with any dispute, resolution or arbitration arising under or in connection with this Agreement; provided, however, that in the event of a resolution in favor of Buyer, any amounts, including fees and expenses, payable in favor of the
Rights Agent related to such dispute, resolution or arbitration shall be offset against the CVR Payment Amount, if any. 
 Section 3.3 Resignation
and Removal; Appointment of Successor. 
 (a) The Rights Agent may resign at any time by giving written notice thereof to Buyer specifying
a date when such resignation shall take effect, which notice shall be sent at least 30 days prior to the date so specified. 
 (b) If the
Rights Agent shall resign, be removed or become incapable of acting, Buyer, by way of a Board Resolution, shall promptly appoint a qualified successor Rights Agent who may be a Holder but shall not be an officer of Buyer. The successor Rights Agent
so appointed shall, forthwith upon its acceptance of such appointment in accordance with this Section 3.3(c), become the successor Rights Agent. 
 (c) Buyer shall give notice of each resignation and each removal of a Rights Agent and each appointment of a successor Rights Agent by mailing written notice of such event by first-class mail, postage prepaid, to the
Holders as their names and addresses appear in the CVR Register. Each notice shall include the name and address of the successor Rights Agent. If Buyer fails to send such notice within ten days after acceptance of appointment by a successor Rights
Agent, the successor Rights Agent shall cause such notice to be mailed at the expense of Buyer. 
  

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 Section 3.4 Acceptance of Appointment by Successor. 
 Every successor Rights Agent appointed hereunder shall execute, acknowledge and deliver to Buyer and to the retiring Rights Agent an instrument accepting
such appointment and a counterpart of this Agreement, and thereupon such successor Rights Agent, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Rights Agent;
provided, that upon the request of Buyer or the successor Rights Agent, such retiring Rights Agent shall execute and deliver an instrument transferring to such successor Rights Agent all the rights, powers and trusts of the retiring Rights
Agent. 
 ARTICLE IV 
 COVENANTS 
 Section 4.1 List of Holders. 
 Buyer shall furnish or cause to be furnished to the Rights Agent (a) in such form as Buyer receives from its transfer agent (or other agent performing similar services for Buyer), the names, addresses and
shareholdings of the Holders within five Business Days of the effective time of the Merger, and (b) at such other times as the Rights Agent may request in writing, within five days after receipt by Buyer of any such request, a list, in such
form as Buyer receives from its transfer agent (or other agent performing similar services for Buyer), of the names and the addresses of the Holders as of a date not more than 15 days prior to the time such list is furnished. Buyer shall also
furnish or cause to be furnished to the Rights Agent with respect to each holder of any Assumed Company Option and New Warrant, such holder’s name, address and the number of shares of Buyer’s common stock issuable upon exercise of such
Assumed Company Option or New Warrant. Upon such exercise, such holder shall be a “Holder” for all purposes of this Agreement. 
 Following the distribution by the Rights Agent of the CVR Payment Amount, if any, to the Holders in accordance with Section 4.2 hereof, any remaining amount which has been set aside for holders of Assumed Company Options and New
Warrants will be promptly returned to Buyer to be held by Buyer for distribution to such holders, upon exercise of such Assumed Company Options and New Warrants. 
 Section 4.2 Payment of CVR Payment Amount. 
 Buyer shall duly and promptly pay the CVR Payment Amount, if any, in
immediately available funds, to the Rights Agent to be distributed to the Holders in the manner provided for in Section 2.4 and in accordance with the terms of this Agreement. 
 Section 4.3 Ability to Make Prompt Payment. 
 Neither Buyer nor any of its Subsidiaries shall
enter into any agreement that would restrict Buyer’s right to be able to promptly make payments to the Holders under this Agreement or otherwise restrict Buyer’s ability to fund such payments. 
 Section 4.4 Assignment. 
 Buyer shall not, in
whole or in part, assign any of its rights or obligations under this Agreement other than in accordance with the terms of Section 6.1 hereof. 
  

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 Section 4.5 Registration 
 If required pursuant to applicable U.S. securities laws, the CVRs will be registered pursuant to the Registration Statement under the Securities Act and Buyer covenants and agrees: 
 (a) to prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may
be necessary to keep the Registration Statement effective through the CVR Payment Date or until such time as the CVRs terminate in accordance with the terms hereof and to use its reasonable efforts to keep the Registration Statement effective during
such period; and 
 (b) to use its reasonable efforts to register or qualify the CVRs under the securities or blue sky laws of each
jurisdiction in which such registration or qualification is necessary. 
 ARTICLE V 
 AMENDMENTS 
 Section 5.1 Amendments Without
Consent of Holders. 
 (a) Without the consent of any Holders or the Rights Agent, Buyer, when authorized by a Board Resolution, at any
time and from time to time, may enter into one or more amendments hereto, for any of the following purposes: 
 (i) to
evidence the succession of another Person to Buyer and the assumption by any such successor of the covenants of Buyer herein in a transaction contemplated by Section 6.1 hereof; or 
 (ii) to evidence the termination of the CVR Registrar and the succession of another Person as a successor CVR Registrar and the assumption
by any successor of the obligations of the CVR Registrar herein. 
 (b) Without the consent of any Holders, Buyer, when authorized by a Board
Resolution, and the Rights Agent, in the Rights Agent’s sole and absolute discretion, at any time and from time to time, may enter into one or more amendments hereto, for any of the following purposes: 
 (i) to evidence the succession of another Person as a successor Rights Agent and the assumption by any successor of the covenants and
obligations of the Rights Agent herein; 
 (ii) to add to the covenants of Buyer such further covenants, restrictions,
conditions or provisions as the Board of Directors and the Rights Agent shall consider to be for the protection of the Holders; provided, that in each case, such provisions shall not adversely affect the interests of the Holders; 
 (iii) to cure any ambiguity, to correct or supplement any provision herein that may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or questions arising under this Agreement; provided, that in each case, such provisions shall not adversely affect the interests of the Holders; or 
 (iv) to add, eliminate or change any provision of this Agreement unless such addition, elimination or change is adverse to the interests
of the Holders. 
 (c) Promptly after the execution by Buyer and the Rights Agent of any amendment pursuant to the provisions of this
Section 5.1, Buyer shall mail a notice thereof by first-class mail to each of the Holders at their addresses as they shall appear on the CVR Register, setting forth in general terms the substance of such amendment. 
  

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 Section 5.2 Amendments With Consent of Holders. 
 (a) Subject to Section 5.1 (which amendments pursuant to Section 5.1 may be made without the consent of the Holders), with the consent of the
Holders of not less than a majority of the outstanding CVRs, whether evidenced in writing or taken at a meeting of the Holders, Buyer, when authorized by a Board Resolution, and the Rights Agent may enter into one or more amendments hereto for the
purpose of adding, eliminating or changing any provisions of this Agreement, even if such addition, elimination or change is in any way adverse to the interests of the Holders. 
 (b) Promptly after the execution by Buyer and the Rights Agent of any amendment pursuant to the provisions of this Section 5.2, Buyer shall mail a
notice thereof by first-class mail to the Holders at their addresses as they shall appear on the CVR Register, setting forth in general terms the substance of such amendment. 
 Section 5.3 Execution of Amendments. 
 In executing any amendment permitted by this Article V,
the Rights Agent shall be entitled to receive, and shall be fully protected in relying upon, an opinion of counsel stating that the execution of such amendment is authorized or permitted by this Agreement. The Rights Agent may, but is not obligated
to, enter into any such amendment that affects the Rights Agent’s own rights, privileges, covenants or duties under this Agreement or otherwise. 
 Section 5.4 Effect of Amendments. 
 Upon the execution of any amendment under this Article V, this Agreement shall be
modified in accordance therewith, such amendment shall form a part of this Agreement for all purposes and every Holder shall be bound thereby. 
 ARTICLE VI 
 CONSOLIDATION, MERGER, SALE OR CONVEYANCE 
 Section 6.1 Buyer May Consolidate, Etc. 
 (a) Buyer shall not consolidate with or merge into any
other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless: 
 (i)
the Person formed by such consolidation or into which Buyer is merged or the Person that acquires by conveyance or transfer, or that leases, the properties and assets of Buyer substantially as an entirety (the “Surviving
Person”) shall expressly assume payment of amounts on all the CVRs and the performance of every duty and covenant of this Agreement on the part of Buyer to be performed or observed; and 
 (ii) Buyer has delivered to the Rights Agent an Officer’s Certificate, stating that such consolidation, merger, conveyance, transfer
or lease complies with this Article VI and that all conditions precedent herein provided for relating to such transaction have been complied with. 
 (b) For purposes of this Section 6.1 only, “convey, transfer or lease its properties and assets substantially as an entirety” shall mean (i) properties and assets contributing in the aggregate at least 80% of
Buyer’s total consolidated revenues for the current period as reported in Buyer’s last available periodic financial report (quarterly or annual, as the case may be) or (ii) properties and assets constituting in the aggregate at least
80% of Buyer’s total assets for the current period as reported in Buyer’s last available periodic financial report (quarterly or annual, as the case may be). 
  

