EXHIBIT 10.1

 

KNOLL, INC.

 

AMENDED AND RESTATED 2013 STOCK INCENTIVE PLAN

 

1.                                      Purpose

 

The Knoll, Inc. 2013 Stock Incentive Plan, as set forth herein and as amended
from time to time, (the “Plan”) is intended to provide incentives that will
attract, retain, motivate and reward highly competent persons such as officers,
certain other key employees, directors and consultants of Knoll, Inc. (the
“Company”) or any of its subsidiary corporations, limited liability companies or
other forms of business entities now existing or hereafter formed or acquired
(“Subsidiaries”), by providing them opportunities to acquire shares of the
common stock, par value $.01 per share, of the Company (“Common Stock”) or to
receive monetary payments based on the value of such shares pursuant to Awards
(as defined in Section 4) described herein.  Furthermore, the Plan is intended
to assist in further aligning the interests of the Company’s (and Subsidiaries’)
officers, other key employees, directors and consultants with those of its
stockholders.

 

2.                                      Administration

 

a.                                      The Plan shall be administered by a
committee (the “Committee”) which shall be the Compensation Committee of the
Board of Directors of the Company (the “Board”) or another committee appointed
by the Board from among its members.  Unless the Board determines otherwise, the
Committee shall be comprised solely of at least two members who each shall
qualify as a (i) “Non-Employee Director” within the meaning of
Rule 16b-3(b)(3) (or any successor rule) under the Securities Exchange Act of
1934, as amended (the “Exchange Act”) and (ii) an “outside director” within the
meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations thereunder.  The Committee is authorized, subject
to the provisions of the Plan to establish such rules and regulations as it
deems necessary for the proper administration of the Plan, to make such
determinations and interpretations and to take such action in connection with
the Plan and any Awards granted hereunder as it deems necessary or advisable, in
its sole discretion.  All determinations and interpretations made by the
Committee shall be binding and conclusive on all participants and their legal
representatives.

 

b.                                      No member of the Board, no member of the
Committee and no agent of the Committee who is an employee of the Company shall
be liable for any act or failure to act hereunder, except in circumstances
involving his or her bad faith, gross negligence or willful misconduct, or for
any act or failure to act hereunder by any other member or employee or by any
agent to whom duties in connection with the administration of this Plan have
been delegated.  The Company shall indemnify members of the Board, members of
the Committee and any agent of the Committee who is an employee of the Company
against any and all liabilities or expenses to which they may be subjected by
reason of any act or failure to act with respect to their duties on behalf of
the Plan, except in circumstances involving such person’s bad faith, gross
negligence or willful misconduct.

 

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c.                                       The Committee shall have the authority
to grant Awards to officers, other key employees, directors and consultants of
the Company or any of its Subsidiaries.  The Committee may delegate to one or
more of its members, or to one or more agents, such administrative duties as it
may deem advisable, and the Committee, or any person to whom it has delegated
duties as aforesaid, may employ one or more persons to render advice with
respect to any responsibility the Committee or such person may have under the
Plan.  The Committee may employ such legal or other counsel, consultants and
agents as it may deem desirable for the administration of the Plan and may rely
upon any opinion or computation received from any such counsel, consultant or
agent.  Expenses incurred by the Committee in the engagement of such counsel,
consultant or agent shall be paid by the Company or any of its Subsidiaries
whose employees have benefited from the Plan, as determined by the Committee.

 

3.                                      Participants

 

Participants shall consist of such officers, other key employees, directors and
consultants (including employees of a consultant, provided that such employee is
actually providing bona fide consulting services to the Company) of the Company
or any of its Subsidiaries as the Committee in its sole discretion determines to
have significant responsibility for the success and future growth and
profitability of the Company and whom the Committee may designate from time to
time to receive Awards under the Plan.  Designation of a participant in any year
shall not require the Committee to designate such person to receive an Award in
any other year or, once designated, to receive the same type or amount of Award
as granted to the participant in any other year.  The Committee shall consider
such factors as it deems pertinent in selecting participants and in determining
the type and amount of Awards.

