Document:

EXHIBIT
10.1

 

AMENDED
PENSION ENHANCEMENT FOR EDWARD M. LIDDY

 

             This agreement
(“Agreement”) memorializes the terms applicable to a certain pension enhancement
for Mr. Edward M. Liddy (“Mr. Liddy”) that was approved on November 13,
2001, by The Allstate Corporation.  To
the extent applicable, this Agreement is intended to comply with the
requirements of Internal Revenue Code section 409A (including any applicable
regulations and guidance thereunder) (“Code section 409A”).

 

Pension
Enhancement Benefit

 

             Mr. Liddy shall
accrue a benefit (“Pension Enhancement Benefit”) under this Agreement until his
separation from service, which is anticipated to be April 30, 2008, in an
amount equal to the difference between (i) the sum of the benefit
otherwise owed to Mr. Liddy under the Allstate Retirement Plan (“ARP”) and
the Supplemental Retirement Income Plan (“SRIP”), and (ii) the benefit
otherwise owed to Mr. Liddy under the ARP and SRIP, after crediting Mr. Liddy
with a total of 28 years of Credited Service, which is the maximum Credited
Service allowed under the ARP.

 

Time of
Distribution

 

             The Pension
Enhancement Benefit shall be paid to Mr. Liddy on the date that is 6
months following the date of his separation from service.  Accordingly, assuming an April 30, 2008 separation
from service date, payment will be made on November 1, 2008.  Interest shall accrue in accordance with the
interest crediting provisions for mandatory delayed payments under the SRIP and
shall be paid concurrent with the Pension Enhancement Benefit.  In the event of Mr. Liddy’s death prior
to payment of the Pension Enhancement Benefit, such benefit shall be
distributed to Mr. Liddy’s beneficiary, as determined under the ARP, upon
his death and shall not be subject to a six-month delay.

 

Form of
Distribution

 

             The Pension
Enhancement Benefit shall be distributed in the form of a single lump sum
payment.  The amount of such single lump
sum payment shall be calculated using the interest and mortality rates for
determining an “Option F” lump sum distribution under Section 4.2 of the
ARP.

 

Change of
Control

 

             Prior to Mr. Liddy’s
separation from service, the Pension Enhancement Benefit payable under this
Agreement shall be distributed upon a change of control within the meaning of
Code section 409A.

 

IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of April 15,
2008.

 

 

	
   

  	
  /s/
  Edward M. Liddy

  	
   

  
	
   

  	
   

  
	
   

  	
  Edward
  M. Liddy

  
	
   

  	
   

  
	
   

  	
  THE
  ALLSTATE CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  H. John Riley, Jr.

  
	
   

  	
  Name:

  	
  H.
  John Riley, Jr.

  
	
   

  	
  Title:

  	
  Chairman,
  Compensation and Succession CommitteeExhibit 10.2

 

	
   

  	
  H. John Riley, Jr. 

  Chairman of The Compensation 

  and Succession Committee

  

 

 

 

April 15,
2008

 

 

Edward
M. Liddy

Chairman

The
Allstate Corporation

 

 

 

Dear
Ed,

 

This
letter is to document the compensation and perquisites that will be provided to
you following your retirement on April 30, 2008, that were approved by the
Board on April 15, 2008.

 

The
Corporation will provide you with the following perquisites or will reimburse
you for the reasonable expenses in obtaining the following for a period of ten
years from the date of your retirement unless noted otherwise below:

 

1)              Office, secretary, and
office equipment, including computers and phones;

2)              Tax preparation services for
tax years through 2010 on the same terms available to senior officers of
Allstate Insurance Company (“AIC”);

3)              An annual physical
examination provided under the terms of any executive physical examination
program made available to senior officers of AIC;

4)              Use on a second priority
basis of ground transportation services using vehicles owned or leased by AIC
and operated by AIC employees for attendance at civic-related events;

5)              Access to corporate travel
and meeting planning services used by AIC for reservations;

6)              Use of AIC’s Glen Club
membership for a period of ten years from your retirement date as long as AIC
maintains a membership; you will be responsible for paying, and the Corporation
will not reimburse you for, any charges or fees related to your actual use of
the Glen Club; and

7)              Use of the 1953 Allstate Coupe
from May 1 through September 30 of each year for a period of five
years from the date of your retirement.

