{"id":40598,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/stock-incentive-plan-amazon.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"stock-incentive-plan-amazon","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/stock-incentive-plan-amazon.html","title":{"rendered":"Stock Incentive Plan – Amazon"},"content":{"rendered":"

AMAZON.COM, INC. <\/u> <\/strong><\/p>\n

1997 STOCK INCENTIVE PLAN <\/strong><\/p>\n

(as amended and restated ) <\/strong><\/p>\n

SECTION 1. PURPOSE <\/strong><\/p>\n

The purpose of the Amazon.com, Inc. 1997 Stock Incentive Plan (the “Plan”) is
\nto enhance the long-term stockholder value of Amazon.com, Inc., a Delaware
\ncorporation (the “Company”), by offering opportunities to employees, directors,
\nofficers, consultants, agents, advisors and independent contractors of the
\nCompany and its Subsidiaries (as defined in Section 2) to participate in the
\nCompany’s growth and success, and to encourage them to remain in the service of
\nthe Company and its Subsidiaries and to acquire and maintain stock ownership in
\nthe Company.<\/p>\n

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

For purposes of the Plan, the following terms shall be defined as set forth
\nbelow:<\/p>\n<\/p>\n\n\n\n
2.1<\/strong><\/td>\nAward <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Award” means an award or grant made pursuant to the Plan, including, without
\nlimitation, awards or grants of Options and Stock Awards , or any combination of
\nthe foregoing.<\/p>\n<\/p>\n\n\n\n
2.2<\/strong><\/td>\nBoard <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Board” means the Board of Directors of the Company.<\/p>\n<\/p>\n\n\n\n
2.3<\/strong><\/td>\nCause <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Cause” means dishonesty, fraud, misconduct, unauthorized use or disclosure
\nof confidential information or trade secrets, or conviction or confession of a
\ncrime punishable by law (except minor violations), in each case as determined by
\nthe Plan Administrator, and its determination shall be conclusive and binding.\n<\/p>\n<\/p>\n\n\n\n
2.4<\/strong><\/td>\nCode <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Code” means the Internal Revenue Code of 1986, as amended from time to time.\n<\/p>\n<\/p>\n\n\n\n
2.5<\/strong><\/td>\nCommon Stock <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Common Stock” means the common stock, par value $.01 per share, of the
\nCompany.<\/p>\n<\/p>\n\n\n\n
2.6<\/strong><\/td>\nCorporate Transaction <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Corporate Transaction” means any of the following events:<\/p>\n<\/p>\n

\n

(a) Consummation of any merger or consolidation of the Company in which the
\nCompany is not the continuing or surviving corporation, or pursuant to which
\nshares of the Common Stock are converted into cash, securities or other property
\n(other than a merger of the Company in which the holders of Common Stock
\nimmediately prior to the merger have the same proportionate ownership of capital
\nstock of the surviving corporation immediately after the merger);<\/p>\n

(b) Consummation of any sale, lease, exchange or other transfer in one
\ntransaction or a series of related transactions of all or substantially all of
\nthe Company’s assets other than a transfer of the Company’s assets to a
\nmajority-owned subsidiary corporation (as the term “subsidiary corporation” is
\ndefined in Section 8.3) of the Company; or<\/p>\n

(c) Approval by the holders of the Common Stock of any plan or proposal for
\nthe liquidation or dissolution of the Company.<\/p>\n<\/p>\n\n\n\n
2.7<\/strong><\/td>\nDisability <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Disability” means “permanent and total disability” as that term is defined
\nfor purposes of Section 22(e)(3) of the Code.<\/p>\n<\/p>\n\n\n\n
2.8<\/strong><\/td>\nEarly Retirement <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Early Retirement” means early retirement as that term is defined by the Plan
\nAdministrator from time to time for purposes of the Plan.<\/p>\n<\/p>\n\n\n\n
2.9<\/strong><\/td>\nExchange Act <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Exchange Act” means the Securities Exchange Act of 1934, as amended.<\/p>\n<\/p>\n\n\n\n
2.10<\/strong><\/td>\nFair Market Value <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The “Fair Market Value” shall be as established in good faith by the Plan
\nAdministrator or (a) if the Common Stock is listed on the Nasdaq National
\nMarket, the average of the high and low per share sales prices for the Common
\nStock as reported by the Nasdaq National Market for a single trading day or
\n(b) if the Common Stock is listed on the New York Stock Exchange or the American
\nStock Exchange, the average of the high and low per share sales prices for the
\nCommon Stock as such price is officially quoted in the composite tape of
\ntransactions on such exchange for a single trading day. If there is no such
\nreported price for the Common Stock for the date in question, then such price on
\nthe last preceding date for which such price exists shall be determinative of
\nthe Fair Market Value.<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

-2-<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n\n\n\n
2.11<\/strong><\/td>\nGrant Date <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Grant Date” means the date the Plan Administrator adopted the granting
\nresolution and all conditions precedent to the grant have been satisfied;
\nprovided that conditions to the exercisability or vesting of Awards shall not
\ndefer the Grant Date. If, however, the Plan Administrator designates in a
\nresolution a later date as the date an Award is to be granted, then such later
\ndate shall be the “Grant Date.”<\/p>\n<\/p>\n\n\n\n
2.12<\/strong><\/td>\nIncentive Stock Option <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Incentive Stock Option” means an Option to purchase Common Stock granted
\nunder Section 7 with the intention that it qualify as an “incentive stock
\noption” as that term is defined in Section 422 of the Code.<\/p>\n<\/p>\n\n\n\n
2.13<\/strong><\/td>\nNonqualified Stock Option <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Nonqualified Stock Option” means an Option to purchase Common Stock granted
\nunder Section 7 other than an Incentive Stock Option.<\/p>\n<\/p>\n\n\n\n
2.14<\/strong><\/td>\nOption <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Option” means the right to purchase Common Stock granted under Section 7.\n<\/p>\n<\/p>\n\n\n\n
2.15<\/strong><\/td>\nParticipant <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Participant” means (a) the person to whom an Award is granted; (b) for a
\nParticipant who has died, the personal representative of the Participant’s
\nestate, the person(s) to whom the Participant’s rights under the Award have
\npassed by will or by the applicable laws of descent and distribution, or the
\nbeneficiary designated in accordance with Section 10; or (c) person(s) to whom
\nan Award has been transferred in accordance with Section 10.<\/p>\n<\/p>\n\n\n\n
2.16<\/strong><\/td>\nPlan Administrator <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Plan Administrator” means the Board or any committee of the Board designated
\nto administer the Plan under Section 3.1.<\/p>\n<\/p>\n\n\n\n
2.17<\/strong><\/td>\nRetirement <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Retirement” means retirement on or after the individual’s normal retirement
\ndate under the Company’s 401(k) plan or other similar successor plan applicable
\nto salaried employees, unless otherwise defined by the Plan Administrator from
\ntime to time for purposes of the Plan.<\/p>\n<\/p>\n\n\n\n
2.18<\/strong><\/td>\nSecurities Act <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Securities Act” means the Securities Act of 1933, as amended.<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

