Document:

exv10w38

 

Exhibit 10.38

January 31, 2007

Dear Ms. McAlister

When executed by all the parties below this letter will serve as an extension until July 31,
2007 of the Note Payable of Remote Knowledge, Inc. (“RKI”), dated July 25, 2006 ,and
due January 31, 2007 for $250,000 issued to Lewie Ventures, LP ( “Holder”)
(the “Note”).

As consideration for this 6 month extension RKI will issue to Holder 83,333 shares of its
common stock. All terms of the Note except the due date shall remain unchanged and in full force
and effect.

	 	 	 	 	 	 	 	 	 	 	 
	Agreed and Accepted	 	 	 	Agreed and Accepted	 	 
	Lewie Ventures, LP (Holder)	 	 	 	Remote Knowledge, Inc.	 	 
	by

	 	 
	 	 	 	by
	 	/s/ Henry Houston
 

	 	 
		 	 	 	 	 	Henry Houston its CFO	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	/s/ Dan Granader	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Dan Granader (Guarantor)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	/s/ Alan Granader	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Alan Granader (Guarantor)exv10w39

 

Exhibit 10.39

March 15, 2007

Dear Mr. Lord

When executed by all the parties below this letter will serve as an extension until September
15, 2007 of the Note Payable of Remote Knowledge, Inc. (“RKI”), dated September 8,
2006 ,and due March 15, 2007 for $200,000 issued to Ralph H. Lord (
“Holder”) (the “Note”).

As consideration for this 6 month extension RKI will issue to Holder 66,667 shares of its
common stock. All terms of the Note except the due date shall remain unchanged and in full force
and effect.

	 	 	 	 	 	 	 	 	 
	Agreed and Accepted
	 	Agreed and Accepted	 	 
	by	 	 	 	Remote Knowledge, Inc.	 	 
	 

	 	 

	 	by
	 	/s/ Henry Houston 
	 	 
	 

	 	 	 	
Henry Houston its CFO
	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	/s/ Dan Granader	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Dan Granader (Guarantor)	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	/s/ Alan Granader	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Alan Granader (Guarantor)exv10w10

 

Exhibit 10.10

AMENDED AND RESTATED

STOCK OPTION PLAN

 OF 

UCI HOLDCO, INC.

     The Stock Option Plan of UCI Acquisition Holdings, Inc. was originally adopted by the Board of
Directors of UCI Acquisition Holdings, Inc., a Delaware corporation (“UCI Acquisition”), on June
20, 2003, as subsequently amended and restated. On May 25, 2006, UCI Acquisition became a
wholly-owned subsidiary of UCI Holdco, Inc., a Delaware corporation (the “Company”) (the
“Reorganization”). In furtherance of the purposes of the plan and in connection with the
Reorganization, said plan is hereby adopted as amended and restated by the Board of Directors of
the Company as of the date hereof. This amendment constitutes a complete amendment, restatement
and continuation of the Amended and Restated Stock Option Plan of UCI Acquisition Holdings, Inc.

     The purposes of this Plan are as follows:

(1) To further the growth, development and financial success of the Company and its
Subsidiaries (as defined herein), by providing additional incentives to employees,
consultants and directors of the Company and its Subsidiaries who have been or will be
given responsibility for the management or administration of the Company’s (or one of its
Subsidiaries’) business affairs, by assisting them to become owners of Common Stock,
thereby benefiting directly from the growth, development and financial success of the
Company and its Subsidiaries.

(2) To enable the Company (and its Subsidiaries) to obtain and retain the services of the
type of professional, technical and managerial employees, consultants and directors
considered essential to the long-range success of the Company (and its Subsidiaries) by
providing and offering them an opportunity to become owners of Common Stock under Options,
including, in the case of employees, Options that are intended to qualify as “incentive
stock options” under Section 422 of the Code (as defined herein).

ARTICLE I.

DEFINITIONS

     Whenever the following terms are used in this Plan, they shall have the meaning specified
below unless the context clearly indicates to the contrary. The singular pronoun shall include the
plural where the context so indicates.

 

 

     Section 1.1 Affiliate

     “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with, such Person where “control” shall have
the meaning given such term under Rule 405 of the Securities Act. For the purpose of this Plan,
Affiliates of Carlyle Partners III, L.P., a Delaware limited partnership shall include all Person
directly or indirectly controlled by TC Group, LLC, a Delaware limited liability.

