Document:

exv10w1

Exhibit 10.1

Execution Version

 

AMENDMENT NO. 2

Effective as of September 30, 2011

to

COLLATERAL TRUST AGREEMENT

Dated as of April 21, 2011

among

CALUMET LUBRICANTS CO., LIMITED PARTNERSHIP,

a limited partnership organized under the laws of the State of Indiana,

THE GUARANTORS

party hereto,

THE SECURED HEDGE COUNTERPARTIES

party hereto,

and

BANK OF AMERICA, N.A.,

as Administrative Agent

 

 

 

     This AMENDMENT NO. 2 (this “Amendment”), effective as of September 30, 2011, is among
Calumet Lubricants Co., Limited Partnership, a limited partnership organized under the laws of the
State of Indiana (“Calumet”), each Guarantor party hereto, each Secured Hedge Counterparty
party hereto and Bank of America, N.A., in its capacity as administrative agent for the benefit of
the Secured Hedge Counterparties (the “Administrative Agent”). Unless otherwise defined in
this Amendment, each capitalized term used in this Amendment has the meaning given to such term in
the Collateral Trust Agreement (as hereinafter defined).

     WHEREAS, Calumet, the Guarantors, the Secured Hedge Counterparties and the Administrative
Agent are parties to that certain Collateral Trust Agreement dated as of April 21, 2011 (as
amended, the “Collateral Trust Agreement”);

     WHEREAS, the parties hereto have agreed to make certain amendments to the Collateral Trust
Agreement as provided for herein;

     NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

     SECTION 1 Amendments to the Collateral Trust Agreement.

          (a) Amendments. Effective as of the date first above written, the
Collateral Trust Agreement is amended by:

(i) in Section 1.1, deleting the definition of “Approved
Counterparty” and replacing it in its entirety with the following:

“Approved Counterparty” means any of the following: (a) J. Aron &
Company, Koch Supply & Trading, LP, Merrill Lynch Commodities, Inc.,
JPMorgan Chase Bank, N.A., Bank of America, N.A., or any successor by merger
of the foregoing (together with any trading affiliate of any of foregoing
entities that has comparable credit support, if any, from the applicable
parent entity), (b) any Person whose senior unsecured debt ratings, if any,
otherwise the corporate credit rating or issuer rating, as the case may be
(or whose parent entity has any such rating if such Person receives
comparable credit support from such parent entity), are not less than A3
from Moody’s Investors Service, Inc. or A- from Standard & Poor’s Ratings
Services, a division of The McGraw-Hill Companies, Inc., and any successors
thereto, and (c) with respect to Forward Purchase Contracts only, any Person
that is a Forward Purchase Secured Hedge Counterparty.

(ii) in Section 1.1, deleting the definition of “Exposure” and
replacing it in its entirety with the following:

“Exposure” means, for any Secured Hedge Counterparty, on any date of
determination, the greater of (i) U.S.$10,000,000 and (ii) the sum of (A)
with respect to all Swap Contracts to which such Secured Hedge Counterparty
is a party other than Forward Purchase Contracts, the amount determined in
good faith by the applicable Secured Hedge Counterparty equal to the
aggregate amount, if any, that would be or is payable by any Transaction
Party to such Secured Hedge Counterparty under the Secured Hedge Agreement
with such Secured Hedge Counterparty, as if (1) each such Secured Hedge
Agreement were being terminated early on such date of determination due to a
“Termination Event”, “Event of Default”, “Additional Event of Default”, or
“Additional

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Termination Event”, where such Transaction Party is the sole “Affected
Party,” or the sole “Defaulting Party”, as applicable, and (2) the Secured
Hedge Counterparty were the sole party determining such payment amount (with
the applicable Secured Hedge Counterparty making such determination
reasonably in accordance with the provisions of the above-described Secured
Hedge Agreement) and (B) with respect to all Forward Purchase Contracts to
which such Secured Hedge Counterparty is a counterparty, such Forward
Purchase Secured Hedge Counterparty’s Forward Purchase Limited Exposure in
the aggregate. If, as of the date of determination, any Secured Hedge
Agreement has been terminated and a payment is expected to become due to the
relevant Secured Hedge Counterparty in respect of such termination, then,
for purposes of calculating its Exposure pursuant to subclause (ii)(A)
hereof, (i) until such termination payment has been calculated pursuant to
the terms of the Secured Hedge Agreement, such Secured Hedge Counterparty
shall reasonably estimate the amount of such termination payment, and (ii)
after such termination payment has been calculated pursuant to the terms of
the Secured Hedge Agreement, the actual termination payment (including any
accrued interest due thereon) shall be used; provided, however, if such
Secured Hedge Agreement included both Forward Purchase Contracts and Swap
Contracts that were not Forward Purchase Contracts, then the Secured Hedge
Counterparty shall continue to calculate Exposure pursuant to subclause
(ii)(A) on a gross basis with respect only to Swap Contracts that were not
Forward Purchase Contracts without regard to any netting of transactions
that may have resulted from including Forward Purchase Contracts in the
calculation of the termination payment.

(iii) in Section 1.1, inserting the following new defined terms in the
appropriate alphabetical order:

“Forward Purchase Contract” means a Swap Contract that involves the
purchase or sale of any physical commodity.

“Forward Purchase Exposure” means, for any Forward Purchase Secured
Hedge Counterparty, the amount determined in good faith by such Forward
Purchase Secured Hedge Counterparty equal to the aggregate amount, if any,
that would be or is payable by any Transaction Party to such Forward
Purchase Secured Hedge Counterparty under the Secured Hedge Agreement with
respect to all Forward Purchase Contracts to which such Forward Purchase
Secured Hedge Counterparty is a party, as if (a) each such Secured Hedge
Agreement were being terminated early on such date of determination due to a
“Termination Event”, “Event of Default”, “Additional Event of Default”, or
“Additional Termination Event”, where such Transaction Party is the sole
“Affected Party,” or the sole “Defaulting Party”, as applicable, and (b) the
Forward Purchase Secured Hedge Counterparty were the sole party determining
such payment amount (with the applicable Forward Purchase Secured Hedge
Counterparty making such determination reasonably in accordance with the
provisions of the above-described Secured Hedge Agreement). If, as of the
date of determination, any Secured Hedge Agreement has been terminated and a
payment (in respect of a Forward Purchase Contract) is expected to become
due to the relevant Forward Purchase Secured Hedge Counterparty in respect
of such termination, then, for purposes of calculating its Forward Purchase
Exposure hereunder, (i) until such termination payment has been calculated
pursuant to the terms of the Secured Hedge Agreement, such Forward Purchase
Secured Hedge Counterparty shall

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	 	 	 	reasonably estimate the amount of such termination payment, and (ii) after
such termination payment has been calculated pursuant to the terms of the
Secured Hedge Agreement, the actual termination payment (including any
accrued interest due thereon) shall be used; provided, however, if such
Secured Hedge Agreement included both Forward Purchase Contracts and Swap
Contracts that were not Forward Purchase Contracts, then the Secured Hedge
Counterparty shall continue to calculate its Forward Purchase Exposure on a
gross basis with respect only to Forward Purchase Contracts without regard
to any netting of transactions that may have resulted from including other
Swap Contracts that were not Forward Purchase Contracts in the calculation
of the termination payment.
	 
	 	 	 	“Forward Purchase Limit” means U.S. $100,000,000.
	 
