EXHIBIT 10.29(a)
MarineMax, Inc.
2011 Stock-Based Compensation Plan
1. Purpose. The purpose of this Plan is to assist the Company and its Related
Entities in attracting, motivating, retaining and rewarding high-quality
Employees, officers, Directors, and Consultants by enabling such persons to
acquire or increase a proprietary interest in the Company in order to strengthen
the mutuality of interests between such persons and the Company’s stockholders
and providing such persons with annual and long-term performance incentives to
expend their maximum efforts in the creation of stockholder value. The Plan is
intended to qualify certain compensation awarded under the Plan for tax
deductibility under Section 162(m) of the Code (as hereafter defined) to the
extent deemed appropriate by the Plan Administrator.
2. Definitions. For purposes of the Plan, the following terms shall be defined
as set forth below.
(a) “2007 Plan Award” means a stock award granted under the 2007 Incentive
Compensation Plan.
(b) “Applicable Laws” means the requirements relating to the administration of
equity compensation plans under U.S. state corporate laws, U.S. federal and
state securities laws, the Code, the rules and regulations of any stock exchange
upon which the Common Stock is listed, and the applicable laws of any foreign
country or jurisdiction where Awards are granted under the Plan.
(c) “Award” means any award granted pursuant to the terms of this Plan,
including an Option, Stock Appreciation Right, Restricted Stock, Stock Unit,
Stock granted as a bonus or in lieu of another award, Dividend Equivalent, and
Other Stock-Based Award or Performance Award, together with any other right or
interest, granted to a Participant under the Plan.
(d) “Award Agreement” means the written agreement evidencing an Award granted
under the Plan.
(e) “Beneficiary” means the person, persons, trust, or trusts that have been
designated by a Participant in his or her most recent written beneficiary
designation filed with the Plan Administrator to receive the benefits specified
under the Plan upon such Participant’s death or to which Awards or other rights
are transferred if and to the extent permitted under Section 10(b) hereof. If,
upon a Participant’s death, there is no designated Beneficiary or surviving
designated Beneficiary, then the term Beneficiary means the person, persons,
trust, or trusts entitled by will or the laws of descent and distribution to
receive such benefits.
(f) “Beneficial Owner,” “Beneficially Owning,” and “Beneficial Ownership” shall
have the meanings ascribed to such terms in Rule 13d-3 under the Exchange Act
and any successor to such Rule.

 

 

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(g) “Board” means the Company’s Board of Directors.
(h) “Cause” shall, with respect to any Participant, have the meaning specified
in the Award Agreement. In the absence of any definition in the Award Agreement,
“Cause” shall have the equivalent meaning or the same meaning as “cause” or “for
cause” set forth in any employment, consulting, change in control, or other
agreement for the performance of services between the Participant and the
Company or a Related Entity or, in the absence of any such definition in such
agreement, such term shall mean (i) the failure by the Participant to perform
his or her duties as assigned by the Company (or a Related Entity) in a
reasonable manner, (ii) any violation or breach by the Participant of his or her
employment, consulting, or other similar agreement with the Company (or a
Related Entity), if any, (iii) any violation or breach by the Participant of his
or her confidential information and invention assignment, non-competition,
non-solicitation, non-disclosure, and/or other similar agreement with the
Company or a Related Entity, if any, (iv) any act by the Participant of
dishonesty or bad faith with respect to the Company (or a Related Entity),
(v) any material violation or breach by the Participant of the Company’s or a
Related Entity’s policy for employee conduct, if any, (vi) use of alcohol,
drugs, or other similar substances in a manner that adversely affects the
Participant’s work performance, or (vii) the commission by the Participant of
any act, misdemeanor, or crime reflecting unfavorably upon the Participant or
the Company or any Related Entity. The good faith determination by the Plan
Administrator of whether the Participant’s Continuous Service was terminated by
the Company for “Cause” shall be final and binding for all purposes hereunder.
(i) “Change in Control” means and shall be deemed to have occurred on the
earliest of the following dates:
(i) the date on which any “person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), obtains “beneficial ownership” (as defined in
Rule 13d-3 of the Exchange Act) or a pecuniary interest in fifty percent (50%)
or more of the Voting Stock;
(ii) the consummation of a merger, consolidation, reorganization, or similar
transaction other than a transaction (1) (a) in which substantially all of the
holders of Company’s Voting Stock hold or receive directly or indirectly fifty
percent (50%) or more of the voting stock of the resulting entity or a parent
company thereof, in substantially the same proportions as their ownership of the
Company immediately prior to the transaction; or (2) in which the holders of
Company’s capital stock immediately before such transaction will, immediately
after such transaction, hold as a group on a fully diluted basis the ability to
elect at least a majority of the directors of the surviving corporation (or a
parent company);
(iii) there is consummated a sale, lease, exclusive license, or other
disposition of all or substantially all of the consolidated assets of the
Company and its Subsidiaries, other than a sale, lease, license, or other
disposition of all or substantially all of the consolidated assets of the
Company and its Subsidiaries to an entity, fifty percent (50%) or more of the
combined voting power of the voting securities of which are owned by the
stockholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale, lease, license or other
disposition; or

 

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(iv) individuals who, on the date this Plan is adopted by the Board, are
Directors (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Directors; provided, however, that if the appointment or
election (or nomination for election) of any new Director was approved or
recommended by a majority vote of the members of the Incumbent Board then still
in office, such new member shall, for purposes of this Plan, be considered as a
member of the Incumbent Board.
For purposes of determining whether a Change in Control has occurred, a
transaction includes all transactions in a series of related transactions, and
terms used in this definition but not defined are used as defined in the Plan.
The term Change in Control shall not include a sale of assets, merger, or other
transaction effected exclusively for the purpose of changing the domicile of the
Company.
Notwithstanding the foregoing or any other provision of this Plan, the
definition of Change in Control (or any analogous term) in an individual written
agreement between the Company and the Participant shall supersede the foregoing
definition with respect to Awards subject to such agreement (it being
understood, however, that if no definition of Change in Control or any analogous
term is set forth in such an individual written agreement, the foregoing
definition shall apply).
(j) “Code” means the Internal Revenue Code of 1986, as amended from time to
time, including regulations thereunder and successor provisions and regulations
thereto.
(k) “Committee” means a committee designated by the Board to administer the Plan
with respect to at least a group of Employees, Directors, or Consultants.
(l) “Company” means MarineMax, Inc., a Delaware corporation.
(m) “Consultant” means any person (other than an Employee or a Director, solely
with respect to rendering services in such person’s capacity as a director) who
is engaged by the Company or any Related Entity to render consulting or advisory
services to the Company or such Related Entity.
(n) “Continuous Service” means uninterrupted provision of services to the
Company or any Related Entity in the capacity as either an officer, Employee,
Director, or Consultant. Continuous Service shall not be considered to be
interrupted in the case of (i) any approved leave of absence, (ii) transfers
among the Company, any Related Entities, or any successor entities, in the
capacity as either an officer, Employee, Director, or Consultant or (iii) any
change in status as long as the individual remains in the service of the Company
or a Related Entity in the capacity as either an officer, Employee, Director, or
Consultant (except as otherwise provided in the Award Agreement). An approved
leave of absence shall include sick leave, military leave, or any other
authorized personal leave.
(o) “Corporate Transaction” means the occurrence, in a single transaction or in
a series of related transactions, of any one or more of the following events:
(i) a sale, lease, exclusive license, or other disposition of a substantial
portion of the consolidated assets of the Company and its Subsidiaries, as
determined by the Plan Administrator, in its discretion;
(ii) a sale or other disposition of more than twenty percent (20%) of the
outstanding securities of the Company; or
(iii) a merger, consolidation, reorganization, or similar transaction, whether
or not the Company is the surviving corporation.