 

4.                                      Types of Awards and Vesting Restrictions

 

a.                                      Awards under the Plan may be granted in
any one or a combination of (1) Stock Options, (2) Stock Appreciation Rights,
(3) Stock Awards, (4) Performance Awards and (5) Stock Units (each as described
above an “Award,” and collectively, “Awards”).  Awards may, as determined by the
Committee in its discretion, constitute Performance-Based Awards, as described
in Section 11.  Awards shall be evidenced by Award agreements (which need not be
identical) in such forms as the Committee may from time to time approve;
provided, however, that in the event of any conflict between the provisions of
the Plan and any such agreements, the provisions of the Plan shall prevail.

 

b.                                      Awards shall be subject to forfeiture as
determined by the Committee and set forth in the applicable Award agreement,
provided however, that:

 

(1)                                 No more than one-third of any Stock Award or
Stock Unit shall become vested in any single annual period, except, as
determined by the Committee, in the case of the participant’s death, disability
or retirement or a Change in Control (as defined in Section 13b), provided that
this restriction shall not apply to (A) a Performance Award (as defined in
Section 10) or (B) an Award that is  granted in lieu of cash compensation
foregone at the election of an employee, director or consultant of the Company;
and

 

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(2)                                 A Stock Award or Stock Unit that is a
Performance Award shall become vested no sooner than the first anniversary of
the date of grant of such Award except, as determined by the Committee, in the
case of the participant’s death, disability or retirement or a Change in
Control.

 

5.                                      Common Stock Available Under the Plan

 

a.                                      Shares Available.  Subject to any
adjustments made in accordance with Section 12, the aggregate number of shares
of Common Stock that may be granted or issued pursuant to Awards, including
shares of Common Stock subject to Stock Options, shall be 2,000,000 shares of
Common Stock, all of which may be issued pursuant to the exercise of Incentive
Stock Options, which may be authorized and unissued or treasury shares.

 

b.                                      Individual Limitation.  The number of
shares of Common Stock with respect to which Stock Options and Stock
Appreciation Rights may be granted to any individual during any calendar year
shall not exceed 500,000 shares of Common Stock, subject to adjustment in
accordance with Section 12.  The number of shares of Common Stock with respect
to which Stock Awards, Performance Awards and Stock Units may be granted during
any calendar year shall not exceed 250,000 shares of Common Stock, subject to
adjustment in accordance with Section 12.

 

c.                                       Shares Underlying Awards That Again
Become Available.  Any shares of Common Stock subject to a Stock Option, Stock
Appreciation Right, Stock Award, Performance Award, or Stock Unit which for any
reason is cancelled or forfeited shall again be available for Awards under the
Plan.  The preceding sentence shall apply only for purposes of determining the
aggregate number of shares of Common Stock subject to Awards pursuant to
Section 5a but shall not apply for purposes of determining the maximum number of
Awards that any individual participant may be granted in any calendar year.  For
the avoidance of doubt, (i) upon the exercise of a stock-settled Stock
Appreciation Right or net-settled Stock Option, the number of shares of Common
Stock subject to the Award (or portion of the Award) that is then being
exercised shall be counted against the maximum aggregate number of shares of
Common Stock that may be issued under the Plan, on the basis of one share for
every share subject to the Award (or portion of the Award) being exercised,
regardless of the actual number of shares issued upon exercise, (ii) any shares
tendered to exercise a Stock Option shall not be added back to the maximum
aggregate number of shares that may be issued under the Plan, and (iii) any
shares of Common Stock withheld with respect to an Award (or, with respect to
Stock Awards, returned to the Company) in satisfaction of tax withholding
obligations shall be counted as shares issued.