 

Allstate
will reimburse you for the taxes associated with the cost of your office,
secretary, and office equipment, but will not provide any other tax
reimbursement.

 

The
reimbursement of any expenses described above shall be provided not later than
the end of the calendar year following the calendar year in which the expense
was incurred.  In addition, the amount of
any expense eligible for reimbursement, or in-kind benefit provided, during any
calendar year shall not affect the amount of such expense 

 

 

eligible
for reimbursement, or in-kind benefits to be provided, in any other calendar
year.  Lastly, the right to reimbursement
or in-kind benefits is not subject to liquidation or exchange for another
benefit.

 

To
the extent applicable, it is the Board’s intention that the provision of such
perquisites and the reimbursement of such expenses are intended to comply with
the requirements of Internal Revenue Code section 409A (including any
applicable regulations and guidance thereunder).

 

With
regard to compensation, your salary, and long-term cash incentive awards for
the 2007-2009 and 2008-2010 performance cycles will be prorated based on your
retirement date of April 30, 2008. 
The long-term cash incentive award for the 2006-2008 cycle will not be
prorated.  All awards will be paid at the
time all awards are paid for that particular cycle and calculated based on
actual results.

 

If you have any questions regarding this letter, please contact me.

 

 

Sincerely,

 

 

	
  /s/ H. John Riley, Jr.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  H. John Riley, Jr.

  	
   

  	
   

  

 

2Exhibit
10.12

 

Final
Version

 

INSIGHT
HEALTH SERVICES HOLDINGS CORP.

2008 DIRECTOR STOCK OPTION PLAN

 

I.              PURPOSE AND DEFINITIONS

 

A.            PURPOSE OF THE PLAN

 

The Plan is intended to encourage ownership of Shares
by Directors of the Company, and to provide additional incentive for such
persons to promote the success of the Company.

 

B.            DEFINITIONS

 

Unless otherwise specified or unless the context
otherwise requires, the following terms, as used in this Plan, have the
following meanings:

 

1.             Affiliate means a corporation which, for
purposes of Section 424 of the Code, is a parent or subsidiary of the
Company, direct or indirect.

 

2.             Board means the Board of Directors of the
Company.

 

3.             Change in Control means the occurrence of
one of the following events:

 

(i)            if
any “person” or “group” as those terms are used in Sections 13(d) and 14(d) of
the Exchange Act or any successors thereto is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act or any successor thereto), directly or indirectly, of
securities of the Company representing 50%
or more of the combined voting power of the Company’s then outstanding
securities; or

 

(ii)           during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board and any new directors whose election by the Board
or nomination for election by the Company’s stockholders was approved by at
least two-thirds of the directors then still in office who either were
directors at the beginning of the period or whose election was previously so
approved, cease for any reason to constitute a majority thereof; or

 

(iii)          the consummation of a merger or consolidation
of the Company with any other corporation, other than a merger or consolidation
(A) which would result in all or a portion of the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation or (B) by which the corporate existence
of the Company is not affected and following which the Company’s chief 

 

 

executive officer and directors retain their positions with the Company
(and constitute at least a majority of the Board); or

 

(iv)          the
consummation of a plan of complete liquidation of the Company or consummation
of the sale or disposition by the Company of all or substantially all the
Company’s assets, whether by sale,
lease, exchange or otherwise.

