Document:

Exhibit 10(c)

 

 

CBS Corporation

Restricted Share Units Certificate

(Performance-Based with
Time-Vesting)

 

 

Granted under the [_________________]
Plan

 

 

DATE OF GRANT:   ________________________

 

 

This
certifies that CBS Corporation has granted to the employee named on the CBS
Stock Plans webpage (the “Participant”) on the date indicated above
(the “Date of Grant”), the target number of Restricted Share Units,
corresponding to the Company’s Class B Common Stock, listed under the
Restricted Shares and Units Award Listing tab of the CBS Stock Plans webpage (the
“Target Award”), under the Company’s [_____________] Plan, as amended
from time to time, all on the Terms and Conditions attached hereto.

 

 

 

 

 

	
   

  	
   

  	
   

  
	
   

  	
  Executive Vice
  President,

  
	
   

  	
  Human Resources and
  Administration

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If there
is a discrepancy between the CBS Stock Plans webpage and the official
records maintained by the office of the Executive Vice President, Human
Resources and Administration, the official records will prevail.

 

 

CBS Corporation

Terms and Conditions to the Restricted Share Units Certificate

(Performance-Based with
Time-Vesting)

 

Granted under the [_________________]
Plan

 

 

ARTICLE I

 

TERMS OF PERFORMANCE-BASED
RESTRICTED SHARE UNITS

 

Section 1.1 
Grant of Restricted Share Units. 
CBS Corporation, a Delaware corporation (the “Company”), has
awarded the Participant Restricted Share Units (the “RSUs”) under the
[____________] Plan, as amended from time to time (the “Plan”).  The RSUs have been awarded to the Participant
subject to the terms and conditions contained in (A) the certificate for
the grant of RSUs attached hereto (the “Restricted Share Units Certificate”),
(B) the terms and conditions contained herein (the Restricted Share Units
Certificate and the terms and conditions herein, collectively, the “Certificate”)
and (C) the Plan, the terms of which are hereby incorporated by reference
(the items listed in (A), (B), and (C), collectively, the “Terms and
Conditions”).  A copy of the Plan has
been or will be made available to the Participant on-line at Morgan Stanley
Smith Barney’s website.

 

Capitalized terms that are not otherwise defined
herein have the meanings assigned to them in the Restricted Share Units
Certificate or the Plan.

 

Section 1.2  Terms of RSUs.

 

(a)     Determination
of Number of RSUs Eligible for Vesting and Settlement.  The Committee shall establish a performance
goal for the RSUs based on achievement of [_____________] (the “Performance
Goal”), subject to adjustment pursuant to Section 2.1 or 2.2 hereof,
for calendar year [____] (the “Performance Period”).  As of the last day of the Performance Period,
the Company’s degree of achievement (expressed as a percentage) of the
Performance Goal will be used to calculate the number of RSUs eligible for
vesting and settlement pursuant to Sections 1.2(b) and (c), determined in
accordance with the following schedule:

 

	
   

  	
  (i)

  	
  If the Company achieves less than 80% of the
  Performance Goal for the Performance Period, the RSUs will be forfeited;

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  If the Company achieves 80% of the Performance Goal
  for the Performance Period (“Minimum Threshold Performance”), the
  number of RSUs will be equal to 80% of the Target Award;

  
	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  If the Company achieves
  100% of the Performance Goal for the Performance Period, the number of RSUs
  will be equal to the Target Award; and

  

 

2

 

	
   

  	
  (iv)

  	
  If the Company achieves 120% or more of the
  Performance Goal for the Performance Period, the number of RSUs will be equal
  to 120% of the Target Award.

  

 

For achievement at an
intermediate point between 80% and 100% or between 100% and 120%, the number of
RSUs eligible for vesting and settlement pursuant to Sections 1.2(b) and (c) will
be interpolated on a straight-line basis between the respective numbers of RSUs
at such percentages.  Fractional RSUs
will be rounded to the next highest whole RSU.

 

(b)    Vesting.  The number of RSUs determined pursuant to Section 1.2(a) shall
vest in four equal installments on each of the first four anniversaries of the
Date of Grant, subject to the Committee certifying that at least Minimum
Threshold Performance has been achieved. 
Any fractional RSUs resulting from the application of the foregoing
vesting schedule will be aggregated and will vest on whichever of such vesting
dates as shall be determined by the Company in accordance with its customary
procedures.  Notwithstanding anything to
the contrary in Section 1.2(e) below, unless the Committee determines
that at least Minimum Threshold Performance has been achieved, the RSUs will
not vest, and will be immediately cancelled in their entirety and the
Participant’s rights with respect to such RSUs will cease.

 

(c)    Settlement.  Within ten (10) business days after the
date each installment of the RSUs vests, that installment of the vested RSUs
shall be settled in shares of Class B Common Stock, which may be evidenced
in such manner as the Committee in its discretion shall deem appropriate,
including, without limitation, book-entry registration; provided, however,
that the RSUs scheduled to vest on the first anniversary of the Date of Grant
will be settled between January 1st and March 15th of
the calendar year following the end of the Performance Period, unless the first
anniversary of the Date of Grant occurs after such settlement period, in which
case the RSUs will be settled not later than March 15th of
the calendar year following the calendar year in which the first anniversary of
the Date of Grant occurs; provided, further, that such shares
shall bear such legends as the Committee, in its discretion, may determine to
be necessary or advisable.  (The Company
currently does not issue share certificates for the Class B Common
Stock.)  The Company will settle vested
RSUs by delivering the corresponding number of shares of Class B Common
Stock (less any shares withheld to satisfy withholding tax obligations) to the
Participant’s equity compensation account maintained with Morgan Stanley Smith
Barney (or its successor as service provider to the Company’s equity
compensation plans).  Following
settlement, the Participant may direct Morgan Stanley Smith Barney (or its
successor) to sell some or all of such shares, may leave such shares in such
equity compensation account or may transfer them to an account that the
Participant maintains with a bank or broker by following the instructions made
available to the Participant by the Company.

