Document:

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EXHIBIT
10.3

SPECTRUM PHARMACEUTICALS, INC.

2003 AMENDED AND RESTATED INCENTIVE AWARD PLAN

     SPECTRUM PHARMACEUTICALS, INC., a Delaware corporation (the “COMPANY”), has adopted this 2003
Amended and Restated Incentive Award Plan, (the “PLAN”), which amends and restates the Spectrum
Pharmaceuticals, Inc. 2003 Stock Incentive Plan for the benefit of its eligible employees,
consultants and directors.

ARTICLE 1

PURPOSE

     1.1 General. The purpose of the Plan is to promote the success and enhance the value of the
Company by linking the personal interests of the members of the Board, employees, consultants,
officers, and executives of the Company and any Subsidiary, to those of Company stockholders and by
providing such individuals with an incentive for outstanding performance to generate superior
returns to Company stockholders. The Plan is further intended to provide flexibility to the Company
in its ability to motivate, attract, and retain the services of members of the Board, employees,
consultants, officers, and executives of the Company upon whose judgment, interest, and special
effort the successful conduct of the Company’s operation is largely dependent.

ARTICLE 2

DEFINITIONS AND CONSTRUCTION

     2.1 Definitions. The following words and phrases shall have the following meanings:

          (a) “AWARD” means an Option, a Restricted Stock award, a Stock Appreciation Right award, a
Performance Share award, a Dividend Equivalents award, a Stock Payment award, a Restricted Stock
Unit award, or a Performance-Based Award granted to a Participant pursuant to the Plan.

          (b) “AWARD AGREEMENT” means any written or electronic agreement, contract, or other instrument
or document evidencing an Award.

          (c) “BOARD” means the Board of Directors of the Company.

          (d) “CAUSE” includes one or more of the following: (i) the commission of an act of fraud,
embezzlement or dishonesty by a Participant that has a material adverse impact on the Company or
any successor or parent or Subsidiary thereof; (ii) a conviction of, or plea of “guilty” or “no
contest” to, a felony by a Participant; (iii) any unauthorized use or disclosure by a Participant
of confidential information or trade secrets of the Company or any successor or parent or
Subsidiary thereof that has a material adverse impact on any such entity or (iv) any other
intentional misconduct by a Participant that has a material adverse impact on the Company or any
successor or parent or Subsidiary thereof. However, if the term or concept of “Cause” has been
defined in an agreement between a Participant and the Company or any successor or parent or
Subsidiary thereof, then “Cause” shall have the definition set forth in such agreement. The
foregoing definition shall not in any way preclude or restrict the right of the Company or any
successor or parent or Subsidiary thereof to discharge or dismiss any Participant in the service of
such entity for any other acts or omissions, but such other acts or omissions shall not be deemed,
for purposes of this Plan, to constitute grounds for termination for Cause.

 

 

          (e) “CHANGE OF CONTROL” means and includes each of the following:

               (i) the acquisition, directly or indirectly, by any “person” or “group” (as those terms are
defined in Sections 3(a)(9), 13(d) and 14(d) of the Exchange Act and the rules thereunder) of
“beneficial ownership” (as determined pursuant to Rule 13d-3 under the Exchange Act) of securities
entitled to vote generally in the election of directors (“voting securities”) of the Company that
represent 50% or more of the combined voting power of the Company’s then outstanding voting
securities, other than:

                    (A) an acquisition by a trustee or other fiduciary holding securities under any employee
benefit plan (or related trust) sponsored or maintained by the Company or any person controlled by
the Company or by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any person controlled by the Company, or

                    (B) an acquisition of voting securities by the Company or a corporation owned, directly or
indirectly by the stockholders of the Company in substantially the same proportions as their
ownership of the stock of the Company;

               Notwithstanding the foregoing, the following event shall not constitute an “acquisition” by
any person or group for purposes of this subsection (e): an acquisition of the Company’s securities
by the Company that causes the Company’s voting securities beneficially owned by a person or group
to represent 50% or more of the combined voting power of the Company’s then outstanding voting
securities; provided, however, that if a person or group shall become the beneficial owner of 50%
or more of the combined voting power of the Company’s then outstanding voting securities by reason
of share acquisitions by the Company as described above and shall, after such share acquisitions by
the Company, become the beneficial owner of any additional voting securities of the Company, then
such acquisition shall constitute a Change of Control; or

               (ii) during any period of twelve consecutive months, individuals who, at the beginning of such
period, constitute the Board together with any new director(s) (other than a director designated by
a person who shall have entered into an agreement with the Company to effect a transaction
described in clauses (i) or (iii) of this subsection (e)) whose election by the Board or nomination
for election by the Company’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any reason to constitute
a majority thereof; or

               (iii) the consummation by the Company (whether directly involving the Company or indirectly
involving the Company through one or more intermediaries) of (x) a merger, consolidation,
reorganization, or business combination or (y) a sale or other disposition of all or substantially
all of the Company’s assets or (z) the acquisition of assets or stock of another entity, in each
case other than a transaction:

                    (A) which results in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being converted into
voting securities of the Company or the person that, as a result of the transaction, controls,
directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of
the Company’s assets or otherwise succeeds to the business of the Company (the Company or such
person, the “SUCCESSOR ENTITY”)) directly or indirectly, at least a majority of the combined voting
power of the Successor Entity’s outstanding voting securities immediately after the transaction,
and

                    (B) after which no person or group beneficially owns voting securities representing 50% or
more of the combined voting power of the Successor Entity; provided, however, that no person or
group shall be treated for purposes of this clause (B) as beneficially owning 50% or more of

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combined voting power of the Successor Entity solely as a result of the voting power held in
the Company prior to the consummation of the transaction; or

               (iv) the Company’s stockholders approve a liquidation or dissolution of the Company.

          Notwithstanding the foregoing, a transaction shall not constitute a “CHANGE OF CONTROL” if:
(w) its sole purpose is to change the state of the Company’s incorporation; (x) its sole purpose is
to create a holding company that will be owned in substantially the same proportions by the persons
who held the Company’s securities immediately before such transaction; (y) it constitutes the
Company’s initial public offering of its securities; or (z) it is a transaction effected primarily
for the purpose of financing the Company with cash (as determined by the Committee in its
discretion and without regard to whether such transaction is effectuated by a merger, equity
financing or otherwise).

          The Committee shall have full and final authority, which shall be exercised in its discretion,
to determine conclusively whether a Change of Control of the Company has occurred pursuant to the
above definition, and the date of the occurrence of such Change of Control and any incidental
matters relating thereto.

          (f) “CODE” means the Internal Revenue Code of 1986, as amended.

          (g) “COMMITTEE” means the committee of the Board described in Article 12.

          (h) “COVERED EMPLOYEE” means an Employee who is, or could be, a “covered employee” within the
meaning of Section 162(m) of the Code.

          (i) “DISABILITY” means, for purposes of this Plan, that the Participant qualifies to receive
long-term disability payments under the Company’s long-term disability insurance program, as it may
be amended from time to time.

          (j) “DIVIDEND EQUIVALENTS” means a right granted to a Participant pursuant to Article 8 to
receive the equivalent value (in cash or Stock) of dividends paid on Stock.

          (k) “EMPLOYEE” means any officer or other employee (as defined in accordance with Section
3401(c) of the Code) of the Company or any Subsidiary. A person shall not cease to be an Employee
in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations
of the Company or between the Company, any Subsidiary, or any successor. For purposes of Incentive
Stock Options, no such leave may exceed ninety days, unless reemployment upon expiration of such
leave is guaranteed by statute or contract. Neither service as a director nor payment of a
director’s fee by the Company shall be sufficient, by itself, to constitute “employment” by the
Company.