 

6.                                      Stock Options

 

a.                                      In General.  The Committee is authorized
to grant Stock Options to officers, other key employees, directors and
consultants of the Company or any of its Subsidiaries and shall, in its sole
discretion, determine such participants in the Plan who will receive Stock
Options and the number of shares of Common Stock underlying each Stock Option. 
Stock Options may be (i) incentive stock options (“Incentive Stock Options”)
within the meaning of Section 422 of the Code, or (ii) Stock Options which do
not qualify as Incentive Stock Options (“Nonqualified Stock Options”).  The
Committee may grant to any participant one or more Incentive Stock

 

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Options, Nonqualified Stock Options, or both types of Stock Options.  Each Stock
Option shall be subject to such terms and conditions consistent with the Plan as
shall be determined by the Committee and as set forth in the Award agreement. 
In addition, each Stock Option shall be subject to the following limitations set
forth in this Section 6.

 

b.                                      Exercise Price.  Each Stock Option
granted hereunder shall have such per-share exercise price as the Committee may
determine on the date of grant; provided, however, subject to Section 6(e), that
the per-share exercise price shall not be less than 100 percent of the Fair
Market Value (as defined in Section 16) of Common Stock on the date the Stock
Option is granted.

 

c.                                       Payment of Exercise Price.  The Stock
Option exercise price may be paid in cash or, in the discretion of the
Committee, by the delivery of shares of Common Stock then owned by the
participant, by the withholding of shares of Common Stock for which a Stock
Option is exercisable, or by a combination of these methods.  In the discretion
of the Committee, a payment may also be made by delivering a properly executed
exercise notice to the Company together with a copy of irrevocable instructions
to a broker to deliver promptly to the Company the amount of sale or loan
proceeds to pay the exercise price with the requirement of the broker same day
reconciliation or as otherwise determined by the Company.  To facilitate the
foregoing, the Company may enter into agreements for coordinated procedures with
one or more brokerage firms.  The Committee may prescribe any other method of
paying the exercise price that it determines to be consistent with applicable
law and the purpose of the Plan, including, without limitation, in lieu of the
exercise of a Stock Option by delivery of shares of Common Stock, providing the
Company with a notarized statement attesting to the number of shares owned,
where upon verification by the Company, the Company would issue to the
participant only the number of incremental shares to which the participant is
entitled upon exercise of the Stock Option.  In determining which methods a
participant may utilize to pay the exercise price, the Committee may consider
such factors as it determines are appropriate; provided, however, that with
respect to Incentive Stock Options, all such discretionary determinations shall
be made at the time of grant and specified in the Award agreement.

 

d.                                      Exercise Period.  Stock Options granted
under the Plan shall be exercisable at such time or times as specified in the
Plan and the Award agreement; provided, however, that no Stock Option shall be
exercisable later than ten years after the date it is granted.

 

e.                                       Limitations on Incentive Stock
Options.  Incentive Stock Options may be granted only to participants who are
officers or other key employees of the Company or any of its Subsidiaries on the
date of grant.  The aggregate market value (determined as of the time the Stock
Option is granted) of Common Stock with respect to which Incentive Stock Options
(under all option plans of the Company) are exercisable for the first time by a
participant during any calendar year shall not exceed $100,000.  For purposes of
the preceding sentence, Incentive Stock Options shall be taken into account in
the order in which they are granted.  Incentive Stock Options may not be granted
to any participant who, at the time of grant, owns stock possessing (after the
application of the attribution rules of Section 424(d) of the Code) more than 10
percent of the total combined voting power of all outstanding classes of stock
of the Company or any of its Subsidiaries, unless the exercise price is fixed at
not less than 110 percent of the Fair Market

 

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Value of Common Stock on the date of grant and the exercise of such option is
prohibited by its terms after the expiration of 5 years from the date of grant
of such option.

 

7.                                      Stock Appreciation Rights

 

The Committee is authorized to grant Stock Appreciation Rights to officers,
other key employees, directors and consultants of the Company or any of its
Subsidiaries and shall, in its sole discretion, determine such participants who
will receive Stock Appreciation Rights and the number of shares of Common Stock
with respect to each Stock Appreciation Right.  A “Stock Appreciation Right”
shall mean a right to receive a payment in cash, Common Stock or a combination
thereof, in an amount equal to the excess of (x) the Fair Market Value (or some
lesser amount), of a specified number of shares of Common Stock on the date the
Stock Appreciation Right is exercised over (y) the Fair Market Value of such
shares of Common Stock on the date the Stock Appreciation Right is granted, or
other specified valuation (which shall be no less than the Fair Market Value as
of the date the Stock Appreciation Right is granted) (the “Grant Price”), with
the number of shares of Common Stock represented by the Stock Appreciation Right
as determined by the Committee.  Each Stock Appreciation Right shall be subject
to such terms and conditions consistent with the Plan as shall be determined by
the Committee and as set forth in the Award agreement.

