Document:

Executive
        Incentive, Change of Control Retention and Severance
        Agreement

       

       

      This
        Executive Incentive, Change of Control Retention and Severance Agreement
        (the
        "Agreement")
        is
        made and entered into as of August 19, 2008 (the "Effective
        Date"),
        by
        and between Solar Enertech Corp. (“Company”)
        and
        Leo
        S. Young (the "Executive").
        Capitalized terms used in this Agreement shall have the meanings set forth
        in
        Section 5 below.

       

      1. Purpose.
        The
        purpose of this Agreement is to encourage Executive to remain in the employ
        of
        the Company and to continue to devote Executive's full attention to the success
        of the Company including in the event of a Change of Control, as such term
        is
        defined in Section 5 of this Agreement.

       

      2. Compensation 

       

      2.1
        Base
        Salary.
        The
        Company plans to increase base salary for the Executive in relation to
        improvements in the operating and financial performance of the Company
        consistent with the forecasts and plans agreed upon between the Board of
        Directors and the Executive. For the Fiscal Year 2009, contingent on achievement
        of certain operating and financial metrics to be agreed upon between the
        Board
        of Directors and the Executive, the base salary is planned to increase as
        follows:

       

      Current
        base salary: $200,000 per annum

       

      January
        2009 base salary: $250,000 per annum

       

      For
        the
        Fiscal Year 2010, assuming fiscal 2009 performance metrics were met and
        contingent on achievement of certain operating and financial metrics to be
        agreed upon between the Board of Directors and the Executive, the base salary
        is
        planned to increase as follows:

       

      January
        2010 base salary: $300,000 per annum

       

      In
        the
        event fiscal 2009 performance metrics are not met, the parties agree to revisit
        appropriate adjustments to this Section 2.1.

       

      2.2
        Stock
        Options.
        Contingent on achievement of certain operating and financial metrics to be
        agreed upon between the Board of Directors and the Executive, the Company
        plans
        to award (subject to Board approval) options to purchase up to 1.5 million
        shares of the Company’s common stock to Executive.  Any grants shall become
        fully vested twelve (12) months after the date of grant if the Executive
        is
        currently employed by the Company. The exercise price shall be equal to the
        market price of the Company’s common stock on the date of the grant and shall be
        exercisable until the earlier of (a) the third (3rd)
        anniversary of the date of vesting and (b) sixty (60) days from the date
        at
        which the Executive ceases to be employed by the Company.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      2.3
        Personal
        Travel to USA.
        The
        Company will provide 2 weeks of paid vacation for each 6 month period of
        employment under this Agreement and the Company will pay for round trip business
        class airfare to/from China and the United States for the either the Executive
        or his spouse.

       

      3. Severance
        for reasons other than Cause.
        In the
        event of Executive’s involuntary severance from service for reasons other than
        Cause, or due to the event of a Diminution of Responsibilities, then, provided
        that Executive complies with Section 7 below prior to the forty-fifth
        (45th)
        day
        following such termination, Executive shall receive a lump sum cash payment
        in
        an amount equal to eighteen (18) months of Executive's then effective base
        salary (less applicable withholding), paid on the first payroll date which
        is
        forty-five (45) days after the date of termination.

       

      4. Termination
        Upon Change of Control.
        The
        provisions set forth in this Section 4 shall apply in lieu of those in
        Section 3 in the event of the Executive’s Termination Upon a Change of
        Control. In the event of Executive's Termination Upon a Change of Control,
        Executive shall receive the following payments and benefits: 

       

      4.1
        Accrued
        Salary and Vacation, and Benefits.
        Executive shall receive all salary and accrued vacation (less applicable
        withholding) earned through Executive's termination date, and the benefits,
        if
        any, under Company benefit plans to which Executive may be entitled pursuant
        to
        the terms of such plans.

       

      4.2
        Stock
        Award Acceleration.
        Provided that Executive complies with Section 7 below, all outstanding stock
        options granted and restricted stock issued by the Company to Executive prior
        to
        the Change of Control shall become fully vested and exercisable immediately
        prior to the effective date of the Termination Upon a Change of Control.
        

       

      4.3
        Cash
        Severance Payment.
        Provided that Executive complies with Section 7 below prior to the forty-fifth
        (45th)
        day
        following such termination, Executive shall receive a lump sum cash payment
        in
        an amount equal to eighteen (18) months of Executive's then effective base
        salary (less applicable withholding), paid on the first payroll date which
        is
        forty-five (45) days after the date of termination.

       

      5. Definitions. Capitalized
        terms used in this Agreement shall have the meanings set forth in this Section
        5.

       

      5.1
        "Cause"
        means
        Executive's (a) failure to perform any reasonable and lawful duty of Executive's
        position or failure to follow the lawful written directions of the Board
        of
        Directors; (b) commission of an act that constitutes misconduct and is injurious
        to the Company or any subsidiary; (c) conviction of, or pleading "guilty"
        or "no
        contest" to, a felony under the laws of the United States or any state thereof;
        (d) committing an act of fraud against, or the misappropriation of property
        belonging to, the Company or any subsidiary; (e) commission of an act of
        dishonesty in connection with Executive's responsibilities as an employee
        and
        affecting the business or affairs of the Company; (f) material breach of
        any
        confidentiality, proprietary information or other agreement between Executive
        and the Company or any subsidiary; or (g) failure or refusal to carry out
        the
        reasonable directives of the Board of Directors.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      5.2
        "Change
        of Control"
        means
        (a) any "person" (as such term is used in Sections 13(d) and 14(d) of the
        Securities Exchange Act of 1934, as amended (the "Exchange
        Act")),
        other than a trustee or other fiduciary holding securities of the Company
        under
        an employee benefit plan of the Company, becomes the "beneficial owner" (as
        defined in Rule 13d-3 promulgated under the Exchange Act), directly or
        indirectly, of securities of the Company representing 50% or more of (A)
        the outstanding shares of common stock of the Company or (B) the combined
        voting
        power of the Company's then outstanding securities; (b) the Company is
        party to a merger or consolidation which results in the voting securities
        of the
        Company outstanding immediately prior thereto failing to continue to represent
        (either by remaining outstanding or by being converted into voting securities
        of
        the surviving or another entity) at least fifty (50%) percent of the combined
        voting power of the voting securities of the Company or such surviving or
        other
        entity outstanding immediately after such merger or consolidation; (c) the
        sale
        or disposition of all or substantially all of the Company's assets (or
        consummation of any transaction having similar effect); or (d) the dissolution
        or liquidation of the Company. 

       

      5.3
        "Company"
        means
        Solar Enertech Corp. and any successor or assign to substantially all the
        business and/or assets of Solar Enertech Corp.