          (l) “EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended.

          (m) “FAIR MARKET VALUE” shall mean, as of any date, the value of Stock determined as follows:

               (i) If the Stock is listed on any established stock exchange or a national market system,
including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq
Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such exchange or system for the last market trading
day prior

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to the date of determination, as reported in The Wall Street Journal or such other source
as the Committee deems reliable;

               (ii) If the Stock is regularly quoted by a recognized securities dealer but selling prices are
not reported, its Fair Market Value shall be the mean of the closing bid and asked prices for the
Stock on the date prior to the date of determination as reported in The Wall Street Journal or such
other source as the Committee deems reliable; or

               (iii) In the absence of an established market for the Stock, the Fair Market Value thereof
shall be determined in good faith by the Committee.

          (n) “GOOD REASON” means a Participant’s voluntary resignation following any one or more of the
following that is effected without the Participant’s written consent: (i) a reduction in his or her
base salary following a Change of Control, unless the base salaries of all similarly situated
individuals are similarly reduced or (ii) a relocation of such Participant’s place of employment of
more than fifty (50) miles following a Change of Control.

          (o) “INCENTIVE STOCK OPTION” means an Option that is intended to meet the requirements of
Section 422 of the Code or any successor provision thereto.

          (p) “NON-EMPLOYEE DIRECTOR” means a member of the Board who qualifies as a “Non-Employee
Director” as defined in Rule 16b-3(b)(3) of the Exchange Act, or any successor definition adopted
by the Board.

          (q) “NON-QUALIFIED STOCK OPTION” means an Option that is not intended to be an Incentive Stock
Option.

          (r) “OPTION” means a right granted to a Participant pursuant to Article 5 of the Plan to
purchase a specified number of shares of Stock at a specified price during specified time periods.
An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option.

          (s) “PARTICIPANT” means a person who, as a member of the Board, consultant to the Company or
any Subsidiary or Employee, has been granted an Award pursuant to the Plan.

          (t) “PERFORMANCE-BASED AWARD” means an Award granted to selected Covered Employees pursuant to
Articles 6 and 8, but which is subject to the terms and conditions set forth in Article 9. All
Performance-Based Awards are intended to qualify as Qualified Performance-Based Compensation.

          (u) “PERFORMANCE CRITERIA” means the criteria that the Committee selects for purposes of
establishing the Performance Goal or Performance Goals for a Participant for a Performance Period.
The Performance Criteria that will be used to establish Performance Goals are limited to the
following: net earnings (either before or after interest, taxes, depreciation and amortization),
net losses, sales or revenue, operating earnings, operating cash flow, return on net assets, return
on stockholders’ equity, return on assets, return on capital, stockholder returns, gross or net
profit margin, earnings per share, price per share of Stock, and market share, any of which may be
measured either in absolute terms or as compared to any incremental increase or as compared to
results of a peer group. The Committee shall, within the time prescribed by Section 162(m) of the
Code, define in an objective fashion the manner of calculating the Performance Criteria it selects
to use for such Performance Period for such Participant.

          (v) “PERFORMANCE GOALS” means, for a Performance Period, the goals established in writing by
the Committee for the Performance Period based upon the Performance Criteria. Depending on the
Performance Criteria used to establish such Performance Goals, the Performance Goals may be

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expressed in terms of overall Company performance or the performance of a division, business
unit, or an individual. The Committee, in its discretion, may, within the time prescribed by
Section 162(m) of the Code, adjust or modify the calculation of Performance Goals for such
Performance Period in order to prevent the dilution or enlargement of the rights of Participants
(i) in the event of, or in anticipation of, any unusual or extraordinary corporate item,
transaction, event, or development, or (ii) in recognition of, or in anticipation of, any other
unusual or nonrecurring events affecting the Company, or the financial statements of the Company,
or in response to, or in anticipation of, changes in applicable laws, regulations, accounting
principles, or business conditions.

          (w) “PERFORMANCE PERIOD” means the one or more periods of time, which may be of varying and
overlapping durations, as the Committee may select, 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 Performance-Based Award.

          (x) “PERFORMANCE SHARE” means a right granted to a Participant pursuant to Article 8, to
receive cash, Stock, or other Awards, the payment of which is contingent upon achieving certain
performance goals established by the Committee.

          (y) “PLAN” means this Spectrum Pharmaceuticals, Inc. 2003 Equity Incentive Award Plan, as
amended and/or restated from time to time, as successor to the Spectrum Pharmaceuticals, Inc. 2003
Stock Incentive Plan.

          (z) “PUBLIC TRADING DATE” means the first date upon which Stock is listed (or approved for
listing) upon notice of issuance on any securities exchange or designated (or approved for
designation) upon notice of issuance as a national market security on an interdealer quotation
system.

          (aa) “QUALIFIED PERFORMANCE-BASED COMPENSATION” means any compensation that is intended to
qualify as “qualified performance-based compensation” as described in Section 162(m)(4)(C) of the
Code.

          (bb) “RESTRICTED STOCK” means Stock awarded to a Participant pursuant to Article 6 that is
subject to certain restrictions and to risk of forfeiture.

          (cc) “RESTRICTED STOCK UNIT” means a right to receive a share of Stock during specified time
periods pursuant to Article 8.

          (dd) “STOCK” means the common stock of the Company and such other securities of the Company
that may be substituted for Stock pursuant to Article 11.

          (ee) “STOCK APPRECIATION RIGHT” or “SAR” means a right granted pursuant to Article 7 to
receive a payment equal to the excess of the Fair Market Value of a specified number of shares of
Stock on the date the SAR is exercised over the Fair Market Value on the date the SAR was granted
as set forth in the applicable Award Agreement.

          (ff) “STOCK PAYMENT” means (a) a payment in the form of shares of Stock, or (b) an option or
other right to purchase shares of Stock, as part of any bonus, deferred compensation or other
arrangement, made in lieu of all or any portion of the compensation, granted pursuant to Article 8.

          (gg) “SUBSIDIARY” means any corporation or other entity of which a majority of the outstanding
voting stock or voting power is beneficially owned directly or indirectly by the Company.

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ARTICLE 3

SHARES SUBJECT TO THE PLAN

     3.1 Number of Shares.

          (a) The initial number of shares of Stock available for issuance under the Plan shall be
2,000,000. Commencing on July 1, 2004, the aggregate number of shares of Stock (i) subject to
outstanding Awards under the Plan and under any other bonus or similar plan or agreement of the
Company, (ii) previously issued upon exercise of Awards under the Plan and awards under any other
bonus or similar plan or agreement of the Company and (iii) issuable upon future grants of Awards
under the Plan and awards under any other bonus or similar plan or agreement of the Company, at any
time, shall equal 30 % of the then outstanding shares of Stock of the Company, as calculated
pursuant to Section 260.140.45 of Title 10 of the California Code of Regulations; provided,
however, that notwithstanding the foregoing, the aggregate number of shares of Stock that may be
issued under the Plan shall not exceed 15,000,000 during the ten year term of the Plan, as set
forth in Section 13.2.