	 	 	 	“Forward Purchase Limited Exposure” means, for any Forward Purchase
Secured Hedge Counterparty, the lower of (i) such Forward Purchase Secured
Hedge Counterparty’s Forward Purchase Exposure and (ii) the product of (a)
the Forward Purchase Limit and (b) such Forward Purchase Secured Hedge
Counterparty’s Forward Purchase Exposure Percentage.
	 
	 	 	 	“Forward Purchase Exposure Percentage” means, for any Forward
Purchase Secured Hedge Counterparty, the percentage determined by dividing
(a) the amount of such Forward Purchase Secured Hedge Counterparty’s Forward
Purchase Exposure then in effect by (b) the aggregate amount of all Forward
Purchase Secured Hedge Counterparties’ Forward Purchase Exposures then in
effect.
	 
	 	 	 	“Forward Purchase Secured Hedge Counterparty” means a Secured Hedge
Counterparty that has entered into one or more Forward Purchase Contracts
with a Transaction Party.
	 
	 	(iv)	 	inserting a new Section 2.13 as follows:

        Section 2.13 Forward Purchase Contract Notice.

              (a) Within five (5) Business Days of entering into any Forward Purchase
Contract, Calumet shall notify Administrative Agent and provide the details
thereof, including the type of commodity, the pricing mechanism, whether
fixed or floating, the applicable fixed price or index, the applicable
delivery period and the quantity.

              (b) Upon Administrative Agent’s receipt of a notice in accordance with
clause (a) above, the Administrative Agent shall promptly forward such
notice to all Secured Hedge Counterparties.

	 	(v)	 	deleting Section 6.3(c) in its entirety and replacing it with the
following:
	 
	 	 	 	third, to the payment of any Secured Obligations outstanding under each
Secured Hedge Agreement or any Collateral Document payable to each Secured
Hedge Counterparty, ratably in accordance with the Secured Obligations owed
to each such Secured Hedge Counterparty provided, however, that for purposes
of determining the amount of Secured Obligations owed to any Secured Hedge
Counterparty that is also a Forward Purchase Secured Hedge Counterparty
pursuant to this clause third, the gross amount of Secured Obligations
(other than

3

 

	 	 	 	any amount payable in respect of any Forward Purchase Contract) and the
gross amount of Secured Obligations in respect of Forward Purchase Contracts
shall be calculated separately (without regard to any netting between
Forward Purchase Contracts and other Swap Contracts) and the amount of
Secured Obligations payable to such Secured Hedge Counterparty that is also
a Forward Purchase Secured Hedge Counterparty in respect of such Forward
Purchase Contracts shall be limited to such Forward Purchase Secured Hedge
Counterparty’s Forward Purchase Limited Exposure; provided, however, that in
no event shall the Secured Obligations owing to a Forward Purchase Secured
Hedge Counterparty under this clause exceed the net Secured Obligations then
outstanding; and
	 
	 	(vi)	 	deleting Section 6.3(d) in its entirety and replacing it with the
following:
	 
	 	 	 	fourth, to the extent not paid under clause third above, to the payment of
any other Secured Obligations in respect of Forward Purchase Contracts owed
to any Forward Purchase Secured Hedge Counterparty, ratably in accordance
with any other Secured Obligations owed to each such Forward Purchase
Secured Hedge Counterparty after deducting amounts paid under clause third
above; and
	 
	 	(vii)	 	inserting a new Section 6.3(e) as follows:
	 
	 	 	 	fifth, to the applicable Transaction party or pursuant to applicable Law or
court order.

          SECTION 2 Certification. Calumet certifies that this Amendment will not
cause Calumet or any other Transaction Party to be in breach of any of its obligations under any
Group Transaction Document and that such Transaction Parties are in compliance with the Group
Transaction Documents, in each case, as of the date hereof.

          SECTION 3 Effect on Collateral Documents.

          (a) Except as amended herein, the Collateral Trust Agreement, the Security Agreement
and each other Collateral Document shall remain in full force and effect as originally executed,
and nothing herein shall act as a waiver of any of the Administrative Agent’s or any Secured Hedge
Counterparty’s rights under the Collateral Documents, as amended; provided, however, that for the
avoidance of doubt, the Administrative Agent and each Secured Hedge Counterparty waive Calumet’s
requirement, pursuant to Section 7.3(c) of the Collateral Trust Agreement, to deliver a Vote
Request in connection with this Amendment.

          (b) This Amendment is a Collateral Document for the purposes of the provisions of
each other Collateral Document.

          (c) Upon and after the execution of this Amendment by each of the parties hereto,
each reference in the Collateral Trust Agreement to “this Agreement”, “hereunder”, “hereof” or
words of like import referring to the Collateral Trust Agreement, and each reference in the other
Collateral Documents, including the Security Agreement, to “the Collateral Trust Agreement”,
“thereunder”, “thereof” or words of like import referring to the Collateral Trust Agreement, shall
mean and be a reference to the Collateral Trust Agreement as modified hereby.

          SECTION 4 Headings. Headings herein are for convenience only and shall not
be relied upon in interpreting or enforcing this Agreement.

4

 

          SECTION 5 Counterparts. This Agreement may be executed in any number of
counterparts, all of which when taken together shall constitute one and the same instrument and any
of the parties hereto may execute this Agreement by signing any such counterpart.

          SECTION 6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CHOICE OF LAW
DOCTRINE, OTHER THAN §§ 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

[remainder of page intentionally left blank]

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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their
duly authorized officers on the respective dates specified below effective on the date specified on
the first page of this document.

	 	 	 	 	 
	 	BANK OF AMERICA, N.A.,

as Administrative Agent

 	 
	 	By:  	/s/ Alan Tapley
 	 
	 	 	Name:  	Alan Tapley 	 
	 	 	Title:  	Assistant Vice President
 	 
	 	 	Date:

[Signature Page to Amendment No. 2 to Collateral Trust Agreement]

 

	 	 	 	 	 
	 	CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.

 	 
	 	By:  	Calumet GP, LLC, its general partner
 	 

					
	 	
 	 
	 	By:  	/s/ R. Patrick Murray, II
 	 
	 	 	Name:  	R. Patrick Murray, II 	 
		 	Title:  	Vice President and Chief Financial Officer
	 
	 	 	Date:   September 30, 2011 

	 	 	 	 	 
	 	CALUMET LP GP, LLC

 	 
	 	By:  	Calumet Operating, LLC, its sole member
 	 

					
	 	
 	 
	 	By:  	Calumet Specialty Products Partners, L.P.,
 	 
	 	 	its sole member 	 

	 			 	
	 	By:  	Calumet GP, LLC, its general partner	 

					 
	 	By:  	/s/ R. Patrick Murray, II
 	 
	 	 	Name:  	R. Patrick Murray, II 	 
		 	Title:  	Vice President and Chief Financial Officer

	 
	 	 	Date:   September 30, 2011 

	 	 	 	 	 
	 	CALUMET OPERATING, LLC

 	 
	 	By:  	Calumet Specialty Products Partners, L.P.,
 	 
	 	 	its sole member 	 

					
	 	
 	 
	 	By:  	Calumet GP, LLC, its general partner
 	 

					
	 	
 	 
	 	By:  	/s/ R. Patrick Murray, II
 	 
	 	 	Name:  	R. Patrick Murray, II 	 
		 	Title:  	Vice President and Chief Financial Officer
	 