 

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(p) “Covered Employee” means an Eligible Person who is a Covered Employee as
specified in Section 7(d) of the Plan.
(q) “Director” means a member of the Board or the board of directors of any
Related Entity.
(r) “Disability” means a permanent and total disability (within the meaning of
Section 22(e) of the Code), as determined by a medical doctor satisfactory to
the Plan Administrator.
(s) “Dividend Equivalent” means a right, granted to a Participant under Section
6(g) hereof, to receive cash, Shares, other Awards, or other property equal in
value to dividends paid with respect to a specified number of Shares or other
periodic payments.
(t) “Effective Date” means the effective date of this Plan, which shall be the
date this Plan is adopted by the Board, subject to the approval of the
stockholders of the Company.
(u) “Eligible Person” means each officer, Director, Employee, or Consultant. The
foregoing notwithstanding, only employees of the Company, any Parent, or any
Subsidiary shall be Eligible Persons for purposes of receiving Incentive Stock
Options. An Employee on leave of absence may be considered as still in the
employ of the Company or a Related Entity for purposes of eligibility for
participation in the Plan.
(v) “Employee” means any person, including an officer or Director, who is an
employee of the Company or any Related Entity. The payment of a director’s fee
by the Company or a Related Entity shall not be sufficient to constitute
“employment” by the Company.
(w) “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time, including rules thereunder and successor provisions and rules
thereto.
(x) “Executive Officer” means an executive officer of the Company as defined
under the Exchange Act.
(y) “Fair Market Value” means the fair market value of Shares, Awards, or other
property as determined by the Plan Administrator, or under procedures
established by the Plan Administrator. Unless otherwise determined by the Plan
Administrator, the Fair Market Value of Shares as of any given date, after which
the Shares are publicly traded on a stock exchange or market, shall be the
closing sale price per share reported on a consolidated basis for stock listed
on the principal stock exchange or market on which Shares are traded on the date
as of which such value is being determined or, if there is no sale on that date,
then on the last previous day on which a sale was reported.

 

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(z) “Good Reason” shall, with respect to any Participant, have the meaning
specified in the Award Agreement. In the absence of any definition in the Award
Agreement, “Good Reason” shall have the equivalent meaning (or the same meaning
as “good reason” or “for good reason”) set forth in any employment, consulting,
change in control, or other agreement for the performance of services between
the Participant and the Company or a Related Entity or, in the absence of any
such definition in such agreement(s), such term shall mean (i) the assignment to
the Participant of any duties inconsistent in any material respect with the
Participant’s position (including status, offices, titles, and reporting
requirements), authority, duties, or responsibilities as assigned by the Company
(or a Related Entity) or any other action by the Company (or a Related Entity)
that results in a material diminution in such position, authority, duties, or
responsibilities, excluding for this purpose an isolated, insubstantial, and
inadvertent action not taken in bad faith and which is remedied by the Company
(or a Related Entity) promptly after receipt of notice thereof given by the
Participant; (ii) any failure by the Company (or a Related Entity) to comply
with its obligations to the Participant as agreed upon, other than an isolated,
insubstantial, or inadvertent failure not occurring in bad faith and which is
remedied by the Company (or a Related Entity) promptly after receipt of notice
thereof given by the Participant; (iii) the Company’s (or Related Entity’s)
requiring the Participant to be based at any office or location more than fifty
(50) miles from the location of employment as of the date of Award, except for
travel reasonably required in the performance of the Participant’s
responsibilities; (iv) any purported termination by the Company (or a Related
Entity) of the Participant’s Continuous Service otherwise than for Cause, as
defined in Section 2(h), death, or by reason of the Participant’s Disability as
defined in Section 2I; or (v) any reduction in the Participant’s base salary
(unless such reduction is part of Company-wide reduction that affects a majority
of the persons of comparable level to the Participant).
(aa) “Incentive Stock Option” means any Option intended to be designated as an
incentive stock option within the meaning of Section 422 of the Code or any
successor provision thereto.
(bb) “Non-Employee Director” means a Director of the Company who is not an
Employee.
(cc) “Non-Qualified Stock Option” means any Option that is not intended to be
designated as an incentive stock option within the meaning of Section 422 of the
Code or any successor provision thereto.
(dd) “Option” means a right, granted to a Participant under Section 6(b) hereof,
to purchase Shares or other Awards at a specified price during specified time
periods.
(ee) “Other Stock-Based Awards” means Awards granted to a Participant pursuant
to Section 6(h) hereof.

 

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(ff) “Parent” means any corporation (other than the Company), whether now or
hereafter existing, in an unbroken chain of corporations ending with the
Company, if each of the corporations in the chain (other than the Company) owns
stock possessing fifty percent (50%) or more of the combined voting power of all
classes of stock in one of the other corporations in the chain.
(gg) “Participant” means a person who has been granted an Award under the Plan
that remains outstanding, including a person who is no longer an Eligible
Person.
(hh) “Performance Award” means a right, granted to an Eligible Person under
Sections 6(h) hereof, to receive Awards based upon performance criteria
specified by the Plan Administrator.
(ii) “Performance Period” means that period established by the Plan
Administrator at the time any Performance Award is granted or at any time
thereafter during which any performance goals specified by the Plan
Administrator with respect to such Award are to be measured.
(jj) “Person” has the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, and shall include a
“group” as defined in Section 12(d) thereof.
(kk) “Plan” means this MarineMax, Inc. 2011 Stock-Based Compensation Plan.
(ll) “Plan Administrator” means the Board or any Committee delegated by the
Board to administer the Plan. There may be different Plan Administrators with
respect to different groups of Eligible Persons.
(mm) “Related Entity” means any Parent, Subsidiary, and any business,
corporation, partnership, limited liability company, or other entity designated
by the Plan Administrator in which the Company, a Parent, or a Subsidiary,
directly or indirectly, holds a substantial ownership interest.
(nn) “Restricted Stock” means Stock granted to a Participant under Section 6(d)
hereof, that is subject to certain restrictions, including a risk of forfeiture.
(oo) “Rule 16b-3” and “Rule 16a-1(c)(3)” means Rule 16b-3 and Rule 16a-1(c)(3),
as from time to time in effect and applicable to the Plan and Participants,
promulgated by the Securities and Exchange Commission under Section 16 of the
Exchange Act.
(pp) “Share” means a share of the Company’s Common Stock, and the share of such
other securities as may be substituted (or resubstituted) for Stock pursuant to
Section 10(c) hereof.
(qq) “Stock” means the Company’s Common Stock, and such other securities as may
be substituted (or resubstituted) for the Company’s Common Stock pursuant to
Section 10(c) hereof.

 

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(rr) “Stock Appreciation Right” means a right granted to a Participant pursuant
to Section 6(c) hereof.
(ss) “Stock Unit” means a right, granted to a Participant pursuant to Section
6(e) hereof, to receive Shares, cash, or a combination thereof at the end of a
specified period of time.
(tt) “Subsidiary” means any corporation (other than the Company), whether now or
hereafter existing, in an unbroken chain of corporations beginning with the
Company, if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
(uu) “Voting Stock” means the stock of the Company with a right to vote for the
election of Directors.
3. Administration.
(a) Administration by Board. The Board shall administer the Plan unless and
until the Board delegates administration to a Committee, as provided in
Section 3(c). The Board and/or Committee(s) administering the Plan shall be the
Plan Administrator.
(b) Powers of the Plan Administrator. The Plan Administrator shall have the
following powers, subject to, and within the limitations of, the express
provisions of the Plan:
(i) Subject to Section 3(g) below, to determine from time to time those of the
persons eligible under the Plan shall be granted Awards; when and how each Award
shall be granted; what type or combination of types of Award shall be granted;
the provisions of each Award granted (which need not be identical), including
the time or times when a person shall be permitted to receive Shares or cash
pursuant to an Award; and the number of Shares or amount of cash with respect to
which an Award shall be granted to each such person.
(ii) To construe and interpret the Plan and Awards granted under it and to
establish, amend, and revoke rules and regulations for its administration. The
Plan Administrator, in the exercise of this power, may correct any one or more
defects, omissions, or inconsistencies in the Plan or in any Award Agreement, in
a manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(iii) To amend the Plan or an Award as provided in Section 10(e).
(iv) To terminate or suspend the Plan as provided in Section 10(e).
(v) To adopt such modifications, procedures, and subplans as may be necessary or
desirable to comply with provisions of the laws of foreign countries in which
the Company or Related Entities may operate to assure the viability of the
benefits from Awards granted to Participants performing services in such
countries and to meet the objectives of the Plan.