       

      5.4
        "Diminution
        of Responsibilities"
        means
        the occurrence of any of the following conditions, without Executive's written
        consent which condition(s) remain(s) in effect twenty (20) days after receipt
        by
        Company from the Executive of a written notice to: (a) a significant diminution
        in the nature or scope of Executive's authority, title, function or duties
        from
        Executive's authority, title, function or duties; (b) a ten percent (10%)
        reduction in Executive's base salary or a twenty-five percent (25%) reduction
        in
        Executive's target bonus opportunity, if any (in either case, unless such
        reduction is part of a Company officer-wide program to reduce expenses);
        (c) the
        Company's requiring Executive to be based at any office or location more
        than 50
        miles from the office where Executive was employed; (d) any material breach
        of
        the terms of this Agreement by the Company; or (e) failure of any successor
        or
        assignee to the Company to assume this Agreement. Notwithstanding the foregoing,
        the Executive’s continued employment for ninety (90) days following the
        occurrence of any condition constituting “Diminution of Responsibilities”
without the Executive providing written notice to the Company shall constitute
        consent to, or a waiver of right with respect to, such condition.

       

      5.5
        "Termination
        Upon a Change of Control"
        means:

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (a)
        any
        involuntary severance from service of Executive by the Company without Cause
        within twelve (12) months following a Change of Control; or

       

      (b)
        any
        resignation by Executive based on a Diminution of Responsibilities where
        (i)
        such Diminution of Responsibilities occurs within twelve (12) months following
        the Change of Control, and (ii) such resignation occurs within ninety (90)
        days
        following such Diminution of Responsibilities. The diminution shall be measured
        as against existing responsibilities as in effect immediately preceding any
        Change of Control; provided, that a reduction of Executive’s duties, position or
        responsibilities by an acquirer of the Company immediately upon a Change
        of
        Control to a relatively comparable position taking into account the relative
        size and geographical scope of the Company as compared to the acquirer shall
        not
        be deemed a significant reduction in and of itself.

       

      6. Federal
        Excise Tax.
        If the
        payments and benefits provided for in this Agreement constitute "parachute
        payments" within the meaning of the Internal Revenue Code of 1986, as amended
        (the "Code"),
        but
        for this Section 6, would be subject to the excise tax imposed by Section
        4999
        of the Code, then the payments and benefits under this Agreement will be
        payable, at Executive's election, either in full or in such lesser amount
        as
        would result, after taking into account the applicable federal, state and
        local
        income taxes and excise tax imposed by Section 4999 of the Code, in Executive's
        receipt on an after-tax basis of the greatest amount of benefits. 

       

      7. Release
        of Claims.
        The
        Company shall condition the payments and benefits set forth in Sections 3;
        4.2
        and 4.3 of this Agreement upon the delivery by Executive of a signed release
        of
        claims in a form satisfactory to the Company. With respect to the payments
        provided pursuant to Sections 3 and 4.3, such Release must become effective
        in accordance with its terms prior to the forty-fifth (45th)
        day
        following the termination date.

       

      8. Agreement
        Not to Solicit.
        If
        Company performs its obligations to deliver the severance compensation set
        forth
        in Sections 3 and 4 of this Agreement, then for a period of one (1) year
        after
        Executive's termination of employment, Executive will not solicit any employee
        of the Company to discontinue that person's employment relationship with
        the Company.

       

      9. Arbitration.
        Any
        claim, dispute or controversy arising out of this Agreement, the interpretation,
        validity or enforceability of this Agreement or the alleged breach thereof
        shall
        be submitted by the parties to binding arbitration by the American Arbitration
        Association. The site of the arbitration proceeding shall be in Santa Clara
        County, California, or another location mutually agreed to by the parties.
        

       

      10. Conflict
        in Benefits; Effect of Agreement.
        This
        Agreement shall supersede all prior arrangements, whether written or oral,
        and
        understandings regarding incentive compensation and severance compensation
        following a Change of Control and shall be the exclusive agreement for the
        determination of any severance compensation due upon Executive's termination
        of
        employment upon a Change of Control. 

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      11. Miscellaneous.

       

      11.1
        Successors
        of the Company.
        The
        Company will require any successor or assign (whether direct or indirect,
        by
        purchase, merger, consolidation or otherwise) to all or substantially all
        of the
        business and/or assets of the Company, expressly, absolutely and unconditionally
        to assume and agree to perform this Agreement in the same manner and to the
        same
        extent that the Company would be required to perform it if no such succession
        or
        assignment had taken place. 

       

      11.2
        No
        Employment Agreement.
        This
        Agreement does not alter Executive's at-will employment status or obligate
        the
        Company to continue to employ Executive for any specific period of time,
        or in
        any specific role or geographic location.

       

      11.3
        Modification
        of Agreement.
        This
        Agreement may be modified, amended or superseded only by a written agreement
        signed by Executive and the Chairman of the Board of Directors.

       

      11.4
        Governing
        Law.
        This
        Agreement shall be interpreted in accordance with and governed by the laws
        of
        the State of California.

       

      11.5
        Application
        of Section 40A.

       

      (a)   Notwithstanding
        anything set forth in this Agreement to the contrary, no amount payable pursuant
        to this Agreement which constitutes a “deferral of compensation” within the
        meaning of the Treasury Regulations issued pursuant to Section 409A of the
        Code
        (the “Section 409A Regulations”) shall be paid unless and until Executive has
        incurred a “separation from service” within the meaning of the Section 409A
        Regulations. Furthermore, to the extent that Executive is a “specified employee”
within the meaning of the Section 409A Regulations as of the date of Executive’s
        separation from service, no amount that constitutes a deferral of compensation
        which is payable on account of Executive’s separation from service shall paid to
        Executive before the date (the “Delayed Payment Date”) which is first day of the
        seventh month after the date of Executive’s separation from service or, if
        earlier, the date of Executive’s death following such separation from service.
        All such amounts that would, but for this Section, become payable prior to
        the
        Delayed Payment Date will be accumulated and paid on the Delayed Payment
        Date.

       

      (b)   The
        Company intends that income provided to Executive pursuant to this Agreement
        will not be subject to taxation under Section 409A of the Code. The provisions
        of this Agreement shall be interpreted and construed in favor of satisfying
        any
        applicable requirements of Section 409A of the Code. However,
        the Company does not guarantee any particular tax effect for income provided
        to
        Executive pursuant to this Agreement.
        In any
        event, except for the Company’s responsibility to withhold applicable income and
        employment taxes from compensation paid or provided to Executive, the Company
        shall not be responsible for the payment of any applicable taxes on compensation
        paid or provided to Executive pursuant to this Agreement. 

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      

      
        	
                EXECUTIVE

              	 	
                SOLAR
                  ENERTECH CORP.