	 	 	Date:   September 30, 2011 

	 	 	 	 	 
	 	CALUMET LUBRICANTS CO., LIMITED PARTNERSHIP

 	 
	 	By:  	Calumet LP GP, LLC, its general partner
 	 

					
	 	
 	 
	 	By:  	Calumet Operating, LLC, its sole member
 	 

					
	 	
 	 
	 	By:  	Calumet Specialty Products Partners, L.P.,
 	 
	 	 	its sole member 	 

					
	 	
 	 
	 	By:  	Calumet GP, LLC, its general partner
 	 

					
	 	
 	 
	 	By:  	/s/ R. Patrick Murray, II
 	 
	 	 	Name:  	R. Patrick Murray, II 	 
		 	Title:  	Vice President and Chief
Financial Officer
	 
	 	 	Date:   September 30, 2011 

[Signature Page to Amendment No. 2 to Collateral Trust Agreement]

 

 

	 	 	 	 	 
	 	CALUMET SHREVEPORT, LLC

 	 
	 	By:  	Calumet Lubricants Co., Limited Partnership,
 	 
	 	 	its sole member 	 

					
	 	
 	 
	 	By:  	Calumet LP GP, LLC, its general partner
 	 
	 

					
	 	By:  	Calumet Operating, LLC, its sole member	 
	 

					
	 	By:  	Calumet Specialty Products Partners, L.P.,
 	 
	 	 	its sole member 	 
	 	 	 	 

					
	 	By:  	Calumet GP, LLC,
 	 
	 	 	its general partner 	 

					
	 	
 	 
	 	By:  	/s/ R. Patrick Murray, II
 	 
	 	 	Name:  	R. Patrick Murray, II 	 
		 	Title:  	Vice President and

 Chief Financial Officer
	 
	 	 	Date:   September 30, 2011 

	 	 	 	 	 
	 	CALUMET SHREVEPORT LUBRICANTS &WAXES, LLC

 	 
	 	By:  	Calumet Shreveport, LLC, its sole member
 	 
	 

					
	 	By:  	Calumet Lubricants Co., Limited Partnership,
 	 
	 	 	its sole member 	 

					
	 	
 	 
	 	By:  	Calumet LP GP, LLC, 

its general partner
 	 

					
	 	
 	 
	 	By:  	Calumet Operating, LLC, its sole member
 	 

					
	 	
 	 
	 	By:  	Calumet Specialty Products Partners, L.P.,
 	 
	 	 	its sole member 	 

					
	 	
 	 
	 	By:  	Calumet GP, LLC, 

its general partner
 	 
	 

					
	 	By:  	/s/ R. Patrick Murray, II
 	 
	 	 	Name:  	R. Patrick Murray, II 	 
		 	Title:  	Vice President and

Chief Financial Officer
	 
	 	 	Date:   September 30, 2011  

[Signature Page to Amendment No. 2 to Collateral Trust Agreement]

 

 

	 	 	 	 	 
	 	CALUMET SHREVEPORT FUELS, LLC 

 	 
	 	By:  	Calumet Shreveport, LLC, its sole member
 	 

					
	 	
 	 
	 	By:  	Calumet Lubricants Co., Limited Partnership, its sole member
 	 

					
	 	
 	 
	 	By:  	Calumet LP GP, LLC, its general partner
 	 

					
	 	
 	 
	 	By:  	Calumet Operating, LLC, its sole member
 	 

			 		
			
	 	By:  	Calumet Specialty Products Partners, L.P., its sole member
 	 

	 				
	 	By:  	Calumet GP, LLC, its general partner
 	 
	 	 	 	 

					
	 	By:  	/s/ R. Patrick Murray, II
 	 
	 	 	Name:  	R. Patrick Murray, II 	 
		 	Title:  	Vice President and Chief Financial Officer
	 
	 	 	Date:   September 30, 2011  

	 	 	 	 	 
	 	CALUMET SALES COMPANY INCORPORATED

 	 
	 	By:  	/s/ R. Patrick Murray, II
 	 
	 	 	Name:  	R. Patrick Murray, II 	 
		 	Title:  	Vice President and Chief Financial Officer
	 
	 	 	Date:   September 30, 2011 

	 	 	 	 	 
	 	CALUMET PENRECO, LLC

 	 
	 	By:  	Calumet Lubricants Co., Limited Partnership, its sole member
 	 

					
	 	
 	 
	 	By:  	Calumet LP GP, LLC, its general partner
 	 

					
	 	
 	 
	 	By:  	Calumet Operating, LLC, its sole member
 	 

					
	 	
 	 
	 	By:  	Calumet Specialty Products Partners, L.P., its sole member
 	 

					
	 
	 	By:  	Calumet GP, LLC, 
its general partner
 	 
	 	 	 	 

					
	 	By:  	/s/ R. Patrick Murray, II
 	 
	 	 	Name:  	R. Patrick Murray, II 	 
		 	Title:  	Vice President and Chief Financial Officer
	 
	 	 	Date:   September 30, 2011  

[Signature Page to Amendment No. 2 to Collateral Trust Agreement]

 

 

	 	 	 	 	 
	 	J. ARON & COMPANY

as a Secured Hedge Counterparty

 	 
	 	By:  	/s/ Colleen Foster
 	 
	 	 	Name:  	Colleen Foster 	 
	 	 	Title:  	Managing Director
 	 
	 	 	Date: 	 	 	 
	 

[Signature Page to Amendment No. 2 to Collateral Trust Agreement]

 

 

	 	 	 	 	 
	 	KOCH SUPPLY & TRADING, LP

as a Secured Hedge Counterparty

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	Authorized Signatory 	 
	 	 	Title:  	President

 	 
	 	 	Date:   	September 30, 2011

 	 
	 

[Signature Page to Amendment No. 2 to Collateral Trust Agreement]

 

 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A.

as a Secured Hedge Counterparty

 	 
	 	By:  	/s/ Ana Morales Gillard
 	 
	 	 	Name:  	Ana Morales Gillard 	 
	 	 	Title:  	Vice President

 	 
	 	 	Date:  	

 	 
	 

[Signature Page to Amendment No. 2 to Collateral Trust Agreement]

 

 

	 	 	 	 	 
	 	MERRILL LYNCH COMMODITIES, INC.

as a Secured Hedge Counterparty

 	 
	 	By:  	/s/ Rob L. Jones
 	 
	 	 	Name:  	Rob L. Jones 	 
	 	 	Title:  	Managing Director
 	 
	 	 	Date: 	September 29, 2011	 
	 

[Signature Page to Amendment No. 2 to Collateral Trust Agreement]exv4w3

Exhibit 4.3

FORCE10 NETWORKS, INC.