 

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(vi) Generally, to exercise such powers and to perform such acts as the Plan
Administrator deems necessary or appropriate to promote the best interests of
the Company and that are not in conflict with the provisions of the Plan.
(c) Delegation to Committee.
(i) General. The Board may delegate administration of the Plan to a Committee or
Committees of more members of the Board, and the term “Committee” shall apply to
any person or persons to whom such authority has been delegated. If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, to the extent delegated by the Board, including the power to
delegate to a subcommittee any of the administrative powers the Committee is
authorized to exercise, subject, however, to such resolutions, not inconsistent
with the provisions of the Plan, as may be adopted from time to time by the
Board. The Board may abolish the Committee at any time and revest in the Board
the administration of the Plan.
(ii) Section 162(m) and Rule 16b-3 Compliance. In the discretion of the Board,
the Committee may consist solely of two or more “Outside Directors”, in
accordance with Section 162(m) of the Code, and/or solely of two or more
“Non-Employee Directors”, in accordance with Rule 16b-3. In addition, the Plan
Administrator may delegate to a committee of two or more members of the Board
the authority to grant Awards to Eligible Persons who are either (a) not then
Covered Employees and are not expected to be Covered Employees at the time of
recognition of income resulting from such Award, (b) not persons with respect to
whom the Company wishes to comply with Section 162(m) of the Code or (c) not
then subject to Section 16 of the Exchange Act.
(d) Effect of Plan Administrator’s Decision. All determinations,
interpretations, and constructions made by the Plan Administrator shall be made
in good faith and shall not be subject to review by any person and shall be
final, binding and conclusive on all persons.
(e) Arbitration. Any dispute or claim concerning any Award granted (or not
granted) pursuant to the Plan or any disputes or claims relating to or arising
out of the Plan shall be fully, finally, and exclusively resolved by binding and
confidential arbitration conducted pursuant to the rules of Judicial Arbitration
and Mediation Services, Inc. (“JAMS”) in the nearest city in which JAMS conducts
business to the city in which the Participant is employed by the Company. The
Company shall pay all arbitration fees. In addition to any other relief, the
arbitrator may award to the prevailing party recovery of its attorneys’ fees and
costs. By accepting an Award, the Participant and the Company waive their
respective rights to have any such disputes or claims tried by a judge or jury.
(f) Limitation of Liability. The Board and any Committee(s), and each member
thereof, who act as the Plan Administrator, shall be entitled to, in good faith,
rely or act upon any report or other information furnished to him or her by any
officer or Employee, the Company’s independent auditors, Consultants, or any
other agents assisting in the administration of the Plan. Members of the Board
and any Committee(s), and any officer or Employee acting at the direction or on
behalf of the Board and any Committee(s), shall not be personally liable for any
action or determination taken or made in good faith with respect to the Plan and
shall, to the extent permitted by law, be fully indemnified and protected by the
Company with respect to any such action or determination.

 

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(g) Administration of the Plan For Non-Employee Directors. Notwithstanding the
foregoing, the grant of all Awards to the Non-Employee Directors shall be
approved by a majority of the Directors who qualify as independent under the
rules of the principal stock exchange or market on which Shares are traded or a
Committee composed solely of such independent Directors.
4. Shares Issuable Under the Plan.
(a) Number of Shares Available for Issuance Under Plan. Subject to adjustment as
provided in Section 10(c) hereof, the total number of Shares reserved and
available for issuance in connection with Awards shall be 1,000,000 Shares. In
addition, any shares available for issuance under the 2007 Incentive
Compensation Plan that are not subject to an outstanding award under the 2007
Incentive Compensation Plan as of the date of stockholder approval of this Plan
shall become available for issuance under this Plan, and shall no longer be
available for issuance under the 2007 Incentive Compensation Plan, as
applicable. Any Shares issued under the Plan may consist, in whole or in part,
of authorized and unissued shares or treasury shares.
(b) Availability of Shares Not Issued pursuant to Awards.
(i) If any Shares subject to an Award or to an 2007 Plan Award are forfeited,
expire, or otherwise terminate without issuance of such Shares, any Award or
2007 Plan Award is settled for cash or otherwise does not result in the issuance
of all or a portion of the Shares subject to such Award or 2007 Plan Award, the
Shares shall, to the extent of such forfeiture, expiration, termination, cash
settlement, or non-issuance, be available for Awards under the Plan, subject to
Section 4(b)(iv) below.
(ii) If any Shares issued pursuant to an Award or 2007 Plan Award are forfeited
back to or repurchased by the Company, including, but not limited to, any
repurchase or forfeiture caused by the failure to meet a contingency or
condition required for the vesting of such shares, then the Shares forfeited or
repurchased shall revert to and become available for issuance under the Plan,
subject to Section 4(b)(iv) below.
(iii) In the event that any Option or other Award granted hereunder is exercised
through the withholding of Shares from the Award by the Company or withholding
tax liabilities arising from such Option or other Award are satisfied by the
withholding of Shares from the Award by the Company, then only the number of
Shares issued net of the Shares withheld shall be counted as issued for purposes
of determining the maximum number of Shares available for grant under the Plan,
subject to Section 4(b)(iv) below. In the event that any 2007 Plan Award is
exercised through the withholding of Shares by the Company from the 2007 Plan
Award or withholding tax liabilities arising from such 2007 Plan Award are
satisfied by the withholding of Shares from the 2007 Plan Award by the Company,
then Shares withheld shall become available for issuance under the Plan, subject
to Section 4(b)(iv) below.

 

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(iv) Notwithstanding anything in this Section 4(b) to the contrary, solely for
purposes of determining whether Shares are available for the grant of Incentive
Stock Options, the maximum aggregate number of Shares that may be granted under
this Plan through Incentive Stock Options shall be determined without regard to
any Shares restored pursuant to this Section 4(b) that, if taken into account,
would cause the Plan, for purposes of the grant of Incentive Stock Options, to
fail the requirement under Code Section 422 that the Plan designate a maximum
aggregate number of shares that may be issued.
(c) Application of Limitations. The limitation contained in this Section 4 shall
apply not only to Awards that are settled by the delivery of Shares but also to
Awards relating to Shares but settled only in cash (such as cash-only Stock
Appreciation Rights). The Plan Administrator may adopt reasonable counting
procedures to ensure appropriate counting, and avoid double counting (as, for
example, in the case of tandem or substitute awards) and may make adjustments if
the number of Shares actually delivered differs from the number of shares
previously counted in connection with an Award.
5. Eligibility; Per-Person Award Limitations. Awards may be granted under the
Plan only to Eligible Persons.
In any one calendar year, an Eligible Person may not be granted Awards under
which more than fifty percent (50%) of the total number of Shares reserved for
issuance under the Plan (whether or not issued) could be received by the
Participant, subject to adjustment as provided in Section 10(c). In addition,
the maximum dollar value payable in cash to any one Participant with respect to
Performance Awards vesting based on the performance objectives of Section 7 is
$5,000,000 per calendar year.
6. Terms of Awards.
(a) General. Awards may be granted on the terms and conditions set forth in this
Section 6. In addition, the Plan Administrator may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to Section 10(e)),
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Plan Administrator shall determine, including terms requiring
forfeiture of Awards in the event of termination of the Participant’s Continuous
Service and terms permitting a Participant to make elections relating to his or
her Award. The Plan Administrator shall retain full power and discretion to
accelerate, waive or modify, at any time, any term or condition of an Award that
is not mandatory under the Plan.
(b) Options. The Plan Administrator is authorized to grant Options to any
Eligible Person on the following terms and conditions:
(i) Stock Option Agreement. Each grant of an Option shall be evidenced by an
Award Agreement. Such Award Agreement shall be subject to all applicable terms
and conditions of the Plan and may be subject to any other terms and conditions,
which are not inconsistent with the Plan and which the Plan Administrator deems
appropriate for inclusion in the Award Agreement. The provisions of the various
Award Agreements entered into under the Plan need not be identical.