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 (c) In the event Buyer conveys, transfers or leases its properties and assets substantially as an
entirety in accordance with the terms and conditions of this Section 6.1, Buyer and the Surviving Person shall be jointly and severally liable for the payment of the CVR Payment Amount and the performance of every duty and covenant of this
Agreement on the part of Buyer to be performed or observed. 
 Section 6.2 Successor Substituted. 
 Upon any consolidation of or merger by Buyer with or into any other Person, or any conveyance, transfer or lease of the properties and assets
substantially as an entirety to any Person in accordance with Section 6.1, the Surviving Person shall succeed to, and be substituted for, and may exercise every right and power of, Buyer under this Agreement with the same effect as if the
Surviving Person had been named as Buyer herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Agreement and the CVRs. 
 ARTICLE VII 
 OTHER PROVISIONS OF
GENERAL APPLICATION 
 Section 7.1 Notices to Rights Agent and Buyer. 
 Any request, demand, authorization, direction, notice, consent, waiver or other document provided or permitted by this Agreement shall be sufficient for
every purpose hereunder if in writing and sent by facsimile transmission, delivered personally, or by certified or registered mail (return receipt requested and first-class postage prepaid) or sent by a nationally recognized overnight courier (with
proof of service), addressed as follows, and shall be deemed to have been given upon receipt: 
 (a) if to the Rights Agent, addressed to it
at [—], facsimile at [—], or at any other address previously furnished in writing to the Holders and Buyer by the Rights Agent in accordance with this Section 7.1; or

 (b) if to Buyer, addressed to it at 10275 Science Center Drive, San Diego, California 92121, facsimile at (858) 550-7272, or at any
other address previously furnished in writing to the Rights Agent and the Holders by Buyer in accordance with this Section 7.1. 
 Section 7.2
Notice to Holders. 
 Where this Agreement provides for notice to Holders, such notice shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his, her or its address as it appears in the CVR Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. 
 Section 7.3 Effect of Headings. 
 The Article and Section headings herein are for convenience only and shall not affect the construction hereof. 
 Section 7.4 Successors and Assigns. 
 All
covenants and agreements in this Agreement by Buyer shall bind its successors and assigns, whether so expressed or not. 
  

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 Section 7.5 Benefits of Agreement. 
 Nothing in this Agreement, express or implied, shall give to any Person (other than the parties hereto, the Holders and their permitted successors and
assigns hereunder) any benefit or any legal or equitable right, remedy or claim under this Agreement or under any covenant or provision herein contained, all such covenants and provisions being for the sole benefit of the parties hereto, the Holders
and their permitted successors and assigns. 
 Section 7.6 Governing Law. 
 This Agreement and the CVRs shall be governed by and construed in accordance with the laws of the State of Delaware without regards to its rules of
conflicts of laws. 
 Section 7.7 Legal Holidays. 
 In the event that a CVR Payment Date shall not be a Business Day, then, notwithstanding any provision of this Agreement to the contrary, any payment required to be made in respect of the CVRs on such date need not be
made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the CVR Payment Date. 
 Section 7.8 Severability Clause. 
 In case any one or more of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, but this Agreement shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the court or other tribunal making such determination is authorized and instructed to modify this
Agreement so as to effect the original intent of the parties as closely as possible so that the transactions and agreements contemplated herein are consummated as originally contemplated to the fullest extent possible. 
 Section 7.9 Counterparts. 
 This Agreement may be
signed in any number of counterparts (which may be effectively delivered by facsimile or other electronic means), each of which shall be deemed to constitute but one and the same instrument. 
 Section 7.10 Termination. 
 This Agreement shall
terminate and be of no further force or effect, and the parties hereto shall have no liability hereunder, upon the earlier to occur of (a) the payment of the CVR Payment Amount, (b) in the event that a Notice of Objection is not delivered
within the Objection Period, the expiration of the Objection Period or (c) in the event of the delivery of a Notice of Objection, either (i) the final determination in accordance with this Agreement that a CVR Payment Event has not been
achieved or (ii) the fulfillment of any payment or other obligation required pursuant to a final determination made in accordance with this Agreement. 
 Section 7.11 Entire Agreement. 
 This Agreement and the Merger Agreement represent the entire understanding of the
parties hereto with reference to the CVRs and this Agreement supersedes any and all other oral or written agreements hereto made with respect to the CVRs, except for the Merger Agreement. If and to the extent that any provision of this Agreement is
inconsistent or conflicts with the Merger Agreement, this Agreement shall govern and be controlling. 
  

 11 

 Section 7.12 Negotiation; Arbitration. 
 (a) Prior to any arbitration pursuant to Section 7.12(b), Buyer, the Rights Agent and, if available, any Holder or Holders of at least 5% in the
aggregate of the outstanding CVRs shall negotiate in good faith for a period of 30 days to resolve any controversy or claim arising out of or relating to this Agreement or the breach thereof. 
 (b) After expiration of the 30-day period contemplated by Section 7.12(a), such controversy or claim, including any claims for breach of this
Agreement, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction
thereof. Buyer, the Rights Agent and any Holder or Holders of at least 20% in the aggregate of the outstanding CVRs may initiate an arbitration for any matter relating to this Agreement. However, in the event of a dispute arising from the
delivery of a Notice of Objection, the sole matter to be settled by arbitration shall be whether a CVR Payment Event has occurred on or prior to December 31, 2011. The number of arbitrators shall be three. Within 15 days after the commencement
of arbitration, each party shall select one person to act as arbitrator, and the two selected shall select a third arbitrator within 15 days of their appointment. If the arbitrators selected by the parties are unable or fail to agree upon the third
arbitrator, the third arbitrator shall be selected by the American Arbitration Association. The place of the arbitration shall be New York, New York. The arbitrators shall be lawyers or retired judges with experience in the life sciences industry
and with mergers and acquisitions. Except as may be required by law, neither a party nor an arbitrator may disclose the existence, content or results of any arbitration hereunder without the prior written consent of both parties (provided that the
Rights Agent may disclose to the Holders any such information without the consent of Buyer). Any award payable in favor of the Holders or the Rights Agent as a result of arbitration shall be distributed to the Holders on a pro rata basis, based on
the number of CVRs held by each Holder. Buyer shall pay all fees and expenses incurred in connection with any arbitration, including the costs and expenses billed by the arbitrators in connection with the performance of their duties described
herein; provided, however, that if the arbitrator rules in favor of Buyer, the Arbitrator’s fees and expenses shall be offset against the CVR Payment Amount, if any. 
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

 12 

 IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed on its behalf by
its duly authorized officers as of the day and year first above written. 
  