2007 EQUITY INCENTIVE PLAN

As Adopted on January 29, 2007

As Approved by the Stockholders on January 30, 2007

Amended by the Board of Directors: February 6, 2008

Amendment Adopted by the Stockholders: March 5, 2008

Amended by the Board of Directors:

approved December 29, 2008 and effective as of March 31, 2009

Amendment Adopted by the Stockholders: March 20, 2009

Amended by the Board of Directors:

approved May 14, 2009 and effective as of June 18, 2009

Amendment Adopted by the Stockholders: June 18, 2009

Amended by the Board of Directors: November 4, 2009

Amendment Adopted by the Stockholders: November 12, 2009

Amended by the Board of Directors: February 9, 2010

Amendment Adopted by the Stockholders: May 24, 2010

     1. PURPOSE. The purpose of this Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions are important to the
success of the Company, its Parent and Subsidiaries, by offering them an opportunity to participate
in the Company’s future performance through awards of Options and Restricted Stock. Capitalized
terms not defined in the text are defined in Section 22 hereof. Although this Plan is intended to
be a written compensatory benefit plan within the meaning of Rule 701 promulgated under the
Securities Act, grants may be made pursuant to this plan which do not qualify for exemption under
Rule 701 or Section 25102(o) of the California Corporations Code. Any requirement of this Plan
which is required in law only because of Section 25102(o) need not apply if the Committee so
provides.

     2. SHARES SUBJECT TO THE PLAN.

          2.1 Number of Shares Available. Subject to Sections 2.2 and 17, the total
number of Shares reserved and available for grant and issuance pursuant to this Plan will be
17,618,561 Shares. Subject to Sections 2.2, 5.10 and 17 hereof, Shares subject to Awards
previously granted will again be available for grant and issuance in connection with future Awards
under this Plan to the extent such Shares: (i) cease to be subject to issuance upon exercise of an
Option, other than due to exercise of such Option; (ii) are subject to an Award granted hereunder
but the Shares subject to such Award are forfeited or repurchased by the

 

 

Company at the original issue price; or (iii) are subject to an Award that otherwise terminates
without Shares being issued. At all times the Company will reserve and keep available a sufficient
number of Shares as will be required to satisfy the requirements of all Awards granted and
outstanding under this Plan.

          2.2 Adjustment of Shares. In the event that the number of outstanding shares of the
Company’s Common Stock is changed by a stock dividend, recapitalization, stock split, reverse stock
split, subdivision, combination, reclassification or similar change in the capital structure of the
Company without consideration, then (i) the number of Shares reserved for issuance under this Plan,
(ii) the Exercise Prices of and number of Shares subject to outstanding Options and (iii) the
Purchase Prices of and number of Shares subject to other outstanding Awards will be proportionately
adjusted, subject to any required action by the Board or the stockholders of the Company and
compliance with applicable securities laws; provided, however, that fractions of a Share will not
be issued but will either be paid in cash at the Fair Market Value of such fraction of a Share or
will be rounded down to the nearest whole Share, as determined by the Committee; and provided,
further, that the Exercise Price of any Option may not be decreased to below the par value of the
Shares.

          2.3 Automatic Share Reserve Increase. The number of Shares available for grant and
issuance under the Plan shall be increased on January 1 of each calendar year following the date on
which this provision is first approved by the stockholders of the corporation by the lesser of (i)
five percent (5%) of the number of shares of the Company’s capital stock issued and outstanding on
each December 31 immediately prior to the date of increase or (ii) such number of Shares determined
by the Board or the Committee.

     3. ELIGIBILITY. ISOs (as defined in Section 5 hereof) may be granted only to
employees (including officers and directors who are also employees) of the Company or of a Parent
or Subsidiary of the Company. NQSOs (as defined in Section 5 hereof) and Restricted Stock Awards
may be granted to employees, officers, directors and consultants of the Company or any Parent or
Subsidiary of the Company; provided such consultants render bona fide services not in connection
with the offer and sale of securities in a capital-raising transaction. A person may be granted
more than one Award under this Plan.

     4. ADMINISTRATION.

          4.1 Committee Authority. This Plan will be administered by the Committee
or the Board if no Committee is created by the Board. Subject to the general purposes, terms and
conditions of this Plan, and to the direction of the Board, the Committee will have full power to
implement and carry out this Plan. Without limitation, the Committee will have the authority to:

               (a) construe and interpret this Plan, any Award Agreement and any other agreement or document
executed pursuant to this Plan;

               (b) prescribe, amend and rescind rules and regulations relating to this Plan;

               (c) approve persons to receive Awards;

2

 

               (d) determine the form and terms of Awards;

               (e) determine the number of Shares or other consideration subject to Awards;

               (f) determine whether Awards will be granted singly, in combination with, in tandem with,
in replacement of, or as alternatives to, other Awards under this Plan or awards under any other
incentive or compensation plan of the Company or any Parent or Subsidiary of the Company;

               (g) grant waivers of any conditions of this Plan or any Award;

               (h) determine the terms of vesting, exercisability and payment of Awards;

               (i) correct any defect, supply any omission, or reconcile any inconsistency in this Plan,
any Award, any Award Agreement, any Exercise Agreement or any Restricted Stock Purchase
Agreement;

               (j) determine whether an Award has been earned;

               (k) make all other determinations necessary or advisable for the administration of this
Plan; and

               (l) extend the vesting period beyond a Participant’s Termination Date.

          4.2 Committee Discretion. Unless in contravention of any express terms of this
Plan or Award, any determination made by the Committee with respect to any Award will be made
in its sole discretion either (i) at the time of grant of the Award, or (ii) subject to Section
5.9 hereof, at any later time. Any such determination will be final and binding on the Company
and on all persons having an interest in any Award under this Plan. The Committee may delegate
to one or more officers of the Company the authority to grant an Award under this Plan,
provided such officer or officers are members of the Board.

     5. OPTIONS. The Committee may grant Options to eligible persons described in Section
3 hereof and will determine whether such Options will be Incentive Stock Options within  the
meaning of the Code (“ISOs”) or Nonqualified Stock Options (“NQSOs”), the number of Shares subject
to the Option, the Exercise Price of the Option, the period during which the Option may be
exercised, and all other terms and conditions of the Option, subject to the following:

          5.1 Form of Option Grant. Each Option granted under this Plan will be evidenced by
an Award Agreement which will expressly identify the Option as an ISO or an NQSO (“Stock Option
Agreement”), and will be in such form and contain such provisions (which need not be the same
for each Participant) as the Committee may from time to time approve, and which will comply with
and be subject to the terms and conditions of this Plan.

3

 

          5.2 Date of Grant. The date of grant of an Option will be the date on which the
Committee makes the determination to grant such Option, unless a later date is otherwise specified
by the Committee. The Stock Option Agreement and a copy of this Plan will be delivered to the
Participant within a reasonable time after the granting of the Option.

          5.3 Exercise Period. Options may be exercisable immediately but subject to repurchase
pursuant to Section 11 hereof or may be exercisable within the times or upon the events determined
by the Committee as set forth in the Stock Option Agreement governing such Option; provided,
however, that no Option will be exercisable after the expiration of ten (10) years from the date
the Option is granted; and provided further that no ISO granted to a person who directly or by
attribution owns more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or of any Parent or Subsidiary of the Company (“Ten Percent Stockholder”) will
be exercisable after the expiration of five (5) years from the date the ISO is granted. The
Committee also may provide for Options to become exercisable at one time or from time to time,
periodically or otherwise, in such number of Shares or percentage of Shares as the Committee
determines. Subject to earlier termination of the Option as provided herein, to the extent section
25102(o) of the California Corporations Code is intended to apply, each Participant who is not an
officer, director or consultant of the Company or of a Parent or Subsidiary of the Company shall
have the right to exercise an Option granted hereunder at the rate of no less than twenty percent
(20%) per year over five (5) years from the date such Option is granted.