              
	 	 	 
	
                /s/
                  LEO S. YOUNG

              	 	
                /s/
                  ANTHEA CHUNG

              
	 	 	 
	
                 

              	 	
                By:
                  

              
	 	 	 
	
                Leo
                  S. Young

              	 	
                Name:
                  Anthea Chung

              
	 	 	 
	
                 

              	 	
                Title:
                  Chief Financial OfficerSOLAR
        ENERTECH CORP.

      2008
        RESTRICTED STOCK PLAN

       

      1. Establishment,
        Purpose and Term of Plan.

       

      1.1  Establishment.
        The
        Solar Enertech Corp. 2008 Restricted Stock Plan (the “Plan”)
        is
        established effective as of August 19, 2008 (the “Effective Date”).

       

      1.2  Purpose.
        The
        purpose of the Plan is to advance the interests of the Participating Company
        Group and its stockholders by providing an incentive to attract, retain and
        reward persons performing services for the Participating Company Group and
        by
        motivating such persons to contribute to the growth and profitability of
        the
        Participating Company Group. 

       

      1.3  Term
        of Plan.
        The
        Plan shall continue in effect until its termination by the Committee; provided,
        however, that all Restricted Stock Awards must be granted, if at all, within
        ten (10) years from the Plan’s Effective Date.

       

      2. Definitions
        and Construction.

       

      2.1  Definitions.
        Whenever used herein, the following terms shall have their respective meanings
        set forth below:

       

      (a) “Affiliate”
means
        (i) an entity, other than a Parent Corporation, that directly, or
        indirectly through one or more intermediary entities, controls the Company
        or
        (ii) an entity, other than a Subsidiary Corporation, that is controlled by
        the Company directly or indirectly through one or more intermediary entities.
        For this purpose, the term “control”
        (including the term “controlled
        by”)
        means
        the possession, direct or indirect, of the power to direct or cause the
        direction of the management and policies of the relevant entity, whether
        through
        the ownership of voting securities, by contract or otherwise; or shall have
        such
        other meaning assigned such term for the purposes of registration on
        Form S-8 under the Securities Act.

       

      (b) “Award
        Agreement”
means
        a
        written or electronic agreement between the Company and a Participant setting
        forth the terms, conditions and restrictions of the Restricted Stock Award
        granted to the Participant.

       

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

       

      (d) “Cause”
means,
        unless such term or an equivalent term is otherwise defined with respect
        to an
        Award by the Participant’s Award Agreement or by a written contract of
        employment or service, any of the following: (i) the Participant’s theft,
        dishonesty, willful misconduct, breach of fiduciary duty for personal profit,
        or
        falsification of any Participating Company documents or records, in each
        case
        which has a material detrimental effect on a Participating Company’s reputation
        or business; (ii) the Participant’s unauthorized use, misappropriation,
        destruction or diversion of any tangible or intangible asset or corporate
        opportunity of a Participating Company (including, without limitation, the
        Participant’s improper use or disclosure of a Participating Company’s
        confidential or proprietary information) in each case which has a material
        detrimental effect on a Participating Company’s reputation or business; or
        (iii) the Participant’s conviction (including any plea of guilty or
nolo
        contendere)
        of any
        criminal act involving fraud, dishonesty, misappropriation or moral turpitude,
        or which impairs the Participant’s ability to perform his or her duties with a
        Participating Company.

       

      
        
           

        

        
          -1-

          
            

          

        

        
           

        

      

      (e) “Change
        in Control”
means,
        unless such term or an equivalent term is otherwise defined with respect
        to an
        Award by the Participant’s Award Agreement or written contract of employment or
        service, the occurrence of any of the following:

       

      (i) any
        “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange
        Act) becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated
        under the Exchange Act), directly or indirectly, of securities of the Company
        representing more than fifty percent (50%) of the total combined voting power
        of
        the Company’s then-outstanding securities entitled to vote generally in the
        election of Directors; provided, however, that the following acquisitions
        shall
        not constitute a Change in Control: (1) an acquisition by any such person
        who on the Effective Date is the beneficial owner of more than fifty percent
        (50%) of such voting power, (2) any acquisition directly from the Company,
        including, without limitation, a public offering of securities, (3) any
        acquisition by the Company, (4) any acquisition by a trustee or other
        fiduciary under an employee benefit plan of a Participating Company or
        (5) any acquisition by an entity owned directly or indirectly by the
        stockholders of the Company in substantially the same proportions as their
        ownership of the voting securities of the Company; or

       

      (ii) an
        Ownership Change Event or series of related Ownership Change Events
        (collectively, a “Transaction”)
        in
        which the stockholders of the Company immediately before the Transaction
        do not
        retain immediately after the Transaction direct or indirect beneficial ownership
        of more than fifty percent (50%) of the total combined voting power of the
        outstanding securities entitled to vote generally in the election of Directors
        or, in the case of an Ownership Change Event described in
        Section 2.1(t)(iii),
        the entity to which the assets of the Company were transferred (the
“Transferee”),
        as
        the case may be; or

       

      (iii) the
        liquidation or dissolution of the Company.

       

      Notwithstanding
        the foregoing, a Change in Control shall be deemed not to include a transaction
        described in subsections (i) or (ii) of this Section 2.1(e)
        in which
        a majority of the members of the board of directors of the continuing, surviving
        or successor entity, or parent thereof, immediately after such transaction
        is
        comprised of Incumbent Directors. 

       

      For
        purposes of this Section 2.1(e), indirect beneficial ownership shall include,
        without limitation, an interest resulting from ownership of the voting
        securities of one or more corporations or other business entities which own
        the
        Company or the Transferee, as the case may be, either directly or through
        one or
        more subsidiary corporations or other business entities. The Committee shall
        have the right to determine whether multiple sales or exchanges of the voting
        securities of the Company or multiple Ownership Change Events are related,
        and
        its determination shall be final, binding and conclusive.

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      (f) “Code”
means
        the Internal Revenue Code of 1986, as amended, and any applicable regulations
        promulgated thereunder.

       

      (g) “Committee”
means
        the Compensation Committee and such other committee or subcommittee of the
        Board, if any, duly appointed to administer the Plan and having such powers
        in
        each instance as shall be specified by the Board. If, at any time, there
        is no
        committee of the Board then authorized or properly constituted to administer
        the
        Plan, the Board shall exercise all of the powers of the Committee granted
        herein, and, in any event, the Board may in its discretion exercise any or
        all
        of such powers. 

       

      (h) “Company”
means
        Solar Enertech Corp., a Nevada corporation, or any successor corporation
        thereto.

       

      (i) “Consultant”
means
        a
        person engaged to provide consulting or advisory services (other than as
        an
        Employee or a Director) to a Participating Company.

