{"id":40237,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/pari-networks-inc-2011-equity-incentive-plan-cisco.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"pari-networks-inc-2011-equity-incentive-plan-cisco","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/pari-networks-inc-2011-equity-incentive-plan-cisco.html","title":{"rendered":"Pari Networks, Inc. 2011 Equity Incentive Plan – Cisco"},"content":{"rendered":"

PARI NETWORKS, INC. <\/strong><\/p>\n

2011 EQUITY INCENTIVE PLAN <\/strong><\/p>\n

SECTION 1. <\/strong>INTRODUCTION<\/u>.<\/p>\n

The Pari Networks, Inc. 2011 Equity Incentive Plan became effective upon its
\nadoption by the Company153s Board of Directors on the Effective Date, and must be
\napproved by the shareholders of the Company, when required by applicable laws,
\nwithin twelve (12) months following such date. If the Company153s shareholders do
\nnot approve this Plan, no Awards will be granted under this Plan.<\/p>\n

The purpose of the Plan is to promote the long-term success of the Company
\nand the creation of shareholder value by offering designated Employees and
\nConsultants an opportunity to share in such long-term success by acquiring a
\nproprietary interest in the Company. The Plan seeks to achieve this purpose by
\nproviding for discretionary long-term incentive awards in the form of Awards.\n<\/p>\n

The Plan shall be governed by, and construed in accordance with, the laws of
\nthe State of California (except its choice-of-law provisions). Capitalized terms
\nshall have the meaning provided in Section 2 unless otherwise provided in this
\nPlan or any related Stock Option Agreement or Stock Unit Agreement.<\/p>\n

SECTION 2. <\/strong>DEFINITIONS<\/u>.<\/p>\n

(a) “Affiliate” means any entity other than a Subsidiary, if the Company
\nand\/or one or more Subsidiaries own not less than 50% of such entity.<\/p>\n

(b) “Award” means any award of an Option or Stock Unit under the Plan.<\/p>\n

(c) “Board” means the Board of Directors of the Company, as constituted from
\ntime to time.<\/p>\n

(d) “Cashless Exercise” means, to the extent that a Stock Option Agreement so
\nprovides and as permitted by applicable law, a program approved by the Committee
\nin which payment may be made all or in part by delivery (on a form prescribed by
\nthe Committee) of an irrevocable direction to a securities broker to sell Shares
\nand to deliver all or part of the sale proceeds to the Company in payment of the
\naggregate Exercise Price and, if applicable, the amount necessary to satisfy the
\nCompany153s withholding obligations at the minimum statutory withholding rates,
\nincluding, but not limited to, U.S. federal and state income taxes, payroll
\ntaxes, and foreign taxes, if applicable.<\/p>\n

(e) “Cause” means, except as may otherwise be provided in a Participant153s
\nemployment agreement or Award agreement, a conviction of a Participant for a
\nfelony crime or the failure of a Participant to contest prosecution for a felony
\ncrime, or a Participant153s misconduct, fraud or dishonesty (as such terms are
\ndefined by the Committee in its sole discretion), or any unauthorized use or
\ndisclosure of confidential information or trade secrets, in each case as
\ndetermined by the Committee, and the Committee153s determination shall be
\nconclusive and binding.<\/p>\n

(f) “Change In Control” means, except as may otherwise be provided in a
\nParticipant153s employment agreement, Stock Option Agreement or Stock Unit
\nAgreement, the occurrence of any of the following:<\/p>\n

(i) A change in the composition of the Board over a period of thirty-six
\nconsecutive months or less such that a majority of the Board members ceases, by
\nreason of one or more contested elections for Board membership, to be comprised
\nof individuals who either (A) have been Board members continuously since the
\nbeginning of such period or (B) have been elected or nominated for election as
\nBoard members during such period by at least a majority of the Board<\/p>\n<\/p>\n

-1-<\/p>\n

\n

members described in clause (A) who were still in office at the time the
\nBoard approved such election or nomination; or<\/p>\n

(ii) The acquisition, directly or indirectly, by any person or related group
\nof persons (other than the Company or a person that directly or indirectly
\ncontrols, is controlled by, or is under common control with, the Company) of
\nbeneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act)
\nof securities of the Company representing more than 35% of the total combined
\nvoting power of the Company153s then outstanding securities pursuant to a tender
\nor exchange offer made directly to the Company153s shareholders which the Board
\ndoes not recommend such shareholders accept.<\/p>\n

(g) “Code” means the Internal Revenue Code of 1986, as amended, and the
\nregulations and interpretations promulgated thereunder.<\/p>\n

