Document:

EXHIBIT
10.1

PIERRE
FOODS, INC.

FISCAL
2008

EXECUTIVE
INCENTIVE COMPENSATION PLAN

1.             PURPOSE
OF THE PLAN.

The purpose of the
Pierre Foods, Inc. Fiscal 2008 Executive Incentive Compensation Plan is to
provide certain executives of Pierre Foods, Inc. and its subsidiaries with
incentive compensation based upon the achievement of financial, business and
other performance criteria.  The Plan is
an annual Plan with quarterly partial interim bonus payments.

2.             DEFINITIONS.

The following
capitalized terms used in the Plan have the respective meanings set forth in
this Section:

(a)           “Award”
means a cash bonus award granted pursuant to the Plan.

(b)           “Board”
means the Board of Directors of the Company.

(c)           “Code”
means the Internal Revenue Code of 1986, as amended, or any
successor thereto.

(d)           “Committee”
means the Compensation Committee of the Board, or any successor
thereto or any other committee designated by the Board to assume the
obligations of the Committee hereunder.

(e)           “Company”
means Pierre Foods, Inc., a North Carolina corporation and its subsidiaries.

(f)            “Direct
Contribution” means net sales less standard cost of goods sold
(adjusted for formula-pricing associated with certain customers), less direct
expenses, including but not limited to, freight and selling expenses, based
upon the Company’s financial statements, as determined by the Committee with
respect to Awards to the President and CEO, or by the Committee together with
the President and CEO in all other cases.

(g)           “EBITDA”
means earnings before interest, taxes, depreciation and amortization, based
upon the Company’s financial statements, as determined by the Committee with
respect to Awards to the President and CEO or by the Committee together with
the President and CEO in all other cases.

(h)           “Effective
Date” means the date on which the Plan takes effect in accordance
with Section 12 of the Plan.

(i)            “Estimated
Award” has the meaning ascribed to it in Section 5(c).

(j)            “Fiscal
2008” means the Company’s fiscal year ending March 1, 2008.

(k)           “Maximum
Award” means the maximum Award which a Participant can earn pursuant
to the Plan as set forth on Schedule I.

(l)            “Participant”
means the President and CEO and such other executives of the Company
who are selected by the Committee together with the President and CEO to
participate in the Plan pursuant to Section 4 of the Plan.

(m)          “Performance
Period” means Fiscal 2008.

(n)           “Plan”
means the Pierre Foods, Inc. Fiscal 2008 Executive Incentive Compensation Plan.

(o)           “President
and CEO” means the President and Chief Executive Officer of the
Company.

3.             ADMINISTRATION.

The Plan shall be
administered by the Committee for purposes of any Award granted to the
President and CEO.  For all other Awards,
the Plan shall be administered by the President and CEO with oversight by the
Committee.  The President and CEO shall
be a Participant in the Plan and shall have the authority to select the other
executives to be granted Awards under the Plan. 
The Committee, with respect to the President and CEO, and the Committee
together with the President and CEO with respect to all other Participants,
shall have the authority to determine the size and terms of Awards (subject to
the limitations imposed on Awards in Section 5 below), to modify the terms of
any Award that has been granted, to determine the time when Awards will be
made, the amount of any payments pursuant to such Awards, and the Performance
Period to which they relate, to establish performance objectives in respect of
such Performance Periods and to determine whether such performance objectives
were attained.  The Committee with
respect to the President and CEO, and the Committee together with the President
and CEO with respect to all other Participants, is authorized to interpret the
Plan, to establish, amend and rescind any rules and regulations relating to the
Plan, and to make any other determinations that it deems necessary or desirable
for the administration of the Plan.  Any
decision of the Committee or the President and CEO, in their respective roles
as administrators of the Plan, in the interpretation and administration of the
Plan, as described herein, shall lie within their sole and absolute discretion
and shall be final, conclusive and binding on all parties concerned.  Determinations made by the Committee or the
Committee together with the President and CEO under the Plan need not be
uniform and may be made selectively among Participants, whether or not such
Participants are similarly situated.

4.             ELIGIBILITY
AND PARTICIPATION.

(a)           Participants.  The President and CEO shall be a Participant
in the Plan, and shall select the other executives who shall be Participants
for the Performance Period.  Participants
shall be selected from among the employees of the Company and the designation
of Participants may be made individually or by groups or classifications of
employees, as the Committee together with the President and CEO deem
appropriate.

(b)           New Hires; Promotions.  If an employee other than the President and
CEO becomes a Participant after the commencement of the Performance Period, the
Committee together with the President and CEO, in their sole discretion, shall
determine the date on which the Participant will be entitled to participate in
the Plan, the performance objectives, amount of Award and other terms applicable
to such Participant.  New employees (who
are determined to be Participants by the Committee together with the President
and CEO) shall be eligible to participate in the Plan in the first full fiscal
quarter of his or her employment.  If a
Participant is transferred or promoted before the end of the Performance
Period, the Committee together with the President and CEO, in their sole
discretion, shall determine whether such Participant shall be entitled to
continue to participate in the Plan, and if so, the performance objectives,
amount of Award and other terms and conditions applicable to such
Participant.  Unless otherwise
specifically determined by the Committee together with the President and CEO,
any Participant who is promoted during the Performance Period shall continue
under the Plan as if he or she was not promoted.

5.             AWARDS.

(a)           Performance Objectives.  Awards under the Plan shall be conditioned on
the attainment of written performance objectives.  Performance objectives and Awards shall be recommended
by the President and CEO and determined and approved by the Committee for the
Performance Period and may include, among other things, objectives relating to
EBITDA and Direct Contribution.  The
Committee, with respect to Awards to the President and CEO, and based upon the
recommendation by the President and CEO in all other cases, shall determine
whether and to what extent each performance objective has been met.  In determining whether and to what extent a
performance objective has been met, the Committee or the Committee together
with the President and CEO, as applicable, may consider such matters as they
deem appropriate.

(b)           Amount Payable.  The amount payable pursuant to an Award shall
be determined by the Committee (upon recommendation by the President and CEO
for all Awards other than Awards to the President and 

CEO) in its sole
discretion based on the applicable performance objectives and their
determination of whether and to what extent each applicable performance
objective has been met; provided, however, that in no event shall a Participant
be paid more than the Maximum Award applicable to such Participant.  Unless otherwise specifically determined by
the Committee together with the President and CEO with respect to a
Participant, Awards for the Performance Period shall be based upon a
Participant’s salary at the commencement of the Performance Period.

(c)           Payment.  As soon as practicable after the end of each
fiscal quarter during the Performance Period, the Company shall estimate the total
Award for the Performance Period that will be payable to each Participant based
upon (i) the actual performance of the Company through the end of such fiscal
quarter and (ii) the projected performance of the Company for the remainder of
the Performance Period (the “Estimated Award”).  Subject to the terms and conditions of the
Plan, for each of the first three fiscal quarters during the Performance
Period, the Company shall pay each Participant an amount equal to one-fourth
(1/4) of seventy-five percent (75%) of the total Estimated Award for such
Participant.  The final payment of the
Award shall include the total Award for the Performance Period less any
payments made for each of the first three fiscal quarters during the
Performance Period.  The final payment is
not payable to a Participant if the Participant ceases to be a Participant at
any time prior to the end of the Performance Period.  Following the completion of the annual audit
of the Company’s financial statements and the filing of such financial
statements with the Securities and Exchange Commission, subject to the terms
and conditions of the Plan, a fourth and final payment shall be made to each
Participant reflecting the actual attainment of the performance objectives.

