Exhibit 10.1

 

THIRD AMENDED AND RESTATED

GAMESTOP CORP.

2001 INCENTIVE PLAN

GAMESTOP CORP., a Delaware corporation (the “Company”), has adopted the GameStop
Corp. 2001 Incentive Plan (the “Plan”) which has been previously amended and
restated. The Company hereby amends and restates the Plan effective as of
December 31, 2008 to read as follows:

RECITALS

WHEREAS, the Company desires to encourage high levels of performance by those
individuals who are key to the success of the Company or any parent, subsidiary
or affiliate of the Company, to attract new individuals who are highly motivated
and who will contribute to the success of the Company and to encourage such
individuals to remain as officers, employees, consultants, advisors and/or
directors of the Company and its parent, subsidiaries and affiliates by
increasing their proprietary interest in the Company’s growth and success.

WHEREAS, to attain these ends, the Company has formulated the Plan embodied
herein to authorize the granting of incentive awards through grants of options
to purchase shares (“Options”), grants of share appreciation rights, grants of
Share Purchase Awards (hereafter defined), grants of Restricted Share Awards
(hereafter defined), or any other award made under the Plan to those persons
(each such person a “Participant”) whose judgment, initiative and efforts are,
have been, or are expected to be responsible for the success of the Company or
any parent, subsidiary or affiliate of the Company.

NOW, THEREFORE, the Company hereby constitutes, establishes and adopts the
following Plan and agrees to the following provisions:

ARTICLE 1

PURPOSE OF THE PLAN

1.1     Purpose. The purpose of the Plan is to assist the Company or any parent,
subsidiary or affiliate of the Company in attracting and retaining selected
individuals to serve as directors, officers, consultants, advisors, and
employees of the Company or any parent, subsidiary or affiliate of the Company
who will contribute to the Company’s success and to achieve long-term objectives
which will inure to the benefit of all shareholders of the Company through the
additional incentive inherent in the ownership of the Company’s Class A Common
Stock, par value $.001 per share (the “Shares”). Options granted under the Plan
will be either “incentive stock options,” intended to qualify as such under the
provisions of Section 422 of the Internal Revenue Code of 1986, as from time to
time amended (the “Code”), or “nonqualified stock options.” For purposes of the
Plan, the terms “subsidiary” and “parent” shall mean “subsidiary corporation”
and “parent corporation,” respectively, as such terms are defined in Sections
424(f) and 424(e) of the Code, and “affiliate” shall have the meaning set forth
in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). Awards other than incentive stock options shall be made hereunder only to
the extent the underlying stock constitutes “service recipient stock” of an
“eligible issuer” as defined under Section 409A of the

Code. Accordingly, no Awards other than incentive stock options may be awarded
to a service provider of a parent or entity in which the Company does not hold a
controlling interest. For purposes of the Plan, the term “Award” shall include a
grant of an Option, a grant of a share appreciation right, a grant of a Share
Purchase Award, a grant of a Restricted Share Award, or any other award made
under the terms of the Plan.

ARTICLE 2

SHARES SUBJECT TO AWARDS

2.1       Number of Shares. Subject to the adjustment provisions of Section 9.9
hereof, the aggregate number of Shares which may be issued under Awards under
the Plan, whether pursuant to Options, Share Purchase Awards, Restricted Share
Awards or any other award under the Plan shall be 40,000,000 Shares, plus an
additional 3,500,000 Shares which may be issued solely pursuant to Options. No
Options to purchase fractional Shares shall be granted and no fractional shares
shall be issued under the Plan. For purposes of this Section 2.1, the Shares
that shall be counted toward such limitation shall include all Shares:

 

(1)

issued or issuable pursuant to Options that have been or may be exercised;

 

(2)

issued or issuable pursuant to Share Purchase Awards;

 

(3)

issued as, or subject to issuance as a Restricted Share Award; and

 

(4)

issued or issuable under any other award granted under the terms of the Plan.

2.2       Shares Subject to Terminated Awards. The Shares covered by any
unexercised portions of terminated Options granted under Articles 4 and 6,
Shares forfeited as provided in Section 8.2(a) and Shares subject to any Awards
which are otherwise surrendered by the Participant without receiving any payment
or other benefit with respect thereto may again be subject to new Awards under
the Plan, other than grants of Options intended to qualify as incentive stock
options. In the event the purchase price of an Option is paid in whole or in
part through the delivery of Shares, the number of Shares tendered for the
exercise of the Option shall not again be available for the grant of Awards
under the Plan. Shares subject to Options, or portions thereof, which have been
surrendered in connection with the exercise of share appreciation rights shall
not again be available for the grant of Awards under the Plan.

2.3       Character of Shares. Shares delivered under the Plan may be authorized
and unissued Shares or Shares acquired by the Company, or both.

2.4       Limitations on Grants to Individual Participant. Subject to
adjustments pursuant to the provisions of Section 9.9 hereof, the maximum number
of Shares with respect to which Options or stock appreciation rights may be
granted hereunder to any employee during any fiscal year of the Company shall be
4,500,000 Shares (the “Limitation”).

If an Option is canceled, the canceled Option shall continue to be counted
toward the Limitation for the year granted. An Option (or a share appreciation
right) that is repriced during any fiscal year is treated as the cancellation of
the Option (or share appreciation right) and a

 

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grant of a new Option (or share appreciation right) for purposes of the
Limitation for that fiscal year.

ARTICLE 3

ELIGIBILITY AND ADMINISTRATION

3.1       Awards to Employees, Directors and Others. (a) Participants who
receive Options under Articles 4 and 6 hereof (including share appreciation
rights under Article 5) (“Optionees”), Share Purchase Awards under Article 7 or
Restricted Share Awards or other Share-based awards under Article 8 (in either
case, a “Participant”) shall consist of such key officers, employees,
consultants, advisors and directors of the Company or any parent, subsidiary or
affiliate of the Company as the Committee (hereinafter defined) shall select
from time to time. The Committee’s designation of an Optionee or Participant in
any year shall not require the Committee to designate such person to receive
Awards or grants in any other year. The designation of an Optionee or
Participant to receive Awards or grants under one portion of the Plan shall not
require the Committee to include such Optionee or Participant under other
portions of the Plan.

(b)       No Option that is intended to qualify as an “incentive stock option”
may be granted (x) to any individual that is not an employee of the Company or
any parent, subsidiary or affiliate thereof, or (y) to any employee who, at the
time of such grant, owns, directly or indirectly (within the meaning of Sections
422(b)(6) and 424(d) of the Code), shares possessing more than 10% of the total
combined voting power of all classes of shares of the Company or any parent,
subsidiary or affiliate of the Company, unless at the time of such grant, (i)
the option price is fixed at not less than 110% of the Fair Market Value (as
defined below) of the Shares subject to such Option, determined on the date of
the grant, and (ii) the exercise of such Option is prohibited by its terms after
the expiration of five (5) years from the date such Option is granted.