(h) “Committee” means a committee described in Section 3.<\/p>\n

(i) “Common Stock” means the Company153s common stock.<\/p>\n

(j) “Company” means Pari Networks, Inc., a California corporation.<\/p>\n

(k) “Consultant” means an individual who performs bona fide services to the
\nCompany, a Parent, a Subsidiary or an Affiliate, other than as an Employee or
\nDirector or Non-Employee Director.<\/p>\n

(l) “Corporate Transaction” means, except as may otherwise be provided in a
\nParticipant153s employment agreement or Award agreement, the occurrence of any of
\nthe following shareholder approved transactions:<\/p>\n

(i) The consummation of a merger or consolidation of the Company with or into
\nanother entity or any other corporate reorganization, if more than 50% of the
\ncombined voting power of the continuing or surviving entity153s securities
\noutstanding immediately after such merger, consolidation or other reorganization
\nis owned by persons who were not shareholders of the Company immediately prior
\nto such merger, consolidation or other reorganization; or<\/p>\n

(ii) The sale, transfer or other disposition of all or substantially all of
\nthe Company153s assets.<\/p>\n

A transaction shall not constitute a Corporate Transaction if its sole
\npurpose is to change the state of the Company153s incorporation or to create a
\nholding company that will be owned in substantially the same proportions by the
\npersons who held the Company153s securities immediately before such transactions.\n<\/p>\n

(m) “Director” means a member of the Board who is also an Employee.<\/p>\n

(n) “Disability” means that the Participant is classified as disabled under a
\nlong-term disability policy of the Company or, if no such policy applies, the
\nParticipant is unable to engage in any substantial gainful activity by reason of
\nany medically determinable physical or mental impairment which can be expected
\nto result in death or which has lasted or can be expected to last for a
\ncontinuous period of not less than 12 months.<\/p>\n

(o) “Effective Date” means January 25, 2011, the date the Plan was adopted by
\nthe Company Board of Directors.<\/p>\n

(p) “Employee” means any individual who is a common-law employee of the
\nCompany, a Parent, a Subsidiary or an Affiliate.<\/p>\n

(q) “Exchange Act” means the Securities Exchange Act of 1934, as amended.\n<\/p>\n<\/p>\n

-2-<\/p>\n

\n

(r) “Exercise Price” means, in the case of an Option, the amount for which a
\nShare may be purchased upon exercise of such Option, as specified in the
\napplicable Stock Option Agreement.<\/p>\n

(s) “Fair Market Value” means the market price of a Share as determined in
\ngood faith by the Committee. The Fair Market Value shall be determined by the
\nfollowing:<\/p>\n

(i) If the Shares were traded over-the-counter or listed with NASDAQ on the
\ndate in question, then the Fair Market Value shall be equal to the last
\ntransaction price quoted by the NASDAQ system for the date in question; or<\/p>\n

(ii) if the Common Stock is listed on the New York Stock Exchange or the
\nAmerican Stock Exchange on the date in question, the Fair Market Value is the
\nclosing selling price for the Common Stock as such price is officially quoted in
\nthe composite tape of transactions on the exchange determined by the Committee
\nto be the primary market for the Common Stock for the date in question;
\nprovided, however, that if there is no such reported price for the Common Stock
\nfor the date in question under (i) or (ii), then if available such price on the
\nlast preceding date for which such price exists shall be determinative of Fair
\nMarket Value.<\/p>\n

If neither (i) or (ii) are applicable, then the Fair Market Value shall be
\ndetermined by the Committee in good faith on such basis as it deems appropriate.\n<\/p>\n

Whenever possible, the determination of Fair Market Value by the Committee
\nshall be based on the prices reported in the Western Edition of The Wall
\nStreet Journal<\/u>. Such determination shall be conclusive and binding on all
\npersons.<\/p>\n

(t) “Fiscal Year” means the Company153s fiscal year.<\/p>\n

(u) “Grant” means any grant of an Award under the Plan.<\/p>\n

(v) “Incentive Stock Option” or “ISO” means an incentive stock option
\ndescribed in Code 422.<\/p>\n

(w) “Non-Employee Director” means a member of the Board who is not an
\nEmployee.<\/p>\n

(x) “Nonstatuatory Stock Option” or “NSO” means a stock option that is not an
\nISO.<\/p>\n

(y) “Option” means a stock option granted under the Plan entitling the
\nOptionee to purchase Shares.<\/p>\n

(z) “Optionee” means an individual, estate or other entity that holds an
\nOption.<\/p>\n