       

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

       

      (k) “Disability”
means
        the inability of the Participant, in the opinion of a qualified physician
        acceptable to the Company, to perform the major duties of the Participant’s
        position with the Participating Company Group because of the sickness or
        injury
        of the Participant.

       

      (l) “Dividend
        Equivalent Right”
means
        the right of a Participant, granted at the discretion of the Committee or
        as
        otherwise provided by the Plan, to receive a credit for the account of such
        Participant in an amount equal to the cash dividends paid on one share of
        Stock
        for each share of Stock represented by an Award held by such
        Participant.

       

      (m) “Employee”
means
        any person treated as an employee (including an Officer or a Director who
        is
        also treated as an employee) in the records of a Participating Company;
        provided, however, that neither service as a member of the Board nor payment
        of
        a director’s fee shall be sufficient to constitute employment for purposes of
        the Plan. The Company shall determine in good faith and in the exercise of
        its
        discretion whether an individual has become or has ceased to be an Employee
        and
        the effective date of such individual’s employment or termination of employment,
        as the case may be. For
        purposes of an individual’s rights, if any, under the terms of the Plan as of
        the time of the Company’s determination of whether or not the individual is an
        Employee, all such determinations by the Company shall be final, binding
        and
        conclusive as to such rights, if any, notwithstanding that the Company or
        any
        court of law or governmental agency subsequently makes a contrary determination
        as to such individual’s status as an Employee.

       

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

       

      (o) “Fair Market Value”
means,
        as of any date, the value of a share of Stock or other property as determined
        by
        the Committee, in its discretion, or by the Company, in its discretion, if
        such
        determination is expressly allocated to the Company herein, subject to the
        following:

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      (i) If,
        on
        such date, the Stock is listed on a national or regional securities exchange
        or
        market system, or is quoted on the Over the Counter Bulletin Board (“OTCBB”),
        the Fair Market Value of a share of Stock shall be the closing price of a
        share
        of Stock (or the mean of the closing bid and asked prices of a share of Stock
        if
        the Stock is so quoted instead) as quoted on such national, regional securities
        exchange, market system or OTCBB constituting the primary market for the
        Stock,
        as reported in The
        Wall Street Journal,
        the
        OTCBB or such other source as the Company deems reliable. If the relevant
        date
        does not fall on a day on which the Stock has traded over the counter or
        on such
        securities exchange or market system, the date on which the Fair Market Value
        shall be established shall be the last day on which the Stock was so traded
        prior to the relevant date, or such other appropriate day as shall be determined
        by the Committee, in its discretion.

       

      (ii) If,
        on
        such date, the Stock is not listed on a national or regional securities
        exchange, market system or OTCBB, the Fair Market Value of a share of Stock
        shall be as determined by the Committee in good faith without regard to any
        restriction other than a restriction which, by its terms, will never lapse,
        and
        subject to the applicable requirements, if any, of applicable law.

       

      (p) “Incumbent
        Director”
means
        a
        director who either (i) is a member of the Board as of the Effective Date
        or (ii) is elected, or nominated for election, to the Board with the
        affirmative votes of at least a majority of the Incumbent Directors at the
        time
        of such election or nomination, but who was not elected or nominated in
        connection with an actual or threatened proxy contest relating to the election
        of directors of the Company.

       

      (q) “Insider”
means
        an Officer, a Director of the Company or other person whose transactions
        in
        Stock are subject to Section 16 of the Exchange Act.

       

      (r) “Insider
        Trading Policy”
means
        the written policy of the Company pertaining to the purchase, sale, transfer
        or
        other disposition of the Company’s equity securities by Directors, Officers,
        Employees or other service providers who may possess material, nonpublic
        information regarding the Company or its securities.

       

      (s) “Officer”
means
        any person designated by the Board as an officer of the Company.

       

      (t) “Ownership
        Change Event”
means
        the occurrence of any of the following with respect to the Company: (i) the
        direct or indirect sale or exchange in a single or series of related
        transactions by the stockholders of the Company of more than fifty percent
        (50%)
        of the voting stock of the Company; (ii) a merger or consolidation in which
        the Company is a party; or (iii) the sale, exchange, or transfer of all or
        substantially all of the assets of the Company (other than a sale, exchange
        or
        transfer to one or more subsidiaries of the Company).

       

      (u) “Parent Corporation”
means
        any present or future “parent corporation”
        of the Company, as defined in Section 424(e) of the Code.

       

      (v) “Participant”
means
        any eligible person who has been granted one or more Restricted Stock
        Awards.

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

      (w) “Participating
        Company”
means
        the Company or any Parent Corporation, Subsidiary Corporation or
        Affiliate.

       

      (x) “Participating Company Group”
means,
        at any point in time, all entities collectively which are then Participating
        Companies.

       

      (y) “Restricted
        Stock Award”
means
        an award of Restricted Stock pursuant to Section 6.

       

      (z) “Rule 16b-3”
means
        Rule 16b-3 under the Exchange Act, as amended from time to time, or any
        successor rule or regulation.

       

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

       

      (bb) “Service”
means
        a
        Participant’s employment or service with the Participating Company Group,
        whether in the capacity of an Employee, a Director or a Consultant. A
        Participant’s Service shall not be deemed to have terminated merely because of a
        change in the capacity in which the Participant renders Service to the
        Participating Company Group or a change in the Participating Company for
        which
        the Participant renders such Service, provided that there is no interruption
        or
        termination of the Participant’s Service. Furthermore, a Participant’s Service
        shall not be deemed to have terminated if the Participant takes any military
        leave, sick leave, or other bona fide leave of absence approved by the Company.
        However, if any such leave taken by a Participant exceeds ninety (90) days,
        then
        on the ninety-first (91st) day following the commencement of such leave the
        Participant’s Service shall be deemed to have terminated, unless the
        Participant’s right to return to Service is guaranteed by statute or contract.
        Notwithstanding the foregoing, unless otherwise designated by the Company
        or
        required by law, a leave of absence shall not be treated as Service for purposes
        of determining vesting under the Participant’s Award Agreement. A Participant’s
        Service shall be deemed to have terminated either upon an actual termination
        of
        Service or upon the corporation for which the Participant performs Service
        ceasing to be a Participating Company. Subject to the foregoing, the Company,
        in
        its discretion, shall determine whether the Participant’s Service has terminated
        and the effective date of and reason for such termination.

       

      (cc) “Stock”
means
        the common stock of the Company, as adjusted from time to time in accordance
        with Section 4.3.

       

      (dd) “Subsidiary Corporation”
means
        any present or future “subsidiary corporation” of the Company, as defined in
        Section 424(f) of the Code.