 

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(ii) Number of Shares. The Plan Administrator shall determine and each Award
Agreement shall specify the number of Shares that are subject to the Option and
shall provide for the adjustment of such number in accordance with Section 10(c)
hereof. The Award Agreement shall also specify whether the Stock Option is an
Incentive Stock Option or a Non-Qualified Stock Option.
(iii) Exercise Price.
(A) In General. The Plan Administrator shall determine and each Award Agreement
shall state the price at which Shares subject to the Option may be purchased
(the “Exercise Price”), which shall be not less than 100% of the Fair Market
Value of the Stock on the date of grant.
(B) Ten Percent Stockholder. If a Participant owns or is deemed to own (by
reason of the attribution rules applicable under Section 424(d) of the Code)
more than 10% of the combined voting power of all classes of stock of the
Company or any Parent or Subsidiary, any Incentive Stock Option granted to such
Employee must have an exercise price per Share of at least 110% of the Fair
Market Value of a Share on the date of grant.
(iv) Time and Method of Exercise. The Plan Administrator shall determine the
time or times at which or the circumstances under which an Option may be
exercised in whole or in part (including based on achievement of performance
goals and/or future service requirements), the time or times at which Options
shall cease to be or become exercisable following termination of Continuous
Service or upon other conditions, the methods by which the exercise price may be
paid or deemed to be paid (including, in the discretion of the Plan
Administrator, a cashless exercise procedure), the form of such payment,
including, without limitation, cash, Stock, net exercise, other Awards, or
awards granted under other plans of the Company or a Related Entity, other
property (including notes or other contractual obligations of Participants to
make payment on a deferred basis) or any other form of consideration legally
permissible, and the methods by or forms in which Stock will be delivered or
deemed to be delivered to Participants.
(v) Termination of Service. Subject to earlier termination of the Option as
otherwise provided in the Plan and unless otherwise provided by the Plan
Administrator with respect to an Option and set forth in the Award Agreement, an
Option shall be exercisable after a Participant’s termination of Continuous
Service only during the applicable time period determined in accordance with
this Section and thereafter shall terminate and no longer be exercisable:
(A) Death or Disability. If the Participant’s Continuous Service terminates
because of the death or Disability of the Participant, the Option, to the extent
unexercised and exercisable on the date on which the Participant’s Continuous
Service terminated, may be exercised by the Participant (or the Participant’s
legal representative or estate) at any time prior to the expiration of twelve
(12) months (or such other period of time as determined by the Plan
Administrator, in its discretion) after the date on which the Participant’s
Continuous Service terminated, but in any event only with respect to the vested
portion of the Option and no later than the date of expiration of the Option’s
term as set forth in the Award Agreement evidencing such Option (the “Option
Expiration Date”).

 

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(B) Termination for Cause. Notwithstanding any other provision of the Plan to
the contrary, if the Participant’s Continuous Service is terminated for Cause,
the Option shall terminate and cease to be exercisable immediately upon such
termination of Continuous Service.
(C) Other Termination of Service. If the Participant’s Continuous Service
terminates for any reason, except Disability, death, or Cause, the Option, to
the extent unexercised and exercisable by the Participant on the date on which
the Participant’s Continuous Service terminated, may be exercised by the
Participant at any time prior to the expiration of three (3) months (or such
longer period of time as determined by the Plan Administrator, in its
discretion) after the date on which the Participant’s Continuous Service
terminated, but in any event only with respect to the vested portion of the
Option and no later than the Option Expiration Date.
(vi) Incentive Stock Options. The terms of any Incentive Stock Option granted
under the Plan shall comply in all respects with the provisions of Section 422
of the Code. If and to the extent required to comply with Section 422 of the
Code, Options granted as Incentive Stock Options shall be subject to the
following special terms and conditions:
(1) The Option shall not be exercisable more than ten (10) years after the date
such Incentive Stock Option is granted; provided, however, that if a Participant
owns or is deemed to own (by reason of the attribution rules of Section 424(d)
of the Code) more than 10% of the combined voting power of all classes of stock
of the Company or any Parent or Subsidiary and the Incentive Stock Option is
granted to such Participant, the Incentive Stock Option shall not be exercisable
(to the extent required by the Code at the time of the grant) for no more than
five (5) years from the date of grant; and
(2) If the aggregate Fair Market Value (determined as of the date the Incentive
Stock Option is granted) of the Shares with respect to which Incentive Stock
Options granted under the Plan and all other option plans of the Company, its
Parent or any Subsidiary are exercisable for the first time by a Participant
during any calendar year in excess of $100,000, then such Participant’s
Incentive Stock Option(s) or portions thereof that exceed such $100,000 limit
shall be treated as Non-Qualified Stock Options (in the reverse order in which
they were granted, so that the last Incentive Stock Option will be the first
treated as a Non-Qualified Stock Option). This paragraph shall only apply to the
extent such limitation is applicable under the Code at the time of the grant.
(c) Stock Appreciation Rights. The Plan Administrator is authorized to grant
Stock Appreciation Rights to Participants on the following terms and conditions:
(i) Agreement. Each grant of a Stock Appreciation Right shall be evidenced by an
Award Agreement. Such Award Agreement shall be subject to all applicable terms
and conditions of the Plan and may be subject to any other terms and conditions
which are not inconsistent with the Plan and which the Plan Administrator deems
appropriate for inclusion in the Award Agreement. The provisions of the various
Award Agreements entered into under the Plan need not be identical.

 

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(ii) Right to Payment. A Stock Appreciation Right shall confer on the
Participant to whom it is granted a right to receive, upon exercise thereof, the
excess of (A) the Fair Market Value of one share of stock on the date of
exercise over (B) the grant price of the Stock Appreciation Right as determined
by the Plan Administrator. The per Share grant price of each Stock Appreciation
Right shall not be less than the Fair Market Value of a Share on the grant date.
(iii) Other Terms. The Plan Administrator shall determine at the date of grant
or thereafter, the time or times at which and the circumstances under which a
Stock Appreciation Right may be exercised in whole or in part (including based
on achievement of performance goals and/or future service requirements), the
time or times at which Stock Appreciation Rights shall cease to be or become
exercisable following termination of Continuous Service or upon other
conditions, the form of payment upon exercise of Shares, cash, or other
property, the method of exercise, method of settlement, form of consideration
payable in settlement (either cash, Shares or other property), method by or
forms in which Stock will be delivered or deemed to be delivered to
Participants, whether or not a Stock Appreciation Right shall be in tandem or in
combination with any other Award, and any other terms and conditions of any
Stock Appreciation Right. Stock Appreciation Rights may be either freestanding
or in tandem with other Awards. Notwithstanding any other provision of the Plan,
unless otherwise exempt from Section 409A of the Code or otherwise specifically
determined by the Plan Administrator, each Stock Appreciation Right shall be
structured to avoid the imposition of any excise tax under Section 409A of the
Code.
(d) Restricted Stock. The Plan Administrator is authorized to grant Restricted
Stock to any Eligible Person on the following terms and conditions:
(i) Grant and Restrictions. Restricted Stock shall be subject to such
restrictions on transferability, risk of forfeiture, and other restrictions, if
any, as the Plan Administrator may impose, or as otherwise provided in this
Plan. The terms of any Restricted Stock granted under the Plan shall be set
forth in a written Award Agreement that shall contain provisions determined by
the Plan Administrator and not inconsistent with the Plan. The restrictions may
lapse separately or in combination at such times, under such circumstances
(including based on achievement of performance goals and/or future service
requirements), in such installments or otherwise, as the Plan Administrator may
determine at the date of grant or thereafter. Except to the extent restricted
under the terms of the Plan and any Award Agreement relating to the Restricted
Stock, a Participant granted Restricted Stock shall have all of the rights of a
stockholder, including the right to vote the Restricted Stock and the right to
receive dividends thereon (subject to any mandatory reinvestment or other
requirement imposed by the Plan Administrator). During the restricted period
applicable to the Restricted Stock, subject to Section 10(b) below, the
Restricted Stock may not be sold, transferred, pledged, hypothecated, margined,
or otherwise encumbered by the Participant. Notwithstanding the foregoing, all
grants of Restricted Stock shall comply with the vesting terms of Section 8(f).