(aa) “Parent” means any corporation (other than the Company) in an unbroken
\nchain of corporations ending with the Company, if each of the corporations other
\nthan the Company owns stock possessing 50% or more of the total combined voting
\npower of all classes of stock in one of the other corporations in such chain. A
\ncorporation that attains the status of a Parent on a date after the adoption of
\nthe Plan shall be considered a Parent commencing as of such date<\/p>\n

(bb) “Participant” means an individual or estate or other entity that holds
\nan Award.<\/p>\n

(cc) “Plan” means this Pari Networks, Inc. 2011 Equity Incentive Plan, as it
\nmay be amended from time to time.<\/p>\n

(dd) “SEC” means the Securities and Exchange Commission.<\/p>\n

(ee) “Securities Act” means the Securities Act of 1933, as amended.<\/p>\n<\/p>\n

-3-<\/p>\n

\n

(ff) “Service” means service as an Employee, Director, Non-Employee Director
\nor Consultant. A Participant153s Service does not terminate when continued service
\ncrediting is required by applicable law. Service terminates in any event when an
\napproved leave ends, unless such Employee immediately returns to active work.
\nThe Committee determines which leaves count toward Service, and when Service
\nterminates for all purposes under the Plan. Further, unless otherwise determined
\nby the Committee, a Participant153s Service shall not be deemed to have terminated
\nmerely because of a change in the capacity in which the Participant provides
\nservice to the Company, a Parent, Subsidiary or Affiliate, or a transfer between
\nentities (the Company or any Parent, Subsidiary, or Affiliate); provided that
\nthere is no interruption or other termination of Service.<\/p>\n

(gg) “Share” means one share of Common Stock, as adjusted pursuant to
\nSections 8 and 9, and any successor security.<\/p>\n

(hh) “Specified Employee” means an Employee, Director, Non-Employee Director
\nor Consultant who has been selected by the Committee to receive a Stock Unit
\nunder the Plan.<\/p>\n

(ii) “Stock Option Agreement” means the agreement described in Section 6
\nevidencing each award of an Option.<\/p>\n

(jj) “Stock Unit” means a bookkeeping entry representing the equivalent of
\none Share, as awarded under the Plan.<\/p>\n

(kk) “Stock Unit Agreement” means the agreement described in Section 8
\nevidencing each Award of a Stock Unit.<\/p>\n

(ll) “Subsidiary” means any corporation (other than the Company) in an
\nunbroken chain of corporations beginning with the Company, if each of the
\ncorporations other than the last corporation in the unbroken chain owns stock
\npossessing 50% or more of the total combined voting power of all classes of
\nstock in one of the other corporations in such chain. A corporation that attains
\nthe status of a Subsidiary on a date after the adoption of the Plan shall be
\nconsidered a Subsidiary commencing as of such date.<\/p>\n

SECTION 3. <\/strong>ADMINISTRATION<\/u>.<\/p>\n

(a) General<\/u>. The Board or a Committee appointed by the Board shall
\nadminister the Plan. Members of the Committee shall serve for such period of
\ntime as the Board may determine and shall be subject to removal by the Board at
\nany time. The Board may also at any time terminate the functions of the
\nCommittee and reassume all powers and authority previously delegated to the
\nCommittee.<\/p>\n

(b) Authority of the Committee<\/u>. Subject to the provisions of the Plan,
\nthe Committee shall have full authority and sole discretion to take any actions
\nit deems necessary or advisable for the administration of the Plan. Such actions
\nshall include:<\/p>\n\n\n\n
<\/td>\n\n

(i)<\/p>\n<\/td>\n

\n

selecting Participants who are to receive Options under the Plan;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(ii)<\/p>\n<\/td>\n

\n

determining the type, number, vesting requirements and other features and
\nconditions of such Options and amending such Options;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(iii)<\/p>\n<\/td>\n

\n

selecting Specified Employees who are to receive Stock Units under the Plan;\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(iv)<\/p>\n<\/td>\n

\n

determining the type, number, vesting requirements and other features and
\nconditions of such Stock Units and amending such Stock Units;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(v)<\/p>\n<\/td>\n

\n

correcting any defect, supplying any omission, or reconciling any
\ninconsistency in the Plan or any Award agreement;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(vi)<\/p>\n<\/td>\n

\n

accelerating the vesting, or extending the post-termination exercise term, of
\nAwards at any time and under such terms and conditions as it deems appropriate;\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(vii)<\/p>\n<\/td>\n

\n

interpreting the Plan;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(viii)<\/p>\n<\/td>\n

\n

making all other decisions relating to the operation of the Plan; and<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-4-<\/p>\n