          (b) To the extent that an Award terminates, expires, or lapses for any reason, any shares of
Stock subject to the Award shall again be available for the grant of an Award pursuant to the Plan.
Additionally, any shares of Stock tendered or withheld to satisfy the grant or exercise price or
tax withholding obligation pursuant to any Award shall again be available for the grant of an Award
pursuant to the Plan. To the extent permitted by applicable law or any exchange rule, shares of
Stock issued in assumption of, or in substitution for, any outstanding awards of any entity
acquired in any form of combination by the Company or any Subsidiary shall not be counted against
shares of Stock available for grant pursuant to this Plan. If shares of Stock issued pursuant to
Awards are repurchased by the Company at no less than their original purchase price, such shares of
Stock shall become available for future grant under the Plan (unless the Plan has terminated).

          (c) Notwithstanding the provisions of this Section 3.1, no shares of Stock may again be
optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to
qualify as an Incentive Stock Option under Code Section 422.

     3.2 Stock Distributed. Any Stock distributed pursuant to an Award may consist, in whole or in
part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open market.

ARTICLE 4

ELIGIBILITY AND PARTICIPATION

     4.1 Eligibility.

          (a) General. Persons eligible to participate in this Plan include Employees, consultants to
the Company or any Subsidiary and all members of the Board, as determined by the Committee.

          (b) Foreign Participants. In order to assure the viability of Awards granted to Participants
employed in foreign countries, the Committee may provide for such special terms as it may consider
necessary or appropriate to accommodate differences in local law, tax policy, or custom. Moreover,
the Committee may approve such supplements to, or amendments, restatements, or alternative versions
of, the Plan as it may consider necessary or appropriate for such purposes without thereby
affecting the terms of the Plan as in effect for any other purpose; provided, however, that no such
supplements, amendments, restatements, or alternative versions shall increase the share limitations
contained in Sections 3.1 and 3.3 of the Plan.

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     4.2 Actual Participation. Subject to the provisions of the Plan, the Committee may, from time
to time, select from among all eligible individuals, those to whom Awards shall be granted and
shall determine the nature and amount of each Award. No individual shall have any right to be
granted an Award pursuant to this Plan.

ARTICLE 5

STOCK OPTIONS

     5.1 General. The Committee is authorized to grant Options to Participants on the following
terms and conditions:

          (a) Exercise Price. The exercise price per share of Stock subject to an Option shall be
determined by the Committee and set forth in the Award Agreement; provided that the exercise price
for any Option shall not be less than par value of a share of Stock on the date of grant.

          (b) Time And Conditions Of Exercise. The Committee shall determine the time or times at which
an Option may be exercised in whole or in part, provided that the term of any Option granted under
the Plan shall not exceed ten years, and provided further, that in the case of a Non-Qualified
Stock Option, such Option shall be exercisable for one year after the date of the Participant’s
death. The Committee shall also determine the performance or other conditions, if any, that must be
satisfied before all or part of an Option may be exercised.

          (c) Payment. The Committee shall determine the methods by which the exercise price of an
Option may be paid, the form of payment, including, without limitation, cash, promissory note
bearing interest at such rate as is a market rate of interest and which also precludes the
imputation of interest under the Code, shares of Stock held for longer than six months having a
Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or
exercised portion thereof, or other property acceptable to the Committee (including through the
delivery of a notice that the Participant has placed a market sell order with a broker with respect
to shares of Stock then issuable upon exercise of the Option, and that the broker has been directed
to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the
Option exercise price, provided that payment of such proceeds is then made to the Company upon
settlement of such sale), and the methods by which shares of Stock shall be delivered or deemed to
be delivered to Participants. Notwithstanding any other provision of the Plan to the contrary, no
Participant who is a member of the Board or an “executive officer” of the Company within the
meaning of Section 13(k) of the Exchange Act shall be permitted to pay the exercise price of an
Option in any method which would violate Section 13(k).

          (d) Evidence Of Grant. All Options shall be evidenced by a written Award Agreement between the
Company and the Participant. The Award Agreement shall include such additional provisions as may be
specified by the Committee.

     5.2 Incentive Stock Options. Incentive Stock Options shall be granted only to Employees and
the terms of any Incentive Stock Options granted pursuant to the Plan must comply with the
following additional provisions of this Section 5.2:

          (a) Exercise Price. The exercise price per share of Stock shall be set by the Committee,
provided that the exercise price for any Incentive Stock Option shall not be less than 100% of the
Fair Market Value on the date of grant.

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          (b) Expiration Of Option. An Incentive Stock Option may not be exercised to any extent by
anyone after the first to occur of the following events:

               (1) Ten years from the date it is granted, unless an earlier time is set in the Award
Agreement.

               (2) One year after the date of the Participant’s termination of employment or service on
account of Disability or death, unless in the case of death a shorter or longer period is
designated in the Award Agreement. Upon the Participant’s Disability or death, any Incentive Stock
Options exercisable at the Participant’s Disability or death may be exercised by the Participant’s
legal representative or representatives, by the person or persons entitled to do so pursuant to the
Participant’s last will and testament, or, if the Participant fails to make testamentary
disposition of such Incentive Stock Option or dies in testate, by the person or persons entitled to
receive the Incentive Stock Option pursuant to the applicable laws of descent and distribution.

               (3) Three months after the date of the Participant’s termination of employment or service for
any reason other than Disability or death, unless the Participant dies during said three month
period.

          (c) Individual Dollar Limitation. The aggregate Fair Market Value (determined as of the time
the Option is granted) of all shares of Stock with respect to which Incentive Stock Options are
first exercisable by a Participant in any calendar year may not exceed $100,000 or such other
limitation as imposed by Section 422(d) of the Code, or any successor provision. To the extent that
Incentive Stock Options are first exercisable by a Participant in excess of such limitation, the
excess shall be considered Non-Qualified Stock Options.

          (d) Ten Percent Owners. An Incentive Stock Option shall be granted to any individual who, at
the date of grant, owns stock possessing more than ten percent of the total combined voting power
of all classes of Stock of the Company only if such Option is granted at a price that is not less
than 110% of Fair Market Value on the date of grant and the Option is exercisable for no more than
five years from the date of grant.

          (e) Transfer Restriction. The Participant shall give the Company prompt notice of any
disposition of shares of Stock acquired by exercise of an Incentive Stock Option within (1) two
years from the date of grant of such Incentive Stock Option or (2) one year after the transfer of
such shares of Stock to the Participant.

          (f) Expiration Of Incentive Stock Options. No Award of an Incentive Stock Option may be made
pursuant to this Plan after the tenth anniversary of the Effective Date.

          (g) Right To Exercise. During a Participant’s lifetime, an Incentive Stock Option may be
exercised only by the Participant.

     5.3 Early Exercisability. The Committee may provide in the terms of a Participant’s Award
Agreement that the Participant may, at any time before the Participant’s status as an Employee,
member of the Board or consultant to the Company terminates, exercise the Option(s) granted to such
Participant in whole or in part prior to the full vesting of the Option(s); provided, however,
shares of Stock acquired upon exercise of an Option which has not fully vested may be subject to
any forfeiture, transfer or other restrictions as the Committee may determine in its sole
discretion.

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ARTICLE 6

RESTRICTED STOCK AWARDS

     6.1 Grant of Restricted Stock. The Committee is authorized to make Awards of Restricted Stock
to any Participant selected by the Committee in such amounts and subject to such terms and
conditions as determined by the Committee. All Awards of Restricted Stock shall be evidenced by a
Restricted Stock Award Agreement.