 

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

 

5.             Committee means the committee to which the
Board delegates the power to act under or pursuant to the provisions of the
Plan, or the Board if no committee is selected or as otherwise set forth
herein.  Initially, the Compensation
Committee of the Board will administer the Plan, except as otherwise specially
set forth herein.  If the Board delegates
powers to a committee, and if the Company is or becomes subject to Section 16
of the Exchange Act, then, if necessary for compliance therewith, such
committee shall consist initially of not less than two (2) members of the
Board, each member of which must be a “non-employee director,” within the
meaning of the applicable rules promulgated pursuant to the Exchange
Act.  If the Company is or becomes
subject to Section 16 of the Exchange Act, no member of the Committee
shall receive any Option pursuant to the Plan or any similar plan of the
Company or any Affiliate while serving on the Committee unless the Board
determines that the grant of such an Option satisfies the then current Rule 16b-3
requirements under the Exchange Act. 
Notwithstanding anything herein to the contrary, and insofar as the
Board determines that it is desirable in order for compensation recognized by
Participants pursuant to the Plan to be fully deductible to the Company for
federal income tax purposes, each member of the Committee also shall be an “outside
director” (as defined in regulations or other guidance issued by the Internal
Revenue Service under Code Section 162(m)).

 

6.             Common Stock means the common stock of the
Company.

 

7.             Company means InSight Health Services
Holdings Corp., a Delaware corporation, and includes any successor or assignee
corporation or corporations into which the Company may be merged, changed, or
consolidated; any corporation for whose securities the securities of the
Company shall be exchanged; and any assignee of or successor to substantially
all of the assets of the Company.

 

8.             Director means a member of the Board.

 

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

 

2

 

10.           Eligible Director means a member of the
Board designated by the Board as being eligible to be granted Options under the
Plan.

 

11.           Exchange Act means the Securities Exchange
Act of 1934, as amended from time to time, or any successor statute thereto.

 

12.           Incentive Option means an Option which,
when granted, is intended to be an “incentive stock option,” as defined in Section 422
of the Code.

 

13.           Nonstatutory Option means an Option which,
when granted, is not intended to be an “incentive stock option,” as defined in Section 422
of the Code, or that subsequently fails to comply with the requirements of Section 422
of the Code.

 

14.           Option means a right or option granted
under the Plan.

 

15.           Option Agreement means an agreement between
the Company and a Participant executed and delivered pursuant to the Plan.

 

16.           Participant means an Eligible Director to
whom one or more Nonstatutory Options are granted under the Plan.

 

17.           Plan means this Stock Option Plan, as
amended from time to time.

 

18.           Shares means the following shares of the
capital stock of the Company as to which Options have been or may be granted
under the Plan: treasury shares or authorized but unissued Common Stock, or any
shares of capital stock into which the Shares are changed or for which they are
exchanged within the provisions of Article VI of the Plan.

 

II.            SHARES SUBJECT TO THE PLAN

 

The aggregate number of Shares as to which Options may
be granted from time to time shall be One Hundred Ninety-Two Thousand and
ninety-six (192,096) Shares (subject to adjustment for stock splits, stock
dividends, and other adjustments described in Article VI hereof)  Notwithstanding the foregoing, the aggregate
number of Shares issuable upon exercise of all outstanding Options shall not
exceed a number of Shares which is equal to thirty percent (30%) of the then
outstanding shares of the Company, as calculated in accordance with and if
required to otherwise comply with the conditions and exclusions of California
Corporate Securities Rule 260.140.45, unless a percentage higher than
thirty percent (30%) is approved by at least two-thirds (2/3) of the
outstanding Shares entitled to vote.

 

Shares subject to Options that are forfeited,
terminated, expire unexercised, canceled by agreement of the Company and the Participant
(whether for the purpose of repricing such Options or otherwise), settled in
cash in lieu of Common Stock or in such manner that all or some of the Shares
covered by such Options are not issued to a Participant (or, if issued to the
Participant, are returned to the Company by the Participant pursuant to a 

 

3

 

right of repurchase or right of first refusal
exercised by the Company), shall immediately become available for Options
hereunder.  In addition, if the exercise
price of any Option is satisfied by tendering Shares to the Company (by actual
delivery or attestation), only the number of Shares issued net of the Shares
tendered shall be deemed delivered for purposes of determining the maximum number
of Shares available for Options.