 

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(ii) Forfeiture. Except as otherwise determined by the Plan Administrator, upon
termination of a Participant’s Continuous Service during the applicable
restriction period, the Participant’s Restricted Stock that is at that time
subject to a risk of forfeiture that has not lapsed or otherwise been satisfied
shall be forfeited to or reacquired by the Company; provided that the Plan
Administrator may provide, by rule or regulation or in any Award Agreement or
may determine in any individual case, that restrictions or forfeiture conditions
relating to Restricted Stock shall be waived in whole or in part in the event of
terminations resulting from specified causes, and the Plan Administrator may in
other cases waive in whole or in part the forfeiture of Restricted Stock.
Notwithstanding the foregoing, all grants of Stock Units shall comply with the
vesting acceleration terms of Sections 8(g).
(iii) Certificates for Shares. Restricted Stock granted under the Plan may be
evidenced in such manner as the Plan Administrator shall determine. If
certificates representing Restricted Stock are registered in the name of the
Participant, the Plan Administrator may require that such certificates bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such Restricted Stock, that the Company retain physical possession
of the certificates, that the certificates be kept with an escrow agent, and
that the Participant deliver a stock power to the Company, endorsed in blank,
relating to the Restricted Stock.
(iv) Dividends and Splits. As a condition to the grant of an Award of Restricted
Stock, the Plan Administrator may require that any cash dividends paid on a
share of Restricted Stock be automatically reinvested in additional shares of
Restricted Stock or applied to the purchase of additional Awards under the Plan.
Unless otherwise determined by the Plan Administrator, Shares distributed in
connection with a stock split or stock dividend, and other property distributed
as a dividend, shall be subject to restrictions and a risk of forfeiture to the
same extent as the Restricted Stock with respect to which such Shares or other
property has been distributed.
(e) Stock Units. The Plan Administrator is authorized to grant Stock Units to
Participants, which are rights to receive Shares, cash, or other property, or a
combination thereof at the end of a specified time period, subject to the
following terms and conditions:
(i) Award and Restrictions. Satisfaction of an Award of Stock Units shall occur
upon expiration of the time period specified for such Stock Units by the Plan
Administrator (or, if permitted by the Plan Administrator, as elected by the
Participant). In addition, Stock Units shall be subject to such restrictions
(which may include a risk of forfeiture) as the Plan Administrator may impose,
if any, which restrictions may lapse at the expiration of the time period or at
earlier specified times (including based on achievement of performance goals
and/or future service requirements), separately or in combination, in
installments or otherwise, as the Plan Administrator may determine. The terms of
an Award of Stock Units shall be set forth in a written Award Agreement that
shall contain provisions determined by the Plan Administrator and not
inconsistent with the Plan. Stock Units may be satisfied by delivery of Stock,
cash equal to the Fair Market Value of the specified number of Shares covered by
the Stock Units, or a combination thereof, as determined by the Plan
Administrator at the date of grant or thereafter. Prior to satisfaction of an
Award of Stock Units, an Award of Stock Units carries no voting or dividend or
other rights associated with share ownership. Notwithstanding the foregoing, all
grants of Stock Units shall comply with the vesting terms of Sections 8(f).
Notwithstanding any other provision of the Plan, unless otherwise exempt from
Section 409A of the Code or otherwise specifically determined by the Plan
Administrator, each Stock Unit shall be structured to avoid the imposition of
any excise tax under Section 409A of the Code.

 

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(ii) Forfeiture. Except as otherwise determined by the Plan Administrator, upon
termination of a Participant’s Continuous Service during the applicable time
period thereof to which forfeiture conditions apply (as provided in the Award
Agreement evidencing the Stock Units), the Participant’s Stock Units (other than
those Stock Units subject to deferral at the election of the Participant) shall
be forfeited; provided that the Plan Administrator may provide, by rule or
regulation or in any Award Agreement or may determine in any individual case,
that restrictions or forfeiture conditions relating to Stock Units shall be
waived in whole or in part in the event of terminations resulting from specified
causes, and the Plan Administrator may in other cases waive in whole or in part
the forfeiture of Stock Units. Notwithstanding the foregoing, all grants of
Stock Units shall comply with the vesting acceleration terms of Sections 8(g).
(iii) Dividend Equivalents. Unless otherwise determined by the Plan
Administrator at date of grant, any Dividend Equivalents that are granted with
respect to any Award of Stock Units shall be either (A) paid with respect to
such Stock Units at the dividend payment date in cash or in Shares of
unrestricted Stock having a Fair Market Value equal to the amount of such
dividends or (B) deferred with respect to such Stock Units and the amount or
value thereof automatically deemed reinvested in additional Stock Units, other
Awards or other investment vehicles, as the Plan Administrator shall determine
or permit the Participant to elect.
(f) Bonus Stock and Awards in Lieu of Obligations. The Plan Administrator is
authorized to grant Shares as a bonus or to grant Shares or other Awards in lieu
of Company obligations to pay cash or deliver other property under the Plan or
under other plans or compensatory arrangements, provided that, in the case of
Participants subject to Section 16 of the Exchange Act, the amount of such
grants remains within the discretion of the Plan Administrator to the extent
necessary to ensure that acquisitions of Shares or other Awards are exempt from
liability under Section 16(b) of the Exchange Act. Shares or Awards granted
hereunder shall be subject to such other terms as shall be determined by the
Plan Administrator. Notwithstanding the foregoing, all grants Shares pursuant to
this Section shall comply with the vesting terms of Section 8(f) and the vesting
acceleration terms of Section 8(g).
(g) Dividend Equivalents. The Plan Administrator is authorized to grant Dividend
Equivalents to any Eligible Person entitling the Eligible Person to receive
cash, Shares, other Awards, or other property equal in value to dividends paid
with respect to a specified number of Shares, or other periodic payments.
Dividend Equivalents may be awarded on a free-standing basis or in connection
with another Award. The terms of an Award of Dividend Equivalents shall be set
forth in a written Award Agreement that shall contain provisions determined by
the Plan Administrator and not inconsistent with the Plan. The Plan
Administrator may provide that Dividend Equivalents shall be paid or distributed
when accrued or shall be deemed to have been reinvested in additional Stock,
Awards, or other investment vehicles, and subject to such restrictions on
transferability and risks of forfeiture, as the Plan Administrator may specify.
Notwithstanding any other provision of the Plan, unless otherwise exempt from
Section 409A of the Code or otherwise specifically determined by the Plan
Administrator, each Dividend Equivalent shall be structured to avoid the
imposition of any excise tax under Section 409A of the Code.

