Exhibit 10.23

LIBERMAN BROADCASTING, INC.

STOCK INCENTIVE PLAN

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TABLE OF CONTENTS

 

               Page 1.    PURPOSE OF THE PLAN    1 2.    ADMINISTRATION    1   
2.1    Administrator    1    2.2    Plan Awards; Interpretation; Powers of
Administrator    2    2.3    Binding Determinations    3    2.4    Reliance on
Experts    3    2.5    Delegation    3 3.    ELIGIBILITY    3 4.    STOCK
SUBJECT TO THE PLAN    4    4.1    Shares Available    4    4.2    Share Limits
   4    4.3    Replenishment and Reissue of Unvested Awards    4    4.4   
Reservation of Shares    5 5.    OPTION GRANT PROGRAM    5    5.1    Option
Grants in General    5    5.2    Types of Options    5    5.3    Option Price   
6    5.4    Vesting; Term; Exercise Procedure    7    5.5    Limitations on
Grant and Terms of Incentive Stock Options    7    5.6    Effects of Termination
of Employment on Options    8    5.7    Option Repricing/Cancellation and
Regrant/Waiver of Restrictions    9    5.8    Early Exercise Options    10 6.   
STOCK AWARD PROGRAM    10    6.1    Stock Awards in General    10    6.2   
Types of Stock Awards    10    6.3    Purchase Price    10    6.4    Vesting   
11    6.5    Term    11    6.6    Stock Certificates; Fractional Shares    11   
6.7    Dividend and Voting Rights    11

 

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TABLE OF CONTENTS

(continued)

 

               Page    6.8    Termination of Employment; Return to the
Corporation    11    6.9    Waiver of Restrictions.    12 7.    PROVISIONS
APPLICABLE TO ALL AWARDS    12    7.1    Rights of Eligible Persons,
Participants and Beneficiaries    12    7.2    No Transferability; Limited
Exception to Transfer Restrictions    13    7.3    Adjustments; Changes in
Control    14    7.4    Termination of Employment or Services    18    7.5   
Compliance with Laws    20    7.6    Tax Withholding    21    7.7    Plan and
Award Amendments, Termination and Suspension    22    7.8    Privileges of Stock
Ownership    23    7.9    Stock-Based Awards in Substitution for Awards Granted
by Other Corporation    23    7.10    Effective Date of the Plan    23    7.11
   Term of the Plan    24    7.12    Governing Law/Severability    24    7.13   
Captions    24    7.14    Non-Exclusivity of Plan    24    7.15    No
Restriction on Corporate Powers    24    7.16    Other Company Compensation or
Benefit Programs    25 8.    DEFINITIONS    25

 

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LIBERMAN BROADCASTING, INC.

STOCK INCENTIVE PLAN

PREFACE

This Plan is divided into two separate equity programs: (1) the option grant
program set forth in Section 5 under which Eligible Persons (as defined in
Section 3) may, at the discretion of the Administrator, be granted Options, and
(2) the stock award program set forth in Section 6 under which Eligible Persons
may, at the discretion of the Administrator, be awarded restricted or
unrestricted shares of Common Stock. Section 2 of this Plan contains the general
rules regarding the administration of this Plan. Section 3 sets forth the
requirements for eligibility to receive an Award grant under this Plan.
Section 4 describes the capital stock of the Corporation that may be subject to
Awards granted under this Plan. Section 7 contains other provisions applicable
to all Awards granted under this Plan. Section 8 provides definitions for
certain capitalized terms used in this Plan and not otherwise defined herein.

 

1. PURPOSE OF THE PLAN.

The purpose of this Plan is to promote the success of the Corporation and the
interests of its stockholders by providing a means through which the Corporation
may grant equity-based incentives to attract, motivate, retain and reward
certain officers, employees, directors and other eligible persons and to further
link the interests of Award recipients with those of the Corporation’s
stockholders generally.

 

2. ADMINISTRATION.

 

  2.1 Administrator. This Plan shall be administered by and all Awards under
this Plan shall be authorized by the Administrator. The “Administrator” means
the Board or one or more committees appointed by the Board or another committee
(within its delegated authority) to administer all or certain aspects of this
Plan. Any such committee shall be comprised solely of one or more directors or
such number of directors as may be required under applicable law. A committee
may delegate some or all of its authority to another committee so constituted.
The Board or a committee comprised solely of directors may also delegate, to the
extent permitted by Section 157(c) of the Delaware General Corporation Law and
any other applicable law, to one or more officers of the Corporation, its powers
under this Plan (a) to designate the officers and employees of the Corporation
and its Affiliates who will receive grants of Awards under this Plan, and (b) to
determine the number of shares subject to, and the other terms and conditions
of, such Awards. The Board may delegate different levels of authority to
different committees with administrative and grant authority under this Plan.
Unless otherwise provided in the Bylaws of the Corporation or the applicable
charter of any Administrator: (a) a majority of the members of the acting
Administrator shall constitute a quorum, and (b) the vote of a majority of the
members present assuming the presence of a quorum or the unanimous written
consent of the members of the Administrator shall constitute action by the
acting Administrator.

 

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  2.2 Plan Awards; Interpretation; Powers of Administrator. Subject to the
express provisions of this Plan, the Administrator is authorized and empowered
to do all things necessary or desirable in connection with the authorization of
Awards and the administration of this Plan (in the case of a committee or
delegation to one or more officers, within the authority delegated to that
committee or person(s)), including, without limitation, the authority to:

 

  (a) determine eligibility and, from among those persons determined to be
eligible, the particular Eligible Persons who will receive Awards;

 

  (b) grant Awards to Eligible Persons, determine the price and number of
securities to be offered or awarded to any of such persons, determine the other
specific terms and conditions of Awards consistent with the express limits of
this Plan, establish the installments (if any) in which such Awards will become
exercisable or will vest (which may include, without limitation, performance
and/or time-based schedules) or determine that no delayed exercisability or
vesting is required, establish any applicable performance targets, and establish
the events of termination or reversion of such Awards;

 

  (c) approve the forms of Award Agreements, which need not be identical either
as to type of Award or among Participants;

 

  (d) construe and interpret this Plan and any Award Agreement or other
agreements defining the rights and obligations of the Corporation, its
Affiliates, and Participants under this Plan, make factual determinations with
respect to the administration of this Plan, further define the terms used in
this Plan, and prescribe, amend and rescind rules and regulations relating to
the administration of this Plan or the Awards;

 

  (e) cancel, modify, or waive the Corporation’s rights with respect to, or
modify, discontinue, suspend, or terminate any or all outstanding Awards,
subject to any required consent under Section 7.7.4;

 

  (f) accelerate or extend the vesting or exercisability or extend the term of
any or all outstanding Awards (within the maximum ten-year term of Awards under
Sections 5.4.2 and 6.5) in such circumstances as the Administrator may deem
appropriate (including, without limitation, in connection with a termination of
employment or services or other events of a personal nature);

 

  (g) determine Fair Market Value for purposes of this Plan and Awards;

 

  (h) determine the duration and purposes of leaves of absence that may be
granted to Participants without constituting a termination of their employment
for purposes of this Plan; and

 

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  (i) determine whether, and the extent to which, adjustments are required
pursuant to Section 7.3 hereof and authorize the termination, conversion,
substitution or succession of awards upon the occurrence of an event of the type
described in Section 7.3.