 

III.           ADMINISTRATION OF THE PLAN

 

The Plan shall be administered by the Committee.  A majority of the Committee shall constitute
a quorum at any meeting thereof (including by telephone conference) and the
acts of a majority of the members present, or acts approved in writing by a
majority of the entire Committee without a meeting, shall be the acts of the
Committee for purposes of this Plan.  The
Committee may authorize one or more of its members or an officer of the Company
to execute and deliver documents on behalf of the Committee.  A member of the Committee shall not exercise
any discretion respecting himself or herself under the Plan, other than such
discretion that applies to all holders of Options equally.  The Board shall have the authority to remove,
replace or fill any vacancy of any member of the Committee upon notice to the
Committee and the affected member.  Any
member of the Committee may resign upon notice to the Board.  If permitted by applicable law, and in accordance
with any such law, the Committee may allocate among one or more of its members,
or may delegate to one or more of its agents, such duties and responsibilities
as it determines.

 

Subject to the provisions of the Plan, the Committee
is authorized to:

 

(a)           interpret
the provisions of the Plan or of any Option or Option Agreement and, except as
otherwise set forth herein, to make all rules and determinations which it
deems necessary or advisable for the administration of the Plan;

 

(b)           determine
which Directors shall be designated as Eligible Directors and which of the
Eligible Directors shall be granted Options;

 

(c)           determine
the number of Shares for which an Option or Options shall be granted;

 

(d)           provide
for the acceleration of the right to exercise an Option (or portion thereof);
and

 

(e)           specify
the terms and conditions upon which Options may be granted.

 

All determinations of the Committee shall be made by a
majority of its members.  No member of
the Committee shall be liable for any action or determination made in good
faith with respect to the Plan or any Option.

 

IV.           ELIGIBILITY FOR PARTICIPATION

 

The Committee may, at any time and from time to time,
grant one or more Options to one or more Eligible Directors and may designate
the number of Shares to be subject to each Option so granted.

 

4

 

Notwithstanding any of the foregoing provisions, the
Committee may authorize the grant of an Option to a person not then serving as
a Director, conditioned upon such person becoming eligible to become a
Participant at or prior to the execution of the Option Agreement evidencing the
actual grant of such Option.

 

V.            TERMS AND CONDITIONS OF OPTIONS

 

Each Option shall be a Nonstatutory Option and shall
be set forth in an Option Agreement, duly executed on behalf of the Company and
by the Participant to whom such Option is granted.  Except for the setting of the Option price
under Paragraph A, no Option shall be granted and no purported grant of any
Option shall be effective until such Option Agreement shall have been duly
executed on behalf of the Company and by the Participant.  Each such Option Agreement shall be subject
to at least the following terms and conditions:

 

A.            OPTION PRICE

 

The exercise price of the Shares covered by each Option granted under
the Plan shall be determined by the Committee. 
The Option price per share shall be at such amount as may be determined
by the Committee in its sole discretion on the date of the grant of the Option.

 

B.            NUMBER OF SHARES

 

Each Option shall state the number of Shares to which it pertains.

 

C.            TERM OF OPTION

 

Each Option shall terminate not more than ten (10) years from the
date of the grant thereof, or at such earlier time as the Option Agreement may
provide, and shall be subject to earlier termination as herein provided.

 

D.            DATE OF EXERCISE

 

Upon the authorization of the grant of an Option, or at any time
thereafter, the Committee may, subject to the provisions of Paragraph C of this
Article V, prescribe the date or dates on which the Option becomes
exercisable, and may provide that the Option rights become exercisable in
installments over a period of years, and/or upon the attainment of stated
goals.  Unless the Committee otherwise
provides in writing, the date or dates on which the Option becomes exercisable
shall be tolled during any unpaid leave of absence.