-3-<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n\n\n\n
2.19<\/strong><\/td>\nStock Award <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Stock Award” means shares of Common Stock or units denominated in Common
\nStock granted under Section 9, the rights of ownership of which may be subject
\nto restrictions prescribed by the Plan Administrator.<\/p>\n<\/p>\n\n\n\n
2.20<\/strong><\/td>\nSubsidiary <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Subsidiary,” except as provided in Section 8.3 in connection with Incentive
\nStock Options, means any entity that is directly or indirectly controlled by the
\nCompany or in which the Company has a significant ownership interest, as
\ndetermined by the Plan Administrator, and any entity that may become a direct or
\nindirect parent of the Company.<\/p>\n

SECTION 3. ADMINISTRATION <\/strong><\/p>\n<\/p>\n\n\n\n
3.1<\/strong><\/td>\nPlan Administrator <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Plan shall be administered by the Board or a committee or committees
\n(which term includes subcommittees) appointed by, and consisting of two or more
\nmembers of, the Board. If and so long as the Common Stock is registered under
\nSection 12(b) or 12(g) of the Exchange Act, the Board shall consider in
\nselecting the Plan Administrator and the membership of any committee acting as
\nPlan Administrator, with respect to any persons subject or likely to become
\nsubject to Section 16 of the Exchange Act, the provisions regarding (a) “outside
\ndirectors” as contemplated by Section 162(m) of the Code and (b) “nonemployee
\ndirectors” as contemplated by Rule 16b-3 under the Exchange Act. The Board may
\ndelegate the responsibility for administering the Plan with respect to
\ndesignated classes of eligible persons to different committees consisting of one
\nor more members of the Board, subject to such limitations as the Board deems
\nappropriate. Committee members shall serve for such term as the Board may
\ndetermine, subject to removal by the Board at any time. To the extent consistent
\nwith applicable law, the Plan Administrator may authorize one or more officers
\nof the Company to grant Awards to designated classes of eligible persons, within
\nthe limits specifically prescribed by the Plan Administrator.<\/p>\n<\/p>\n\n\n\n
3.2<\/strong><\/td>\nAdministration and Interpretation by the Plan
\nAdministrator <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Except for the terms and conditions explicitly set forth in the Plan, the
\nPlan Administrator shall have exclusive authority, in its discretion, to
\ndetermine all matters relating to Awards under the Plan, including the selection
\nof individuals to be granted Awards, the type of Awards, the number of shares of
\nCommon Stock subject to an Award, all terms, conditions, restrictions and
\nlimitations, if any, of an Award and the terms of any instrument that evidences
\nthe Award. The Plan Administrator shall also have exclusive authority to
\ninterpret the Plan and may from time to time adopt, and change, rules and
\nregulations of general application for the Plan’s administration. The Plan
\nAdministrator’s interpretation of the Plan and its rules and regulations, and
\nall actions taken and determinations made by the Plan Administrator pursuant to
\nthe Plan, shall be conclusive and binding on all parties involved or affected.
\nThe Plan Administrator may delegate administrative duties to such of the
\nCompany’s officers as it so determines.<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

-4-<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n

SECTION 4. STOCK SUBJECT TO THE PLAN <\/strong><\/p>\n<\/p>\n\n\n\n
4.1<\/strong><\/td>\nAuthorized Number of Shares <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Subject to adjustment from time to time as provided in Section 11.1, the
\nnumber of shares of Common Stock that shall be available for issuance under the
\nPlan shall be:<\/p>\n

(a) 80 million shares plus;<\/p>\n

(b) an annual increase to be added as of the first day of the Company’s
\nfiscal year beginning in 2001 and ending with a final increase on January 1,
\n2010, equal to (i) the lesser of (a) 4% of the outstanding common shares of the
\nCompany as of the end of the immediately preceding fiscal year and
\n(b) 15 million shares, or (ii) a lesser amount determined by the Plan
\nAdministrator; provided that any shares from any such increases in previous
\nyears that are not actually issued shall be added to the aggregate number of
\nshares available for issuance under the Plan; plus<\/p>\n

(c) any authorized shares of Common Stock that, as of February 26, 1997, were
\navailable for issuance under the Company’s 1994 Stock Option Plan (the “Prior
\nPlan”) (or that thereafter become available for issuance under the Prior Plan in
\naccordance with its terms as in effect on such date), up to an aggregate maximum
\nof 21,025,075 shares.<\/p>\n

(d) Notwithstanding the foregoing, the maximum number of shares that may be
\nissued pursuant to Options intended to qualify as Incentive Stock Options shall
\nbe 251,025,075<\/p>\n

Shares issued under the Plan shall be drawn from authorized and unissued
\nshares or shares now held or subsequently acquired by the Company as treasury
\nshares.<\/p>\n<\/p>\n\n\n\n
4.2<\/strong><\/td>\nLimitations <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Subject to adjustment from time to time as provided in Section 11.1, not more
\nthan 4,500,000 shares of Common Stock may be made subject to Awards under the
\nPlan to any individual in the aggregate in any one fiscal year of the Company,
\nexcept that the Company may make additional one-time grants of up to
\n18 million shares to newly hired or newly promoted individuals, such limitation
\nto be applied in a manner consistent with the requirements of, and only to the
\nextent required for compliance with, the exclusion from the limitation on
\ndeductibility of compensation under Section 162(m) of the Code.<\/p>\n<\/p>\n\n\n\n
4.3<\/strong><\/td>\nReuse of Shares <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Any shares of Common Stock that have been made subject to an Award that cease
\nto be subject to the Award (other than by reason of exercise or payment of the
\nAward to the extent it is exercised for or settled in shares), and\/or shares of
\nCommon Stock subject to repurchase or forfeiture which are subsequently
\nreacquired by the Company, shall again be available for issuance in connection
\nwith future grants of Awards under the Plan; provided, however, that for
\npurposes of Section 4.2, any such shares shall be counted in accordance with the
\nrequirements of Section 162(m) of the Code.<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