     6.2 Issuance and Restrictions. Restricted Stock shall be subject to such restrictions on
transferability and other restrictions as the Committee may impose (including, without limitation,
limitations on the right to vote Restricted Stock or the right to receive dividends on the
Restricted Stock). These restrictions may lapse separately or in combination at such times,
pursuant to such circumstances, in such installments, or otherwise, as the Committee determines at
the time of the grant of the Award or thereafter.

     6.3 Forfeiture. Except as otherwise determined by the Committee at the time of the grant of
the Award or thereafter, upon termination of employment or service during the applicable
restriction period, Restricted Stock that is at that time subject to restrictions shall be
forfeited; provided, however, that the Committee may provide in any Restricted Stock Award
Agreement that restrictions or forfeiture conditions relating to Restricted Stock will be waived in
whole or in part in the event of terminations resulting from specified causes, and the Committee
may in other cases waive in whole or in part restrictions or forfeiture conditions relating to
Restricted Stock.

     6.4 Certificates For Restricted Stock. Restricted Stock granted pursuant to the Plan may be
evidenced in such manner as the Committee shall determine. If certificates representing shares of
Restricted Stock are registered in the name of the Participant, certificates must bear an
appropriate legend referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, and the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse.

ARTICLE 7

STOCK APPRECIATION RIGHTS

     7.1 Grant of Stock Appreciation Rights. A Stock Appreciation Right may be granted to any
Participant selected by the Committee. A Stock Appreciation Right may be granted (a) in connection
and simultaneously with the grant of an Option, (b) with respect to a previously granted Option, or
(c) independent of an Option. A Stock Appreciation Right shall be subject to such terms and
conditions not inconsistent with the Plan as the Committee shall impose and shall be evidenced by
an Award Agreement.

     7.2 Coupled Stock Appreciation Rights.

          (a) A Coupled Stock Appreciation Right (“CSAR”) shall be related to a particular Option and
shall be exercisable only when and to the extent the related Option is exercisable.

          (b) A CSAR may be granted to a Participant for no more than the number of shares subject to
the simultaneously or previously granted Option to which it is coupled.

          (c) A CSAR shall entitle the Participant (or other person entitled to exercise the Option
pursuant to the Plan) to surrender to the Company unexercised a portion of the Option to which the
CSAR relates (to the extent then exercisable pursuant to its terms) and to receive from the Company
in exchange therefor an amount determined by multiplying the difference obtained by subtracting the
Option exercise

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price from the Fair Market Value of a share of Stock on the date of exercise of the CSAR by
the number of shares of Stock with respect to which the CSAR shall have been exercised, subject to
any limitations the Committee may impose.

     7.3 Independent Stock Appreciation Rights.

          (a) An Independent Stock Appreciation Right (“ISAR”) shall be unrelated to any Option and
shall have a term set by the Committee. An ISAR shall be exercisable in such installments as the
Committee may determine. An ISAR shall cover such number of shares of Stock as the Committee may
determine. The exercise price per share of Stock subject to each ISAR shall be set by the
Committee; provided, however, that, the Committee in its sole and absolute discretion may provide
that the ISAR may be exercised subsequent to a termination of employment or service, as applicable,
or following a Change of Control of the Company, or because of the Participant’s retirement, death
or disability, or otherwise.

          (b) An ISAR shall entitle the Participant (or other person entitled to exercise the ISAR
pursuant to the Plan) to exercise all or a specified portion of the ISAR (to the extent then
exercisable pursuant to its terms) and to receive from the Company an amount determined by
multiplying the difference obtained by subtracting the exercise price per share of the ISAR from
the Fair Market Value of a share of Stock on the date of exercise of the ISAR by the number of
shares of Stock with respect to which the ISAR shall have been exercised, subject to any
limitations the Committee may impose.

     7.4 Payment and Limitations on Exercise.

          (a) Payment of the amounts determined under Section 7.2(c) and 7.3(b) above shall be in cash,
in Stock (based on its Fair Market Value as of the date the Stock Appreciation Right is exercised)
or a combination of both, as determined by the Committee.

          (b) To the extent any payment under Section 7.2(c) or 7.3(b) is effected in Stock it shall be
made subject to satisfaction of all provisions of Article 5 above pertaining to Options.

ARTICLE 8

OTHER TYPES OF AWARDS

     8.1 Performance Share Awards. Any Participant selected by the Committee may be granted one or
more Performance Share awards which may be denominated in a number of shares of Stock or in a
dollar value of shares of Stock and which may be linked to any one or more of the Performance
Criteria or other specific performance criteria determined appropriate by the Committee, in each
case on a specified date or dates or over any period or periods determined by the Committee. In
making such determinations, the Committee shall consider (among such other factors as it deems
relevant in light of the specific type of award) the contributions, responsibilities and other
compensation of the particular Participant.

     8.2 Dividend Equivalents.

          (a) Any Participant selected by the Committee may be granted Dividend Equivalents based on the
dividends declared on the shares of Stock that are subject to any Award, to be credited as of
dividend payment dates, during the period between the date the Award is granted and the date the
Award is exercised, vests or expires, as determined by the Committee. Such Dividend Equivalents
shall be converted to cash or additional shares of Stock by such formula and at such time and
subject to such limitations as may be determined by the Committee.

10

 

          (b) Dividend Equivalents granted with respect to Options or SARs that are intended to be
Qualified Performance-Based Compensation shall be payable, with respect to pre-exercise periods,
regardless of whether such Option or SAR is subsequently exercised.

     8.3 Stock Payments. Any Participant selected by the Committee may receive Stock Payments in
the manner determined from time to time by the Committee. The number of shares shall be determined
by the Committee and may be based upon the Performance Criteria or other specific performance
criteria determined appropriate by the Committee, determined on the date such Stock Payment is made
or on any date thereafter.

     8.4 Restricted Stock Units. Any Participant selected by the Committee may be granted an award
of Restricted Stock Units in the manner determined from time to time by the Committee. The number
of Restricted Stock Units shall be determined by the Committee and may be linked to the Performance
Criteria or other specific performance criteria determined to be appropriate by the Committee, in
each case on a specified date or dates or over any period or periods determined by the Committee.
Stock underlying a Restricted Stock Unit will not be issued until the Restricted Stock Unit has
vested, pursuant to a vesting schedule or performance criteria set by the Committee. Unless
otherwise provided by the Committee, a Participant awarded Restricted Stock Units shall have no
rights as a Company stockholder with respect to such Restricted Stock Units until such time as the
Restricted Stock Units have vested and the Stock underlying the Restricted Stock Units has been
issued.

     8.5 Term. The term of any Award of Performance Shares, Dividend Equivalents, Stock Payments or
Restricted Stock Units shall be set by the Committee in its discretion.

     8.6 Exercise or Purchase Price. The Committee may establish the exercise or purchase price of
any Award of Performance Shares, Restricted Stock Units or Stock Payments; provided, however, that
such price shall not be less than the par value of a share of Stock, unless otherwise permitted by
applicable state law.

8.7 Exercise Upon Termination of Employment or Service. An Award of Performance

     Shares, Dividend Equivalents, Restricted Stock Units and Stock Payments shall only be exercisable
or payable while the Participant is an Employee, consultant to the Company or a member of the
Board, as applicable; provided, however, that the Committee in its sole and absolute discretion may
provide that an Award of Performance Shares, Dividend Equivalents, Stock Payments or Restricted
Stock Units may be exercised or paid subsequent to a termination of employment or service, as
applicable, upon or following a Change of Control of the Company, or because of the Participant’s
retirement, death or disability, or otherwise; provided, however, that any such provision with
respect to Performance Shares shall be subject to the requirements of Section 162(m) of the Code
that apply to Qualified Performance-Based Compensation.

