{"id":38443,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/2002-stock-incentive-plan-jetblue-airways-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"2002-stock-incentive-plan-jetblue-airways-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/2002-stock-incentive-plan-jetblue-airways-corp.html","title":{"rendered":"2002 Stock Incentive Plan &#8211; JetBlue Airways Corp."},"content":{"rendered":"<pre>                           JETBLUE AIRWAYS CORPORATION\n\n                            2002 STOCK INCENTIVE PLAN\n\n                                  ARTICLE ONE\n\n                               GENERAL PROVISIONS\n\n     I.   PURPOSE OF THE PLAN\n\n          This 2002 Stock Incentive Plan is intended to promote the interests of\nJetBlue Airways Corporation, a Delaware corporation, by providing eligible\npersons in the Corporation's service with the opportunity to acquire a\nproprietary interest, or otherwise increase their proprietary interest, in the\nCorporation as an incentive for them to remain in such service.\n\n          Capitalized terms shall have the meanings assigned to such terms in\nthe attached Appendix.\n\n     II.  STRUCTURE OF THE PLAN\n\n          A. The Plan shall be divided into five separate equity incentives\nprograms:\n\n             -   the Discretionary Option Grant Program under which eligible\n     persons may, at the discretion of the Plan Administrator, be granted\n     options to purchase shares of Common Stock,\n\n             -   the Salary Investment Option Grant Program under which eligible\n     employees may elect to have a portion of their base salary invested each\n     year in special option grants,\n\n             -   the Stock Issuance Program under which eligible persons may, at\n     the discretion of the Plan Administrator, be issued shares of Common Stock\n     directly, either through the immediate purchase of such shares or as a\n     bonus for services rendered the Corporation (or any Parent or Subsidiary),\n\n             -   the Automatic Option Grant Program under which eligible\n     non-employee Board members shall automatically receive option grants at\n     designated intervals over their period of continued Board service, and\n\n             -   the Director Fee Option Grant Program under which non-employee\n     Board members may elect to have all or any portion of their annual retainer\n     fee otherwise payable in cash applied to a special stock option grant.\n\n          B. The provisions of Articles One and Seven shall apply to all equity\nprograms under the Plan and shall govern the interests of all persons under the\nPlan.\n\n\n\n     III. ADMINISTRATION OF THE PLAN\n\n          A.   The Primary Committee shall have sole and exclusive authority to\nadminister the Discretionary Option Grant and Stock Issuance Programs with\nrespect to Section 16 Insiders. Administration of the Discretionary Option Grant\nand Stock Issuance Programs with respect to all other persons eligible to\nparticipate in those programs may, at the Board's discretion, be vested in the\nPrimary Committee or a Secondary Committee, or the Board may retain the power to\nadminister those programs with respect to all such persons. However, any\ndiscretionary option grants or stock issuances for members of the Primary\nCommittee must be authorized by a disinterested majority of the Board.\n\n          B.   Members of the Primary Committee or any Secondary Committee shall\nserve for such period of time as the Board may determine and may be removed by\nthe Board at any time. The Board may also at any time terminate the functions of\nany Secondary Committee and reassume all powers and authority previously\ndelegated to such committee.\n\n          C.   Each Plan Administrator shall, within the scope of its\nadministrative functions under the Plan, have full power and authority (subject\nto the provisions of the Plan) to establish such rules and regulations as it may\ndeem appropriate for proper administration of the Discretionary Option Grant and\nStock Issuance Programs and to make such determinations under, and issue such\ninterpretations of, the provisions of those programs and any outstanding options\nor stock issuances thereunder as it may deem necessary or advisable. Decisions\nof the Plan Administrator within the scope of its administrative functions under\nthe Plan shall be final and binding on all parties who have an interest in the\nDiscretionary Option Grant and Stock Issuance Programs under its jurisdiction or\nany stock option or stock issuance thereunder.\n\n          D.   The Primary Committee shall have the sole and exclusive authority\nto determine which Section 16 Insiders and other highly compensated Employees\nshall be eligible for participation in the Salary Investment Option Grant\nProgram for one or more calendar years. However, all option grants under the\nSalary Investment Option Grant Program shall be made in accordance with the\nexpress terms of that program, and the Primary Committee shall not exercise any\ndiscretionary functions with respect to the option grants made under that\nprogram.\n\n          E.   Service on the Primary Committee or the Secondary Committee shall\nconstitute service as a Board member, and members of each such committee shall\naccordingly be entitled to full indemnification and reimbursement as Board\nmembers for their service on such committee. No member of the Primary Committee\nor the Secondary Committee shall be liable for any act or omission made in good\nfaith with respect to the Plan or any option grants or stock issuances under the\nPlan.\n\n          F.   Administration of the Automatic Option Grant and Director Fee\nOption Grant Programs shall be self-executing in accordance with the terms of\nthose programs, and no Plan Administrator shall exercise any discretionary\nfunctions with respect to any option grants or stock issuances made under those\nprograms.\n\n                                        2\n\n\n     IV.  ELIGIBILITY\n\n          A.   The persons eligible to participate in the Discretionary Option\nGrant and Stock Issuance Programs are as follows:\n\n                    (i)   Employees,\n\n                    (ii)  non-employee members of the Board or the board of\n     directors of any Parent or Subsidiary, and\n\n                    (iii) consultants and other independent advisors who provide\n     services to the Corporation (or any Parent or Subsidiary).\n\n          B.   Only Employees who are Section 16 Insiders or other highly\ncompensated individuals shall be eligible to participate in the Salary\nInvestment Option Grant Program.\n\n          C.   Each Plan Administrator shall, within the scope of its\nadministrative jurisdiction under the Plan, have full authority to determine,\n(i) with respect to the option grants under the Discretionary Option Grant\nProgram, which eligible persons are to receive such grants, the time or times\nwhen those grants are to be made, the number of shares to be covered by each\nsuch grant, the status of the granted option as either an Incentive Option or a\nNon-Statutory Option, the time or times when each option is to become\nexercisable, the vesting schedule (if any) applicable to the option shares and\nthe maximum term for which the option is to remain outstanding and (ii) with\nrespect to stock issuances under the Stock Issuance Program, which eligible\npersons are to receive such issuances, the time or times when the issuances are\nto be made, the number of shares to be issued to each Participant, the vesting\nschedule (if any) applicable to the issued shares and the consideration for such\nshares.\n\n          D.   The Plan Administrator shall have the absolute discretion either\nto grant options in accordance with the Discretionary Option Grant Program or to\neffect stock issuances in accordance with the Stock Issuance Program.\n\n          E.   The individuals who shall be eligible to participate in the\nAutomatic Option Grant Program shall be limited to (i) those individuals \nserving as non-employee Board members on the Underwriting Date, (ii) those \nindividuals who first become non-employee Board members at any time after the \nUnderwriting Date, whether through appointment by the Board or election by \nthe Corporation's stockholders, and (iii) those individuals who continue to \nserve as non-employee Board members at one or more Annual Stockholders \nMeetings held after the Underwriting Date. A non-employee Board member who \nhas previously been in the employ of the Corporation (or any Parent or \nSubsidiary) shall not be eligible to receive an option grant under the \nAutomatic Option Grant Program at the time he or she first becomes a \nnon-employee Board member, but shall be eligible to receive periodic option \ngrants under the Automatic Option Grant Program while he or she continues to \nserve as a non-employee Board member.\n\n          F.   All non-employee Board members shall be eligible to participate\nin the Director Fee Option Grant Program.\n\n                                        3\n\n\n     V.   STOCK SUBJECT TO THE PLAN\n\n          A.   The stock issuable under the Plan shall be shares of authorized\nbut unissued or reacquired Common Stock, including shares repurchased by the\nCorporation on the open market. The number of shares of Common Stock initially\nreserved for issuance over the term of the Plan shall not exceed 5,629,968\nshares. Such reserve shall consist of (i) the number of shares estimated to\nremain available for issuance, as of the Plan Effective Date, under the\nPredecessor Plan as last approved by the Corporation's stockholders, including\nthe shares subject to outstanding options under the Predecessor Plan, (ii) plus\nan additional increase of approximately 500,000 shares to be approved by the\nCorporation's stockholders prior to the Underwriting Date.\n\n          B.   The number of shares of Common Stock available for issuance under\nthe Plan shall automatically increase on the first trading day of January each\ncalendar year during the term of the Plan, beginning with calendar year 2003, by\nan amount equal to four percent (4%) of the total number of shares of Common\nStock outstanding on the last trading day in December of the immediately\npreceding calendar year, but in no event shall any such annual increase exceed\n3,600,000 shares.\n\n          C.   No one person participating in the Plan may receive stock\noptions, separately exercisable stock appreciation rights and direct stock\nissuances for more than 1,000,000 shares of Common Stock in the aggregate per\ncalendar year.\n\n          D.   Shares of Common Stock subject to outstanding options (including\noptions transferred to this Plan from the Predecessor Plan) shall be available\nfor subsequent issuance under the Plan to the extent (i) those options expire or\nterminate for any reason prior to exercise in full or (ii) the options are\ncancelled in accordance with the cancellation-regrant provisions of Article Two.\nUnvested shares issued under the Plan and subsequently cancelled or repurchased\nby the Corporation, at a price per share not greater than the original issue\nprice paid per share, pursuant to the Corporation's repurchase rights under the\nPlan shall be added back to the number of shares of Common Stock reserved for\nissuance under the Plan and shall accordingly be available for reissuance\nthrough one or more subsequent option grants or direct stock issuances under the\nPlan. However, should the exercise price of an option under the Plan be paid\nwith shares of Common Stock or should shares of Common Stock otherwise issuable\nunder the Plan be withheld by the Corporation in satisfaction of the withholding\ntaxes incurred in connection with the exercise of an option or the vesting of a\nstock issuance under the Plan, then the number of shares of Common Stock\navailable for issuance under the Plan shall be reduced by the gross number of\nshares for which the option is exercised or which vest under the stock issuance,\nand not by the net number of shares of Common Stock issued to the holder of such\noption or stock issuance. Shares of Common Stock underlying one or more stock\nappreciation rights exercised under Section IV of Article Two, Section III of\nArticle Three, Section II of Article Five or Section III of Article Six of the\nPlan shall NOT be available for subsequent issuance under the Plan.\n\n                                        4\n\n\n          E.   