3.2       Administration. The Plan shall be administered by a committee (the
“Committee”) consisting of not fewer than two directors of the Company (the
directors of the Company being hereinafter referred to as the “Directors”), as
designated by the Directors. The Directors may remove from, add members to, or
fill vacancies in the Committee. Unless otherwise determined by the Directors,
each member of the Committee is intended to be a “Non-Employee Director” within
the meaning of Rule 16b-3 (or any successor rule) of the Exchange Act and an
“outside director” within the meaning of Section 162(m)(4)(C)(i) of the Code and
the regulations thereunder.

Any Award to a member of the Committee shall be on terms consistent with Awards
made to other Directors who are not members of the Committee and who are not
employees, except where the Award is approved or ratified by the Compensation
Committee (excluding persons who are also members of the Committee) of the Board
of Directors of the Company.

(a)       The Committee is authorized, subject to the provisions of the Plan, to
establish such rules and regulations as it may deem appropriate for the conduct
of meetings and proper administration of the Plan. All actions of the Committee
shall be taken by majority vote of its members. The Committee is also
authorized, subject to the provisions of the Plan, to make

 

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provisions in various Awards pertaining to a “change of control” of the Company
and to amend or modify existing Awards.

(b)       Subject to the provisions of the Plan, the Committee shall have
authority, in its sole discretion, to interpret the provisions of the Plan and
any Award thereunder and, subject to the requirements of applicable law,
including Rule 16b-3 of the Exchange Act, to prescribe, amend, and rescind rules
and regulations relating to the Plan or any Award thereunder as it may deem
necessary or advisable. All decisions made by the Committee pursuant to the
provisions of the Plan shall be final, conclusive and binding on all persons,
including the Company, its shareholders, Directors and employees, and Plan
participants and beneficiaries.

3.3       Designation of Consultants/Liability. (a) The Committee may designate
employees of the Company and professional advisors to assist the Committee in
the administration of this Plan and may grant authority to employees to execute
agreements or other documents on behalf of the Committee.

(b)       The Committee may employ such legal counsel, consultants and agents as
it may deem desirable for the administration of this Plan and may rely upon any
opinion received from any such counsel or consultant and any computation
received from any such consultant or agent. Expenses incurred by the Committee
or the Board in the engagement of any such counsel, consultant or agent shall be
paid by the Company. The Committee, its members and any person designated
pursuant to Section 3.3(a) shall not be liable for any action or determination
made in good faith with respect to this Plan. To the maximum extent permitted by
applicable law, no officer or former officer of the Company or member or former
member of the Committee or of the Board shall be liable for any action or
determination made in good faith with respect to this Plan or any Award granted
under it. To the maximum extent permitted by applicable law and to the extent
not covered by insurance, each officer or former officer and member or former
member of the Committee or of the Board shall be indemnified and held harmless
by the Company against any cost or expense (including reasonable fees of counsel
reasonably acceptable to the Company) or liability (including any sum paid in
settlement of a claim with the approval of the Company), and advanced amounts
necessary to pay the foregoing at the earliest time and to the fullest extent
permitted, arising out of any act or omission to act in connection with this
Plan, except to the extent arising out of such officer’s or former officer’s,
member’s or former member’s own fraud or bad faith. Such indemnification shall
be in addition to any rights of indemnification the officers, directors or
members or former officers, directors or members may have under applicable law.
Notwithstanding anything else herein, this indemnification will not apply to the
actions or determinations made by an individual with regard to Awards granted to
him or her under this Plan.

ARTICLE 4

OPTIONS

4.1       Grant of Options. The Committee shall determine, within the
limitations of the Plan generally and within the limitations of Section 1.1
specifically, those key officers, employees, consultants, advisors and Directors
of the Company or any parent, subsidiary or affiliate of the Company to whom
Options are to be granted under the Plan, the number of Shares that may be
purchased under each such Option, the option price and other terms of each such

 

4

Option, and shall designate such Options at the time of the grant as either
“incentive stock options” or “nonqualified stock options”; provided, however,
that Options granted to employees of an affiliate (that is not also a parent or
a subsidiary) or to non-employees of the Company may only be “nonqualified stock
options.”

All Options granted pursuant to this Article 4 and Article 6 herein shall be
authorized by the Committee and shall be evidenced in writing by share option
agreements (“Share Option Agreements”) in such form and containing such terms
and conditions as the Committee shall determine that are not inconsistent with
the provisions of the Plan, and, with respect to any Share Option Agreement
granting Options that are intended to qualify as “incentive stock options,” are
not inconsistent with Section 422 of the Code. The granting of an Option
pursuant to the Plan shall impose no obligation on the recipient to exercise
such Option. Any individual who is granted an Option pursuant to this Article 4
and Article 6 herein may hold more than one Option granted pursuant to such
Articles at the same time and may hold both “incentive stock options” and
“nonqualified stock options” at the same time. To the extent that any Option
does not qualify as an “incentive stock option” (whether because of its
provisions, the time or manner of its exercise or otherwise) such Option or the
portion thereof which does not so qualify shall constitute a separate
“nonqualified stock option.”

4.2       Option Price. Subject to Section 3.1(b), the option exercise price per
each Share purchasable under any Option granted under the Plan shall not be less
than 100% of the Fair Market Value (as hereinafter defined) of such Share on the
date of the grant of such Option.

4.3       Other Provisions. (a) Options granted pursuant to this Article 4 shall
be made in accordance with the terms and provisions of Article 9 hereof and any
other applicable terms and provisions of the Plan.

(b)       Subject to Section 9.9, the Option exercise price per Share may not be
decreased after the Option has been granted, unless otherwise approved by the
Company’s stockholders. Notwithstanding the foregoing, the exercise price of
such Options shall not be decreased after the date of grant if such action would
either cause an amount to be considered “deferred compensation” within the
meaning of Code Section 409A that would otherwise not be considered “deferred
compensation” or cause an amount to be included in an Award recipient’s income
under Code Section 409A.

(c)       No Option may be cancelled in exchange for cash at the time the
exercise price per Share is greater than the fair market value per Share of the
underlying Shares, unless otherwise approved by the Company’s stockholders.
Notwithstanding the foregoing, such Options shall not be cancelled in exchange
for cash if such action would either cause an amount to be considered “deferred
compensation” within the meaning of Code Section 409A that would otherwise not
be considered “deferred compensation” or cause an amount to be included in an
Award recipient’s income under Code Section 409A.