     Section 1.2 Board

     “Board” shall mean the Board of Directors of the Company.

     Section 1.3 CEO

     “CEO” shall mean Chief Executive Officer of the Company.

     Section 1.4 Code

     “Code” shall mean the Internal Revenue Code of 1986, as amended.

     Section 1.5 Committee

     “Committee” shall mean the Committee appointed as provided in Section 6.1.

     Section 1.6 Common Stock

     “Common Stock” shall mean the common stock, par value $0.01 per share, of the Company or any
of its Subsidiaries.

     Section 1.7 Company

     “Company” shall mean UCI Holdco, Inc. In addition, “Company” shall mean any corporation
assuming, or issuing new employee stock options in substitution for, Incentive Stock Options
outstanding under the Plan in a transaction to which Section 424(a) of the Code applies.

     Section 1.8 Consultant

     “Consultant” shall mean any Person who has entered into a consulting agreement with the
Company or any of its Subsidiaries.

     Section 1.9 Corporate Event

     “Corporate Event” shall mean, as determined by the Committee (or by the Board, in the case of
Options granted to Independent Directors) in its sole discretion, any transaction or event
described in Section 7.1(a) or any unusual or nonrecurring transaction or event affecting the
Company, any Subsidiary of the Company, or the financial statements of the Company or any
Subsidiary, or changes in applicable laws, regulations, or accounting principles.

 

 

     Section 1.10 Director

     “Director” shall mean a member of the Board.

     Section 1.11 Eligible Representative

     “Eligible Representative” for an Optionee shall mean such Optionee’s personal representative
or such other person as is empowered under the deceased Optionee’s will or the then applicable laws
of descent and distribution to represent the Optionee hereunder.

     Section 1.12 Employee

     “Employee” shall mean any employee (as defined in accordance with the regulations and revenue
rulings then applicable under Section 3401(c) of the Code) of the Company or one of its
Subsidiaries, whether such employee is so employed at the time this Plan is adopted or becomes so
employed subsequent to the adoption of this Plan.

     Section 1.13 Exchange Act

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

     Section 1.14 Incentive Stock Option

     “Incentive Stock Option” shall mean an Option which qualifies under Section 422 of the Code
and is designated as an Incentive Stock Option by the Committee.

     Section 1.15 Independent Director

     “Independent Director” shall mean a member of the Board who is not an Employee of the Company
or any of its Subsidiaries.

     Section 1.16 Liquidity Event

     “Liquidity Event” shall mean the consummation of the sale, transfer, conveyance or other
disposition in one or a series of related transactions, of the equity securities of the Company or
its successor held by the Principal Stockholder(s) such that immediately following such transaction
(or transactions), (i) the value (at original cost) of all equity securities held by all of the
Principal Stockholder(s) is in the aggregate less than 20% of the equity securities (at original
cost) held by the Principal Stockholder(s) as of June 20, 2003 or (ii) any person or group of
Persons (other than the Principal Stockholders and their Affiliates) beneficially owing more than
50% of the then outstanding shares of Common Stock.

 

 

     Section 1.17 Non-Qualified Stock Option

     “Non-Qualified Stock Option” shall mean an Option which is not an “incentive stock option”
under Section 422 of the Code and shall include an Option which is designated as a Non-Qualified
Stock Option by the Committee.

     Section 1.18 Officer

     “Officer” shall mean an officer of the Company or any of its Subsidiaries, as defined in Rule
16a-l(f) under the Exchange Act, as such Rule may be amended in the future.

     Section 1.19 Option

     “Option” shall mean an option granted under the Plan to purchase Common Stock. “Options”
includes both Incentive Stock Options and Non-Qualified Stock Options.

     Section 1.20 Optionee

     “Optionee” shall mean an Employee, Consultant or Independent Director to whom an Option is
granted under the Plan.

     Section 1.21 Person

     “Person” shall mean an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint venture, governmental
authority or other entity of whatever nature.

     Section 1.22 Plan 

     “Plan” shall mean this Amended and Restated Stock Option Plan of UCI Acquisition Holdings,
Inc.

     Section 1.23 Principal Stockholder(s)

     “Principal Stockholder(s)” shall mean Carlyle Partners III, L.P. or any of its Affiliates to
which (a) Carlyle Partners III, L.P. or any other Person transfers Common Stock, or (b) the Company
issues Common Stock.