 

8.                                      Stock Awards

 

The Committee is authorized to grant Stock Awards to officers, other key
employees, directors and consultants of the Company or any of its Subsidiaries
and shall, in its sole discretion, determine such participants in the Plan who
will receive Stock Awards and the number of shares of Common Stock underlying
each Stock Award.  A “Stock Award” is an immediate grant of a specified number
of shares of Common Stock, with such number of shares of Common Stock determined
by the Committee.  Each Stock Award shall be subject to such terms and
conditions consistent with the Plan as shall be determined by the Committee and
as set forth in the Award agreement, including, without limitation, restrictions
on the sale or other disposition of such shares, and the right of the Company to
reacquire such shares for no consideration upon termination of the participant’s
employment within specified periods.  The Committee may require the participant
to deliver a duly signed stock power, endorsed in blank, relating to Common
Stock covered by such Stock Award and/or that the stock certificates evidencing
such shares be held in custody or bear restrictive legends until the
restrictions thereon shall have lapsed.  The Stock Award agreement shall specify
whether the participant shall have, with respect to the shares of Common Stock
subject to a Stock Award, all of the rights of a holder of shares of Common
Stock, including the right to receive dividends and to vote the shares.

 

9.                                      Stock Units

 

a.                                      In General.  The Committee is authorized
to grant Stock Units to officers, other key employees, directors and consultants
of the Company or any of its Subsidiaries and shall, in its sole discretion,
determine such officers, other key employees, directors and consultants who will
receive Stock Units and the number of shares of Common Stock with respect to
each Stock Unit.  The Committee shall determine the criteria for the vesting of
Stock Units.  A Stock Unit

 

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granted by the Committee shall provide payment in shares of Common Stock at such
time as the Award agreement shall specify.  Shares of Common Stock issued
pursuant to this Section 9 may be issued with or without other payments therefor
as may be required by applicable law or such other consideration as may be
determined by the Committee.  The Committee shall determine whether a
participant granted a Stock Unit shall be entitled to a Dividend Equivalent
Right (as defined below).  Each Stock Unit shall be subject to such terms and
conditions consistent with the Plan as shall be determined by the Committee and
as set forth in the Award agreement.

 

b.                                      Payout.  Upon vesting of a Stock Unit,
unless the Committee has determined to defer payment with respect to such unit
or a participant has elected to defer payment in accordance with the terms of a
deferred compensation plan or arrangement of the Company, shares of Common Stock
representing the Stock Units shall be distributed to the participant unless the
Committee, with the consent of the participant, provides for the payment of the
Stock Units in cash or partly in cash and partly in shares of Common Stock equal
to the value of the shares of Common Stock which would otherwise be distributed
to the participant.

 

c.                                       Definitions.  A “Stock Unit” shall mean
a notional account representing one share of Common Stock.  A “Dividend
Equivalent Right” shall mean the right to receive the amount of any dividend
paid on the share of Common Stock underlying a Stock Unit, which shall be
payable in cash or in the form of additional Stock Units, at the time set forth
in the Award Agreement or as deferred in accordance with the terms of a deferred
compensation plan or arrangement of the Company.

 

10.                               Performance Awards

 

a.                                      In General.  The Committee is authorized
to grant Performance Awards to officers and other key employees, directors and
consultants of the Company or any of its Subsidiaries and shall, in its sole
discretion, determine such participants who will receive Performance Awards,
provided however that directors may not receive Incentive Stock Options.  A
“Performance Award” is a Stock Option, Stock Award or Stock Unit, the vesting or
payment of which is conditioned on the satisfaction of performance criteria. 
Each Performance Award shall be subject to such terms and conditions consistent
with the Plan as shall be determined by the Committee and as set forth in the
Award agreement.  The Committee shall set performance targets at its discretion
which, depending on the extent to which they are met, will determine the number
and/or value of Performance Awards that will be paid out to the participants,
and may attach to such Performance Awards one or more restrictions.  Performance
targets may be based upon, without limitation, Company-wide, divisional and/or
individual performance.