       

      (ee) “Vesting
        Conditions”
mean
        those conditions established in accordance with the Plan prior to the
        satisfaction of which shares subject to a Restricted Stock Award remain subject
        to forfeiture or a repurchase option in favor of the Company exercisable
        for the
        Participant’s monetary purchase price, if any, for such shares upon the
        Participant’s termination of Service.

       

      2.2 Construction.
        Captions and titles contained herein are for convenience only and shall not
        affect the meaning or interpretation of any provision of the Plan. Except
        when
        otherwise indicated by the context, the singular shall include the plural
        and
        the plural shall include the singular. Use of the term “or” is not intended to
        be exclusive, unless the context clearly requires otherwise.

       

      
        
           

        

        
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      3. Administration.

       

      3.1  Administration
        by the Committee.
        The
        Plan shall be administered by the Committee. All questions of interpretation
        of
        the Plan, of any Award Agreement or of any other form of agreement or other
        document employed by the Company in the administration of the Plan or of
        any
        Award shall be determined by the Committee, and such determinations shall
        be
        final, binding and conclusive upon all persons having an interest in the
        Plan or
        such Award, unless fraudulent or made in bad faith. Any and all actions,
        decisions and determinations taken or made by the Committee in the exercise
        of
        its discretion pursuant to the Plan or Award Agreement or other agreement
        thereunder (other than determining questions of interpretation pursuant to
        the
        preceding sentence) shall be final, binding and conclusive upon all persons
        having an interest therein.

       

      3.2  Authority
        of Officers.
        Any
        Officer shall have the authority to act on behalf of the Company with respect
        to
        any matter, right, obligation, determination or election which is the
        responsibility of or which is allocated to the Company herein, provided the
        Officer has apparent authority with respect to such matter, right, obligation,
        determination or election.

       

      3.3  Administration
        with Respect to Insiders.
        With
        respect to participation by Insiders in the Plan, at any time that any class
        of
        equity security of the Company is registered pursuant to Section 12 of the
        Exchange Act, the Plan shall be administered in compliance with the
        requirements, if any, of Rule 16b-3.

       

      3.4  Powers
        of the Committee.
        In
        addition to any other powers set forth in the Plan and subject to the provisions
        of the Plan, the Committee shall have the full and final power and authority,
        in
        its discretion:

       

      (a) to
        determine the persons to whom, and the time or times at which, Restricted
        Stock
        Awards shall be granted and the number of shares of Stock to be subject to
        each
        Restricted Stock Award;

       

      (b) to
        determine the terms, conditions and restrictions applicable to each Restricted
        Stock Award (which need not be identical) and any shares acquired pursuant
        thereto, including, without limitation, (i) the method of payment (if any)
        for shares purchased pursuant to any Restricted Stock Award, (ii) the
        method for satisfaction of any tax withholding obligation arising in connection
        with Restricted Stock Awards, including by the withholding or delivery of
        shares
        of Stock, (iii) the timing, terms and conditions of the exercisability or
        vesting of any Restricted Stock Award or any shares acquired pursuant thereto,
        (iv)  the time of the expiration of any Restricted Stock Award,
        (v) the effect of the Participant’s termination of Service on any of the
        foregoing, and (vi) all other terms, conditions and restrictions applicable
        to any Restricted Stock Award or shares acquired pursuant thereto not
        inconsistent with the terms of the Plan;

       

      (c) to
        approve one or more forms of Award Agreement;

       

      
        
           

        

        
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      (d) to
        amend,
        modify, extend, cancel or renew any Restricted Stock Award or to waive any
        restrictions or conditions applicable to any Restricted Stock Award or any
        shares acquired upon the exercise thereof;

       

      (e) to
        accelerate, continue, extend or defer the exercisability of any Restricted
        Stock
        Award or the vesting of any shares acquired upon the exercise thereof, including
        with respect to the period following a Participant’s termination of
        Service;

       

      (f) to
        prescribe, amend or rescind rules, guidelines and policies relating to the
        Plan,
        or to adopt sub-plans or supplements to, or alternative versions of, the
        Plan,
        including, without limitation, as the Committee deems necessary or desirable
        to
        comply with the laws or regulations of or to accommodate the tax policy,
        accounting principles or custom of, foreign jurisdictions whose citizens
        may be
        granted Restricted Stock Awards; and

       

      (g) to
        correct any defect, supply any omission or reconcile any inconsistency in
        the
        Plan or any Award Agreement and to make all other determinations and take
        such
        other actions with respect to the Plan or any Restricted Stock Award as the
        Committee may deem advisable to the extent not inconsistent with the provisions
        of the Plan or applicable law.

       

      3.5  Indemnification.
        In
        addition to such other rights of indemnification as they may have as members
        of
        the Board or the Committee or as officers or employees of the Participating
        Company Group, members of the Board or the Committee and any officers or
        employees of the Participating Company Group to whom authority to act for
        the
        Board, the Committee or the Company is delegated shall be indemnified by
        the
        Company against all reasonable expenses, including attorneys’ fees, actually and
        necessarily 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 or failure to act under
        or in
        connection with the Plan, or any right granted hereunder, 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 such person is liable for gross negligence, bad faith or
        intentional misconduct in duties; provided, however, that within sixty (60)
        days
        after the institution of such action, suit or proceeding, such person shall
        offer to the Company, in writing, the opportunity at its own expense to handle
        and defend the same.

       

      4. Shares
        Subject to Plan.

       

      4.1  Maximum
        Number of Shares Issuable.
        Subject
        to adjustment as provided in Sections 4.2
        and
4.3,
        the
        maximum aggregate number of shares of Stock that may be issued under the
        Plan
        shall be 25,250,000 which shall consist of authorized but unissued or reacquired
        shares of Stock or any combination thereof.

       

      4.2  Share
        Counting.
        If an
        outstanding Award for any reason expires or is terminated or canceled without
        having been exercised or settled in full, or if shares of Stock acquired
        pursuant to a Restricted Stock Award subject to forfeiture or repurchase
        are
        forfeited or repurchased by the Company for an amount not greater than the
        Participant’s purchase price, the shares of Stock allocable to the terminated
        portion of such Restricted Stock Award or such forfeited or repurchased shares
        of Stock shall again be available for issuance under the Plan. Shares withheld
        or reacquired by the Company in satisfaction of tax withholding obligations
        pursuant to Section 10.2
        shall
        not again be available for issuance under the Plan.