          5.4 Exercise Price. The Exercise Price of an Option will be determined by the
Committee when the Option is granted and may not be less than eighty-five percent (85%) of the Fair
Market Value of the Shares on the date of grant; provided that (i) the Exercise Price of an ISO
will not be less than one hundred percent (100%) of the Fair Market Value of the Shares on the date
of grant and (ii) the Exercise Price of any Option granted to a Ten Percent Stockholder will not be
less than one hundred ten percent (110%) of the Fair Market Value of the Shares on the date of
grant. Payment for the Shares purchased must be made in accordance with Section 7 hereof.

          5.5 Method of Exercise. Options may be exercised only by delivery to the Company of
a written stock option exercise agreement (the “Exercise Agreement”) in a form approved by the
Committee (which need not be the same for each Participant). The Exercise Agreement will state
(i) the number of Shares being purchased, (ii) the restrictions imposed on the Shares purchased
under such Exercise Agreement, if any, and (iii) such representations and agreements regarding
Participant’s investment intent and access to information and other matters, if any, as may be
required or desirable by the Company to comply with applicable securities laws. Participant shall
execute and deliver to the Company the Exercise Agreement together with payment in full of the
Exercise Price, and any applicable taxes, for the number of Shares being purchased.

          5.6 Termination. Subject to earlier termination pursuant to Sections 17 and 18
hereof and notwithstanding the exercise periods set forth in the Stock Option Agreement, exercise
of an Option will always be subject to the following:

4

 

               (a) If the Participant is Terminated for any reason other than death, Disability or for Cause,
then the Participant may exercise such Participant’s Options only to the extent that such Options
are exercisable as to Vested Shares upon the Termination Date or as otherwise determined by the
Committee. Such Options must be exercised by the Participant, if at all, as to all or some of the
Vested Shares calculated as of the Termination Date or such other date determined by the Committee,
within three (3) months after the Termination Date (or within such shorter time period, not less
than thirty (30) days, or within such longer time period, not exceeding five (5) years, after the
Termination Date as may be determined by the Committee, with any exercise beyond three (3) months
after the Termination Date deemed to be an NQSO) but in any event, no later than the expiration
date of the Options.

               (b) If the Participant is Terminated because of Participant’s death or Disability (or the
Participant dies within three (3) months after a Termination other than for Cause), then
Participant’s Options may be exercised only to the extent that such Options are exercisable as to
Vested Shares by Participant on the Termination Date or as otherwise determined by the Committee.
Such options must be exercised by Participant (or Participant’s legal representative or authorized
assignee), if at all, as to all or some of the Vested Shares calculated as of the Termination Date
or such other date determined by the Committee, within twelve (12) months after the Termination
Date (or within such shorter time period, not less than six (6) months, or within such longer time
period, not exceeding five (5) years, after the Termination Date as may be determined by the
Committee, with any exercise beyond (i) three (3) months after the Termination Date when the
Termination is for any reason other than the Participant’s death or disability, within the meaning
of Section 22(e)(3) of the Code, or (ii) twelve (12) months after the Termination Date when the
Termination is for Participant’s disability, within the meaning of Section 22(e)(3) of the Code,
deemed to be an NQSO) but in any event no later than the expiration date of the Options.

               (c) If the Participant is terminated for Cause, the Participant may exercise such
Participant’s Options, but not to an extent greater than such Options are exercisable as to Vested
Shares upon the Termination Date and Participant’s Options shall expire on such Participant’s
Termination Date, or at such later time and on such conditions as are determined by the Committee.

          5.7 Limitations on Exercise. The Committee may specify a reasonable minimum number
of Shares that may be purchased on any exercise of an Option, provided that such minimum number
will not prevent Participant from exercising the Option for the full number of Shares for which it
is then exercisable.

          5.8 Limitations on ISOs. The aggregate Fair Market Value (determined as of the date of
grant) of Shares with respect to which ISOs are exercisable for the first time by a Participant
during any calendar year (under this Plan or under any other incentive stock option plan of the
Company or any Parent or Subsidiary of the Company) will not exceed One Hundred Thousand Dollars
($100,000). If the Fair Market Value of Shares on the date of grant with respect to which ISOs
are exercisable for the first time by a Participant during any calendar year exceeds One Hundred
Thousand Dollars ($100,000), then the Options for the first One Hundred Thousand Dollars ($100,000)
worth of Shares to become exercisable in such calendar year will be ISOs and the Options for the
amount in excess of One Hundred Thousand Dollars ($100,000)

5

 

that become exercisable in that calendar year will be NQSOs. In the event that the Code or the
regulations promulgated thereunder are amended after the Effective Date (as defined in Section 18
hereof) to provide for a different limit on the Fair Market Value of Shares permitted to be subject
to ISOs, then such different limit will be automatically incorporated herein and will apply to any
Options granted after the effective date of such amendment.

          5.9 Modification, Extension or Renewal. The Committee may modify, extend or renew
outstanding Options and authorize the grant of new Options in substitution therefor, provided that
any such action may not, without the written consent of a Participant, impair any of such
Participant’s rights under any Option previously granted. Any outstanding ISO that is modified,
extended, renewed or otherwise altered will be treated in accordance with Section 424(h) of the
Code. Subject to Section 5.10 hereof, the Committee may reduce the Exercise Price of outstanding
Options without the consent of Participants by a written notice to them; provided, however, that
the Exercise Price may not be reduced below the minimum Exercise Price that would be permitted
under Section 5.4 hereof for Options granted on the date the action is taken to reduce the Exercise
Price; provided, further, that the Exercise Price will not be reduced below the par value of the
Shares, if any.

          5.10 No Disqualification. Notwithstanding any other provision in this Plan, no term of
this Plan relating to ISOs will be interpreted, amended or altered, nor will any discretion or
authority granted under this Plan be exercised, so as to disqualify this Plan under Section 422 of
the Code or, without the consent of the Participant, to disqualify any Participant’s ISO under
Section 422 of the Code. In no event shall the total number of Shares issued (counting each
reissuance of a Share that was previously issued and then forfeited or repurchased by the Company
as a separate issuance) under the Plan upon exercise of ISOs exceed 6,000,000 Shares (adjusted in
proportion to any adjustments under Section 2.2 hereof) over the term of the Plan.

     6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the Company to sell to
an eligible person Shares that are subject to certain specified restrictions. The Committee will
determine to whom an offer will be made, the number of Shares the person may purchase, the
Purchase Price, the restrictions to which the Shares will be subject, and all other terms and
conditions of the Restricted Stock Award, subject to the following:

          6.1 Form of Restricted Stock Award. All purchases under a Restricted Stock Award
made pursuant to this Plan will be evidenced by an Award Agreement (“Restricted Stock Purchase
Agreement”) that will be in such form (which need not be the same for each Participant) as the
Committee will from time to time approve, and will comply with and be subject to the terms and
conditions of this Plan. The Restricted Stock Award will be accepted by the Participant’s execution
and delivery of the Restricted Stock Purchase Agreement and full payment for the Shares to the
Company within thirty (30) days from the date the Restricted Stock Purchase Agreement is delivered
to the person. If such person does not execute and deliver the Restricted Stock Purchase Agreement
along with full payment for the Shares to the Company within such thirty (30) days, then the offer
will terminate, unless otherwise determined by the Committee.