If any change is made to the Common Stock by reason of any\nstock split, stock dividend, recapitalization, combination of shares, exchange\nof shares or other change affecting the outstanding Common Stock as a class\nwithout the Corporation's receipt of consideration, appropriate adjustments\nshall be made by the Plan Administrator to (i) the maximum number and\/or class\nof securities issuable under the Plan, (ii) the maximum number and\/or class of\nsecurities for which any one person may be granted stock options, separately\nexercisable stock appreciation rights and direct stock issuances under the Plan\nper calendar year, (iii) the number and\/or class of securities for which grants\nare subsequently to be made under the Automatic Option Grant Program to new and\ncontinuing non-employee Board members, (iv) the number and\/or class of\nsecurities and the exercise price per share in effect under each outstanding\noption under the Plan, (v) the number and\/or class of securities and exercise\nprice per share in effect under each outstanding option transferred to this Plan\nfrom the Predecessor Plan and (vi) the maximum number and\/or class of securities\nby which the share reserve is to increase automatically each calendar year\npursuant to the provisions of Section V.B of this Article One. Such adjustments\nto the outstanding options are to be effected in a manner which shall preclude\nthe enlargement or dilution of rights and benefits under such options. The\nadjustments determined by the Plan Administrator shall be final, binding and\nconclusive.\n\n                                        5\n\n\n                                  ARTICLE TWO\n\n                       DISCRETIONARY OPTION GRANT PROGRAM\n\n     I.   OPTION TERMS\n\n          Each option shall be evidenced by one or more documents in the form\napproved by the Plan Administrator; PROVIDED, however, that each such document\nshall comply with the terms specified below. Each document evidencing an\nIncentive Option shall, in addition, be subject to the provisions of the Plan\napplicable to such options.\n\n          A.   EXERCISE PRICE.\n\n               1.   The exercise price per share shall be fixed by the Plan\nAdministrator but shall not be less than one hundred percent (100%) of the Fair\nMarket Value per share of Common Stock on the option grant date.\n\n               2.   The exercise price shall become immediately due upon\nexercise of the option and shall, subject to the provisions of Section I of\nArticle Seven and the documents evidencing the option, be payable in one or more\nof the forms specified below:\n\n                    (i)   cash or check made payable to the Corporation,\n\n                    (ii)  shares of Common Stock held for the requisite period\n     necessary to avoid a charge to the Corporation's earnings for financial\n     reporting purposes and valued at Fair Market Value on the Exercise Date, or\n\n                    (iii) to the extent the option is exercised for vested\n     shares, through a special sale and remittance procedure pursuant to which\n     the Optionee shall concurrently provide irrevocable instructions to (a) a\n     Corporation-designated brokerage firm to effect the immediate sale of the\n     purchased shares and remit to the Corporation, out of the sale proceeds\n     available on the settlement date, sufficient funds to cover the aggregate\n     exercise price payable for the purchased shares plus all applicable\n     Federal, state and local income and employment taxes required to be\n     withheld by the Corporation by reason of such exercise and (b) the\n     Corporation to deliver the certificates for the purchased shares directly\n     to such brokerage firm in order to complete the sale.\n\n          Except to the extent such sale and remittance procedure is utilized,\npayment of the exercise price for the purchased shares must be made on the\nExercise Date.\n\n          B.   EXERCISE AND TERM OF OPTIONS. Each option shall be exercisable at\nsuch time or times, during such period and for such number of shares as shall be\ndetermined by the Plan Administrator and set forth in the documents evidencing\nthe option. However, no option shall have a term in excess of ten (10) years\nmeasured from the option grant date.\n\n                                        6\n\n\n          C.   EFFECT OF TERMINATION OF SERVICE.\n\n               1.   The following provisions shall govern the exercise of any\noptions held by the Optionee at the time of cessation of Service or death:\n\n                    (i)   Any option outstanding at the time of the Optionee's\n     cessation of Service for any reason shall remain exercisable for such\n     period of time thereafter as shall be determined by the Plan Administrator\n     and set forth in the documents evidencing the option, but no such option\n     shall be exercisable after the expiration of the option term.\n\n                    (ii)  Any option held by the Optionee at the time of death\n     and exercisable in whole or in part at that time may be subsequently\n     exercised by the personal representative of the Optionee's estate or by the\n     person or persons to whom the option is transferred pursuant to the\n     Optionee's will or the laws of inheritance or by the Optionee's designated\n     beneficiary or beneficiaries of that option.\n\n                    (iii) Should the Optionee's Service be terminated for\n     Misconduct or should the Optionee otherwise engage in Misconduct while\n     holding one or more outstanding options under this Article Two, then all\n     those options shall terminate immediately and cease to be outstanding.\n\n                    (iv)  During the applicable post-Service exercise period,the\n     option may not be exercised in the aggregate for more than the number of\n     vested shares for which the option is exercisable on the date of the\n     Optionee's cessation of Service. Upon the expiration of the applicable\n     exercise period or (if earlier) upon the expiration of the option term, the\n     option shall terminate and cease to be outstanding for any vested shares\n     for which the option has not been exercised. However, the option shall,\n     immediately upon the Optionee's cessation of Service, terminate and cease\n     to be outstanding to the extent the option is not otherwise at that time\n     exercisable for vested shares.\n\n               2.   The Plan Administrator shall have complete discretion,\nexercisable either at the time an option is granted or at any time while the\noption remains outstanding, to:\n\n                    (i)   extend the period of time for which the option is to\n     remain exercisable following the Optionee's cessation of Service from the\n     limited exercise period otherwise in effect for that option to such greater\n     period of time as the Plan Administrator shall deem appropriate, but in no\n     event beyond the expiration of the option term, and\/or\n\n                    (ii) permit the option to be exercised, during the\n     applicable post-Service exercise period, not only with respect to the\n     number of vested shares of Common Stock for which such option is\n     exercisable at the time\n\n                                        7\n\n\n     of the Optionee's cessation of Service but also with respect to one or more\n     additional installments in which the Optionee would have vested had the\n     Optionee continued in Service.\n\n          D.   STOCKHOLDER RIGHTS. The holder of an option shall have no\nstockholder rights with respect to the shares subject to the option until such\nperson shall have exercised the option, paid the exercise price and become a\nholder of record of the purchased shares.\n\n          E.   REPURCHASE RIGHTS. The Plan Administrator shall have the\ndiscretion to grant options which are exercisable for unvested shares of Common\nStock. Should the Optionee cease Service while holding such unvested shares, the\nCorporation shall have the right to repurchase any or all of those unvested\nshares at a price per share equal to the LOWER of (i) the exercise price paid\nper share or (ii) the Fair Market Value per share of Common Stock at the time of\nrepurchase. The terms upon which such repurchase right shall be exercisable\n(including the period and procedure for exercise and the appropriate vesting\nschedule for the purchased shares) shall be established by the Plan\nAdministrator and set forth in the document evidencing such repurchase right.\n\n          F.   LIMITED TRANSFERABILITY OF OPTIONS. During the lifetime of the\nOptionee, Incentive Options shall be exercisable only by the Optionee and shall\nnot be assignable or transferable other than by will or the laws of inheritance\nfollowing the Optionee's death. Non-Statutory Options shall be subject to the\nsame restriction, except that a Non-Statutory Option may be assigned in whole or\nin part during the Optionee's lifetime to one or more members of the Optionee's\nfamily or to a trust established exclusively for one or more such family members\nor to Optionee's former spouse, to the extent such assignment is in connection\nwith the Optionee's estate plan or pursuant to a domestic relations order. The\nassigned portion may only be exercised by the person or persons who acquire a\nproprietary interest in the option pursuant to the assignment. The terms\napplicable to the assigned portion shall be the same as those in effect for the\noption immediately prior to such assignment and shall be set forth in such\ndocuments issued to the assignee as the Plan Administrator may deem appropriate.\nNotwithstanding the foregoing, the Optionee may also designate one or more\npersons as the beneficiary or beneficiaries of his or her outstanding options\nunder this Article Two, and those options shall, in accordance with such\ndesignation, automatically be transferred to such beneficiary or beneficiaries\nupon the Optionee's death while holding those options. Such beneficiary or\nbeneficiaries shall take the transferred options subject to all the terms and\nconditions of the applicable agreement evidencing each such transferred option,\nincluding (without limitation) the limited time period during which the option\nmay be exercised following the Optionee's death.\n\n     II.  INCENTIVE OPTIONS\n\n          The terms specified below shall be applicable to all Incentive\nOptions. Except as modified by the provisions of this Section II, all the\nprovisions of Articles One, Two and Seven shall be applicable to Incentive\nOptions. Options which are specifically designated as Non-Statutory Options when\nissued under the Plan shall NOT be subject to the terms of this Section II.\n\n          A.   ELIGIBILITY. Incentive Options may only be granted to Employees.\n\n                                        8\n\n\n          B.   DOLLAR LIMITATION. The aggregate Fair Market Value of the shares\nof Common Stock (determined as of the respective date or dates of grant) for\nwhich one or more options granted to any Employee under the Plan (or any other\noption plan of the Corporation or any Parent or Subsidiary) may for the first\ntime become exercisable as Incentive Options during any one calendar year shall\nnot exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the\nEmployee holds two (2) or more such options which become exercisable for the\nfirst time in the same calendar year, the foregoing limitation on the\nexercisability of such options as Incentive Options shall be applied on the\nbasis of the order in which such options are granted.\n\n          C.   10% STOCKHOLDER. If any Employee to whom an Incentive Option is\ngranted is a 10% Stockholder, then the exercise price per share shall not be\nless than one hundred ten percent (110%) of the Fair Market Value per share of\nCommon Stock on the option grant date, and the option term shall not exceed five\n(5) years measured from the option grant date.\n\n     III. CHANGE IN CONTROL\/HOSTILE TAKE-OVER\n\n          A.   In the event of a Change in Control, each outstanding option\nunder the Discretionary Option Grant Program shall automatically accelerate so\nthat each such option shall, immediately prior to the effective date of that\nChange in Control, become exercisable for all the shares of Common Stock at the\ntime subject to such option and may be exercised for any or all of those shares\nas fully vested shares of Common Stock. However, an outstanding option shall NOT\nbecome exercisable on such an accelerated basis if and to the extent: (i) such\noption is to be assumed by the successor corporation (or parent thereof) or is\notherwise to continue in full force and effect pursuant to the terms of the\nChange in Control transaction or (ii) such option is to be replaced with a cash\nincentive program of the successor corporation which preserves the spread\nexisting at the time of the Change in Control on any shares for which the option\nis not otherwise at that time exercisable and provides for subsequent payout of\nthat spread in accordance with the same exercise\/vesting schedule applicable to\nthose option shares or (iii) the acceleration of such option is subject to other\nlimitations imposed by the Plan Administrator at the time of the option grant.\n\n          B.   