 

(d)    Dividend
Equivalents.  Dividend Equivalents
shall accrue on the RSUs until the RSUs are vested and settled.  Dividend Equivalents will be subject to the
same vesting and forfeiture conditions as the underlying RSUs on which the
Dividend Equivalents were accrued.  The
Company shall maintain a bookkeeping account on behalf of the Participant to
record the amount of the Dividend Equivalents credited in respect of the
Participant’s RSUs and shall periodically credit the accrual of Dividend
Equivalents to the Participant’s account at such time and in such manner as
determined by the Committee, in its discretion. 
Accrued Dividend Equivalents that have been credited to the Participant’s
account shall be paid in cash through 

 

3

 

payroll (reduced
by amounts necessary to satisfy withholding tax obligations) in a lump sum as
soon as practicable after the date the RSUs on which the Dividend Equivalents
accrued are settled, but in no event later than the sixtieth (60th) day after such date; provided,
however, that Dividend Equivalents shall be accrued and paid only with
respect to the Target Award, unless actual performance results in vesting and
settlement of a lesser number of RSUs than the Target Award, in which case
Dividend Equivalents shall be paid only with respect to such lesser number of
RSUs; provided, further, that if RSUs are scheduled to vest and
be settled between a dividend record date and a dividend payment date, the
Dividend Equivalents payable with respect to the RSUs on account of such
dividend will be paid in a lump sum on the dividend payment date, but in no
event later than March 15th of the calendar year following the calendar
year in which the RSUs vest.  Accrued
Dividend Equivalents that have been credited to the Participant’s account will
not be paid with respect to any RSUs that do not vest and are cancelled.  Dividend Equivalents will not be credited
with any interest or other return between the date they accrue and the date
they are paid to the Participant.

 

(e)    Termination
of Employment.

 

	
   

  	
  (i)

  	
  If, at the time of his or her termination of
  employment, the Participant is a party to an employment agreement with the
  Company or one of its Subsidiaries that contains provisions different from
  those set forth in Section 1.2(e)(ii) below, then such different
  provisions will control so long as they are in effect and applicable to the
  Participant at the time of his or her termination of employment.

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  Otherwise, in the event
  that the Participant’s employment with the Company and its Subsidiaries ends
  for any reason before the RSUs have vested in accordance with
  Section 1.2(b) hereof, unless the Committee determines otherwise,
  the Participant shall forfeit all unvested RSUs (and all unvested Dividend
  Equivalents accrued thereon) as of the date of such termination of
  employment. A “termination of employment” occurs, for purposes of the RSUs, when
  a Participant is no longer an employee of the Company or any of its
  Subsidiaries for any reason, including, without limitation, a reduction in
  force, a sale or divestiture or shut-down of the business for which the
  Participant works, the Participant’s voluntary resignation, the Participant’s
  termination with or without cause or the Participant’s retirement, death or
  permanent disability. Unless the Committee determines otherwise, the
  employment of a Participant who works for a Subsidiary shall terminate, for
  purposes of the RSUs, on the date on which the Participant’s employing
  company ceases to be a Subsidiary.

  

 

4

 

ARTICLE II

 

ADJUSTMENT
OF AWARDS

 

Section 2.1  Effect of Certain Corporate Changes.   In the event of a
merger, consolidation, stock split, reverse stock split, dividend,
distribution, combination, reclassification, reorganization, split-up, spin-off
or recapitalization that changes the character or amount of the Class B
Common Stock or any other changes in the corporate structure, equity securities
or capital structure of the Company, the Committee shall make such adjustments,
if any, to the number and kind of securities subject to the RSUs, as it deems
appropriate. The Committee may, in its discretion, also make such other
adjustments as it deems appropriate in order to preserve the benefits or
potential benefits intended to be made available hereunder. Such determinations
by the Committee shall be conclusive and binding on all persons for all purposes.

 

Section 2.2 
Adjustment of Performance Goal. 
The Committee may adjust or modify the calculation of the Performance
Goal, as it determines in its discretion to be appropriate, in accordance with Section [___]
of the Plan; provided, however, that to the extent compliance
with the requirements of the Section 162(m) Exception is required in order
to ensure the deductibility of the RSUs, the Committee shall make such
adjustments as are authorized by the Committee at the time the Performance Goal
is established by the Committee for the Performance Period.  Adjustments made by the Committee shall be
conclusive and binding on all persons for all purposes.

 

 

ARTICLE III

 

DEFINITIONS

 

As used herein, the
following terms shall have the following meanings:

 

(a)   “Board” shall mean the Board of Directors of
the Company.

 

(b)   “Certificate”
shall mean the Restricted Share Units Certificate, together with the terms and
conditions contained herein.

 

(c)   “Class B
Common Stock” shall mean shares of Class B Common Stock, par value $0.001
per share, of the Company.

 

(d)   “Code”
shall mean the U.S. Internal Revenue Code of l986, as amended, including any
successor law thereto and the rules and regulations promulgated
thereunder.

 

(e)   “Committee”
shall mean the Compensation Committee of the Board (or such other Committee(s) as
may be appointed or designated by the Board to administer the Plan).

 

5

 

(f)    “Date of
Grant” shall be the date set forth on the Restricted Share Units Certificate.

 

(g)   “Dividend
Equivalent” shall mean an amount in cash equal to the regular cash dividend
that would have been paid on the number of shares of Class B Common Stock
underlying the RSUs.

 

(h)   “Fair
Market Value” of a share of Class B Common Stock on a given date shall be
the 4:00 p.m. (New York time) closing price on such date on the New York
Stock Exchange or other principal stock exchange on which the Class B
Common Stock is then listed, as reported by The Wall Street Journal (Northeast
edition) or as reported by any other authoritative source selected by the
Company.

 

(i)    “Participant”
shall mean the employee named on the Restricted Share Units Certificate.

 

(j)    “Restricted
Share Units Certificate” shall have the meaning set forth in Section 1.1
hereof.

 

(k)   “Section 409A”
shall mean Section 409A of the Code and the rules, regulations and
guidance promulgated thereunder from time to time.

 

(l)    “Subsidiary”
shall mean a corporation or other entity with respect to which the Company owns
or controls, directly or indirectly, more than 50% of the outstanding shares of
stock normally entitled to vote for the election of directors (or comparable
voting power), provided that the Committee may also designate any other
corporation or other entity in which the Company, directly or indirectly, has
an equity or similar interest corresponding to 50% or less of such voting power
as a Subsidiary for purposes of the Plan.

 

(m)  “Target
Award” shall mean the target number of RSUs reflected in the Restricted Share
Units Certificate.

 

(n)   “Terms and
Conditions” shall mean the Certificate, together with the Plan.

 

 

ARTICLE IV

 

MISCELLANEOUS

 

Section 4.1   No Rights to Grants or Continued
Employment.  Neither the Terms and
Conditions nor any action taken in accordance with such documents shall confer
upon the Participant any right to be employed by or to continue in the
employment of the Company or any Subsidiary, or to receive any future awards
under the Plan or any other plan of the Company or any Subsidiary or interfere
with or limit the right of the Company or any Subsidiary to modify the terms of
or terminate the Participant’s employment at any time for any reason.