          6.2 Purchase Price. The Purchase Price of Shares sold pursuant to a Restricted
Stock Award will be determined by the Committee and will be at least eighty-five

6

 

percent (85%) of the Fair Market Value of the Shares on the date the Restricted Stock Award is
granted or at the time the purchase is consummated, except in the case of a sale to a Ten Percent
Stockholder, in which case the Purchase Price will be one hundred percent (100%) of the Fair
Market Value on the date the Restricted Stock Award is granted or at the time the purchase is
consummated. Payment of the Purchase Price must be made in accordance with Section 7 hereof.

          6.3 Restrictions. Restricted Stock Awards may be subject to the restrictions set forth
in Section 11 hereof or such other restrictions not inconsistent with Section 25102(o) of the
California Corporations Code.

     7. PAYMENT FOR SHARE PURCHASES.

          7.1 Payment. Payment for Shares purchased pursuant to this Plan may be made in cash
(by check) or, where expressly approved for the Participant by the Committee and where permitted
by law:

               (a) by cancellation of indebtedness of the Company owed to the Participant;

               (b) by surrender of shares that: (i) either (A) have been owned by Participant for more than
six (6) months and have been paid for within the meaning of SEC Rule 144 (and, if such shares were
purchased from the Company by use of a promissory note, such note has been fully paid with respect
to such shares) or (B) were obtained by Participant in the public market and (ii) are clear of all
liens, claims, encumbrances or security interests;

               (c) by tender of a full recourse promissory note having such terms as may be approved by the
Committee and bearing interest at a rate sufficient to avoid (i) imputation of income under
Sections 483 and 1274 of the Code and (ii) variable accounting treatment under Financial Accounting
Standards Board Interpretation No. 44 to APB No. 25; provided, however, that Participants who are
not employees or directors of the Company will not be entitled to purchase Shares with a promissory
note unless the note is adequately secured by collateral other than the Shares; provided, further,
that the portion of the Exercise Price or Purchase Price, as the case may be, equal to the par
value of the Shares must be paid in cash or other legal consideration permitted by Delaware General
Corporation Law;

               (d) by waiver of compensation due or accrued to the Participant from the Company for services
rendered;

               (e) with respect only to purchases upon exercise of an Option, and provided that a public
market for the Company’s stock exists:

                    (i) through a “same day sale” commitment from the
Participant and a broker-dealer that is a member of the National Association of Securities Dealers
(an “NASD Dealer”) whereby the Participant irrevocably elects to exercise the Option and to sell a
portion of the Shares so purchased sufficient to pay the total Exercise Price, and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to forward the total Exercise Price
directly to the Company; or

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                    (ii) through a “margin” commitment from the Participant and
an NASD Dealer whereby the Participant irrevocably elects to exercise the Option and to pledge the
Shares so purchased to the NASD Dealer in a margin account as security for a loan from the NASD
Dealer in the amount of the total Exercise Price, and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the total Exercise Price directly to the Company; or

               (f) by any combination of the foregoing.

          7.2 Loan Guarantees. The Committee may, in its sole discretion, elect to assist the
Participant in paying for Shares purchased under this Plan by authorizing a guarantee by the
Company of a third-party loan to the Participant.

     8. WITHHOLDING TAXES.

          8.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of
Awards granted under this Plan, the Company may require the Participant to remit to the Company an
amount sufficient to satisfy federal, state and local withholding tax requirements prior to the
delivery of any certificate or certificates for such Shares. Whenever, under this Plan, payments in
satisfaction of Awards are to be made in cash by the Company, such payment will be net of an amount
sufficient to satisfy federal, state, and local withholding tax requirements.

          8.2 Stock Withholding. When, under applicable tax laws, a Participant incurs tax
liability in connection with the exercise or vesting of any Award that is subject to tax
withholding and the Participant is obligated to pay the Company the amount required to be withheld,
the Committee may in its sole discretion allow the Participant to satisfy the minimum withholding
tax obligation by electing to have the Company withhold from the Shares to be issued that minimum
number of Shares having a Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be determined; but in no event
will the Company withhold Shares if such withholding would result in adverse accounting
consequences to the Company. All elections by a Participant to have Shares withheld for this
purpose will be made in accordance with the requirements established by the Committee for such
elections and be in writing in a form acceptable to the Committee.

     9. PRIVILEGES OF STOCK OWNERSHIP.

          9.1 Voting and Dividends. No Participant will have any of the rights of a stockholder
with respect to any Shares until the Shares are issued to the Participant. After Shares are
issued to the Participant, the Participant will be a stockholder and have all the rights of a
stockholder with respect to such Shares, including the right to vote and receive all dividends or
other distributions made or paid with respect to such Shares; provided, that if such Shares are
Restricted Stock, then any new, additional or different securities the Participant may become
entitled to receive with respect to such Shares by virtue of a stock dividend, stock split or any
other change in the corporate or capital structure of the Company will be subject to the same
restrictions as the Restricted Stock. The Participant will have no right to retain such stock
dividends or stock distributions with respect to Unvested Shares that are repurchased pursuant to

8

 

Section 11 hereof. To the extent required, the Company will comply with Section 260.140.1 of Title
10 of the California Code of Regulations with respect to the voting rights of Common Stock.

          9.2 Financial Statements. The Company will provide financial statements to each
Participant annually during the period such Participant has Awards outstanding, or as otherwise
required under Section 260.140.46 of Title 10 of the California Code of Regulations.
Notwithstanding the foregoing, the Company will not be required to provide such financial
statements to Participants when issuance of Awards is limited to key employees whose services in
connection with the Company assure them access to equivalent information.

     10. TRANSFERABILITY. Except as permitted by the Committee, Awards granted under this
Plan, and any interest therein, will not be transferable or assignable by Participant, other than
by will or by the laws of descent and distribution, and, with respect to NQSOs, by instrument to an
inter vivos or testamentary trust in which the options are to be passed to beneficiaries upon the
death of the trustor (settlor), or by gift to “immediate family” as that term is defined in 17
C.F.R. 240.16a-1(e), and may not be made subject to execution, attachment or similar process.
During the lifetime of the Participant an Award will be exercisable only by the Participant or
Participant’s legal representative and any elections with respect to an Award may be made only by
the Participant or Participant’s legal representative.

     11. RESTRICTIONS ON SHARES.

          11.1 Right of First Refusal. At the discretion of the Committee, the Company may
reserve to itself and/or its assignee(s) in the Award Agreement a right of first refusal to
purchase all Shares that a Participant (or a subsequent transferee) may propose to transfer to a
third party, unless otherwise not permitted by Section 25102(o) of the California Corporations
Code, provided that such right of first refusal terminates upon the Company’s initial public
offering of Common Stock pursuant to an effective registration statement filed under the Securities
Act.

          11.2 Right of Repurchase. At the discretion of the Committee, the Company may reserve
to itself and/or its assignee(s) in the Award Agreement a right to repurchase Unvested Shares held
by a Participant for cash and/or cancellation of purchase money indebtedness owed to the Company by
the Participant following such Participant’s Termination at any time within the later of ninety
(90) days after the Participant’s Termination Date and the date the Participant purchases Shares
under the Plan at the Participant’s Exercise Price or Purchase Price, as the case may be, provided
that to the extent Section 25102(o) of the California Corporations Code is intended to apply,
unless the Participant is an officer, director or consultant of the Company or of a Parent or
Subsidiary of the Company, such right of repurchase lapses at the rate of no less than twenty
percent (20%) per year over five (5) years from: (a) the date of grant of the Option or (b) in the
case of Restricted Stock, the date the Participant purchases the Shares.