-5-<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n

SECTION 5. ELIGIBILITY <\/strong><\/p>\n

Awards may be granted under the Plan to those officers, directors and
\nemployees of the Company and its Subsidiaries as the Plan Administrator from
\ntime to time selects. Awards may also be granted to consultants, agents,
\nadvisors and independent contractors who provide services to the Company and its
\nSubsidiaries.<\/p>\n

SECTION 6. AWARDS <\/strong><\/p>\n<\/p>\n\n\n\n
6.1<\/strong><\/td>\nForm and Grant of Awards <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Plan Administrator shall have the authority, in its sole discretion, to
\ndetermine the type or types of Awards to be made under the Plan. Such Awards may
\ninclude, but are not limited to, Incentive Stock Options, Nonqualified Stock
\nOptions and Stock Awards. Awards may be granted singly or in combination.<\/p>\n<\/p>\n\n\n\n
6.2<\/strong><\/td>\nSettlement of Awards <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Company may settle Awards through the delivery of shares of Common Stock,
\ncash payments, the granting of replacement Awards or any combination thereof as
\nthe Plan Administrator shall determine. Any Award settlement, including payment
\ndeferrals, may be subject to such conditions, restrictions and contingencies as
\nthe Plan Administrator shall determine. The Plan Administrator may permit or
\nrequire the deferral of any Award payment, subject to such rules and procedures
\nas it may establish, which may include provisions for the payment or crediting
\nof interest, or dividend equivalents, including converting such credits into
\ndeferred stock equivalents. The Plan Administrator may at any time offer to buy
\nout, for a payment in cash or Common Stock, an Award previously granted based on
\nsuch terms and conditions as the Plan Administrator shall establish and
\ncommunicate to the Participant at the time such offer is made.<\/p>\n<\/p>\n\n\n\n
6.3<\/strong><\/td>\nAcquired Company Option Awards <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Notwithstanding anything in the Plan to the contrary, the Plan Administrator
\nmay grant Awards under the Plan in substitution for awards issued under other
\nplans, or assume under the Plan awards issued under other plans, if the other
\nplans are or were plans of other acquired entities (“Acquired Entities”) (or the
\nparent of an Acquired Entity) and the new Award is substituted, or the old award
\nis assumed, by reason of a merger, consolidation, acquisition of property or of
\nstock, reorganization or liquidation (the “Acquisition Transaction”). In the
\nevent that a written agreement pursuant to which the Acquisition Transaction is
\ncompleted is approved by the Board and said agreement sets forth the terms and
\nconditions of the substitution for or assumption of outstanding awards of the
\nAcquired Entity, said terms and conditions shall be deemed to be the action of
\nthe Plan Administrator without any further action by the Plan Administrator,
\nexcept as may be required for compliance with Rule 16b-3 under the Exchange Act,
\nand the persons holding such awards shall be deemed to be Participants.<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

-6-<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n

SECTION 7. TERMS AND CONDITIONS OF OPTIONS <\/strong>\n<\/p>\n<\/p>\n\n\n\n
7.1<\/strong><\/td>\nGrant of Options <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Plan Administrator is authorized under the Plan, in its sole discretion,
\nto issue Options as Incentive Stock Options or as Nonqualified Stock Options,
\nwhich shall be appropriately designated.<\/p>\n<\/p>\n\n\n\n
7.2<\/strong><\/td>\nOption Exercise Price <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The exercise price for shares purchased under an Option shall be as
\ndetermined by the Plan Administrator, but shall not be less than 100% of the
\nFair Market Value of the Common Stock on the Grant Date with respect to
\nIncentive Stock Options.<\/p>\n<\/p>\n\n\n\n
7.3<\/strong><\/td>\nTerm of Options <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The term of each Option shall be as established by the Plan Administrator or,
\nif not so established, shall be 10 years from the Grant Date.<\/p>\n<\/p>\n\n\n\n
7.4<\/strong><\/td>\nExercise and Vesting of Options <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Plan Administrator shall establish and set forth in each instrument that
\nevidences an Option the time at which, or the installments in which, the Option
\nshall vest and become exercisable, which provisions may be waived or modified by
\nthe Plan Administrator at any time. If not otherwise established in the
\ninstrument evidencing the Option, the Option will vest and become exercisable
\naccording to the following schedule, which may be waived or modified by the Plan
\nAdministrator at any time:<\/p>\n<\/p>\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Period of Participant’s Continuous Employment
\nor<\/strong><\/p>\n

Service With the Company or Its Subsidiaries<\/strong>\n<\/p>\n

From the Grant Date<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Percent of Total Option<\/strong><\/p>\n

That Is Vested and Exercisable<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

After 1 year<\/p>\n<\/td>\n

<\/td>\n\n

20%<\/p>\n<\/td>\n<\/tr>\n

\n

After 2 years<\/p>\n<\/td>\n

<\/td>\n\n

40%<\/p>\n<\/td>\n<\/tr>\n

\n

Each three-month period completed thereafter<\/p>\n<\/td>\n

<\/td>\n\n

An additional 5%<\/p>\n<\/td>\n<\/tr>\n

\n

After 5 years<\/p>\n<\/td>\n

<\/td>\n\n

100%<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

To the extent that an Option has become exercisable, the Option may be
\nexercised from time to time by written notice to the Company, in accordance with
\nprocedures established by the Plan Administrator, setting forth the number of
\nshares with respect to which the Option is being exercised and accompanied by
\npayment in full as described in Section 7.5. The Plan Administrator may
\ndetermine at any time that an Option may not be exercised as to less than
\n100 shares at any one time for vested shares and any number in its discretion
\nfor unvested shares (or the lesser number of remaining shares covered by the
\nOption).<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