       

      
        
           

        

        
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      4.3  Adjustments
        for Changes in Capital Structure.
        Subject
        to any required action by the stockholders of the Company, in the event of
        any
        change in the Stock effected without receipt of consideration by the Company,
        whether through merger, consolidation, reorganization, reincorporation,
        recapitalization, reclassification, stock dividend, stock split, reverse
        stock
        split, split-up, split-off, spin-off, combination of shares, exchange of
        shares,
        or similar change in the capital structure of the Company, or in the event
        of
        payment of a dividend or distribution to the stockholders of the Company
        in a
        form other than Stock (excepting normal cash dividends) that has a material
        effect on the Fair Market Value of shares of Stock, appropriate and
        proportionate adjustments shall be made in the number and class of shares
        subject to the Plan in order to prevent dilution or enlargement of Participants’
rights under the Plan. For purposes of the foregoing, conversion of any
        convertible securities of the Company shall not be treated as “effected without
        receipt of consideration by the Company.” If a majority of the shares which are
        of the same class as the shares that are subject to outstanding Restricted
        Stock
        Awards are exchanged for, converted into, or otherwise become (whether or
        not
        pursuant to an Ownership Change Event) shares of another corporation (the
        “New
        Shares”),
        the
        Committee may unilaterally amend the outstanding Restricted Stock Awards
        to
        provide that such Restricted Stock Awards are for New Shares. In the event
        of
        any such amendment, the number of shares subject to, and the purchase price
        per
        share of, the outstanding Restricted Stock Awards shall be adjusted in a
        fair
        and equitable manner as determined by the Committee, in its discretion. Any
        fractional share resulting from an adjustment pursuant to this Section shall
        be
        rounded down to the nearest whole number, and the exercise price per share
        shall
        be rounded up to the nearest whole cent. In no event may the purchase price
        of
        any Restricted Stock Purchase Right be decreased to an amount less than the
        par
        value, if any, of the Stock subject to the Restricted Stock Award. The
        adjustments determined by the Committee pursuant to this Section shall be
        final,
        binding and conclusive.

       

      5. Eligibility.

       

      5.1  Persons
        Eligible for Awards.
        Restricted Stock Awards may be granted only to Employees, Consultants and
        Directors.

       

      5.2  Participation
        in Plan.
        Restricted Stock Awards are granted solely at the discretion of the Committee.
        Eligible persons may be granted more than one Restricted Stock Award. However,
        eligibility in accordance with this Section shall not entitle any person
        to be
        granted a Restricted Stock Award, or, having been granted a Restricted Stock
        Award, to be granted an additional Restricted Stock Award.

       

      6. Restricted
        Stock Awards.

       

      Restricted
        Stock Awards shall be evidenced by Award Agreements specifying the terms
        and
        conditions of the Restricted Stock Award, in such form as the Committee shall
        from time to time establish. Award Agreements evidencing Restricted Stock
        Awards
        may incorporate all or any of the terms of the Plan by reference and shall
        comply with and be subject to the following terms and conditions:

       

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

      6.1  Types
        of Restricted Stock Awards Authorized.
        Restricted Stock Awards may be granted upon such conditions as the Committee
        shall determine, including, without limitation, upon the attainment of one
        or
        more performance goals.

       

      6.2  Purchase
        Price.
        Except
        as set forth in the Award Agreement, monetary payment (other than applicable
        tax
        withholding) shall be required as a condition of receiving shares of Stock
        pursuant to a Restricted Stock Award, the consideration for which shall be
        services actually rendered to a Participating Company or for its benefit.
        Notwithstanding the foregoing, if required by applicable law, the Participant
        shall furnish consideration in the form of cash or past services rendered
        to a
        Participating Company or for its benefit having a value not less than the
        par
        value of the shares of Stock subject to a Restricted Stock Award.

       

      6.3  Payment
        of Purchase Price. Payment,
        if any is required, for the number of shares of Stock subject to a being
        purchased pursuant to any Restricted Stock Award shall be made (a) in cash
        or by check or cash equivalent, (b) by such other consideration as may be
        approved by the Committee from time to time to the extent permitted by
        applicable law, or (c) by any combination thereof.

       

      6.4  Vesting
        and Restrictions on Transfer.
        Shares
        issued pursuant to any Restricted Stock Award may (but need not) be made
        subject
        to Vesting Conditions based upon the satisfaction of such Service requirements,
        conditions, restrictions or performance criteria as shall be established
        by the
        Committee and set forth in the Award Agreement evidencing such Award. During
        any
        period in which shares acquired pursuant to a Restricted Stock Award remain
        subject to Vesting Conditions, such shares may not be sold, exchanged,
        transferred, pledged, assigned or otherwise disposed of other than pursuant
        to
        an Ownership Change Event or as provided in Section 6.5. The Committee, in
        its discretion, may provide in any Award Agreement evidencing a Restricted
        Stock
        Award that, if the satisfaction of Vesting Conditions with respect to any
        shares
        subject to such Restricted Stock Award would otherwise occur on a day on
        which
        the sale of such shares would violate the provisions of the Insider Trading
        Policy, then satisfaction of the Vesting Conditions automatically shall be
        determined on the next trading day on which the sale of such shares would
        not
        violate the Insider Trading Policy. Upon request by the Company, each
        Participant shall execute any agreement evidencing such transfer restrictions
        prior to the receipt of shares of Stock hereunder and shall promptly present
        to
        the Company any and all certificates representing shares of Stock acquired
        hereunder for the placement on such certificates of appropriate legends
        evidencing any such transfer restrictions.

       

      6.5  Voting
        Rights; Dividends and Distributions.
        Except
        as provided in this Section, Section 6.4 and any Award Agreement, during
        any period in which shares acquired pursuant to a Restricted Stock Award
        remain
        subject to Vesting Conditions, the Participant shall have all of the rights
        of a
        stockholder of the Company holding shares of Stock, including the right to
        vote
        such shares and to receive all dividends and other distributions paid with
        respect to such shares. However, in the event of a dividend or distribution
        paid
        in shares of Stock or other property or any other adjustment made upon a
        change
        in the capital structure of the Company as described in
        Section 4.3,
        any and
        all new, substituted or additional securities or other property (other than
        normal cash dividends) to which the Participant is entitled by reason of
        the
        Participant’s Restricted Stock Award shall be immediately subject to the same
        Vesting Conditions as the shares subject to the Restricted Stock Award with
        respect to which such dividends or distributions were paid or adjustments
        were
        made.

       

      
        
           

        

        
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      6.6  Effect
        of Termination of Service.
        Unless
        otherwise provided by the Committee in the Award Agreement evidencing a
        Restricted Stock Award, if a Participant terminates his or her Service for
        any
        reason (other than the Participant’s death or Disability), or the Participant’s
        Service is terminated by a Participating Company for Cause, then the Participant
        shall forfeit to the Company any shares acquired by the Participant pursuant
        to
        a Restricted Stock Bonus which remain subject to Vesting Conditions as of
        the
        date of the Participant’s termination of Service. Unless otherwise provided by
        the Committee in an Award Agreement, if a Participant’s Service is terminated by
        a Participating Company without Cause, or due to the death or Disability
        of the
        Participant, then the vesting of any Restricted Stock Award shall be accelerated
        in full as of the effective date of the Participant’s termination of Service.
        The Company shall have the right to assign at any time any repurchase right
        it
        may have, whether or not such right is then exercisable, to one or more persons
        as may be selected by the Company.