(d)           Termination of Employment.  If a Participant’s employment is terminated
during the Performance Period for any reason, the Participant shall forfeit any
and all Awards for the Performance Period. 
Payment of Awards to Participants whose employment is terminated following
the end of any fiscal quarter, but prior to the expiration of the Performance
Period, shall be paid at the sole and exclusive discretion of the Committee
together with the President and CEO (or with respect to the President and CEO,
the sole and exclusive discretion of the Committee).  Unless otherwise specifically determined by
the Committee with respect to the President and CEO, or the Committee together
with the President and CEO with respect to any other Participants, no payments
shall be made to any Participant for any quarter in which the Participant was
not an employee for the entire quarter.

6.             NO RIGHT TO EMPLOYMENT.

Neither the Plan
nor any action taken hereunder shall be construed as conferring upon any
Participant the right to continued employment by the Company or limit in any
way the Company’s right to terminate any Participant’s employment at will or in
accordance with such employee’s written employment agreement, if any.

7.             NONTRANSFERABILITY
OF AWARDS.

An Award shall not
be transferable or assignable by the Participant other than by will or by the
laws of descent and distribution.

8.             TAXES; OFFSET OF AWARDS.

Prior to the
payment of an Award, the Company may withhold, or require the Participant to
remit to the Company, an amount sufficient to pay any federal, state, and local
taxes associated with the Award. 
Notwithstanding anything to the contrary herein, the Committee, in its
sole discretion, may reduce any amounts otherwise payable to any Participant
hereunder in order to satisfy any liabilities owed to the Company by the
Participant.   All Awards shall be
considered salary of the Participant for purposes of the Company’s 401(k) Plan.

9.             ADJUSTMENTS
UPON CERTAIN EVENTS; AMENDMENTS; TERMINATION.

The Committee
together with the President and CEO shall have the discretion to decrease, but
not increase, the amount of any payment otherwise payable pursuant to an Award
based on such factors as they shall deem appropriate.  In the event of any material change in the
business assets, liabilities or prospects of the Company, or any division of
the Company, the Committee together with the President and CEO, in their sole
discretion and without liability to any person may make such adjustment, if
any, as they deem to be equitable as to any affected 

terms of outstanding
Awards (other than with respect to Awards to the President and CEO).  In addition, the Committee together with the
President and CEO may at any time without notice, amend or alter the
performance objectives or any part thereof with respect to Awards (other than
with respect to Awards to the President and CEO).  The Committee together with the President and
CEO may amend, alter or discontinue the Plan or any part thereof.

10.          MISCELLANEOUS
PROVISIONS.

The Company is the
sponsor and legal obligor under the Plan and shall make all payments
hereunder.  The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to ensure the payment of any amounts under the Plan, and
the Participants’ rights to the payment hereunder shall be no greater than the
rights of the Company’s unsecured creditors. 
All expenses involved in administering the Plan shall be borne by the
Company.

11.          CHOICE OF LAW.

The Plan shall be
governed by and construed in accordance with the laws of the State of Ohio
applicable to contracts made and to be performed in the State of Ohio.

12.          EFFECTIVENESS OF THE PLAN.

The Plan shall
become effective on the date it is approved by the Board and will continue in
effect until terminated by the Board.

 

SCHEDULE
I

MAXIMUM
AWARDS

	
  President and Chief Executive
  Officer

  	
   

  	
  No
  Cap

  
	
   

  	
   

  	
   

  
	
  All Participants other than

  	
   

  	
  No
  Cap

  
	
  the President
  and Chief Executive

  	
   

  	
   

  
	
  OfficerExhibit
10.1

APPLE INC.

2003 EMPLOYEE
STOCK PLAN

(Effective as of
May 10, 2007)

   

APPLE INC.

2003 EMPLOYEE
STOCK PLAN

SECTION 1.   INTRODUCTION.

On April 9, 2007 the
Board adopted amendments to this 2003 Employee Stock Plan, which shall govern
all grants of Awards made after this amendment and restatement, and which shall
become effective upon its approval by the Company’s stockholders (the “Effective
Date”). For the terms and conditions of the Plan applicable to Awards granted
before the Effective Date, refer to the version of the Plan in effect as of the
date such Award was granted.

The purpose of the Plan
is to promote the long-term success of the Company and the creation of
stockholder value by offering Participants the opportunity to share in such
long-term success by acquiring a proprietary interest in the Company.

The Plan seeks to achieve
this purpose by providing for discretionary long-term incentive Awards in the
form of Options (which may be Incentive Stock Options or Nonstatutory Stock
Options), Stock Appreciation Rights, Stock Grants, Restricted Stock Units and
Cash Bonus Awards.

The Plan shall be
governed by, and construed in accordance with, the laws of the State of
California (except its choice-of-law provisions). Capitalized terms shall have
the meaning provided in Section 2 unless otherwise provided in this Plan
or any related Award Agreement.

SECTION 2.   DEFINITIONS.

(a)     “Applicable Laws” means all applicable
laws, rules, regulations and requirements relating to the administration of
stock plans, including, but not limited to, all applicable U.S. federal and
state laws, the rules and regulations of any stock exchange or quotation
system on which the Common Stock is listed or quoted, and the applicable laws,
rules, regulations or requirements of any foreign country or jurisdiction where
Awards are, or will be, granted under the Plan or where Participants reside or
provide services, as such laws, rules, regulations and requirements shall be in
place from time to time.

(b)     “Award” means an Option, SAR, Stock Grant
or Restricted Stock Unit.

(c)     “Award Agreement” means any Stock Option
Agreement, SAR Agreement, Stock Grant Agreement, Restricted Stock Unit
Agreement or any written document that evidences a Cash Bonus Award granted
under the Plan. Award Agreements shall consist of either (1) a written
award agreement in a form approved by the Committee and executed by the Company
by an officer duly authorized to act on its behalf, or (2) an electronic
notice of award grant in a form approved by the Committee and recorded by the
Company (or its designee) in an electronic recordkeeping system used for the
purpose of tracking award grants under the Plan generally, as the Committee may
provide and, in each case and if required by the Committee, executed or
otherwise electronically accepted by the recipient of the Award in such form
and manner as the Committee may require. The Committee may authorize any
officer of the Company (other than the particular Award recipient) to execute
any or all Award Agreements on behalf of the Company.

(d)     “Board” means the Board of Directors of the
Company, as constituted from time to time.

(e)     “Cash Bonus Award” means an Award granted
pursuant to Section 10(b) of the Plan.

(f)      “Cashless Exercise” means, to the extent
that a Stock Option Agreement so provides and as permitted by Applicable Laws,
a program approved by the Committee in which payment of the aggregate Exercise
Price and/or satisfaction of any applicable tax withholding obligations may be
made all or in part by delivery (on a form prescribed by the Committee) of an
irrevocable direction to a securities broker to sell Shares subject to an
Option and to deliver all or part of the sale proceeds to the Company.

 1
 

(g)     “Code” means the Internal Revenue Code of
1986, as amended, and the regulations and interpretations promulgated
thereunder.

(h)     “Committee” has the meaning given to such
term in Section 3.

(i)      “Common Stock” means the Company’s common
stock.

(j)      “Company” means Apple Inc., a California
corporation.

(k)     “Consultant” means an individual who
provides bona fide services to the Company, a Parent or a Subsidiary, other
than as an Employee or Director.

(l)      “Covered Employees” means those persons
who the Committee determines are subject to the limitations of Code Section 162(m).

(m)    “Director” means a member of the Board.

(n)     “Disability” means that the Participant is
classified as disabled under the long-term disability policy of the
Company or, if no such policy applies, the Participant is unable to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not less than
12 months; provided, however, that with respect to an Option intended to
qualify as an ISO, “Disability” shall mean a “permanent and total disability”
within the meaning of Section 22(e)(3) of the Code.

(o)     “Employee” means any individual who is a
common-law employee of the Company, a Parent or a Subsidiary (including any
Director that is also an Employee).