     Section 1.24 Secretary

     “Secretary” shall mean the Secretary of the Company.

     Section 1.25 Securities Act

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

     Section 1.26 Stockholders Agreement

 

 

     “Stockholders Agreement” shall mean that certain agreement by and between the Optionee and the
Company which contains certain restrictions and limitations applicable to the shares of Common
Stock acquired upon Option exercise (and to other shares of Common Stock, if any, held by the
Optionee during the term of such agreement). The Board, in its discretion, shall determine the
terms of the Stockholders Agreement and may amend the terms thereof from time to time. If the
Optionee is not a party to a Stockholders Agreement at the time of exercise of the Option (or any
portion thereof), the exercise of the Option shall be subject to the condition that the Optionee
enter a Stockholders Agreement with the Company.

     Section 1.27 Subsidiary

     “Subsidiary” of any entity shall mean any corporation in an unbroken chain of corporations
beginning with such entity if each of the corporations other than the last corporation in the
unbroken chain then owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

     Section 1.28 Termination of Directorship

     “Termination of Directorship” shall mean the time when an Optionee who is an Independent
Director ceases to be a Director for any reason, including but not by way of limitation, a
termination by resignation, failure to be elected or appointed, death or retirement. The Board, in
its sole discretion, shall determine the effect of all matters and questions relating to
Termination of Directorship.

     Section 1.29 Termination of Employment

     “Termination of Employment” shall mean the time when the employee-employer relationship
between an Optionee and the Company (or one of its Subsidiaries) is terminated for any reason, with
or without cause, including, but not by way of limitation, a termination by resignation, discharge,
death or retirement, but excluding a termination where there is a simultaneous reemployment by the
Company (or one of its Subsidiaries). The Committee shall determine the effect of all matters and
questions relating to Termination of Employment, including, but not by way of limitation, the
question of whether a Termination of Employment resulted from a discharge for good cause, and all
questions of whether a particular leave of absence constitutes a Termination of Employment;
provided, however, that, with respect to Incentive Stock Options, a leave of absence shall
constitute a Termination of Employment if, and to the extent that, such leave of absence interrupts
employment for the purposes of Section 422(a)(2) of the Code and the then applicable regulations
and revenue rulings under Section 442(a)(2) of the Code.

 

 

ARTICLE II.

SHARES SUBJECT TO PLAN

     Section 2.1 Shares Subject to Plan

     The shares of stock subject to Options shall be shares of Common Stock. Subject to Section
7.1, the aggregate number of such shares which may be issued under this Plan is 450,000.

     Section 2.2 Unexercised Options

     If any Option (or portion thereof) expires or is canceled without having been fully exercised,
the number of shares subject to such Option (or portion thereof) but as to which such Option was
not exercised prior to its expiration or cancellation may again be optioned hereunder, subject to
the limitations of Section 2.1.

ARTICLE III.

GRANTING OF OPTIONS AND SALE OF STOCK

     Section 3.1 Eligibility

     Any Employee of the Company or one of its Subsidiaries, any Independent Director and any
Consultant shall be eligible to be granted Options, except as provided in Section 3.2.

     Section 3.2 Qualification of Incentive Stock Options

     No Incentive Stock Option shall be granted to any person who is not an Employee.

     Section 3.3 Granting of Options to Employees or Consultants

(a) The Committee shall from time to time:

(i) Select from among the Employees or Consultants (including those to
whom Options have been previously granted under the Plan) such of them as
in its opinion should be granted Options;

(ii) Determine the number of shares to be subject to such Options granted
to such Employees or Consultants, and determine whether such Options are
to be Incentive Stock Options or Non-Qualified Stock Options; and

(iii) Determine the terms and conditions of such Options, consistent with
the Plan.

(b) Upon the selection of an Employee or Consultant to be granted an Option
pursuant to Section 3.3(a), the Committee shall instruct the Secretary or another
authorized Officer of the Company to issue such Option and may impose such
conditions on the grant of such Option as it
deems appropriate. Without limiting the generality of the preceding sentence, the
Committee may require as a condition to the grant of an

 

 

Option to an Employee or
Consultant that the Employee or Consultant surrender for cancellation some or all
of the unexercised Options which have been previously granted to him or her. An
Option, the grant of which is conditioned upon such surrender, may have an Option
price lower (or higher) than the Option price of the surrendered Option, may cover
the same (or a lesser or greater) number of shares as the surrendered Option, may
contain such other terms as the Committee deems appropriate and shall be
exercisable in accordance with its terms, without regard to the number of shares,
price, period of exercisability or any other term or condition of the surrendered
Option.