\n\n\n\n
<\/td>\n\n

(ix)<\/p>\n<\/td>\n

\n

adopting such plans or subplans as may be deemed necessary or appropriate to
\nprovide for the participation by Participants of the Company and its
\nSubsidiaries and Affiliates who reside outside the U.S., which plans and\/or
\nsubplans shall be attached hereto as Appendices.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Committee may adopt such rules or guidelines as it deems appropriate to
\nimplement the Plan. The Committee153s determinations under the Plan shall be final
\nand binding on all persons.<\/p>\n

(c) Indemnification<\/u>. To the maximum extent permitted by applicable
\nlaw, each member of the Committee, or of the Board, shall be indemnified and
\nheld harmless by the Company against and from (i) any loss, cost, liability, or
\nexpense that may be imposed upon or reasonably incurred by him or her in
\nconnection with or resulting from any claim, action, suit, or proceeding to
\nwhich he or she may be a party or in which he or she may be involved by reason
\nof any action taken or failure to act under the Plan or any Stock Option
\nAgreement or Stock Unit Agreement, and (ii) from any and all amounts paid by him
\nor her in settlement thereof, with the Company153s approval, or paid by him or her
\nin satisfaction of any judgment in any such claim, action, suit, or proceeding
\nagainst him or her, provided he or she shall give the Company an opportunity, at
\nits own expense, to handle and defend the same before he or she undertakes to
\nhandle and defend it on his or her own behalf. The foregoing right of
\nindemnification shall not be exclusive of any other rights of indemnification to
\nwhich such persons may be entitled under the Company153s Articles of Incorporation
\nor Bylaws, by contract, as a matter of law, or otherwise, or under any power
\nthat the Company may have to indemnify them or hold them harmless.<\/p>\n

SECTION 4. <\/strong>GENERAL<\/u>.<\/p>\n

(a) General Eligibility<\/u>. Only Employees, Directors, Non-Employee
\nDirectors and Consultants shall be eligible to receive Options or Stock Units
\nunder the Plan.<\/p>\n

(b) Stock Options<\/u>. No person shall be eligible for the grant of an
\nOption so long as Section 260.140.41(b) of Title 10 of the California Code of
\nRegulations applies unless the requirements of such regulation are satisfied. No
\nOption granted under the Plan is intended to qualify for the treatment afforded
\nunder Sections 421 and 422 of the Code.<\/p>\n

(c) Restrictions on Shares<\/u>. Any Shares issued pursuant to an Award
\nshall be subject to such rights of repurchase, rights of first refusal and other
\ntransfer restrictions as the Committee may determine, in its sole discretion.
\nSuch restrictions shall apply in addition to any restrictions that may apply to
\nholders of Shares generally and shall also comply to the extent necessary with
\napplicable law. In no event shall the Company be required to issue fractional
\nShares under this Plan.<\/p>\n

(d) Beneficiaries<\/u>. Unless stated otherwise in an Award agreement, a
\nParticipant may designate one or more beneficiaries with respect to an Award by
\ntimely filing the prescribed form with the Company. A beneficiary designation
\nmay be changed by filing the prescribed form with the Company at any time before
\nthe Participant153s death. If no beneficiary was designated or if no designated
\nbeneficiary survives the Participant, then after a Participant153s death any
\nvested Award(s) shall be transferred or distributed to the Participant153s estate.\n<\/p>\n

(e) No Rights as a Shareholder<\/u>. A Participant, or a transferee of a
\nParticipant, shall have no rights as a shareholder with respect to any Common
\nStock covered by an Award until such person has satisfied all of the terms and
\nconditions to receive such Common Stock, has satisfied any applicable
\nwithholding or tax obligations relating to the Award and the Shares have been
\nissued (as evidenced by an appropriate entry on the books of the Company or a
\nduly authorized transfer agent of the Company).<\/p>\n

(f) Termination of Service<\/u>. Unless the applicable Award agreement or,
\nwith respect to Participants who reside in the U.S., the applicable employment
\nagreement provides otherwise, the following rules shall govern the vesting,
\nexercisability and term of outstanding Awards held by a Participant in the event
\nof<\/p>\n<\/p>\n

-5-<\/p>\n

\n

termination of such Participant153s Service (in all cases subject to the term
\nof the Award): (i) upon termination of Service for any reason, all unvested
\nportions of any outstanding Awards shall be immediately forfeited without
\nconsideration and the vested portions of any outstanding Stock Units shall be
\nsettled upon termination; (ii) if the Service of a Participant is terminated for
\nCause, then all unexercised Options, and unvested portions of Stock Units, shall
\nterminate and be forfeited immediately without consideration; (iii) if the
\nService of Participant is terminated for any reason other than for Cause, death,
\nor Disability, then the vested portion of his\/her then-outstanding Options may
\nbe exercised by such Participant or his or her personal representative within
\nthree months after the date of such termination; or (iv) if the Service of a
\nParticipant is terminated due to death or Disability, the vested portion of
\nhis\/her then-outstanding Options may be exercised within eighteen months after
\nthe date of termination of Service.<\/p>\n