			
	 LIGAND PHARMACEUTICALS INCORPORATED

		
	By:	 	  

	Name:	 	
	Title:	 	
	
	PHARMACOPEIA, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	[RIGHTS AGENT]
		
	By:	 	  

	Name:	 	
	Title:	 	

 Schedule 1 
 Fees and Expenses of the Rights AgentAmended and Restated 2006 Equity Incentive Plan

 Exhibit 10.3 
 DAYSTAR TECHNOLOGIES, INC. 
 AMENDED AND RESTATED 2006 EQUITY INCENTIVE PLAN 
 ADOPTED BY THE BOARD OF DIRECTORS: MARCH 29, 2006 
 APPROVED BY THE STOCKHOLDERS: JUNE 19, 2006 
 AMENDED AND RESTATED BY THE BOARD OF
DIRECTORS: AUGUST 1, 2008 
 APPROVED BY THE
STOCKHOLDERS: SEPTEMBER 22, 2008 
 TERMINATION DATE:
JULY 31, 2018 
  

	1.	GENERAL. 

 (a) Eligible
Award Recipients. The persons eligible to receive Awards are Employees, Directors and Consultants. 
 (b) Available Awards.
The Plan provides for the grant of the following Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights (iv) Restricted Stock Awards, (v) Restricted Stock Unit Awards,
(vi) Performance Stock Awards, (vii) Performance Cash Awards, and (viii) Other Stock Awards. 
 (c) Purpose. The
Company, by means of the Plan, seeks to secure and retain the services of the group of persons eligible to receive Awards as set forth in Section 1(b), to provide incentives for such persons to exert maximum efforts for the success of the
Company and any Affiliate and to provide a means by which such eligible recipients may be given an opportunity to benefit from increases in value of the Common Stock through the granting of Stock Awards. 
 (d) Awards Granted Prior to Effective Date. All Awards granted on or after the Effective Date of this Plan shall be subject to the terms of
this Plan, as amended and restated on the Effective Date. Except as expressly set forth in Section 9(e) below, all outstanding stock awards granted under the Plan prior to the Effective Date shall remain subject to the terms of the Plan prior
to the amendment and restatement thereof on the Effective Date and the applicable award agreement. 
  

	2.	ADMINISTRATION. 

 (a)
Administration by Board. The Board shall administer the Plan unless and until the Board delegates administration of the Plan to a Committee or Committees, as provided in Section 2(c). 
 (b) Powers of Board. The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

 (i) To determine from time to time (A) which of the persons eligible under the Plan shall be granted Awards;
(B) when and how each Award shall be granted; (C) what type or combination of types of Award shall be granted; (D) the provisions of each Award granted (which need not be identical), including the time or times when a person shall be
permitted to receive cash or Common Stock pursuant to a Stock Award; (E) the number of shares of Common Stock with respect to which a Stock Award shall be granted to each such person; and (F) the Fair Market Value applicable to a Stock
Award. 
  

 1. 

 (ii) To construe and interpret the Plan and Awards 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 Stock Award Agreement or in the written terms of a
Performance Cash Award, in a manner and to the extent it shall deem necessary or expedient to make the Plan or Award fully effective. 
 (iii) To settle all controversies regarding the Plan and Awards granted under it. 
 (iv) 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 the Award stating the time at which
it may first be exercised or the time during which it will vest. 
 (v) To suspend or terminate the Plan at any time.
Suspension or termination of the Plan shall not impair rights and obligations under any Award granted while the Plan is in effect except with the written consent of the affected Participant. 
 (vi) To amend the Plan in any respect the Board deems necessary or advisable, including, without limitation, relating to Incentive
Stock Options and certain nonqualified deferred compensation under Section 409A of the Code and/or to bring the Plan or Awards granted under the Plan into compliance therewith, subject to the limitations, if any, of applicable law. However,
except as provided in Section 9(a) relating to Capitalization Adjustments, to the extent required by applicable law or listing requirements, stockholder approval shall be required for any amendment of the Plan that either (A) materially
increases the number of shares of Common Stock available for issuance under the Plan, (B) materially expands the class of individuals eligible to receive Awards under the Plan, (C) materially increases the benefits accruing to Participants
under the Plan or materially reduces the price at which shares of Common Stock may be issued or purchased under the Plan, (D) materially extends the term of the Plan, or (E) expands the types of Awards available for issuance under the
Plan. Except as provided above, rights under any Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (1) the Company requests the consent of the affected Participant, and (2) such
Participant consents in writing.  
 (vii) To submit any amendment to the Plan for stockholder approval,
including, but not limited to, amendments to the Plan intended to satisfy the requirements of (A) Section 162(m) of the Code regarding the exclusion of performance-based compensation from the limit on corporate deductibility of
compensation paid to Covered Employees, (B) Section 422 of the Code regarding “incentive stock options” or (C) Rule 16b-3. 
 (viii) To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more Awards, including, but not limited to, amendments to provide terms more favorable to the Participant
than previously provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion; provided however, that except with respect to amendments that disqualify or impair the status of 

  

 2. 

 
an Incentive Stock Option, a Participant’s rights under any Award shall not be impaired by any such amendment unless (A) the Company requests the
consent of the affected Participant, and (B) such Participant consents in writing. Notwithstanding the foregoing, subject to the limitations of applicable law, if any, and the Board may amend the terms of any one or more Awards without the
affected Participant’s consent if necessary to maintain the qualified status of the Award as an Incentive Stock Option or to bring the Award into compliance with Section 409A of the Code. 
 (ix) 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 and that are not in conflict with the provisions of the Plan or Awards. 
 (x) To adopt such
procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Employees, Directors or Consultants who are foreign nationals or employed outside the United States. 
 (c) Delegation to Committee. 
 (i) General. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board shall thereafter be to the Committee or subcommittee), 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 retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated. 
 (ii) Section 162(m) and Rule 16b-3 Compliance. The Committee may consist solely of two or more Outside Directors, in
accordance with Section 162(m) of the Code, or solely of two or more Non-Employee Directors, in accordance with Rule 16b-3. 
 (d) Delegation to an Officer. The Board may delegate to one (1) or more Officers the authority to do one or both of the following (i) designate Employees who are providing Continuous Service to the Company or any of
its Subsidiaries who are not Officers to be recipients of Options and Stock Appreciation Rights (and, to the extent permitted by applicable law, other Stock Awards) and the terms thereof, and (ii) determine the number of shares of Common Stock
to be subject to such Stock Awards granted to such Employees; provided, however, that the Board resolutions regarding such delegation shall specify the total number of shares of Common Stock that may be subject to the Stock Awards granted by
such Officer and that such Officer may not grant a Stock Award to himself or herself. Notwithstanding the foregoing, the Board may not delegate authority to an Officer to determine the Fair Market Value pursuant to Section 13(w)(iii) below.

  

 3. 

 (e) Effect of Board’s Decision. All determinations, interpretations and constructions
made by the Board in good faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons. 
 (f) Cancellation and Re-Grant of Stock Awards. Neither the Board nor any Committee shall have the authority to: (i) reduce the exercise price of any outstanding Options or Stock Appreciation Rights under the Plan, or
(ii) cancel any outstanding Options or Stock Appreciation Rights that have an exercise price or strike price greater than the current Fair Market Value of the Common Stock in exchange for cash or other Stock Awards under the Plan, unless the
stockholders of the Company have approved such an action within twelve (12) months prior to such an event. Notwithstanding the foregoing, the Board or Committee shall have the authority, without the approval of the Company’s stockholders,
to cancel outstanding Options or Stock Appreciation Rights that have an exercise price or strike price greater than the current Fair Market Value of the Common Stock in exchange for a nominal cash payment of consideration as necessary to effect a
cancellation of the Award. 
  