All outstanding repurchase rights under the Discretionary Option\nGrant Program shall automatically terminate, and the shares of Common Stock\nsubject to those terminated rights shall immediately vest in full, in the event\nof a Change in Control, except to the extent: (i) those repurchase rights are to\nbe assigned to the successor corporation (or parent thereof) or are otherwise to\ncontinue in full force and effect pursuant to the terms of the Change in Control\ntransaction or (ii) such accelerated vesting is precluded by other limitations\nimposed by the Plan Administrator at the time the repurchase right is issued.\n\n          C.   Immediately following the consummation of the Change in Control,\nall outstanding options under the Discretionary Option Grant Program shall\nterminate and cease to be outstanding, except to the extent assumed by the\nsuccessor corporation (or parent thereof) or otherwise continued in full force\nand effect pursuant to the terms of the Change in Control transaction.\n\n                                        9\n\n\n          D.   Each option which is assumed in connection with a Change in\nControl or otherwise continued in effect shall be appropriately adjusted,\nimmediately after such Change in Control, to apply to the number and class of\nsecurities which would have been issuable to the Optionee in consummation of\nsuch Change in Control had the option been exercised immediately prior to such\nChange in Control. Appropriate adjustments to reflect such Change in Control\nshall also be made to (i) the exercise price payable per share under each\noutstanding option, PROVIDED the aggregate exercise price payable for such\nsecurities shall remain the same, (ii) the maximum number and\/or class of\nsecurities available for issuance over the remaining term of the Plan and (iii)\nthe maximum number and\/or class of securities for which any one person may be\ngranted stock options, separately exercisable stock appreciation rights and\ndirect stock issuances under the Plan per calendar year and (iv) the maximum\nnumber and\/or class of securities by which the share reserve is to increase\nautomatically each calendar year. To the extent the actual holders of the\nCorporation's outstanding Common Stock receive cash consideration for their\nCommon Stock in consummation of the Change in Control, the successor corporation\nmay, in connection with the assumption of the outstanding options under the\nDiscretionary Option Grant Program, substitute one or more shares of its own\ncommon stock with a fair market value equivalent to the cash consideration paid\nper share of Common Stock in such Change in Control transaction.\n\n          E.   The Plan Administrator shall have the discretionary authority to\nstructure one or more outstanding options under the Discretionary Option Grant\nProgram so that those options shall, immediately prior to the effective date of\na Change in Control, become exercisable for all the shares of Common Stock at\nthe time subject to those options and may be exercised for any or all of those\nshares as fully vested shares of Common Stock, whether or not those options are\nto be assumed in the Change in Control transaction or otherwise continued in\neffect. In addition, the Plan Administrator shall have the discretionary\nauthority to structure one or more of the Corporation's repurchase rights under\nthe Discretionary Option Grant Program so that those rights shall immediately\nterminate upon the consummation of the Change in Control transaction, and the\nshares subject to those terminated rights shall thereupon vest in full.\n\n          F.   The Plan Administrator shall have full power and authority to\nstructure one or more outstanding options under the Discretionary Option Grant\nProgram so that those options shall become exercisable for all the shares of\nCommon Stock at the time subject to those options in the event the Optionee's\nService is subsequently terminated by reason of an Involuntary Termination\nwithin a designated period (not to exceed eighteen (18) months) following the\neffective date of any Change in Control transaction in which those options do\nnot otherwise accelerate. In addition, the Plan Administrator may structure one\nor more of the Corporation's repurchase rights so that those rights shall\nimmediately terminate with respect to any shares held by the Optionee at the\ntime of such Involuntary Termination, and the shares subject to those terminated\nrepurchase rights shall accordingly vest in full at that time.\n\n          G.   The Plan Administrator shall have the discretionary authority to\nstructure one or more outstanding options under the Discretionary Option Grant\nProgram so that those options shall, immediately prior to the effective date of\na Hostile Take-Over, become exercisable for all the shares of Common Stock at\nthe time subject to those options and may be exercised for any or all of those\nshares as fully vested shares of Common Stock. In addition, the Plan\n\n                                       10\n\n\nAdministrator shall have the discretionary authority to structure one or more of\nthe Corporation's repurchase rights under the Discretionary Option Grant Program\nso that those rights shall terminate automatically upon the consummation of such\nHostile Take-Over, and the shares subject to those terminated rights shall\nthereupon vest in full. Alternatively, the Plan Administrator may condition the\nautomatic acceleration of one or more outstanding options under the\nDiscretionary Option Grant Program and the termination of one or more of the\nCorporation's outstanding repurchase rights under such program upon the\nsubsequent termination of the Optionee's Service by reason of an Involuntary\nTermination within a designated period (not to exceed eighteen (18) months)\nfollowing the effective date of such Hostile Take-Over.\n\n          H.   The portion of any Incentive Option accelerated in connection\nwith a Change in Control or Hostile Take-Over shall remain exercisable as an\nIncentive Option only to the extent the applicable One Hundred Thousand Dollar\n($100,000) limitation is not exceeded. To the extent such dollar limitation is\nexceeded, the accelerated portion of such option shall be exercisable as a\nNonstatutory Option under the Federal tax laws.\n\n          I.   The outstanding options shall in no way affect the right of the\nCorporation to adjust, reclassify, reorganize or otherwise change its capital or\nbusiness structure or to merge, consolidate, dissolve, liquidate or sell or\ntransfer all or any part of its business or assets.\n\n     IV.  CANCELLATION AND REGRANT OF OPTIONS\n\n          The Plan Administrator shall have the authority to effect, at any time\nand from time to time, with the consent of the affected option holders, the\ncancellation of any or all outstanding options under the Discretionary Option\nGrant Program (including outstanding options incorporated from the Predecessor\nPlan) and to grant in substitution new options covering the same or a different\nnumber of shares of Common Stock but with an exercise price per share based on\nthe Fair Market Value per share of Common Stock on the new grant date.\n\n     V.   STOCK APPRECIATION RIGHTS\n\n          A.   The Plan Administrator shall have full power and authority to\ngrant to selected Optionees tandem stock appreciation rights and\/or limited\nstock appreciation rights.\n\n          B.   The following terms shall govern the grant and exercise of tandem\nstock appreciation rights:\n\n                    (i)   One or more Optionees may be granted the right,\n     exercisable upon such terms as the Plan Administrator may establish, to\n     elect between the exercise of the underlying option for shares of Common\n     Stock and the surrender of that option in exchange for a distribution from\n     the Corporation in an amount equal to the excess of (a) the Fair Market\n     Value (on the option surrender date) of the number of shares in which the\n     Optionee is at the time vested under the surrendered option (or surrendered\n     portion thereof) over (b) the aggregate exercise price payable for such\n     shares.\n\n                                       11\n\n\n                    (ii)  No such option surrender shall be effective unless it\n     is approved by the Plan Administrator, either at the time of the actual\n     option surrender or at any earlier time. If the surrender is so approved,\n     then the distribution to which the Optionee shall be entitled may be made\n     in shares of Common Stock valued at Fair Market Value on the option\n     surrender date, in cash, or partly in shares and partly in cash, as the\n     Plan Administrator shall in its sole discretion deem appropriate.\n\n                    (iii) If the surrender of an option is not approved by the\n     Plan Administrator, then the Optionee shall retain whatever rights the\n     Optionee had under the surrendered option (or surrendered portion thereof)\n     on the option surrender date and may exercise such rights at any time prior\n     to the LATER of (a) five (5) business days after the receipt of the\n     rejection notice or (b) the last day on which the option is otherwise\n     exercisable in accordance with the terms of the documents evidencing such\n     option, but in no event may such rights be exercised more than ten (10)\n     years after the option grant date.\n\n          C.   The following terms shall govern the grant and exercise of\nlimited stock appreciation rights:\n\n                    (i)   One or more Section 16 Insiders may be granted limited\n     stock appreciation rights with respect to their outstanding options.\n\n                    (ii)  Upon the occurrence of a Hostile Tender-Offer, each\n     individual holding one or more options with such a limited stock\n     appreciation right shall have the unconditional right (exercisable for a\n     thirty (30)-day period following such Hostile Tender-Offer) to surrender\n     each such option to the Corporation. In return for the surrendered option,\n     the Optionee shall receive a cash distribution from the Corporation in an\n     amount equal to the excess of (A) the Tender-Offer Price of the shares of\n     Common Stock at the time subject to such option (whether or not the option\n     is otherwise at that time vested and exercisable for those shares) over (B)\n     the aggregate exercise price payable for those shares. Such cash\n     distribution shall be paid within five (5) days following the option\n     surrender date.\n\n                    (iii) At the time such limited stock appreciation right is\n     granted, the Plan Administrator shall pre-approve any subsequent exercise\n     of that right in accordance with the terms of this Paragraph C.\n     Accordingly, no further approval of the Plan Administrator or the Board\n     shall be required at the time of the actual option surrender and cash\n     distribution.\n\n                                       12\n\n\n                                 ARTICLE THREE\n\n                     SALARY INVESTMENT OPTION GRANT PROGRAM\n\n     I.   OPTION GRANTS\n\n          The Primary Committee shall have the sole and exclusive authority to\ndetermine the calendar year or years (if any) for which the Salary Investment\nOption Grant Program is to be in effect and to select the Section 16 Insiders\nand other highly compensated Employees eligible to participate in the Salary\nInvestment Option Grant Program for such calendar year or years. Each selected\nindividual who elects to participate in the Salary Investment Option Grant\nProgram must, prior to the start of each calendar year of participation, file\nwith the Plan Administrator (or its designate) an irrevocable authorization\ndirecting the Corporation to reduce his or her base salary for that calendar\nyear by an amount not less than Ten Thousand Dollars ($10,000.00) nor more than\nFifty Thousand Dollars ($50,000.00). Each individual who files such a timely\nauthorization shall automatically be granted an option under the Salary\nInvestment Option Grant Program on the first trading day in January of the\ncalendar year for which the salary reduction is to be in effect.\n\n     II.  OPTION TERMS\n\n          Each option shall be a Non-Statutory Option evidenced by one or more\ndocuments in the form approved by the Plan Administrator; PROVIDED, however,\nthat each such document shall comply with the terms specified below.\n\n          A.   EXERCISE PRICE.\n\n               1.   The exercise price per share shall be thirty-three and\none-third percent (33-1\/3%) of the Fair Market Value per share of Common Stock\non the option grant date.\n\n               2.   The exercise price shall become immediately due upon\nexercise of the option and shall be payable in one or more of the alternative\nforms authorized under the Discretionary Option Grant Program. Except to the\nextent the sale and remittance procedure specified thereunder is utilized,\npayment of the exercise price for the purchased shares must be made on the\nExercise Date.\n\n          B.   