 

b.                                      Adjustment of Performance Targets.  With
respect to those Performance Awards that are not intended to qualify as
Performance-Based Awards (as described in Section 11), the Committee shall have
the authority at any time to make adjustments to performance targets for any
outstanding Performance Awards which the Committee deems necessary or desirable
to prevent dilution or enlargement of the rights of participants in the event
of, in recognition of, or in anticipation of, any unanticipated, unusual
nonrecurring or extraordinary corporate item, transaction, event or development;
or in response to, or in anticipation of, changes in applicable laws,
regulations, accounting principles, or business conditions.

 

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c.                                       Payout.  Payment of earned Performance
Awards may be made in shares of Common Stock, in cash or any combination of the
two and shall be made in accordance with the terms and conditions prescribed or
authorized by the Committee.  The participant may elect to defer, or the
Committee may require or permit the deferral of, the receipt of Performance
Awards, provided that, the election to defer receipt of Performance Awards must
be in accordance with the terms of a deferred compensation plan or arrangement
of the Company.

 

11.                               Performance-Based Awards

 

a.                                      In General.  All Stock Options and Stock
Appreciation Rights granted under the Plan, and the compensation attributable to
such Awards, are intended to qualify as  “performance-based compensation” (as
such term is used in Section 162(m) of the Code and the regulations thereunder)
and thus be exempt from the deduction limitation imposed by Section 162(m) of
the Code.  Stock Awards, Performance Awards and Stock Units may be granted in a
manner such that such Awards qualify as “performance-based compensation” and
thus be exempt from the deduction limitation imposed by Section 162(m) of the
Code.  All Awards that qualify as “performance-based compensation” are referred
to herein as “Performance-Based Awards.”  An Award shall qualify as a
Performance-Based Award only if at the time of grant the Committee is comprised
solely of two or more “outside directors” (as such term is used in
Section 162(m) of the Code and the regulations thereunder).

 

b.                                      Performance Measures.  Stock Awards,
Performance Awards, and Stock Units granted under the Plan may qualify as
Performance-Based Awards if, as determined by the Committee, in its discretion,
either the granting or vesting of such Award is subject to the achievement of a
performance target or targets based on one or more performance measures.  The
Committee may use the following performance measures (either individually or in
any combination) to set performance targets with respect to Awards intended to
qualify as Performance-Based Awards:  operating profits; revenue growth; gross
profit margin; operating profit margin; net sales; pretax income before
allocation of corporate overhead and bonus; budget; earnings per share; net
income; division, group or corporate financial goals; return on stockholders’
equity; return on assets; attainment of strategic and operational initiatives;
appreciation in and/or maintenance of the price of Common Stock or any other
publicly-traded securities of the Company; market share; gross profits; earnings
before interest and taxes; earnings before interest, taxes, depreciation and
amortization; economic value-added models; comparisons with various stock market
indices; and/or reductions in costs.

 

c.                                       Adjustment of Performance Measures. 
The Committee shall have the authority at any time to make adjustments to
performance measures for any outstanding Performance-Based Awards which the
Committee deems necessary or desirable to prevent dilution or enlargement of the
rights of participants in the event of, in recognition of, or in anticipation
of, any unanticipated, unusual, nonrecurring or extraordinary corporate item,
transaction, event or development, or in response to, or in anticipation of,
changes in applicable laws, regulations, accounting principles, or business
conditions; provided, however, that to the extent such adjustments relate to
performance measures that determine the qualification of an Award as
“performance-based compensation” under Section 162(m) of the Code, such
performance measures may not be adjusted except to the extent such adjustments
are permitted under Section 162(m) of the Code.  The Committee may, in its sole
discretion, adjust such Awards downward.