 

5

ARTICLE 5

SHARE APPRECIATION RIGHTS

5.1       Grant and Exercise. Share appreciation rights may be granted in
conjunction with all or part of any Option granted under the Plan provided such
rights are granted at the time of the grant of such Option. A “share
appreciation right” is a right to receive cash or whole Shares, as provided in
this Article 5, in lieu of the purchase of a Share under a related Option. A
share appreciation right or applicable portion thereof shall terminate and no
longer be exercisable upon the termination or exercise of the related Option,
and a share appreciation right granted with respect to less than the full number
of Shares covered by a related Option shall not be reduced until, and then only
to the extent that, the exercise or termination of the related Option exceeds
the number of Shares not covered by the share appreciation right. A share
appreciation right may be exercised by the holder thereof (the “Holder”), in
accordance with Section 5.2 of this Article 5, by giving written notice thereof
to the Company and surrendering the applicable portion of the related Option.
Upon giving such notice and surrender, the Holder shall be entitled to receive
an amount determined in the manner prescribed in Section 5.2 of this Article 5.
Options which have been so surrendered, in whole or in part, shall no longer be
exercisable to the extent the related share appreciation rights have been
exercised.

5.2       Terms and Conditions. Share appreciation rights shall be subject to
such terms and conditions, not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Committee, including the following:

(a)       Share appreciation rights shall be exercisable only at such time or
times and to the extent that the Options to which they relate shall be
exercisable in accordance with the provisions of the Plan.

(b)       Upon the exercise of a share appreciation right, a Holder shall be
entitled to receive up to but no more than an amount in cash or whole Shares
equal to the excess of the then Fair Market Value of one Share over the option
exercise price per Share specified in the related Option multiplied by the
number of Shares in respect of which the share appreciation right shall have
been exercised. The Holder shall specify in his written notice of exercise,
whether payment shall be made in cash or in whole Shares (unless otherwise
provided in the agreement governing the share appreciation right). Each share
appreciation right may be exercised only at the time and so long as a related
Option, if any, would be exercisable or as otherwise permitted by applicable
law.

(c)       Upon the exercise of a share appreciation right, the Option or part
thereof to which such share appreciation right is related shall be deemed to
have been exercised for the purpose of the limitation of the number of Shares to
be issued under the Plan, as set forth in Section 2.1 of the Plan.

 

6

(d)       With respect to share appreciation rights granted in connection with
an Option that is intended to be an “incentive stock option,” the following
shall apply:

(i)        No share appreciation right shall be transferable by a Holder other
than by will or by the laws of descent and distribution, and share appreciation
rights shall be exercisable, during the Holder’s lifetime, only by the Holder.

(ii)       Share appreciation rights granted in connection with an Option may be
exercised only when the Fair Market Value of the Shares subject to the Option
exceeds the option exercise price at which Shares can be acquired pursuant to
the Option.

ARTICLE 6

RELOAD OPTIONS

6.1       Authorization of Reload Options. Concurrently with the award of any
Option (such Option hereinafter referred to as the “Underlying Option”) to any
Participant in the Plan, the Committee may grant one or more reload options
(each, a “Reload Option”) to such Participant to purchase for cash or Shares
(held for at least six (6) months or such other period to avoid accounting
charges against the Company’s earnings) a number of Shares as specified below. A
Reload Option shall be exercisable for an amount of Shares equal to (i) the
number of Shares delivered by the Optionee to the Company to exercise the
Underlying Option, and (ii) to the extent authorized by the Committee, the
number of Shares used to satisfy any tax withholding requirement incident to the
exercise of the Underlying Option, subject to the availability of Shares under
the Plan at the time of such exercise. Any Reload Option may provide for the
grant, when exercised, of subsequent Reload Options to the extent and upon such
terms and conditions consistent with this Article 6, as the Committee in its
sole discretion shall specify at or after the time of grant of such Reload
Option. Except as otherwise determined by the Committee, a Reload Option will
vest and become exercisable six (6) months after the exercise of an Underlying
Option or Reload Option whereby the Participant delivers to the Company Shares
held by the Optionee for at least six (6) months in payment of the exercise
price and/or tax withholding obligations. Notwithstanding the fact that the
Underlying Option may be an “incentive stock option,” a Reload Option is not
intended to qualify as an “incentive stock option” under Section 422 of the
Code.

6.2       Reload Option Amendment. Each Share Option Agreement shall state
whether the Committee has authorized Reload Options with respect to the
Underlying Option. Upon the exercise of an Underlying Option or other Reload
Option, the Reload Option will be evidenced by an amendment to the underlying
Share Option Agreement.

6.3       Reload Option Price. The option exercise price per each Share
purchasable under any Reload Option granted under the Plan shall be determined
on the date the Underlying Option is exercised and shall be equal to 100% of the
Fair Market Value of a Share on such date of grant.

6.4       Term and Exercise. Except as otherwise determined by the Committee,
each Reload Option vests and is fully exercisable six months after its grant
(i.e., six months after the

 

7

corresponding Underlying Option is exercised). The term of each Reload Option
shall be equal to the remaining option term of the Underlying Option.

6.5       Termination of Employment. No additional Reload Options shall be
granted to an Optionee when Options and/or Reload Options are exercised pursuant
to the terms of this Plan following termination of the Optionee’s employment
unless the Committee, in its sole discretion, shall determine otherwise.

6.6       Applicability of Other Sections. Except as otherwise provided in this
Article 6, the provisions of Article 9 applicable to Options shall apply equally
to Reload Options.

ARTICLE 7

SHARE AWARDS

7.1       Grant of Share Purchase Award. The term “Share Purchase Award” means
the right to purchase Shares of the Company and to pay for such Shares through a
loan made by the Company to the Participant (a “Purchase Loan”) as set forth in
this Article 7. Unless otherwise permitted by law, no executive officer or
director of the Company shall be eligible to receive a Share Purchase Award.

7.2       Terms of Purchase Loans. (a) Purchase Loan. Each Purchase Loan shall
be evidenced by a promissory note. The term of the Purchase Loan shall be for a
period of years, as determined by the Committee, and the proceeds of the
Purchase Loan shall be used exclusively by the Participant for purchase of
Shares from the Company at a purchase price equal to the Fair Market Value on
the date of the Share Purchase Award.

(b)       Interest on Purchase Loan. A Purchase Loan shall be non-interest
bearing or shall bear interest at whatever rate the Committee shall determine
(but not in excess of the maximum rate permissible under applicable law),
payable in a manner and at such times as the Committee shall determine. Those
terms and provisions as the Committee shall determine shall be incorporated into
the promissory note evidencing the Purchase Loan.

(c)       Pre-payment of Purchase Loan. A Participant’s Purchase Loan can be
prepaid at any time, and from time to time, without penalty.

7.3       Security for Loans. (a) Stock Power and Pledge. Purchase Loans granted
to Participants shall be secured by a pledge of the Shares acquired pursuant to
the Share Purchase Award. Such pledge shall be evidenced by a pledge agreement
(the “Pledge Agreement”) containing such terms and conditions as the Committee
shall determine. The share certificates for the Shares purchased by a
Participant pursuant to a Share Purchase Award shall be issued in the
Participant’s name, but shall be held by the Company as security for repayment
of the Participant’s Purchase Loan together with a stock power executed in blank
by the Participant (the execution and delivery of which by the Participant shall
be a condition to the issuance of the Share Purchase Award). Unless otherwise
determined by the Committee, the Participant shall be entitled to exercise all
rights applicable to such Shares, including, but not limited to, the right to
vote such Shares and the right to receive dividends and other distributions made
with respect to such Shares. When the Purchase Loan and any accrued but unpaid
interest thereon has been repaid or otherwise satisfied in full, the Company
shall deliver to the Participant the share

 

8

certificates for the Shares purchased by a Participant under the Share Purchase
Award. Purchase Loans shall be recourse or non-recourse with respect to a
Participant, as determined by the Committee.