-7-<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n\n\n\n
7.5<\/strong><\/td>\nPayment of Exercise Price <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The exercise price for shares purchased under an Option shall be paid in full
\nto the Company by delivery of consideration equal to the product of the Option
\nexercise price and the number of shares purchased. Such consideration must be
\npaid in cash or by check or, unless the Plan Administrator in its sole
\ndiscretion determines otherwise, either at the time the Option is granted or at
\nany time before it is exercised, a combination of cash and\/or check (if any) and
\none or both of the following alternative forms: (a) tendering (either actually
\nor, if and so long as the Common Stock is registered under Section 12(b) or
\n12(g) of the Exchange Act, by attestation) Common Stock already owned by the
\nParticipant for at least six months (or any shorter period necessary to avoid a
\ncharge to the Company’s earnings for financial reporting purposes) having a Fair
\nMarket Value on the day prior to the exercise date equal to the aggregate Option
\nexercise price or (b) if and so long as the Common Stock is registered under
\nSection 12(b) or 12(g) of the Exchange Act, delivery of a properly executed
\nexercise notice, together with irrevocable instructions, to (i) a brokerage firm
\ndesignated by the Company to deliver promptly to the Company the aggregate
\namount of sale or loan proceeds to pay the Option exercise price and any
\nwithholding tax obligations that may arise in connection with the exercise and
\n(ii) the Company to deliver the certificates for such purchased shares directly
\nto such brokerage firm, all in accordance with the regulations of the Federal
\nReserve Board. In addition, the exercise price for shares purchased under an
\nOption may be paid, either singly or in combination with one or more of the
\nalternative forms of payment authorized by this Section 7.5, by (y) a promissory
\nnote delivered pursuant to Section 13 or (z) such other consideration as the
\nPlan Administrator may permit.<\/p>\n<\/p>\n\n\n\n
7.6<\/strong><\/td>\nPost-Termination Exercises <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Plan Administrator shall establish and set forth in each instrument that
\nevidences an Option whether the Option will continue to be exercisable, and the
\nterms and conditions of such exercise, if a Participant ceases to be employed
\nby, or to provide services to, the Company or its Subsidiaries, which provisions
\nmay be waived or modified by the Plan Administrator at any time. If not so
\nestablished in the instrument evidencing the Option, the Option will be
\nexercisable according to the following terms and conditions, which may be waived
\nor modified by the Plan Administrator at any time.<\/p>\n

In case of termination of the Participant’s employment or services other than
\nby reason of death or Cause, the Option shall be exercisable, to the extent of
\nthe number of shares vested at the date of such termination, only (a) within one
\nyear if the termination of the Participant’s employment or services is
\ncoincident with Retirement, Early Retirement at the Company’s request or
\nDisability or (b) within three months after the date the Participant ceases to
\nbe an employee, director, officer, consultant, agent, advisor or independent
\ncontractor of the Company or a Subsidiary if termination of the Participant’s
\nemployment or services is for any reason other than Retirement, Early Retirement
\nat the Company’s request or Disability, but in no event later than the remaining
\nterm of the Option. Any Option exercisable at the time of the Participant’s
\ndeath may be exercised, to the extent of the number of shares vested at the date
\nof the Participant’s death, by the personal representative of the Participant’s
\nestate, the person(s) to whom the Participant’s rights under the Option have
\npassed by will or the applicable laws of<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

-8-<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n

descent and distribution or the beneficiary designated pursuant to Section 10
\nat any time or from time to time within one year after the date of death, but in
\nno event later than the remaining term of the Option. Any portion of an Option
\nthat is not vested on the date of termination of the Participant’s employment or
\nservices shall terminate on such date, unless the Plan Administrator determines
\notherwise. In case of termination of the Participant’s employment or services
\nfor Cause, the Option shall automatically terminate upon first notification to
\nthe Participant of such termination, unless the Plan Administrator determines
\notherwise. If a Participant’s employment or services with the Company are
\nsuspended pending an investigation of whether the Participant shall be
\nterminated for Cause, all the Participant’s rights under any Option likewise
\nshall be suspended during the period of investigation.<\/p>\n

With respect to employees, unless the Plan Administrator at any time
\ndetermines otherwise, “termination of the Participant’s employment or services”
\nfor purposes of the Plan (including without limitation this Section 7 and
\nSection 14) shall mean any reduction in the Participant’s regular hours of
\nemployment to less than thirty (30) hours per week. A transfer of employment or
\nservices between or among the Company and its Subsidiaries shall not be
\nconsidered a termination of employment or services. The effect of a
\nCompany-approved leave of absence on the terms and conditions of an Option shall
\nbe determined by the Plan Administrator, in its sole discretion.<\/p>\n

SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS
\n<\/strong><\/p>\n

To the extent required by Section 422 of the Code, Incentive Stock Options
\nshall be subject to the following additional terms and conditions:<\/p>\n<\/p>\n\n\n\n
8.1<\/strong><\/td>\nDollar Limitation <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

To the extent the aggregate Fair Market Value (determined as of the Grant
\nDate) of Common Stock with respect to which Incentive Stock Options are
\nexercisable for the first time during any calendar year (under the Plan and all
\nother stock option plans of the Company) exceeds $100,000, such portion in
\nexcess of $100,000 shall be subject to delayed exercisability or treated as a
\nNonqualified Stock Option as set forth by the Plan Administrator in the
\nagreement(s) evidencing the Option. In the event the Participant holds two or
\nmore such Options that become exercisable for the first time in the same
\ncalendar year, such limitation shall be applied on the basis of the order in
\nwhich such Options are granted.<\/p>\n<\/p>\n\n\n\n
8.2<\/strong><\/td>\n10% Stockholders <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

If an individual owns more than 10% of the total voting power of all classes
\nof the Company’s stock, then the exercise price per share of an Incentive Stock
\nOption shall not be less than 110% of the Fair Market Value of the Common Stock
\non the Grant Date and the Option term shall not exceed five years. The
\ndetermination of 10% ownership shall be made in accordance with Section 422 of
\nthe Code.<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