     Section 3.4 Granting of Option to Independent Directors

(a) The Board shall from time to time:

(i) Select from among the Independent Directors (including those to whom
Options have previously been granted under the Plan) such of them as in
its opinion should be granted Options;

(ii) Determine the number of shares to be subject to such Options granted
to such selected Independent Directors; and

(iii) Determine the terms and conditions of such Options, consistent with
the Plan; provided, however, that all Options granted to Independent
Directors shall be Non-Qualified Stock Options.

(b) Upon the selection of an Independent Director to be granted an Option pursuant
to Section 3.4(a), the Board shall instruct the Secretary or another authorized
Officer of the Company to issue such Option and may impose such conditions on the
grant of such Option as it deems appropriate. Without limiting the generality of
the preceding sentence, the Board may require as a condition to the grant of an
Option to an Independent Director that the Independent Director surrender for
cancellation some or all of the unexercised Options which have been previously
granted to him or her. An Option the grant of which is conditioned upon such
surrender may have an Option price lower (or higher) than the Option price of the
surrendered Option, may cover the same (or a lesser or greater) number of shares as
the surrendered Option, may contain such other terms as the Board deems appropriate
and shall be exercisable in accordance with its terms, without regard to the number
of shares, price, period of exercisability or any other term or condition of the
surrendered Option.

 

 

     Section 3.5 Sale of Common Stock to Employees, Consultants or Independent Directors

     The Committee, acting in its sole discretion, may from time to time designate one or more
Employees, Consultants or Independent Directors to whom an offer to sell shares of Common Stock
shall be made and the terms and conditions thereof, provided, however, that the price per share of
Common Stock shall not be less than the fair market value (as determined in accordance with Section
4.3(b) hereof) thereof on the date any such offer is accepted. Each share of Common Stock sold to
an Employee, Consultant or Independent Director under this Section 3.5 shall be evidenced by a
written stock subscription form approved by an authorized Officer of the Company which shall be
consistent with the terms hereof. Any Common Stock sold under this Section 3.5 shall be subject to
the same limitations, restrictions and administration hereunder as would apply to any Common Stock
issued pursuant to the exercise of an Option under this Plan including but not limited to
conditions and restrictions set forth in Sections 5.4 and 5.6 hereunder.

ARTICLE IV.

TERMS OF OPTIONS

     Section 4.1 Stock Option Agreement

     Each Option shall be evidenced by a written Stock Option Agreement, which shall be executed by
the Optionee and an authorized Officer of the Company and which shall contain such terms and
conditions as the Committee (or the Board, in the case of Options granted to Independent Directors)
shall determine, consistent with the Plan. Stock Option Agreements evidencing Incentive Stock
Options shall contain such terms and conditions as may be necessary to qualify such Options as
“incentive stock options” under Section 422 of the Code.

     Section 4.2 Exercisability of Options

(a) Each Option shall become exercisable according to the terms of the applicable
Stock Option Agreement; provided, however, that by a resolution adopted after an
Option is granted the Committee (or the Board, in the case of Options granted to
Independent Directors) may, on such terms and conditions as it may determine to be
appropriate, accelerate the time at which such Option or any portion thereof may be
exercised.

(b) Except as otherwise provided in the applicable Stock Option Agreement, no
portion of an Option which is unexercisable at Termination of Employment,
Termination of Directorship or Termination of Consultancy, as applicable, shall
thereafter become exercisable.

(c) To the extent that the aggregate fair market value of stock with respect to
which “incentive stock options” (within the meaning of Section 422 of the Code, but
without regard to Section 422(d) of the Code) are exercisable for the first time by
an Optionee during any calendar year
(under the Plan and all other incentive stock option plans of the Company or any
Subsidiary thereof) exceeds $100,000, such options shall be treated
and taxable as
Non-Qualified Stock Options.

 

 

The rule set forth in the preceding sentence shall be
applied by taking options into account in the order in which they were granted, and
the stock issued upon exercise of options shall designate whether such stock was
acquired upon exercise of an Incentive Stock Option. For purposes of these rules,
the fair market value of stock shall be determined as of the date of grant of the
Option granted with respect to such stock.