NUMBER OF OPTION SHARES. The number of shares of Common Stock\nsubject to the option shall be determined pursuant to the following formula\n(rounded down to the nearest whole number):\n\n               X = A DIVIDED BY (B x 66-2\/3%), where\n\n               X is the number of option shares,\n\n                                       13\n\n\n               A is the dollar amount by which the Optionee's base salary is to\n          be reduced for the calendar year pursuant to his or her election under\n          the Salary Investment Option Grant Program, and\n\n               B is the Fair Market Value per share of Common Stock on the\n          option grant date.\n\n          C.   EXERCISE AND TERM OF OPTIONS. The option shall become exercisable\nin a series of twelve (12) successive equal monthly installments upon the\nOptionee's completion of each calendar month of Service in the calendar year for\nwhich the salary reduction is in effect. Each option shall have a maximum term\nof ten (10) years measured from the option grant date.\n\n          D.   EFFECT OF TERMINATION OF SERVICE. Should the Optionee cease\nService for any reason while holding one or more options under this Article\nThree, then each such option shall remain exercisable, for any or all of the\nshares for which the option is exercisable at the time of such cessation of\nService, until the EARLIER of (i) the expiration of the ten (10)-year option\nterm or (ii) the expiration of the three (3)-year period measured from the date\nof such cessation of Service. Should the Optionee die while holding one or more\noptions under this Article Three, then each such option may be exercised, for\nany or all of the shares for which the option is exercisable at the time of the\nOptionee's cessation of Service (less any shares subsequently purchased by\nOptionee prior to death), by the personal representative of the Optionee's\nestate or by the person or persons to whom the option is transferred pursuant to\nthe Optionee's will or the laws of inheritance or by the designated beneficiary\nor beneficiaries of the option. Such right of exercise shall lapse, and the\noption shall terminate, upon the EARLIER of (i) the expiration of the ten\n(10)-year option term or (ii) the three (3)-year period measured from the date\nof the Optionee's cessation of Service. However, the option shall, immediately\nupon the Optionee's cessation of Service for any reason, terminate and cease to\nremain outstanding with respect to any and all shares of Common Stock for which\nthe option is not otherwise at that time exercisable.\n\n     III. CHANGE IN CONTROL\/HOSTILE TAKE-OVER\/HOSTILE TENDER-OFFER\n\n          A.   In the event of a Change in Control while the Optionee remains in\nService, each outstanding option held by such Optionee under this Salary\nInvestment Option Grant Program shall automatically accelerate so that each such\noption shall, immediately prior to the effective date of the Change in Control,\nbecome exercisable for all the shares of Common Stock at the time subject to\nsuch option and may be exercised for any or all of those shares as fully vested\nshares of Common Stock. Each such outstanding option shall terminate immediately\nfollowing the Change in Control, except to the extent assumed by the successor\ncorporation (or parent thereof) or otherwise continued in effect pursuant to the\nterms of the Change in Control transaction. Any option so assumed or continued\nshall remain exercisable for the fully vested shares until the EARLIER of (i)\nthe expiration of the ten (10)-year option term or (ii) the expiration of the\nthree (3)-year period measured from the date of the Optionee's cessation of\nService.\n\n                                       14\n\n\n          B.   In the event of a Hostile Take-Over while the Optionee remains in\nService, each outstanding option held by such Optionee under this Salary\nInvestment Option Grant Program shall automatically accelerate so that each such\noption shall, immediately prior to the effective date of the Hostile Take-Over,\nbecome exercisable for all the shares of Common Stock at the time subject to\nsuch option and may be exercised for any or all of those shares as fully vested\nshares of Common Stock. The option shall remain so exercisable until the\nEARLIEST to occur of (i) the expiration of the ten (10)-year option term, (ii)\nthe expiration of the three (3)-year period measured from the date of the\nOptionee's cessation of Service, (iii) the termination of the option in\nconnection with a Change in Control or (iv) the surrender of the option in\nconnection with a Hostile Tender-Offer.\n\n          C.   Upon the occurrence of a Hostile Tender-Offer while the Optionee\nremains in Service, such Optionee shall have a thirty (30)-day period in which\nto surrender to the Corporation each outstanding option held by him or her under\nthe Salary Investment Option Grant Program. The Optionee shall in return be\nentitled to a cash distribution from the Corporation in an amount equal to the\nexcess of (i) the Tender-Offer Price of the shares of Common Stock at the time\nsubject to the surrendered option (whether or not the option is otherwise at the\ntime exercisable for those shares) over (ii) the aggregate exercise price\npayable for such shares. Such cash distribution shall be paid within five (5)\ndays following the surrender of the option to the Corporation. The Primary\nCommittee shall, at the time the option with such limited stock appreciation\nright is granted under the Salary Investment Option Grant Program, pre-approve\nany subsequent exercise of that right in accordance with the terms of this\nParagraph C. Accordingly, no further approval of the Primary Committee or the\nBoard shall be required at the time of the actual option surrender and cash\ndistribution.\n\n          D.   Each option which is assumed in connection with a Change in\nControl or otherwise continued in effect shall be appropriately adjusted,\nimmediately after such Change in Control, to apply to the number and class of\nsecurities which would have been issuable to the Optionee in consummation of\nsuch Change in Control had the option been exercised immediately prior to such\nChange in Control. Appropriate adjustments shall also be made to the exercise\nprice payable per share under each outstanding option, PROVIDED the aggregate\nexercise price payable for such securities shall remain the same. To the extent\nthe actual holders of the Corporation's outstanding Common Stock receive cash\nconsideration for their Common Stock in consummation of the Change in Control,\nthe successor corporation may, in connection with the assumption of the\noutstanding options under the Salary Investment Option Grant Program, substitute\none or more shares of its own common stock with a fair market value equivalent\nto the cash consideration paid per share of Common Stock in such Change in\nControl.\n\n          E.   The grant of options under the Salary Investment Option Grant\nProgram shall in no way affect the right of the Corporation to adjust,\nreclassify, reorganize or otherwise change its capital or business structure or\nto merge, consolidate, dissolve, liquidate or sell or transfer all or any part\nof its business or assets.\n\n                                       15\n\n\n     IV.  REMAINING TERMS\n\n          The remaining terms of each option granted under the Salary Investment\nOption Grant Program shall be the same as the terms in effect for option grants\nmade under the Discretionary Option Grant Program.\n\n                                       16\n\n\n                                  ARTICLE FOUR\n\n                             STOCK ISSUANCE PROGRAM\n\n     I.   STOCK ISSUANCE TERMS\n\n          Shares of Common Stock may be issued under the Stock Issuance Program\nthrough direct and immediate issuances without any intervening option grants.\nEach such stock issuance shall be evidenced by a Stock Issuance Agreement which\ncomplies with the terms specified below. Shares of Common Stock may also be\nissued under the Stock Issuance Program pursuant to share right awards which\nentitle the recipients to receive those shares upon the attainment of designated\nperformance goals or the satisfaction of specified Service requirements.\n\n          A.   PURCHASE PRICE.\n\n               1.   The purchase price per share shall be fixed by the Plan\nAdministrator, but shall not be less than one hundred percent (100%) of the Fair\nMarket Value per share of Common Stock on the issuance date.\n\n               2.   Subject to the provisions of Section I of Article Seven,\nshares of Common Stock may be issued under the Stock Issuance Program for any of\nthe following items of consideration which the Plan Administrator may deem\nappropriate in each individual instance:\n\n                    (i)  cash or check made payable to the Corporation, or\n\n                    (ii) past services rendered to the Corporation (or any\n     Parent or Subsidiary).\n\n          B.   VESTING PROVISIONS.\n\n               1.   Shares of Common Stock issued under the Stock Issuance\nProgram may, in the discretion of the Plan Administrator, be fully and\nimmediately vested upon issuance or may vest in one or more installments over\nthe Participant's period of Service or upon attainment of specified performance\nobjectives. The elements of the vesting schedule applicable to any unvested\nshares of Common Stock issued under the Stock Issuance Program shall be\ndetermined by the Plan Administrator and incorporated into the Stock Issuance\nAgreement. Shares of Common Stock may also be issued under the Stock Issuance\nProgram pursuant to share right awards which entitle the recipients to receive\nthose shares upon the attainment of designated performance goals or the\nsatisfaction of specified Service requirements.\n\n               2.   Any new, substituted or additional securities or other\nproperty (including money paid other than as a regular cash dividend) which the\nParticipant may have the right to receive with respect to the Participant's\nunvested shares of Common Stock by reason of any stock dividend, stock split,\nrecapitalization, combination of shares, exchange of shares or\n\n                                       17\n\n\nother change affecting the outstanding Common Stock as a class without the\nCorporation's receipt of consideration shall be issued subject to (i) the same\nvesting requirements applicable to the Participant's unvested shares of Common\nStock and (ii) such escrow arrangements as the Plan Administrator shall deem\nappropriate.\n\n               3.   The Participant shall have full stockholder rights with\nrespect to any shares of Common Stock issued to the Participant under the Stock\nIssuance Program, whether or not the Participant's interest in those shares is\nvested. Accordingly, the Participant shall have the right to vote such shares\nand to receive any regular cash dividends paid on such shares.\n\n               4.   Should the Participant cease to remain in Service while\nholding one or more unvested shares of Common Stock issued under the Stock\nIssuance Program or should the performance objectives not be attained with\nrespect to one or more such unvested shares of Common Stock, then those shares\nshall be immediately surrendered to the Corporation for cancellation, and the\nParticipant shall have no further stockholder rights with respect to those\nshares. To the extent the surrendered shares were previously issued to the\nParticipant for consideration paid in cash or cash equivalent (including the\nParticipant's purchase-money indebtedness), the Corporation shall repay to the\nParticipant the LOWER of (i) the cash consideration paid for the surrendered\nshares or (ii) the Fair Market Value of those shares at the time of cancellation\nand shall cancel the unpaid principal balance of any outstanding purchase-money\nnote of the Participant attributable to the surrendered shares by the applicable\nclause (i) or (ii) amount.\n\n               5.   The Plan Administrator may in its discretion waive the\nsurrender and cancellation of one or more unvested shares of Common Stock which\nwould otherwise occur upon the cessation of the Participant's Service or the\nnon-attainment of the performance objectives applicable to those shares. Such\nwaiver shall result in the immediate vesting of the Participant's interest in\nthe shares of Common Stock as to which the waiver applies. Such waiver may be\neffected at any time, whether before or after the Participant's cessation of\nService or the attainment or non-attainment of the applicable performance\nobjectives.\n\n               6.   Outstanding share right awards under the Stock Issuance\nProgram shall automatically terminate, and no shares of Common Stock shall\nactually be issued in satisfaction of those awards, if the performance goals or\nService requirements established for such awards are not attained or satisfied.