 

6

 

Section 4.2  Taxes. 
The Company or a Subsidiary, as appropriate, shall be entitled to
withhold from any RSUs that vest, and from any payment (including payment of
accrued dividends) made with respect to the RSUs or otherwise under the Plan to
the Participant or a Participant’s estate or any permitted transferee, an
amount sufficient to satisfy any U.S. federal, state, local and/or other tax
withholding requirements. The Company expects that, in order to satisfy such
requirements, it will (i) in connection with the vesting of any RSUs,
retain a portion of such shares, and (ii) in connection with the payment
any accrued cash dividends, retain a portion of the cash amount that would
otherwise be paid. As a condition to receiving this grant of RSUs, the
Participant has agreed to the foregoing actions to satisfy such tax withholding
requirements. Notwithstanding the foregoing, the Company may, in its discretion
and subject to such conditions as it may determine, require or permit the
Participant to satisfy such tax withholding requirements through some other
means (including without limitation by payment of a cash amount equal to the
amount of such tax withholding requirements or by delivery of Class B
Common Stock already owned by the Participant having a Fair Market Value equal
to the amount of such tax withholding requirements).

 

Section 4.3  Stockholder Rights; Unsecured Creditor
Status.  The grant of RSUs shall not
entitle the Participant or a Participant’s estate, any permitted transferee or
beneficiary to any rights of a holder of shares of Class B Common Stock, prior
to the time that the Participant, the Participant’s estate, any permitted
transferee or beneficiary is registered on the books and records of the Company
as a stockholder with respect to the shares of Class B Common Stock
underlying the RSUs (or, where the shares are permitted to be held in “street”
name by a broker designated by the Participant or the Participant’s estate,
permitted transferee or beneficiary, until such broker has been so
registered).  Except as set forth above
under Section 1.2(d) and unless otherwise determined by the Committee
in its discretion, no adjustment shall be made for dividends or distributions
or other rights in respect of any shares of Class B Common Stock for which
the record date is prior to the date on which the Participant, a Participant’s
estate, any permitted transferee or beneficiary (or broker for any of the
following, if applicable) shall become the registered or beneficial holder of
such shares of Class B Common Stock. 
RSUs constitute unsecured and unfunded obligations of the Company.  As a holder of RSUs, the Participant shall
have only the rights of a general unsecured creditor of the Company.

 

Section 4.4 
No Restriction on Right of Company to Effect Corporate Changes.  The Terms and Conditions shall not affect in
any way the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company’s capital structure or its business, or any merger or
consolidation of the Company, or any issue of stock or of options, warrants or
rights to purchase stock or of bonds, debentures, preferred or prior preference
stocks whose rights are superior to or affect the Class B Common Stock or
the rights thereof or which are convertible into or exchangeable for Class B
Common Stock, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.

 

Section 4.5 
Section 409A.  The
intent of the Company is that payments and distributions under these Terms and
Conditions comply with Section 409A and, accordingly, to the maximum
extent permitted, these Terms and Conditions shall be interpreted to be in compliance
therewith.

 

7

 

Notwithstanding
anything herein to the contrary, if the Participant is deemed on the date of
his or her “separation from service” (as determined by the Company pursuant to Section 409A)
to be one of the Company’s “specified employees” (as determined by the Company
pursuant to Section 409A), then any portion of any of the Participant’s
RSUs that constitutes deferred compensation within the meaning of Section 409A
and is payable or distributable upon the Participant’s separation from service
shall not be made or provided prior to the earlier of (i) the six-month
anniversary of the date of the Participant’s separation from service or (ii) the
date of Participant’s death (the “Delay Period”).  All payments and distributions delayed
pursuant to this Section 4.5 shall be paid or distributed to the
Participant within 30 days following the end of the Delay Period, subject to
applicable withholding, and any remaining payments and distributions due thereafter
under these Terms and Conditions shall be paid or distributed in accordance
with the dates specified for them herein. 
In no event shall the Company or any of its Subsidiaries be liable for
any tax, interest or penalties that may be imposed on the Participant with
respect to Section 409A.

 

Section 4.6  Interpretation.  In the event of any conflict between the
provisions of the Certificate (including the definitions set forth herein) and
those of the Plan, the provisions of the Plan will control.

 

Section 4.7  Breach of Covenants.  In the event that (i) the Participant is
party to an employment agreement or other agreement with the Company or one of
its Subsidiaries containing  restrictive
covenants relating to non-competition, no solicitation of employees,
confidential information or proprietary property, and (ii) the Committee
makes a good faith determination at any time that the Participant has committed
a material breach of any of such restrictive covenants during the one year
period after termination of the Participant’s employment with the Company or a
Subsidiary (regardless of the circumstances of the Participant’s termination of
employment), then (x) the
Participant will be required to return to the Company all shares of Class B
Common Stock received by him or her as a result of the vesting of the RSUs
during the one year period prior to such breach and the cash payment of related
accrued dividends; provided, however, to the extent that any such
shares of Class B Common Stock were sold by the Participant, the
Participant shall remit to the Company any proceeds realized on the sale of
such shares of Class B Common Stock, whether such sale occurred during the
one year period prior to such breach or any time after such breach occurs, and (y) notwithstanding any provision of the Certificate or
any other agreement between the Company and the Participant, including any
agreement referenced in Section 1.2(e) hereof, under no circumstances
will any unvested RSUs vest following the Committee’s determination that
Participant has committed a material breach.

 

Section 4.8  Governmental Regulations.  The RSUs shall be subject to all applicable rules and
regulations of governmental or other authorities.

 

Section 4.9  Headings.  The headings of articles and sections herein
are included solely for convenience of reference and shall not affect the
meaning of any of the provisions of the Terms and Conditions.

 

8

 

Section 4.10  Governing Law.  The Terms and Conditions and all rights
hereunder shall be construed in accordance with and governed by the laws of the
State of Delaware.

 

 

*****************

 

The Participant will be
deemed to have agreed to these Terms and Conditions, unless he or she provides
the Company with a written notice of rejection within 30 days of receipt of
these Terms and Conditions.  Any such
notice may be addressed to the Company at the following email address:  stockplanadministrator@cbs.com.

 

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  Exhibit 10.1    
    

 VERTEX PHARMACEUTICALS INCORPORATED

AMENDED AND RESTATED 2006 STOCK and OPTION PLAN  

1.     DEFINITIONS  

        Unless otherwise specified or unless the context otherwise requires, the following terms, as used in this Vertex Pharmaceuticals Incorporated Amended and Restated
2006 Stock and Option Plan, have the following meanings: 

Administrator means the Board of Directors and/or a committee of the Board of Directors to which the Board of Directors has delegated power to act on
its behalf in administering this Plan in whole or in part. 

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

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

Code means the United States Internal Revenue Code of 1986, as amended. 

Common Stock means shares of the Company's common stock, $.01 par value. 

Company means Vertex Pharmaceuticals Incorporated, a Massachusetts corporation. 

Employee means an employee of the Company or of an Affiliate (including, without limitation, an employee who is also serving as an officer or director
of the Company or of an Affiliate), designated by the Administrator to be eligible to be granted one or more Stock Rights under the Plan. 