 

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12.                               Adjustment Provisions

 

In the event of any equity restructuring (within the meaning of FASB Accounting
Standards Codification (ASC) 718) that causes the per share value of a share of
Common Stock to change, such as a stock dividend, stock split, spin off, rights
offering, or recapitalization through a large, nonrecurring cash dividend, in
order to prevent dilution or enlargement of participants’ rights under the Plan,
the Committee shall cause there to be made an equitable adjustment to the number
and kind of shares that may be issued under the Plan (as set forth in
Section 5(a)), the individual limitations set forth in Section 5(b), the number
and kind of shares subject to outstanding Awards, the exercise price applicable
to outstanding Awards, and the Fair Market Value of Common Stock and other value
determinations applicable to outstanding Awards.  In the event of any other
change in corporate structure or capitalization, such as a merger,
consolidation, any reorganization or any partial or complete liquidation of the
Company, the Committee, in its sole discretion, in order to prevent dilution or
enlargement of participants’ rights under the Plan, may cause there to be made
such equitable adjustments described in the foregoing sentence.  Appropriate
adjustments may also be made by the Committee in the terms of any Awards under
the Plan to reflect such changes or distributions and to modify any other terms
of outstanding Awards on an equitable basis, including modifications of
performance targets and changes in the length of performance periods (subject to
the limitations on such adjustments to the extent related to Awards intended to
qualify as Performance-Based Awards, as described in Section 11(c)).  Any
adjustment with respect to a Stock Option or Stock Appreciation Right shall
comply with the rules of Section 409A of the Code.  Any adjustment made pursuant
to this Section 12 shall be conclusive and binding on all Plan participants.

 

13.                               Change In Control

 

a.                                      Accelerated Vesting.  Notwithstanding
any other provision of this Plan, if there is a Change in Control of the Company
(as defined in Section 13b), all unvested Awards granted under the Plan shall
become fully vested immediately upon the consummation of the Change of Control,
unless otherwise determined by the Committee as set forth in the Award
Agreement, and such vested Awards shall be paid out or settled, as applicable,
to the extent determined by the Committee.  Notwithstanding the foregoing, to
the extent an amount is subject to Section 409A of the Code, no amounts payable
pursuant to this Section 13 shall be payable unless the event triggering such
payment would constitute a “change in control” as defined in Section 409A of the
Code.

 

b.                                      Definition.  For purposes of this
Section 13, (i) if there is an employment agreement or a change in control
agreement between the participant and the Company or any of its Subsidiaries in
effect, “Change in Control” shall have the same definition as the definition of
“Change in Control” contained in such employment agreement or change in control
agreement (unless the amount involved is subject to Section 409A of the Code and
such definition does not comply with Section 409A(2)(c)(v) of the Code), or
(ii) if “Change in Control” is not defined in such employment agreement or
change in control agreement (or the amount involved is subject to Section 409A
of the Code and such definition does not comply with Section 409A(2)(c)(v) of
the Code), or if there is no employment agreement or change in control agreement
between the participant and the Company or any of its Subsidiaries in effect, a
“Change in Control” of the Company shall be deemed to have occurred upon any of
the following events:

 

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(1)                                 any person or other entity (other than any
of the Company’s Subsidiaries or any employee benefit plan sponsored by the
Company or any of its Subsidiaries) including any person as defined in
Section 13(d)(3) of the Exchange Act, becomes the beneficial owner, as defined
in Rule 13d-3 under the Exchange Act, directly or indirectly, of more than 50%
of the total combined voting power of all classes of capital stock of the
Company normally entitled to vote for the election of directors of the Company
(the “Voting Stock”);

 

(2)                                 the Company consummates the sale of all or
substantially all of the property or assets of the Company;

 

(3)                                 the Company consummates a consolidation or
merger of the Company with another corporation (other than with any of the
Company’s Subsidiaries), and as a result,  the stockholders of the Company
immediately before the occurrence of the consolidation or merger own, in the
aggregate, not more than 50% of the Voting Stock of the surviving entity; or

 

(4)                                 a change in the Company’s Board occurs with
the result that, within any 12-month period, the members of the Board as of the
beginning of such period (the “Incumbent Directors”) no longer constitute a
majority of such Board, provided that any person becoming a director (other than
a director whose initial assumption of office is in connection with an actual or
threatened election contest or the settlement thereof, including but not limited
to a consent solicitation, relating to the election of directors of the Company)
whose election or nomination for election was supported by at least a majority
of the then Incumbent Directors shall be considered an Incumbent Director for
purposes hereof.