     Section 4.3 Option Price

(a) The price of the shares subject to each Option shall be set by the Committee
(or the Board, in the case of Options granted to Independent Directors); provided,
however, that in the case of an Incentive Stock Option, the price per share shall
be not less than 100% of the fair market value of such shares on the date such
Option is granted; and that in the case of an individual then owning (within the
meaning of Section 424(d) of the Code) more than 10% of the total combined voting
power of all classes of stock of the Company, the price per share shall not be less
than 110% of the fair market value of such shares on the date such Incentive Stock
Option is granted.

(b) For purposes of the Plan, the fair market value of a share of Common Stock as
of a given date shall be:

(i) if the Common Stock is listed on one or more National Securities
Exchanges (within the meaning of the Exchange Act), each share of Common
Stock shall be valued at the average closing price of a share of such
class of Common Stock on the principal exchange on which such shares are
then trading, on the twenty trading days immediately preceding such date;

(ii) if the Common Stock is not traded on a National Securities Exchange
but is quoted on NASDAQ or a successor quotation system and the Common
Stock is listed as a National Market Issue under the NASD National Market
System, each share of Common Stock shall be valued at the average of the
last sales price on each of the twenty trading days immediately preceding
such date as reported by NASDAQ or such successor quotation system; or

(iii) if the class of Common Stock is not publicly traded on a National
Securities Exchange and is not quoted on NASDAQ or a successor quotation
system, the fair market value of the Common Stock shall be determined in
good faith by the Committee.

 

 

     Section 4.4 Expiration of Options

     No Option may be exercised to any extent by anyone after the first to occur of the following
events:

(a) The expiration of ten years from the date the Option was granted; or

(b) With respect to an Incentive Stock Option in the case of an Optionee owning
(within the meaning of Section 424(d) of the Code), at the time the Incentive Stock
Option was granted, more than 10% of the total combined voting power of all classes
of stock of the Company or any subsidiary corporation, the expiration of five years
from the date the Incentive Stock Option was granted.

ARTICLE V.

EXERCISE OF OPTIONS

     Section 5.1 Person Eligible to Exercise

     During the lifetime of the Optionee, only he or she may exercise an Option (or any portion
thereof granted to him or her; provided, however, that the Optionee’s Eligible Representative may
exercise his or her Option during the period of the Optionee’s disability (as defined in Section
22(e)(3) of the Code) notwithstanding that an Option so exercised may not qualify as an Incentive
Stock Option. After the death of the Optionee, any exercisable portion of an Option may, prior to
the time when such portion becomes unexercisable under the Plan or the applicable Stock Option
Agreement, be exercised by his or her Eligible Representative.

     Section 5.2 Partial Exercise

     At any time and from time to time prior to the time when the Option becomes unexercisable
under the Plan or the applicable Stock Option Agreement, the exercisable portion of an Option may
be exercised in whole or in part; provided, however, that the Company shall not be required to
issue fractional shares and the Committee (or the Board, in the case of Options granted to
Independent Directors) may, by the terms of the Option, require any partial exercise to exceed a
specified minimum number of shares.

     Section 5.3 Manner of Exercise

     An exercisable Option, or any exercisable portion thereof, may be exercised solely by delivery
to the Secretary of all of the following prior to the time when such Option or such portion becomes
unexercisable under the Plan or the applicable Stock Option Agreement:

(a) Notice in writing signed by the Optionee or his or her Eligible Representative,
stating that such Option or portion is exercised, and specifically stating the
number of shares with respect to which the Option is being exercised;

(b) A copy of the Stockholders Agreement signed by the Optionee or Eligible
Representative, as applicable;

 

 

(c) Full
payment (in cash or by personal, certified, or bank cashier check) for the shares with respect to which such Option or portion is thereby exercised; or

(i) With the consent of the Committee (or the Board, in the case of
Options to Independent Directors), (A) shares of Common Stock owned by the
Optionee duly endorsed for transfer to the Company; or (B) except with
respect to Incentive Stock Options, shares of the Common Stock issuable to
the Optionee upon exercise of the Option, with a fair market value (as
determined under Section 4.3(b)) on the date of Option exercise equal to
the aggregate Option price of the shares with respect to which such Option
or portion is thereby exercised; or

(ii) With the consent of the Committee (or the Board, in the case of
Options granted to Independent Directors), any combination of the
consideration listed in this subsection (c);