\nThe Plan Administrator, however, shall have the discretionary authority to issue\nshares of Common Stock under one or more outstanding share right awards as to\nwhich the designated performance goals or Service requirements have not been\nattained or satisfied.\n\n     II.  CHANGE IN CONTROL\/HOSTILE TAKE-OVER\n\n          A.   All of the Corporation's outstanding repurchase rights under the\nStock Issuance Program shall terminate automatically, and all the shares of\nCommon Stock subject to those terminated rights shall immediately vest in full,\nin the event of any Change in Control, except to the extent (i) those repurchase\nrights are to be assigned to the successor corporation (or\n\n                                       18\n\n\nparent thereof) or are otherwise to continue in full force and effect pursuant\nto the terms of the Change in Control transaction or (ii) such accelerated\nvesting is precluded by other limitations imposed in the Stock Issuance\nAgreement.\n\n          B.   The Plan Administrator shall have the discretionary authority to\nstructure one or more of the Corporation's repurchase rights under the Stock\nIssuance Program so that those rights shall automatically terminate in whole or\nin part, and the shares of Common Stock subject to those terminated rights shall\nvest, either immediately upon the effective date of a Change in Control or\nsubsequently upon an Involuntary Termination of the Participant's Service within\na designated period (not to exceed eighteen (18) months) following the effective\ndate of any Change in Control transaction in which those repurchase rights are\nassigned to the successor corporation (or parent thereof) or are otherwise\ncontinued in effect.\n\n          C.   The Plan Administrator shall also have the discretionary\nauthority to structure one or more of the Corporation's repurchase rights under\nthe Stock Issuance Program so that those rights shall automatically terminate in\nwhole or in part, and the shares of Common Stock subject to those terminated\nrights shall immediately vest, either upon the occurrence of a Hostile Take-Over\nor upon the subsequent termination of the Participant's Service by reason of an\nInvoluntary Termination within a designated period (not to exceed eighteen (18)\nmonths) following the effective date of that Hostile Take-Over.\n\n     III. SHARE ESCROW\/LEGENDS\n\n          Unvested shares may, in the Plan Administrator's discretion, be held\nin escrow by the Corporation until the Participant's interest in such shares\nvests or may be issued directly to the Participant with restrictive legends on\nthe certificates evidencing those unvested shares.\n\n                                       19\n\n\n                                  ARTICLE FIVE\n\n                         AUTOMATIC OPTION GRANT PROGRAM\n\n     I.   OPTION TERMS\n\n          A.   GRANT DATES. Option grants shall be made on the dates specified\nbelow:\n\n               1.   Each individual who is serving as a non-employee Board\nmember on the Underwriting Date shall automatically be granted on that date a\nNon-Statutory Option to purchase 16,000 shares(1) of Common Stock, provided that\nindividual has not previously been in the employ of the Corporation or any\nParent or Subsidiary.\n\n               2.   Each individual who is first elected or appointed as a\nnon-employee Board member at any time after the Underwriting Date shall\nautomatically be granted, on the date of such initial election or appointment, a\nNon-Statutory Option to purchase 16,000 shares(2) of Common Stock, provided that\nindividual has not previously been in the employ of the Corporation or any\nParent or Subsidiary.\n\n               3.   On the date of each Annual Stockholders Meeting held after\nthe Underwriting Date, each individual who is to continue to serve as a\nnon-employee Board member, whether or not that individual is standing for\nre-election to the Board at that particular Annual Meeting, shall automatically\nbe granted a Non-Statutory Option to purchase 4,000 shares(3) of Common Stock,\nprovided such individual has served as a non-employee Board member for at least\nsix (6) months. There shall be no limit on the number of such 4,000-share option\ngrants any one non-employee Board member may receive over his or her period of\nBoard service, and non-employee Board members who have previously been in the\nemploy of the Corporation (or any Parent or Subsidiary) or who have otherwise\nreceived one or more stock option grants from the Corporation prior to the\nUnderwriting Date shall be eligible to receive one or more such annual option\ngrants over their period of continued Board service.\n\n          B.   EXERCISE PRICE.\n\n               1.   The exercise price per share shall be equal to one hundred\npercent (100%) of the Fair Market Value per share of Common Stock on the option\ngrant date.\n\n-------------------\n     (1) This share number shall not be adjusted for any stock split, stock\ndividend or other similar change affecting the outstanding Common Stock as a\nclass without the Corporation's receipt of consideration which is effected prior\nto the closing of the initial public offering of such Common Stock.\n     (2) This share number shall not be adjusted for any stock split, stock\ndividend or other similar change affecting the outstanding Common Stock as a\nclass without the Corporation's receipt of consideration which is effected prior\nto the closing of the initial public offering of such Common Stock.\n     (3) This share number shall not be adjusted for any stock split, stock\ndividend or other similar change affecting the outstanding Common Stock as a\nclass without the Corporation's receipt of consideration which is effected prior\nto the closing of the initial public offering of such Common Stock.\n\n                                       20\n\n\n               2.   The exercise price shall be payable in one or more of the\nalternative forms authorized under the Discretionary Option Grant Program.\nExcept to the extent the sale and remittance procedure specified thereunder is\nutilized, payment of the exercise price for the purchased shares must be made on\nthe Exercise Date.\n\n          C.   OPTION TERM. Each option shall have a term of ten (10) years\nmeasured from the option grant date.\n\n          D.   EXERCISE AND VESTING OF OPTIONS. Each option shall be immediately\nexercisable for any or all of the option shares. However, any unvested shares\npurchased under the option shall be subject to repurchase by the Corporation, at\nthe LOWER of (i) the exercise price paid per share or (ii) the Fair Market Value\nper share of Common Stock at the time of repurchase, upon the Optionee's\ncessation of Board service prior to vesting in those shares. The shares subject\nto each initial 16,000-share grant shall vest, and the Corporation's repurchase\nright shall lapse, in a series of four (4) successive equal annual installments\nupon the Optionee's completion of each year of service as a Board member over\nthe four (4)-year period measured from the option grant date. The shares subject\nto each annual 4,000-share option grant shall vest in one installment upon the\nOptionee's completion of the one (1)-year period of service measured from the\ngrant date.\n\n          E.   LIMITED TRANSFERABILITY OF OPTIONS. Each option under this\nArticle Five may be assigned in whole or in part during the Optionee's lifetime\nto one or more members of the Optionee's family or to a trust established\nexclusively for one or more such family members or to Optionee's former spouse,\nto the extent such assignment is in connection with the Optionee's estate plan\nor pursuant to a domestic relations order. The assigned portion may only be\nexercised by the person or persons who acquire a proprietary interest in the\noption pursuant to the assignment. The terms applicable to the assigned portion\nshall be the same as those in effect for the option immediately prior to such\nassignment and shall be set forth in such documents issued to the assignee as\nthe Plan Administrator may deem appropriate. The Optionee may also designate one\nor more persons as the beneficiary or beneficiaries of his or her outstanding\noptions under this Article Five, and those options shall, in accordance with\nsuch designation, automatically be transferred to such beneficiary or\nbeneficiaries upon the Optionee's death while holding those options. Such\nbeneficiary or beneficiaries shall take the transferred options subject to all\nthe terms and conditions of the applicable agreement evidencing each such\ntransferred option, including (without limitation) the limited time period\nduring which the option may be exercised following the Optionee's death.\n\n          F.   TERMINATION OF BOARD SERVICE. The following provisions shall\ngovern the exercise of any options held by the Optionee at the time the Optionee\nceases to serve as a Board member:\n\n                                       21\n\n\n                    (i)  The Optionee (or, in the event of Optionee's death, the\n     personal representative of the Optionee's estate or the person or persons\n     to whom the option is transferred pursuant to the Optionee's will or the\n     laws of inheritance or the designated beneficiary or beneficiaries of such\n     option) shall have a twelve (12)-month period following the date of such\n     cessation of Board service in which to exercise each such option.\n\n                    (ii) During the twelve (12)-month exercise period, the\n     option may not be exercised in the aggregate for more than the number of\n     vested shares of Common Stock for which the option is exercisable at the\n     time of the Optionee's cessation of Board service.\n\n                    (iii) Should the Optionee cease to serve as a Board member\n     by reason of death or Permanent Disability, then all shares at the time\n     subject to the option shall immediately vest so that such option may,\n     during the twelve (12)-month exercise period following such cessation of\n     Board service, be exercised for any or all of those shares as fully vested\n     shares of Common Stock.\n\n                    (iv) In no event shall the option remain exercisable after\n     the expiration of the option term. Upon the expiration of the twelve\n     (12)-month exercise period or (if earlier) upon the expiration of the\n     option term, the option shall terminate and cease to be outstanding for any\n     vested shares for which the option has not been exercised. However, the\n     option shall, immediately upon the Optionee's cessation of Board service\n     for any reason other than death or Permanent Disability, terminate and\n     cease to be outstanding to the extent the option is not otherwise at that\n     time exercisable for vested shares.\n\n     II.  CHANGE IN CONTROL\/HOSTILE TAKE-OVER\/HOSTILE TENDER-OFFER\n\n          A.   In the event of a Change in Control while the Optionee remains a\nBoard member, the shares of Common Stock at the time subject to each outstanding\noption held by such Optionee under this Automatic Option Grant Program but not\notherwise vested shall automatically vest in full so that each such option\nshall, immediately prior to the effective date of the Change in Control, become\nexercisable for all the option shares as fully vested shares of Common Stock and\nmay be exercised for any or all of those vested shares. Immediately following\nthe consummation of the Change in Control, each automatic option grant shall\nterminate and cease to be outstanding, except to the extent assumed by the\nsuccessor corporation (or parent thereof) or otherwise continued in effect\npursuant to the terms of the Change in Control transaction.\n\n          B.   In the event of a Hostile Take-Over while the Optionee remains a\nBoard member, the shares of Common Stock at the time subject to each outstanding\noption held by such Optionee under this Automatic Option Grant Program but not\notherwise vested shall automatically vest in full so that each such option\nshall, immediately prior to the effective date of the Hostile Take-Over, become\nexercisable for all the option shares as fully vested shares of\n\n                                       22\n\n\nCommon Stock and may be exercised for any or all of those vested shares. Each\nsuch option shall remain exercisable for such fully vested option shares until\nthe expiration or sooner termination of the option term or the surrender of the\noption in connection with a Hostile Tender-Offer.\n\n          C.   All outstanding repurchase rights under this under this Automatic\nOption Grant Program shall automatically terminate, and the shares of Common\nStock subject to those terminated rights shall immediately vest in full, in the\nevent of any Change in Control or Hostile Take-Over.\n\n          D.   