	3.	SHARES SUBJECT TO THE PLAN. 

 (a) Share Reserve. Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate number of shares of Common Stock that
may be issued pursuant to Stock Awards from and after the Effective Date shall not exceed ten million, nine hundred fifty thousand (10,950,000) shares. For clarity, the limitation in this Section 3(a) is a limitation in the number of
shares of the Common Stock that may be issued pursuant to the Plan and does not limit the granting of Stock Awards except as provided in Section 7(a). Shares may be issued in connection with a merger or acquisition as permitted by NASDAQ
Marketplace Rule 4350(i)(1)(A)(iii) or, if applicable, NYSE Listed Company Manual Section 303A.08, or AMEX Company Guide Section 711 or other applicable rule and such issuance shall not reduce the number of shares available for issuance
under the Plan. Furthermore, if a Stock Award or any portion thereof (i) expires or otherwise terminates without all of the shares covered by such Stock Award have been issued or (ii) is settled in cash (i.e., the Participant
receives cash rather than stock), such expiration, termination or settlement shall not reduce (or otherwise offset) the number of shares of Common Stock that may be available for issuance under the Plan. 
 (b) Reversion of Shares to the Share Reserve. If any shares of common stock issued pursuant to a Stock Award are forfeited back to the
Company because of the failure to meet a contingency or condition required to vest such shares in the Participant, then the shares which are forfeited shall revert to and again become available for issuance under the Plan. Also, any shares
reacquired by the Company pursuant to Section 8(g) or as consideration for the exercise of an Option shall again become available for issuance under the Plan. Notwithstanding the provisions of this Section 3(b), any such shares shall not
be subsequently issued pursuant to the exercise of Incentive Stock Options. 
 (c) Incentive Stock Option Limit.
Notwithstanding anything to the contrary in this Section 3(c), subject to the provisions of Section 9(a) relating to Capitalization Adjustments the aggregate maximum number of shares of Common Stock that may be issued pursuant to the
exercise of Incentive Stock Options shall be ten million, nine hundred fifty thousand (10,950,000) shares of Common Stock. 
  

 4. 

 (d) Source of Shares. The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise. 
  

	4.	ELIGIBILITY. 

 (a)
Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and
(f) of the Code). Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants; provided, however, Nonstatutory Stock Options and SARs may not be granted to Employees, Directors, and Consultants
who are providing Continuous Services to any “parent” of the Company, as such term is defined in Rule 405 promulgated under the Securities Act, unless such Stock Awards comply with the distribution requirements of Section 409A of the
Code. 
 (b) Ten Percent Stockholders. A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless the
exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value on the date of grant and the Option is not exercisable after the expiration of five (5) years from the date of grant. 
 (c) Section 162(m) Limitation on Annual Grants. Subject to the provisions of Section 9(a) relating to Capitalization Adjustments,
at such time as the Company may be subject to the applicable provisions of Section 162(m) of the Code, no Participant shall be eligible to be granted during any calendar year Options, Stock Appreciation Rights and Other Stock Awards whose value
is determined by reference to an increase over an exercise or strike price of at least one hundred percent (100%) of the Fair Market Value on the date the Stock Award is granted covering more than one million two hundred thousand
(1,200,000) shares of Common Stock. 
  

	5.	PROVISIONS RELATING TO OPTIONS AND STOCK APPRECIATION
RIGHTS. 

 Each Option or SAR shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. All Options shall be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates shall be issued for shares of
Common Stock purchased on exercise of each type of Option. If an Option is not specifically designated as an Incentive Stock Option, then the Option shall be a Nonstatutory Stock Option. The provisions of separate Options or SARs need not be
identical; provided, however, that each Option Agreement or Stock Appreciation Right Agreement shall conform to (through incorporation of provisions hereof by reference in the applicable Award Agreement or otherwise) the substance of each of
the following provisions: 
 (a) Term. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, no
Option or SAR shall be exercisable after the expiration of ten (10) years from the date of its grant or such shorter period specified in the Award Agreement. 
 (b) Exercise Price. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, the exercise price (or strike price) of each Option or SAR shall be not less than one hundred
percent (100%) of the Fair Market Value of the Common Stock subject to the Option or 

  

 5. 

 
SAR on the date the Option or SAR is granted. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise price (or strike price) lower
than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option or SAR if such Option or SAR is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a
Corporate Transaction and in a manner consistent with the provisions of Sections 409A and 424(a) of the Code (whether or not such awards are Incentive Stock Options). Each SAR will be denominated in shares of Common Stock equivalents. 
 (c) Purchase Price for Options. The purchase price of Common Stock acquired pursuant to the exercise of an Option shall be paid, to the
extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below. The Board shall have the authority to grant Options that do not permit all of the following
methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to utilize a particular method of payment. The permitted methods of payment are as follows: 
 (i) by cash, check, bank draft or money order payable to the Company; 
 (ii) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of
the stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds; 
 (iii) by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock; 
 (iv) if the option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will
reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, that the Company shall accept a cash or
other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued; provided, further, that shares of Common Stock will no
longer be subject to an Option and will not be exercisable thereafter to the extent that (A) shares issuable upon exercise are reduced to pay the exercise price pursuant to the “net exercise,” (B) shares are delivered to the
Participant as a result of such exercise, and (C) shares are withheld to satisfy tax withholding obligations; or 
 (v) in any other form of legal consideration that may be acceptable to the Board. 
 (d) Exercise and Payment of a
SAR. To exercise any outstanding Stock Appreciation Right, the Participant must provide written notice of exercise to the Company in compliance with the provisions of the Stock Appreciation Right Agreement evidencing such Stock Appreciation
Right. The appreciation distribution payable on the exercise of a Stock Appreciation Right will be not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the Stock Appreciation
Right) of a number of shares of Common Stock equal to the number of Common Stock equivalents in which the 

  

 6. 

 
Participant is vested under such Stock Appreciation Right, and with respect to which the Participant is exercising the Stock Appreciation Right on such date,
over (B) the strike price that will be determined by the Board at the time of grant of the Stock Appreciation Right. The appreciation distribution in respect to a Stock Appreciation Right may be paid in Common Stock, in cash, in any combination
of the two or in any other form of consideration, as determined by the Board and contained in the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right. 
 (e) Transferability of Options and SARs. The Board may, in its sole discretion, impose such limitations on the transferability of Options
and SARs as the Board shall determine. In the absence of such a determination by the Board to the contrary, the following restrictions on the transferability of Options and SARs shall apply: 
 (i) Restrictions on Transfer. An Option or SAR shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Participant only by the Participant; provided, however, that the Board may, in its sole discretion, permit transfer of the Option or SAR in a manner that is not prohibited by
applicable tax and securities laws upon the Participant’s request. Except as explicitly provided herein, neither an Option nor a SAR may be transferred for consideration. 
 (ii) Domestic Relations Orders. Notwithstanding the foregoing, an Option or SAR may be transferred pursuant to a domestic
relations order; provided, however, that if an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer. 
 (iii) Beneficiary Designation. Notwithstanding the foregoing, the Participant may, by delivering written notice to the
Company, in a form provided by or otherwise satisfactory to the Company and any broker designated by the Company to effect Option exercises, designate a third party who, in the event of the death of the Participant, shall thereafter be entitled to
exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, the executor or administrator of the Participant’s estate shall be entitled to exercise the
Option or SAR and receive the Common Stock or other consideration resulting from such exercise. 
 (f) Vesting Generally. The
total number of shares of Common Stock subject to an Option or SAR may vest and therefore become exercisable in periodic installments that may or may not be equal. The Option or SAR may be subject to such other terms and conditions on the time or
times when it may or may not be exercised (which may be based on the satisfaction of Performance Goals or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options or SARs may vary. The provisions of this
Section 5(f) are subject to any Option or SAR provisions governing the minimum number of shares of Common Stock as to which an Option or SAR may be exercised. 
 (g) Termination of Continuous Service. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, in the event that a Participant’s
Continuous Service terminates (other than for Cause or upon the Participant’s death or Disability), the Participant may exercise his or her Option or SAR (to the 

  

 7. 

 
extent that the Participant was entitled to exercise such Award as of the date of termination of Continuous Service) but only within such period of time
ending on the earlier of (i) the date three (3) months following the termination of the Participant’s Continuous Service (or such longer or shorter period specified in the applicable Award Agreement), or (ii) the expiration of
the term of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the time specified herein or in the Award Agreement (as applicable),
the Option or SAR shall terminate. 
 (h) Extension of Termination Date. In the event that the exercise of an Option or SAR
following the termination of the Participant’s Continuous Service (other than for Cause or upon the Participant’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the
registration requirements under the Securities Act, then the Option or SAR shall terminate on the earlier of (i) the expiration of a period of three (3) months after the termination of the Participant’s Continuous Service during which
the exercise of the Option or SAR would not be in violation of such registration requirements, or (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement. In addition, unless otherwise provided in a
Participant’s Award Agreement, if the sale of any Common Stock received upon exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause) would violate the Company’s insider
trading policy, then the Option or SAR shall terminate on the earlier of (i) the expiration of a period equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during which the
exercise of the Option or SAR would not be in violation of the Company’s insider trading policy, or (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement. 
 (i) Disability of Participant. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant
and the Company, in the event that a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to
exercise such Option or SAR as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination of Continuous Service (or such longer
or shorter period specified in the Award Agreement), or (ii) the expiration of the term of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option
or SAR within the time specified herein or in the Award Agreement (as applicable), the Option or SAR (as applicable) shall terminate. 
 (j) Death of Participant. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, in the event that (i) a Participant’s Continuous Service terminates
as a result of the Participant’s death, or (ii) the Participant dies within the period (if any) specified in the Award Agreement after the termination of the Participant’s Continuous Service for a reason other than death, then the
Option or SAR may be exercised (to the extent the Participant was entitled to exercise such Option or SAR as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option or SAR by bequest or
inheritance or by a person designated to exercise the Option or SAR upon the Participant’s death, but only within the period ending on the earlier of (i) the date eighteen (18) months following the date of death (or such longer or
shorter period specified in 