 

E.             METHOD OF PAYMENT

 

The Option price shall be paid on the date of purchase specified in the
notice of exercise, as set forth in Paragraph I.  It shall be paid in such form as the
Committee shall, either by rules promulgated pursuant to the provisions of
Article III of the Plan, or in the particular Option Agreement, provide.

 

5

 

F.             TERMINATION OF SERVICE

 

1.             A
Participant who ceases to be a Director for any reason other than death,
Disability, or removal for cause, may exercise any Option granted to such
Participant, to the extent that the right to purchase Shares thereunder has
become exercisable by the date of such termination, but only within three (3) months
(or such other period of time as the Committee may determine), after such date,
or, if earlier, within the originally prescribed term of the Option, and
subject to the conditions that (i) no Option shall be exercisable after
the expiration of the term of the Option and (ii) unless the Committee
otherwise provides, no Option that has not become exercisable by the date of
such end of service shall at any time thereafter be or become exercisable.

 

2.             A
Participant who ceases to be a Director as a result of removal for cause shall,
immediately upon such removal, cease to have any right to exercise any Option,
whether or not then vested or unvested. 
For purposes of this Plan, cause shall be defined to include (but shall
not be limited to) wrongful appropriation of funds of the Company or an
Affiliate, divulging confidential information about the Company or an Affiliate
to the public, the commission of a gross misdemeanor or felony, or the
performance of any other action that the Board or the Committee, in their sole
discretion, may deem to be sufficiently injurious to the interests of the
Company or an Affiliate to constitute substantial cause for removal.  The determination of the Board or the
Committee as to the existence of cause shall be conclusive and binding upon the
Participant and the Company.

 

3.             Except
as the Committee may otherwise expressly provide or determine, a Participant
who is absent from service on the Board because of temporary disability (any disability
other than a permanent and total Disability as defined at Paragraph B(7) of
Article I hereof), or who is on leave of absence for any purpose permitted
by the Board, shall not, during the period of any such absence, be deemed, by
virtue of such absence alone, to have terminated his or her relationship with
the Company.

 

4.             Paragraph
F(1) shall control and fix the rights of a Participant who ceases to be a
Director for any reason other than death, Disability, or removal for cause, and
who subsequently becomes Disabled or dies. 
Nothing in Paragraphs G and H of this Article V shall be applicable
in any such case except that, in the event of such a subsequent Disability or
death within the three (3) month period after the termination of service
or, if earlier, within the originally prescribed term of the Option, the
Participant or the Participant’s estate or personal representative may exercise
the Option permitted by this Paragraph F, in the event of Disability, within
twelve (12) months after the date that the Participant ceased to be a Director
or, in the event of death, within twelve (12) months after the date of death of
such Participant.

 

6

 

G.            TOTAL AND PERMANENT DISABILITY

 

A Participant who ceases to be a Director by reason of Disability may
exercise any Option granted to such Participant to the extent that the right to
purchase Shares thereunder has become exercisable on or before the date such
Participant becomes Disabled as determined by the Committee.

 

A Disabled Participant, or his or her estate or personal
representative, shall exercise such rights, if at all, only within a period of
not more than twelve (12) months after the date that the Participant became
Disabled as determined by the Committee (notwithstanding that the Participant
might have been able to exercise the Option as to some or all of the Shares on
a later date if the Participant had not become Disabled) or, if earlier, within
the originally prescribed term of the Option.

 

H.            DEATH

 

In the event that a Participant to whom an Option has been granted
ceases to be a Director by reason of such Participant’s death, such Option, to
the extent that the right is exercisable but not exercised on the date of
death, may be exercised by the Participant’s estate or personal representative
within twelve (12) months after the date of death of such Participant or, if
earlier, within the originally prescribed term of the Option, notwithstanding
that the decedent might have been able to exercise the Option as to some or all
of the Shares on a later date if the Participant were alive and had continued
to be a Director.