 

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(h) Performance Awards. The Plan Administrator is authorized to grant
Performance Awards to any Eligible Person payable in cash, Shares, other
property, or other Awards, on terms and conditions established by the Plan
Administrator, including Awards subject to the provisions of Section 7, if and
to the extent that the Plan Administrator shall, in its sole discretion,
determine that an Award shall be subject to those provisions. The performance
criteria to be achieved during any Performance Period and the length of the
Performance Period shall be determined by the Plan Administrator upon the grant
of each Performance Award. Except as provided in this Plan or as may be provided
in an Award Agreement, Performance Awards will be distributed only after the end
of the relevant Performance Period. The performance goals to be achieved for
each Performance Period shall be conclusively determined by the Plan
Administrator and may be based upon the criteria set forth in Section 7(b), or
in the case of an Award that the Plan Administrator determines shall not be
subject to Section 7 hereof, any other criteria that the Plan Administrator, in
its sole discretion, shall determine should be used for that purpose. The amount
of the Award to be distributed shall be conclusively determined by the Plan
Administrator. Performance Awards may be paid in a lump sum or in installments
following the close of the Performance Period or, in accordance with procedures
established by the Plan Administrator, on a deferred basis. Notwithstanding the
foregoing, all grants of Performance Awards which would qualify as Full Value
Awards (as defined in Section 8(f)) shall comply with the vesting terms of
Section 8(f).
(i) Other Stock-Based Awards. The Plan Administrator is authorized, subject to
limitations under applicable law, to grant to any Eligible Person such other
Awards that may be denominated or payable in, valued in whole or in part by
reference to, or otherwise based on, or related to, Shares, as deemed by the
Plan Administrator to be consistent with the purposes of the Plan, including,
without limitation, convertible or exchangeable debt securities, other rights
convertible or exchangeable into Stock, purchase rights for Stock, Awards with
value and payment contingent upon performance of the Company or any other
factors designated by the Plan Administrator, and Awards valued by reference to
the book value of Stock or the value of securities of or the performance of
specified Related Entities or business units. The Plan Administrator shall
determine the terms and conditions of such Awards. The terms of any Award
pursuant to this Section shall be set forth in a written Award Agreement that
shall contain provisions determined by the Plan Administrator and not
inconsistent with the Plan. Stock delivered pursuant to an Award in the nature
of a purchase right granted under this Section 6(h) shall be purchased for such
consideration (including without limitation loans from the Company or a Related
Entity), paid for at such times, by such methods, and in such forms, including,
without limitation, cash, Stock, other Awards, or other property, as the Plan
Administrator shall determine. Cash awards, as an element of or supplement to
any other Award under the Plan, may also be granted pursuant to this
Section 6(h). Notwithstanding any other provision of the Plan, unless otherwise
exempt from Section 409A of the Code or otherwise specifically determined by the
Plan Administrator, each such Award shall be structured to avoid the imposition
of any excise tax under Section 409A of the Code. Notwithstanding the foregoing,
all grants of Other Stock Based Award which would qualify as Full Value Awards
(as defined in Section 8(f)) shall comply with the vesting terms of Section 8(f)
and the vesting acceleration terms of Section 8(g).

 

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7. Tax Qualified Performance Awards.
(a) Covered Employees. A Committee, composed in compliance with the requirements
of Section 162(m) of the Code, in its discretion, may determine at the time an
Award is granted to an Eligible Person who is, or is likely to be, as of the end
of the tax year in which the Company would claim a tax deduction in connection
with such Award, a Covered Employee, that the provisions of this Section 7 shall
be applicable to such Award.
(b) Performance Criteria. If an Award is subject to this Section 7, then the
lapsing of restrictions thereon and the distribution of cash, Shares or other
property pursuant thereto, as applicable, shall be contingent upon achievement
of one or more objective performance goals. Performance goals shall be objective
and shall otherwise meet the requirements of Section 162(m) of the Code and
regulations thereunder, including the requirement that the level or levels of
performance targeted by the Committee result in the achievement of performance
goals being “substantially uncertain.” One or more of the following business
criteria for the Company, on a consolidated basis, and/or for Related Entities,
or for business or geographical units of the Company and/or a Related Entity
(except with respect to the total stockholder return and earnings per share
criteria), shall be used by the Committee in establishing performance goals for
such Awards: (1) earnings per share; (2) revenues or gross margins; (3) cash
flow; (4) operating margin; (5) return on net assets, investment, capital, or
equity; (6) economic value added; (7) direct contribution; (8) net income;
pretax earnings; earnings before interest and taxes; earnings before interest,
taxes, depreciation, and amortization; earnings after interest expense and
before extraordinary or special items; operating income; income before interest
income or expense, unusual items, and income taxes, local, state, or federal and
excluding budgeted and actual bonuses that might be paid under any ongoing bonus
plans of the Company; (9) working capital; (10) management of fixed costs or
variable costs; (11) identification or consummation of investment opportunities
or completion of specified projects in accordance with corporate business plans,
including strategic mergers, acquisitions, or divestitures; (12) total
stockholder return; and (13) debt reduction. Any of the above goals may be
determined on an absolute or relative basis or as compared to the performance of
a published or special index deemed applicable by the Committee, including, but
not limited to, the Standard & Poor’s 500 Stock Index or a group of companies
that are comparable to the Company. The Committee shall exclude the impact of an
event or occurrence which the Committee determines should appropriately be
excluded, including without limitation, (i) restructurings, discontinued
operations, extraordinary items, and other unusual or non-recurring charges,
(ii) an event either not directly related to the operations of the Company or
not within the reasonable control of the Company’s management, or (iii) a change
in accounting standards required by generally accepted accounting principles.
(c) Performance Period; Timing For Establishing Performance Goals. Achievement
of performance goals in respect of such Performance Awards shall be measured
over a Performance Period, as specified by the Committee. Performance goals
shall be established not later than ninety (90) days after the beginning of any
Performance Period applicable to such Performance Awards, or at such other date
as may be required or permitted for “performance-based compensation” under
Section 162(m) of the Code.

 

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(d) Adjustments. The Committee may, in its discretion, reduce the amount of a
settlement otherwise to be made in connection with Awards subject to this
Section 7, but may not exercise discretion to increase any such amount payable
to a Covered Employee in respect of an Award subject to this Section 7. The
Committee shall specify the circumstances in which such Awards shall be paid or
forfeited in the event of termination of Continuous Service by the Participant
prior to the end of a Performance Period or settlement of Awards.
(e) Committee Certification. Within a reasonable period of time after the
performance criteria have been satisfied (but no later than three (3) months
after the satisfaction of the performance criteria), to the extent necessary to
qualify the payments as “performance based compensation” under Section 162(m) of
the Code, the Committee shall certify, by resolution or other appropriate action
in writing, that the performance criteria and any other material terms
previously established by the Committee or set forth in the Plan, have been
satisfied.
8. Certain Provisions Applicable to Awards or Sales.
(a) Stand-Alone, Additional, Tandem and Substitute Awards. Awards granted under
the Plan may, in the discretion of the Plan Administrator, be granted either
alone or in addition to, in tandem with or in substitution or exchange for, any
other Award or any award granted under another plan of the Company, any Related
Entity or any business entity to be acquired by the Company or a Related Entity
or any other right of a Participant to receive payment from the Company or any
Related Entity. Such additional, tandem, and substitute or exchange Awards may
be granted at any time. If an Award is granted in substitution or exchange for
another Award or award, the Plan Administrator shall require the surrender of
such other Award or award in consideration for the grant of the new Award. In
addition, Awards may be granted in lieu of cash compensation, including in lieu
of cash amounts payable under other plans of the Company or any Related Entity.
(b) Form and Timing of Payment Under Awards; Deferrals. Subject to the terms of
the Plan and any applicable Award Agreement, payments to be made by the Company
or a Related Entity upon the exercise of an Option or other Award or settlement
of an Award may be made in such forms as the Plan Administrator shall determine,
including, without limitation, cash, other Awards, or other property, and may be
made in a single payment or transfer, in installments, or on a deferred basis.
The settlement of any Award may be accelerated, and cash paid in lieu of Shares
in connection with such settlement, in the discretion of the Plan Administrator
or upon occurrence of one or more specified events (in addition to a Change in
Control). Installment or deferred payments may be required by the Plan
Administrator (subject to Section 10(g) of the Plan) or permitted at the
election of the Participant on terms and conditions established by the Plan
Administrator. Payments may include, without limitation, provisions for the
payment or crediting of a reasonable interest rate on installment or deferred
payments or the grant or crediting of Dividend Equivalents or other amounts in
respect of installment or deferred payments denominated in Shares.