     8.8 Form of Payment. Payments with respect to any Awards granted under this Article 8 shall be
made in cash, in Stock or a combination of both, as determined by the Committee.

     8.9 Award Agreement. All Awards under this Article 8 shall be subject to such additional terms
and conditions as determined by the Committee and shall be evidenced by a written Award Agreement.

11

 

ARTICLE 9

PERFORMANCE-BASED AWARDS

     9.1 Purpose. The purpose of this Article 9 is to provide the Committee the ability to qualify
Awards other than Options and SARs and that are granted pursuant to Articles 6 and 8 as Qualified
Performance-Based Compensation. If the Committee, in its discretion, decides to grant a
Performance-Based Award to a Covered Employee, the provisions of this Article 9 shall control over
any contrary provision contained in Articles 6 or 8; provided, however, that the Committee may in
its discretion grant Awards to Covered Employees that are based on Performance Criteria or
Performance Goals but that do not satisfy the requirements of this Article 9.

     9.2 Applicability. This Article 9 shall apply only to those Covered Employees selected by the
Committee to receive Performance-Based Awards. The designation of a Covered Employee as a
Participant for a Performance Period shall not in any manner entitle the Participant to receive an
Award for the period. Moreover, designation of a Covered Employee as a Participant for a particular
Performance Period shall not require designation of such Covered Employee as a Participant in any
subsequent Performance Period and designation of one Covered Employee as a Participant shall not
require designation of any other Covered Employees as a Participant in such period or in any other
period.

     9.3 Procedures With Respect to Performance-Based Awards. To the extent necessary to comply
with the Qualified Performance-Based Compensation requirements of Section 162(m)(4)(C) of the Code,
with respect to any Award granted under Articles 6 and 8 which may be granted to one or more
Covered Employees, no later than ninety (90) days following the commencement of any fiscal year in
question or any other designated fiscal period or period of service (or such other time as may be
required or permitted by Section 162(m) of the Code), the Committee shall, in writing, (i)
designate one or more Covered Employees, (ii) select the Performance Criteria applicable to the
Performance Period, (iii) establish the Performance Goals, and amounts of such Awards, as
applicable, which may be earned for such Performance Period, and (iv) specify the relationship
between Performance Criteria and the Performance Goals and the amounts of such Awards, as
applicable, to be earned by each Covered Employee for such Performance Period. Following the
completion of each Performance Period, the Committee shall certify in writing whether the
applicable Performance Goals have been achieved for such Performance Period. In determining the
amount earned by a Covered Employee, the Committee shall have the right to reduce or eliminate (but
not to increase) the amount payable at a given level of performance to take into account additional
factors that the Committee may deem relevant to the assessment of individual or corporate
performance for the Performance Period.

     9.4 Payment of Performance-Based Awards. Unless otherwise provided in the applicable Award
Agreement, a Participant must be employed by the Company or a Subsidiary on the day a
Performance-Based Award for such Performance Period is paid to the Participant. Furthermore, a
Participant shall be eligible to receive payment pursuant to a Performance-Based Award for a
Performance Period only if the Performance Goals for such period are achieved. In determining the
amount earned under a Performance-Based Award, the Committee may reduce or eliminate the amount of
the Performance-Based Award earned for the Performance Period, if in its sole and absolute
discretion, such reduction or elimination is appropriate.

     9.5 Additional Limitations. Notwithstanding any other provision of the Plan, any Award which
is granted to a Covered Employee and is intended to constitute Qualified Performance-Based
Compensation shall be subject to any additional limitations set forth in Section 162(m) of the Code
(including any amendment to Section 162(m) of the Code) or any regulations or rulings issued
thereunder that are requirements for qualification as qualified performance-based compensation as
described in Section 162(m)(4)(C) of the Code, and the Plan shall be deemed amended to the extent
necessary to conform to such requirements.

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ARTICLE 10

PROVISIONS APPLICABLE TO AWARDS

     10.1 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the discretion
of the Committee, be granted either alone, in addition to, or in tandem with, any other Award
granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards may be
granted either at the same time as or at a different time from the grant of such other Awards.

     10.2 Award Agreement. Awards under the Plan shall be evidenced by Award Agreements that set
forth the terms, conditions and limitations for each Award which may include the term of an Award,
the provisions applicable in the event the Participant’s employment or service terminates, and the
Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an
Award.

     10.3 Limits on Transfer. No right or interest of a Participant in any Award may be pledged,
encumbered, or hypothecated to or in favor of any party other than the Company or a Subsidiary, or
shall be subject to any lien, obligation, or liability of such Participant to any other party other
than the Company or a Subsidiary. Except as otherwise provided by the Committee, no Award shall be
assigned, transferred, or otherwise disposed of by a Participant other than by will or the laws of
descent and distribution. The Committee by express provision in the Award or an amendment thereto
may permit an Award (other than an Incentive Stock Option) to be transferred to, exercised by and
paid to certain persons or entities related to the Participant, including but not limited to
members of the Participant’s family, charitable institutions, or trusts or other entities whose
beneficiaries or beneficial owners are members of the Participant’s family and/or charitable
institutions, or to such other persons or entities as may be expressly approved by the Committee,
pursuant to such conditions and procedures as the Committee may establish. Any permitted transfer
may be subject to the condition that the Committee receive evidence satisfactory to it that the
transfer is being made for estate and/or tax planning purposes (or to a “blind trust” in connection
with the Participant’s termination of employment or service with the Company or a Subsidiary to
assume a position with a governmental, charitable, educational or similar non-profit institution)
and on a basis consistent with the Company’s lawful issue of securities.

     10.4 Beneficiaries. Notwithstanding Section 10.3, a Participant may, in the manner determined
by the Committee, designate a beneficiary to exercise the rights of the Participant and to receive
any distribution with respect to any Award upon the Participant’s death. A beneficiary, legal
guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject
to all terms and conditions of the Plan and any Award Agreement applicable to the Participant,
except to the extent the Plan and Award Agreement otherwise provide, and to any additional
restrictions deemed necessary or appropriate by the Committee. If the Participant is married and
resides in a community property state, a designation of a person other than the Participant’s
spouse as his beneficiary with respect to more than 50% of the Participant’s interest in the Award
shall not be effective without the prior written consent of the Participant’s spouse. If no
beneficiary has been designated or survives the Participant, payment shall be made to the person
entitled thereto pursuant to the Participant’s will or the laws of descent and distribution.
Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at
any time provided the change or revocation is filed with the Committee.

     10.5 Stock Certificates. Notwithstanding anything herein to the contrary, the Company shall
not be required to issue or deliver any certificates evidencing shares of Stock pursuant to the
exercise of any Award, unless and until the Board has determined, with advice of counsel, that the
issuance and delivery of such certificates is in compliance with all applicable laws, regulations
of governmental authorities and, if applicable, the requirements of any exchange on which the
shares of Stock are listed or traded. All Stock certificates delivered pursuant to the Plan are
subject to any stop-transfer orders and other restrictions as the Committee deems necessary or
advisable to comply with federal, state, or foreign jurisdiction, securities or other laws, rules
and regulations and the rules of any national securities

13

 

exchange or automated quotation system on which the Stock is listed, quoted, or traded. The
Committee may place legends on any Stock certificate to reference restrictions applicable to the
Stock. In addition to the terms and conditions provided herein, the Board may require that a
Participant make such reasonable covenants, agreements, and representations as the Board, in its
discretion, deems advisable in order to comply with any such laws, regulations, or requirements.
The Committee shall have the right to require any Participant to comply with any timing or other
restrictions with respect to the settlement or exercise of any Award, including a window-period
limitation, as may be imposed in the discretion of the Committee.