(g) Information Delivery<\/u>. When required to comply with Section
\n260.140.41(h) of Title 10 of the California Code of Regulations, the security
\nholders to whom such information is required to be provided shall be provided
\nthe information required by Section 260.140.46 of Title 10 of the California
\nCode of Regulations not less frequently than annually.<\/p>\n

SECTION 5. <\/strong>SHARES SUBJECT TO PLAN AND SHARE LIMITS<\/u>.\n<\/p>\n

(a) Basic Limitation<\/u>. The stock issuable under the Plan shall be
\nauthorized but unissued Shares. The aggregate number of Shares reserved for
\nAwards under the Plan shall not exceed 1,000,000 Shares, subject to adjustment
\npursuant to Section 9 and, when required, compliance with the shareholder
\napproval requirements of Section 260.140.45 of Title 10 of the California Code
\nof Regulations.<\/p>\n

(b) Additional Shares<\/u>. If Awards are forfeited or are terminated for
\nany other reason before being exercised or settled, then the Shares underlying
\nsuch Awards shall again become available for Awards under the Plan.<\/p>\n

SECTION 6. <\/strong>TERMS AND CONDITIONS OF OPTIONS<\/u>.<\/p>\n

(a) Stock Option Agreement<\/u>. Each grant of an Option under the Plan
\nshall be evidenced and governed exclusively by a Stock Option Agreement between
\nthe Optionee and the Company. Such Option shall be subject to all applicable
\nterms and conditions of the Plan and may be subject to any other terms and
\nconditions that are not inconsistent with the Plan and that the Committee deems
\nappropriate for inclusion in a Stock Option Agreement (including without
\nlimitation any performance conditions). The provisions of the various Stock
\nOption Agreements entered into under the Plan need not be identical.<\/p>\n

(b) Number of Shares<\/u>. Each Stock Option Agreement shall specify the
\nnumber of Shares that are subject to the Option and shall be subject to
\nadjustment of such number in accordance with Section 9.<\/p>\n

(c) Exercise Price<\/u>. An Option153s Exercise Price shall be established by
\nthe Committee and set forth in a Stock Option Agreement.<\/p>\n

(d) Exercisability and Term<\/u>. Each Stock Option Agreement shall specify
\nthe date when all or any installment of the Option is to become exercisable. The
\nStock Option Agreement shall also specify the term of the Option; provided that
\nthe term of an Option shall in no event exceed nine years from the date of
\ngrant. Unless the applicable Stock Option Agreement provides otherwise, each
\nOption shall vest and become exercisable with respect to 25% of the Shares
\nsubject to the Option upon completion of one year of Service measured from the
\nvesting commencement date, the balance of the Shares subject to the Option shall
\nvest and become exercisable in forty-eight equal installments upon completion of
\neach month of Service thereafter, and the term of the Option shall be nine years
\nfrom the date of grant. A Stock Option Agreement may provide for accelerated
\nvesting in the event of the Participant153s death, Disability, or other events.
\nNotwithstanding any other provision of the Plan, no Option can be exercised
\nafter the expiration<\/p>\n<\/p>\n

-6-<\/p>\n

\n

date provided in the applicable Stock Option Agreement and no Option may
\nprovide that, upon exercise of the Option, a new Option will automatically be
\ngranted.<\/p>\n

(e) Modifications of Options<\/u>. Within the limitations of the Plan, the
\nCommittee may modify outstanding Options provided that no modification of an
\nOption shall, without the consent of the Optionee, impair his or her rights
\nunder such Option.<\/p>\n

(f) Assignment or Transfer of Options<\/u>. Except as otherwise provided in
\nthe applicable Stock Option Agreement and then only to the extent permitted by
\napplicable law, no Option shall be transferable by the Optionee other than by
\nwill or by the laws of descent and distribution. Except as otherwise provided in
\nthe applicable Stock Option Agreement, an Option may be exercised during the
\nlifetime of the Optionee only by the Optionee or by the guardian or legal
\nrepresentative of the Optionee. No Option or interest therein may be assigned,
\npledged or hypothecated by the Optionee during his or her lifetime, whether by
\noperation of law or otherwise, or be made subject to execution, attachment or
\nsimilar process.<\/p>\n