(b)       Release and Delivery of Share Certificates During the Term of the
Purchase Loan. The Company shall release and deliver to each Participant
certificates for Shares purchased by a Participant pursuant to a Share Purchase
Award, in such amounts and on such terms and conditions as the Committee shall
determine, which shall be set forth in the Pledge Agreement.

(c)       Release and Delivery of Share Certificates Upon Repayment of the
Purchase Loan. The Company shall release and deliver to each Participant
certificates for the Shares purchased by the Participant under the Share
Purchase Award and then held by the Company, provided the Participant has paid
or otherwise satisfied in full the balance of the Purchase Loan and any accrued
but unpaid interest thereon. In the event the balance of the Purchase Loan is
not repaid, forgiven or otherwise satisfied within 90 days after (i) the date
repayment of the Purchase Loan is due (whether in accordance with its term, by
reason of acceleration or otherwise), or (ii) such longer time as the Committee,
in its discretion, shall provide for repayment or satisfaction, the Company
shall retain those Shares then held by the Company in accordance with the Pledge
Agreement.

(d)       Recourse Purchase Loans. Notwithstanding Sections 7.3(a), (b) and (c)
above, in the case of a recourse Purchase Loan, the Committee may make a
Purchase Loan on such terms as it determines, including without limitation, not
requiring a pledge of the acquired Shares.

7.4       Termination of Employment. (a) Termination of Employment by Death,
Disability or by the Company Without Cause; Change of Control. In the event of a
Participant’s termination of employment by reason of death, “disability” or by
the Company without “cause,” or in the event of a “change of control,” the
Committee shall have the right (but shall not be required) to forgive the
remaining unpaid amount (principal and interest) of the Purchase Loan in whole
or in part as of the date of such occurrence. “Change of Control,” “disability”
and “cause” shall have the respective meanings as set forth in the promissory
note evidencing the Purchase Loan.

(b)       Termination of Employment. Subject to Section 7.4(a) above, in the
event of a Participant’s termination of employment for any reason, the
Participant shall repay to the Company the entire balance of the Purchase Loan
and any accrued but unpaid interest thereon, which amounts shall become
immediately due and payable, unless otherwise determined by the Committee.

7.5       Restrictions on Transfer. No Share Purchase Award or Shares purchased
through such an Award and pledged to the Company as collateral security for the
Participant’s Purchase Loan (and accrued and unpaid interest thereon) may be
otherwise pledged, sold, assigned or transferred (other than by will or by the
laws of descent and distribution).

 

9

ARTICLE 8

SHARE AWARDS

8.1       Restricted Share Awards. (a) A grant of Shares made pursuant to
Sections 8.1 and 8.2 is referred to as a “Restricted Share Award.” The Committee
may grant to any Participant an amount of Shares in such manner, and subject to
such terms and conditions relating to vesting, forfeitability and restrictions
on delivery and transfer (whether based on performance standards, periods of
service or otherwise) as the Committee shall establish (such Shares, “Restricted
Shares”). The terms of any Restricted Share Award granted under this Plan shall
be set forth in a written agreement (a “Restricted Share Agreement”) which shall
contain provisions determined by the Committee and not inconsistent with this
Plan. The provisions of Restricted Share Awards need not be the same for each
Participant receiving such Awards.

(b)       Issuance of Restricted Shares. As soon as practicable after the date
of grant of a Restricted Share Award by the Committee, the Company shall cause
to be transferred on the books of the Company Shares registered in the name of
the Company, as nominee for the Participant, evidencing the Restricted Shares
covered by the Award; provided, however, such Shares shall be subject to
forfeiture to the Company retroactive to the date of grant if a Restricted Share
Agreement delivered to the Participant by the Company with respect to the
Restricted Shares covered by the Award is not duly executed by the Participant
and timely returned to the Company. All Restricted Shares covered by Awards
under this Article 8 shall be subject to the restrictions, terms and conditions
contained in the Plan and the Restricted Share Agreement entered into by and
between the Company and the Participant. Until the lapse or release of all
restrictions applicable to an Award of Restricted Shares, the share certificates
representing such Restricted Shares shall be held in custody by the Company or
its designee.

(c)       Shareholder Rights. Beginning on the date of grant of the Restricted
Share Award and subject to execution of the Restricted Share Agreement as
provided in Sections 8.1(a) and (b), unless the Restricted Share Agreement
provides otherwise, the Participant shall become a shareholder of the Company
with respect to all Shares subject to the Restricted Share Agreement and shall
have all of the rights of a shareholder, including, but not limited to, the
right to vote such Shares and the right to receive distributions made with
respect to such Shares; provided, however, that any Shares distributed as a
dividend or otherwise with respect to any Restricted Shares as to which the
restrictions have not yet lapsed shall be subject to the same restrictions as
such Restricted Shares and shall be represented by book entry and held as
prescribed in Section 8.1(b).

(d)       Restriction on Transferability. None of the Restricted Shares may be
assigned or transferred (other than by will or the laws of descent and
distribution), pledged or sold prior to lapse or release of the restrictions
applicable thereto.

(e)       Delivery of Shares Upon Release of Restrictions. Upon expiration or
earlier termination of the forfeiture period without a forfeiture and the
satisfaction of or release from any other conditions prescribed by the
Committee, the restrictions applicable to the Restricted Shares shall lapse. As
promptly as administratively feasible thereafter, subject to the requirements of
Section 10.1, the Company shall deliver to the Participant or, in case of the
Participant’s death, to the Participant’s beneficiary, one or more stock
certificates for the

 

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appropriate number of Shares, free of all such restrictions, except for any
restrictions that may be imposed by law.

8.2       Terms of Restricted Shares. (a) Forfeiture of Restricted Shares.
Subject to Section 8.2(b), all Restricted Shares shall be forfeited and returned
to the Company and all rights of the Participant with respect to such Restricted
Shares shall terminate unless the Participant continues in the service of the
Company as an employee (or Director, consultant or advisor, as the case may be)
until the expiration of the forfeiture period for such Restricted Shares and
satisfies any and all other conditions set forth in the Restricted Share
Agreement. The Committee in its sole discretion, shall determine the forfeiture
period (which may, but need not, lapse in installments) and any other terms and
conditions applicable with respect to any Restricted Share Award and the
Committee has the discretion to modify the terms and conditions of a Restricted
Share Award as long as the rights of the Participant are not impaired.