  

 8. 

 
the Award Agreement), or (ii) the expiration of the term of such Option or SAR as set forth in the Award Agreement. If, after the Participant’s
death, the Option or SAR is not exercised within the time specified herein or in the Award Agreement (as applicable), the Option or SAR shall terminate. 
 (k) Termination for Cause. Except as explicitly provided otherwise in a Participant’s Award Agreement, in the event that a Participant’s Continuous Service is terminated for Cause, the Option or SAR
shall terminate upon the termination date of such Participant’s Continuous Service, and the Participant shall be prohibited from exercising his or her Option or SAR from and after the time of such termination of Continuous Service. 

(l) Non-Exempt Employees. No Option or SAR granted to an Employee who is a non-exempt employee for purposes of the Fair Labor Standards
Act of 1938, as amended shall be first exercisable for any shares of Common Stock until at least six months following the date of grant of the Option or SAR. Notwithstanding the foregoing, consistent with the provisions of the Worker Economic
Opportunity Act, in the event of the Participant’s death or Disability, upon a Corporate Transaction in which such Option or SAR is not assumed, continued, or substituted, a Change in Control, or upon the Participant’s retirement (as such
term may be defined in the Participant’s Award Agreement or in another applicable agreement) any such vested Options and SARs may be exercised earlier than six months following the date of grant. The foregoing provision is intended to operate
so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay. 
  

	6.	PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS AND
SARS. 

 (a) Restricted Stock Awards. Each Restricted Stock Award Agreement shall be in such
form and shall contain such terms and conditions as the Board shall deem appropriate. To the extent consistent with the Company’s Bylaws, at the Board’s election, shares of Common Stock may be (x) held in book entry form subject to
the Company’s instructions until any restrictions relating to the Restricted Stock Award lapse; or (y) evidenced by a certificate, which certificate shall be held in such form and manner as determined by the Board. The terms and conditions
of Restricted Stock Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Award Agreements need not be identical; provided, however, that each Restricted Stock Award Agreement shall conform
to (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions: 
 (i) Consideration. A Restricted Stock Award may be awarded in consideration for (A) cash, check, bank draft or money order payable to the Company, (B) services to the Company or an Affiliate,
or (C) any other form of legal consideration that may be acceptable to the Board in its sole discretion and permissible under applicable law. 
 (ii) Vesting. Shares of Common Stock awarded under the Restricted Stock Award Agreement may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the Board.

  

 9. 

 (iii) Termination of Participant’s Continuous Service. In the event a
Participant’s Continuous Service terminates, the Company may receive via a forfeiture condition or a repurchase right, any or all of the shares of Common Stock held by the Participant which have not vested as of the date of termination of
Continuous Service under the terms of the Restricted Stock Award Agreement. 
 (iv) Transferability. Rights to acquire
shares of Common Stock under the Restricted Stock Award Agreement shall be transferable by the Participant only upon such terms and conditions as are set forth in the Restricted Stock Award Agreement, as the Board shall determine in its sole
discretion, so long as Common Stock awarded under the Restricted Stock Award Agreement remains subject to the terms of the Restricted Stock Award Agreement. 
 (b) Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The terms and conditions of
Restricted Stock Unit Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical; provided, however, that each Restricted Stock Unit Award Agreement
shall conform to (through incorporation of the provisions hereof by reference in the Agreement or otherwise) the substance of each of the following provisions: 
 (i) Consideration. At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if
any, to be paid by the Participant upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by the Participant for each share of Common Stock subject to a Restricted Stock Unit
Award may be paid in any form of legal consideration that may be acceptable to the Board in its sole discretion and permissible under applicable law. 
 (ii) Vesting. At the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole
discretion, deems appropriate. 
 (iii) Payment. A Restricted Stock Unit Award may be settled by the delivery of
shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit Award Agreement. 
 (iv) Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate,
may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award. 
 (v) Dividend Equivalents. Dividend equivalents may be credited in respect of shares of Common Stock covered by a Restricted
Stock Unit Award, as determined by the Board and contained in the Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such dividend equivalents may be converted into additional shares of Common Stock covered by the Restricted
Stock Unit Award in such manner as determined by the Board. Any additional shares covered by the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all the terms and conditions of the underlying Restricted
Stock Unit Award Agreement to which they relate. 
  

 10. 

 (vi) Termination of Participant’s Continuous Service. Except as otherwise
provided in the applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant’s termination of Continuous Service. 
 (c) Performance Awards. 
 (i) Performance Stock Awards. A Performance Stock Award is a Stock Award that may be granted, may vest, or may be exercised based upon the attainment during a Performance Period of certain Performance
Goals. A Performance Stock Award may, but need not, require the completion of a specified period of Continuous Service. The length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of
whether and to what degree such Performance Goals have been attained shall be conclusively determined by the Committee in its sole discretion. The maximum number of shares that may be granted to any Participant in a calendar year attributable to
Stock Awards described in this Section 6(c)(i) shall not exceed one million two hundred thousand (1,200,000) shares of Common Stock. In addition, to the extent permitted by applicable law and the applicable Award Agreement, the Board may
determine that cash may be used in payment of Performance Stock Awards. 
 (ii) Performance Cash Awards. A
Performance Cash Award is a cash award that may be granted upon the attainment during a Performance Period of certain Performance Goals. A Performance Cash Award may also require the completion of a specified period of Continuous Service. The length
of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained shall be conclusively determined by the Committee in its sole
discretion. The maximum value that may be granted to any Participant in a calendar year attributable to cash awards described in this Section 6(c)(i) shall not exceed five million dollars ($5,000,000). The Board may provide for or, subject to
such terms and conditions as the Board may specify, may permit a Participant to elect for, the payment of any Performance Cash Award to be deferred to a specified date or event. The Committee may specify the form of payment of Performance Cash
Awards, which may be cash or other property, or may provide for a Participant to have the option for his or her Performance Cash Award, or such portion thereof as the Board may specify, to be paid in whole or in part in cash or other property. In
addition, to the extent permitted by applicable law and the applicable Award Agreement, the Board may determine that Common Stock authorized under this Plan may be used in payment of Performance Cash Awards, including additional shares in excess of
the Performance Cash Award as an inducement to hold shares of Common Stock. 
 (d) Other Stock Awards. Other forms of Stock
Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options or stock rights with an exercise price or strike price less than 100% of the Fair Market Value of the
Common Stock at the time of grant) may be granted either alone or in addition to Stock Awards provided for under Section 5 and the preceding provisions of this 

  

 11. 

 
Section 6. Subject to the provisions of the Plan, the Board shall have sole and complete authority to determine the persons to whom and the time or
times at which such Other Stock Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Stock Awards and all other terms and conditions of such Other Stock Awards.