     12. CERTIFICATES. All certificates for Shares or other securities delivered under this
Plan will be subject to such stock transfer orders, legends and other restrictions as the Committee
may deem necessary or advisable, including restrictions under any applicable federal,

9

 

state or foreign securities law, or any rules, regulations and other requirements of the SEC or
any stock exchange or automated quotation system upon which the Shares may be listed or quoted.

     13. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant’s Shares set forth in Section 11 hereof, the Committee may require the Participant to
deposit all certificates representing Shares, together with stock powers or other instruments of
transfer approved by the Committee, appropriately endorsed in blank, with the Company or an agent
designated by the Company to hold in escrow until such restrictions have lapsed or terminated. The
Committee may cause a legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory note as partial or full
consideration for the purchase of Shares under this Plan will be required to pledge and deposit
with the Company all or part of the Shares so purchased as collateral to secure the payment of
Participant’s obligation to the Company under the promissory note; provided, however, that the
Committee may require or accept other or additional forms of collateral to secure the payment of
such obligation and, in any event, the Company will have full recourse against the Participant
under the promissory note notwithstanding any pledge of the Participant’s Shares or other
collateral. In connection with any pledge of the Shares, Participant will be required to execute
and deliver a written pledge agreement in such form as the Committee will from time to time
approve. The Shares purchased with the promissory note may be released from the pledge on a pro
rata basis as the promissory note is paid.

     14. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from time to
time, authorize the Company, with the consent of the respective Participants, to issue new Awards
in exchange for the surrender and cancellation of any or all outstanding Awards. The Committee may
at any time buy from a Participant an Award previously granted with payment in cash, shares of
Common Stock of the Company (including Restricted Stock) or other consideration, based on such
terms and conditions as the Committee and the Participant may agree.

     15. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.
Although this Plan is intended to be a written compensatory benefit plan within the meaning
of Rule 701 promulgated under the Securities Act, grants may be made pursuant to this plan that do
not qualify for exemption under Rule 701 or Section 25102(o) of the California Corporations Code.
Any requirement of this Plan which is required in law only because of Section 25102(o) need not
apply if the Committee so provides. An Award will not be effective unless such Award is in
compliance with all applicable federal and state securities laws, rules and regulations of any
governmental body, and the requirements of any stock exchange or automated quotation system upon
which the Shares may then be listed or quoted, as they are in effect on the date of grant of the
Award and also on the date of exercise or other issuance. Notwithstanding any other provision in
this Plan, the Company will have no obligation to issue or deliver certificates for Shares under
this Plan prior to (i) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable, and/or (ii) compliance with any exemption, completion of
any registration or other qualification of such Shares under any state or federal law or ruling of
any governmental body that the Company determines to be necessary or advisable. The Company will
be under no obligation to register the Shares with the SEC or to effect compliance with the
exemption, registration, qualification or listing requirements of any state

10

 

securities laws, stock exchange or automated quotation system, and the Company will have no
liability for any inability or failure to do so.

     16. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted under this Plan
will confer or be deemed to confer on any Participant any right to continue in the employ of, or to
continue any other relationship with, the Company or any Parent or Subsidiary of the Company or
limit in any way the right of the Company or any Parent or Subsidiary of the Company to terminate
Participant’s employment or other relationship at any time, with or without Cause.

     17. CORPORATE TRANSACTIONS.

          17.1 Assumption or Replacement of Awards by Successor or Acquiring Company. In the
event of (i) a dissolution or liquidation of the Company, (ii) any reorganization, consolidation,
merger or similar transaction or series of related transactions
(each, a “combination
transaction”) in which the Company is a constituent corporation or is a party if, as a result of
such combination transaction, the voting securities of the Company that are outstanding immediately
prior to the consummation of such combination transaction (other
than any such securities
that are held by an “Acquiring Stockholder”, as defined below) do not represent, or are not
converted into, securities of the surviving corporation of such combination transaction (or such
surviving corporation’s parent corporation if the surviving corporation is owned by the parent
corporation) that, immediately after the consummation of such combination transaction, together
possess at least a majority of the total voting power of all securities of such surviving
corporation (or its parent corporation, if applicable) that are outstanding immediately after the
consummation of such combination transaction, including securities of such surviving corporation
(or its parent corporation, if applicable) that are held by the Acquiring Stockholder; or (b) a
sale of all or substantially all of the assets of the Company, that is followed by the distribution
of the proceeds to the Company’s stockholders, any or all outstanding Awards may be assumed,
converted or replaced by the successor or acquiring corporation (if any), which assumption,
conversion or replacement will be binding on all Participants. In the alternative, the successor or
acquiring corporation may substitute equivalent Awards or provide substantially similar
consideration to Participants as was provided to stockholders of the Company (after taking into
account the existing provisions of the Awards). The successor or acquiring corporation may also
substitute by issuing, in place of outstanding Shares of the Company held by the Participant,
substantially similar shares or other property subject to repurchase restrictions and other
provisions no less favorable to the Participant than those which applied to such outstanding Shares
immediately prior to such transaction described in this Section 17.1. For purposes of this
Section 17.1, an “Acquiring Stockholder” means a stockholder or stockholders of the Company that
(i) merges or combines with the Company in such combination transaction or (ii) owns or controls a
majority of another corporation that merges or combines with the Corporation in such combination
transaction. In the event such successor or acquiring corporation (if any) does not assume,
convert, replace or substitute Awards, as provided above, pursuant to a transaction described in
this Section 17.1, then notwithstanding any other provision in this Plan to the contrary, the
vesting of such Awards will accelerate and the Options will become exercisable in full prior to the
consummation of such event at such times and on such conditions as the Committee determines, and if
such Options are not exercised prior to the

11

 

consummation of the corporate transaction, they shall terminate in accordance with the provisions
of this Plan.

          17.2 Other Treatment of Awards. Subject to any greater rights granted to
Participants under the foregoing provisions of this Section 17, in the event of the occurrence of
any transaction described in Section 17.1 hereof, any outstanding Awards will be treated as
provided in the applicable agreement or plan of reorganization, merger, consolidation,
dissolution, liquidation or sale of assets.

          17.3 Assumption of Awards by the Company. The Company, from time to time, also may
substitute or assume outstanding awards granted by another company, whether in connection with an
acquisition of such other company or otherwise, by either (i) granting an Award under this Plan in
substitution of such other company’s award or (ii) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award granted under this
Plan. Such substitution or assumption will be permissible if the holder of the substituted or
assumed award would have been eligible to be granted an Award under this Plan if the other company
had applied the rules of this Plan to such grant. In the event the Company assumes an award granted
by another company, the terms and conditions of such award will remain unchanged (except that the
exercise price and the number and nature of shares issuable upon exercise of any such option will
be adjusted appropriately pursuant to Section 424(a) of the Code). In the event the Company elects
to grant a new Option rather than assuming an existing option, such new Option may be granted with
a similarly adjusted Exercise Price.