-9-<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n\n\n\n
8.3<\/strong><\/td>\nEligible Employees <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Individuals who are not employees of the Company or one of its parent
\ncorporations or subsidiary corporations may not be granted Incentive Stock
\nOptions. For purposes of this Section 8.3, “parent corporation” and “subsidiary
\ncorporation” shall have the meanings attributed to those terms for purposes of
\nSection 422 of the Code.<\/p>\n<\/p>\n\n\n\n
8.4<\/strong><\/td>\nTerm <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The term of an Incentive Stock Option shall not exceed 10 years.<\/p>\n<\/p>\n\n\n\n
8.5<\/strong><\/td>\nExercisability <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

To qualify for Incentive Stock Option tax treatment, an Option designated as
\nan Incentive Stock Option must be exercised within three months after
\ntermination of employment for reasons other than death, except that, in the case
\nof termination of employment due to Disability, such Option must be exercised
\nwithin one year after such termination. Disability shall be deemed to have
\noccurred on the first day after the Company has furnished its opinion of
\nDisability to the Plan Administrator. Employment shall not be deemed to continue
\nbeyond the first 90 days of a leave of absence unless the Participant’s
\nreemployment rights are guaranteed by statute or contract.<\/p>\n<\/p>\n\n\n\n
8.6<\/strong><\/td>\nTaxation of Incentive Stock Options <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

In order to obtain certain tax benefits afforded to Incentive Stock Options
\nunder Section 422 of the Code, the Participant must hold the shares issued upon
\nthe exercise of an Incentive Stock Option for two years after the Grant Date of
\nthe Incentive Stock Option and one year from the date of exercise. A Participant
\nmay be subject to the alternative minimum tax at the time of exercise of an
\nIncentive Stock Option. The Plan Administrator may require a Participant to give
\nthe Company prompt notice of any disposition of shares acquired by the exercise
\nof an Incentive Stock Option prior to the expiration of such holding periods.\n<\/p>\n<\/p>\n\n\n\n
8.7<\/strong><\/td>\nPromissory Notes <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The amount of any promissory note delivered pursuant to Section 13 in
\nconnection with an Incentive Stock Option shall bear interest at a rate
\nspecified by the Plan Administrator but in no case less than the rate required
\nto avoid imputation of interest (taking into account any exceptions to the
\nimputed interest rules) for federal income tax purposes.<\/p>\n

SECTION 9. STOCK AWARDS <\/strong><\/p>\n<\/p>\n\n\n\n
9.1<\/strong><\/td>\nGrant of Stock Awards <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Plan Administrator is authorized to make Awards of Common Stock or Awards
\ndenominated in units of Common Stock on such terms and conditions and subject to
\nsuch restrictions, if any (which may be based on continuous service with the
\nCompany or the achievement of performance goals related to profits or loss,
\nrevenue or profit growth or loss<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

-10-<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n

reduction, profit or loss related return ratios, other balance sheet or
\nincome statement targets or ratios, market share, project completion,
\noperational or productivity efficiency gains, cash flow, share price
\nappreciation or total stockholder return, where such goals may be stated in
\nabsolute terms or relative to comparison companies), as the Plan Administrator
\nshall determine, in its sole discretion, which terms, conditions and
\nrestrictions shall be set forth in the instrument evidencing the Award. The
\nterms, conditions and restrictions that the Plan Administrator shall have the
\npower to determine shall include, without limitation, the manner in which shares
\nsubject to Stock Awards are held during the periods they are subject to
\nrestrictions and the circumstances under which forfeiture of the Stock Award
\nshall occur by reason of termination of the Participant’s employment or service
\nrelationship.<\/p>\n<\/p>\n\n\n\n
9.2<\/strong><\/td>\nIssuance of Shares <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Upon the satisfaction of any terms, conditions and restrictions prescribed in
\nrespect to a Stock Award, or upon the Participant’s release from any terms,
\nconditions and restrictions of a Stock Award, as determined by the Plan
\nAdministrator, the Company shall release, as soon as practicable, to the
\nParticipant or, in the case of the Participant’s death, to the personal
\nrepresentative of the Participant’s estate or as the appropriate court directs,
\nthe appropriate number of shares of Common Stock.<\/p>\n<\/p>\n\n\n\n
9.3<\/strong><\/td>\nWaiver of Restrictions <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Notwithstanding any other provisions of the Plan, the Plan Administrator may,
\nin its sole discretion, waive the forfeiture period and any other terms,
\nconditions or restrictions on any Stock Award under such circumstances and
\nsubject to such terms and conditions as the Plan Administrator shall deem
\nappropriate; provided, however, that the Plan Administrator may not adjust
\nperformance goals for any Stock Award intended to be exempt under Section 162(m)
\nof the Code for the year in which the Stock Award is settled in such a manner as
\nwould increase the amount otherwise payable to a Participant.<\/p>\n

SECTION 10. ASSIGNABILITY <\/strong><\/p>\n

No Awards granted under the Plan or any interest therein may be assigned,
\npledged or transferred by the Participant other than by will or by the
\napplicable laws of descent and distribution, and, during the Participant’s
\nlifetime, such Award may be exercised only by the Participant or a permitted
\nassignee or transferee of the Participant (as provided below). Notwithstanding
\nthe foregoing, and to the extent permitted by Section 422 of the Code, the Plan
\nAdministrator, in its sole discretion, may permit such assignment, transfer and
\nexercisability and may permit a Participant to designate a beneficiary who may
\nexercise the Award or receive payment under the Award after the Participant’s
\ndeath; provided, however, that any Award so assigned or transferred shall be
\nsubject to all the same terms and conditions contained in the instrument
\nevidencing the Award.<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

-11-<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n

SECTION 11. ADJUSTMENTS <\/strong><\/p>\n<\/p>\n\n\n\n
11.1<\/strong><\/td>\nAdjustment of Shares <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