Exchange Act means the Securities Exchange Act of 1934, as amended. 

Fair Market Value of a Share of Common Stock on a particular date shall be the mean between the highest and lowest quoted selling prices on such date
(the "valuation date") on the securities market where the Common Stock is traded, or if there were no sales on the valuation date, on the next preceding date within a reasonable period (as determined
in the sole discretion of the Administrator) on which there were sales. If there were no sales in such a market within a reasonable period, the fair market value shall be as determined in good faith
by the Administrator in its sole discretion. The Fair Market Value as determined in this paragraph shall be rounded down to the next lower whole cent if the foregoing calculation results in fractional
cents. 

ISO means an option intended to qualify as an incentive stock option under Code Section 422. 

Non-Employee Director means a member of the Board of Directors who is not an employee of the Company or any Affiliate. 

Non-Qualified Option means an option that is not intended to qualify as an ISO. 

Option means an ISO or Non-Qualified Option granted under the Plan. 

Participant means an Employee, Non-Employee Director, consultant or advisor of the Company or an Affiliate to whom one or more Stock Rights
are granted under the Plan. As used herein, "Participant" shall include "Participant's Survivors" and a Participant's permitted transferees where the context requires. 

Participant's Survivors means a deceased Participant's legal representatives and/or any person or persons who acquires the Participant's rights to a
Stock Right by will or by the laws of descent and distribution. 

1

 

Plan means this Vertex Pharmaceuticals Incorporated Amended and Restated 2006 Stock and Option Plan, as amended from time to time. 

Shares means shares of the Common Stock as to which Stock Rights have been or may be granted under the Plan or any shares of capital stock into which
the Shares are changed or for which they are exchanged within the provisions of Section 3 of the Plan. The Shares subject to Stock Rights granted under the Plan may be authorized and unissued
shares or shares held by the Company in its treasury, or both. 

Stock Agreement means an agreement between the Company and a Participant delivered pursuant to the Plan with respect to a Stock Right, in such form as
the Administrator shall approve. 

Stock-Based Award means a grant by the Company under the Plan of an equity award or equity-based award that is not an Option or Stock Grant. 

Stock Grant means a grant by the Company of Shares under the Plan. 

Stock Right means a right to Shares or the value of Shares of the Company granted pursuant to the Plan as an ISO, a Non-Qualified Option, a
Stock Grant or a Stock-Based Award. 

2.     PURPOSES OF THE PLAN  

        The Plan is intended to encourage ownership of Shares by Employees, Non-Employee Directors and certain consultants and advisors to the Company in
order to attract such persons, to induce them to work for the benefit of the Company or of an Affiliate and to provide additional incentive for them to promote the success of the Company or of an
Affiliate. The Plan provides for the granting of Stock Rights to Employees, Non-Employee Directors, consultants and advisors of the Company. 

3.     SHARES SUBJECT TO THE PLAN  

        The number of Shares subject to this Plan as to which Stock Rights may be granted from time to time shall be 13,902,380 or the equivalent of such number of Shares
after the Administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with
Section 17 of this Plan. The number of Shares subject to this Plan shall be reduced, share for share, by the number of shares underlying Stock Rights, if any, that are granted under the
Company's 2007 New Hire Stock and Option Plan after March 17, 2008. 

        If
an Option granted hereunder ceases to be outstanding, in whole or in part (other than by exercise), or if the Company shall reacquire (at no more than its original issuance price) any
Shares issued pursuant to a Stock Grant, or if any Stock Right expires or is forfeited, cancelled or otherwise terminated or results in any Shares not being issued, the unissued Shares that were
subject to such Stock Right shall again be available for issuance from time to time pursuant to this Plan; provided that, the following Shares may not again be made available for issuance as Awards
under the Plan: (i) Shares that are not issued or delivered as a result of the net settlement of an outstanding Stock- Based Award or Option and (ii) Shares that the Company acquires
from a Participant for a price that is more than the original issuance price of the Share, including any Share acquired by the Company to fund employee payroll tax withholding obligations on a Stock
Grant or Shares applied to payment of the exercise price for an Option. 

        After
May 14, 2008, the number Shares that may be subject to or delivered pursuant to any form of Stock Right other than an Option shall not exceed 20% of the aggregate of
(A) the number of Shares available as to which Stock Rights may be granted under this Plan on May 15, 2008 (taking in account the Shares added on such date, but which amount does not
include those 536,625 Shares as to which the Company granted Options on February 7, 2008, subject to obtaining subsequent shareholder 

2

 

approval
of such Options) and (B) any Shares that again become available for issuance on or after May 15, 2008 pursuant to the preceding paragraph. 

4.     ADMINISTRATION OF THE PLAN  

        The Administrator shall administer the Plan. Subject to the provisions of the Plan, the Administrator is authorized to: 

	a.
	Interpret
the provisions of the Plan and of any Stock Right or Stock Agreement and to make all rules and determinations that it deems necessary or advisable
for the administration of the Plan;

	b.
	Determine
which Employees, Non-Employee Directors, consultants and advisors of the Company and its Affiliates shall be granted Stock Rights;

	c.
	Determine
the number of Shares and exercise price for which a Stock Right shall be granted;

	d.
	Specify
the terms and conditions upon which a Stock Right or Stock Rights may be granted;

	e.
	In
its discretion, accelerate:

	(i)
	the
date of exercise of any installment of any Option; provided that the Administrator shall not, without the consent of the Option holder accelerate the
exercise date of any installment of any Option granted to any Employee as an ISO (and not previously converted into a Non-Qualified Option pursuant to Section 20) if such
acceleration would violate the annual vesting limitation contained in Section 422(d) of the Code, as described in Section 6.2.3; or

	(ii)
	the
date or dates of vesting of Shares, or lapsing of Company repurchase rights with respect to any Shares, under any Stock Rights; and

	f.
	In
its discretion, extend the exercise date for any Option; 

provided,
however, that all such interpretations, rules, determinations, terms and conditions shall be made and prescribed in the context of preserving the tax status under Code Section 422 of
those Options which are designated as ISOs (unless the holder of any such Option otherwise agrees). Subject to the foregoing, the interpretation and construction by the Administrator of any provisions
of the Plan or of any Stock Right granted under it shall be final, unless otherwise determined by the Board of Directors, if the Administrator is other than the Board of Directors. 

        The
Administrator may employ attorneys, consultants, accountants or other persons, and the Administrator, the Company and its officers and directors shall be entitled to rely upon the
advice, opinions or valuations of such persons. All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon the Company, all
Participants, and all other interested persons. No member or agent of the Administrator shall be personally liable for any action, determination, or interpretation made in good faith with respect to
this Plan or grants hereunder. Each member of the Administrator shall be indemnified and held harmless by the Company against any cost or expense (including counsel fees) reasonably incurred by him or
her or any liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with this Plan unless arising out of
such member's own fraud or bad faith. Such indemnification shall be in addition to any rights of indemnification the members of the Administrator may have as directors or otherwise under the
by-laws of the Company, or any agreement, vote of stockholders or disinterested directors, or otherwise. 