  

	7.	COVENANTS OF THE COMPANY. 

 (a) Availability of Shares. During the terms of the Stock Awards, the Company shall keep available at all times the number of shares of
Common Stock reasonably required to satisfy such Stock Awards. 
 (b) Securities Law Compliance. The Company shall seek to
obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that
this undertaking shall not require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts, the Company is unable to obtain from
any such regulatory commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell
Common Stock upon exercise of such Stock Awards unless and until such authority is obtained. A Participant shall not be eligible for the grant of a Stock Award or the subsequent issuance of Common Stock pursuant to the Stock Award if such grant or
issuance would be in violation of any applicable securities law. 
 (c) No Obligation to Notify. The Company shall have no duty
or obligation to any Participant to advise such holder as to the time or manner of exercising such Stock Award. Furthermore, the Company shall have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration
of a Stock Award or a possible period in which the Stock Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of a Stock Award to the holder of such Stock Award. 
  

	8.	MISCELLANEOUS. 

 (a) Use of
Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock pursuant to Stock Awards shall constitute general funds of the Company. 
 (b) Corporate Action Constituting Grant of Stock Awards. Corporate action constituting a grant by the Company of a Stock Award to any Participant shall be deemed completed as of the date of such
corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the Stock Award is communicated to, or actually received or accepted by, the Participant. 
 (c) Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any
shares of Common Stock subject to such Stock Award unless and until (i) such Participant has satisfied all requirements for exercise of the Stock Award pursuant to its terms, if applicable, and (ii) the issuance of the Common Stock subject
to such Stock Award has been entered into the books and records of the Company. 
  

 12. 

 (d) No Employment or Other Service Rights. Nothing in the Plan, any Stock Award Agreement
or any other instrument executed thereunder or in connection with any Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Stock Award
was granted or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such
Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the
Affiliate is incorporated, as the case may be. 
 (e) Incentive Stock Option $100,000 Limitation. To the extent that the
aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and any
Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or portions thereof that exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock Options, notwithstanding any contrary
provision of the applicable Option Agreement(s). 
 (f) Investment Assurances. The Company may require a Participant, as a
condition of exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant’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 Stock Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own account and not with any
present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (A) the issuance of the shares upon the exercise or acquisition
of Common Stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act, or (B) 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. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock. 
 (g) Withholding Obligations. Unless prohibited by the terms of a Stock Award Agreement, the Company may, in its sole discretion, satisfy any federal, state or local tax withholding obligation relating to
an Award by any of the following means (in addition to the Company’s right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (i) causing the Participant to tender a cash payment;
(ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise 

  

 13. 

 
issuable to the Participant in connection with the Award; provided, however, that no shares of Common Stock are withheld with a value exceeding the
minimum amount of tax required to be withheld by law (or such lower amount as may be necessary to avoid classification of the Stock Award as a liability for financial accounting purposes); (iii) withholding cash from an Award settled in cash;
(iv) withholding payment from any amounts otherwise payable to the Participant; or (v) by such other method as may be set forth in the Award Agreement. 
 (h) Electronic Delivery. Any reference herein to a “written” agreement or document shall include any agreement or document delivered electronically or posted on the Company’s
intranet. 
 (i) Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion, may determine that
the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may establish programs and procedures for deferral elections to be made by Participants. Deferrals by
Participants will be made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the Board may provide for distributions while a Participant is still an employee. The Board is authorized to make deferrals of
Awards and determine when, and in what annual percentages, Participants may receive payments, including lump sum payments, following the Participant’s termination of employment or retirement, and implement such other terms and conditions
consistent with the provisions of the Plan and in accordance with applicable law. 
 (j) Compliance with Section 409A. To
the extent that the Board determines that any Award granted hereunder 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 applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code, including without limitation any applicable guidance that may be issued or amended
after the Effective Date. 
  

	9.	ADJUSTMENTS UPON CHANGES IN COMMON STOCK; OTHER CORPORATE
EVENTS. 

 (a) Capitalization Adjustments. In the event of a Capitalization Adjustment, the
Board shall appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities that may be issued pursuant to
the exercise of Incentive Stock Options pursuant to Section 3(c), (iii) the class(es) and maximum number of securities that may be awarded to any person pursuant to Section 4(c) and 6(c)(i) , and (iv) the class(es) and number of
securities and price per share of stock subject to outstanding Stock Awards. The Board shall make such adjustments, and its determination shall be final, binding and conclusive. 
 (b) Dissolution or Liquidation. Except as otherwise provided in the Stock Award Agreement, in the event of a dissolution or liquidation of
the Company, all outstanding Stock Awards (other than Stock Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s right of repurchase) shall terminate immediately prior to the
completion of such dissolution or liquidation, and the shares of 

  

 14. 

 
Common Stock subject to the Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company
notwithstanding the fact that the holder of such Stock Award is providing Continuous Service, provided, however, that the Board may, in its sole discretion, cause some or all Stock Awards to become fully vested, exercisable and/or no longer
subject to repurchase or forfeiture (to the extent such Stock Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion. 
 (c) Corporate Transaction. The following provisions shall apply to Stock Awards in the event of a Corporate Transaction unless otherwise
provided in the instrument evidencing the Stock Award or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of a Stock Award. 
 (i) Stock Awards May Be Assumed. Except as otherwise stated in the Stock Award Agreement, in the event of a Corporate
Transaction, any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue any or all Stock Awards outstanding under the Plan or may substitute similar stock awards for
Stock Awards outstanding under the Plan (including but not limited to, awards to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the
Company in respect of Common Stock issued pursuant to Stock Awards may be assigned by the Company to the successor of the Company (or the successor’s parent company, if any), in connection with such Corporate Transaction. A surviving
corporation or acquiring corporation (or its parent) may choose to assume or continue only a portion of a Stock Award or substitute a similar stock award for only a portion of a Stock Award. The terms of any assumption, continuation or substitution
shall be set by the Board in accordance with the provisions of Section 2. 
 (ii) Stock Awards Held by Current
Participants. Except as otherwise stated in the Stock Award Agreement, in the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Stock
Awards or substitute similar stock awards for such outstanding Stock Awards, then with respect to Stock Awards that have not been assumed, continued or substituted and that are held by Participants whose Continuous Service has not terminated prior
to the effective time of the Corporate Transaction (referred to as the “Current Participants”), the vesting of such Stock Awards (and, with respect to Options and Stock Appreciation Rights, the time when such Stock Awards may
be exercised) shall be accelerated in full to a date prior to the effective time of such Corporate Transaction (contingent upon the effectiveness of the Corporate Transaction) as the Board shall determine (or, if the Board shall not determine such a
date, to the date that is five (5) days prior to the effective time of the Corporate Transaction), and such Stock Awards shall terminate if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction, and any
reacquisition or repurchase rights held by the Company with respect to such Stock Awards shall lapse (contingent upon the effectiveness of the Corporate Transaction). 
  

 15. 

 (iii) Stock Awards Held by Persons other than Current Participants. Except
as otherwise stated in the Stock Award Agreement, in the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Stock Awards or substitute
similar stock awards for such outstanding Stock Awards, then with respect to Stock Awards that have not been assumed, continued or substituted and that are held by persons other than Current Participants, such Stock Awards shall terminate if not
exercised (if applicable) prior to the effective time of the Corporate Transaction; provided, however, that any reacquisition or repurchase rights held by the Company with respect to such Stock Awards shall not terminate and may continue to
be exercised notwithstanding the Corporate Transaction. 
 (iv) Payment for Stock Awards in Lieu of Exercise.
Notwithstanding the foregoing, in the event a Stock Award will terminate if not exercised prior to the effective time of a Corporate Transaction, the Board may provide, in its sole discretion, that the holder of such Stock Award may not exercise
such Stock Award but will receive a payment, in such form as may be determined by the Board, equal in value, at the effective time, to the excess, if any, of (A) the value of the property the Participant would have received upon the exercise of
the Stock Award (including, at the discretion of the Board, any unvested portion of such Stock Award), over (B) any exercise price payable by such holder in connection with such exercise. 
 (d) Change in Control. A Stock Award may be subject to additional acceleration of vesting and exercisability upon or after a Change in
Control as may be provided in the Stock Award Agreement for such Stock Award or as may be provided in any other written agreement between the Company or any Affiliate and the Participant, but in the absence of such provision, no such acceleration
shall occur. 
 (e) Section 280G Reduction. Unless otherwise provided in an employment or severance rights agreement
between the Company and a Participant, if any payment or benefit (including payments and benefits pursuant to this Plan) that a Participant would receive in connection with a Change in Control from the Company or otherwise
(“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the
Code (the “Excise Tax”), then the Company shall make a payment of only a part of the Payment so that the Participant receives the largest set of payments and benefits possible without the imposition of the Excise Tax (a
“Reduced Payment”). For purposes of this determination, the Company shall cause to be taken into account all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest
applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes). If a Reduced Payment is made, (i) the Participant shall have no rights to any additional
payments and/or benefits constituting the Payment, and (ii) reduction in payments and/or benefits shall occur in the following order: (1) reduction of other cash payments (if any); (2) cancellation of accelerated vesting of equity
awards other than stock options; (3) cancellation of accelerated vesting of stock options; and (4) reduction of other benefits (if any) paid to the Participant. In the event that acceleration of compensation from the Participant’s
equity awards is to be reduced, such acceleration of vesting shall be canceled in the reverse order of the date of grant. 
  