(d) The payment to the Company (in cash or by personal, certified or bank cashier
or by any other means of payment approved by the Committee) of all amounts
necessary to satisfy any and all federal, state and local tax withholding
requirements arising in connection with the exercise of the Option;

(e) Such representations and documents as the Committee (or the Board, in the case
of Options granted to Independent Directors) deems necessary or advisable to effect
compliance with all applicable provisions of the Securities Act and any other
federal or state securities laws or regulations. The Committee (or the Board, in
the case of Options granted to Independent Directors) may, in its sole discretion,
also take whatever additional actions it deems appropriate to effect such
compliance including, without limitation, placing legends on share certificates and
issuing stop-transfer orders to transfer agents and registrars; and

(f) In the event that the Option or portion thereof shall be exercised pursuant to
Section 5.1 by any person or persons other than the Optionee, appropriate proof of
the right of such person or persons to exercise the Option or portion thereof.

     Section 5.4 Conditions to Issuance of Stock Certificates

     The shares of stock issuable and deliverable upon the exercise of an Option, or any portion
thereof, may be either previously authorized but unissued shares or issued shares which have then
been reacquired by the Company. A certificate of shares will be
delivered to the Optionee at the Company’s principal place of business within thirty days of
receipt by the Company of the written notice and payment, unless an earlier date is agreed upon.

 

 

Notwithstanding the above, the Company shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option or portion thereof prior
to fulfillment of all of the following conditions:

(a) The admission of such shares to listing on any and all stock exchanges on which
such class of stock is then listed;

(b) The completion of any registration or other qualification of such shares under
any state or federal law or under the rulings or regulations of the Securities and
Exchange Commission or any other governmental regulatory body, which the Committee
(or the Board, in the case of Options granted to Independent Directors) shall, in
its sole discretion, deem necessary or advisable;

(c) The obtaining of any approval or other clearance from any state or federal
governmental agency which the Committee (or the Board, in the case of Options
granted to Independent Directors) shall, in its sole discretion, determine to be
necessary or advisable; and

(d) The payment to the Company of all amounts which it is required to withhold
under federal, state or local law in connection with the exercise of the Option.

     Section 5.5 Rights as Stockholders

     The holder of an Option shall not be, nor have any of the rights or privileges of, a
stockholder of the Company in respect of any shares purchasable upon the exercise of any part of an
Option unless and until such holder has signed a Stockholders Agreement and certificates
representing such shares have been issued by the Company to such holder.

     Section 5.6 Transfer Restrictions

     Shares acquired upon exercise of an Option shall be subject to the terms and conditions of a
Stockholders Agreement. In addition, the Committee (or the Board, in the case of Options granted
to Independent Directors), in its sole discretion, may impose further restrictions on the
transferability of the shares purchasable upon the exercise of an Option as it deems appropriate.
Any such restriction shall be set forth in the respective Stock Option Agreement and may be
referred to on the certificates evidencing such shares. The Committee may require the Employee to
give the Company prompt notice of any disposition of shares of stock, acquired by exercise of an
Incentive Stock Option, within two years from the date of granting such Option or one year after
the transfer of such shares to such Employee. The Committee may direct that the certificates
evidencing shares acquired by exercise of an Incentive Stock Option refer to such requirement.

 

 

ARTICLE VI.

ADMINISTRATION

     Section 6.1 Committee

     The Committee shall be the Compensation Committee of the Board. Any action required or
permitted to be taken by the Committee hereunder or under any Stock Option Agreement may be taken
by the Board.

     Section 6.2 Delegation by Committee

     Except as otherwise determined by the Committee, all rights, powers and duties of the
Committee under the Plan (except those granted pursuant to Sections 3.3, 4.3, 5.3(c), 5.3(e), 5.6
and Article VII) shall be exercised by the CEO, subject to the approval of the Committee.

     Section 6.3 Duties and Powers of CEO and the Committee

     It shall be the duty of the CEO, subject to the approval of the Committee, to conduct the
general administration of the Plan in accordance with its provisions. The approval of the
Committee shall have the power to interpret the Plan and the Options and to adopt such rules for
the administration, interpretation and application of the Plan as are consistent therewith and to
interpret, amend or revoke any such rules. Notwithstanding the foregoing, the full Board, acting
by a majority of its members in office, shall conduct the general administration of the Plan with
respect to Options granted to Independent Directors. Any such interpretations and rules in regard
to Incentive Stock Options shall be consistent with the terms and conditions applicable to
“incentive stock options” within the meaning of Section 422 of the Code. All determinations and
decisions made by the CEO and approved by the Committee under any provision of the Plan or of any
Option granted thereunder shall be final, conclusive and binding on all persons.