SECTION 7. <\/strong>PAYMENT FOR OPTION SHARES<\/u>.<\/p>\n

The entire Exercise Price of Shares issued upon exercise of Options shall be
\npayable in cash at the time when such Shares are purchased, except as follows
\nand only if so provided for in an applicable Stock Option Agreement:<\/p>\n

(i) Surrender of Stock<\/u>. Payment for all or any part of the Exercise
\nPrice may be made with Shares which have already been owned by the Optionee;
\nprovided that the Committee may, in its sole discretion, require that Shares
\ntendered for payment be previously held by the Optionee for a minimum duration.
\nSuch Shares shall be valued at their Fair Market Value.<\/p>\n

(ii) Cashless Exercise<\/u>. Payment for all or any part of the Exercise
\nPrice may be made through Cashless Exercise.<\/p>\n

(iii) Other Forms of Payment<\/u>. Payment for all or any part of the
\nExercise Price may be made in any other form that is consistent with applicable
\nlaws, regulations and rules and approved by the Committee.<\/p>\n

The Stock Option Agreement may specify that payment may be made in any
\nform(s) described in this Section 7.<\/p>\n

SECTION 8. <\/strong>TERMS AND CONDITIONS OF STOCK UNITS<\/u>.<\/p>\n

(a) Stock Unit Agreement<\/u>. Each grant of Stock Units under the Plan
\nshall be evidenced and governed exclusively by a Stock Unit Agreement between
\nthe Specified Employee and the Company. Such Stock Units shall be subject to all
\napplicable terms and conditions of the Plan and may be subject to any other
\nterms and conditions that are not inconsistent with the Plan and that the
\nCommittee deems appropriate for inclusion in the applicable Stock Unit Agreement
\n(including without limitation any performance conditions). The provisions of the
\nvarious Stock Unit Agreements entered into under the Plan need not be identical.
\nStock Units may be granted in consideration of a reduction in the Specified
\nEmployee153s other compensation.<\/p>\n

(b) Number of Shares<\/u>. Each Stock Unit Agreement shall specify the
\nnumber of Shares to which the Stock Unit Grant pertains and shall be subject to
\nadjustment of such number in accordance with Section 9.<\/p>\n

(c) Payment for Stock Units<\/u>. Stock Units shall be issued without
\nconsideration.<\/p>\n<\/p>\n

-7-<\/p>\n

\n

(d) Vesting Conditions<\/u>. Unless the applicable Stock Unit Agreement
\nprovides otherwise, each Stock Unit shall vest with respect to 25% of the Shares
\nsubject to the Stock Unit upon completion of each year of Service on each of the
\nfirst through fourth annual anniversaries of the vesting commencement date.<\/p>\n

(e) Voting Rights<\/u>. The holders of Stock Units shall have no voting
\nrights.<\/p>\n

(f) Form and Time of Settlement<\/u>. Settlement of vested Stock Units may
\nbe made in the form of (i) cash, (ii) Shares or (iii) any combination of both,
\nas determined by the Committee at the time of grant of the Stock Units, in its
\nsole discretion. Methods of converting Stock Units into cash may include
\n(without limitation) a method based on the average Fair Market Value of Shares
\nover a series of trading days. Vested Stock Units may be settled in a lump sum
\nor in installments, provided, however, that any settlement of Vested Stock Units
\nin installments shall be exempt from or otherwise comply with the provisions
\nregarding deferred compensation set forth in Section 409A of the Code. The
\ndistribution may occur or commence when the vesting conditions applicable to the
\nStock Units have been satisfied or have lapsed, in accordance with applicable
\nlaw, to any later date. Until an Award of Stock Units is settled, the number of
\nsuch Stock Units shall be subject to adjustment pursuant to Section 9.<\/p>\n

(g) Creditors153 Rights<\/u>. A holder of Stock Units shall have no rights
\nother than those of a general creditor of the Company. Stock Units represent an
\nunfunded and unsecured obligation of the Company, subject to the terms and
\nconditions of the applicable Stock Unit Agreement.<\/p>\n

(h) Modifications or Assumption of Stock Units<\/u>. Within the limitations
\nof the Plan, the Committee may modify or assume outstanding Stock Units or may
\naccept the cancellation of outstanding Stock Units (including stock units
\ngranted by another issuer) in return for the grant of new Stock Units for the
\nsame or a different number of Shares and with the same or different vesting
\nprovisions. Notwithstanding the preceding sentence or anything to the contrary
\nherein, no modification of a Stock Unit shall, without the consent of the
\nSpecified Employee, impair his or her rights or obligations under such Stock
\nUnit.<\/p>\n