(p)     “Exchange Act” means the Securities
Exchange Act of 1934, as amended.

(q)     “Exercise Price” means, in the case of an
Option, the amount for which a Share may be purchased upon exercise of such
Option, as specified in the applicable Stock Option Agreement. “Exercise Price,”
in the case of a SAR, means an amount, as specified in the applicable SAR
Agreement, which is subtracted from the Fair Market Value at the time such SAR
is exercised in determining the amount payable upon exercise of such SAR.

(r)      “Fair Market Value” means, unless
otherwise determined or provided by the Committee in the circumstances, the
last price (in regular trading) for a share of Common Stock as furnished by the
National Association of Securities Dealers, Inc. (the “NASD”) through the NASDAQ Global
Market Reporting System (the “Global
Market”) for the date in question or, if no sales of Common Stock were
reported by the NASD on the Global Market on that date, the last price (in
regular trading) for a share of Common Stock as furnished by the NASD through
the Global Market for the next preceding day on which sales of Common Stock
were reported by the NASD. The Committee may, however, provide with respect to
one or more Awards that the Fair Market Value shall equal the last price for a
share of Common Stock as furnished by the NASD through the Global Market on the
last trading day preceding the date in question or the average of the high and
low trading prices of a share of Common Stock as furnished by the NASD through
the Global Market for the date in question or the most recent trading day. If
the Common Stock is no longer listed or is no longer actively traded on the
Global Market as of the applicable date, the Fair Market Value of the Common
Stock shall be the value as reasonably determined by the Committee for purposes
of the Award in the circumstances. The Committee also may adopt a different
methodology for determining Fair Market Value with respect to one or more
Awards if a different methodology is necessary or advisable to secure any
intended favorable tax, legal or other treatment for the particular Award(s) (for
example, and without limitation, the Committee may provide that Fair Market
Value for purposes of one or more Awards will be based on an average of closing
prices (or the average of high and low daily trading prices) for a specified
period preceding the relevant date).

 2
 

(s)     “Fiscal Year” means the Company’s fiscal
year.

(t)      “Grant Date” means the date on which the
Committee makes the determination to grant an Award or such later date as the
Committee may specify in making such determination.

(u)     “Incentive Stock Option” or “ISO” means an
incentive stock option described in Code Section 422.

(v)     “Non-Employee Director” means a member of
the Board who is not an Employee.

(w)    “Nonstatutory Stock Option” or “NSO” means a
stock option that is not an ISO.

(x)     “Option” means an ISO or NSO granted under
the Plan entitling the Participant to purchase Shares.

(y)     “Parent” means any corporation or other
entity that beneficially owns directly or indirectly a majority of the Company’s
outstanding voting stock or voting power. An entity that attains the status of
a Parent on a date after the adoption of the Plan shall be considered a Parent
commencing as of such date.

(z)     “Participant” means an Employee or
Consultant who has been selected by the Committee to receive an Award under the
Plan or any individual, estate or other entity that holds an Award.

(aa)   “Performance Goals” means one or more
objective measurable performance goals established by the Committee with
respect to a Performance Period based upon one or more of the following
criteria: (i) operating income; (ii) earnings before interest, taxes,
depreciation and amortization; (iii) earnings; (iv) cash flow; (v) market
share; (vi) sales or revenue; (vii) expenses; (viii) cost of
goods sold; (ix) profit/loss or profit margin; (x) working capital;
(xi) return on equity or assets; (xii) earnings per share;
(xiii) total shareholder return; (xiv) price/earnings ratio;
(xv) debt or debt-to-equity; (xvi) accounts receivable;
(xvii) writeoffs; (xviii) cash; (xix) assets;
(xx) liquidity; (xxi) operations; (xxii) intellectual property
(e.g., patents); (xxiii) product development; (xxiv) manufacturing,
production or inventory; (xxv) mergers and acquisitions or divestitures;
and/or (xxvi) individual performance objective. Any criteria used may be
measured, as applicable, (a) in absolute terms, (b) in relative terms
(including but not limited to, the passage of time and/or against other
companies or financial metrics), (c) on a per share and/or share per
capita basis, (d) against the performance of the Company as a whole or
against particular entities, segments, operating units or products of the
Company and /or (e) on a pre-tax or after tax basis. Awards issued to
persons who are not Covered Employees may take into account any other factors
deemed appropriate by the Committee.

(bb)  “Performance Period” means any period not
exceeding 60 months as determined by the Committee, in its sole discretion. The
Committee may establish different Performance Periods for different
Participants, and the Committee may establish concurrent or overlapping
Performance Periods.

(cc)   “Plan” means this Apple Inc. 2003 Employee
Stock Plan as it may be amended from time to time.

(dd)  “Re-Price” means that the Company has lowered
or reduced the Exercise Price of outstanding Options and/or outstanding SARs
for any Participant(s) whether through amendment, cancellation or
replacement grants, or any other means.

(ee)   “Restricted Stock Unit” means a bookkeeping
entry representing the equivalent of one Share awarded under the Plan and
represents an unfunded and unsecured obligation of the Company.

(ff)    “Restricted Stock Unit Agreement” means the
agreement described in Section 9 evidencing a Restricted Stock Unit Award.

(gg)  “SAR Agreement” means the agreement described
in Section 7 evidencing a Stock Appreciation Right.

 3
 

(hh)   “SEC” means the Securities and Exchange
Commission.

(ii)      “Section 16 Persons” means those
officers, directors or other persons who are subject to Section 16 of the
Exchange Act.

(jj)      “Securities Act” means the Securities Act
of 1933, as amended.

(kk)    “Share” means one share of Common Stock.

(ll)      “Stock Appreciation Right” or “SAR” means
a stock appreciation right awarded under the Plan.

(mm) “Stock Grant”
means Shares awarded under the Plan pursuant to Section 8.

(nn)   “Stock Grant Agreement” means the agreement
described in Section 8 evidencing a Stock Grant.

(oo)   “Stock Option Agreement” means the agreement
described in Section 6 evidencing an Option.

(pp)   “Subsidiary” means any corporation or other
entity a majority of whose outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Company. An entity that
attains the status of a Subsidiary on a date after the adoption of the Plan
shall be considered a Subsidiary commencing as of such date.

(qq)  “10-Percent Stockholder” means an
individual who owns more than 10% of the total combined voting power of all
classes of outstanding stock of the Company or of its parent corporation or
subsidiary corporation (as defined in Sections 424(e) and (f) of the
Code). In determining stock ownership, the attribution rules of Code Section 424(d) shall
be applied.

(rr)    “Termination of Service” means (i) in
the case of an Employee, a cessation of the employee-employer relationship
between the Employee and the Company and its Subsidiaries for any reason,
including but not by way of limitation, a termination by resignation,
discharge, death, disability, or retirement, but excluding any such termination
where there is a simultaneous reemployment by the Company or a Subsidiary and
excluding any bona fide and Company (or Subsidiary) approved leave of absence;
and (ii) in the case of a Consultant, a cessation of the service
relationship (as determined by the Committee in its sole discretion) between
the Consultant and the Company and its Subsidiaries for any reason, including
but not by way of limitation, a termination by resignation, discharge, death or
disability, but excluding any such termination where there is a simultaneous
re-engagement of the Consultant by the Company or a Subsidiary. For purposes of
the Plan and any Award, if an entity ceases to be a Subsidiary of the Company,
a Termination of Service shall be deemed to have occurred with respect to each
Employee and Consultant in respect of such Subsidiary who does not continue as
an Employee or Consultant in respect of the Company or another Subsidiary that
continues as such after giving effect to the transaction or other event giving
rise to the change in status.

SECTION 3.   ADMINISTRATION.