ARTICLE 11

CHANGES IN CAPITAL STRUCTURE

     11.1 Adjustments.

          (a) In the event of any stock dividend, stock split, combination or exchange of shares,
merger, consolidation, spin-off, recapitalization or other distribution (other than normal cash
dividends) of Company assets to stockholders, or any other change affecting the shares of Stock or
the share price of the Stock, the Committee shall make such proportionate adjustments, if any, as
the Committee in its discretion may deem appropriate to reflect such change with respect to (i) the
aggregate number and type of shares that may be issued under the Plan (including, but not limited
to, adjustments of the limitations in Sections 3.1 and 3.3); (ii) the terms and conditions of any
outstanding Awards (including, without limitation, any applicable performance targets or criteria
with respect thereto); and (iii) the grant or exercise price per share for any outstanding Awards
under the Plan.

          (b) In the event of any transaction or event described in Section 11.1(a), the Committee, in
its sole discretion, and on such terms and conditions as it deems appropriate, either by the terms
of the Award or by action taken prior to the occurrence of such transaction or event and either
automatically or upon the Participant’s request, is hereby authorized to take any one or more of
the following actions whenever the Committee determines that such action is appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be
made available under the Plan or with respect to any Award granted or issued under the Plan or to
facilitate such transaction or event:

               (1) To provide for either the purchase of any such Award for an amount of cash equal to the
amount that could have been obtained upon the exercise of such Award or realization of the
Participant’s rights had such Award been currently exercisable or payable or fully vested or the
replacement of such Award with other rights or property selected by the Committee in its sole
discretion;

               (2) To provide that such Award shall be exercisable as to all shares covered thereby,
notwithstanding anything to the contrary in the Plan or the provisions of such Award;

               (3) To provide that such Award be assumed by the successor or survivor corporation or entity,
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 entity, or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kind of shares and prices;

               (4) To make adjustments in the number and type of shares of Stock (or other securities or
property) subject to outstanding Awards, and/or in the terms and conditions of (including the grant
or exercise price), and the criteria included in, outstanding Awards or Awards which may be granted
in the future; and

14

 

               (5) To provide that immediately upon the consummation of such event, such Award shall not be
exercisable and shall terminate; provided, that for a specified period of time prior to such event,
such Award shall be exercisable as to all shares of Stock covered thereby, and the restrictions
imposed under an Award Agreement upon some or all shares of Stock may be terminated and, in the
case of Restricted Stock, some or all shares of such Restricted Stock may cease to be subject to
repurchase or forfeiture, notwithstanding anything to the contrary in the Plan or the provisions of
such Award Agreement.

          (c) With respect to Awards intended as Qualified Performance-Based Compensation, no adjustment
or action described in this Section 11.1 or in any other provision of the Plan shall be authorized
to the extent that such adjustment or action would cause such Award to fail to so qualify under
Section 162(m)(4)(C), or any successor provisions thereto. No adjustment or action described in
this Section 11.1 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. Furthermore, no
such adjustment or action shall be authorized to the extent such adjustment or action would result
in short-swing profits liability under Section 16 or violate the exemptive conditions of Rule 16b-3
unless the Committee determines that the Award is not to comply with such exemptive conditions. The
number of shares of Stock subject to any Award shall always be rounded to the next whole number.

     11.2 No Other Rights. Except as expressly provided in the Plan, no Participant shall have any
rights by reason of any subdivision or consolidation of shares of stock of any class, the payment
of any dividend, any increase or decrease in the number of shares of stock of any class or any
dissolution, liquidation, merger, or consolidation of the Company or any other corporation. Except
as expressly provided in the Plan or pursuant to action of the Committee under the Plan, no
issuance by the Company of shares of stock of any class, or securities convertible into shares of
stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect
to, the number of shares of Stock subject to an Award or the grant or exercise price of any Award.

ARTICLE 12

ADMINISTRATION

     12.1 Committee. Unless and until the Board delegates administration to a Committee as set
forth below, the Plan shall be administered by the Board. The Board may delegate administration of
the Plan to a Committee or Committees of one or more members of the Board, and the term “Committee”
shall apply to any person or persons to whom such authority has been delegated. If administration
is delegated to a Committee, the Committee shall have, in connection with the administration of the
Plan, the powers theretofore possessed by the Board, including the power to delegate to a
subcommittee 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. Notwithstanding the foregoing, however, from and after the
Public Trading Date, a Committee of the Board shall administer the Plan and the Committee shall
consist solely of two or more members of the Board each of whom is both an “outside director,”
within the meaning of Section 162(m) of the Code, and a Non-Employee Director. Within the scope of
such authority, the Board or the Committee may (i) delegate to a committee of one or more members
of the Board who are not “outside directors,” within the meaning of Section 162(m) of the Code the
authority to grant awards under the Plan to eligible persons who are either (1) not then “covered
employees,” within the meaning of Section 162(m) of the Code and are not expected to be “covered
employees” at the time of recognition of income resulting from such award or (2) not persons with
respect to whom the Company wishes to comply with Section 162(m) of the Code and/or (ii) delegate
to a committee of one or more members of the Board who are not Non-

15

 

Employee Directors, the authority to grant awards under the Plan to eligible persons who are
not then subject to Section 16 of the Exchange Act. The Board may abolish the Committee at any time
and/or revest in the Board the administration of the Plan. Appointment of Committee members shall
be effective upon acceptance of appointment. Committee members may resign at any time by delivering
written notice to the Board. Vacancies in the Committee may only be filled by the Board.

     12.2 Action by the Committee. A majority of the Committee shall constitute a quorum. The acts
of a majority of the members present at any meeting at which a quorum is present, and acts approved
in writing by a majority of the Committee in lieu of a meeting, shall be deemed the acts of the
Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report
or other information furnished to that member by any officer or other employee of the Company or
any Subsidiary, the Company’s independent certified public accountants, or any executive
compensation consultant or other professional retained by the Company to assist in the
administration of the Plan.

     12.3 Authority of Committee. Subject to any specific designation in the Plan, the Committee
has the exclusive power, authority and discretion to:

          (a) Designate Participants to receive Awards;

          (b) Determine the type or types of Awards to be granted to each Participant;

          (c) Determine the number of Awards to be granted and the number of shares of Stock to which an
Award will relate;

          (d) Determine the terms and conditions of any Award granted pursuant to the Plan, including,
but not limited to, the exercise price, grant price, or purchase price, any reload provision, any
restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or
restrictions on the exercisability of an Award, and accelerations or waivers thereof, any
provisions related to non-competition and recapture of gain on an Award, based in each case on such
considerations as the Committee in its sole discretion determines; provided, however, that the
Committee shall not have the authority to accelerate the vesting or waive the forfeiture of any
Performance-Based Awards;

          (e) Determine whether, to what extent, and pursuant to what circumstances an Award may be
settled in, or the exercise price of an Award may be paid in, cash, Stock, other Awards, or other
property, or an Award may be canceled, forfeited, or surrendered;

          (f) Prescribe the form of each Award Agreement, which need not be identical for each
Participant;

          (g) Decide all other matters that must be determined in connection with an Award;

          (h) Establish, adopt, or revise any rules and regulations as it may deem necessary or
advisable to administer the Plan;

          (i) Interpret the terms of, and any matter arising pursuant to, the Plan or any Award
Agreement; and

          (j) Make all other decisions and determinations that may be required pursuant to the Plan or
as the Committee deems necessary or advisable to administer the Plan.