 16. 

 The independent registered public accounting firm engaged by the Company for general
audit purposes as of the day prior to the effective date of the Change in Control shall make all determinations required to be made under this Section 9(e). If the independent registered public accounting firm so engaged by the Company is
serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Company shall appoint a nationally recognized independent registered public accounting firm to make the determinations required hereunder. The
Company shall bear all expenses with respect to the determinations by such independent registered public accounting firm required to be made hereunder. Any good faith determinations of the accounting firm made hereunder shall be final, binding and
conclusive upon the Company and the Participant. 
 This Section 9(e) shall supersede the application of Article 17 of the Plan as in
existence prior to the Effective Date for any Participant who accepts an Award under this Plan on or after the Effective Date unless expressly provided otherwise in the applicable Award Agreement. 
  

	10.	TERMINATION OR SUSPENSION OF THE PLAN. 

 (a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless terminated sooner by the Board pursuant to
Section 2(b)(v), the Plan shall automatically terminate on the day before the tenth (10th) anniversary of the earlier of (i) the date the Plan is amended and restated by the Board, or (ii) the date the Plan, as amended and
restated, is approved by the stockholders of the Company. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated. 
 (b) No Impairment of Rights. Suspension or termination of the Plan shall not impair rights and obligations under any Award granted while the Plan is in effect except with the written consent of the
affected Participant. 
  

	11.	EFFECTIVE DATE OF PLAN. 

 This Plan shall become effective on the Effective Date. 
  

	12.	CHOICE OF LAW. 

 The law of the State of Delaware shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to that state’s conflict of laws rules. 
 13. DEFINITIONS. As used in the Plan, the following definitions shall apply to the capitalized terms indicated below: 
 (a) “Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company as
such terms are defined in Rule 405 of the Securities Act. The Board shall have the authority to determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition. 
 (b) “Award” means a Stock Award or a Performance Cash Award. 
 (c) “Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions
of an Award. 
  

 17. 

 (d) “Board” means the Board of Directors of the Company. 
 (e) “Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Common
Stock subject to the Plan or subject to any Stock Award after the Effective Date without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or similar transaction. Notwithstanding the foregoing, the conversion of any convertible securities of the Company
shall not be treated as a Capitalization Adjustment. 
 (f) “Cause” means with respect to a Participant, the
occurrence of any of the following events: (a) the unauthorized use or disclosure of the confidential information or trade secrets of the Company, which use or disclosure causes material harm to the Company, (b) conviction of, or a plea of
“guilty” or “no contest” to, a felony under the laws of the United States or any State thereof, (c) gross negligence, (d) willful misconduct or (e) a failure to perform assigned duties that continues after the
Participant has received written notice of such failure from the Board or its designee. The foregoing, however, shall not be deemed an exclusive list of all acts or omissions that the Company (or any Affiliate employing the Participant) may consider
as grounds for the discharge of the Participant without Cause. The determination that a termination of the Participant’s Continuous Service is either for Cause or without Cause shall be made by the Company in its sole discretion. Any
determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by such Participant shall have no effect upon any determination of the rights or obligations
of the Company or such Participant for any other purpose. 
 Notwithstanding the foregoing or any other provision of this Plan, the
definition of Cause (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant shall supersede the foregoing definition with respect to Awards subject to such agreement; provided,
however, that if no definition of Cause or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply. 
 (g) “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events: 
 (i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than fifty
percent (50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
(A) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary
purpose of which is to obtain financing for the Company through the issuance of equity securities or (B) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated
percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the
operation of this sentence) as a 

  

 18. 

 
result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional
voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control
shall be deemed to occur; 
 (ii) there is consummated a merger, consolidation or similar transaction involving
(directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either
(A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than fifty percent
(50%) of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting
securities of the Company immediately prior to such transaction; 
 (iii) the stockholders of the Company approve or
the Board approves a plan of complete dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company shall otherwise occur, except for a liquidation into a parent corporation; 
 (iv) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated
assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than fifty percent (50%) 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 outstanding voting securities of the Company immediately prior to such sale, lease,
license or other disposition; or 
 (v) individuals who, on the date the Plan is adopted by the Board, are members of
the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board
member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of this Plan, be considered as a member of the Incumbent Board. 
 Notwithstanding the foregoing or any other provision of this Plan, (A) the term Change in Control shall not include a sale of assets, merger or
other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the
Participant shall supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement,
the foregoing definition shall apply. 
 (h) “Code” means the Internal Revenue Code of 1986, as amended, as
well as any applicable regulations and guidance thereunder. 
  

 19. 

 (i) “Committee” means a committee of one or more Directors to whom
authority has been delegated by the Board in accordance with Section 2(c). 
 (j) “Common Stock” means
the common stock of the Company. 
 (k) “Company” means DayStar Technologies, Inc., a Delaware corporation.

 (l) “Consultant” means any person, including an advisor, who is (i) engaged by the Company or an
Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services. However, service solely as a Director, or
payment of a fee for such service, shall not cause a Director to be considered a “Consultant” for purposes of the Plan. Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if a Form S-8 Registration
Statement under the Securities Act is available to register the sale of the Company’s securities to such person. 
 (m)
“Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the
Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the
Participant’s service with the Company or an Affiliate, shall not terminate a Participant’s Continuous Service; provided, however, if the Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as
determined by the Board in its sole discretion, such Participant’s Continuous Service shall be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. To the extent permitted by law, the Board or the chief
executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of (i) any leave of absence approved by the Board or Chief Executive Officer, including
sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting
in a Stock Award only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law. 
 (n) “Corporate Transaction” means the occurrence, in a single transaction or in a series of related transactions, of any
one or more of the following events: 
 (i) the consummation of a sale or other disposition of all or substantially
all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its Subsidiaries; 
 (ii) the consummation of a sale or other disposition of at least ninety percent (90%) of the outstanding securities of the Company; 
 (iii) the consummation of a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or 
  

 20. 

 (iv) the consummation of a merger, consolidation or similar transaction following
which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction
into other property, whether in the form of securities, cash or otherwise. 
 (o) “Covered Employee” shall
have the meaning provided in Section 162(m)(3) of the Code. 
 (p) “Director” means a member of the
Board. 
 (q) “Disability” means, with respect to a Participant, the inability of such Participant to engage
in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve
(12) months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code, and shall be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances. 
 (r) “Effective Date” means September 22, 2008, the date of the annual meeting of the Company’s stockholders that
occurred in 2008 at which the Plan, as amended and restated, was approved by the Company’s stockholders at such meeting. 
 (s)
“Employee” means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, shall not cause a Director to be considered an “Employee” for
purposes of the Plan. 
 (t) “Entity” means a corporation, partnership, limited liability company or other
entity. 
 (u) “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
 (v) “Exchange Act Person” means any natural person, Entity or “group” (within the meaning of Section 13(d)
or 14(d) of the Exchange Act), except that “Exchange Act Person” shall not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or
other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an
Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or “group” (within the meaning of
Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s
then outstanding securities. 
  