 

  2.3 Binding Determinations. Any action taken by, or inaction of, the
Corporation, any Affiliate, the Board or the Administrator relating or pursuant
to this Plan and within its authority hereunder or under applicable law shall be
within the absolute discretion of that entity or body and shall be conclusive
and binding upon all persons. Neither the Board nor the Administrator, nor any
member thereof or person acting at the direction thereof, shall be liable for
any act, omission, interpretation, construction or determination made in good
faith in connection with this Plan (or any Award), and all such persons shall be
entitled to indemnification and reimbursement by the Corporation in respect of
any claim, loss, damage or expense (including, without limitation, attorneys’
fees) arising or resulting therefrom to the fullest extent permitted by law
and/or under any directors and officers liability insurance coverage that may be
in effect from time to time.

 

  2.4 Reliance on Experts. In making any determination or in taking or not
taking any action under this Plan, the Administrator may obtain and may rely
upon the advice of experts, including employees of and professional advisors to
the Corporation. No director, officer or agent of the Corporation or any of its
Affiliates shall be liable for any such action or determination taken or made or
omitted in good faith.

 

  2.5 Delegation. The Administrator may delegate ministerial, non-discretionary
functions to individuals who are officers or employees of the Corporation or any
of its Affiliates or to third parties.

 

3. ELIGIBILITY.

Awards may be granted under this Plan only to those persons that the
Administrator determines to be Eligible Persons. An “Eligible Person” means any
person who qualifies as one of the following at the time of grant of the
respective Award:

 

  (a) an officer (whether or not a director) or employee of the Corporation or
any of its Affiliates;

 

  (b) any member of the Board; or

 

  (c) any director of one of the Corporation’s Affiliates, or any individual
consultant or advisor who renders or has rendered bona fide services (other than
services in connection with the offering or sale of securities of the
Corporation or one of its Affiliates, as applicable, in a capital raising
transaction or as a market maker or promoter of that entity’s securities) to the
Corporation or one of its Affiliates.

 

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An advisor or consultant may be selected as an Eligible Person pursuant to
clause (c) above only if such person’s participation in this Plan would not
adversely affect (1) the Corporation’s eligibility to rely on the Rule 701
exemption from registration under the Securities Act for the offering of shares
issuable under this Plan by the Corporation, or (2) the Corporation’s compliance
with any other applicable laws.

An Eligible Person may, but need not, be granted one or more Awards pursuant to
Section 5 and/or one or more Awards pursuant to Section 6. An Eligible Person
who has been granted an Award under this Plan may, if otherwise eligible, be
granted additional Awards under this Plan if the Administrator so determines.
However, a person’s status as an Eligible Person is not a commitment that any
Award will be granted to that person under this Plan. Furthermore, an Eligible
Person who has been granted an Award under Section 5 is not necessarily entitled
to an Award under Section 6, or vice versa, unless otherwise expressly
determined by the Administrator.

Each Award granted under this Plan must be approved by the Administrator at or
prior to the grant of the Award.

 

4. STOCK SUBJECT TO THE PLAN.

 

  4.1 Shares Available. Subject to the provisions of Section 7.3.1, the capital
stock that may be delivered under this Plan will be shares of the Corporation’s
authorized but unissued Common Stock and any of its shares of Common Stock held
as treasury shares. The shares of Common Stock issued and delivered may be
issued and delivered for any lawful consideration.

 

  4.2 Share Limits. Subject to the provisions of Section 7.3.1 and further
subject to the share counting rules of Section 4.3, the maximum number of shares
of Common Stock that may be delivered pursuant to Awards granted under this Plan
will not exceed 14.568461 shares (the “Share Limit”) in the aggregate. As
required under Treasury Regulation Section 1.422-2(b)(3)(i), in no event will
the number of shares of Common Stock that may be delivered pursuant to Incentive
Stock Options granted under this Plan exceed the Share Limit.

 

  4.3

Replenishment and Reissue of Unvested Awards. To the extent that an Award is
settled in cash or a form other than shares of Common Stock, the shares that
would have been delivered had there been no such cash or other settlement shall
not be counted against the shares available for issuance under this Plan. No
Award may be granted under this Plan unless, on the date of grant, the sum of
(a) the maximum number of shares of Common Stock issuable at any time pursuant
to such Award, plus (b) the number of shares of Common Stock that have
previously been issued pursuant to Awards granted under this Plan, plus (c) the
maximum number of shares of Common Stock that may be issued at any time after
such date of grant pursuant to Awards that are outstanding on such date, does
not exceed the Share Limit. Shares of Common Stock that are subject to or
underlie Options granted under this Plan that expire or for any reason are
canceled or terminated without having been exercised (or shares of Common Stock
subject

 

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to or underlying the unexercised portion of such Options in the case of Options
that were partially exercised), as well as shares of Common Stock that are
subject to Stock Awards made under this Plan that are forfeited to the
Corporation or otherwise repurchased by the Corporation prior to the vesting of
such shares for a price not greater than the original purchase or issue price of
such shares (as adjusted pursuant to Section 7.3.1) will again, except to the
extent prohibited by law or applicable listing or regulatory requirements (and
subject to any applicable limitations of the Code in the case of Awards intended
to be Incentive Stock Options), be available for subsequent Award grants under
this Plan. Shares that are exchanged by a Participant or withheld by the
Corporation as full or partial payment in connection with any Award under this
Plan, as well as any shares exchanged by a Participant or withheld by the
Corporation or one of its Affiliates to satisfy the tax withholding obligations
related to any Award, shall be available for subsequent Awards under this Plan.

 

  4.4 Reservation of Shares. The Corporation shall at all times reserve a number
of shares of Common Stock sufficient to cover the Corporation’s obligations and
contingent obligations to deliver shares with respect to Awards then outstanding
under this Plan.