(a)           Committee Composition. The Board or a
Committee appointed by the Board shall administer the Plan. The Committee shall
generally have membership composition which enables (i) Awards to
Section 16 Persons to qualify as exempt from liability under
Section 16(b) of the Exchange Act and (ii) Awards to Covered
Employees to qualify as performance-based compensation as provided under Code
Section 162(m). However, the Board may also appoint one or more separate
Committees, each composed of one or more directors of the Company who need not
qualify under Rule 16b-3 or Code Section 162(m), that may
administer the Plan with respect to Participants who are not Section 16
Persons or Covered Employees, respectively, may grant Awards under the Plan to
such Participants and may determine all terms of such Awards. Members of any
such Committee shall serve for such period of time as the Board may determine
and shall be subject to removal by the Board at any time. The Board may also at
any time terminate the functions of any Committee and reassume all powers and
authority previously delegated to the Committee.

 4

The Board and any
Committee appointed to administer the Plan is referred to herein as the “Committee.”

(b)   Authority
of the Committee.   Subject to the provisions
of the Plan, the Committee shall have the full authority, in its sole
discretion, to take any actions it deems necessary or advisable for the
administration of the Plan. Such actions shall include:

(i)        selecting Participants who
are to receive Awards under the Plan;

(ii)       determining the Fair Market
Value for purposes of any Award;

(iii)      determining the type of and
number of securities to be subject to each Award, and the Grant Date, vesting
requirements and other features and conditions of such Awards;

(iv)      approving the forms of Award
Agreements to be used under the Plan;

(v)       amending any outstanding
Awards;

(vi)      accelerating the vesting or
extending the post-termination exercise term of Awards at any time and under
such terms and conditions as it deems appropriate (including, without
limitation, in connection with a termination of employment or services or other
events of a personal nature) subject to any required consent under Section 15;

(vii)     construing and interpreting
the Plan and any agreements defining the rights and obligations of the Company,
its Subsidiaries, and Participants under the Plan;

(viii)    correcting any defect,
supplying any omission or reconciling any inconsistency in the Plan or any
Award Agreement;

(ix)       adopting such rules or
guidelines as it deems appropriate to implement the Plan;

(x)        authorizing any person to
execute on behalf of the Company any instrument required to effect the grant of
an Award previously authorized by the Committee;

(xi)       adjusting the number of
shares of Common Stock subject to any Award, adjusting the price of any or all
outstanding Awards or otherwise changing previously imposed terms and
conditions, in such circumstances as the Committee may deem appropriate, in
each case subject to Sections 5 and 15, and provided that in no case (except
due to an adjustment contemplated by Section 11 or any Re-Pricing that may
be approved by shareholders) shall such an adjustment constitute a Re-Pricing
(by amendment, substitution, cancellation and regrant, exchange or other means)
of the per share Exercise Price of any Option or SAR;

(xii)      determining whether, and the
extent to which, adjustments are required pursuant to Section 13 hereof
and authorizing the termination, conversion, substitution or succession of
Awards upon the occurrence of an event of the type described in Section 13;

(xiii)     acquiring or settling (subject
to Sections 13 and 15) rights under Awards in cash, stock of equivalent value,
or other consideration, provided, however, that in no case without stockholder
approval shall the Company effect a Re-Pricing of an Option or SAR granted
under the Plan by purchasing the Option or SAR at a time when the Exercise
Price of the Award is greater than the Fair Market Value of a share of Common
Stock;

(xiv)    making all other decisions
relating to the operation of the Plan; and

(xv)     adopting such plans or
subplans as may be deemed necessary or appropriate to comply with the laws of
other countries, allow for tax-preferred treatment of Awards or otherwise
provide for the participation by Participants who reside outside of the U.S.

 5
 

The Committee’s
determinations under the Plan shall be final and binding on all persons.

(c)   Indemnification.   To
the maximum extent permitted by Applicable Laws, each member of the Committee
shall be indemnified and held harmless by the Company against and from (i) any
loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her 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 taken or failure to act under the Plan or
any Award Agreement, and (ii) from any and all amounts paid by him or her
in settlement thereof, with the Company’s approval, or paid by him or her in
satisfaction of any judgment in any such claim, action, suit, or proceeding
against him or her, provided he or she shall give 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 under the Company’s Articles of
Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or
under any power that the Company may have to indemnify them or hold them
harmless.

(d)   Reliance on Experts.   In
making any determination or in taking or not taking any action under the Plan,
the Committee may obtain and may rely upon the advice of experts, including
employees and professional advisors to the Company. No director, officer or
agent of the Company or any of its Subsidiaries shall be liable for any such
action or determination taken or made or omitted in good faith.

SECTION 4.   GENERAL.

(a)   General Eligibility.   Only Employees and Consultants shall be eligible to
participate in the Plan. Non-Employee Directors are not eligible for Award
grants under the Plan.

(b)   Incentive Stock Options.   Only Participants who are Employees of the Company,
a “parent corporation” of the Company (within the meaning of Section 424(e) of
the Code) or a “subsidiary corporation” of the Company (within the meaning of Section 424(f) of
the Code) shall be eligible for the grant of ISOs. In addition, a 10-Percent
Stockholder shall not be eligible for the grant of an ISO unless the requirements
set forth in Code Section 422(c)(5) are satisfied.

(c)   Restrictions on Transfer.

(i)    Unless otherwise expressly
provided in (or pursuant to) this Section 4(c) or required by
Applicable Law: (A) all Awards are non-transferable and shall not be subject
in any manner to sale, transfer, anticipation, alienation, assignment, pledge,
encumbrance or charge; (B) Awards shall be exercised only by the
Participant; and (C) amounts payable or Shares issuable pursuant to any
Award shall be delivered only to (or for the account of) the Participant.

(ii)   The Committee may permit Awards
to be exercised by and paid to, or otherwise transferred to, other persons or
entities pursuant to such conditions and procedures, including limitations on
subsequent transfers, as the Committee may, in its sole discretion, establish
in writing. Any permitted transfer shall be subject to compliance with
applicable federal and state securities laws and shall not be for value (other
than nominal consideration, settlement of marital property rights, or for
interests in an entity in which more than 50% of the voting interests are held
by the Participant or by the Participant’s family members).

(iii)  The exercise and transfer
restrictions in Section 4(c) shall not apply to:

(A)  transfers to the Company (for
example, in connection with the expiration or termination of the Award),

(B)   the designation of a
beneficiary to receive benefits in the event of the Participant’s death or, if
the Participant has died, transfers to or exercise by the Participant’s 

 6
 

beneficiary, or,
in the absence of a validly designated beneficiary, transfers by will or the
laws of descent and distribution,

(C)   subject to any applicable
limitations on ISOs, transfers to a family member (or former family member)
pursuant to a domestic relations order if approved or ratified by the Company,

(D)  if the Participant has suffered
a disability, permitted transfers or exercises on behalf of the participant by
his or her legal representative, or

(E)   the authorization by the Committee
of Cashless Exercise procedures with third parties who provide financing for
the purpose of (or who otherwise facilitate) the exercise of Awards consistent
with applicable laws and the express authorization of the Committee.

(d)   Beneficiaries.   If permitted by the Committee in the Award
Agreement, a Participant under the Plan may name a beneficiary or beneficiaries
to whom any vested but unpaid Award shall be paid in the event of the
Participant’s death. Each such designation shall revoke all prior beneficiary
designations by the Participant and shall be effective only if given in a form
and manner acceptable to the Committee. In the absence of any such designation,
any vested benefits remaining unpaid at the Participant’s death shall be paid
to the Participant’s estate and, subject to the terms of the Plan and of the
applicable Award Agreement, any unexercised vested Award may be exercised by
the administrator or executor of the Participant’s estate.