(b)       Waiver of Forfeiture Period. Notwithstanding anything contained in
this Article 8 to the contrary, the Committee may, in its sole discretion and
subject to the limitations imposed under Code Section 162(m) and the Treasury
Regulations thereunder in the case of a Restricted Share Award intended to
comply with the performance-based compensation exception under Code Section
162(m), waive the forfeiture period and any other conditions set forth at grant
in any Restricted Share Agreement under appropriate circumstances (including the
death, disability or retirement of the Participant or a material change in
circumstances arising after the date of an Award) as determined by the Committee
in its sole discretion and subject to such terms and conditions (including
forfeiture of a proportionate number of the Restricted Shares) as the Committee
shall deem appropriate. In no event may the Committee waive the forfeiture
period or any other conditions set forth in the grant with respect to an Award
intended to comply with Code Section 162(m) in the event of retirement or any
other circumstance which would cause the Award to lose its status under Code
Section 162(m) as performance-based on grant.

8.3       Other Share-Based Awards. The Committee is authorized to grant other
Share-based awards that are payable in, valued in whole or in part by reference
to, or otherwise based on or related to Shares, including but not limited to,
Shares awarded purely as a bonus and not subject to any restrictions or
conditions, Shares in payment of the amounts due under an incentive or
performance plan sponsored or maintained by the Company or any parent,
subsidiary or affiliate of the Company, share appreciation rights (in tandem
with Options), stock equivalent units, and Awards valued by reference to book
value of Shares. Subject to the provisions of this Plan, the Committee shall
have authority to determine the persons to whom and the time or times at which
such Awards shall be made, the number of Shares to be awarded pursuant to or
referenced by such Awards, and all other conditions of the Awards. Grants of
other Share-based awards may be subject to such conditions, restrictions and
contingencies as the Committee may determine which may include, but are not
limited to, continuous service with the Company or any parent, subsidiary or
affiliate of the Company and/or the achievement of performance goals.
Notwithstanding the foregoing, all other Share-based awards granted under this
Section 8.3 will be structured so that such Awards either are not “deferred
compensation” for purposes of Code Section 409A or comply with Code Section
409A.

8.4       Objective Performance Goals, Formulae or Standards. If the grant of
Restricted Shares or other Share-based awards or the lapse of restrictions or
vesting of Restricted Shares or

 

11

other Share-based awards is based on the attainment of performance goals, the
Committee shall establish the performance goals and the applicable vesting
percentage of the Restricted Share Award or other Share-based award applicable
to each Participant or class of Participants in writing prior to the beginning
of the applicable fiscal year or at such later date as otherwise determined by
the Committee and while the outcome of the performance goals are substantially
uncertain. Such performance goals may incorporate provisions for disregarding
(or adjusting for) changes in accounting methods, corporate transactions
(including, without limitation, dispositions and acquisitions) and other similar
type events or circumstances. With regard to a Restricted Share Award or other
Share-based award that is intended to comply with Section 162(m) of the Code, to
the extent any such provision would create impermissible discretion under
Section 162(m) of the Code or otherwise violate Section 162(m) of the Code, such
provision shall be of no force or effect. The applicable performance goals shall
be based on one or more of the Performance Criteria set forth in Exhibit A
hereto. Other performance goals may be used to the extent such goals satisfy
Section 162(m) of the Code or the Award is not intended to satisfy the
requirements of Section 162(m) of the Code.

8.5       Annual Limitation on Grants of Shares. Subject to adjustments pursuant
to the provisions of Section 9.9 hereof, the maximum number of Shares subject to
specified performance goals intended to satisfy the requirements of Section
162(m) of the Code and in accordance with Section 8.4 hereof that may be granted
as Restricted Shares to any employee or subject to any other Share-based awards
to any employee during any fiscal year of the Company shall be 4,500,000 Shares.

ARTICLE 9

GENERALLY APPLICABLE PROVISIONS

9.1       Option Period. Subject to Section 3.1(b), the period for which an
Option is exercisable shall be set by the Committee and shall not exceed ten
(10) years from the date such Option is granted unless approved by the Company’s
stockholders. After the Option is granted, the option period may not be reduced,
subject to expiration due to termination of employment.

9.2       Fair Market Value. If the Shares are listed or admitted to trading on
a securities exchange registered under the Exchange Act, the “Fair Market Value”
of a Share as of a specified date shall mean the average of the high and low
price of the shares for the day immediately preceding the date as of which Fair
Market Value is being determined (or if there was no sale on such date, on the
last preceding date on which any reported sale occurred) reported on the
principal securities exchange on which the Shares are listed or admitted to
trading. If the Shares are not listed or admitted to trading on any such
exchange but are traded in the over-the-counter market or traded on any similar
system then in use, the Fair Market Value of a Share shall be the average of the
high and low sales price for the day immediately preceding the date as of which
the Fair Market Value is being determined (or if there was no reported sale on
such date, on the last preceding date on which any reported sale occurred)
reported on such system. If the Shares are not listed or admitted to trading on
any such exchange and are not traded in the over-the-counter market or traded on
any similar system then in use, but are quoted on any similar system then in
use, the Fair Market Value of a Share shall be the average of the closing high
bid and low asked quotations on such system for the Shares on the date in
question. If the Shares are not publicly traded, Fair Market Value shall be
determined by the Committee in

 

12

its sole discretion using appropriate criteria. An Option shall be considered
granted on the date the Committee acts to grant the Option or such later date as
the Committee shall specify. Notwithstanding the foregoing, the Fair Market
Value of Shares shall, in all events, be determined in accordance with Code
Section 409A, and the regulations and other guidance promulgated thereunder.

9.3       Exercise of Options. Vested Options granted under the Plan shall be
exercised by the Optionee thereof (or by his or her executors, administrators,
guardian or legal representative, or by a Permitted Assignee, as provided in
Sections 9.4, 9.6 and 9.7 hereof) as to all or part of the Shares covered
thereby, by the giving of written notice of exercise to the Company, specifying
the number of Shares to be purchased, accompanied by payment of the full
purchase price for the Shares being purchased. Full payment of such purchase
price shall be made at the time of exercise and shall be made (i) in cash or by
certified check or bank check or wire transfer of immediately available funds,
(ii) with the consent of the Committee, unless otherwise prohibited by law, by
delivery of a promissory note in favor of the Company upon such terms and
conditions as determined by the Committee, (iii) with the consent of Committee,
by tendering previously acquired Shares (valued at their Fair Market Value, as
determined by the Committee as of the date of tender) that have been owned for a
period of at least six (6) months (or such other period to avoid accounting
charges against the Company’s earnings), or (iv) if Shares are traded on a
national securities exchange, the NASDAQ or quoted on a national quotation
system sponsored by the National Association of Securities Dealers, Inc. and the
Committee authorizes this method of exercise, through the delivery of
irrevocable instructions to a broker approved by the Committee to deliver
promptly to the Company an amount equal to the purchase price, or (v) with the
consent of the Committee, any combination of (i), (ii), (iii) and (iv). In
connection with a tender of previously acquired Shares pursuant to clause (iii)
above, the Committee, in its sole discretion, may permit the Optionee to
constructively exchange Shares already owned by the Optionee in lieu of actually
tendering such Shares to the Company, provided that adequate documentation
concerning the ownership of the Shares to be constructively tendered is
furnished in a form satisfactory to the Committee. The notice of exercise,
accompanied by such payment, shall be delivered to the Company at its principal
business office or such other office as the Committee may from time to time
direct, and shall be in such form, containing such further provisions consistent
with the provisions of the Plan, as the Committee may from time to time
prescribe. In no event may any Option granted hereunder be exercised for a
fraction of a Share. The Company shall, subject to Section 10.4 herein, effect
the transfer of Shares purchased pursuant to an Option as soon as practicable,
and, within a reasonable time thereafter, such transfer shall be evidenced on
the books of the Company. No person exercising an Option shall have any of the
rights of a holder of Shares subject to an Option until certificates for such
Shares shall have been issued following the exercise of such Option. No
adjustment shall be made for cash dividends or other rights for which the record
date is prior to the date of such issuance.