 

5. OPTION GRANT PROGRAM.

 

  5.1 Option Grants in General. Each Option shall be evidenced by an Award
Agreement in the form approved by the Administrator. The Award Agreement
evidencing an Option shall contain the terms established by the Administrator
for that Option, as well as any other terms, provisions, or restrictions that
the Administrator may impose on the Option or any shares of Common Stock subject
to the Option; in each case subject to the applicable provisions and limitations
of this Section 5 and the other applicable provisions and limitations of this
Plan. The Administrator may require that the recipient of an Option promptly
execute and return to the Corporation his or her Award Agreement evidencing the
Option. In addition, the Administrator may require that the spouse of any
married recipient of an Option also promptly execute and return to the
Corporation the Award Agreement evidencing the Option granted to the recipient
or such other spousal consent form that the Administrator may require in
connection with the grant of the Option.

 

  5.2 Types of Options. The Administrator will designate each Option granted
under this Plan as either an Incentive Stock Option or a Nonqualified Stock
Option, and such designation shall be set forth in the applicable Award
Agreement. Any Option granted under this Plan that is not expressly designated
in the applicable Award Agreement as an Incentive Stock Option will be deemed to
be designated a Nonqualified Stock Option under this Plan and not an “incentive
stock option” within the meaning of Section 422 of the Code. Incentive Stock
Options shall be subject to the provisions of Section 5.5 in addition to the
provisions of this Plan applicable to Options generally. The Administrator may,
in its discretion, designate any Option as an “early exercise option” pursuant
to Section 5.8.

 

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  5.3 Option Price.

 

  5.3.1 Pricing Limits. Subject to the following provisions of this
Section 5.3.1, the Administrator will determine the purchase price per share of
the Common Stock covered by each Option (the “exercise price” of the Option) at
the time of the grant of the Option, which exercise price will be set forth in
the applicable Award Agreement. In no case will the exercise price of an Option
be less than the greater of:

 

  (a) the par value of the Common Stock;

 

  (b) in the case of an Incentive Stock Option and subject to clause (c) below,
100% of the Fair Market Value of the Common Stock on the date of grant; or

 

  (c) in the case of an Incentive Stock Option granted to a Participant
described in Section 5.5.4, 110% of the Fair Market Value of the Common Stock on
the date of grant.

 

  5.3.2 Payment Provisions. The Corporation will not be obligated to deliver
certificates for the shares of Common Stock to be purchased on exercise of an
Option unless and until it receives full payment of the exercise price therefor,
all related withholding obligations under Section 7.6 have been satisfied, and
all other conditions to the exercise of the Option set forth herein or in the
Award Agreement have been satisfied. The purchase price of any shares of Common
Stock purchased on exercise of an Option must be paid in full at the time of
each purchase in such lawful consideration as may be permitted or required by
the Administrator, which may include, without limitation, one or a combination
of the following methods:

 

  (a) cash, certified or cashier’s check payable to the order of the
Corporation, or electronic funds transfer;

 

  (b) notice and third party payment in such manner as may be authorized by the
Administrator;

 

  (c) the delivery of previously owned shares of Common Stock;

 

  (d) by a reduction in the number of shares of Common Stock otherwise
deliverable pursuant to the Award; or

 

  (e) subject to such procedures as the Administrator may adopt, pursuant to a
“cashless exercise.”

In no event shall any shares newly-issued by the Corporation be issued for less
than the minimum lawful consideration for such shares or for consideration other
than consideration permitted by applicable state law. Shares of Common Stock
used to satisfy the exercise price of an Option

 

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(whether previously-owned shares or shares otherwise deliverable pursuant to the
terms of the Option) shall be valued at their Fair Market Value on the date of
exercise. Unless otherwise expressly provided in the applicable Award Agreement,
the Administrator may eliminate or limit a Participant’s ability to pay the
purchase or exercise price of any Award by any method other than cash payment to
the Corporation.

 

  5.4 Vesting; Term; Exercise Procedure.

 

  5.4.1 Vesting. Except as provided in Section 5.8, an Option may be exercised
only to the extent that it is vested and exercisable. The Administrator will
determine the vesting and/or exercisability provisions of each Option (which may
be based on performance criteria, passage of time or other factors or any
combination thereof), which provisions will be set forth in the applicable Award
Agreement. Unless the Administrator otherwise expressly provides, once
exercisable an Option will remain exercisable until the expiration or earlier
termination of the Option.

 

  5.4.2 Term. Each Option shall expire not more than 10 years after its date of
grant. Each Option will be subject to earlier termination as provided in or
pursuant to Sections 5.7 and 7.3.

 

  5.4.3 Exercise Procedure. Any exercisable Option will be deemed to be
exercised when the Corporation receives written notice of such exercise from the
Participant (on a form and in such manner as may be required by the
Administrator), together with any required payment made in accordance with
Section 5.3 and Section 7.6 and any written statement required pursuant to
Section 7.5.1.

 

  5.4.4 Fractional Shares/Minimum Issue. Fractional share interests may be
permitted (and may be cumulated), subject to the discretion of the
Administrator. The Administrator, however, may determine that cash, other
securities, or other property will be paid or transferred in lieu of any
fractional share interests. The Administrator may impose certain restrictions on
the exercise of any Option including the minimum number of shares that may be
purchased on exercise of any Option at one time (subject to adjustment pursuant
to Section 7.3.1).

 

  5.5 Limitations on Grant and Terms of Incentive Stock Options.

 

  5.5.1

$100,000 Limit. To the extent that the aggregate Fair Market Value of stock with
respect to which incentive stock options first become exercisable by a
Participant in any calendar year exceeds $100,000, taking into account both
Common Stock subject to Incentive Stock Options under this Plan and stock
subject to incentive stock options under all other plans of the Corporation or
any of its Affiliates, such options will be treated as nonqualified stock
options. For this purpose, the Fair Market Value of the

 

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stock subject to options will be determined as of the date the options were
awarded. In reducing the number of options treated as incentive stock options to
meet the $100,000 limit, the most recently granted options will be reduced
(recharacterized as nonqualified stock options) first. To the extent a reduction
of simultaneously granted options is necessary to meet the $100,000 limit, the
Administrator may, in the manner and to the extent permitted by law, designate
which shares of Common Stock are to be treated as shares acquired pursuant to
the exercise of an incentive stock option.

 

  5.5.2 Other Code Limits. Incentive Stock Options may only be granted to
individuals that are employees of the Corporation or one of its Affiliates and
satisfy the other eligibility requirements of the Code. Any Award Agreement
relating to Incentive Stock Options will contain or shall be deemed to contain
such other terms and conditions as from time to time are required in order that
the Option be an “incentive stock option” as that term is defined in Section 422
of the Code.