(e)   No Rights as a Stockholder.   A Participant, or a transferee of a Participant,
shall have no rights as a stockholder with respect to any Common Stock covered
by an Award until such person has satisfied all of the terms and conditions to
receive such Common Stock, has satisfied any applicable withholding or tax
obligations relating to the Award and the Shares have been issued (as evidenced
by an appropriate entry on the books of the Company or a duly authorized
transfer agent of the Company).

(f)    Termination of Service.   The Committee shall establish the effect of a
Termination of Service on the rights and benefits under each Award under the
Plan and in so doing may make distinctions based upon, inter alia, the cause of
termination and type of Award.

(g)   Consideration.   The
purchase price for any Award granted under the Plan or the Common Stock to be
delivered pursuant to an award, as applicable, may be paid by means of any
lawful consideration as determined by the Committee.

SECTION 5.   SHARES SUBJECT TO PLAN AND SHARE LIMITS.

(a)   Basic Limitation.   The stock issuable under the Plan shall be
authorized but unissued Shares. The aggregate number of Shares reserved for
Awards under the Plan is 173,000,000, subject to adjustment pursuant to Section 11.

(b)   Share Count.   Shares
issued pursuant to Awards of Stock Grants or as Restricted Stock Units will
count against the Shares available for issuance under the Plan as two (2) Shares
for every one (1) Share issued in connection with the Award. Shares issued
pursuant to the exercise of Options will count against the Shares available for
issuance under the Plan as one (1) Share for every one (1) Share to
which such exercise relates. The total number of Shares subject to SARs that
are settled in Shares shall be counted in full against the number of Shares
available for issuance under the Plan, regardless of the number of Shares
actually issued upon settlement of the SARs. If Awards are settled in cash, the
Shares that would have been delivered had there been no cash settlement shall
not be counted against the Shares available for issuance under the Plan. If
Awards are forfeited or are terminated for any reason before vesting or being
exercised, then the Shares underlying such Awards shall again become available
for Awards under the Plan; provided that any one (1) Share issued pursuant
to a Stock Grant or subject to a 

 7
 

Restricted Stock
Unit Award that is forfeited or terminated shall be credited as two (2) Shares
when determining the number of Shares that shall again become available for
Awards under the Plan if upon grant, the Shares underlying such forfeited or
terminated Awards were counted as two (2) Shares against the Plan reserve.
Shares that are exchanged by a Participant or withheld by the Company as full
or partial payment in connection with any Award under the Plan, as well as any
Shares exchanged by a Participant or withheld by the Company or one of its
Subsidiaries to satisfy the tax withholding obligations related to any Award,
shall not be available for subsequent Awards under the Plan.

(c)   Share
Limits.

(i)            Limits
on Options.   No Participant
shall receive Options or SARs during any Fiscal Year covering, in the
aggregate, in excess of 15,000,000 Shares, subject to adjustment pursuant to Section 11.

(ii)           Limits on
Stock Grants and Restricted Stock Units.   No Participant shall receive
Stock Grants or Restricted Stock Units during any Fiscal Year covering, in the
aggregate, in excess of 5,000,000 Shares, subject to adjustment pursuant to Section 11.

(d)   Reservation of Shares; No
Fractional Shares.   The Company shall at all
times reserve a number of shares of Common Stock sufficient to cover the
Company’s obligations and contingent obligations to deliver Shares with respect
to Awards then outstanding under the Plan (exclusive of any dividend equivalent
obligations to the extent the Company has the right to settle such rights in
cash). No fractional Shares shall be delivered under the Plan. The Committee
may pay cash in lieu of any fractional Shares in settlements of Awards under
the Plan.

SECTION 6.   TERMS AND CONDITIONS OF OPTIONS.

(a)   Stock Option Agreement.   Each
Option granted under the Plan shall be evidenced and governed exclusively by a
Stock Option Agreement between the Participant and the Company. Such Option
shall be subject to all applicable terms and conditions of the Plan and may be
subject to any other terms and conditions that are not inconsistent with the
Plan and that the Committee deems appropriate for inclusion in a Stock Option
Agreement. The provisions of the various Stock Option Agreements entered into
under the Plan need not be identical. The Stock Option Agreement shall specify
whether the Option is an ISO or an NSO.

(b)   Number of Shares.   Each Stock Option Agreement shall specify the number
of Shares that are subject to the Option, which number is subject to adjustment
in accordance with Section 11.

(c)   Exercise Price.   Each Stock Option Agreement shall specify the Option’s
Exercise Price which shall be established by the Committee and is subject to
adjustment in accordance with Section 11. The Exercise Price of an Option
shall not be less than 100% of the Fair Market Value (110% for an ISO granted
to a 10-Percent Stockholder)  on the Grant Date.

(d)   Exercisability and Term.   Each
Stock Option Agreement shall specify the date when all or any installment of
the Option is to become exercisable and/or any performance conditions or
Performance Goals pursuant to Section 10 that must be satisfied before the
Option may be exercised. The Stock Option Agreement shall also specify the
maximum term of the Option; provided that the maximum term of an Option shall
in no event exceed seven (7) years from the Grant Date. A Stock Option
Agreement may provide for accelerated vesting in the event of the Participant’s
death, Disability or other events and may provide for tolling of vesting in the
event of a Participant’s leave of absence. Notwithstanding any other provision
of the Plan or the Stock Option Agreement, no Option can be exercised after the
expiration date provided in the applicable Stock Option Agreement.

 8

(e)   Method of Exercise.   An
Option may be exercised, in whole or in part, by giving written notice of
exercise to the Company or the Company’s designee (or, subject to Applicable
Laws and if the Company permits, by electronic or voice methods) of the number
of Shares to be purchased. Such notice shall be accompanied by payment in full
of the aggregate Exercise Price, plus any required withholdings (unless
satisfactory arrangements have been made to satisfy such withholdings). The
Company reserves the right to delay issuance of the Shares until the such
payment obligations are fully satisfied.

(f)    Payment
for Option Shares.   The Exercise Price of an
Option shall be paid in cash at the time of exercise, except as follows and if
so provided for in the applicable Stock Option Agreement:

(i)    Cashless Exercise.   Payment
of all or a part of the Exercise Price may be made through Cashless Exercise.

(ii)   Other Forms of Payment.   Payment
may be made in any other form that is consistent with Applicable Laws,
regulations and rules and approved by the Committee.

In the case of an ISO
granted under the Plan, except to the extent permitted by Applicable Laws,
payment shall be made only pursuant to the express provisions of the applicable
Stock Option Agreement. In the case of an NSO granted under the Plan, the
Committee may, in its discretion at any time, accept payment in any
form(s) described in this Section 6(f).

SECTION 7.   TERMS AND CONDITIONS OF STOCK APPRECIATION
RIGHTS.

(a)   SAR Agreement.   Each
SAR granted under the Plan shall be evidenced by a SAR Agreement between the
Participant and the Company. Such SAR shall be subject to all applicable terms
of the Plan and may be subject to any other terms that are not inconsistent
with the Plan. A SAR Agreement may provide for a maximum limit on the amount of
any payout notwithstanding the Fair Market Value on the date of exercise of the
SAR. The provisions of the various SAR Agreements entered into under the Plan
need not be identical.

(b)   Number of Shares.   Each
SAR Agreement shall specify the number of Shares to which the SAR pertains,
which number is subject to adjustment in accordance with Section 11.

(c)   Exercise Price.   Each
SAR Agreement shall specify the Exercise Price, which is subject to adjustment
in accordance with Section 11. A SAR Agreement may specify an Exercise
Price that varies in accordance with a predetermined formula while the SAR is
outstanding, provided that in all cases the Exercise Price of a SAR shall not
be less than 100% of the Fair Market Value on the Grant Date.