In the event that, at any time or from time to time, a stock dividend, stock
\nsplit, spin-off, combination or exchange of shares, recapitalization, merger,
\nconsolidation, distribution to stockholders other than a normal cash dividend,
\nor other change in the Company’s corporate or capital structure results in
\n(a) the outstanding shares, or any securities exchanged therefor or received in
\ntheir place, being exchanged for a different number or class of securities of
\nthe Company or of any other corporation or (b) new, different or additional
\nsecurities of the Company or of any other corporation being received by the
\nholders of shares of Common Stock of the Company, then the Plan Administrator
\nshall make proportional adjustments in (i) the maximum number and kind of
\nsecurities subject to the Plan as set forth in Sections 4.1(a), (b) and (c);
\n(ii) the maximum number and kind of securities that may be issued as ISOs under
\nthe Plan as set forth in Section 4.1(d); (iii) the maximum number and kind of
\nsecurities that may be made subject to Awards to any individual as set forth in
\nSection 4.2, and (iv) the number and kind of securities that are subject to any
\noutstanding Award and the per share price of such securities, without any change
\nin the aggregate price to be paid therefor. The determination by the Plan
\nAdministrator as to the terms of any of the foregoing adjustments shall be
\nconclusive and binding.<\/p>\n<\/p>\n\n\n\n
11.2<\/strong><\/td>\nCorporate Transaction <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

11.2.1 Options <\/strong><\/p>\n

Except as otherwise provided in the instrument that evidences the Option, in
\nthe event of a Corporate Transaction, the Plan Administrator shall determine
\nwhether provision will be made in connection with the Corporate Transaction for
\nan appropriate assumption of the Options theretofore granted under the Plan
\n(which assumption may be effected by means of a payment to each Participant (by
\nthe Company or any other person or entity involved in the Corporate
\nTransaction), in exchange for the cancellation of the Options held by such
\nParticipant, of the difference between the then Fair Market Value of the
\naggregate number of shares of Common Stock then subject to such Options and the
\naggregate exercise price that would have to be paid to acquire such shares) or
\nfor substitution of appropriate new options covering stock of a successor
\ncorporation to the Company or stock of an affiliate of such successor
\ncorporation. If the Plan Administrator determines that such an assumption or
\nsubstitution will be made, the Plan Administrator shall give notice of such
\ndetermination to the Participants, and the provisions of such assumption or
\nsubstitution, and any adjustments made (i) to the number and kind of shares
\nsubject to the outstanding Options (or to the options in substitution therefor),
\n(ii) to the exercise prices, and\/or (iii) to the terms and conditions of the
\nstock options, shall be binding on the Participants. Any such determination
\nshall be made in the sole discretion of the Plan Administrator and shall be
\nfinal, conclusive and binding on all Participants. If the Plan Administrator, in
\nits sole discretion, determines that no such assumption or substitution will be
\nmade, the Plan Administrator shall give notice of such determination to the
\nParticipants, and each Option that is at the time outstanding shall
\nautomatically accelerate so that each such Option shall, immediately prior to
\nthe specified effective date for the Corporate Transaction, become<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

-12-<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n

100% vested and exercisable, except that such acceleration will not occur if,
\nin the opinion of the Company’s outside accountants, it would render unavailable
\n“pooling of interest” accounting for a Corporate Transaction that would
\notherwise qualify for such accounting treatment. All such Options shall
\nterminate and cease to remain outstanding immediately following the consummation
\nof the Corporate Transaction, except to the extent assumed by the successor
\ncorporation or an affiliate thereof.<\/p>\n<\/p>\n\n\n\n
<\/td>\n11.2.2<\/strong><\/td>\n Stock Awards <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Except as otherwise provided in the instrument that evidences the Award, in
\nthe event of a Corporate Transaction, the vesting of shares subject to Stock
\nAwards shall accelerate, and the forfeiture provisions to which such shares are
\nsubject shall lapse, if and to the same extent that the vesting of outstanding
\nOptions accelerates in connection with the Corporate Transaction. If unvested
\nOptions are to be assumed, continued or substituted by a successor corporation
\nwithout acceleration upon the occurrence of a Corporate Transaction, the
\nforfeiture provisions to which such Stock Awards are subject will continue with
\nrespect to shares of the successor corporation that may be issued in exchange
\nfor such shares subject to Stock Awards.<\/p>\n<\/p>\n\n\n\n
11.3<\/strong><\/td>\nFurther Adjustment of Awards <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Subject to Section 11.2, the Plan Administrator shall have the discretion,
\nexercisable at any time before a sale, merger, consolidation, reorganization,
\nliquidation or change in control of the Company, as defined by the Plan
\nAdministrator, to take such further action as it determines to be necessary or
\nadvisable, and fair and equitable to Participants, with respect to Awards. Such
\nauthorized action may include (but shall not be limited to) establishing,
\namending or waiving the type, terms, conditions or duration of, or restrictions
\non, Awards so as to provide for earlier, later, extended or additional time for
\nexercise and other modifications, and the Plan Administrator may take such
\nactions with respect to all Participants, to certain categories of Participants
\nor only to individual Participants. The Plan Administrator may take such action
\nbefore or after granting Awards to which the action relates and before or after
\nany public announcement with respect to such sale, merger, consolidation,
\nreorganization, liquidation or change in control that is the reason for such
\naction.<\/p>\n<\/p>\n\n\n\n
11.4<\/strong><\/td>\nLimitations <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The grant of Awards will in no way affect the Company’s right 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.<\/p>\n<\/p>\n\n\n\n
11.5<\/strong><\/td>\nFractional Shares <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

In the event of any adjustment in the number of shares covered by any Award,
\neach such Award shall cover only the number of full shares resulting from such
\nadjustment.<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

-13-<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n

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

The Company may require the Participant to pay to the Company the amount of
\nany withholding taxes that the Company is required to withhold with respect to
\nthe grant, vesting or exercise of any Award. Subject to the Plan and applicable
\nlaw, the Plan Administrator may, in its sole discretion, permit the Participant
\nto satisfy withholding obligations, in whole or in part, (a) by paying cash,
\n(b) by electing to have the Company withhold shares of Common Stock (up to the
\nminimum required federal withholding rate), or (c) by transferring shares of
\nCommon Stock to the Company (already owned by the Participant for the period
\nnecessary to avoid a charge to the Company’s earnings for financial reporting
\npurposes), in such amounts as are equivalent to the Fair Market Value of the
\nwithholding obligation. The Company shall have the right to withhold from any
\nshares of Common Stock issuable pursuant to an Award or from any cash amounts
\notherwise due or to become due from the Company to the Participant an amount
\nequal to such taxes. The Company may also deduct from any Award any other
\namounts due from the Participant to the Company or a Subsidiary.<\/p>\n