 

  5.5.3 ISO Notice of Sale Requirement. Any Participant who exercises an
Incentive Stock Option shall give prompt written notice to the Corporation of
any sale or other transfer of the shares of Common Stock acquired on such
exercise if the sale or other transfer occurs within (a) one year after the
exercise date of the Option, or (b) two years after the grant date of the
Option.

 

  5.5.4 Limits on 10% Holders. No Incentive Stock Option may be granted to any
person who, at the time the Incentive Stock Option is granted, owns (or is
deemed to own under Section 424(d) of the Code) shares of outstanding stock of
the Corporation (or any of its Affiliates) possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation (or any of its
Affiliates), unless the exercise price of such Incentive Stock Option is at
least 110% of the Fair Market Value of the stock subject to the Incentive Stock
Option and the Incentive Stock Option by its terms is not exercisable more than
five years after the date the Incentive Stock Option is granted.

 

  5.6 Effects of Termination of Employment on Options.

 

  5.6.1 Dismissal for Cause. Unless otherwise provided in the Award Agreement
and subject to earlier termination pursuant to or as contemplated by
Section 5.4.2 or 7.3, if a Participant’s employment by or service to the
Corporation or any of its Affiliates is terminated by such entity for Cause, the
Participant’s Option will terminate on the Participant’s Severance Date, whether
or not the Option is then vested and/or exercisable.

 

  5.6.2

Death or Disability. Unless otherwise provided in the Award Agreement
(consistent with applicable securities laws) and subject to earlier

 

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termination pursuant to or as contemplated by Section 5.4.2 or 7.3, if a
Participant’s employment by or service to the Corporation or any of its
Affiliates terminates as a result of the Participant’s death or Total
Disability:

 

  (a) the Participant (or his or her Personal Representative or Beneficiary, in
the case of the Participant’s Total Disability or death, respectively), will
have until the date that is 12 months after the Participant’s Severance Date to
exercise the Participant’s Option (or portion thereof) to the extent that it was
vested and exercisable on the Severance Date;

 

  (b) the Option, to the extent not vested and exercisable on the Participant’s
Severance Date, shall terminate on the Severance Date; and

 

  (c) the Option, to the extent exercisable for the 12-month period following
the Participant’s Severance Date and not exercised during such period, shall
terminate at the close of business on the last day of the 12-month period.

 

  5.6.3 Other Terminations of Employment. Unless otherwise provided in the Award
Agreement (consistent with applicable securities laws) and subject to earlier
termination pursuant to or as contemplated by Section 5.4.2 or 7.3, if a
Participant’s employment by or service to the Corporation or any of its
Affiliates terminates for any reason other than a termination by such entity for
Cause or because of the Participant’s death or Total Disability:

 

  (a) the Participant will have until the date that is 3 months after the
Participant’s Severance Date to exercise his or her Option (or portion thereof)
to the extent that it was vested and exercisable on the Severance Date;

 

  (b) the Option, to the extent not vested and exercisable on the Participant’s
Severance Date, shall terminate on the Severance Date; and

 

  (c) the Option, to the extent exercisable for the 3-month period following the
Participant’s Severance Date and not exercised during such period, shall
terminate at the close of business on the last day of the 3-month period.

 

  5.7

Option Repricing/Cancellation and Regrant/Waiver of Restrictions. Subject to
Section 4 and Section 7.7 and the specific limitations on Options contained in
this Plan, the Administrator from time to time may authorize, generally or in
specific cases only, for the benefit of any Eligible Person, any adjustment in
the exercise price, the vesting schedule, the number of shares subject to, or
the term of, an Option granted under this Plan by cancellation of an outstanding
Option and a

 

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subsequent regranting of the Option, by amendment, by substitution of an
outstanding Option, by waiver or by other legally valid means. Such amendment or
other action may result in, among other changes, an exercise price that is
higher or lower than the exercise price of the original or prior Option, provide
for a greater or lesser number of shares of Common Stock subject to the Option,
or provide for a longer or shorter vesting or exercise period.

 

  5.8 Early Exercise Options. The Administrator may, in its discretion,
designate any Option as an “early exercise” Option which, by express provision
in the applicable Award Agreement, may be exercised prior to the date such
Option has vested. If the Participant elects to exercise all or a portion of any
such Option before it is vested, the shares of Common Stock acquired under the
Option which are attributable to the unvested portion of the Option shall be
Restricted Shares. The applicable Award Agreement will specify the extent (if
any) to which and the time (if ever) at which the Participant will be entitled
to dividends, voting and other rights in respect of such Restricted Shares prior
to vesting, and the restrictions imposed on such shares and the conditions of
release or lapse of such restrictions. Unless otherwise expressly provided in
the applicable Award Agreement, such Restricted Shares shall be subject to the
provisions of Sections 6.6 through 6.9, below.

 

6. STOCK AWARD PROGRAM.

 

  6.1 Stock Awards in General. Each Stock Award shall be evidenced by an Award
Agreement in the form approved by the Administrator. The Award Agreement
evidencing a Stock Award shall contain the terms established by the
Administrator for that Stock Award, as well as any other terms, provisions, or
restrictions that the Administrator may impose on the Stock Award; in each case
subject to the applicable provisions and limitations of this Section 6 and the
other applicable provisions and limitations of this Plan. The Administrator may
require that the recipient of a Stock Award promptly execute and return to the
Corporation his or her Award Agreement evidencing the Stock Award. In addition,
the Administrator may require that the spouse of any married recipient of a
Stock Award also promptly execute and return to the Corporation the Award
Agreement evidencing the Stock Award granted to the recipient or such other
spousal consent form that the Administrator may require in connection with the
grant of the Stock Award.

 

  6.2 Types of Stock Awards. The Administrator shall designate whether a Stock
Award shall be a Restricted Stock Award, and such designation shall be set forth
in the applicable Award Agreement.

 

  6.3 Purchase Price.

 

  6.3.1 Pricing Limits. Subject to the following provisions of this Section 6.3,
the Administrator will determine the purchase price per share of the Common
Stock covered by each Stock Award at the time of grant of the Award. In no case
will such purchase price be less than the par value of the Common Stock.