(d)   Exercisability and Term.   Each
SAR Agreement shall specify the date when all or any installment of the SAR is
to become exercisable and/or any performance conditions or Performance Goals
pursuant to Section 10 that must be satisfied before the SAR is exercised.
The SAR Agreement shall also specify the maximum term of the SAR which shall
not exceed seven (7) years from the Grant Date. A SAR Agreement may
provide for accelerated vesting in the event of the Participant’s death,
Disability or other events and may provide for tolling of vesting in the event
of a Participant’s leave of absence. SARs may be awarded in combination with
Options or Stock Grants, and such an Award shall provide that the SARs will not
be exercisable unless the related Options or Stock Grants are forfeited. A SAR
may be included in an ISO only at the time of grant but may be included in an
NSO at the time of grant or at any subsequent time, but not later than six
months before the expiration of such NSO. Notwithstanding any other provision
of the Plan or the SAR Agreement, no SAR can be exercised after the expiration
date provided in the applicable SAR Agreement.

(e)   Exercise of SARs.   Upon
exercise of a SAR, the Participant (or any person having the right to exercise
the SAR after Participant’s death) shall receive from the Company
(i) Shares, (ii) cash or (iii) any combination of Shares and
cash, as the Committee shall determine at the time of grant of the SAR, in its
sole discretion. The amount of cash and/or the Fair Market Value of Shares
received upon exercise of 

 9
 

SARs shall, in the
aggregate, be equal to the amount by which the Fair Market Value (on the date
of exercise) of the Shares subject to the SARs exceeds the Exercise Price of
the Shares.

SECTION 8.   TERMS AND CONDITIONS FOR STOCK GRANTS.

(a)   Time, Amount and Form of Awards.   Awards under this Section 8 may be granted in
the form of a Stock Grant. A Stock Grant may be awarded in combination with
NSOs, and such an Award may provide that the Stock Grant will be forfeited in
the event that the related NSOs are exercised.

(b)   Stock Grant Agreement.   Each
Stock Grant awarded under the Plan shall be evidenced and governed exclusively
by a Stock Grant Agreement between the Participant and the Company. Each Stock
Grant shall be subject to all applicable terms and conditions of the Plan and
may be subject to any other terms and conditions that are not inconsistent with
the Plan that the Committee deems appropriate for inclusion in the applicable
Stock Grant Agreement. The provisions of the Stock Grant Agreements entered
into under the Plan need not be identical.

(c)   Number of Shares.   Each
Stock Grant Agreement shall specify the number of Shares to which the Stock
Grant pertains, which number is subject to adjustment in accordance with
Section 11.

(d)   Vesting Conditions.   The Committee shall
determine the vesting schedule of each Stock Grant. Vesting shall occur, in
full or in installments, upon satisfaction of the conditions specified in the
Stock Grant Agreement which may include performance conditions or Performance
Goals pursuant to Section 10. Except for any accelerated vesting required
or permitted pursuant to Section 12 and except as otherwise provided in
the following provisions of this Section 8(d), and subject to such
additional vesting requirements or conditions as the Committee may establish
with respect to the Award, each Stock Grant under this Plan shall be subject to
the following minimum vesting requirements: 
(a) if the Stock Grant includes a performance-based vesting
condition, the Stock Grant shall not vest earlier than the first anniversary of
the Grant Date and vesting shall occur only if the Participant is an Employee
or Consultant of the Company or one of its Subsidiaries on such vesting date;
and (b) if the Stock Grant does not include a performance-based vesting
condition, the Stock Grant shall not vest more rapidly than in monthly
installments over the three-year period immediately following the Grant Date
and vesting of any vesting installment of the Stock Grant shall occur only if
the Participant is an Employee or Consultant of the Company or one of its
Subsidiaries on the date such installment is scheduled to vest; provided that
the Committee may accelerate or provide in the applicable Award Agreement for
the accelerated vesting of any Stock Grant in connection with a change in
control of the Participant’s employer (or a parent thereof), the termination of
the Participant’s employment (including a termination of employment due to the
Participant’s death, disability or retirement, but not including a termination
of employment by the Participant’s employer for cause), or as consideration or
partial consideration for a release by the Participant of pending or threatened
claims against the Company, the Participant’s employer, or any of their
respective officers, directors or other affiliates (regardless of whether the release
is given in connection with a termination of employment by the Participant’s
employer for cause or other circumstances). The Committee may, however,
accelerate or provide in the applicable Award Agreement for the accelerated
vesting of any Stock Grant, and/or any Restricted Stock Unit Award as provided
in Section 9(c), in circumstances not contemplated by the preceding
sentence, and/or provide for a vesting schedule for such Stock Grant or
Restricted Stock Unit Award that is shorter than the minimum schedule
contemplated by the preceding sentence, in such circumstances as the Committee
may deem appropriate; provided, however, that the total number of Shares
subject to the portion of any such Stock Grant and any such Restricted Stock
Unit Award that vests earlier than the minimum vesting dates that would be
applicable pursuant to the minimum vesting requirements of the preceding
sentence (or, as to any accelerated vesting, provides for accelerated vesting
other than in the circumstances contemplated by the preceding sentence) shall
not exceed five percent (5%) of the Plan’s aggregate Share limit set forth in
Section 5 (a).

 10
 

(e)   Voting and Dividend Rights. The
holder of a Stock Grant awarded under the Plan shall have the same voting,
dividend and other rights as the Company’s other stockholders, except as
otherwise stated in the Stock Grant Agreement. A Stock Grant Agreement may
require that the holder of such Stock Grant invest any cash dividends received
in additional Shares subject to the Stock Grant. Such additional Shares and any
Shares received as a dividend pursuant to the Stock Grant shall be subject to
the same conditions and restrictions as the Stock Grant with respect to which
the dividends were paid.

SECTION 9.   TERMS AND CONDITIONS OF RESTRICTED STOCK
UNITS.

(a)   Restricted Stock Unit
Agreement. Each Restricted Stock Unit granted under the Plan shall be evidenced
by a Restricted Stock Unit Agreement between the Participant and the Company. Such
Restricted Stock Units shall be subject to all applicable terms of the Plan and
may be subject to any other terms that are not inconsistent with the Plan. The
provisions of the various Restricted Stock Unit Agreements entered into under
the Plan need not be identical.

(b)   Number of Shares. Each
Restricted Stock Unit Agreement shall specify the number of Restricted Stock
Units to which the Restricted Stock Unit Award pertains, which number is
subject to adjustment in accordance with Section 11.

(c)   Vesting Conditions. The
Committee shall determine the vesting schedule of each Restricted Stock Unit
Award. Vesting shall occur, in full or in installments, upon satisfaction of
the conditions specified in the Restricted Stock Unit Agreement which may
include performance conditions or Performance Goals pursuant to Section 10.
Each Restricted Stock Unit Award shall be subject to the same minimum vesting
provisions applicable to Stock Grants as set forth in Section 8(d),
including (without limitation) the Committee’s discretion under the last
sentence of Section 8(d) to grant Awards that do not comply with such
minimum vesting provisions, subject to the Share limit set forth in such
sentence.

(d)   Form and Time of
Settlement of Restricted Stock Units. Settlement of vested Restricted Stock
Units may be made in the form of (i) cash, (ii) Shares or (iii) any
combination of both, as determined by the Committee at the time of the grant of
the Restricted Stock Units, in its sole discretion. Vested Restricted Stock
Units may be settled in a lump sum or in installments. The distribution may
occur or commence when the vesting conditions applicable to the Restricted
Stock Units have been satisfied or have lapsed, or, if the Committee so
provides in the Restricted Stock Unit Agreement, it may be deferred, in
accordance with Applicable Laws, to any later date. The amount of a deferred
distribution may be increased by an interest factor or by dividend equivalents,
as determined by the Committee and provided in the Restricted Stock Unit
Agreement.