 

I.              EXERCISE OF OPTION AND ISSUE OF STOCK

 

Options shall be exercised by giving written notice to the
Company.  Such written notice shall: (l) be
signed by the person exercising the Option, (2) state the number of Shares
with respect to which the Option is being exercised, (3) contain the
warranty required by Paragraph M of this Article V, and (4) specify a
date (other than a Saturday, Sunday or legal holiday) not less than five (5) nor
more than ten (10) days after the date of such written notice, as the date
on which the Shares will be purchased. 
Such tender and conveyance shall take place at the principal office of
the Company during ordinary business hours, or at such other hour and place
agreed upon by the Company and the person or persons exercising the
Option.  On the date specified in such
written notice (which date may be extended by the Company in order to comply
with any law or regulation which requires the Company to take any action with
respect to the Option Shares prior to the issuance thereof, whether pursuant to
the provisions of Article VI or otherwise), the Company shall accept
payment for the Option Shares, and shall deliver to the person or persons
exercising the Option in exchange therefor an appropriate certificate or
certificates for fully paid non-assessable Shares.  In the event of any failure to pay for the
number of Shares specified in such written notice on the date set forth therein
(or on the extended date as above provided), the right to exercise the Option
shall terminate with respect to such number of 

 

7

 

Shares, but shall continue with respect to the remaining Shares covered
by the Option and not yet acquired pursuant thereto.

 

J.             RIGHTS AS A STOCKHOLDER

 

No Participant to whom an Option has been granted shall have rights as
a stockholder with respect to any Shares covered by such Option except as to
such Shares as have been issued to or registered in the Company’s share
register in the name of such Participant upon the due exercise of the Option
and tender of the full Option price.

 

K.            ASSIGNABILITY AND TRANSFERABILITY OF OPTION

 

Unless otherwise permitted by the Code and by Rule 16b-3 of the
Exchange Act and by Section 260.140.41(d) of Title 10 of the
California Code of Regulations, if applicable, and approved in advance by the
Committee, an Option granted to a Participant shall not be transferable by the
Participant and shall be exercisable, during the Participant’s lifetime, only
by such Participant or, in the event of the Participant’s incapacity, his
guardian or legal representative.  Except
as otherwise permitted herein, such Option shall not be assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise) and shall
not be subject to execution, attachment, or similar process.  Any attempted transfer, assignment, pledge, hypothecation
or other disposition of any Option or of any rights granted thereunder contrary
to the provisions of this Paragraph K, or the levy of any attachment or similar
process upon an Option or such rights, shall be null and void.

 

L.            OTHER PROVISIONS

 

The Option Agreements authorized under the Plan shall be subject to
such other terms and conditions including, without limitation, restrictions
upon the exercise of the Option, as the Committee shall deem advisable.

 

M.           PURCHASE FOR INVESTMENT

 

Unless the Shares to be issued upon the particular exercise of an
Option shall have been effectively registered under the Securities Act of 1933,
as now in force or hereafter amended, the Company shall be under no obligation
to issue the Shares covered by such exercise unless and until the following
conditions have been fulfilled.  In
accordance with the direction of the Committee, the persons who exercise such
Option shall warrant to the Company that, at the time of such exercise, such
persons are acquiring their Option Shares for investment and not with a view
to, or for sale in connection with, the distribution of any such Shares, and
shall make such other representations, warranties, acknowledgments and/or
affirmations, if any, as the Committee may require.  In such event, the persons acquiring such
Shares shall be bound by the provisions of the following legend (or similar
legend) which shall be endorsed upon the certificate(s) evidencing their
Option Shares issued pursuant to such exercise.

 

8

 

“The shares represented by this certificate have been acquired for
investment and they may not be sold or otherwise transferred by any person,
including a pledgee, in the absence of an effective registration statement for
the shares under the Securities Act of 1933 or an opinion of counsel
satisfactory to the Company that an exemption from registration is then
available.”

 

Without limiting the generality of the foregoing, the Company may delay
issuance of the Shares until completion of any action or obtaining any consent
that the Company deems necessary under any applicable law (including without
limitation state securities or “blue sky” laws).