9.4       Non-Transferability. Except as otherwise specifically provided herein,
no Award shall be transferable by the Participant otherwise than by will or by
the laws of descent and distribution. All Options shall be exercisable, during
the Participant’s lifetime, only by the Participant. Any attempt to transfer any
Award, except as specifically provided herein, shall be void, and no such Award
shall in any manner be subject to the debts, contracts, liabilities, engagements
or torts of any person who shall be entitled to such Award, nor shall it be
subject to

 

13

attachment or legal process for or against such person. Notwithstanding the
foregoing, the Committee may determine at the time of grant or thereafter that
an Award (other than (x) an Option that is intended to be an incentive stock
option, (y) a share appreciation right covered by Section 5.2(d)(i) and (z) a
Restricted Share Award) that is otherwise not transferable pursuant to this
Section 9.4 is transferable to a Family Member (defined below) in whole or in
part and in such circumstances, and under such conditions as specified by the
Committee. An Award that is transferred to a Family Member pursuant to the
preceding sentence (i) may not be subsequently transferred otherwise than by
will or by the laws of descent and distribution and (ii) remains subject to the
terms of this Plan and the Award agreement. “Family Member” means, solely to the
extent provided for in Securities Act Form S-8, any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, any person
sharing the employee’s household (other than a tenant or employee), a trust in
which these persons have more than 50% of the beneficial interest, a foundation
in which these persons (or the employee) control the management of assets, and
any other entity in which these persons (or the employee) own more than 50% of
the voting interests or as otherwise defined in Securities Act Form S-8.

9.5       Termination of Employment. Unless the Committee otherwise determines,
in the event of the termination of employment with the Company or any parent,
subsidiary or affiliate of the Company of an Optionee who is an employee or the
termination or separation from service with the Company or any parent,
subsidiary or affiliate of the Company of an advisor, consultant or a Director
(who is an Optionee) for any reason (other than death or disability as provided
below), any Option(s) granted to such Optionee (or its Permitted Assignee) under
this Plan and not previously exercised or expired, to the extent vested on the
date of such termination or separation, shall be exercisable as of such
termination for a period not to exceed three (3) months after the date of such
termination or separation, provided, however, that in no instance may the term
of the Option, as so extended, exceed the lesser of ten (10) years from the date
of grant or the original expiration date of the Option.

9.6       Death. In the event an Optionee dies while employed by the Company or
any parent, subsidiary or affiliate of the Company or while serving as a
Director, advisor or consultant of the Company or any parent, subsidiary of the
Company, as the case may be, any Option(s) held by such Optionee (or its
Permitted Assignee) and not previously expired or exercised shall, to the extent
exercisable on the date of death, be exercisable by the estate of such Optionee
or by any person who acquired such Option by bequest or inheritance, or by the
Permitted Assignee at any time within one year after the death of the Optionee,
unless earlier terminated pursuant to its terms, provided, however, that in no
instance may the term of the Option, as so extended, exceed the lesser of ten
(10) years from the date of grant or the original expiration date of the Option.

9.7       Disability. In the event of the termination of employment with the
Company or any parent, subsidiary or affiliate of the Company of an Optionee or
separation from service with the Company or any parent, subsidiary or affiliate
of the Company of an Optionee who is a Director, advisor or consultant of the
Company or any parent, subsidiary or affiliate of the Company due to total
disability, the Optionee, or his guardian or legal representative, or a
Permitted Assignee shall have the unqualified right to exercise any Option that
has not expired or

 

14

been previously exercised and that the Optionee was eligible to exercise as of
the first date of total disability (as determined by the Committee), at any time
within one year after such termination or separation, unless earlier terminated
pursuant to its terms, provided, however, that in no instance may the term of
the Option, as so extended, exceed the lesser of ten (10) years from the date of
grant or the original expiration date of the Option. The term “total disability”
shall, for purposes of this Plan, be defined in the same manner as such term is
defined in Section 22(e)(3) of the Code.

9.8       Terms of Grant. Notwithstanding anything in Section 9.5, 9.6 or 9.7 to
the contrary, the Committee may grant an Option under such terms and conditions
as may be provided in the Share Option Agreement given to the Optionee and,
subject to Section 4.3(b), the Committee has the discretion to modify the terms
and conditions of an Option after grant as long as no rights of the Participant
are impaired, provided, however, that in no instance may the term of the Option,
as so extended, exceed the lesser of ten (10) years from the date of grant or
the original expiration date of the Option.

9.9       Adjustments. To prevent the dilution or enlargement of benefits or
potential benefits intended to be made available under the Plan, in the event of
any corporate transaction or event such as a stock dividend, extraordinary
dividend or other similar distribution (whether in the form of cash, Shares,
other securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Shares or other securities, the issuance
of warrants or other rights to purchase Shares or other securities, or other
similar corporate transaction or event affecting the Shares with respect to
which Awards have been or may be issued under the Plan (any such transaction or
event, a “Transaction”), then the Committee shall, in such manner as the
Committee deems equitable, (A) adjust (i) the number and type of Shares that
thereafter may be made the subject of Awards, (ii) the number and type of Shares
subject to outstanding Awards, and (iii) the grant or exercise price with
respect to any Award (any such adjustment, an “Antidilution Adjustment”);
provided, in each case, that with respect to “incentive stock options,” no such
adjustment shall be authorized to the extent that such adjustment would cause
such options to violate Section 422(b) of the Code or any successor provision
(unless otherwise agreed by the Committee and the holder of such option); and
provided further, that the number of Shares subject to any Award denominated in
Shares shall always be a whole number; or (B) cause any Award outstanding as of
the effective date of the Transaction to be cancelled in consideration of a cash
payment or alternate Award (whether from the Company or another entity that is a
party to the Transaction) or a combination thereof made to the holder of such
cancelled Award substantially equivalent in value to the fair market value of
such cancelled Award. With respect to each adjustment contemplated by the
foregoing sentence, no such adjustment shall be authorized to the extent that
such adjustment would cause an Award to violate the provisions of Section 409A
of the Code (unless otherwise agreed by the Committee and the holder of such
Award). The determination of fair market value shall be made by the Committee in
its sole discretion. Any adjustments made by the Committee shall be binding on
all Participants. If the Committee determines that an adjustment in accordance
with the provisions of this Section 9.9 would not be fully consistent with the
purposes of the Plan or the purposes of the outstanding Awards under the Plan,
the Committee may make such other adjustments, if any, that the Committee
reasonably determines are consistent with the purposes of the Plan and/or the
affected Awards.