(e)   Voting and Dividend Rights. The
holders of Restricted Stock Units shall have no voting rights. Prior to
settlement or forfeiture, any Restricted Stock Unit awarded under the Plan may,
at the Committee’s discretion, carry with it a right to dividend equivalents. Such
right entitles the holder to be credited with an amount equal to all cash
dividends paid on one Share while the Restricted Stock Unit is outstanding. Dividend
equivalents may be converted into additional Restricted Stock Units and may be
made subject to the same conditions and restrictions as the Restricted Stock
Units to which they attach. Settlement of dividend equivalents may be made in
the form of cash, in the form of Shares, or in a combination of both.

(f)    Creditors’ Rights. A holder
of Restricted Stock Units shall have no rights other than those of a general
creditor of the Company. Restricted Stock Units represent an unfunded and
unsecured obligation of the Company, subject to the terms and conditions of the
applicable Restricted Stock Unit Agreement.

SECTION 10.   PERFORMANCE-BASED AWARDS.

(a)   General. The Committee may, in its
discretion, include performance conditions in an Award. If performance
conditions are included in Awards to Covered Employees and such Awards are
intended to 

 11
 

qualify
as “performance-based compensation” under Code Section 162(m), then such
Awards will be subject to the achievement of Performance Goals with respect to
a Performance Period established by the Committee. Such Awards shall be granted
and administered pursuant to the requirements of Code Section 162(m). Performance
Goals shall be adjusted to mitigate the unbudgeted impact of material, unusual
or nonrecurring gains and losses, accounting changes or other extraordinary
events not foreseen at the time the targets were set unless the Committee provides
otherwise at the time of establishing the targets. Before any Shares underlying
an Award or any Award payments are released to a Covered Employee with respect
to a Performance Period, the Committee shall certify in writing that the
Performance Goals for such Performance Period have been satisfied. Awards with
performance conditions that are granted to Participants who are not Covered
Employees need not comply with the requirements of Code Section 162(m).

(b)   Cash Bonus Awards. The Committee may,
in its discretion, grant Cash Bonus Awards under the Plan to one or more
Employees of the Company or any of its Subsidiaries. Cash Bonus Awards shall be
subject to performance conditions as described above and, to the extent such
Cash Bonus Awards are granted to Covered Persons and intended to qualify as “performance-based
compensation” under Section 162(m), shall be subject to the requirements
of Section 162(m), including without limitation, the establishment of
Performance Goals and certification of performance by the Committee as set
forth above. In addition, the aggregate amount of compensation to be paid to
any one participant in respect of all Cash Bonus Awards payable only in cash
and not related to shares of Common Stock and granted to that participant in any
one calendar year shall not exceed $5,000,000. Awards that are cancelled during
the year shall be counted against this limit to the extent required by Section 162(m) of
the Code.

(c)   Expiration of Grant Authority. As
required pursuant to Section 162(m) of the Code and the regulations
promulgated thereunder, the Committee’s authority to grant new awards that are
intended to qualify as performance-based compensation within the meaning of Section 162(m) of
the Code (other than Options and SARs with an Exercise Price that is not less
than the Fair Market Value of a share of Common Stock on the Grant Date) shall
terminate upon the first meeting of the Company’s shareholders that occurs in
2012.

SECTION 11.   PROTECTION AGAINST DILUTION.

(a)   Adjustments. Subject to Section 12,
upon (or, as may be necessary to effect the adjustment, immediately prior to):
any reclassification, recapitalization, stock split (including a stock split in
the form of a stock dividend) or reverse stock split; any merger, combination,
consolidation, or other reorganization; any spin-off, split-up, or similar
extraordinary dividend distribution in respect of the Common Stock; or any
exchange of Common Stock or other securities of the Company, or any similar,
unusual or extraordinary corporate transaction in respect of the Common Stock;
then the Committee shall equitably and proportionately adjust (1) the
number and type of Shares of Common Stock (or other securities) that thereafter
may be made the subject of Awards (including the specific Share limits,
maximums and numbers of Shares set forth elsewhere in the Plan), (2) the
number, amount and type of Shares of Common Stock (or other securities or
property) subject to any outstanding Awards, (3) the grant, purchase, or
Exercise Price of any outstanding Awards, and/or (4) the securities, cash
or other property deliverable upon exercise or payment of any outstanding
Awards, in each case to the extent necessary to preserve (but not increase) the
level of incentives intended by the Plan and the then-outstanding Awards.

Unless otherwise
expressly provided in the applicable Award Agreement, upon (or, as may be
necessary to effect the adjustment, immediately prior to) any event or
transaction described in the preceding paragraph or a sale of all or substantially
all of the business or assets of the Company as an entirety, the Company shall
equitably and proportionately adjust the Performance Goals applicable to any
then-outstanding performance-based Awards to the extent necessary to preserve
(but not increase) the level of incentives intended by the Plan and the
then-outstanding performance-based Awards.

 12
 

It is intended that, if
possible, any adjustments contemplated by the preceding two paragraphs be made
in a manner that satisfies applicable legal, tax (including, without limitation
and as applicable in the circumstances, Section 424 of the Code, Section 409A
of the Code and Section 162(m) of the Code) and accounting (so as to
not trigger any charge to earnings with respect to such adjustment) requirements.

Without
limiting the generality of Section 3, any good faith determination by the
Committee as to whether an adjustment is required in the circumstances pursuant
to this Section 11(a), and the extent and nature of any such adjustment,
shall be conclusive and binding on all persons.

(b)   Participant Rights. Except
as provided in this Section 11, a Participant shall have no rights by
reason of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class. If by reason of an
adjustment pursuant to this Section 11 a Participant’s Award covers additional
or different shares of stock or securities, then such additional or different
shares and the Award in respect thereof shall be subject to all of the terms,
conditions and restrictions which were applicable to the Award and the Shares
subject to the Award prior to such adjustment.

SECTION 12.   CORPORATE TRANSACTIONS.

Upon the occurrence of
any of the following: any merger, combination, consolidation, or other
reorganization; any exchange of Common Stock or other securities of the
Company; a sale of all or substantially all the business, stock or assets of
the Company; a dissolution of the Company; or any other event in which the
Company does not survive (or does not survive as a public company in respect of
its Common Stock); then the Committee may make provision for a cash payment in
settlement of, or for the assumption, substitution or exchange of any or all
outstanding Share-based Awards or the cash, securities or property deliverable
to the holder of any or all outstanding Share-based Awards, based upon, to the
extent relevant under the circumstances, the distribution or consideration
payable to holders of the Common Stock upon or in respect of such event. Upon
the occurrence of any event described in the preceding sentence, then, unless
the Committee has made a provision for the substitution, assumption, exchange
or other continuation or settlement of the Award or the Award would otherwise
continue in accordance with its terms in the circumstances, each Award shall
terminate upon the related event; provided that the holder of an Option or SAR shall
be given reasonable advance notice of the impending termination and a
reasonable opportunity to exercise his or her outstanding vested Options and
SARs in accordance with their terms before the termination of such Awards
(except that in no case shall more than ten days’ notice of the impending
termination be required.

The Committee may adopt
such valuation methodologies for outstanding Awards as it deems reasonable in
the event of a cash or property settlement and, in the case of Options, SARs or
similar rights, but without limitation on other methodologies, may base such
settlement solely upon the excess if any of the per share amount payable upon
or in respect of such event over the Exercise Price of the Award.

In any of the events
referred to in this Section 12, the Committee may take such action
contemplated by this Section 12 prior to such event (as opposed to on the
occurrence of such event) to the extent that the Committee deems the action
necessary to permit the Participant to realize the benefits intended to be
conveyed with respect to the underlying Shares.