SECTION 13. LOANS, INSTALLMENT PAYMENTS AND LOAN
\nGUARANTEES <\/strong><\/p>\n

To assist a Participant (including a Participant who is an officer or a
\ndirector of the Company) in acquiring shares of Common Stock pursuant to an
\nAward granted under the Plan, the Plan Administrator, in its sole discretion,
\nmay authorize, either at the Grant Date or at any time before the acquisition of
\nCommon Stock pursuant to the Award, (a) the extension of a full-recourse loan to
\nthe Participant by the Company, (b) the payment by the Participant of the
\npurchase price, if any, of the Common Stock in installments, or (c) the
\nguarantee by the Company of a full-recourse loan obtained by the Participant
\nfrom a third party. Subject to the foregoing, the terms of any loans,
\ninstallment payments or loan guarantees, including the interest rate and terms
\nof repayment, will be subject to the Plan Administrator’s discretion. The
\nmaximum credit available is the purchase price, if any, of the Common Stock
\nacquired, plus the maximum federal and state income and employment tax liability
\nthat may be incurred in connection with the acquisition.<\/p>\n

SECTION 14. REPURCHASE RIGHTS; ESCROW <\/strong><\/p>\n<\/p>\n\n\n\n
14.1<\/strong><\/td>\nRepurchase Rights <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Plan Administrator shall have the discretion to authorize the issuance of
\nunvested shares of Common Stock pursuant to the exercise of an Option. In the
\nevent of termination of the Participant’s employment or services, all shares of
\nCommon Stock issued upon exercise of an Option which are unvested at the time of
\ncessation of employment or services shall be subject to repurchase at the
\nexercise price paid for such shares. The terms and conditions upon which such
\nrepurchase right shall be exercisable (including the period and procedure for
\nexercise) shall be established by the Plan Administrator and set forth in the
\nagreement evidencing such right.<\/p>\n

All of the Company’s outstanding repurchase rights under this Section 14.1
\nare assignable by the Company at any time and shall remain in full force and
\neffect in the event of a Corporate Transaction; provided that if the vesting of
\nOptions is accelerated pursuant to Section 11.2, the repurchase rights under
\nthis Section 14.1 shall terminate and all shares subject to such terminated
\nrights shall immediately vest in full.<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

-14-<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n

The Plan Administrator shall have the discretionary authority, exercisable
\neither before or after the Participant’s cessation of employment or services, to
\ncancel the Company’s outstanding repurchase rights with respect to one or more
\nshares purchased or purchasable by the Participant under an Option and thereby
\naccelerate the vesting of such shares in whole or in part at any time.<\/p>\n<\/p>\n\n\n\n
14.2<\/strong><\/td>\nEscrow <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

To ensure that shares of Common Stock acquired pursuant to an Award that are
\nsubject to any repurchase or forfeiture right and\/or security for any promissory
\nnote will be available for repurchase or forfeiture, the Plan Administrator may
\nrequire the Participant to deposit the certificate or certificates evidencing
\nsuch shares with an agent designated by the Plan Administrator under the terms
\nand conditions of escrow and security agreements approved by the Plan
\nAdministrator. If the Plan Administrator does not require such deposit as a
\ncondition of exercise of an Option or grant of a Stock Award, the Plan
\nAdministrator reserves the right at any time to require the Participant to so
\ndeposit the certificate or certificates in escrow. The Company shall bear the
\nexpenses of the escrow. The Company, at its discretion, may in lieu of issuing a
\nstock certificate for such shares, make a book entry credit in the Company’s
\nstock ledger to evidence the issuance of such shares.<\/p>\n

As soon as practicable after the expiration of any repurchase or forfeiture
\nrights, and after full repayment of any promissory note secured by the shares in
\nescrow, the agent shall deliver to the Participant the shares no longer subject
\nto such restrictions and no longer security for any promissory note.<\/p>\n

In the event shares held in escrow are subject to the Company’s exercise of a
\nrepurchase or forfeiture right, the notices required to be given to the
\nParticipant shall be given to the agent and any payment required to be given to
\nthe Participant shall be given to the agent. Within 30 days after payment by the
\nCompany, the agent shall deliver the shares which the Company has purchased to
\nthe Company and shall deliver the payment received from the Company to the
\nParticipant.<\/p>\n

In the event of any stock dividend, stock split or consolidation of shares or
\nany like capital adjustment of any of the outstanding securities of the Company,
\nany and all new, substituted or additional securities or other property to which
\nthe Participant is entitled by reason of ownership of shares acquired upon
\nexercise of an Option or grant of a Stock Award shall be subject to any
\nrepurchase or forfeiture rights, and\/or security for any promissory note with
\nthe same force and effect as the shares subject to such repurchase or forfeiture
\nrights and\/or security interest immediately before such event.<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

-15-<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n

SECTION 15. AMENDMENT AND TERMINATION OF PLAN
\n<\/strong><\/p>\n<\/p>\n\n\n\n
15.1<\/strong><\/td>\nAmendment of Plan <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Plan may be amended only by the Board in such respects as it shall deem
\nadvisable; however, to the extent required for compliance with Section 422 of
\nthe Code or any applicable law or regulation, stockholder approval will be
\nrequired for any amendment that will (a) increase the total number of shares
\navailable for issuance under the Plan, (b) modify the class of persons eligible
\nto receive Options, or (c) otherwise require stockholder approval under any
\napplicable law or regulation.<\/p>\n<\/p>\n\n\n\n
15.2<\/strong><\/td>\nTermination of Plan <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Board may suspend or terminate the Plan at any time. The Plan will have
\nno fixed expiration date; provided, however, that no Incentive Stock Options may
\nbe granted more than 10 years after the later of (a) the Plan’s adoption by the
\nBoard and (b) the adoption by the Board of any amendment to the Plan that
\nconstitutes the adoption of a new plan for purposes of Section 422 of the Code.\n<\/p>\n<\/p>\n\n\n\n
15.3<\/strong><\/td>\nConsent of Participant <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The amendment or termination of the Plan shall not, without the consent of
\nthe Participant, impair or diminish any rights or obligations under any Award
\ntheretofore granted under the Plan.<\/p>\n