       

      6.7  Nontransferability
        of Restricted Stock Award Rights.
        Rights
        to acquire shares of Stock pursuant to a Restricted Stock Award shall not
        be
        subject in any manner to anticipation, alienation, sale, exchange, transfer,
        assignment, pledge, encumbrance or garnishment by creditors of the Participant
        or the Participant’s beneficiary, except transfer by will or the laws of descent
        and distribution. All
        rights with respect to a Restricted Stock Award granted to a Participant
        hereunder shall be exercisable during his or her lifetime only by such
        Participant or the Participant’s guardian or legal representative.

       

      7. Standard
        Forms of Award Agreements.

       

      7.1  Award
        Agreements.
        Each
        Restricted Stock Award shall comply with and be subject to the terms and
        conditions set forth in the appropriate form of Award Agreement approved
        by the
        Committee and as amended from time to time. No Restricted Stock Award or
        purported Restricted Stock Award shall be a valid and binding obligation
        of the
        Company unless evidenced by a fully executed Award Agreement. Any Award
        Agreement may consist of an appropriate form of Notice of Grant and a form
        of
        Award Agreement incorporated therein by reference, or such other form or
        forms,
        including electronic media, as the Committee may approve from time to
        time.

       

      7.2  Authority
        to Vary Terms.
        The
        Committee shall have the authority from time to time to vary the terms of
        any
        standard form of Award Agreement either in connection with the grant or
        amendment of an individual Restricted Stock Award or in connection with the
        authorization of a new standard form or forms; provided, however, that the
        terms
        and conditions of any such new, revised or amended standard form or forms
        of
        Award Agreement are not inconsistent with the terms of the Plan.

       

      
        
           

        

        
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      8. Change
        in Control.

       

      8.1 Effect
        of Change in Control
        on Restricted Stock Awards.
        Except
        as otherwise provided by the Committee in an Award Agreement, in the event
        of a
        Change in Control, any outstanding Restricted Stock Award or portion thereof
        and
        shares acquired pursuant thereto shall be accelerated in full effective
        immediately prior to, and contingent upon, the consummation of the Change
        in
        Control provided that the Participant is providing Services as of such date.
        

       

      8.2 
        Federal Excise Tax Under Section 4999 of the Code.

       

      (a) Excess
        Parachute Payment.
        In the
        event that any acceleration of vesting pursuant to an Award and any other
        payment or benefit received or to be received by a Participant would subject
        the
        Participant to any excise tax pursuant to Section 4999 of the Code due to
        the
        characterization of such acceleration of vesting, payment or benefit as an
        “excess parachute payment” under Section 280G of the Code, the Participant may
        elect, in his or her sole discretion, to reduce the amount of any acceleration
        of vesting called for under the Award in order to avoid such
        characterization.

       

      (b) Determination
        by Independent Accountants.
        To aid
        the Participant in making any election called for under
        Section 8.2(a),
        no
        later than the date of the occurrence of any event that might reasonably
        be
        anticipated to result in an “excess parachute payment” to the Participant as
        described in Section 8.2(a),
        the
        Company shall request a determination in writing by independent public
        accountants selected by the Company (the “Accountants”).
        As
        soon as practicable thereafter, the Accountants shall determine and report
        to
        the Company and the Participant the amount of such acceleration of vesting,
        payments and benefits which would produce the greatest after-tax benefit
        to the
        Participant. For the purposes of such determination, the Accountants may
        rely on
        reasonable, good faith interpretations concerning the application of Sections
        280G and 4999 of the Code. The Company and the Participant shall furnish
        to the
        Accountants such information and documents as the Accountants may reasonably
        request in order to make their required determination. The Company shall
        bear
        all fees and expenses the Accountants may reasonably charge in connection
        with
        their services contemplated by this Section 8.2(b). 

       

      9. Compliance
        with Securities Law.

       

      The
        grant
        of Restricted Stock Awards and the issuance of shares of Stock pursuant to
        any
        Restricted Stock Award shall be subject to compliance with all applicable
        requirements of federal, state and foreign law with respect to such securities
        and the requirements of any stock exchange or market system upon which the
        Stock
        may then be listed. In addition, no Restricted Stock Award may be exercised
        or
        shares issued pursuant to a Restricted Stock Award unless (a) a
        registration statement under the Securities Act shall at the time of such
        exercise or issuance be in effect with respect to the shares issuable pursuant
        to the Award or (b) in the opinion of legal counsel to the Company, the
        shares issuable pursuant to the Award may be issued in accordance with the
        terms
        of an applicable exemption from the registration requirements of the Securities
        Act. The inability of the Company to obtain from any regulatory body having
        jurisdiction the authority, if any, deemed by the Company’s legal counsel to be
        necessary to the lawful issuance and sale of any shares hereunder shall relieve
        the Company of any liability in respect of the failure to issue or sell such
        shares as to which such requisite authority shall not have been obtained.
        As a
        condition to issuance of any Stock, the Company may require the Participant
        to
        satisfy any qualifications that may be necessary or appropriate, to evidence
        compliance with any applicable law or regulation and to make any representation
        or warranty with respect thereto as may be requested by the
        Company.

       

      
        
           

        

        
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      10. Tax
        Withholding.

       

      10.1 Tax
        Withholding in General.
        The
        Company shall have the right to deduct from any and all payments made under
        the
        Plan, or to require the Participant, through payroll withholding, cash payment
        or otherwise, to make adequate provision for, the federal, state, local and
        foreign taxes, if any, required by law to be withheld by the Participating
        Company Group with respect to an Award or the shares acquired pursuant thereto.
        The Company shall have no obligation to deliver shares of Stock, to release
        shares of Stock from an escrow established pursuant to an Award Agreement,
        or to
        make any payment in cash under the Plan until the Participating Company Group’s
        tax withholding obligations have been satisfied by the Participant.

       

      10.2 Withholding
        in Shares.
        The
        Company shall have the right, but not the obligation, to deduct from the
        shares
        of Stock issuable to a Participant upon the exercise or settlement of an
        Award,
        or to accept from the Participant the tender of, a number of whole shares
        of
        Stock having a Fair Market Value, as determined by the Company, equal to
        all or
        any part of the tax withholding obligations of the Participating Company
        Group.
        The Fair Market Value of any shares of Stock withheld or tendered to satisfy
        any
        such tax withholding obligations shall not exceed the amount determined by
        the
        applicable minimum statutory withholding rates.