 

15

9.10     Amendment and Modification of the Plan. The Compensation Committee of
the Board of Directors of the Company may, from time to time, alter, amend,
suspend or terminate the Plan as it shall deem advisable, subject to any
requirement for shareholder approval imposed by applicable law, including
without limitation Sections 162(m) and 422 of the Code, or any rule of any stock
exchange or quotation system on which Shares are listed or quoted; provided that
such Compensation Committee may not amend the Plan, without the approval of the
Company’s shareholders, to increase the number of Shares that may be the subject
of Options under the Plan (except for adjustments pursuant to Section 9.9
hereof). In addition, no amendments to, or termination of, the Plan shall in any
way impair the rights of an Optionee or a Participant (or a Permitted Assignee
thereof) under any Award previously granted without such Optionee’s or
Participant’s consent.

9.11     Validity of Awards. The validity of any Award or grant of Options made
pursuant to this Plan shall remain in full force and effect and shall not be
affected by the compliance or noncompliance with Section 162(m) of the Code or
Rule 16b-3 of the Exchange Act.

9.12     Cancellation. No outstanding Award may be cancelled in exchange for a
new Award, unless otherwise approved by the Company’s stockholders.
Notwithstanding the foregoing, no Award shall be assumed or substituted under
this Plan if such action would cause an Award not otherwise “deferred
compensation” within the meaning of Code Section 409 to become or create
“deferred compensation” within the meaning of Code Section 409A.

ARTICLE 10

MISCELLANEOUS

10.1     Tax Withholding. The Company or any parent, subsidiary or affiliate of
the Company shall have the right to make all payments or distributions made
pursuant to the Plan to an Optionee or Participant (or a Permitted Assignee
thereof) net of any applicable federal, state and local taxes as it determines
in its discretion are required to be paid as a result of the grant of any Award,
exercise of an Option or stock appreciation rights or any other event occurring
pursuant to this Plan. The Company or any parent, subsidiary or affiliate of the
Company shall have the right to withhold from wages or other payments otherwise
payable to such Optionee or Participant (or a Permitted Assignee thereof) such
withholding taxes as it determines in its discretion may be required by law, or
to otherwise require the Optionee or Participant (or a Permitted Assignee
thereof) to pay such withholding taxes. If the Optionee or Participant (or a
Permitted Assignee thereof) shall fail to make such tax payments as are
required, the Company or any parent, subsidiary or affiliate of the Company
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to such Optionee or Participant or to
take such other action as may be necessary to satisfy such withholding
obligations. In satisfaction of the requirement to pay required withholding
taxes, the Optionee or Participant (or Permitted Assignee) may make a written
election, which may be accepted or rejected in the discretion of the Committee,
to have withheld a portion of the Shares then issuable to the Optionee (or
Permitted Assignee) pursuant to the Plan, having an aggregate Fair Market Value
equal to the required withholding taxes.

10.2     Right of Discharge Reserved. Nothing in the Plan nor the grant of an
Award hereunder shall confer upon any employee, Director, consultant, advisor or
other individual the

 

16

right to continue in the employment or service of the Company or any parent,
subsidiary or affiliate of the Company or affect any right that the Company or
any parent, subsidiary or affiliate of the Company may have to terminate the
employment or service of (or to demote or to exclude from future Awards under
the Plan) any such employee, Director, consultant, advisor or other individual
at any time for any reason. Except as specifically provided by the Committee,
the Company shall not be liable for the loss of existing or potential profit
with respect to an Award in the event of termination of an employment or other
relationship even if the termination is in violation of an obligation of the
Company or any parent, subsidiary or affiliate of the Company to the Optionee or
Participant.

10.3     Unfunded Plan. Unless otherwise determined by the Committee, the Plan
shall be unfunded and shall not create (or be construed to create) a trust or a
separate fund or funds. The Plan shall not establish any fiduciary relationship
between the Company or any parent, subsidiary or affiliate of the Company and
any Optionee, Participant or other person. To the extent any Optionee or
Participant holds any rights by virtue of any grant or award made under the
Plan, such rights shall constitute general unsecured liabilities of the Company
or any parent, subsidiary or affiliate of the Company and shall not confer upon
any participant any right, title, or interest in any assets of the Company or
any parent, subsidiary or affiliate of the Company.

10.4     Legend. All certificates for Shares delivered under this Plan shall be
subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Shares are
then listed or any national securities association system upon whose system the
Shares are then quoted, any applicable Federal or state securities law, and any
applicable corporate law, and the Committee may cause a legend or legends to be
put on any such certificates to make appropriate reference to such restrictions.

10.5     Listing and Other Conditions. (a) As long as the Shares are listed on a
national securities exchange or system sponsored by a national securities
association, the issue of any Shares pursuant to an Award shall be conditioned
upon such Shares being listed on such exchange or system. The Company shall have
no obligation to deliver such Shares unless and until such Shares are so listed;
provided, however, that any delay in the delivery of such Shares shall be based
solely on a reasonable business decision and the right to exercise any Option
with respect to such Shares shall be suspended until such listing has been
effected.

(b)       If at any time counsel to the Company shall be of the opinion that any
sale or delivery of Shares pursuant to any Award is or may in the circumstances
be unlawful or result in the imposition of excise taxes on the Company under the
statutes, rules or regulations of any applicable jurisdiction, the Company shall
have no obligation to make such sale or delivery, or to make any application or
to effect or to maintain any qualification or registration under the Securities
Act of 1933, as amended, or otherwise with respect to Shares or Award, and the
right to any Award shall be suspended until, in the opinion of said counsel,
such sale or delivery shall be lawful or will not result in the imposition of
excise taxes on the Company.

(c)       Upon termination of any period of suspension under this Section 10.5,
any Award affected by such suspension which shall not then have expired or
terminated shall be reinstated as to all shares available before such suspension
and as to shares which would

 

17

otherwise have become available during the period of such suspension, but no
such suspension shall extend the term of any Option.

(d)       A Participant shall be required to supply the Company with any
certificates, representations and information that the Company requests and
otherwise cooperate with the Company in obtaining any listing, registration,
qualification, exemption, consent or approval the Company deems necessary or
appropriate.