     Section 6.4 Compensation, Professional Assistance, Good Faith Actions

     The members of the Committee shall receive such compensation for their services hereunder as
may be determined by the Board. All expenses and liabilities incurred by the members of the
Committee or the Board in connection with the administration of the Plan shall be borne by the
Company. The Committee or the Board may employ attorneys, consultants, accountants, appraisers,
brokers or other persons. The Committee, the Company and its Officers and Directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons. All actions taken
and all interpretations and determinations made by the CEO, the Committee and the Board, in good
faith shall be final and binding upon all Optionees, the Company and all other interested persons.
No member of the Board or the CEO shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Options, and all members of the
Board shall be fully protected by the Company in respect to any such action, determination or
interpretation.

 

 

ARTICLE VII.

OTHER PROVISIONS

     Section 7.1 Changes in Common Stock; Disposition of Assets and Corporate Events.

(a) Subject to Section 7.1(d), in the event that the Committee (or the Board, in
the case of Options granted to Independent Directors) determines that any dividend
or other distribution (whether in the form of cash, Common Stock, other securities,
or other property), recapitalization, reclassification, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the capital stock or assets of the
Company (including, but not limited to, a Liquidity Event), exchange of Common
Stock or other securities of the Company, issuance of warrants or other rights to
purchase Common Stock or other securities of the Company, the acquisition or
disposition of any material assets or business or other similar corporate
transaction or event, in the Committee’s sole discretion (or in the case of Options
granted to Independent Directors, the Board’s sole discretion), affects the Common
Stock such that an adjustment is determined by the Committee (or the Board, in the
case of Options granted to Independent Directors) to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended to
be made available under the Plan or with respect to an Option, then the Committee
(or the Board, in the case of Options granted to Independent Directors) shall, in
such manner as it may deem equitable, adjust any or all of:

(i) The number and kind of shares of Common Stock (or other securities or
property) with respect to which Options may be granted under the Plan
(including, but not limited to, adjustments of the limitations in Section
2.1 on the maximum number and kind of shares which may be issued);

(ii) The number and kind of shares of Common Stock (or other securities or
property) subject to outstanding Options;

(iii) The exercise price with respect to any Option; and

(iv) The financial or other “targets” specified in each Stock Option
Agreement for determining the exercisability of Options.

 

 

(b) Subject to Section 7.1(d) and the terms of outstanding Options, upon the
occurrence of a Corporate Event, the Committee (or the Board, in the case of
options granted to Independent Directors), in its sole discretion, is hereby
authorized to take any one or more of the following actions whenever the Committee
(or the Board, in the case of Options
granted to Independent Directors) determines that such action is appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or with respect to any Option under
this Plan, to facilitate such Corporate Event or to give effect to such changes in
laws, regulations or principles:

(i) In its sole discretion, and on such terms and conditions as it deems
appropriate, the Committee (or the Board, in the case of Options granted
to Independent Directors) may provide, either by the terms of the
applicable Stock Option Agreement or by action taken prior to the
occurrence of such Corporate Event and either automatically or upon the
Optionee’s request, for either the purchase of any such Option for an
amount of cash, securities, or other property equal to the amount that
could have been attained upon the exercise of the vested portion of such
Option (and such additional portion of the Option as the Board or
Committee may determine) immediately prior to the occurrence of such
transaction or event, or the replacement of such vested (and other)
portion of such Option with other rights or property selected by the
Committee (or the Board, in the case of Options granted to Independent
Directors) in its sole discretion;

(ii) In its sole discretion, the Committee (or the Board, in the case of
Options granted to Independent Directors) may provide, either by the terms
of the applicable Stock Option Agreement or by action taken prior to the
occurrence of such Corporate Event, that the Option (or any portion
thereof) will terminate upon the occurrence of such event and cannot be
exercised after such event;

(iii) In its sole discretion, and on such terms and conditions as it deems
appropriate, the Committee (or the Board, in the case of Options granted
to Independent Directors) may provide, either by the terms of the
applicable Stock Option Agreement or by action taken prior to the
occurrence of such Corporate Event, that for a specified period of time
prior to such Corporate Event, such Option shall be exercisable as to
all shares covered thereby or a specified portion of such shares,
notwithstanding anything to the contrary in (A) Section 4.2; or (B) the
provisions of the applicable Stock Option Agreement;