 

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  6.3.2 Payment Provisions. The Corporation will not be obligated to issue
certificates evidencing shares of Common Stock awarded under this Section 6
unless and until it receives full payment of the purchase price therefor and all
other conditions to the purchase, as determined by the Administrator, have been
satisfied. The purchase price of any shares subject to a Stock Award must be
paid in full at the time of the purchase in such lawful consideration as may be
permitted or required by the Administrator, which may include, without
limitation, one or a combination of the methods set forth in clauses (a) through
(e) in Section 5.3.2 and/or past services rendered to the Corporation or any of
its Affiliates.

 

  6.4 Vesting. The restrictions imposed on the shares of Common Stock subject to
a Restricted Stock Award (which may be based on performance criteria, passage of
time or other factors or any combination thereof) will be set forth in the
applicable Award Agreement.

 

  6.5 Term. A Stock Award shall either vest or be forfeited not more than 10
years after the date of grant. Each Stock Award will be subject to earlier
termination as provided in or pursuant to Sections 6.8 and 7.3. Any payment of
cash or delivery of stock in payment for a Stock Award may be delayed until a
future date if specifically authorized by the Administrator in writing and by
the Participant.

 

  6.6 Stock Certificates; Fractional Shares. Stock certificates evidencing
Restricted Shares will bear a legend making appropriate reference to the
restrictions imposed hereunder and will be held by the Corporation or by a third
party designated by the Administrator until the restrictions on such shares have
lapsed, the shares have vested in accordance with the provisions of the Award
Agreement and Section 6.4, and any related loan has been repaid. Fractional
share interests may be permitted (and may be cumulated), subject to the
discretion of the Administrator. The Administrator, however, may determine that
cash, other securities, or other property will be paid or transferred in lieu of
any fractional share interests.

 

  6.7 Dividend and Voting Rights. Unless otherwise provided in the applicable
Award Agreement, a Participant receiving Restricted Shares will be entitled to
cash dividend and voting rights for all Restricted Shares issued even though
they are not vested, but such rights will terminate immediately as to any
Restricted Shares which cease to be eligible for vesting.

 

  6.8

Termination of Employment; Return to the Corporation. Unless the Administrator
otherwise expressly provides, Restricted Shares subject to an Award that remain
subject to vesting conditions that have not been satisfied by the time specified
in the applicable Award Agreement (which may include,

 

11

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without limitation, the Participant’s Severance Date), will not vest and will be
reacquired by the Corporation in such manner and on such terms as the
Administrator provides, which terms shall include return or repayment of the
lower of (a) the Fair Market Value of the Restricted Shares at the time of the
termination, or (b) the original purchase price of the Restricted Shares,
without interest, to the Participant to the extent not prohibited by law. The
Award Agreement shall specify any other terms or conditions of the repurchase if
the Award fails to vest. Any other Stock Award that has not been exercised as of
a Participant’s Severance Date shall terminate on that date unless otherwise
expressly provided by the Administrator in the applicable Award Agreement.

 

  6.9 Waiver of Restrictions. Subject to Sections 4 and 7.7 and the specific
limitations on Stock Awards contained in this Plan, the Administrator from time
to time may authorize, generally or in specific cases only, for the benefit of
any Eligible Person, any adjustment in the vesting schedule, or the restrictions
upon or the term of, a Stock Award granted under this Plan by amendment, by
substitution of an outstanding Stock Award, by waiver or by other legally valid
means.

 

7. PROVISIONS APPLICABLE TO ALL AWARDS.

 

  7.1 Rights of Eligible Persons, Participants and Beneficiaries.

 

  7.1.1 Employment Status. No person shall have any claim or rights to be
granted an Award (or additional Awards, as the case may be) under this Plan,
subject to any express contractual rights (set forth in a document other than
this Plan) to the contrary.

 

  7.1.2 No Employment/Service Contract. Nothing contained in this Plan (or in
any other documents under this Plan or related to any Award) shall confer upon
any Eligible Person or Participant any right to continue in the employ or other
service of the Corporation or any of its Affiliates, constitute any contract or
agreement of employment or other service or affect an employee’s status as an
employee at will, nor shall interfere in any way with the right of the
Corporation or any Affiliate to change such person’s compensation or other
benefits, or to terminate his or her employment or other service, with or
without cause at any time. Nothing in this Section 7.1.2, or in Section 7.3 or
7.15, however, is intended to adversely affect any express independent right of
such person under a separate employment or service contract. An Award Agreement
shall not constitute a contract of employment or service.

 

  7.1.3

Plan Not Funded. Awards payable under this Plan will be payable in shares of
Common Stock or from the general assets of the Corporation, and (except as to
the share reservation provided in Section 4.4) no special or separate reserve,
fund or deposit will be made to assure payment of such Awards. No Participant,
Beneficiary or other person will have any right, title or interest in any fund
or in any specific asset (including shares

 

12

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of Common Stock, except as expressly provided) of the Corporation or any of its
Affiliates by reason of any Award hereunder. Neither the provisions of this Plan
(or of any related documents), nor the creation or adoption of this Plan, nor
any action taken pursuant to the provisions of this Plan will create, or be
construed to create, a trust of any kind or a fiduciary relationship between the
Corporation or any of its Affiliates and any Participant, Beneficiary or other
person. To the extent that a Participant, Beneficiary or other person acquires a
right to receive payment pursuant to any Award hereunder, such right will be no
greater than the right of any unsecured general creditor of the Corporation.

 

  7.1.4 Charter Documents. The Certificate of Incorporation and Bylaws of the
Corporation, as either of them may lawfully be amended from time to time, may
provide for additional restrictions and limitations with respect to the Common
Stock (including additional restrictions and limitations on the voting or
transfer of Common Stock) or priorities, rights and preferences as to securities
and interests prior in rights to the Common Stock. To the extent that these
restrictions and limitations are greater than those set forth in this Plan or
any Award Agreement, such restrictions and limitations shall apply to any shares
of Common Stock acquired pursuant to the exercise of Awards and are incorporated
herein by this reference.

 

  7.2 No Transferability; Limited Exception to Transfer Restrictions.

 

  7.2.1 Limit On Exercise and Transfer. Unless otherwise expressly provided in
(or pursuant to) this Section 7.2, by applicable law and by the Award Agreement,
as the same may be amended:

 

  (a) all Awards are non-transferable and will not be subject in any manner to
sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or
charge;

 

  (b) Awards will be exercised only by the Participant; and

 

  (c) amounts payable or shares issuable pursuant to an Award will be delivered
only to (or for the account of) the Participant.

In addition, the shares shall be subject to the restrictions set forth in the
applicable Award Agreement.