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 (w) “Fair Market Value” means, as of any date, the value of the Common
Stock determined as follows: 
 (i) If the Common Stock is listed on any established stock exchange or traded on any
established market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date
of determination, as reported in a source the Board deems reliable. 
 (ii) Unless otherwise provided by the Board, if
there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. 
 (iii) In the absence of such markets for the Common Stock, the Fair Market Value shall be determined by the Board in good faith and
in a manner that complies with Sections 409A and 422 of the Code. 
 (x) “Incentive Stock Option” means an
option granted pursuant to Section 5 of the Plan that is intended to be, and qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code. 
 (y) “Non-Employee Director” means a Director who either (i) is not a current employee or officer of the Company or an
Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure would be required under
Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for
purposes of Rule 16b-3. 
 (z) “Nonstatutory Stock Option” means any option granted pursuant to Section 5
of the Plan that does not qualify as an Incentive Stock Option. 
 (aa) “Officer” means a person who is an
officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 
 (bb) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan. 
 (cc) “Option Agreement” means a written agreement between the Company and an Optionholder evidencing the terms and
conditions of an Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan. 
 (dd)
“Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option. 
 (ee) “Other Stock Award” means an award based in whole or in part by reference to the Common Stock which is granted
pursuant to the terms and conditions of Section 6(c). 
  

 22. 

 (ff) “Other Stock Award Agreement” means a written agreement between the
Company and a holder of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each Other Stock Award Agreement shall be subject to the terms and conditions of the Plan. 
 (gg) “Outside Director” means a Director who either (i) is not a current employee of the Company or an
“affiliated corporation” (within the meaning of Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated corporation” who receives compensation for prior
services (other than benefits under a tax-qualified retirement plan) during the taxable year, has not been an officer of the Company or an “affiliated corporation,” and does not receive remuneration from the Company or an “affiliated
corporation,” either directly or indirectly, in any capacity other than as a Director, or (ii) is otherwise considered an “outside director” for purposes of Section 162(m) of the Code. 
 (hh) “Own,” “Owned,” “Owner,” “Ownership” A
person or Entity shall be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities. 
 (ii) “Participant” means a person to whom an Award is granted pursuant to the Plan or, if applicable, such other person
who holds an outstanding Stock Award. 
 (jj) “Performance Cash Award” means an award of cash granted pursuant
to the terms and conditions of Section 6(d)(ii). 
 (kk) “Performance Criteria” means the one or more
criteria that the Board shall select for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that shall be used to establish such Performance Goals may be based on any one of, or combination of, the
following as determined by the Board: (i) earnings per share; (ii) earnings before interest, taxes and depreciation; (iii) earnings before interest, taxes, depreciation and amortization; (iv) total stockholder return;
(v) return on equity; (vi) return on assets, investment, or capital employed; (vii) operating margin; (viii) margin; (ix) operating income; (x) income (before or after taxes); (xi) operating income;
(xii) operating income after tax; (xiii) pre-tax profit; (xiv) operating cash flow; (xv) sales or revenue targets; (xvi) increases in revenue or product revenue; (xvii) expenses and cost reduction goals;
(xviii) improvement in or attainment of working capital levels; (xix) economic value added (or an equivalent metric); (xx) market share; (xxi) cash flow; (xxii) cash flow per share; (xxiii) share price performance;
(xxiv) debt reduction; (xxv) implementation or completion of projects or processes; (xxvi) customer satisfaction; (xxvii) stockholders’ equity; (xxviii) capital expenditures; (xxix) debt levels; and (xxx) to
the extent that an Award is not intended to comply with Section 162(m) of the Code, other measures of performance selected by the Board. The Board shall, in its sole discretion, define the manner of calculating the Performance Criteria it
selects to use for such Performance Period. 
 With respect to any criteria listed above, the Board may adjust the definition
of the criteria by providing that such criteria shall apply on either a net or gross basis, if applicable, and excluding elements of the criteria or including an additional element, provided the achievement or non-achievement of the resulting
criteria can be objectively determined by the financial information collected by the Company in the preparation of its financial reports. For example, the income criteria could be net income, and modified to exclude the net income of a division of
the Company. Also by way of example, 

  

 23. 

 
the earnings before interest, taxes, depreciation and amortization could be modified to take into account one of the aforementioned excluded elements in the
calculation of this criterion. Furthermore, a criteria could be created that compares the Company’s performance in a criteria listed above to the approved budget for such criteria or to the performance over the same performance period of a
pre-selected group of companies or a pre-selected index. Notwithstanding the foregoing, the Committee must select criteria that collectively satisfy the requirements of performance-based compensation for the purposes of Section 162(m),
including by establishing the targets at a time when the performance relative to such targets is substantially uncertain. Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement
as specified in the Stock Award Agreement or the written terms of a Performance Cash Award. The Board shall, in its sole discretion, define the manner of calculating the Performance Criteria it selects to use for such Performance Period. 

(ll) “Performance Goals” means, for a Performance Period, the one or more goals established by the Board for the
Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, 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 Board is authorized to determine whether, when calculating the attainment of Performance Goals for a
Performance Period: (i) to exclude restructuring and/or other 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 standards; (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 Board retains the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals. 
 (mm) “Performance Period” means the period of time selected by the Board over which the attainment of one or more
Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of a Stock Award or a Performance Cash Award. Performance Periods may be of varying and overlapping duration, at the sole discretion of
the Board. 
 (nn) “Performance Stock Award” means a Stock Award granted under the terms and conditions of
Section 6(c)(i). 
 (oo) “Plan” means this DayStar Technologies, Inc. 2006 Amended and Restated Equity
Incentive Plan. 
 (pp) “Resignation for Good Reason” means the Participant has resigned from all positions he
or she then-holds with the Company (or any successor thereto): 
 (i) because one of the following actions has been
taken: 
 (1) there is a material diminution of Participant’s authority, including but not limited to
decision-making authority, duties, or responsibilities; 
 (2) there is a material reduction in the Participant’s
annual base salary; 
  

 24. 

 (3) the Participant is required to relocate his or her primary work location to a
facility or location that would increase the Participant’s one way commute distance by more than twenty-five (25) miles from the Participant’s primary work location as of immediately prior to such change; 
 (4) there is a material diminution in the authority, duties, or responsibilities of the supervisor to whom
the Participant is required to report; 
 (5) there is a material diminution in the budget over which the
Participant retains authority; 
 (6) the Company materially breaches its obligations under this Plan or any
then-effective written employment agreement with the Participant; or 
 (7) any acquirer, successor or assign of the
Company fails to assume and perform, in all material respects, the obligations of the Company hereunder; and 
 (ii)
the Participant provides written notice to the Company’s General Counsel within sixty (60) days immediately following such action; and 
 (iii) such action is not remedied by the Company within thirty (30) days following the Company’s receipt of such written notice; and 
 (iv) the Participant’s resignation is effective not later than sixty (60) days after the expiration of such thirty
(30) day cure period. 
 (qq) “Restricted Stock Award” means an award of shares of Common Stock which is
granted pursuant to the terms and conditions of Section 6(a). 
 (rr) “Restricted Stock Award Agreement”
means a written agreement between the Company and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. Each Restricted Stock Award Agreement shall be subject to the terms and conditions of the
Plan. 
 (ss) “Restricted Stock Unit Award” means a right to receive shares of Common Stock which is granted
pursuant to the terms and conditions of Section 6(b). 
 (tt) “Restricted Stock Unit Award Agreement”
means a written agreement between the Company and a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock Unit Award Agreement shall be subject to the terms and
conditions of the Plan. 
 (uu) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time. 
 (vv) “Securities Act” means the Securities Act of
1933, as amended. 
  

 25. 

 (ww) “Stock Appreciation Right” or “SAR” means a
right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 5. 
 (xx)
“Stock Appreciation Right Agreement” means a written agreement between the Company and a holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation
Right Agreement shall be subject to the terms and conditions of the Plan. 
 (yy) “Stock Award” means any
right to receive Common Stock granted under the Plan, including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right, a Performance Stock Award or any Other Stock
Award. 
 (zz) “Stock Award Agreement” means a written agreement between the Company and a Participant
evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan. 
 (aaa) “Subsidiary” means, with respect to the Company, (i) any corporation of which more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a majority of
the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly
or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution)
of more than fifty percent (50%). 
 (bbb) “Ten Percent Stockholder” means a person who Owns (or is deemed to
Own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Affiliate. 
  

 26.

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