     12.4 Decisions Binding. The Committee’s interpretation of the Plan, any Awards granted
pursuant

16

 

to the Plan, any Award Agreement and all decisions and determinations by the Committee with
respect to the Plan are final, binding, and conclusive on all parties.

ARTICLE 13

EFFECTIVE AND EXPIRATION DATE

     13.1 Effective Date. The Plan will be effective as of the date of the Board’s initial adoption
of the Plan (the “EFFECTIVE DATE”). The Plan will be submitted for the approval of the Company’s
stockholders within twelve months after the Effective Date. Awards may be granted or awarded prior
to such stockholder approval, provided that such Awards shall not be exercisable, shall not vest
and the restrictions thereon shall not lapse prior to the time when the Plan is approved by the
stockholders, and provided further that if such approval has not been obtained at the end of said
twelve-month period, all Awards previously granted or awarded under the Plan shall thereupon be
canceled and become null and void.

     13.2 Expiration Date. The Plan will expire on, and no Award may be granted pursuant to the
Plan after, the earlier of the tenth anniversary of (i) the Effective Date or (ii) the date this
Plan is approved by the Company’s stockholders. Any Awards that are outstanding on the tenth
anniversary of the Effective Date shall remain in force according to the terms of the Plan and the
applicable Award Agreement. Each Award Agreement shall provide that it will expire on the tenth
anniversary of the date of grant of the Award to which it relates.

ARTICLE 14

AMENDMENT, MODIFICATION, AND TERMINATION

     14.1 Amendment, Modification, and Termination. With the approval of the Board, at any time and
from time to time, the Committee may terminate, amend or modify the Plan; provided, however, that
to the extent necessary and desirable to comply with any applicable law, regulation, or stock
exchange rule, the Company shall obtain stockholder approval of any Plan amendment in such a manner
and to such a degree as required.

     14.2 Awards Previously Granted. No termination, amendment, or modification of the Plan shall
adversely affect in any material way any Award previously granted pursuant to the Plan without the
prior written consent of the Participant.

ARTICLE 15

GENERAL PROVISIONS

     15.1 No Rights to Awards. No Participant, employee, or other person shall have any claim to be
granted any Award pursuant to the Plan, and neither the Company nor the Committee is obligated to
treat Participants, employees, and other persons uniformly.

     15.2 No Stockholders Rights. No Award gives the Participant any of the rights of a stockholder
of the Company unless and until shares of Stock are in fact issued to such person in connection
with such Award.

     15.3 Withholding. The Company or any Subsidiary shall have the authority and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to
satisfy federal, state, local and foreign taxes (including the Participant’s FICA obligation)
required by law to be

17

 

withheld with respect to any taxable event concerning a Participant arising as a result of
this Plan. The Committee may in its discretion and in satisfaction of the foregoing requirement
allow a Participant to elect to have the Company withhold shares of Stock otherwise issuable under
an Award (or allow the return of shares of Stock) having a Fair Market Value equal to the sums
required to be withheld. Notwithstanding any other provision of the Plan, the number of shares of
Stock which may be withheld with respect to the issuance, vesting, exercise or payment of any Award
(or which may be repurchased from the Participant of such Award within six months after such shares
of Stock were acquired by the Participant from the Company) in order to satisfy the Participant’s
federal, state, local and foreign income and payroll tax liabilities with respect to the issuance,
vesting, exercise or payment of the Award shall be limited to the number of shares which have a
Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such
liabilities based on the minimum statutory withholding rates for federal, state, local and foreign
income tax and payroll tax purposes that are applicable to such supplemental taxable income.

     15.4 No Right to Employment or Services. Nothing in the Plan or any Award Agreement shall
interfere with or limit in any way the right of the Company or any Subsidiary to terminate any
Participant’s employment or services at any time, nor confer upon any Participant any right to
continue in the employ or service of the Company or any Subsidiary.

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

     15.6 Indemnification. To the extent allowable pursuant to applicable law, each member of the
Committee or of the Board shall be indemnified and held harmless by the Company from any loss,
cost, liability, or expense that may be imposed upon or reasonably incurred by such member in
connection with or resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action or failure to act pursuant to
the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in
such action, suit, or proceeding against him or her, provided he or she gives the Company an
opportunity, at its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be entitled pursuant to
the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.

     15.7 Relationship to Other Benefits. No payment pursuant to the Plan shall be taken into
account in determining any benefits pursuant to any pension, retirement, savings, profit sharing,
group insurance, welfare or other benefit plan of the Company or any Subsidiary except to the
extent otherwise expressly provided in writing in such other plan or an agreement thereunder.

     15.8 Expenses. The expenses of administering the Plan shall be borne by the Company and its
Subsidiaries.

     15.9 Titles and Headings. The titles and headings of the Sections in the Plan are for
convenience of reference only and, in the event of any conflict, the text of the Plan, rather than
such titles or headings, shall control.

     15.10 Fractional Shares. No fractional shares of Stock shall be issued and the Committee shall
determine, in its discretion, whether cash shall be given in lieu of fractional shares or whether
such

18

 

fractional shares shall be eliminated by rounding up or down as appropriate.

     15.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the
Plan, the Plan, and any Award granted or awarded to any Participant who is then subject to Section
16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the
Exchange Act) that are requirements for the application of such exemptive rule. To the extent
permitted by applicable law, the Plan and Awards granted or awarded hereunder shall be deemed
amended to the extent necessary to conform to such applicable exemptive rule.

     15.12 Government And Other Regulations. The obligation of the Company to make payment of
awards in Stock or otherwise shall be subject to all applicable laws, rules, and regulations, and
to such approvals by government agencies as may be required. The Company shall be under no
obligation to register pursuant to the Securities Act of 1933, as amended, any of the shares of
Stock paid pursuant to the Plan. If the shares paid pursuant to the Plan may in certain
circumstances be exempt from registration pursuant to the Securities Act of 1933, as amended, the
Company may restrict the transfer of such shares in such manner as it deems advisable to ensure the
availability of any such exemption.

     15.13 Governing Law. The Plan and all Award Agreements shall be construed in accordance with
and governed by the laws of the State of Delaware.

     15.14 Compliance with California Securities Laws. To the extent required to comply with
Section 25102(o) of the California Corporations Code and the regulations issued thereunder, if
applicable, the provisions of Appendix I shall apply to the Plan and any of the provisions
contained in this Plan that are inconsistent with such requirements and Appendix I, such provisions
shall be deemed null and void. The invalidity of any provision of this Plan shall not affect the
validity or enforceability of any other provision of this Plan, which shall remain in full force
and effect.

     15.15 Appendices. The Committee may approve such supplements to, or amendments, or appendices
to, the Plan as it may consider necessary or appropriate for purposes of compliance with applicable
laws or otherwise and such supplements, amendments or appendices shall be considered a part of the
Plan; provided, however, that no such supplements, amendments or appendices shall increase the
share limitations contained in Sections 3.1 and 3.3 of the Plan.

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APPENDIX I

TO

SPECTRUM PHARMACEUTICALS, INC.