 

  7.2.2 Further Exceptions to Limits On Transfer. The exercise and transfer
restrictions in Section 7.2.1 will not apply to:

 

  (a) transfers to the Corporation;

 

  (b) transfers by gift or domestic relations order to one or more “family
members” (as that term is defined in SEC Rule 701 promulgated under the
Securities Act) of the Participant;

 

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  (c) the designation of a Beneficiary to receive benefits if the Participant
dies or, if the Participant has died, transfers to or exercises by the
Participant’s Beneficiary, or, in the absence of a validly designated
Beneficiary, transfers by will or the laws of descent and distribution; or

 

  (d) if the Participant has suffered a disability, permitted transfers or
exercises on behalf of the Participant by the Participant’s duly authorized
legal representative.

Notwithstanding anything else in this Section 7.2.2 to the contrary, but subject
to compliance with all applicable laws, Incentive Stock Options and Restricted
Stock Awards will be subject to any and all transfer restrictions under the Code
applicable to such awards or necessary to maintain the intended tax consequences
of such Awards. Notwithstanding clause (b) above but subject to compliance with
all applicable laws, any contemplated transfer by gift or domestic relations
order to one or more “family members” of a Participant as referenced in clause
(b) above is subject to the condition precedent that the transfer be approved by
the Administrator in order for it to be effective. The Administrator may, in its
sole discretion, withhold its approval of any such proposed transfer.

 

  7.3 Adjustments; Changes in Control.

 

  7.3.1 Adjustments. Subject to Section 7.3.2 below, upon (or, as may be
necessary to effect the adjustment, immediately prior to): any reclassification,
recapitalization, stock split (including a stock split in the form of a stock
dividend) or reverse stock split; any merger, combination, consolidation, or
other reorganization; any split-up, spin-off, or similar extraordinary dividend
distribution in respect of the Common Stock; or any exchange of Common Stock or
other securities of the Corporation, or any similar, unusual or extraordinary
corporate transaction in respect of the Common Stock; then the Administrator
shall equitably and proportionately adjust (1) the number and type of shares of
Common Stock (or other securities) that thereafter may be made the subject of
Awards (including the specific share limits, maximums and numbers of shares set
forth elsewhere in this Plan), (2) the number, amount and type of shares of
Common Stock (or other securities or property) subject to any outstanding
Awards, (3) the grant, purchase, or exercise price of any outstanding Awards,
and/or (4) the securities, cash or other property deliverable upon exercise or
vesting of any outstanding Awards, in each case to the extent necessary to
preserve (but not increase) the level of incentives intended by this Plan and
the then-outstanding Awards.

Unless otherwise expressly provided in the applicable Award Agreement, upon (or,
as may be necessary to effect the adjustment, immediately prior to) any event or
transaction described in the preceding paragraph or a sale

 

14

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of all or substantially all of the business or assets of the Corporation as an
entirety, the Administrator shall equitably and proportionately adjust the
performance standards applicable to any then-outstanding performance-based
Awards to the extent necessary to preserve (but not increase) the level of
incentives by this Plan and the then-outstanding performance-based Awards.

It is intended that, if possible, any adjustments contemplated by the preceding
two paragraphs be made in a manner that satisfies applicable U.S. legal, tax
(including, without limitation and as applicable in the circumstances,
Section 424 of the Code and Section 409A of the Code) and accounting (so as to
not trigger any charge to earnings with respect to such adjustment)
requirements.

Without limiting the generality of Section 2.3, any good faith determination by
the Administrator as to whether an adjustment is required in the circumstances
pursuant to this Section 7.3.1, and the extent and nature of any such
adjustment, shall be conclusive and binding on all persons.

Unless otherwise expressly provided by the Administrator, in no event shall a
conversion of one or more outstanding shares of the Corporation’s preferred
stock (if any) or any new issuance of securities by the Corporation for
consideration be deemed, in and of itself, to require an adjustment pursuant to
this Section 7.3.1.

 

  7.3.2 Consequences of a Change in Control Event. Upon the occurrence of a
Change in Control Event, the Administrator may make provision for a cash payment
in settlement of, or for the assumption, substitution or exchange of any or all
outstanding Awards (or the cash, securities or other property deliverable to the
holder(s) of any or all outstanding Awards) based upon, to the extent relevant
in the circumstances, the distribution or consideration payable to holders of
the Common Stock upon or in respect of such event.

In addition, subject to Sections 7.3.4 and 7.3.5, unless prior to a Change in
Control Event the Administrator determines that, upon its occurrence, benefits
under any or all Awards will not accelerate or determines that only certain or
limited benefits under any or all Awards will be accelerated and the extent to
which they will be accelerated, and/or establishes a different time in respect
of such event for such acceleration, then upon (or, as may be necessary to
effectuate the purposes of this acceleration, immediately prior to) the
occurrence of a Change in Control Event:

 

  (a) as to each Option that is then outstanding and not otherwise fully vested,
fifty percent (50%) of the then-outstanding but otherwise unvested portion of
the Option will become immediately vested and exercisable, and

 

15

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  (b) as to each Restricted Stock Award that is then outstanding and not
otherwise fully vested, fifty percent (50%) of the then-outstanding but
otherwise unvested portion of the Award will immediately vest free of forfeiture
restrictions and/or restrictions giving the Corporation the right to repurchase
the stock at its original purchase price.

In such circumstances and unless otherwise provided in the applicable Award
Agreement, the vesting of the portion of the Award that accelerates in
connection with a Change in Control Event pursuant to the foregoing shall be
deemed to be proportionate as to each applicable vesting installment of the
Award (for example, if an Option is unvested and is scheduled to vest in three
installments, and 50% vesting is triggered as provided above, then 50% of the
first vesting installment shall be deemed to accelerate and vest, 50% of the
second vesting installment shall be deemed to accelerate and vest, and 50% of
the third vesting installment shall be deemed to accelerate and vest).

The foregoing Change in Control Event provisions shall not in any way limit the
authority of the Administrator to accelerate the vesting of one or more Awards
(as to all or only a portion of any Award) in such circumstances (including, but
not limited to, a Change in Control Event) as the Administrator may determine to
be appropriate, regardless of whether accelerated vesting of a portion of the
Award(s) is otherwise required or contemplated by the foregoing in the
circumstances.

The Administrator may adopt such valuation methodologies for outstanding Awards
as it deems reasonable in the event of a cash, securities or other property
settlement. In the case of Options, but without limitation on other
methodologies, the Administrator may base such settlement solely upon the excess
(if any) of the amount payable upon or in respect of such event over the
exercise price of the Option to the extent of the then vested and exercisable
shares subject to the Option.