Upon the occurrence of a Hostile Tender-Offer while the Optionee\nremains a Board member, such Optionee shall have a thirty (30)-day period in\nwhich to surrender to the Corporation each of his or her outstanding options\nunder this Automatic Option Grant Program. The Optionee shall in return be\nentitled to a cash distribution from the Corporation in an amount equal to the\nexcess of (i) the Tender-Offer Price of the shares of Common Stock at the time\nsubject to each surrendered option (whether or not the Optionee is otherwise at\nthe time vested in those shares) over (ii) the aggregate exercise price payable\nfor such shares. Such cash distribution shall be paid within five (5) days\nfollowing the surrender of the option to the Corporation. No approval or consent\nof the Board or any Plan Administrator shall be required at the time of the\nactual option surrender and cash distribution.\n\n          E.   Each option which is assumed in connection with a Change in\nControl or otherwise continued in effect shall be appropriately adjusted,\nimmediately after such Change in Control, to apply to the number and class of\nsecurities which would have been issuable to the Optionee in consummation of\nsuch Change in Control had the option been exercised immediately prior to such\nChange in Control. Appropriate adjustments shall also be made to the exercise\nprice payable per share under each outstanding option, PROVIDED the aggregate\nexercise price payable for such securities shall remain the same. To the extent\nthe actual holders of the Corporation's outstanding Common Stock receive cash\nconsideration for their Common Stock in consummation of the Change in Control,\nthe successor corporation may, in connection with the assumption of the\noutstanding options under the Automatic Option Grant Program, substitute one or\nmore shares of its own common stock with a fair market value equivalent to the\ncash consideration paid per share of Common Stock in such Change in Control\ntransaction.\n\n          F.   The grant of options under the Automatic Option Grant Program\nshall in no way affect the right of the Corporation to adjust, reclassify,\nreorganize or otherwise change its capital or business structure or to merge,\nconsolidate, dissolve, liquidate or sell or transfer all or any part of its\nbusiness or assets.\n\n     III. REMAINING TERMS\n\n          The remaining terms of each option granted under the Automatic Option\nGrant Program shall be the same as the terms in effect for option grants made\nunder the Discretionary Option Grant Program.\n\n                                       23\n\n\n                                   ARTICLE SIX\n\n                        DIRECTOR FEE OPTION GRANT PROGRAM\n\n     I.   OPTION GRANTS\n\n          The Primary Committee shall have the sole and exclusive authority to\ndetermine the calendar year or years for which the Director Fee Option Grant\nProgram is to be in effect. For each such calendar year the program is in\neffect, each non-employee Board member may irrevocably elect to apply all or any\nportion of the annual retainer fee otherwise payable in cash for his or her\nservice on the Board for that year to the acquisition of a special option grant\nunder this Director Fee Option Grant Program. Such election must be filed with\nthe Corporation's Chief Financial Officer prior to the first day of the calendar\nyear for which the annual retainer fee which is the subject of that election is\notherwise payable. Each non-employee Board member who files such a timely\nelection shall automatically be granted an option under this Director Fee Option\nGrant Program on the first trading day in January in the calendar year for which\nthe retainer fee election is in effect.\n\n     II.  OPTION TERMS\n\n          Each option shall be a Non-Statutory Option governed by the terms and\nconditions specified below.\n\n          A.   EXERCISE PRICE.\n\n               1.   The exercise price per share shall be thirty-three and\none-third percent (33-1\/3%) of the Fair Market Value per share of Common Stock\non the option grant date.\n\n               2.   The exercise price shall become immediately due upon\nexercise of the option and shall be payable in one or more of the alternative\nforms authorized under the Discretionary Option Grant Program. Except to the\nextent the sale and remittance procedure specified thereunder is utilized,\npayment of the exercise price for the purchased shares must be made on the\nExercise Date.\n\n          B.   NUMBER OF OPTION SHARES. The number of shares of Common Stock\nsubject to the option shall be determined pursuant to the following formula\n(rounded down to the nearest whole number):\n\n               X = A DIVIDED BY (B x 66-2\/3%), where\n\n               X is the number of option shares,\n\n               A is the portion of the annual retainer fee subject to the\n          non-employee Board member's election under this Director Fee Option\n          Grant Program, and\n\n                                       24\n\n\n               B is the Fair Market Value per share of Common Stock on the\n          option grant date.\n\n          C.   EXERCISE AND TERM OF OPTIONS. The option shall become exercisable\nin a series of twelve (12) equal monthly installments upon the Optionee's\ncompletion of each calendar month of Board service during the calendar year for\nwhich the retainer fee election is in effect. Each option shall have a maximum\nterm of ten (10) years measured from the option grant date.\n\n          D.   LIMITED TRANSFERABILITY OF OPTIONS. Each option under this\nArticle Six may be assigned in whole or in part during the Optionee's lifetime\nto one or more members of the Optionee's family or to a trust established\nexclusively for one or more such family members or to Optionee's former spouse,\nto the extent such assignment is in connection with Optionee's estate plan or\npursuant to a domestic relations order. The assigned portion may only be\nexercised by the person or persons who acquire a proprietary interest in the\noption pursuant to the assignment. The terms applicable to the assigned portion\nshall be the same as those in effect for the option immediately prior to such\nassignment and shall be set forth in such documents issued to the assignee as\nthe Plan Administrator may deem appropriate. The Optionee may also designate one\nor more persons as the beneficiary or beneficiaries of his or her outstanding\noptions under this Article Six, and those options shall, in accordance with such\ndesignation, automatically be transferred to such beneficiary or beneficiaries\nupon the Optionee's death while holding those options. Such beneficiary or\nbeneficiaries shall take the transferred options subject to all the terms and\nconditions of the applicable agreement evidencing each such transferred option,\nincluding (without limitation) the limited time period during which the option\nmay be exercised following the Optionee's death.\n\n          E.   TERMINATION OF BOARD SERVICE. Should the Optionee cease Board\nservice for any reason (other than death or Permanent Disability) while holding\none or more options under this Director Fee Option Grant Program, then each such\noption shall remain exercisable, for any or all of the shares for which the\noption is exercisable at the time of such cessation of Board service, until the\nEARLIER of (i) the expiration of the ten (10)-year option term or (ii) the\nexpiration of the three (3)-year period measured from the date of such cessation\nof Board service. However, each option held by the Optionee under this Director\nFee Option Grant Program at the time of his or her cessation of Board service\nshall immediately terminate and cease to remain outstanding with respect to any\nand all shares of Common Stock for which the option is not otherwise at that\ntime exercisable.\n\n          F.   DEATH OR PERMANENT DISABILITY. Should the Optionee's service as a\nBoard member cease by reason of death or Permanent Disability, then each option\nheld by such Optionee under this Director Fee Option Grant Program shall\nimmediately become exercisable for all the shares of Common Stock at the time\nsubject to that option, and the option may be exercised for any or all of those\nshares as fully vested shares until the EARLIER of (i) the expiration of the ten\n(10)-year option term or (ii) the expiration of the three (3)-year period\nmeasured from the date of such cessation of Board service. To the extent such\noption is held by the Optionee at\n\n                                       25\n\n\nthe time of his or death, that option may be exercised by the personal\nrepresentative of the Optionee's estate or by the person or persons to whom the\noption is transferred pursuant to the Optionee's will or the laws of inheritance\nor by the designated beneficiary or beneficiaries of such option.\n\n               Should the Optionee die after cessation of Board service but\nwhile holding one or more options under this Director Fee Option Grant Program,\nthen each such option may be exercised, for any or all of the shares for which\nthe option is exercisable at the time of the Optionee's cessation of Board\nservice (less any shares subsequently purchased by Optionee prior to death), by\nthe personal representative of the Optionee's estate or by the person or persons\nto whom the option is transferred pursuant to the Optionee's will or the laws of\ninheritance or by the designated beneficiary or beneficiaries of such option.\nSuch right of exercise shall lapse, and the option shall terminate, upon the\nEARLIER of (i) the expiration of the ten (10)-year option term or (ii) the three\n(3)-year period measured from the date of the Optionee's cessation of Board\nservice.\n\n     III. CHANGE IN CONTROL\/HOSTILE TAKE-OVER\/HOSTILE TENDER-OFFER\n\n          A.   In the event of any Change in Control while the Optionee remains\na Board member, each outstanding option held by such Optionee under this\nDirector Fee Option Grant Program shall automatically accelerate so that each\nsuch option shall, immediately prior to the effective date of the Change in\nControl, become exercisable for all the shares of Common Stock at the time\nsubject to such option and may be exercised for any or all of those shares as\nfully vested shares of Common Stock. Each such outstanding option shall\nterminate immediately following the Change in Control, except to the extent\nassumed by the successor corporation (or parent thereof) or otherwise continued\nin effect pursuant to the terms of the Change in Control transaction. Any option\nso assumed or continued shall remain exercisable for the fully vested shares\nuntil the EARLIEST to occur of (i) the expiration of the ten (10)-year option\nterm, (ii) the expiration of the three (3)-year period measured from the date of\nthe Optionee's cessation of Board service or (iii) the surrender of the option\nin connection with a Hostile Tender-Offer.\n\n          B.   In the event of a Hostile Take-Over while the Optionee remains a\nBoard member, each outstanding option held by such Optionee under this Director\nFee Option Grant Program shall automatically accelerate so that each such option\nshall, immediately prior to the effective date of the Hostile Take-Over, become\nexercisable for all the shares of Common Stock at the time subject to such\noption and may be exercised for any or all of those shares as fully vested\nshares of Common Stock. The option shall remain so exercisable until the\nEARLIEST to occur of (i) the expiration of the ten (10)-year option term, (ii)\nthe expiration of the three (3)-year period measured from the date of the\nOptionee's cessation of Board service, (iii) the termination of the option in\nconnection with a Change in Control transaction or (iv) the surrender of the\noption in connection with a Hostile Tender-Offer.\n\n                                       26\n\n\n          C.   Upon the occurrence of a Hostile Tender-Offer while the Optionee\nremains a Board member, such Optionee shall have a thirty (30)-day period in\nwhich to surrender to the Corporation each outstanding option held by him or her\nunder the Director Fee Option Grant Program. The Optionee shall in return be\nentitled to a cash distribution from the Corporation in an amount equal to the\nexcess of (i) the Tender-Offer Price of the shares of Common Stock at the time\nsubject to each surrendered option (whether or not the option is otherwise at\nthe time exercisable for those shares) over (ii) the aggregate exercise price\npayable for such shares. Such cash distribution shall be paid within five (5)\ndays following the surrender of the option to the Corporation. No approval or\nconsent of the Board or any Plan Administrator shall be required at the time of\nthe actual option surrender and cash distribution.\n\n          D.   