Any change or adjustment to an outstanding Incentive Stock Option shall not,
\nwithout the consent of the Participant, be made in a manner so as to constitute
\na “modification” that would cause such Incentive Stock Option to fail to
\ncontinue to qualify as an Incentive Stock Option.<\/p>\n

SECTION 16. GENERAL <\/strong><\/p>\n<\/p>\n\n\n\n
16.1<\/strong><\/td>\nEvidence of Awards <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Awards granted under the Plan shall be evidenced by a written agreement that
\nshall contain such terms, conditions, limitations and restrictions as the Plan
\nAdministrator shall deem advisable and that are not inconsistent with the Plan.\n<\/p>\n<\/p>\n\n\n\n
16.2<\/strong><\/td>\nContinued Employment or Services; Rights in Awards
\n<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

None of the Plan, participation in the Plan or any action of the Plan
\nAdministrator taken under the Plan shall be construed as giving any person any
\nright to be retained in the employ of the Company or limit the Company’s right
\nto terminate the employment or services of any person.<\/p>\n<\/p>\n\n\n\n
16.3<\/strong><\/td>\nRegistration <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Company shall be under no obligation to any Participant to register for
\noffering or resale or to qualify for exemption under the Securities Act, or to
\nregister or qualify under state<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

-16-<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n

securities laws, any shares of Common Stock, security or interest in a
\nsecurity paid or issued under, or created by, the Plan, or to continue in effect
\nany such registrations or qualifications if made. The Company may issue
\ncertificates for shares with such legends and subject to such restrictions on
\ntransfer and stop-transfer instructions as counsel for the Company deems
\nnecessary or desirable for compliance by the Company with federal and state
\nsecurities laws.<\/p>\n

Inability of the Company to obtain, from any regulatory body having
\njurisdiction, the authority deemed by the Company’s counsel to be necessary for
\nthe lawful issuance and sale of any shares hereunder or the unavailability of an
\nexemption from registration for the issuance and sale of any shares hereunder
\nshall relieve the Company of any liability in respect of the nonissuance or sale
\nof such shares as to which such requisite authority shall not have been
\nobtained.<\/p>\n

As a condition to the exercise of an Award, the Company may require the
\nParticipant to represent and warrant at the time of any such exercise or receipt
\nthat such shares are being purchased or received only for the Participant’s own
\naccount and without any present intention to sell or distribute such shares if,
\nin the opinion of counsel for the Company, such a representation is required by
\nany relevant provision of the aforementioned laws. At the option of the Company,
\na stop-transfer order against any such shares may be placed on the official
\nstock books and records of the Company, and a legend indicating that such shares
\nmay not be pledged, sold or otherwise transferred, unless an opinion of counsel
\nis provided (concurred in by counsel for the Company) stating that such transfer
\nis not in violation of any applicable law or regulation, may be stamped on stock
\ncertificates to ensure exemption from registration. The Plan Administrator may
\nalso require such other action or agreement by the Participant as may from time
\nto time be necessary to comply with the federal and state securities laws.<\/p>\n<\/p>\n\n\n\n
16.4<\/strong><\/td>\nNo Rights as a Stockholder <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

No Option or Stock Award denominated in units shall entitle the Participant
\nto any dividend, voting or other right of a stockholder unless and until the
\ndate of issuance under the Plan of the shares that are the subject of such
\nAward, free of all applicable restrictions.<\/p>\n<\/p>\n\n\n\n
16.5<\/strong><\/td>\nCompliance With Laws and Regulations <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Notwithstanding anything in the Plan to the contrary, the Board, in its sole
\ndiscretion, may bifurcate the Plan so as to restrict, limit or condition the use
\nof any provision of the Plan to Participants who are officers or directors
\nsubject to Section 16 of the Exchange Act without so restricting, limiting or
\nconditioning the Plan with respect to other Participants. Additionally, in
\ninterpreting and applying the provisions of the Plan, any Option granted as an
\nIncentive Stock Option pursuant to the Plan shall, to the extent permitted by
\nlaw, be construed as an “incentive stock option” within the meaning of
\nSection 422 of the Code.<\/p>\n<\/p>\n\n\n\n
16.6<\/strong><\/td>\nNo Trust or Fund <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Plan is intended to constitute an “unfunded” plan. Nothing contained
\nherein shall require the Company to segregate any monies or other property, or
\nshares of Common Stock, or to create any trusts, or to make any special deposits
\nfor any immediate or deferred amounts payable to any Participant, and no
\nParticipant shall have any rights that are greater than those of a general
\nunsecured creditor of the Company.<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

-17-<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n\n\n\n
16.7<\/strong><\/td>\nSeverability <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

If any provision of the Plan or any Option is determined to be invalid,
\nillegal or unenforceable in any jurisdiction, or as to any person, or would
\ndisqualify the Plan or any Option under any law deemed applicable by the Plan
\nAdministrator, such provision shall be construed or deemed amended to conform to
\napplicable laws, or, if it cannot be so construed or deemed amended without, in
\nthe Plan Administrator’s determination, materially altering the intent of the
\nPlan or the Option, such provision shall be stricken as to such jurisdiction,
\nperson or Option, and the remainder of the Plan and any such Option shall remain
\nin full force and effect.<\/p>\n<\/p>\n\n\n\n
16.8<\/strong><\/td>\nParticipants in Foreign Countries <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Plan Administrator shall have the authority to adopt such modifications,
\nprocedures and subplans as may be necessary or desirable, after consideration of
\nthe provisions of the laws of foreign countries in which the Company or its
\nSubsidiaries may operate, to ensure the viability of the benefits from Awards
\ngranted to Participants employed in such countries and to meet the objectives of
\nthe Plan.<\/p>\n<\/p>\n\n\n\n
16.9<\/strong><\/td>\nChoice of Law <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Plan and all determinations made and actions taken pursuant hereto, to
\nthe extent not otherwise governed by the laws of the United States, shall be
\ngoverned by the laws of the State of Washington without giving effect to
\nprinciples of conflicts of laws.<\/p>\n

SECTION 17. EFFECTIVE DATE <\/strong><\/p>\n

The Plan’s effective date is the date on which it is adopted by the Board, so
\nlong as it is approved by the Company’s stockholders at any time within 12
\nmonths of such adoption.<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

-18-<\/p>\n<\/td>\n

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