 

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(c) Exemptions from Section 16(b) Liability. It is the intent of the Company
that this Plan comply in all respects with applicable provisions of Rule 16b-3
or Rule 16a-1(c)(3) to the extent necessary to ensure that neither the grant of
any Awards to nor other transaction by a Participant who is subject to
Section 16 of the Exchange Act is subject to liability under Section 16(b)
thereof (except for transactions acknowledged in writing to be non-exempt by
such Participant). Accordingly, if any provision of this Plan or any Award
Agreement does not comply with the requirements of Rule 16b-3 or
Rule 16a-1(c)(3) as then applicable to any such transaction, such provision will
be construed or deemed amended to the extent necessary to conform to the
applicable requirements of Rule 16b-3 or Rule 16a-1(c)(3) so that such
Participant shall avoid liability under Section 16(b).
(d) Code Section 409A. If and to the extent that the Plan Administrator believes
that any Awards may constitute a “nonqualified deferred compensation plan” under
Section 409A of the Code, the terms and conditions set forth in the Award
Agreement for that Award shall be drafted in a manner that is intended to comply
with, and shall be interpreted in a manner consistent with, the applicable
requirements of Section 409A of the Code, unless otherwise agreed to in writing
by the Participant and the Company.
(e) No Option or Stock Appreciation Right Repricing. Other than pursuant to
Section 10(c), without approval of the Company’s stockholders, the Plan
Administrator shall not be permitted to (A) lower the exercise price per Share
of an Option or Stock Appreciation Right after it is granted, (B) cancel an
Option or Stock Appreciation Right when the exercise price per Share exceeds the
Fair Market Value of the underlying Shares in exchange for another Award or
cash, or (C) take any other action with respect to an Option or Stock
Appreciation Right that may be treated as a repricing.
(f) Vesting Restrictions for Full Value Awards. Each award of Restricted Stock,
Stock Units, Bonus Stock, a Performance Award, or Other Stock Based Award where
the Participant is not required to pay more than the par value of the Award in
cash for the Shares delivered (each a “Full Value Award”) shall have a minimum
vesting schedule of (A) with respect to Full Value Awards that vest over time, a
three (3) year vesting schedule with a maximum of one-third (1/3rd) of the Full
Value Award vesting in any one (1) year; (B) with respect to Full Value Awards
that vest based upon the achievement of performance goals, the performance
period shall be a minimum of one (1) year in length; provided, however, that 10%
of the Shares reserved under the Plan may be granted as Full Value Awards that
are not subject to the vesting requirements of the last sentence; provided,
further, that any such grants shall be approved by the Committee.
9. Change in Control; Corporate Transaction.
(a) Change in Control.
(i) The Plan Administrator may, in its discretion, accelerate the vesting,
exercisability, lapsing of restrictions, or expiration of deferral of any Award,
including upon a Change in Control. In addition, the Plan Administrator may
provide in an Award Agreement that the performance goals relating to any Award
will be deemed to have been met upon the occurrence of any Change in Control.

 

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(ii) In the event of a Change in Control that the Board has not approved prior
to the consummation of such Change in Control, then all outstanding Awards shall
become fully vested and exercisable immediately prior to and contingent on the
consummation of the Change in Control.
(iii) In addition to the terms of Sections 9(a)(i) and 9(a)(i) above, the effect
of a “change in control,” may be provided (1) in an employment, compensation, or
severance agreement, if any, between the Company or any Related Entity and the
Participant, relating to the Participant’s employment, compensation, or
severance with or from the Company or such Related Entity or (2) in the Award
Agreement.
(b) Corporate Transactions. In the event of a Corporate Transaction, any
surviving entity or acquiring entity (together, the “Successor Entity”) may
either (i) assume any or all Awards outstanding under the Plan; (ii) continue
any or all Awards outstanding under the Plan; or (iii) substitute similar stock
awards for outstanding Awards (it being understood that similar awards include,
but are not limited to, awards to acquire the same consideration paid to the
stockholders or the Company, as the case may be, pursuant to the Corporate
Transaction); provided that if the Corporate Transaction is not a Change in
Control, each outstanding Award shall be either assumed, continued, or
substituted pursuant to the terms of this Section. In the event that the
Successor Entity does not assume or continue any or all such outstanding Awards
or substitute similar stock awards for such outstanding Awards, then with
respect to Awards that have been not assumed, continued, or substituted, such
Awards shall terminate if not exercised (if applicable) at or prior to such
effective time (contingent upon the effectiveness of the Corporate Transaction).
The Plan Administrator, in its discretion and without the consent of any
Participant, may (but is not obligated to) either (i) accelerate the vesting of
any Awards (determined on an Award by Award basis), including permitting the
lapse of any repurchase rights held by the Company (and, if applicable, the time
at which such Awards may be exercised), in full or as to some percentage of the
Award, to a date prior to the effective time of such Corporate Transaction as
the Plan Administrator shall determine (contingent upon the effectiveness of the
Corporate Transaction) or (ii) provide for a cash payment in exchange for the
termination of an Award or any portion thereof where such cash payment is equal
to the Fair Market Value of the Shares that the Participant would receive if the
Award were fully vested and exercised (if applicable) as of such date (less any
applicable exercise price).
Notwithstanding any other provision in this Plan to the contrary, with respect
to Restricted Stock and any other Award granted under the Plan with respect to
which the Company has any reacquisition or repurchase rights, the reacquisition
or repurchase rights for such Awards may be assigned by the Company to the
successor of the Company (or the successor’s parent company) in connection with
such Corporate Transaction. In the event any such rights are not continued or
assigned to the Successor Entity, then such rights shall lapse and the Award
shall be fully vested as of the effective time of the Corporate Transaction. In
addition, the Plan Administrator, in its discretion, may (but is not obligated
to) provide that any reacquisition or repurchase rights held by the Company with
respect to any such Awards (determined on an Award by Award basis) shall lapse
in whole or in part (contingent upon the effectiveness of the Corporate
Transaction).

 

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(c) Dissolution or Liquidation. In the event of a dissolution or liquidation of
the Company, then all outstanding Awards shall terminate immediately prior to
the completion of such dissolution or liquidation, and Shares subject to the
Company’s repurchase option may be repurchased by the Company notwithstanding
the fact that the holder of such stock is still in Continuous Service.
10. General Provisions.
(a) Compliance With Legal and Other Requirements. The Company may, to the extent
deemed necessary or advisable by the Plan Administrator, postpone the issuance
or delivery of Shares or payment of other benefits under any Award until
completion of such registration or qualification of such Shares or other
required action under any federal or state law, rule, or regulation, listing or
other required action with respect to any stock exchange or automated quotation
system upon which the Shares or other Company securities are listed or quoted or
compliance with any other obligation of the Company, as the Plan Administrator
may consider appropriate, and may require any Participant to make such
representations, furnish such information and comply with or be subject to such
other conditions as it may consider appropriate in connection with the issuance
or delivery of Shares or payment of other benefits in compliance with applicable
laws, rules, and regulations, listing requirements or other obligations.
(b) Limits on Transferability; Beneficiaries.
(i) General. Except as provided in the Award Agreement, a Participant may not
assign, sell, transfer, or otherwise encumber or subject to any lien any Award
or other right or interest granted under this Plan, in whole or in part, other
than by will or by operation of the laws of descent and distribution, and such
Awards or rights that may be exercisable shall be exercised during the lifetime
of the Participant only by the Participant or his or her guardian or legal
representative. In no event may an Award be transferred to a third party in
exchange for consideration.
(ii) Permitted Transfer of Option. The Plan Administrator, in its sole
discretion, may permit the transfer of an Option (but not an Incentive Stock
Option or any other right to purchase Shares other than an Option) as follows:
(A) by gift to a member of the Participant’s Immediate Family or (B) by transfer
by instrument to a trust providing that the Option is to be passed to
beneficiaries upon death of the Participant. For purposes of this
Section 10(b)(ii), “Immediate Family” shall mean the Participant’s spouse
(including a former spouse subject to terms of a domestic relations order);
child, stepchild, grandchild, child-in-law; parent, stepparent, grandparent,
parent-in-law; sibling and sibling-in-law, and shall include adoptive
relationships. If a determination is made by counsel for the Company that the
restrictions contained in this Section 10(b)(ii) are not required by applicable
federal or state securities laws under the circumstances, then the Plan
Administrator, in its sole discretion, may permit the transfer of Awards (other
than Incentive Stock Options and Stock Appreciation Rights in tandem therewith)
to one or more Beneficiaries or other transferees during the lifetime of the
Participant, which may be exercised by such transferees in accordance with the
terms of such Award, but only if and to the extent permitted by the Plan
Administrator pursuant to the express terms of an Award Agreement (subject to
any terms and conditions which the Plan Administrator may impose thereon, and
further subject to any prohibitions and restrictions on such transfers pursuant
to Rule 16b-3). A Beneficiary, transferee or other person claiming any rights
under the Plan from or through any Participant shall be subject to all terms and
conditions of the Plan and any Award Agreement applicable to such Participant,
except as otherwise determined by the Plan Administrator, and to any additional
terms and conditions deemed necessary or appropriate by the Plan Administrator.