2003 AMENDED AND RESTATED INCENTIVE AWARD PLAN

CALIFORNIA STATE SECURITIES LAW COMPLIANCE

     Notwithstanding anything to the contrary contained in the Plan, the provisions set forth in
this Appendix shall apply to all Awards granted under the Spectrum Pharmaceuticals, Inc. 2003
Amended and Restated Incentive Award Plan (the “PLAN”) to residents of California (i) at any time
when the Stock is not a “covered security” as defined in Section 18(b)(1) of the Securities Act of
1933, as amended (the “Securities Act”), and (ii) for which the exemption under Section 25102(f) of
the California Corporations Code is not otherwise available. This Appendix shall be of no force or
effect at any time when the Company’s common stock is a “covered security” as defined in Section
18(b)(1) of the Securities Act. Definitions as set out in Section 2 of the Plan are applicable to
this Appendix.

     The purpose of this Appendix is to set forth those provisions of the Plan necessary to comply
with Section 25102(o) of the California Corporations Code and the regulations issued thereunder. If
any of the provisions contained in this Appendix are inconsistent with such requirements, such
provisions shall be deemed null and void. The invalidity of any provision of this Appendix shall
not affect the validity or enforceability of any other provision of this Appendix, which shall
remain in full force and effect.

     1.1 Term of Awards. The term of each Award shall be no more than ten years from the date of
grant thereof.

     2.1 Award Exercise or Purchase Price. Except as provided in Article 11, the per share exercise
or purchase price for the Stock to be issued upon exercise of an Award shall be such price as is
determined by the Administrator, but shall be subject to the following:

     In the case of an Award:

          (a) granted to a Participant who, at the time of grant of such Award, owns stock representing
more than 10% of the voting power of all classes of stock of the Company or any parent (as defined
in Section 175 of the California Corporations Code) or Subsidiary, the per share exercise or
purchase price shall be no less than 110% of the Fair Market Value per share on the date of the
grant (100% in the case of an Award other than an Option); and

          (b) granted to any other Participant, the per share exercise or purchase price shall be no
less than 85% of the Fair Market Value per share on the date of grant.

     Notwithstanding the foregoing, Awards may be granted with a per share exercise or purchase
price other than as required above pursuant to a merger or other corporate transaction.

     3.1 Exercisability. Except with regard to Awards granted to officers, directors, managers or
consultants, in no event shall an Award granted hereunder become vested and exercisable at a rate
of less than 20% per year over five years from the date the Award is granted, subject to reasonable
conditions, such as continuing to be a service provider.

20

 

     4.1 Exercisability Following Termination of Relationship as a Service Provider.

          (a) Termination Other Than Death or Disability. If a Participant’s employment or service
terminates for any reason other than by reason of the Participant’s disability or death, such
Participant may exercise his or her Award within such period of time as is specified in the Award
Agreement to the extent that the Award is vested on the date of termination; provided, however,
that such period of time shall not be less than thirty days (but in no event later than the
expiration of the term of the Award as set forth in the Award Agreement). In the absence of a
specified time in the Award Agreement, the Option shall remain exercisable for three months
following the Participant’s termination.

          (b) Disability of Participant. If a Participant’s employment or service terminates as a result
of the Participant’s disability, the Participant may exercise his or her Award within such period
of time as is specified in the Award Agreement to the extent the Award is vested on the date of
termination; provided, however, that such period of time shall not be less than six months (but in
no event later than the expiration of the term of such Award as set forth in the Award Agreement).
In the absence of a specified time in the Award Agreement, the Award shall remain exercisable for
twelve months following the Holder’s termination.

          (c) Death. If a Participant’s employment or service terminates as a result of the
Participant’s death, the Award may be exercised within such period of time as is specified in the
Award Agreement; provided, however, that such period of time shall not be less than six months (but
in no event later than the expiration of the term of such Award as set forth in the Notice of
Grant), by the Participant’s estate or by a person who acquires the right to exercise the Award by
bequest or inheritance, but only to the extent that the Award is vested on the date of death. In
the absence of a specified time in the Award Agreement, the Award shall remain exercisable for
twelve months following the Participant’s termination.

     5.1 Repurchase Provisions. In the event the Committee provides that the Company may repurchase
Stock acquired upon exercise of an Award upon the occurrence of certain specified events,
including, without limitation, termination of a Participant’s employment or service, divorce,
bankruptcy or insolvency, then any such repurchase right shall be set forth in the applicable Award
Agreement or in another agreement referred to in such agreement and, to the extent required by
Section 260.140.41 and Section 260.140.42 of Title 10 of the California Code of Regulations, any
such repurchase right set forth in an Award granted to a person who is not an officer, director,
manager or consultant shall be upon the following terms: (i) if the repurchase option gives the
Company the right to repurchase the shares upon the Participant’s termination of employment or
service at not less than the Fair Market Value of the shares to be purchased on the date of
termination of employment or service, then the right to repurchase shall be exercised for cash or
cancellation of purchase money indebtedness for the shares within ninety days of termination of
employment or service (or in the case of shares issued upon exercise of Awards after such date of
termination, within ninety days after the date of the exercise) or such longer period as may be
agreed to by the Administrator and the Participant and; (ii) if the repurchase option gives the
Company the right to repurchase the Stock upon the Participant’s termination of employment or
service at the original purchase price for such Stock, then (A) the right to repurchase at the
original purchase price shall lapse at the rate of at least 20% of the shares per year over five
(5) years from the date the Award is granted (without respect to the date the Award was exercised
or became exercisable) and (B) the right to repurchase shall be exercised for cash or cancellation
of purchase money indebtedness for the shares within ninety days of termination of employment or
service (or, in the case of shares issued upon exercise of Awards, after such date of termination,
within ninety days after the date of the exercise) or such longer period as may be agreed to by the
Company and the Participant.

     6.1 Information Rights. To the extent required by Section 260.140.46 of Title 10 of the
California Code of Regulations, the Company shall provide to each Participant and to each
individual who acquires

21

 

Stock pursuant to the Plan, not less frequently than annually during the period such
Participant has one or more Awards outstanding, and, in the case of an individual who acquires
Stock pursuant to the Plan, during the period such individual owns such Stock, copies of annual
financial statements. Notwithstanding the preceding sentence, the Company shall not be required to
provide such statements to key employees whose duties in connection with the Company assure their
access to equivalent information.

     7.1 Transferability. No Award shall be assigned, transferred, or otherwise disposed of by a
Participant other than by will or the laws of descent and distribution or, with respect to Awards
other than Incentive Stock Options, as permitted by Rule 701 of the Securities Act.

     8.1 Limitation on Number of Shares. At no time shall the total number of shares of Stock
issuable upon exercise of all outstanding Options under the Plan and any shares of Stock provided
for under any bonus or similar plan or agreement of the Company exceed 30% of the then-outstanding
shares of Stock of the Company, as calculated pursuant to Section 260.140.45 of Title 10 of the
California Code of Regulations, unless a percentage higher than 30% is approved by at least
two-thirds of the outstanding securities of the Company entitled to vote. The number of shares of
Stock which may be issued or transferred pursuant to Awards under the Plan shall be reduced to the
extent necessary to comply with this provision.

22exv10w4

 

Exhibit 10.4

Summary of Director Compensation

	 	 	 	 	 
	Annual Retainers:
	 	 	 	 
	Director
	 	$	20,000	 
	In lieu of per meeting fees of the Board and Committees of the Board
	 	$	20,000	 
	Lead Director
	 	$	5,000	 
	Audit Committee — Chair
	 	$	5,000	 
	Compensation Committee — Chair
	 	$	5,000

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