 

This definition shall be interpreted and applied as necessary to avoid
imposition of the taxes and interest under Section 409A of the Code.

 

14.                               Transferability

 

Each Award granted under the Plan to a participant shall not be transferable
otherwise than by will or the laws of descent and distribution and shall be
exercisable, during the participant’s lifetime, only by the participant. 
Notwithstanding the foregoing, the Committee may in its sole discretion allow
for the transfer of an Award (other than an Incentive Stock Option) to other
persons or entities, subject to such conditions or limitations as the Committee
may establish.

 

15.                               Other Provisions

 

Awards granted under the Plan may also be subject to such other provisions
(whether or not applicable to the Award granted to any other participant) as the
Committee determines on the date of grant to be appropriate, including, without
limitation, for the installment purchase of Common Stock under Stock Options,
for the installment exercise of Stock Appreciation Rights,

 

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to assist the participant, excluding an officer or a director, in financing the
acquisition of Common Stock, for the forfeiture of, or restrictions on resale or
other disposition of, Common Stock acquired under any form of the Award, for the
acceleration of exercisability or vesting of Awards in the event of a change in
control of the Company, or to comply with federal and state securities laws, or
understandings or conditions as to the participant’s employment, in addition to
those specifically provided for under the Plan.  In addition, except as
otherwise provided herein, a participant may defer receipt or payment of any
Award granted under this Plan, in accord with the terms of any deferred
compensation plan or arrangement of the Company.

 

16.                               Fair Market Value

 

For purposes of this Plan and any Awards granted hereunder, Fair Market Value
shall mean (i) the closing price of Common Stock on the date of calculation (or
on the last preceding trading date if Common Stock was not traded on such date)
if Common Stock is readily tradeable on a national securities exchange or other
market system or (ii) if Common Stock is not readily tradeable, the amount
determined by the Committee in a manner consistent with Section 409A of the
Code, or, in the case of shares of Common Stock underlying Incentive Stock
Options, the amount determined by the Committee in a manner consistent with
Section 422 of the Code.

 

17.                               Withholding

 

The Company shall have the power and the right to deduct or withhold, or require
a participant to remit to the Company, an amount sufficient to satisfy federal,
state, local, domestic or foreign taxes required by law or regulation to be
withheld with respect to any taxable event arising with respect to an Award. 
The Company, in its discretion, may elect to satisfy such amount by withholding
(or, with respect to Stock Awards, causing to be returned) shares of Common
Stock which would otherwise be delivered or retained having an aggregate Fair
Market Value equal to the minimum statutory total tax that could be imposed on
the transaction.

 

18.                               Tenure

 

A participant’s right, if any, to continue to serve the Company as an officer,
other key employee, director or otherwise shall not be enlarged or otherwise
affected by his or her designation as a participant under the Plan.

 

19.                               Unfunded Plan

 

Participants shall have no right, title, or interest whatsoever in or to any
investments which the Company may make to aid it in meeting its obligations
under the Plan.  Nothing contained in the Plan, and no action taken pursuant to
its provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship between the Company and any participant, beneficiary,
legal representative or any other person.  To the extent that any person
acquires a right to receive payments from the Company under the Plan, such right
shall be no greater than the right of an unsecured general creditor of the
Company.  All payments to be made hereunder shall be paid from the general funds
of the Company and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such amounts except as
expressly set forth in the Plan.  The Plan is not intended to be subject to the
Employee Retirement Income Security Act of 1974, as amended.