 

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(c) Adjustments.
(i) Adjustments.
(A) In the event that any dividend paid in Stock, forward or reverse split,
merger, consolidation, combination, or other similar corporate transaction or
event affects the Stock, then the Plan Administrator shall substitute, exchange,
or adjust any or all of the following in a manner that precludes the enlargement
or dilution of rights and benefits: (A) the number and kind of Shares reserved
for issuance in connection with Awards granted thereafter, (B) the number and
kind of Shares by which annual per-person Award limitations are measured under
Section 5 hereof, (C) the number and kind of Shares subject to or deliverable in
respect of outstanding Awards, (D) the exercise price, grant price, or purchase
price relating to any Award and/or make provision for payment of cash or other
property in respect of any outstanding Award, and (E) any other aspect of any
Award that the Plan Administrator determines to be appropriate.
(B) In the event that a dividend or other distribution in the form of cash or
other property (but excluding a dividend paid in Stock), recapitalization,
reorganization, spin-off, repurchase, share exchange, liquidation, dissolution
or other similar corporate transaction or event affects the Stock and/or such
other securities of the Company or any other issuer such that a substitution,
exchange, or adjustment is determined by the Plan Administrator to be
appropriate, then the Plan Administrator shall, in such manner as the Plan
Administrator may deem equitable, substitute, exchange, or adjust any or all of
(A) the number and kind of Shares reserved for issuance in connection with
Awards granted thereafter, (B) the number and kind of Shares by which annual
per-person Award limitations are measured under Section 5 hereof, (C) the number
and kind of Shares subject to or deliverable in respect of outstanding Awards,
(D) the exercise price, grant price, or purchase price relating to any Award
and/or make provision for payment of cash or other property in respect of any
outstanding Award, and (E) any other aspect of any Award that the Plan
Administrator determines to be appropriate.
(ii) Other Adjustments. The Plan Administrator (which shall be a Committee to
the extent such authority is required to be exercised by a Committee to comply
with Code Section 162(m)) is authorized to make adjustments in the terms and
conditions of, and the criteria included in, Awards (including Awards subject to
performance goals) in recognition of unusual or nonrecurring events (including,
without limitation, acquisitions and dispositions of businesses and assets)
affecting the Company, any Related Entity, or any business unit or the financial
statements of the Company or any Related Entity, or in response to changes in
applicable laws, regulations, accounting principles, tax rates and regulations,
or business conditions or in view of the Plan Administrator’s assessment of the
business strategy of the Company, any Related Entity, or business unit thereof,
performance of comparable organizations, economic and business conditions,
personal performance of a Participant, and any other circumstances deemed
relevant; provided that no such adjustment shall be authorized or made if and to
the extent that such authority or the making of such adjustment would cause
Options, Stock Appreciation Rights, or Performance Awards granted to
Participants designated by the Plan Administrator as Covered Employees and
intended to qualify as “performance-based compensation” under Code Section
162(m) and the regulations thereunder to otherwise fail to qualify as
“performance-based compensation” under Code Section 162(m) and regulations
thereunder.

 

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(d) Taxes. The Company and any Related Entity are authorized to withhold from
any Award granted, any payment relating to an Award under the Plan, including
from a distribution of Shares or any payroll or other payment to a Participant,
amounts of withholding and other taxes due or potentially payable in connection
with any transaction involving an Award, and to take such other action as the
Plan Administrator may deem advisable to enable the Company and Participants to
satisfy obligations for the payment of withholding taxes and other tax
obligations relating to any Award. This authority shall include authority to
withhold or receive Shares or other property and to make cash payments in
respect thereof in satisfaction of a Participant’s tax obligations, either on a
mandatory or elective basis in the discretion of the Plan Administrator.
(e) Changes to the Plan and Awards. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or the Committee’s authority to grant Awards
under the Plan, without the consent of stockholders or Participants. Any
amendment or alteration to the Plan shall be subject to the approval of the
Company’s stockholders if such stockholder approval is deemed necessary and
advisable by the Board or if required under the rules or regulations of the
stock exchange that has the highest trading volume for the Shares for the prior
calendar year. However, without the consent of an affected Participant, no such
amendment, alteration, suspension, discontinuance, or termination of the Plan
may materially and adversely affect the rights of such Participant under any
previously granted and outstanding Award. The Plan Administrator may waive any
conditions or rights under or amend, alter, suspend, discontinue, or terminate
any Award theretofore granted and any Award Agreement relating thereto, except
as otherwise provided in the Plan; provided that, without the consent of an
affected Participant, no such action may materially and adversely affect the
rights of such Participant under such Award.
(f) Limitation on Rights Conferred Under Plan. Neither the Plan nor any action
taken hereunder shall be construed as (i) giving any Eligible Person or
Participant the right to continue as an Eligible Person or Participant or in the
employ of the Company or a Related Entity; (ii) interfering in any way with the
right of the Company or a Related Entity to terminate any Eligible Person’s or
Participant’s Continuous Service at any time, (iii) giving an Eligible Person or
Participant any claim to be granted any Award under the Plan or to be treated
uniformly with other Participants and Employees, or (iv) conferring on a
Participant any of the rights of a stockholder of the Company unless and until
the Participant is duly issued or transferred Shares in accordance with the
terms of an Award.

 

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(g) Unfunded Status of Awards; Creation of Trusts. The Plan is intended to
constitute an “unfunded” plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant or obligations to deliver
Shares pursuant to an Award, nothing contained in the Plan or any Award shall
give any such Participant any rights that are greater than those of a general
creditor of the Company; provided that the Plan Administrator may authorize the
creation of trusts and deposit therein cash, Shares, other Awards, or other
property or make other arrangements to meet the Company’s obligations under the
Plan. Such trusts or other arrangements shall be consistent with the “unfunded”
status of the Plan unless the Plan Administrator otherwise determines with the
consent of each affected Participant. The trustee of such trusts may be
authorized to dispose of trust assets and reinvest the proceeds in alternative
investments, subject to such terms and conditions as the Plan Administrator may
specify and in accordance with applicable law.
(h) Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board
nor its submission to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the Plan Administrator to
adopt such other incentive arrangements as it may deem desirable including
incentive arrangements and awards which do not qualify under Code
Section 162(m).
(i) Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award. The Plan Administrator shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.
(j) Governing Law. The validity, construction, and effect of the Plan, any rules
and regulations under the Plan, and any Award Agreement shall be determined in
accordance with the laws of the state of Delaware without giving effect to
principles of conflicts of laws, and applicable federal law.
(k) Plan Effective Date and Stockholder Approval; Termination of Plan. The Plan
shall become effective on the Effective Date, subject to subsequent approval
within twelve (12) months of its adoption by the Board by stockholders of the
Company eligible to vote in the election of directors, by a vote sufficient to
meet the requirements of Code Sections 162(m) (if applicable) and 422, Rule
16b-3 under the Exchange Act (if applicable), applicable requirements of the
principal stock exchange or market on which Shares are traded, and other laws,
regulations, and obligations of the Company applicable to the Plan. Awards may
be granted subject to stockholder approval, but may not be exercised or
otherwise settled in the event stockholder approval is not obtained. The Plan
shall terminate no later than ten (10) years from the date of the later of
(x) the Effective Date and (y) the date an increase in the number of shares
reserved for issuance under the Plan is approved by the Board (so long as such
increase is also approved by the stockholders).

 

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