3

 

5.     ELIGIBILITY FOR PARTICIPATION  

        The Administrator shall, in its sole discretion, name the Participants in the Plan, provided, however, that each Participant must be a Employee,
Non-Employee Director, consultant or advisor of the Company or of an Affiliate at the time a Stock Right is granted. Notwithstanding the foregoing, the Administrator may authorize the
grant of a Stock Right to a person not then an Employee, Non-Employee Director, consultant or advisor of the Company or of an Affiliate;  provided, however,
that the actual grant of such Stock Right shall be conditioned upon such person
becoming eligible to become a Participant at or prior to the time of execution of the Stock Agreement evidencing such Stock Right. ISOs may be granted only to Employees. The granting of any Stock
Right to any individual shall neither entitle that individual to, nor disqualify him or her from, participation in other grants of Stock Rights. 

6.     TERMS AND CONDITIONS OF OPTIONS  

        6.1    General.    Each Option shall be set forth in writing in a Stock Agreement, duly executed by the Company and,
to the extent required by law or requested by the Company, by the Participant. The Administrator may provide that Options be granted subject to such terms and conditions, consistent with the terms and
conditions specifically required under this Plan, as the Administrator may deem appropriate including, without limitation, subsequent approval by the stockholders of the Company of this Plan or any
amendments thereto. Each Stock Agreement shall state the option price (per share) of the Shares covered by each Option, the number of Shares to which it pertains, the date or dates on which it first
is exercisable and the date after which it may no longer be exercised (subject to Sections 11, 12 and 13 of this Plan). Option rights may accrue or become exercisable in installments over a
period of time, or upon the achievement of certain conditions or the attainment of stated goals or events. The Option Price per share of Shares covered by an Option (including both ISOs and
Non-Qualified Options) shall not be less than one hundred percent (100%) of the Fair Market Value per share of the Common Stock on the date of grant. 

        6.2    ISOs.    Each Option intended to be an ISO shall be issued only to Employees. In addition to the minimum
standards set forth in Section 6.1, ISOs shall be subject to the following terms and conditions, with such additional restrictions or changes as the Administrator determines are appropriate but
not in conflict with Code Section 422 and relevant regulations and rulings of the Internal Revenue Service: 

        6.2.1    ISO Option Price.    In addition to the limitation set forth in Section 6.1, the Option price per
share of the Shares covered by each ISO granted to a Participant who owns, directly or by reason of the applicable attribution rules in Code Section 424(d), more than ten percent (10%) of the
total combined
voting power of all classes of stock of the Company or an Affiliate shall not be less than one hundred ten percent (110%) of the Fair Market Value on the date of grant. 

        6.2.2    Term of ISO.    Each ISO shall expire not more than ten (10) years from the date of grant; provided,
however, that an ISO granted to a Participant who owns, directly or by reason of the applicable attribution rules in Code Section 424(d), more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or an Affiliate shall expire not more than five (5) years from the date of grant. 

        6.2.3    Annual Limit on Incentive Stock Options.    To the extent required for "incentive stock option" treatment
under Section 422 of the Code, the aggregate Fair Market Value (determined as of the time of grant) of the Shares with respect to which ISOs granted under this Plan and any other plan of the
Company or its Affiliate become exercisable for the first time by a Participant during any calendar year shall not exceed the aggregate threshold for ISOs established by the Code ($100,000 as of
March 22, 2006). To the extent that any Option exceeds this limit, it shall constitute a Non-Qualified Option. 

4

 

        6.3    Non-Employee Directors' Options.    Each Non-Employee Director, upon first being
elected or appointed to the Board of Directors, shall be granted a Non-Qualified Option to purchase that number of Shares as shall be established for such Option grants from time to time
by the Board of Directors. Each such Option shall (i) have an exercise price equal to the Fair Market Value (per share) on the date of grant of the Option, (ii) have a term of ten
(10) years, and (ii) shall become cumulatively exercisable in sixteen (16) equal quarterly installments, upon completion of each full quarter of service on the Board of Directors
after the date of grant. In addition, on June 1 of each year, each Non-Employee Director shall be granted a Non-Qualified Option to purchase that number of Shares as
shall be established for such Option grants from time to time by the Board of Directors. Each such Option shall (i) have an exercise price equal to the Fair Market Value (per share) on the date
of grant of such Option, (ii) have a term of ten (10) years, and (iii) be exercisable in full immediately on the date of grant. Any director entitled to receive an Option grant
under this Section may elect to decline the Option. If a Non-Employee Director ceases to be any of an Employee, Non-Employee Director, consultant or advisor of the Company,
Options granted under this Section 6.3 shall remain exercisable to the extent such Options are exercisable on the date of such termination of service, for their full term, and the provisions of
Sections 11 and 13 below shall not apply to any such Options. 

        6.4    Limitation on Number of Options Granted.    Notwithstanding anything in this Plan to the contrary, no
Participant shall be granted an aggregate of Options and/or Stock-Based Awards under this Plan in any
calendar year for more than an aggregate of 600,000 Shares (subject to adjustment pursuant to Section 17 to the extent consistent with Section 162(m) of the Code). 

7.     TERMS AND CONDITIONS OF STOCK GRANTS  

        Each Stock Grant shall be set forth in a Stock Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the
Participant. The Stock Agreement shall be in the form approved by the Administrator, with such changes and modifications to such form as the Administrator, in its discretion, shall approve with
respect to any particular Participant or Participants. The Stock Agreement shall contain terms and conditions that the Administrator determines to be appropriate and in the best interest of the
Company; provided, however, that the purchase price per share of the Shares covered by each Stock Grant shall not be less than the par value per Share. Each Stock Agreement shall state the number of
Shares to which the Stock Grant pertains and the terms of any right of the Company to reacquire the Shares subject to the Stock Grant, including the time and events upon which such rights shall accrue
and the purchase price therefor, and any restrictions on the transferability of such Shares. 

8.     TERMS AND CONDITIONS OF OTHER STOCK-BASED AWARDS  

        The Administrator shall have the right to grant other Stock-Based Awards having such terms and conditions as the Administrator may determine, including, without
limitation, the grant of Shares based upon certain conditions, the grant of securities convertible into Shares and the grant of stock appreciation rights, phantom stock awards or stock units. The
principal terms of each Stock-Based Award shall be set forth in a Stock Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The
Stock Agreement shall be in a form approved by the Administrator and shall contain terms and conditions that the Administrator determines to be appropriate. 