Each option which is assumed in connection with a Change in\nControl or otherwise continued in effect shall be appropriately adjusted,\nimmediately after such Change in Control, to apply to the number and class of\nsecurities which would have been issuable to the Optionee in consummation of\nsuch Change in Control had the option been exercised immediately prior to such\nChange in Control. Appropriate adjustments shall also be made to the exercise\nprice payable per share under each outstanding option, PROVIDED the aggregate\nexercise price payable for such securities shall remain the same. To the extent\nthe actual holders of the Corporation's outstanding Common Stock receive cash\nconsideration for their Common Stock in consummation of the Change in Control,\nthe successor corporation may, in connection with the assumption of the\noutstanding options under the Director Fee Option Grant Program, substitute one\nor more shares of its own common stock with a fair market value equivalent to\nthe cash consideration paid per share of Common Stock in such Change in Control\ntransaction.\n\n          E.   The grant of options under the Director Fee Option Grant Program\nshall in no way affect the right of the Corporation to adjust, reclassify,\nreorganize or otherwise change its capital or business structure or to merge,\nconsolidate, dissolve, liquidate or sell or transfer all or any part of its\nbusiness or assets.\n\n     IV.  REMAINING TERMS\n\n          The remaining terms of each option granted under this Director Fee\nOption Grant Program shall be the same as the terms in effect for option grants\nmade under the Discretionary Option Grant Program.\n\n                                       27\n\n\n                                  ARTICLE SEVEN\n\n                                  MISCELLANEOUS\n\n     I.   FINANCING\n\n          The Plan Administrator may permit any Optionee or Participant to pay\nthe option exercise price under the Discretionary Option Grant Program or the\npurchase price of shares issued under the Stock Issuance Program by delivering a\nfull-recourse, interest-bearing promissory note payable in one or more\ninstallments. The terms of any such promissory note (including the interest rate\nand the terms of repayment) shall be established by the Plan Administrator in\nits sole discretion. In no event may the maximum credit available to the\nOptionee or Participant exceed the sum of (i) the aggregate option exercise\nprice or purchase price payable for the purchased shares (less the par value of\nsuch shares) plus (ii) any Federal, state and local income and employment tax\nliability incurred by the Optionee or the Participant in connection with the\noption exercise or share purchase.\n\n     II.  TAX WITHHOLDING\n\n          A.   The Corporation's obligation to deliver shares of Common Stock\nupon the exercise of options or the issuance or vesting of such shares under the\nPlan shall be subject to the satisfaction of all applicable Federal, state and\nlocal income and employment tax withholding requirements.\n\n          B.   The Plan Administrator may, in its discretion, provide any or all\nholders of Non-Statutory Options or unvested shares of Common Stock under the\nPlan (other than the options granted or the shares issued under the Automatic\nOption Grant or Director Fee Option Grant Program) with the right to use shares\nof Common Stock in satisfaction of all or part of the Withholding Taxes to which\nsuch holders may become subject in connection with the exercise of their options\nor the vesting of their shares. Such right may be provided to any such holder in\neither or both of the following formats:\n\n               STOCK WITHHOLDING: The election to have the Corporation withhold,\nfrom the shares of Common Stock otherwise issuable upon the exercise of such\nNon-Statutory Option or the vesting of such shares, a portion of those shares\nwith an aggregate Fair Market Value equal to the percentage of the Withholding\nTaxes (not to exceed one hundred percent (100%)) designated by the holder.\n\n               STOCK DELIVERY: The election to deliver to the Corporation, at\nthe time the Non-Statutory Option is exercised or the shares vest, one or more\nshares of Common Stock previously acquired by such holder (other than in\nconnection with the option exercise or share vesting triggering the Withholding\nTaxes) with an aggregate Fair Market Value equal to the percentage of the\nWithholding Taxes (not to exceed one hundred percent (100%)) designated by the\nholder.\n\n                                       28\n\n\n     III. EFFECTIVE DATE AND TERM OF THE PLAN\n\n          A.   The Plan shall become effective immediately on the Plan Effective\nDate. However, the Salary Investment Option Grant Program and the Director Fee\nOption Grant Program shall not be implemented until such time as the Primary\nCommittee may deem appropriate. Options may be granted under the Discretionary\nOption Grant at any time on or after the Plan Effective Date, and the initial\noption grants under the Automatic Option Grant Program shall also be made on the\nPlan Effective Date to any non-employee Board members eligible for such grants\nat that time. However, no options granted under the Plan may be exercised, and\nno shares shall be issued under the Plan, until the Plan is approved by the\nCorporation's stockholders. If such stockholder approval is not obtained within\ntwelve (12) months after the Plan Effective Date, then all options previously\ngranted under this Plan shall terminate and cease to be outstanding, and no\nfurther options shall be granted and no shares shall be issued under the Plan.\n\n          B.   The Plan shall serve as the successor to the Predecessor Plan,\nand no further option grants or direct stock issuances shall be made under the\nPredecessor Plan after the Plan Effective Date. All options outstanding under\nthe Predecessor Plan on the Plan Effective Date shall be transferred to the Plan\nat that time and shall be treated as outstanding options under the Plan.\nHowever, each outstanding option so transferred shall continue to be governed\nsolely by the terms of the documents evidencing such option, and no provision of\nthe Plan shall be deemed to affect or otherwise modify the rights or obligations\nof the holders of such transferred options with respect to their acquisition of\nshares of Common Stock.\n\n          C.   One or more provisions of the Plan, including (without\nlimitation) the option\/vesting acceleration provisions of Article Two relating\nto Changes in Control and Hostile Take-Overs, may, in the Plan Administrator's\ndiscretion, be extended to one or more options incorporated from the Predecessor\nPlan which do not otherwise contain such provisions.\n\n          D.   The Plan shall terminate upon the EARLIEST to occur of (i)\nDecember 31, 2011, (ii) the date on which all shares available for issuance\nunder the Plan shall have been issued as fully vested shares or (iii) the\ntermination of all outstanding options in connection with a Change in Control.\nShould the Plan terminate on December 31, 2011, then all option grants and\nunvested stock issuances outstanding at that time shall continue to have force\nand effect in accordance with the provisions of the documents evidencing such\ngrants or issuances.\n\n     IV.  AMENDMENT OF THE PLAN\n\n          A.   The Board shall have complete and exclusive power and authority\nto amend or modify the Plan in any or all respects. However, no such amendment\nor modification shall adversely affect the rights and obligations with respect\nto stock options or unvested stock issuances at the time outstanding under the\nPlan unless the Optionee or the Participant consents to such amendment or\nmodification. In addition, certain amendments may require stockholder approval\npursuant to applicable laws or regulations.\n\n                                       29\n\n\n          B.   Options to purchase shares of Common Stock may be granted under\nthe Discretionary Option Grant and Salary Investment Option Grant Programs and\nshares of Common Stock may be issued under the Stock Issuance Program that are\nin each instance in excess of the number of shares then available for issuance\nunder the Plan, provided any excess shares actually issued under those programs\nshall be held in escrow until there is obtained stockholder approval of an\namendment sufficiently increasing the number of shares of Common Stock available\nfor issuance under the Plan. If such stockholder approval is not obtained within\ntwelve (12) months after the date the first such excess issuances are made, then\n(i) any unexercised options granted on the basis of such excess shares shall\nterminate and cease to be outstanding and (ii) the Corporation shall promptly\nrefund to the Optionees and the Participants the exercise or purchase price paid\nfor any excess shares issued under the Plan and held in escrow, together with\ninterest (at the applicable Short Term Federal Rate) for the period the shares\nwere held in escrow, and such shares shall thereupon be automatically cancelled\nand cease to be outstanding.\n\n     V.   USE OF PROCEEDS\n\n          Any cash proceeds received by the Corporation from the sale of shares\nof Common Stock under the Plan shall be used for general corporate purposes.\n\n     VI.  REGULATORY APPROVALS\n\n          A.   The implementation of the Plan, the granting of any stock option\nunder the Plan and the issuance of any shares of Common Stock (i) upon the\nexercise of any granted option or (ii) under the Stock Issuance Program shall be\nsubject to the Corporation's procurement of all approvals and permits required\nby regulatory authorities having jurisdiction over the Plan, the stock options\ngranted under it and the shares of Common Stock issued pursuant to it.\n\n          B.   No shares of Common Stock or other assets shall be issued or\ndelivered under the Plan unless and until there shall have been compliance with\nall applicable requirements of Federal and state securities laws, including the\nfiling and effectiveness of the Form S-8 registration statement for the shares\nof Common Stock issuable under the Plan, and all applicable listing requirements\nof any stock exchange (or the Nasdaq National Market, if applicable) on which\nCommon Stock is then listed for trading.\n\n     VII. NO EMPLOYMENT\/SERVICE RIGHTS\n\n          Nothing in the Plan shall confer upon the Optionee or the Participant\nany right to continue in Service for any period of specific duration or\ninterfere with or otherwise restrict in any way the rights of the Corporation\n(or any Parent or Subsidiary employing or retaining such person) or of the\nOptionee or the Participant, which rights are hereby expressly reserved by each,\nto terminate such person's Service at any time for any reason, with or without\ncause.\n\n                                       30\n\n\n                                    APPENDIX\n\n          The following definitions shall be in effect under the Plan:\n\n          A.   AUTOMATIC OPTION GRANT PROGRAM shall mean the automatic option\ngrant program in effect under Article Five of the Plan.\n\n          B.   BOARD shall mean the Corporation's Board of Directors.\n\n          C.   CHANGE IN CONTROL shall mean a change in ownership or control of\nthe Corporation effected through any of the following transactions:\n\n               (i)   a merger, consolidation or other reorganization approved by\n     the Corporation's stockholders, UNLESS securities representing more than\n     fifty percent (50%) of the total combined voting power of the voting\n     securities of the successor corporation are immediately thereafter\n     beneficially owned, directly or indirectly and in substantially the same\n     proportion, by the persons who beneficially owned the Corporation's\n     outstanding voting securities immediately prior to such transaction, or\n\n               (ii)  the sale, transfer or other disposition of all or\n     substantially all of the Corporation's assets in complete liquidation or\n     dissolution of the Corporation, or\n\n               (iii) the acquisition, directly or indirectly by any person or\n     related group of persons (other than the Corporation or a person that\n     directly or indirectly controls, is controlled by, or is under common\n     control with, the Corporation), of beneficial ownership (within the meaning\n     of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty\n     percent (50%) of the total combined voting power of the Corporation's\n     outstanding securities pursuant to a tender or exchange offer made directly\n     to the Corporation's stockholders.\n\n          D.   CODE shall mean the Internal Revenue Code of 1986, as amended.\n\n          E.   COMMON STOCK shall mean the Corporation's common stock.\n\n          F.   CORPORATION shall mean JetBlue Airways Corporation, a Delaware\ncorporation, and any corporate successor to all or substantially all of the\nassets or voting stock of JetBlue Airways Corporation which shall by appropriate\naction adopt the Plan.\n\n          G.   