In any of the events referred to in this Section 7.3.2, the Administrator may
take such action contemplated by this Section 7.3.2 prior to such event (as
opposed to on the occurrence of such event) to the extent that the Administrator
deems the action necessary to permit the Participant to realize the benefits
intended to be conveyed with respect to the underlying shares. Without limiting
the generality of the foregoing, the Administrator may deem an acceleration to
occur immediately prior to the applicable event and/or reinstate the original
terms of the Award if an event giving rise to an acceleration does not occur.

 

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  7.3.3 Early Termination of Awards. Upon the occurrence of a Change in Control
Event, each then-outstanding Award (whether or not vested and/or exercisable,
but after giving effect to any accelerated vesting required in the circumstances
pursuant to Sections 7.3.2, 7.3.4 and 7.3.5) shall terminate, subject to any
provision that has been expressly made by the Administrator, through a plan of
reorganization or otherwise, for the survival, substitution, assumption,
exchange or other continuation or settlement of such Award and provided that, in
the case of Options that will not survive or be substituted for, assumed,
exchanged, or otherwise continued or settled in the Change in Control Event, the
holder of such Award shall be given reasonable advance notice of the impending
termination and a reasonable opportunity to exercise his or her outstanding and
vested Options (the vested portion of such Options determined after giving
effect to any accelerated vesting required in the circumstances pursuant to
Sections 7.3.2, 7.3.4 and 7.3.5) in accordance with their terms before the
termination of the Awards (except that in no case shall more than ten days’
notice of accelerated vesting and the impending termination be required and any
acceleration may be made contingent upon the actual occurrence of the event).
For purposes of this Section 7.3, an Award shall be deemed to have been
“assumed” if (without limiting other circumstances in which an Award is assumed)
the Award continues after the Change in Control Event, and/or is assumed and
continued by a Parent (as such term is defined in the definition of Change in
Control Event) following a Change in Control Event, and confers the right to
purchase or receive, as applicable and subject to vesting and the other terms
and conditions of the Award, for each share of Common Stock subject to the Award
immediately prior to the Change in Control Event, the consideration (whether
cash, shares, or other securities or property) received in the Change in Control
Event by the stockholders of the Corporation for each share of Common Stock sold
or exchanged in such transaction (or the consideration received by a majority of
the stockholders participating in such transaction if the stockholders were
offered a choice of consideration); provided, however, that if the consideration
offered for a share of Common Stock in the transaction is not solely the
ordinary common stock of a successor corporation or a Parent, the Board may
provide for the consideration to be received upon exercise or payment of the
Award, for each share subject to the Award, to be solely ordinary common stock
of the successor corporation or a Parent equal in Fair Market Value to the per
share consideration received by the stockholders participating in the Change in
Control Event.

 

  7.3.4

Other Acceleration Rules. The Administrator may override the provisions of this
Section 7.3 as to any Award by express provision in the applicable Award
Agreement and may accord any Participant a right to refuse any acceleration,
whether pursuant to the Award Agreement or otherwise, in such circumstances as
the Administrator may approve. The portion of any Incentive Stock Option
accelerated in connection with a Change in

 

17

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Control Event (or such other circumstances as may trigger accelerated vesting of
the Incentive Stock Option) shall remain exercisable as an Incentive Stock
Option only to the extent the applicable $100,000 limitation on Incentive Stock
Options is not exceeded. To the extent exceeded, the accelerated portion of the
Option shall be exercisable as a Nonqualified Stock Option.

 

  7.3.5 Golden Parachute Limitation. Notwithstanding anything else contained in
this Section 7.3 to the contrary, in no event shall any Award or payment be
accelerated under this Section 7.3 to an extent or in a manner so that such
Award or payment, together with any other compensation and benefits provided to,
or for the benefit of, the Participant under any other plan or agreement of the
Corporation or one of its Affiliates, would not be fully deductible by the
Corporation or one of its Affiliates for federal income tax purposes because of
Section 280G of the Code. If a holder of an Award would be entitled to benefits
or payments hereunder and under any other plan or program that would constitute
“parachute payments” as defined in Section 280G of the Code, then the holder may
by written notice to the Corporation designate the order in which such parachute
payments will be reduced or modified so that the Corporation or one of its
Affiliates is not denied federal income tax deductions for any “parachute
payments” because of Section 280G of the Code. Notwithstanding the foregoing, if
a Participant is a party to an employment or other agreement with the
Corporation or one of its Affiliates, or is a participant in a severance program
sponsored by the Corporation or one of its Affiliates that contains express
provisions regarding Section 280G and/or Section 4999 of the Code (or any
similar successor provision), or the applicable Award Agreement includes such
provisions, the Section 280G and/or Section 4999 provisions of such employment
or other agreement or plan, as applicable, shall control as to the Awards held
by that Participant (for example, and without limitation, a Participant may be a
party to an employment agreement with the Corporation or one of its Affiliates
that provides for a “gross-up” as opposed to a “cut-back” in the event that the
Section 280G thresholds are reached or exceeded in connection with a change in
control and, in such event, the Section 280G and/or Section 4999 provisions of
such employment agreement shall control as to any Awards held by that
Participant).

 

  7.4 Termination of Employment or Services.

 

  7.4.1

Events Not Deemed a Termination of Employment. Unless the Administrator
otherwise expressly provides with respect to a particular Award, if a
Participant’s employment by or service to the Corporation or an Affiliate
terminates but immediately thereafter the Participant continues in the employ of
or service to another Affiliate or the Corporation, as applicable, the
Participant shall be deemed to have not had a termination of employment or
service for purposes of this Plan and the Participant’s

 

18

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Awards. Unless the express policy of the Corporation or the Administrator
otherwise provides, a Participant’s employment relationship with the Corporation
or any of its Affiliates shall not be considered terminated solely due to any
sick leave, military leave, or any other leave of absence authorized by the
Corporation or any Affiliate or the Administrator; provided that, unless
reemployment upon the expiration of such leave is guaranteed by contract or law,
such leave is for a period of not more than three months. In the case of any
Participant on an approved leave of absence, continued vesting of the Award
while on leave from the employ of or service with the Corporation or any of its
Affiliates will be suspended until the Participant returns to service, unless
the Administrator otherwise provides or applicable law otherwise requires. In no
event shall an Award be exercised after the expiration of the term of the Award
set forth in the Award Agreement.

 

  7.4.2 Effect of Change of Affiliate Status. For purposes of this Plan and any
Award, if an entity ceases to be an Affiliate, a termination of employment or
service will be deemed to have occurred with respect to each Eligible Person in
respect of such Affiliate who does not continue as an Eligible Person in respect
of another Affiliate that continues as such after giving effect to the
transaction or other event giving rise to the change in status.