       

      11. Amendment
        or Termination of Plan.

       

      The
        Committee may amend, suspend or terminate the Plan at any time. However,
        without
        the approval of the Company’s stockholders, there shall be no amendment of the
        Plan (including, but not limited to, an increase in the share limitation
        imposed
        by Section 4.1 (other than adjustments made to such Sections pursuant to
        Sections 4.2 and 4.3)) that would require approval of the Company’s stockholders
        under any applicable law, regulation or rule, including the rules of any
        stock
        exchange or market system upon which the Stock may then be listed. No amendment,
        suspension or termination of the Plan shall affect any then outstanding
        Restricted Stock Award unless expressly provided by the Committee. Except
        as
        provided by the next sentence, no amendment, suspension or termination of
        the
        Plan may adversely affect any then outstanding Restricted Stock Award without
        the consent of the Participant. 

       

      12. Miscellaneous
        Provisions.

       

      12.1 Repurchase
        Rights.
        Shares
        issued under the Plan may be subject to one or more repurchase options, or
        other
        conditions and restrictions as determined by the Committee in its discretion
        at
        the time the Award is granted. The Company shall have the right to assign
        at any
        time any repurchase right it may have, whether or not such right is then
        exercisable, to one or more persons as may be selected by the Company. Upon
        request by the Company, each Participant shall execute any agreement evidencing
        such transfer restrictions prior to the receipt of shares of Stock hereunder
        and
        shall promptly present to the Company any and all certificates representing
        shares of Stock acquired hereunder for the placement on such certificates
        of
        appropriate legends evidencing any such transfer restrictions.

       

      
        
           

        

        
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      12.2 Forfeiture
        Events.

       

      (a) The
        Committee may specify in an Award Agreement that the Participant’s rights,
        payments, and benefits with respect to an Award shall be subject to reduction,
        cancellation, forfeiture, or recoupment upon the occurrence of specified
        events,
        in addition to any otherwise applicable vesting or performance conditions
        of an
        Award. Such events may include, but shall not be limited to, termination
        of
        Service for Cause or any act by a Participant, whether before or after
        termination of Service, that would constitute Cause for termination of
        Service.

       

      (b) If
        the
        Company is required to prepare an accounting restatement due to the material
        noncompliance of the Company, as a result of misconduct, with any financial
        reporting requirement under the securities laws, any Participant who knowingly
        or through gross negligence engaged in the misconduct, or who knowingly or
        through gross negligence failed to prevent the misconduct, and any Participant
        who is one of the individuals subject to automatic forfeiture under Section
        304
        of the Sarbanes-Oxley Act of 2002, shall reimburse the Company the amount
        of any
        payment in settlement of a Restricted Stock Award earned or accrued during
        the
        twelve- (12-) month period following the first public issuance or filing
        with
        the United States Securities and Exchange Commission (whichever first occurred)
        of the financial document embodying such financial reporting
        requirement.

       

      12.3 Provision
        of Information.
        Each
        Participant shall be given access to information concerning the Company
        equivalent to that information generally made available to the Company’s common
        stockholders.
        In
        addition, the Company shall deliver such other disclosures to Participants
        as
        may be required pursuant to applicable law.

       

      12.4 Rights
        as Employee, Consultant or Director.
        No
        person, even though eligible pursuant to Section 5, shall have a right to
        be selected as a Participant, or, having been so selected, to be selected
        again
        as a Participant. Nothing in the Plan or any Restricted Stock Award granted
        under the Plan shall confer on any Participant a right to remain an Employee,
        Consultant or Director or interfere with or limit in any way any right of
        a
        Participating Company to terminate the Participant’s Service at any time. To the
        extent that an Employee of a Participating Company other than the Company
        receives an Award under the Plan, that Award shall in no event be understood
        or
        interpreted to mean that the Company is the Employee’s employer or that the
        Employee has an employment relationship with the Company.

       

      12.5 Rights
        as a Stockholder.
        A
        Participant shall have no rights as a stockholder with respect to any shares
        covered by a Restricted Stock Award until the date of the issuance of such
        shares (as evidenced by the appropriate entry on the books of the Company
        or of
        a duly authorized transfer agent of the Company). No adjustment shall be
        made
        for dividends, distributions or other rights for which the record date is
        prior
        to the date such shares are issued, except as provided in
        Section 4.3
        or
        another provision of the Plan.

       

      
        
           

        

        
          -13-

          
            

          

        

        
           

        

      

      12.6 Delivery
        of Title to Shares.
        Subject
        to any governing rules or regulations, the Company shall issue or cause to
        be
        issued the shares of Stock acquired pursuant to a Restricted Stock Award
        and
        shall deliver such shares to or for the benefit of the Participant by means
        of
        one or more of the following: (a) by delivering to the Participant evidence
        of book entry shares of Stock credited to the account of the Participant,
        (b) by depositing such shares of Stock for the benefit of the Participant
        with any broker with which the Participant has an account relationship, or
        (c) by delivering such shares of Stock to the Participant in certificate
        form.

       

      12.7 Fractional
        Shares.
        The
        Company shall not be required to issue fractional shares upon the exercise
        or
        settlement of any Restrict Stock Award.

       

      12.8 Retirement
        and Welfare Plans.
        Neither
        Restricted Stock Awards made under this Plan nor shares of Stock or cash
        paid
        pursuant to such Restricted Stock Awards shall be included as “compensation” for
        purposes of computing the benefits payable to any Participant under any
        Participating Company’s retirement plans (both qualified and non-qualified) or
        welfare benefit plans unless such other plan expressly provides that such
        compensation shall be taken into account in computing such
        benefits.

       

      12.9 Severability.
        If any
        one or more of the provisions (or any part thereof) of this Plan shall be
        held
        invalid, illegal or unenforceable in any respect, such provision shall be
        modified so as to make it valid, legal and enforceable, and the validity,
        legality and enforceability of the remaining provisions (or any part thereof)
        of
        the Plan shall not in any way be affected or impaired thereby.

       

      12.10 No
        Constraint on Corporate Action.
        Nothing
        in this Plan shall be construed to: (a) limit, impair, or otherwise affect
        the Company’s or another Participating Company’s right or power to make
        adjustments, reclassifications, reorganizations, or changes of its capital
        or
        business structure, or to merge or consolidate, or dissolve, liquidate, sell,
        or
        transfer all or any part of its business or assets; or (b) limit the right
        or power of the Company or another Participating Company to take any action
        which such entity deems to be necessary or appropriate.

       

      12.11 Choice
        of Law.
        Except
        to the extent governed by applicable federal law, the validity, interpretation,
        construction and performance of the Plan and each Award Agreement shall be
        governed by the laws of the State of California, without regard to its conflict
        of law rules.

       

      
        
           

        

        
          -14-

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