(i) Assignment or Transfer of Stock Units<\/u>. Except as otherwise
\nprovided in the applicable Stock Unit Agreement and then only to the extent
\npermitted by applicable law, Stock Units shall not be anticipated, assigned,
\nattached garnished, optioned, transferred or made subject to any creditor153s
\nprocess, whether voluntarily, involuntarily or by operation of law. Any act in
\nviolation of this Section 8(i) shall be void. However, this Section 8(i) shall
\nnot preclude a Specified Employee from designating a beneficiary who will
\nreceive any outstanding vested Stock Units in the event of the Specified
\nEmployee153s death, nor shall it preclude a transfer of vested Stock Units by will
\nor by the laws of descent and distribution.<\/p>\n

SECTION 9. <\/strong>PROTECTION AGAINST DILUTION<\/u>.<\/p>\n

(a) Adjustments<\/u>. In the event of a subdivision of the outstanding
\nShares, a declaration of a dividend payable in Shares, a declaration of a
\ndividend payable in a form other than Shares in an amount that has a material
\neffect on the price of Shares, a combination or consolidation of the outstanding
\nShares (by reclassification or otherwise) into a lesser number of Shares, a
\nrecapitalization, a spin-off or a similar occurrence, the Committee shall make
\nappropriate adjustments to the following:<\/p>\n

(i) the number of Shares and the kind of shares or securities available for
\nfuture Awards under Section 5;<\/p>\n

(ii) the number of Shares and the kind of shares or securities covered by
\neach outstanding Award; or<\/p>\n

(iii) the Exercise Price under each outstanding Option.<\/p>\n

(b) Participant Rights<\/u>. Except as provided in this Section 9, a
\nParticipant shall have no rights by reason of any issue by the Company of stock
\nof any class or securities convertible into stock of any class, any<\/p>\n<\/p>\n

-8-<\/p>\n

\n

subdivision or consolidation of shares of stock of any class, the payment of
\nany stock dividend or any other increase or decrease in the number of shares of
\nstock of any class. If by reason of an adjustment pursuant to this Section 9 a
\nParticipant153s Award covers additional or different shares of stock or
\nsecurities, then such additional or different shares and the Award in respect
\nthereof shall be subject to all of the terms, conditions and restrictions which
\nwere applicable to the Award and the Shares subject to the Award prior to such
\nadjustment.<\/p>\n

(c) Fractional Shares<\/u>. Any adjustment of Shares pursuant to this
\nSection 9 shall be rounded down to the nearest whole number of Shares. Under no
\ncircumstances shall the Company be required to authorize or issue fractional
\nshares and no consideration shall be provided as a result of any fractional
\nshares not being issued or authorized.<\/p>\n

SECTION 10. <\/strong>EFFECT OF A CORPORATE TRANSACTION<\/u>.<\/p>\n

(a) Corporate Transaction<\/u>. In the event that the Company is a party to
\na Corporate Transaction, outstanding Awards shall be subject to the applicable
\nagreement of merger, reorganization, or sale of assets. Such agreement may
\nprovide, without limitation, for the assumption or substitution of outstanding
\nOptions or Stock Units by the surviving corporation or its parent, for the
\nreplacement of outstanding Options and Stock Units with a cash incentive program
\nof the surviving corporation which preserves the spread existing on the unvested
\nportions of such outstanding Awards at the time of the transaction and provides
\nfor subsequent payout in accordance with the same vesting provisions applicable
\nto those Awards, or for the cancellation of outstanding Options and\/or Stock
\nUnits, with or without consideration, in all cases without the consent of the
\nParticipant.<\/p>\n

(b) Acceleration<\/u>. The Committee may determine, at the time of grant of
\nan Award or thereafter, that such Award shall become fully vested as to all
\nShares subject to such Award in the event that a Corporate Transaction or a
\nChange in Control occurs. Unless otherwise provided in the applicable Award
\nagreement, in the event that a Corporate Transaction occurs and any outstanding
\nOptions or Stock Units are not assumed, substituted, or replaced with a cash
\nincentive program pursuant to Section 10(a), then such Options or Stock Units
\nshall terminate and cease to be outstanding.<\/p>\n

(c) Dissolution<\/u>. To the extent not previously exercised or settled,
\nOptions or Stock Units shall terminate immediately prior to the dissolution or
\nliquidation of the Company.<\/p>\n

SECTION 11. <\/strong>LIMITATIONS ON RIGHTS<\/u>.<\/p>\n

(a) No Entitlements<\/u>. A Participant153s rights, if any, in respect of or
\nin connection with any Award is derived solely from the discretionary decision
\nof the Company to permit the individual to participate in the Plan and to
\nbenefit from a discretionary Award. By accepting an Award under the Plan, a
\nParticipant expressly acknowledges that there is no obligation on the part of
\nthe Company to continue the Plan and\/or grant any additional Awards. Any Award
\ngranted hereunder is not intended to be compensation of a continuing or
\nrecurring nature, or part of a Participant153s normal or expected compensation,
\nand in no way represents any portion of a Participant153s salary, compensation, or
\nother remuneration for purposes of pension benefits, severance, redundancy,
\nresignation or any other purpose.<\/p>\n