 

VI.           ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; 

SALE OF COMPANY

 

If the outstanding Shares of the Company are changed
into or exchanged for a different number or kind of shares or other securities
of the Company or of another corporation by reason of any reorganization,
merger, or consolidation, or if a change is made to the Common Stock of the
Company by reason of any recapitalization, reclassification, change in par
value, stock split, reverse stock split, combination of shares or dividend
payable in capital stock, or the like, the Board or a committee it may
designate shall make adjustments to such Options (including, by way of example
and not by way of limitation, the grant of substitute options under the Plan or
under the plan of such other corporation) as it may determine to be appropriate
under the circumstances, and, in addition, appropriate adjustments shall be
made in the number and kind of shares and in the option price per share subject
to outstanding options under the Plan or under the plan of such successor
corporation.

 

Notwithstanding anything herein to the contrary, in
the event of (i) the adoption of a plan of merger or consolidation under
which all the Shares of the Company would be eliminated, or (ii) a sale of
all or substantially all of the Company’s assets or Shares, and if a
Participant shall not have exercised such Option, the Board or a committee it
may designate may, in its sole discretion, cancel any or all Options upon any
of the foregoing events and provide for the payment to Participants in cash of
an amount equal to the difference between the Option price and the price of a
Share, as determined in good faith by the Board or any such committee, at the
close of business on the date of such event, multiplied by the number of Shares
subject to the Option so canceled.

 

VII.         DISSOLUTION OR LIQUIDATION OF THE COMPANY

 

Upon the consummation of a dissolution or liquidation
of the Company other than in connection with a transaction to which the
preceding Article VI is applicable, all Options that have not otherwise
been exercised that have been granted hereunder shall terminate and become null
and void; provided, however, that if the rights of a Participant under the
applicable Options have not otherwise terminated and expired, the Participant
shall have the right immediately prior to such dissolution or liquidation to exercise
any Option 

 

9

 

granted hereunder to the extent that the right to
purchase shares thereunder has become exercisable as of the date immediately
prior to such dissolution or liquidation.

 

VIII.            TERMINATION
OF THE PLAN

 

The Plan shall terminate (10) years from the
earlier of the date of its adoption or the date of its approval by the
stockholders.  The Plan may be terminated
at an earlier date by vote of the stockholders or the Board; provided, however,
that any such earlier termination shall not affect any Options granted or
Option Agreements executed prior to the effective date of such
termination.  Except as may otherwise be
provided for under Articles VI and VII, and notwithstanding the termination of
the Plan, any Options granted prior to the effective date of the Plan’s
termination may be exercised until the date set forth in the Option Agreement,
and the provisions of the Plan with respect to the full and final authority of
the Committee under the Plan shall continue to control.

 

IX.           AMENDMENT OF THE PLAN

 

The Plan may be amended by the Board and such
amendment shall become effective upon adoption by the Board; provided, however,
that any amendment shall be subject to the approval of the stockholders of the
Company at or before the next annual meeting of the stockholders of the Company
if such stockholder approval is required by the Code, any federal or state law
or regulation, the rules of any stock exchange or automated quotation
system on which the Shares may be listed or quoted, or if the Board, in its
discretion, determines to submit such changes to the Plan to its stockholders
for approval.

 

X.            INDEMNIFICATION OF COMMITTEE

 

In addition to such other rights of indemnification as
they may have as directors or as members of the Committee, the members of the
Committee shall be indemnified by the Company against all reasonable expenses,
including attorneys’ fees, actually and reasonably incurred in connection with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken by them as members of the Committee and against all amounts paid by them
in settlement thereof (provided such settlement is approved by independent
legal counsel selected by the Company) or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that the
Committee member is liable for gross negligence or willful misconduct in the
performance of his or her duties.  To
receive such indemnification, a Committee member must first offer in writing to
the Company the opportunity, at its own expense, to defend any such action,
suit or proceeding.