9.     EXERCISE OF OPTIONS AND ISSUANCE OF SHARES  

        An Option (or any part or installment thereof) shall be exercised by giving written notice to the Company or its designee, together with provision for payment of
the full purchase price in accordance with this Section for the Shares as to which the Option is being exercised, and upon compliance with any other conditions set forth in the Stock Agreement. Such
notice shall be signed by the person 

5

 

exercising
the Option, shall state the number of Shares with respect to which the Option is being exercised and shall contain any representation required by the Plan or the Stock Agreement. 

        Payment
of the purchase price for the Shares as to which such Option is being exercised shall be made (a) in United States dollars in cash or by check acceptable to the
Administrator, or (b) at the discretion of the Administrator, (i) through delivery of shares of Common Stock not subject to any restriction under any plan and having a Fair Market Value
equal as of the date of exercise to the cash exercise price of the Option, (ii) in accordance with a cashless exercise program established with a securities brokerage firm, and approved by the
Company, (iii) by any other means (excluding, however, delivery of a promissory note of the Participant) that the Administrator determines to be consistent with the purpose of this Plan and
applicable law, or (iv) by any combination of the foregoing. Notwithstanding the foregoing, the Administrator shall accept only such payment on exercise of an ISO as is permitted by
Section 422 of the Code. 

        The
Company shall then as soon as is reasonably practicable deliver the Shares as to which such Option was exercised to the Participant (or to the Participant's Survivors, as the case
may be). It is expressly understood that the Company may delay the delivery of the Shares in order to comply with any law or regulation that requires the Company to take any action with respect to the
Shares prior to their issuance. The Shares shall, upon delivery, be fully paid, non-assessable Shares. 

10.   ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS  

        By its terms, a Stock Right granted to a Participant shall not be transferable by the Participant other than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act or the rules thereunder or as approved by the Administrator in its
discretion and set forth in the applicable Stock Agreement, provided, however, that the Administrator shall not approve any transfer of a Stock Right for consideration. Except as provided in the
preceding sentence or as otherwise permitted under a Stock Agreement, a Stock Right shall be exercisable, during the Participant's lifetime only by such Participant (or by his or her legal
representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of any Stock Right or of any rights granted thereunder contrary to the provisions of this Plan, or the levy of any attachment
or similar process upon a Stock Right, shall be null and void. 

11.   EFFECT ON STOCK RIGHTS OF TERMINATION OF SERVICE  

        11.1     Except
as otherwise provided in the applicable Stock Agreement or as otherwise provided in Sections 12 or 13, if a Participant ceases to be an
Employee, Non-Employee Director, consultant or advisor with the Company and its Affiliates (for any reason other than termination for "cause," or death) (a "Termination of Service") before
the Participant has exercised all Stock Rights, the Participant may exercise any Stock Right granted to him or her to the extent that the Stock Right is exercisable on the date of such Termination of
Service. Any such Stock Right must be exercised within three months after the date of the Participant's Termination of Service, unless otherwise provided in the applicable Stock Agreement, but in no
event after the expiration of the term of the Stock Right. 

        11.2     The
provisions of this Section, and not the provisions of Section 14, shall apply to a Participant who subsequently dies after the Termination of
Service; provided, however, that in the case of a Participant's death within three (3) months after the Termination of Service, the Participant's Survivors may exercise the Stock Right within
one (1) year after the date of the Participant's death, but in no event after the date of expiration of the term of the Stock Right. 

        11.3     Notwithstanding
anything herein to the contrary, if subsequent to a Participant's Termination of Service, but prior to the exercise of a Stock Right, the
Administrator determines that, 

6

 

either
prior or subsequent to the Participant's Termination of Service, the Participant engaged in conduct which would constitute "cause" (as defined in Section 12), then such Participant shall
forthwith cease to have any right to exercise any Stock Right. Stock Rights that consist of Shares issued under Stock Grants for which any restrictions on transfer or Company repurchase right shall
have lapsed, shall be deemed for all purposes to have been "exercised." 

        11.4     Absence
from work with the Company or an Affiliate because of temporary disability or a leave of absence for any purpose, shall not, during the period of
any such absence in accordance with Company policies, be deemed, by virtue of such absence alone, a Termination of Service, except as the Administrator may otherwise expressly provide. 

        11.5     Except
as required by law or as set forth in a Participant's Stock Agreement, Stock Rights granted under the Plan shall not be affected by any change of a
Participant's status within or among the Company and any Affiliates, so long as the Participant continues to be an employee, director, consultant or advisor of the Company or any Affiliate. 

12.   EFFECT ON STOCK RIGHTS OF TERMINATION OF SERVICE FOR "CAUSE"  

        Except as otherwise provided in a Participant's Stock Agreement or as otherwise agreed in writing by the Administrator, if a Participant's service with the
Company or an Affiliate is terminated for "cause," all outstanding and unexercised (vested or unvested) Stock Rights will immediately be forfeited as of the time the Participant is notified that his
or her service is terminated for "cause." Stock Rights that consist of Shares issued under Stock Grants for which any restrictions on transfer or Company repurchase right shall have lapsed, shall be
deemed for all purposes to have been "exercised." For purposes of this Plan, "cause" shall include (and is not limited to) dishonesty with respect to the Company and its Affiliates, insubordination,
substantial malfeasance or non-feasance of duty, unauthorized disclosure of confidential information, breach by the Participant of any provision of any employment, consulting, advisory,
nondisclosure, non-competition or similar agreement between the Participant and the Company, and conduct substantially prejudicial to the business of the Company or any Affiliate. The
determination of the Administrator as to the existence of cause will be conclusive on the Participant and the Company. "Cause" is not limited to events that have occurred prior to a Participant's
termination of service, nor is it necessary that the Administrator's finding of "cause" occur prior to termination of service. If the Administrator determines, subsequent to a Participant's
termination of service but prior to the exercise of a Stock Right, that either prior or subsequent to the Participant's termination of service the Participant engaged in conduct which would constitute
"cause," then the right to exercise any Stock Right shall be forfeited as set forth in this Section 12. Any definition in an agreement between a Participant and the Company or an Affiliate
which contains a conflicting definition of "cause" for termination of service and which is in effect at the time of such termination of service shall supersede the definition in this Plan with respect
to that Participant. 

13.   EFFECT ON STOCK RIGHTS OF DEATH WHILE AN EMPLOYEE, DIRECTOR, CONSULTANT OR ADVISOR  

        Except as otherwise provided in a Participant's Stock Agreement, in the event of death of a Participant while the Participant is an Employee,
Non-Employee Director, consultant or advisor of the Company or of an Affiliate, any Stock Rights granted to such Participant may be exercised by the Participant's Survivors to the extent
exercisable but not exercised on the date of death. Any such Stock Right must be exercised within one (1) year after the date of death of the Participant but in no event after the date of
expiration of the term of the Stock Right, notwithstanding that the decedent might have been able to exercise the Stock Right as to some or all of the Shares on a later date if he or she had not died
and had continued to be an Employee, Non-Employee Director, consultant or advisor. 