     18. ADOPTION AND STOCKHOLDER APPROVAL. This Plan will become effective on the date
that it is adopted by the Board (the “Effective Date”). This Plan will be approved by the
stockholders of the Company (excluding Shares issued pursuant to this Plan), consistent with
applicable laws, within twelve (12) months before or after the Effective Date. Upon the Effective
Date, the Board may grant Awards pursuant to this Plan; provided, however, that: (i) no Option
may be exercised prior to initial stockholder approval of this Plan; (ii) no Option granted
pursuant to an increase in the number of Shares approved by the Board shall be exercised prior to
the time such increase has been approved by the stockholders of the Company; (iii) in the event
that initial stockholder approval is not obtained within the time period provided herein, all
Awards granted hereunder shall be canceled, any Shares issued pursuant to any Award shall be
canceled and any purchase of Shares issued hereunder shall be rescinded; and (iv) Awards granted
pursuant to an increase in the number of Shares approved by the Board which increase is not timely
approved by stockholders shall be canceled, any Shares issued pursuant to any such Awards shall be
canceled, and any purchase of Shares subject to any such Award shall be rescinded.

     19. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided herein, this
Plan will terminate ten (10) years from the Effective Date or, if earlier, the date of stockholder
approval. This Plan and all agreements hereunder shall be governed by and construed in
accordance with the laws of the State of California.

     20. AMENDMENT OR TERMINATION OF PLAN. Subject to Section 5.9 hereof, the Board may
at any time terminate or amend this Plan in any respect, including without

12

 

limitation amendment of any form of Award Agreement or instrument to be executed pursuant to this
Plan; provided, however, that the Board will not, without the approval of the stockholders of the
Company, amend this Plan in any manner that requires such stockholder approval pursuant to Section
25102(o) of the California Corporations Code or the Code or the regulations promulgated thereunder
as such provisions apply to ISO plans.

     21. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the Board, the
submission of this Plan to the stockholders of the Company for approval, nor any provision of this
Plan will be construed as creating any limitations on the power of the Board to adopt such
additional compensation arrangements as it may deem desirable, including, without limitation, the
granting of stock options and other equity awards otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific cases.

     22. DEFINITIONS. As used in this Plan, the following terms will have the following
meanings:

          “Award” means any award under this Plan, including any Option or Restricted Stock Award.

          “Award Agreement” means, with respect to each Award, the signed written agreement between the
Company and the Participant setting forth the terms and conditions of the Award, including the
Stock Option Agreement and Restricted Stock Agreement.

          “Board” means the Board of Directors of the Company.

          “Cause” means Termination because of (i) any willful, material violation by the Participant
of any law or regulation applicable to the business of the Company or a Parent or Subsidiary of
the Company, the Participant’s conviction for, or guilty plea to, a felony or a crime involving
moral turpitude, or any willful perpetration by the Participant of a common law fraud, (ii) the
Participant’s commission of an act of personal dishonesty which involves personal profit in
connection with the Company or any other entity having a business relationship with the Company,
(iii) any material breach by the Participant of any provision of any agreement or understanding
between the Company or any Parent or Subsidiary of the Company and the Participant regarding the
terms of the Participant’s service as an employee, officer, director or consultant to the Company
or a Parent or Subsidiary of the Company, including without limitation, the willful and continued
failure or refusal of the Participant to perform the material duties required of such Participant
as an employee, officer, director or consultant of the Company or a Parent or Subsidiary of the
Company, other than as a result of having a Disability, or a breach of any applicable invention
assignment and confidentiality agreement or similar agreement between the Company or a Parent or
Subsidiary of the Company and the Participant, (iv) Participant’s disregard of the policies of the
Company or any Parent or Subsidiary of the Company so as to cause loss, damage or injury to the
property, reputation or employees of the Company or a Parent or Subsidiary of the Company, or (v)
any other misconduct by the Participant which is materially injurious to the financial condition
or business reputation of, or is otherwise materially injurious to, the Company or a Parent or
Subsidiary of the Company.

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

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          “Committee” means the committee created and appointed by the Board to administer this Plan,
or if no committee is created and appointed, the Board.

          “Company” means Force10 Networks, Inc., or any successor corporation.

          “Disability” means a disability, whether temporary or permanent, partial or total, as
determined by the Committee.

          “Exercise Price” means the price at which a holder of an Option may purchase the Shares
issuable upon exercise of the Option.

          “Fair Market Value” means, as of any date, the value of a share of the Company’s Common Stock
determined as follows:

               (a) if such Common Stock is then quoted on the Nasdaq National Market, its closing price on
the Nasdaq National Market on the date of determination as reported
in The Wall Street Journal;

               (b) if such Common Stock is publicly traded and is then listed on a national securities
exchange, its closing price on the date of determination on the principal national securities
exchange on which the Common Stock is listed or admitted to trading as reported in The Wall
Street Journal;

               (c) if such Common Stock is publicly traded but is not quoted on the Nasdaq National Market
nor listed or admitted to trading on a national securities exchange, the average of the closing bid
and asked prices on the date of determination as reported by The Wall Street Journal (or,
if not so reported, as otherwise reported by any newspaper or other source as the Board may
determine); or

               (d) if none of the foregoing is applicable, by the Committee in good faith.

          “Option” means an award of an option to purchase Shares pursuant to Section 5 hereof.

          “Parent” means any corporation (other than the Company) in an unbroken chain of corporations
ending with the Company if each of such corporations other than the Company owns stock representing
fifty percent (50%) or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

          “Participant” means a person who receives an Award under this Plan.

          “Plan”
means this Force10 Networks, Inc. 2007 Equity Incentive Plan, as amended from time to
time.

          “Purchase Price” means the price at which a Participant may purchase Restricted Stock.

14

 

          “Restricted Stock” means Shares purchased pursuant to a Restricted Stock Award.

          “Restricted Stock Award” means an award of Shares pursuant to Section 6 hereof.

          “SEC” means the Securities and Exchange Commission.

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

          “Shares” means shares of the Company’s Common Stock par value, reserved for issuance under
this Plan, as adjusted pursuant to Sections 2 and 17 hereof, and any successor security.

          “Subsidiary” means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if each of the corporations other than the last
corporation in the unbroken chain owns stock representing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations in such chain.

          “Termination” or “Terminated” means, for purposes of this Plan with respect to a Participant,
that the Participant has for any reason ceased to provide services as an employee, officer,
director or consultant to the Company or a Parent or Subsidiary of
the Company. A Participant will
not be deemed to have ceased to provide services in the case of (i) sick leave, (ii) military
leave, or (iii) any other leave of absence approved by the Committee, provided that such leave is
for a period of not more than ninety (90) days (a) unless reinstatement (or, in the case of an
employee with an ISO, reemployment) upon the expiration of such leave is guaranteed by contract or
statute, or (b) unless provided otherwise pursuant to formal policy adopted from time to time by
the Company’s Board and issued and promulgated in writing. In the case of any Participant on (i)
sick leave, (ii) military leave or (iii) an approved leave of absence, the Committee may make such
provisions respecting suspension of vesting of the Award while on leave from the Company or a
Parent or Subsidiary of the Company as it may deem appropriate, except that in no event may an
Option be exercised after the expiration of the term set forth in the Stock Option Agreement. The
Committee will have sole discretion to determine whether a Participant has ceased to provide
services and the effective date on which the Participant ceased to provide services (the
“Termination Date”).

          “Unvested Shares” means “Unvested Shares” as defined in the Award Agreement.

          “Vested
Shares” means “Vested Shares” as defined in the Award Agreement.

15

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