DIRECTOR FEE OPTION GRANT PROGRAM shall mean the special stock\noption grant in effect for non-employee Board members under Article Six of the\nPlan.\n\n          H.   DISCRETIONARY OPTION GRANT PROGRAM shall mean the discretionary\noption grant program in effect under Article Two of the Plan.\n\n                                      A-1.\n\n\n          I.   EMPLOYEE shall mean an individual who is in the employ of the\nCorporation (or any Parent or Subsidiary), subject to the control and direction\nof the employer entity as to both the work to be performed and the manner and\nmethod of performance.\n\n          J.   EXERCISE DATE shall mean the date on which the Corporation shall\nhave received written notice of the option exercise.\n\n          K.   FAIR MARKET VALUE per share of Common Stock on any relevant date\nshall be determined in accordance with the following provisions:\n\n               (i)   If the Common Stock is at the time traded on the Nasdaq\n     National Market, then the Fair Market Value shall be the closing selling\n     price per share of Common Stock on the date in question, as such price is\n     reported by the National Association of Securities Dealers on the Nasdaq\n     National Market and published in THE WALL STREET JOURNAL. If there is no\n     closing selling price for the Common Stock on the date in question, then\n     the Fair Market Value shall be the closing selling price on the last\n     preceding date for which such quotation exists.\n\n               (ii)  If the Common Stock is at the time listed on any Stock\n     Exchange, then the Fair Market Value shall be the closing selling price per\n     share of Common Stock on the date in question on the Stock Exchange\n     determined by the Plan Administrator to be the primary market for the\n     Common Stock, as such price is officially quoted in the composite tape of\n     transactions on such exchange and published in THE WALL STREET JOURNAL. If\n     there is no closing selling price for the Common Stock on the date in\n     question, then the Fair Market Value shall be the closing selling price on\n     the last preceding date for which such quotation exists.\n\n               (iii) For purposes of any option grants made on the Underwriting\n     Date, the Fair Market Value shall be deemed to be equal to the price per\n     share at which the Common Stock is to be sold in the initial public\n     offering pursuant to the Underwriting Agreement.\n\n          L.   HOSTILE TAKE-OVER shall mean a change in ownership or control of\nthe Corporation effected through either of the following transactions:\n\n               (i)  a change in the composition of the Board over a period of\n     thirty-six (36) consecutive months or less such that a majority of the\n     Board members ceases, by reason of one or more contested elections for\n     Board membership, to be comprised of individuals who either (A) have been\n     Board members continuously since the beginning of such period or (B) have\n     been elected or nominated for election as Board members during such period\n     by at least a majority of the Board members described in clause (A) who\n     were still in office at the time the Board approved such election or\n     nomination, or\n\n               (ii) a Hostile Tender-Offer.\n\n                                      A-2.\n\n\n          M.   HOSTILE TENDER-OFFER shall mean the acquisition, directly or\nindirectly, by any person or related group of persons (other than the\nCorporation or a person that directly or indirectly controls, is controlled by,\nor is under common control with, the Corporation) of beneficial ownership\n(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more\nthan fifty percent (50%) of the total combined voting power of the Corporation's\noutstanding securities pursuant to a tender or exchange offer made directly to\nthe Corporation's stockholders which the Board does not recommend such\nstockholders to accept.\n\n          N.   INCENTIVE OPTION shall mean an option which satisfies the\nrequirements of Code Section 422.\n\n          O.   INVOLUNTARY TERMINATION shall mean the termination of the Service\nof any individual which occurs by reason of:\n\n               (i)  such individual's involuntary dismissal or discharge by the\n     Corporation for reasons other than Misconduct, or\n\n               (ii) such individual's voluntary resignation following (A) a\n     change in his or her position with the Corporation which materially reduces\n     his or her duties and responsibilities or the level of management to which\n     he or she reports, (B) a reduction in his or her level of compensation\n     (including base salary, fringe benefits and target bonus under any\n     corporate-performance based bonus or incentive programs) by more than\n     fifteen percent (15%) or (C) a relocation of such individual's place of\n     employment by more than fifty (50) miles, provided and only if such change,\n     reduction or relocation is effected by the Corporation without the\n     individual's consent.\n\n          P.   MISCONDUCT shall mean the commission of any act of fraud,\nembezzlement or dishonesty by the Optionee or Participant, any unauthorized use\nor disclosure by such person of confidential information or trade secrets of the\nCorporation (or any Parent or Subsidiary), or any other intentional misconduct\nby such person adversely affecting the business or affairs of the Corporation\n(or any Parent or Subsidiary) in a material manner. The foregoing definition\nshall not in any way preclude or restrict the right of the Corporation (or any\nParent or Subsidiary) to discharge or dismiss any Optionee, Participant or other\nperson in the Service of the Corporation (or any Parent or Subsidiary) for any\nother acts or omissions, but such other acts or omissions shall not be deemed,\nfor purposes of the Plan, to constitute grounds for termination for Misconduct.\n\n          Q.   1934 ACT shall mean the Securities Exchange Act of 1934, as\namended.\n\n          R.   NON-STATUTORY OPTION shall mean an option not intended to satisfy\nthe requirements of Code Section 422.\n\n          S.   OPTIONEE shall mean any person to whom an option is granted under\nthe Discretionary Option Grant, Salary Investment Option Grant, Automatic Option\nGrant or Director Fee Option Grant Program.\n\n                                      A-3.\n\n\n          T.   PARENT shall mean any corporation (other than the Corporation) in\nan unbroken chain of corporations ending with the Corporation, provided each\ncorporation in the unbroken chain (other than the Corporation) owns, at the time\nof the determination, stock possessing fifty percent (50%) or more of the total\ncombined voting power of all classes of stock in one of the other corporations\nin such chain.\n\n          U.   PARTICIPANT shall mean any person who is issued shares of Common\nStock under the Stock Issuance Program.\n\n          V.   PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the\ninability of the Optionee or the Participant to engage in any substantial\ngainful activity by reason of any medically determinable physical or mental\nimpairment expected to result in death or to be of continuous duration of twelve\n(12) months or more. However, solely for purposes of the Automatic Option Grant\nand Director Fee Option Grant Programs, Permanent Disability or Permanently\nDisabled shall mean the inability of the non-employee Board member to perform\nhis or her usual duties as a Board member by reason of any medically\ndeterminable physical or mental impairment expected to result in death or to be\nof continuous duration of twelve (12) months or more.\n\n          W.   PLAN shall mean the Corporation's 2002 Stock Incentive Plan, as\nset forth in this document.\n\n          X.   PLAN ADMINISTRATOR shall mean the particular entity, whether the\nPrimary Committee, the Board or the Secondary Committee, which is authorized to\nadminister the Discretionary Option Grant and Stock Issuance Programs with\nrespect to one or more classes of eligible persons, to the extent such entity is\ncarrying out its administrative functions under those programs with respect to\nthe persons under its jurisdiction.\n\n          Y.   PLAN EFFECTIVE DATE shall mean the date the Plan shall become\neffective and shall be coincident with the Underwriting Date.\n\n          Z.   PREDECESSOR PLAN shall mean the Corporation's 1999 Stock\nOption\/Stock Issuance Plan in effect immediately prior to the Plan Effective\nDate hereunder.\n\n          AA.  PRIMARY COMMITTEE shall mean the committee of two (2) or more\nnon-employee Board members appointed by the Board to administer the\nDiscretionary Option Grant and Stock Issuance Programs with respect to Section\n16 Insiders and to administer the Salary Investment Option Grant Program solely\nwith respect to the selection of the eligible individuals who may participate in\nsuch program.\n\n          BB.  SALARY INVESTMENT OPTION GRANT PROGRAM shall mean the salary\ninvestment option grant program in effect under Article Three of the Plan.\n\n          CC.  SECONDARY COMMITTEE shall mean a committee of one or more Board\nmembers appointed by the Board to administer the Discretionary Option Grant and\nStock Issuance Programs with respect to eligible persons other than Section 16\nInsiders.\n\n                                      A-4.\n\n\n          DD.  SECTION 16 INSIDER shall mean an officer or director of the\nCorporation subject to the short-swing profit liabilities of Section 16 of the\n1934 Act.\n\n          EE.  SERVICE shall mean the performance of services for the\nCorporation (or any Parent or Subsidiary) by a person in the capacity of an\nEmployee, a non-employee member of the board of directors or a consultant or\nindependent advisor, except to the extent otherwise specifically provided in the\ndocuments evidencing the option grant or stock issuance.\n\n          FF.  STOCK EXCHANGE shall mean either the American Stock Exchange or\nthe New York Stock Exchange.\n\n          GG.  STOCK ISSUANCE AGREEMENT shall mean the agreement entered into by\nthe Corporation and the Participant at the time of issuance of shares of Common\nStock under the Stock Issuance Program.\n\n          HH.  STOCK ISSUANCE PROGRAM shall mean the stock issuance program in\neffect under Article Four of the Plan.\n\n          II.  SUBSIDIARY shall mean any corporation (other than the\nCorporation) in an unbroken chain of corporations beginning with the\nCorporation, provided each corporation (other than the last corporation) in the\nunbroken chain owns, at the time of the determination, stock possessing fifty\npercent (50%) or more of the total combined voting power of all classes of stock\nin one of the other corporations in such chain.\n\n          JJ.  TENDER-OFFER PRICE shall mean the GREATER of (i) the Fair Market\nValue per share of Common Stock on the date the option is surrendered to the\nCorporation in connection with a Hostile Tender-Offer or (ii) the highest\nreported price per share of Common Stock paid by the tender offeror in effecting\nsuch Hostile Tender-Offer. However, if the surrendered option is an Incentive\nOption, the Tender-Offer Price shall not exceed the clause (i) price per share.\n\n          KK.  10% STOCKHOLDER shall mean the owner of stock (as determined\nunder Code Section 424(d)) possessing more than ten percent (10%) of the total\ncombined voting power of all classes of stock of the Corporation (or any Parent\nor Subsidiary).\n\n          LL.  UNDERWRITING AGREEMENT shall mean the agreement between the\nCorporation and the underwriter or underwriters managing the initial public\noffering of the Common Stock.\n\n          MM.  UNDERWRITING DATE shall mean the date on which the Underwriting\nAgreement is executed and priced in connection with an initial public offering\nof the Common Stock.\n\n                                      A-5.\n\n\n          NN.  WITHHOLDING TAXES shall mean the Federal, state and local income\nand employment withholding taxes to which the holder of Non-Statutory Options or\nunvested shares of Common Stock may become subject in connection with the\nexercise of those options or the vesting of those shares.\n\n                                      A-6.\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7939],"corporate_contracts_industries":[9521],"corporate_contracts_types":[9539,9546],"class_list":["post-38443","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-jetblue-airways-corp","corporate_contracts_industries-transportation__air","corporate_contracts_types-compensation","corporate_contracts_types-compensation__incentive"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38443","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=38443"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38443"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38443"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38443"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}