7

 

14.   RIGHTS AS A STOCKHOLDER  

        No Participant to whom a Stock Right (other than a Stock Grant) has been granted shall have rights as a stockholder with respect to any Shares covered by such
Stock Right, except after due exercise thereof and/or tender of the full purchase price for the Shares being purchased pursuant to such exercise. The provisions of this Section 14 shall not be
applicable to Shares issued pursuant to Stock Grants, provided that the Participant shall have tendered the purchase price therefore, notwithstanding the existence of stock transfer restrictions on or
a Company repurchase right with respect to such Shares. 

15.   EMPLOYMENT OR OTHER RELATIONSHIP  

        Nothing in this Plan or any Stock Agreement shall be deemed to prevent the Company or an Affiliate from terminating the employment, consultancy or director status
of a Participant, or to prevent a Participant from terminating his or her own employment, consultancy or director status or to give any Participant a right to be retained in employment or other
service by the Company or any Affiliate for any period of time. 

16.   DISSOLUTION OR LIQUIDATION OF THE COMPANY  

        Upon the dissolution or liquidation of the Company (other than in connection with a transaction subject to the provisions of Section 17.2), all Stock
Rights granted under this Plan which as of such date shall not have been exercised will terminate and become null and void; provided, however, that if the rights of a Participant or a Participant's
Survivors have not otherwise terminated and expired, the Participant or Participant's Survivors will have the right immediately prior to such dissolution or liquidation to exercise any Stock Right to
the extent that such Stock Right is exercisable as of the date immediately prior to such dissolution or liquidation. Upon the dissolution or liquidation of the Company, any outstanding Stock-Based
Awards shall immediately terminate unless otherwise determined by the Administrator or specifically provided in the applicable Stock Agreement. 

17.   ADJUSTMENTS  

        Upon the occurrence of any of the following events, a Participant's rights with respect to any Stock Right granted to him or her hereunder that have not
previously been exercised in full shall be adjusted as hereinafter provided, unless otherwise specifically provided in the Stock Agreement or in any employment agreement between a Participant and the
Company or an Affiliate: 

        17.1    Stock Dividends and Stock Splits.    If the shares of Common Stock shall be subdivided or combined into a
greater or smaller number of shares or if the Company shall issue any shares of Common Stock as a stock dividend on its outstanding Common Stock, the number of shares of Common Stock subject to or
deliverable upon the exercise of a Stock Right shall be appropriately increased or decreased, and appropriate adjustments shall be made in the purchase price per Share to reflect such event. The
number of Shares subject to Options to be granted to Non-Employee Directors pursuant to Section 6.3 and the number of Shares subject to the limitation in Section 6.4 shall
also be proportionately adjusted upon the occurrence of such events. 

        17.2    Consolidations or Mergers.    In the event of a consolidation or merger in which the Company is not the
surviving corporation or which results in the acquisition of substantially all the Company's outstanding stock by a single person or entity or by a group of persons and/or entities acting in concert,
or in the event of the sale or transfer of substantially all the Company's assets (any of the foregoing, an "Acquisition"), all then outstanding Stock Rights (excluding any Shares subject to Stock
Grants as to which all Company repurchase rights shall have lapsed) shall terminate unless assumed pursuant to clause (i) below; provided that either (i) the Administrator shall provide
for the surviving or acquiring entity or an affiliate thereof to assume the outstanding Stock Rights or grant replacement stock rights 

8

 

in
lieu thereof, any such replacement to be upon an equitable basis as determined by the Administrator, or (ii) if there is no such assumption or substitution, all outstanding Stock Rights
shall become immediately and fully exercisable and all Company repurchase rights with respect to Stock Rights shall lapse, in each case immediately prior to the Acquisition, notwithstanding any
restrictions or vesting conditions set forth therein. 

        17.3    Recapitalization or Reorganization.    In the event of a recapitalization or reorganization of the Company
(other than a transaction described in Section 17.2 above) pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares of Common
Stock, a Participant upon exercising a Stock Right shall be entitled to receive for the purchase price paid upon such exercise the securities he or she would have received if he or she had exercised
such Stock Right prior to such recapitalization or reorganization. 

        17.4    Adjustments to Stock Grants and Stock-Based Awards.    Upon the happening of any of the events described in
Sections 17.1, 17.2 or 17.3, any outstanding Stock-Based Award and the Shares subject to any Stock Grant, vested or unvested, shall be appropriately adjusted to reflect the events described in
such Sections. The Administrator shall determine the specific adjustments to be made under this Section 17.4. 

        17.5    Modification of ISOs.    Notwithstanding the foregoing, any adjustments made pursuant to Section 17.1,
17.2 or 17.3 with respect to ISOs shall be made only after the Administrator determines whether such adjustments would constitute a "modification" of such ISOs (as that term is defined in
Section 424(h) of the Code) or would cause any adverse tax consequences for the holders of such ISOs. If the Administrator determines that such adjustments made with respect to ISOs would
constitute a modification of such ISOs, it may refrain from making such adjustments, unless the holder of an ISO specifically requests in writing that such adjustment be made and such writing
indicates that the holder has full knowledge of the consequences of such "modification" on his or her income tax treatment with respect to the ISO. 

18.   ISSUANCES OF SECURITIES  

        Except as expressly provided herein, no issuance (including for this purpose the delivery of shares held in treasury) by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to Stock
Rights. Except as expressly provided herein, no adjustments shall be made for dividends paid in cash or in property (including without limitation, securities) of the Company. 

19.   FRACTIONAL SHARES  

        No fractional share shall be issued under the Plan and the person exercising any Stock Right shall receive from the Company cash in lieu of any such fractional
share equal to the Fair Market Value thereof. 

20.   CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS: TERMINATION OF ISOs  

        Any Options granted under this Plan that do not meet the requirements of the Code for ISOs shall automatically be deemed to be Non-Qualified Options
without further action on the part of the Administrator. The Administrator, at the written request of any Participant, may in its discretion take such actions as may be necessary to convert such
Participant's ISOs (or any portion thereof) that have not been exercised on the date of conversion into Non-Qualified Options at any time prior to the expiration of such ISOs, regardless
of whether the Participant is an employee of the Company or an Affiliate at the time of such conversion. At the time of such conversion, the Administrator (with the consent of the Participant) may
impose such conditions on the exercise of the resulting Non-Qualified 

9

 

Options
as the Administrator in its discretion may determine, provided that such conditions shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to give any Participant the
right to have such Participant's ISOs converted into Non-Qualified Options, and no such conversion shall occur until and unless the Administrator takes appropriate action. The
Administrator, with the consent of the Participant, may also terminate any portion of any ISO that has not been exercised at the time of such termination. 