(iv) In its sole discretion, and on such terms and conditions as it deems
appropriate, the Committee (or the Board, in the case of Options granted
to Independent Directors) may provide, either by the terms of the
applicable Stock Option Agreement or by action taken prior to the
occurrence of such Corporate Event, that upon such event, such Option (or
any portion thereof) be assumed by the successor or survivor corporation,
or a parent or subsidiary thereof,
or shall be substituted for by similar options, rights or awards covering
the stock of the successor or survivor corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kind
of shares and prices; and

 

 

(v) In its sole discretion, and on such terms and conditions as it deems
appropriate, the Committee (or the Board, in the case of Options granted
to Independent Directors) may make adjustments in the number and type
of shares of Common Stock (or other securities or property) subject to
outstanding Options (or any portion thereof) and/or in the terms and
conditions of (including the exercise price), and the criteria included
in, outstanding Options and Options which may be granted in the future.

(c) Subject to Section 7.1(d), the Committee (or the Board, in the case of Options
granted to Independent Directors) may, in its sole discretion, include such further
provisions and limitations in any Stock Option Agreement as it may deem equitable
and in the best interests of the Company and its Subsidiaries.

(d) With respect to Incentive Stock Options, no adjustment or action described in
this Section 7.1 or in any other provision of the Plan shall be authorized to the
extent that such adjustment or action would cause the Plan to violate Section
422(b)(1) of the Code or any successor provisions thereto, unless the Committee
determines that the Plan and/or the Options are not to comply with Section
422(b)(1) of the Code. The number of shares of Common Stock subject to any Option
shall always be rounded up to the next higher whole number.

     Section 7.2 Options Not Transferable

     No Option or interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Optionee or his or her successors in interest or shall be subject
to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other
means whether such disposition be voluntary or involuntary or by operation of law, by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect; provided, however,
that nothing in this Section 7.2 shall prevent transfers by will or by the applicable laws of
descent and distribution.

 

 

     Section 7.3 Amendment, Suspension or Termination of the Plan

     The Plan may be wholly or partially amended or otherwise modified, suspended or terminated at
any time or from time to time by the Board or the Committee. However, without stockholder approval
within 12 months before or after such action no action of the Board or the Committee may, except as
provided in Section 7.1, increase any limit
imposed in Section 2.1 on the maximum number of shares which may be issued on exercise of
Options, reduce the minimum Option price requirements of Section 4.3(a), or extend the limit
imposed in this Section 7.3 on the period during which options may be granted. Except as provided
by Section 7.1, neither the amendment, suspension nor termination of the Plan shall, without the
consent of the holder of the Option, alter or impair any rights or obligations under any Option
theretofore granted. No Option may be granted during any period of suspension nor after
termination of the Plan, and in no event may any Option be granted under this Plan after the
expiration of ten years from the date the Plan is adopted by the Board.

     Section 7.4 Effect of Plan Upon Other Option and Compensation Plans

     The adoption of this Plan shall not affect any other compensation or incentive plans in effect
for the Company or any Subsidiary. Nothing in this Plan shall be construed to limit the right of
the Company or any Subsidiary (a) to establish any other forms of incentives or compensation for
directors, consultants or employees of the Company (or any Subsidiary); or (b) to grant or assume
options otherwise than under this Plan in connection with any proper corporate purpose, including,
but not by way of limitation, the grant or assumption of options in connection with the acquisition
by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any
corporation, firm or association.

     Section 7.5 Titles

     Titles are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of the Plan.

     Section 7.6 Conformity to Securities Laws

     The Plan is intended to conform to the extent necessary with all provisions of the Securities
Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and
Exchange Commission thereunder to the extent the Company or any Optionee is subject to the
provisions thereof. Notwithstanding anything herein to the contrary, the Plan shall be
administered, and Options shall be granted and may be exercised, only in such a manner as to
conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan
and Options granted hereunder shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.

     Section 7.7 Governing Law

     To the extent not preempted by federal law, the Plan shall be construed in accordance with and
governed by the laws of the state of Delaware.

     Section 7.8 Severability

     In the event any portion of the Plan or any action taken pursuant thereto shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provisions had not been included, and the illegal or invalid action shall be null and void.

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