 

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20.                               No Fractional Shares

 

No fractional shares of Common Stock shall be issued or delivered pursuant to
the Plan or any Award.  The Committee shall determine whether cash, or Awards,
or other property shall be issued or paid in lieu of fractional shares or
whether such fractional shares or any rights thereto shall be forfeited or
otherwise eliminated.

 

21.                               Duration, Amendment and Termination

 

No Award shall be granted more than ten years after the Effective Date;
provided, however, that the terms and conditions applicable to any Award granted
prior to such date may thereafter be amended or modified by mutual agreement
between the Company and the participant or such other persons as may then have
an interest therein.  Also, by mutual agreement between the Company and a
participant under this Plan or under any other present or future plan of the
Company, Awards may be granted to such participant in substitution and exchange
for, and in cancellation of, any Awards previously granted to such participant
under this Plan, or any other present or future plan of the Company, provided
that, such substitution or exchange is permitted under applicable law,
including, but not limited to, Sections 409A and 422 of the Code.  The Board or
the Committee may amend the Plan from time to time or suspend or terminate the
Plan at any time.  However, no action authorized by this Section 21 shall reduce
the amount of any existing Award or change the terms and conditions thereof
without the participant’s consent.  Notwithstanding the foregoing in this
Section 21, except in connection with an equity restructuring or corporate
transaction involving the Company (including, without limitation, any stock
dividend, stock split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination, or
exchange of shares), the Company shall not, and no amendment of the Plan and no
amendment of any Award shall, without approval of the stockholders of the
Company, (i) increase the total number of shares which may be issued under the
Plan or the maximum number of shares with respect to Stock Options, Stock
Appreciation Rights and other Awards that may be granted to any individual under
the Plan; (ii) modify the requirements as to eligibility for Awards under the
Plan; (iii) permit Stock Options, Stock Appreciation Rights or other Awards
encompassing rights to purchase Common Stock to be repriced, replaced or
regranted through cancellation, or by lowering the per-share exercise price of a
previously granted Stock Option or the Grant Price of a previously granted Stock
Appreciation Right, or the purchase price of any other previously granted Award
that encompasses the right to purchase Common Stock or (iv) cancel outstanding
Stock Options, Stock Appreciation Rights or other Awards encompassing rights to
purchase Common Stock, in each case with an exercise or purchase price above the
current price of a share of Common Stock, in exchange for cash or other
securities.

 

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22.                               Compliance with Law

 

a.                                      Governing Law.  This Plan, Awards
granted hereunder and actions taken in connection herewith shall be governed and
construed in accordance with the laws of Delaware (regardless of the law that
might otherwise govern under applicable Delaware principles of conflict of
laws).

 

b.                                      Section 409A Compliance.  To the extent
applicable, it is intended that the Plan and any Awards granted under the Plan
comply with the requirements of Section 409A of the Code and any related
regulations or other guidance promulgated with respect to such Section by the
U.S. Department of the Treasury or the Internal Revenue Service (collectively
“Section 409A”) and the Plan and all Award agreements shall be interpreted and
administered accordingly.  Any provision in the Plan or in any Award agreement
that would cause the Plan or any Award granted under the Plan to fail to be
exempt from or to comply with Section 409A, as the case may be, shall have no
force or effect until amended to be exempt from or to comply with Section 409A,
as the case may be, and such amendment may be retroactive to the extent
permitted by Section 409A.  Notwithstanding the foregoing, the Company makes no
representations or warranties that the Plan or any Award agreement is exempt
from or complies with Section 409A, and neither the Company nor any affiliate,
officer, director, employee or agent of the Company, shall have any liability to
any participant or other person in respect of any taxes, interest or penalties
imposed under Section 409A.

 

23.                               Severability

 

In case any provision of this Plan shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

 

24.                               Effective Date

 

a.                                      The Plan shall be effective as of the
date on which the Plan is approved by the stockholders of the Company at an
annual meeting or any special meeting of stockholders of the Company (the
“Effective Date”) and such approval of stockholders shall be a condition to the
right of each participant to receive Awards hereunder.

 

b.                                      This Plan shall terminate on the 10th
anniversary of the Effective Date (unless sooner terminated by the Board).

 

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