21.   WITHHOLDING  

        If any federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act ("FICA") withholdings or other amounts are required by
applicable law or governmental regulation to be withheld from the Participant's salary, wages or other remuneration in connection with the exercise of a Stock Right, the lapsing of a Company
repurchase right or a Disqualifying Disposition (as defined in Section 22), the Company may withhold from the Participant' compensation, if any, or may require that the Participant advance in
cash to the Company, or to any Affiliate of the Company which employs or employed the Participant, the amount of such withholdings unless a different withholding arrangement, including the use of
shares of the Company's Common Stock, is authorized by the Administrator (and permitted by law). For purposes hereof, the Fair Market Value of any shares withheld for purposes of payroll withholding
shall be determined in the manner provided in Section 1 above, as of the most recent practicable date prior to the date of exercise. If the Fair Market Value of the shares withheld is less than
the amount of payroll withholdings required, the Participant may be required to advance the difference in cash to the Company or the Affiliate employer. The Administrator in its discretion may
condition the exercise of an Option for less than the then Fair Market Value on the Participant's payment of such additional withholding. In no event shall shares be withheld from any award in
satisfaction of tax withholding requirements in an amount that exceeds the statutory minimum amount of tax withholding required. 

22.   NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION  

        Each Employee who receives an ISO must agree to notify the Company in writing immediately after the Employee makes a "Disqualifying Disposition" of any Shares
acquired pursuant to the exercise of an ISO. A Disqualifying Disposition is any disposition (as defined in Section 424(c) of the Code) of such Shares before the later of (a) two years
from the date the Employee was granted the ISO, or (b) one year after the date the Employee acquired Shares by exercising the ISO. If the Employee has died before such Shares are sold, the
notice provisions of this Section 22 shall not apply. 

23.   EFFECTIVE DATE; TERMINATION OF THE PLAN  

        This Plan shall be effective on March 29, 2006, the date of its adoption by the Board of Directors, subject to approval by the shareholders of the Company.
The Plan will terminate on March 28, 2016. The Plan also may be terminated at an earlier date by vote of the Board of Directors. Termination of this Plan will not affect any Stock Rights
granted or Stock Agreements executed prior to the effective date of such termination. 

24.   AMENDMENT OF THE PLAN; AMENDMENT OF STOCK RIGHTS  

        The Plan may be amended by the stockholders of the Company by affirmative vote of a majority of the votes cast at a meeting of the stockholders at which a quorum
is present. The Plan also may be amended by the Board of Directors or the Administrator, including, without limitation, to the extent necessary to qualify any or all outstanding Stock Rights granted
under the Plan or Stock Rights to be granted under the Plan for favorable federal income tax treatment (including deferral of taxation upon exercise) as may be afforded incentive stock options under
Section 422 of the Code, and to the extent necessary to qualify the shares issuable upon exercise of any outstanding Stock Rights granted, or Stock 

10

 

Rights
to be granted, under the Plan for listing on any national securities exchange or quotation in any national automated quotation system of securities dealers. Any amendment approved by the
Administrator that the Administrator determines is of a scope that requires stockholder approval shall be subject to stockholder approval. No modification or amendment of the Plan shall adversely
affect a Participant's rights under a Stock Right previously granted to the Participant, without such Participant's consent. 

        In
its discretion, the Administrator may amend any term or condition of any outstanding Stock Right, provided: (i) such term or condition is not prohibited by the Plan;
(ii) if the amendment is adverse to the Participant, such amendment shall be made only with the consent of the Participant or the Participant's Survivors, as the case may be; and
(iii) any such amendment of any ISO shall be made only after the Administrator determines whether such amendment would constitute a "modification" of any Stock
Right which is an ISO (as that term is defined in Section 424(h) of the Code) or would cause any adverse tax consequences for the holder of such ISO (in which case, the Participant's or
Participant's Survivors' consent to such amendment shall be required). Notwithstanding the foregoing, the Administrator shall not have the authority to reduce the exercise price of any Option after
the date of grant, except for adjustments permitted under Section 17 of this Plan. 

25.   GOVERNING LAW  

        This Plan shall be construed and enforced in accordance with the law of The Commonwealth of Massachusetts. 

11

 
 AMENDMENT NO. 1

TO THE

AMENDED AND RESTATED

VERTEX PHARMACEUTICALS INCORPORATED

2006 STOCK AND OPTION PLAN  

        Effective February 5, 2009, the Amended and Restated Vertex Pharmaceuticals Incorporated 2006 Stock and Option Plan (the
"Plan") is hereby amended as follows: 

Section 6.4 of the Plan is deleted in its entirety and the following is substituted therefor:

        6.4    Limitation on Number of Shares Granted.    Notwithstanding anything in this Plan to the contrary, no
Participant shall be granted an aggregate of Options and/or Stock-Based Awards under this Plan in any calendar year for more than an aggregate of 700,000 Shares (subject to adjustment pursuant to
Section 17 to the extent consistent with Section 162(m) of the Code). 

12

 
 AMENDMENT NO. 2

TO THE

AMENDED AND RESTATED

VERTEX PHARMACEUTICALS INCORPORATED

2006 STOCK AND OPTION PLAN  

        Effective May 14, 2009, the Amended and Restated Vertex Pharmaceuticals Incorporated 2006 Stock and Option Plan (the
"Plan") is hereby amended as follows: 

The first paragraph of Section 3 of the Plan is deleted in its entirety and the following is substituted therefor:

        The
number of Shares subject to this Plan as to which Stock Rights may be granted from time to time shall be 21,602,380 or the equivalent of such number of Shares after the
Administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with Section 17 of this
Plan. 

13

 
 
 

  AMENDMENT NO. 3
  TO THE
  AMENDED AND RESTATED
  VERTEX PHARMACEUTICALS INCORPORATED
  2006 STOCK AND OPTION PLAN    
    

        Effective May 13, 2010, the Amended and Restated Vertex Pharmaceuticals Incorporated 2006 Stock and Option Plan (the
"Plan") is hereby amended as follows: 

The first paragraph of Section 3 of the Plan is deleted in its entirety and the following is substituted therefor:

        The
number of Shares subject to this Plan as to which Stock Rights may be granted from time to time shall be 33,602,380 or the equivalent of such number of Shares after the
Administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with Section 17 of this
Plan. 

14

QuickLinks

Exhibit 10.1

AMENDMENT NO. 3 TO THE AMENDED AND RESTATED VERTEX PHARMACEUTICALS INCORPORATED 2006 STOCK AND OPTION PLAN

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}]]