Without limiting the
generality of Section 3, any good faith determination by the Committee
pursuant to its authority under this Section 12 shall be conclusive and
binding on all persons.

SECTION 13.   LIMITATIONS ON RIGHTS.

(a)   Participant Rights. A
Participant’s rights, if any, in respect of or in connection with any Award are
derived solely from the discretionary decision of the Company to permit the
individual to participate in 

 13
 

the Plan
and to benefit from a discretionary Award. By accepting an Award under the
Plan, a Participant expressly acknowledges that there is no obligation on the
part of the Company to continue the Plan and/or grant any additional Awards. Any
Award granted hereunder is not intended to be compensation of a continuing or
recurring nature, or part of a Participant’s normal or expected compensation,
and in no way represents any portion of a Participant’s salary, compensation,
or other remuneration for purposes of pension benefits, severance, redundancy,
resignation or any other purpose.

Neither the Plan
nor any Award granted under the Plan shall be deemed to give any individual a
right to remain an employee, consultant or director of the Company, a Parent,
or any Subsidiary. The Company and its Parent and Subsidiaries reserve the
right to terminate the service of any person at any time, and for any reason,
subject to Applicable Laws, the Company’s Articles  of
Incorporation  and Bylaws and any applicable
written employment agreement (if any), and such terminated person shall be
deemed irrevocably to have waived any claim to damages or specific performance
for breach of contract or dismissal, compensation for loss of office, tort or
otherwise with respect to the Plan or any outstanding Award that is forfeited
and/or is terminated by its terms or to any future Award.

(b)   Shareholders’ Rights. Except
as provided in Section 9(f), a Participant shall have no dividend rights,
voting rights or other rights as a shareholder with respect to any Shares
covered by his or her Award prior to the issuance of such Shares (as evidenced
by an appropriate entry on the books of the Company or a duly authorized
transfer agent of the Company). No adjustment shall be made for cash dividends
or other rights for which the record date is prior to the date when such Shares
are issued, except as expressly provided in Sections 9(f) and 11.

(c)   Regulatory Requirements. Any
other provision of the Plan notwithstanding, the obligation of the Company to
issue Shares or other securities under the Plan shall be subject to all
Applicable Laws and such approval by any regulatory body as may be required. The
Company reserves the right to restrict, in whole or in part, the delivery of
Shares or other securities pursuant to any Award prior to the satisfaction of
all legal requirements relating to the issuance of such Shares or other
securities, to their registration, qualification or listing or to an exemption
from registration, qualification or listing. The person acquiring any
securities under the Plan will, if requested by the Company or one of its
Subsidiaries, provide such assurances and representations to the Company or one
of its Subsidiaries as the Committee may deem necessary or desirable to assure
compliance with all applicable legal and accounting requirements.

SECTION 14.   WITHHOLDING TAXES.

(a)   General. A Participant shall
make arrangements satisfactory to the Company for the satisfaction of any
withholding tax obligations that arise in connection with his or her Award. The
Company shall have the right to deduct from any amount payable under the Plan,
including delivery of Shares to be made pursuant to an Award granted under the
Plan, all federal, state, city, local or foreign taxes of any kind required by
law to be withheld with respect to such payment and the Company may take any
such actions as may be necessary in the opinion of the Company to satisfy all
obligations for the payment of such taxes. The Company shall not be required to
issue any Shares or make any cash payment under the Plan until such obligations
are satisfied.

(b)   Share Withholding. The
Committee may (i) permit or require a Participant to satisfy all or part
of his or her withholding or income tax obligations by having the Company
withhold all or a portion of any Shares that otherwise would be issued to him
or her, or (ii) permit a Participant to satisfy such obligations by
Cashless Exercise or by surrendering all or a portion of any Shares that he or
she previously acquired; provided that Shares withheld or previously owned
Shares that are tendered shall not exceed the amount necessary to satisfy the
Company’s tax withholding obligations at the minimum statutory withholding
rates, including, but not limited to, U.S. federal and state income taxes,
payroll taxes and foreign taxes, if applicable, unless the previously owned
Shares have been held for a minimum duration determined satisfactory as
established by the Committee in its sole and absolute discretion. Any payment
of taxes by 

 14
 

assigning
Shares to the Company may be subject to restrictions, including, but not
limited to, any restrictions required by rules of the SEC. If any Shares
are used to satisfy withholding taxes, such Shares shall be valued based on the
Fair Market Value thereof on the date when the withholding for taxes is
required to be made.

SECTION 15.   DURATION AND AMENDMENTS; MISCELLANEOUS.

(a)   Term of the Plan. The Plan
shall terminate on May 10, 2017 and may be terminated on any earlier date
pursuant to this Section 15.

(b)   Amendment or Termination of
the Plan. The Board may, at any time, terminate or, from time to time, amend,
modify or suspend the Plan, in whole or in part. No awards may be granted
during any period that the Board suspends the Plan. To the extent then required
by Applicable Laws or required under Sections 162, 422 or 424 of the Code to
preserve the intended tax consequences of the Plan, or deemed necessary or
advisable by the Board, any amendment to the Plan shall be subject to
shareholder approval.

(c)   Amendments to Awards. Without limiting any other express
authority of the Committee under (but subject to) the express limits of the
Plan, the Committee by agreement or resolution may waive conditions of or
limitations on Awards to Participants that the Committee in the prior exercise
of its discretion has imposed, without the consent of a Participant, and
(subject to the requirements of Sections 3 and 15(d)) may make other changes to
the terms and conditions of Awards. Any amendment or other action that would
constitute a Re-Pricing of an Award is subject to the limitations set forth in Section 3(b).

(d)   Limitations on Amendments to Plan and Awards. No amendment,
suspension or termination of the Plan or amendment of any outstanding Award
Agreement shall, without written consent of the Participant, affect in any
manner materially adverse to the Participant any rights or benefits of the
Participant or obligations of the Company under any Award granted under the
Plan prior to the effective date of such change. Changes, settlements and other
actions contemplated by Section 11 shall not be deemed to constitute
changes or amendments for purposes of this Section 15.

(e)   Governing Law. The Plan
shall be governed by, and construed in accordance with the laws of the State of
California (except its choice-of-law provisions) and applicable U.S. Federal
Laws.

(f)    Severability. If a court of
competent jurisdiction holds any provision invalid and unenforceable, the
remaining provisions of the Plan shall continue in effect.

(g)   Section Headings. Captions
and headings are given to the sections and subsections of the Plan solely as a
convenience to facilitate reference. Such headings shall not be deemed in any
way material or relevant to the construction or interpretation of the Plan or
any provision thereof.

(h)   No Corporate Action
Restriction. The existence of the Plan, the Award Agreements and the Awards
granted hereunder shall not limit, affect or restrict in any way the right or
power of the Board or the shareholders of the Company to make or authorize: (i) any
adjustment, recapitalization, reorganization or other change in the capital
structure or business of the Company or any Subsidiary, (ii) any merger,
amalgamation, consolidation or change in the ownership of the Company or any
Subsidiary, (iii) any issue of bonds, debentures, capital, preferred or prior
preference stock ahead of or affecting the capital stock (or the rights
thereof) of the Company or any Subsidiary, (iv) any dissolution or
liquidation of the Company or any Subsidiary, (v) any sale or transfer of
all or any part of the assets or business of the Company or any Subsidiary, or (vi) any
other corporate act or proceeding by the Company or any Subsidiary. No
Participant, beneficiary or any other person shall have any claim under any
Award or Award agreement against any member of the Board or the Committee, or
the Company or any employees, officers or agents of the Company or any
Subsidiary, as a result of any such action.

 15

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