10.6     Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Committee shall notify each Optionee and
Participant as soon as practicable prior to the effective date of such proposed
transaction. The Committee in its sole discretion may permit an Optionee to
exercise an Option until ten (10) days prior to such transaction with respect to
all vested and exercisable Shares covered thereby and with respect to such
number of unvested Shares as the Committee shall determine. In addition, the
Committee may provide that any forfeiture provision or Company repurchase option
applicable to any Restricted Share Award shall lapse as to such number of Shares
as the Committee shall determine, contingent upon the occurrence of the proposed
dissolution or liquidation at the time and in the manner contemplated. To the
extent an Option has not been previously exercised, the Option shall terminate
automatically immediately prior to the consummation of the proposed action. To
the extent a forfeiture provision applicable to a Restricted Share Award has not
been waived by the Committee, the related Restricted Share Award shall be
forfeited automatically immediately prior to the consummation of the proposed
action.

10.7     Severability. If any provision of the Plan shall be held unlawful or
otherwise invalid or unenforceable in whole or in part, such unlawfulness,
invalidity or unenforceability shall not affect any other provision of the Plan
or part thereof, each of which shall remain in full force and effect. If the
making of any payment or the provision of any other benefit required under the
Plan shall be held unlawful or otherwise invalid or unenforceable, such
unlawfulness, invalidity or unenforceability shall not prevent any other payment
or benefit from being made or provided under the Plan, and if the making of any
payment in full or the provision of any other benefit required under the Plan in
full would be unlawful or otherwise invalid or unenforceable, then such
unlawfulness, invalidity or unenforceability shall not prevent such payment or
benefit from being made or provided in part, to the extent that it would not be
unlawful, invalid or unenforceable, and the maximum payment or benefit that
would not be unlawful, invalid or unenforceable shall be made or provided under
the Plan.

10.8     Gender and Number. In order to shorten and to improve the
understandability of the Plan document by eliminating the repeated usage of such
phrases as “his or her” and any masculine terminology herein shall also include
the feminine, and the definition of any term herein in the singular shall also
include the plural except when otherwise indicated by the context.

10.9     Effective Date of Plan; Termination of Plan. The Plan shall be
effective on the date of the approval of the Plan at a meeting of the Company’s
stockholders by the holders of a majority of the shares voting thereon, provided
such approval is obtained within twelve (12) months after the date of adoption
of the Plan by the Board of Directors. Awards may be granted under the Plan at
any time and from time to time after the effective date of the Plan and on or

 

18

prior to August 21, 2011, on which date the Plan will expire except as to Awards
and related share appreciation rights then outstanding under the Plan. Such
outstanding Awards and stock appreciation rights shall remain in effect until
they have been exercised or terminated, or have otherwise expired.

10.10   Nature of Payments. All Awards made pursuant to the Plan are in
consideration of services performed for the Company and any parent, subsidiary
or affiliate of the Company. Any income or gain realized pursuant to Awards
under the Plan and any share appreciation rights constitutes a special incentive
payment to the Optionee, Participant or Holder and shall not be taken into
account, to the extent permissible under applicable law, as compensation for
purposes of any of the employee benefit plans of the Company or any parent,
subsidiary or affiliate of the Company, except as may be determined by the
Committee or by the Directors or directors of the applicable parent, subsidiary
or affiliate of the Company.

10.11   Captions. The captions in this Plan are for convenience of reference
only, and are not intended to narrow, limit or affect the substance or
interpretation of the provisions contained herein.

10.12   Successors and Assigns. This Plan shall be binding upon and inure to the
benefit of the respective successors and permitted assigns of the Company and
the Participants.

10.13   Governing Law. The Plan and all determinations made and actions taken
thereunder, to the extent not otherwise governed by the Code or the laws of the
United States, shall be governed by the laws of the State of Delaware and
construed accordingly.

10.14   Code Section 409A. All provisions of this Plan shall be interpreted in a
manner consistent with Code Section 409A, and the regulations and other guidance
promulgated thereunder. Notwithstanding the preceding, the Company makes no
representations concerning the tax consequences of participation in the Plan
under Code Section 409A or any other federal, state or local tax law. Tax
consequences will depend, in part, upon the application of relevant tax law,
including Code Section 409A, to the relevant facts and circumstances.
Participant should consult a competent and independent tax advisor regarding the
tax consequences of this Plan.

 

19

EXHIBIT A

PERFORMANCE CRITERIA

Subject to the last sentence of Section 8.4 of the Plan, performance goals
established for purposes of conditioning the grant of an Award of Restricted
Shares or other Share-based awards based on performance or the vesting of
performance-based Awards of Restricted Shares shall be based on one or more of
the following performance criteria (“Performance Criteria”): (i) the attainment
of certain target levels of, or a specified percentage increase in, revenues,
income before income taxes and extraordinary items, net income, earnings before
income tax, earnings before interest, taxes, depreciation and amortization, or a
combination of any or all of the foregoing; (ii) the attainment of certain
target levels of, or a percentage increase in, after-tax or pre-tax profits
including, without limitation, that attributable to continuing and/or other
operations; (iii) the attainment of certain target levels of, or a specified
increase in, operational cash flow; (iv) the achievement of a certain level of,
reduction of, or other specified objectives with regard to limiting the level of
increase in, all or a portion of, the Company’s bank debt or other long-term or
short-term public or private debt or other similar financial obligations of the
Company, which may be calculated net of such cash balances and/or other offsets
and adjustments as may be established by the Committee; (v) the attainment of a
specified percentage increase in earnings per share or earnings per share from
continuing operations; (vi) the attainment of certain target levels of, or a
specified increase in return on capital employed or return on invested capital;
(vii) the attainment of certain target levels of, or a percentage increase in,
after-tax or pre-tax return on stockholders’ equity; (viii) the attainment of
certain target levels of, or a specified increase in, economic value added
targets based on a cash flow return on investment formula; (ix) the attainment
of certain target levels in the fair market value of the shares of the Company’s
Shares and (x) the growth in the value of an investment in the Company’s Shares
assuming the reinvestment of dividends. For purposes of item (i) above,
“extraordinary items” shall mean all items of gain, loss or expense for the
fiscal year determined to be extraordinary or unusual in nature or infrequent in
occurrence or related to a corporate transaction (including, without limitation,
a disposition or acquisition) or related to a change in accounting principle,
all as determined in accordance with standards established by Opinion No. 30 of
the Accounting Principles Board.

In addition, such Performance Criteria may be based upon the attainment of
specified levels of Company (or affiliate, division or other operational unit of
the Company) performance under one or more of the measures described above
relative to the performance of other real estate investment trusts. To the
extent permitted under Code Section 162(m) (including, without limitation,
compliance with any requirements for stockholder approval) and Code Section
409A, the Committee may: (i) designate additional business criteria on which the
Performance Criteria may be based or (ii) adjust, modify or amend the
aforementioned business criteria.

 

20