 

XI.           MITIGATION OF EXCISE TAX

 

Unless otherwise provided for in the Option Agreement
or in any other agreement between the Company and the Participant, if any
payment or right accruing to a Participant under this Plan (without the application
of this Article XII), either alone or together with other payments or
rights accruing to the Participant from the Company or an Affiliate would
constitute a “parachute payment” (as defined in Section 280G of the 

 

10

 

Code and regulations thereunder), such payment or
right shall be reduced to the largest amount or greatest right that will result
in no portion of the amount payable or right accruing under the Plan being
subject to an excise tax under Section 4999 of the Code or being
disallowed as a deduction under Section 280G of the Code.  The determination of whether any reduction in
the rights or payments under this Plan is to apply shall be made by the
Company.  The Participant shall cooperate
in good faith with the Company in making such determination and providing any
necessary information for this purpose.

 

XII.              SAVINGS
CLAUSE

 

This Plan is intended to comply in all respects with
applicable law and regulations, including, (i) with respect to those
Participants who are officers or directors for purposes of Section 16 of
the Exchange Act, Rule 16b-3 of the Securities and Exchange Commission, if
applicable, and (ii) Section 402 of the Sarbanes-Oxley Act.  In case any one or more provisions of this
Plan shall be held invalid, illegal, or unenforceable in any respect under
applicable law and regulation (including Rule 16b-3), the validity,
legality, and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby and the invalid, illegal, or unenforceable
provision shall be deemed null and void; however, to the extent permitted by
law, any provision that could be deemed null and void shall first be construed,
interpreted, or revised retroactively to permit this Plan to be construed in
compliance with all applicable law (including Rule 16b-3) so as to foster
the intent of this Plan.  Notwithstanding
anything herein to the contrary, with respect to Participants who are Directors
for purposes of Section 16 of the Exchange Act, no grant of an Option to
purchase Shares shall permit unrestricted ownership of Shares by the
Participant for at least six (6) months from the date of the grant of such
Option, unless the Board determines that the grant of such Option to purchase
Shares otherwise satisfies the then current Rule 16b-3 requirements.

 

XIII.            WITHHOLDING

 

Except as otherwise provided by the Committee,

 

(a)           the
Company shall have the power and right to deduct or withhold, or require a
Participant to remit to the Company, an amount sufficient to satisfy the
minimum federal, state, and local taxes required by law to be withheld with
respect to any grant, exercise, or payment made under or as a result of this
Plan; and

 

(b)           in the
case of any taxable event hereunder, a Participant may elect, subject to the
approval in advance by the Committee, to satisfy the withholding requirement,
if any, in whole or in part, by having the Company withhold Shares of Common
Stock that would otherwise be transferred to the Participant having a fair
market value, on the date the tax is to be determined, equal to the minimum
marginal tax that could be imposed on the transaction.  All elections shall be made in writing and
signed by the Participant.

 

11

 

XIV.            EFFECTIVE
DATE

 

This Plan shall become effective upon adoption by the
Board, provided that the adoption of the Plan shall be subject to the approval
of the stockholders of the Company if such stockholder approval is required by
the Code, any federal or state law or regulations, the rules of any stock
exchange or automated quotation system on which the Shares may be listed or
quoted, or if the Board, in its discretion, desires to submit the Plan to its
stockholders for approval.

 

XV.              INFORMATION

 

The Company shall provide to each Participant, during
the period for which such Participant has one or more Options outstanding,
copies of financial statements at least annually, if necessary to comply with
California Corporate Securities Rule 260.140.46.

 

XVI.            FOREIGN
JURISDICTIONS

 

To the extent the Committee determines that the
restrictions imposed by the Plan preclude the achievement of the material
purposes of the Plan in jurisdictions outside the United States of America, the
Committee in its discretion may modify those restrictions as it determines to
be necessary or appropriate to conform to applicable requirements or practices
of jurisdictions outside of the United States of America.

 

12

 

XVII.    GOVERNING LAW

 

This Plan shall be governed by the laws of the State
of Delaware and construed in accordance therewith.

 

Adopted this 14th day of April, 2008.

 

13

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