Neither the Plan nor any Award granted under the Plan shall be deemed to give
\nany individual a right to remain an employee, consultant or director of the
\nCompany, a Parent, a Subsidiary or an Affiliate. The Company and its Parents and
\nSubsidiaries and Affiliates reserve the right to terminate the Service of any
\nperson at any time, and for any reason, subject to applicable laws, the
\nCompany153s Articles of Incorporation and Bylaws and a written employment
\nagreement (if any), and such terminated person shall be deemed irrevocably to
\nhave waived any claim to damages or specific performance for breach of contract
\nor dismissal, compensation for loss of office, tort or otherwise with respect to
\nthe Plan or any outstanding Award that is forfeited and\/or is terminated by its
\nterms or to any future Award.<\/p>\n<\/p>\n

-9-<\/p>\n

\n

(b) Shareholders153 Rights<\/u>. A Participant shall have no dividend rights,
\nvoting rights or other rights as a shareholder with respect to any Shares
\ncovered by his or her Award prior to the issuance of such Shares (as evidenced
\nby an appropriate entry on the books of the Company or a duly authorized
\ntransfer agent of the Company). No adjustment shall be made for cash dividends
\nor other rights for which the record date is prior to the date when such Shares
\nare issued, except as expressly provided in Section 9.<\/p>\n

(c) Regulatory Requirements<\/u>. Any other provision of the Plan
\nnotwithstanding, the obligation of the Company to issue Shares or other
\nsecurities under the Plan shall be subject to all applicable laws, rules and
\nregulations and such approval by any regulatory body as may be required. The
\nCompany reserves the right to restrict, in whole or in part, the delivery of
\nShares or other securities pursuant to any Award prior to the satisfaction of
\nall legal requirements relating to the issuance of such Shares or other
\nsecurities, to their registration, qualification or listing or to an exemption
\nfrom registration, qualification or listing.<\/p>\n

SECTION 12. <\/strong>WITHHOLDING TAXES<\/u>.<\/p>\n

(a) General<\/u>. A Participant shall make arrangements satisfactory to the
\nCompany for the satisfaction of any withholding tax obligations that arise in
\nconnection with his or her Award. The Company shall not be required to issue any
\nShares or make any cash payment under the Plan until such obligations are
\nsatisfied.<\/p>\n

(b) Share Withholding<\/u>. If a public market for the Company153s Shares
\nexists, the Committee may permit a Participant to satisfy all or part of his or
\nher withholding or income tax obligations by having the Company withhold all or
\na portion of any Shares that otherwise would be issued to him or her or by
\nsurrendering or attesting to all or a portion of any Shares that he or she
\npreviously acquired. Such Shares shall be valued based on the value of the
\nactual trade or, if there is none, the Fair Market Value as of the previous day.
\nAny payment of taxes by assigning Shares to the Company may be subject to
\nrestrictions, including, but not limited to, any restrictions required by rules
\nof the SEC. The Committee may, in its discretion, also permit a Participant to
\nsatisfy withholding or income tax obligations related to an Award through
\nCashless Exercise or through a sale of Shares underlying the Award.<\/p>\n

SECTION 13. <\/strong>DURATION AND AMENDMENTS<\/u>.<\/p>\n

(a) Term of the Plan<\/u>. The Plan shall become effective upon its
\napproval by Board, subject to the approval of the Company153s shareholders in
\ncompliance, when required, with Section 260.140.41(g) of Title 10 of the
\nCalifornia Code of Regulations. The Plan shall terminate on the ninth
\nanniversary of the date of approval by the Company153s shareholders and may be
\nterminated on any earlier date pursuant to this Section 13.<\/p>\n

(b) Right to Amend or Terminate the Plan<\/u>. The Board may amend or
\nterminate the Plan at any time and for any reason. The termination of the Plan,
\nor any amendment thereof, shall not impair the rights or obligations of any
\nParticipant under any Award previously granted under the Plan without the
\nParticipant153s consent. No Awards shall be granted under the Plan after the
\nPlan153s termination. An amendment of the Plan shall be subject to the approval of
\nthe Company153s shareholders only to the extent such approval is otherwise
\nrequired by applicable laws, regulations or rules.<\/p>\n<\/p>\n

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