 

  7.4.3 Administrator Discretion. Notwithstanding the provisions of Section 5.6
or 6.8, in the event of, or in anticipation of, a termination of employment or
service with the Corporation or any of its Affiliates for any reason, the
Administrator may accelerate the vesting and exercisability of all or a portion
of the Participant’s Award, and/or, subject to the provisions of Sections 5.4.2
and 7.3, extend the exercisability period of the Participant’s Option upon such
terms as the Administrator determines and expressly sets forth in or by
amendment to the Award Agreement.

 

  7.4.4 Termination of Consulting or Affiliate Services. If the Participant is
an Eligible Person solely by reason of clause (c) of Section 3, the
Administrator shall be the sole judge of whether the Participant continues to
render services to the Corporation or any of its Affiliates, unless a written
contract or the Award Agreement otherwise provides. If, in these circumstances,
the Corporation or any Affiliate notifies the Participant in writing that a
termination of the Participant’s services to the Corporation or any Affiliate
has occurred for purposes of this Plan, then (unless the contract or the Award
Agreement otherwise expressly provides), the Participant’s termination of
services with the Corporation or Affiliate for purposes of this Plan shall be
the date which is 10 days after the mailing of the notice by the Corporation or
Affiliate or, in the case of a termination for Cause, the date of the mailing of
the notice.

 

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  7.5 Compliance with Laws.

 

  7.5.1 General. This Plan, the granting and vesting of Awards under this Plan,
and the offer, issuance and delivery of shares of Common Stock, the acceptance
of promissory notes and/or the payment of money under this Plan or under Awards
are subject to compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities laws, and
federal margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Corporation, be
necessary or advisable in connection therewith. The person acquiring any
securities under this Plan will, if requested by the Corporation, provide such
assurances and representations to the Corporation as the Administrator may deem
necessary or desirable to assure compliance with all applicable legal and
accounting requirements.

 

  7.5.2 Compliance with Securities Laws. No Participant shall sell, pledge or
otherwise transfer shares of Common Stock acquired pursuant to an Award or any
interest in such shares except in accordance with the express terms of this Plan
and the applicable Award Agreement. Any attempted transfer in violation of this
Section 7.5 shall be void and of no effect. Without in any way limiting the
provisions set forth above, no Participant shall make any disposition of all or
any portion of shares of Common Stock acquired or to be acquired pursuant to an
Award, except in compliance with all applicable federal and state securities
laws and unless and until:

 

  (a) there is then in effect a registration statement under the Securities Act
covering such proposed disposition and such disposition is made in accordance
with such registration statement;

 

  (b) such disposition is made in accordance with Rule 144 under the Securities
Act; or

 

  (c) such Participant notifies the Corporation of the proposed disposition and
furnishes the Corporation with a statement of the circumstances surrounding the
proposed disposition, and, if requested by the Corporation, furnishes to the
Corporation an opinion of counsel acceptable to the Corporation’s counsel, that
such disposition will not require registration under the Securities Act and will
be in compliance with all applicable state securities laws.

Notwithstanding anything else herein to the contrary, neither the Corporation or
any Affiliate has any obligation to register the Common Stock or file any
registration statement under either federal or state securities laws, nor does
the Corporation or any Affiliate make any representation concerning the
likelihood of a public offering of the Common Stock or any other securities of
the Corporation or any Affiliate.

 

20

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  7.5.3 Share Legends. All certificates evidencing shares of Common Stock issued
or delivered under this Plan shall bear the following legends and/or any other
appropriate or required legends under applicable laws:

“OWNERSHIP OF THIS CERTIFICATE, THE SHARES EVIDENCED BY THIS CERTIFICATE AND ANY
INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER
APPLICABLE LAW AND UNDER AGREEMENTS WITH THE CORPORATION, INCLUDING RESTRICTIONS
ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION.”

“THE SHARES ARE SUBJECT TO THE CORPORATION’S RIGHT OF FIRST REFUSAL AND CALL
RIGHTS TO REPURCHASE THE SHARES UNDER THE CORPORATION’S STOCK INCENTIVE PLAN AND
AGREEMENTS WITH THE CORPORATION THEREUNDER, COPIES OF WHICH ARE AVAILABLE FOR
REVIEW AT THE OFFICE OF THE SECRETARY OF THE CORPORATION.”

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (“ACT”), NOR HAVE THEY BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE. NO TRANSFER OF SUCH SECURITIES
WILL BE PERMITTED UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS
TO SUCH TRANSFER, THE TRANSFER IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE
ACT, OR IN THE OPINION OF COUNSEL TO THE CORPORATION, REGISTRATION UNDER THE ACT
IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT AND WITH
APPLICABLE STATE SECURITIES LAWS.”

 

  7.5.4 Confidential Information. Any financial or other information relating to
the Corporation obtained by Participants in connection with or as a result of
this Plan or their Awards shall be treated as confidential.

 

  7.6 Tax Withholding.

 

  7.6.1 Tax Withholding. Upon any exercise, vesting, or payment of any Award or
upon the disposition of shares of Common Stock acquired pursuant to the exercise
of an Incentive Stock Option prior to satisfaction of the holding period
requirements of Section 422 of the Code, the Corporation or any of its
Affiliates shall have the right at its option to:

 

  (a)

require the Participant (or the Participant’s Personal Representative or
Beneficiary, as the case may be) to pay or provide for payment

 

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of at least the minimum amount of any taxes which the Corporation or Affiliate
may be required to withhold with respect to such Award event or payment;

 

  (b) deduct from any amount otherwise payable (in respect of an Award or
otherwise) in cash to the Participant (or the Participant’s Personal
Representative or Beneficiary, as the case may be) the minimum amount of any
taxes which the Corporation or Affiliate may be required to withhold with
respect to such Award event or payment; or

 

  (c) reduce the number of shares of Common Stock to be delivered by (or
otherwise reacquire shares held by the Participant) the appropriate number of
shares of Common Stock, valued at their then Fair Market Value, to satisfy the
minimum withholding obligation.

In any case where a tax is required to be withheld in connection with the
delivery of shares of Common Stock under this Plan, the Administrator may in its
sole discretion (subject to Section 7.5) grant (either at the time of the Award
or thereafter) to the Participant the right to elect, pursuant to such rules and
subject to such conditions as the Administrator may establish, to have the
Corporation reduce the number of shares to be delivered by (or otherwise
reacquire) the appropriate number of shares, valued in a consistent manner at
their Fair Market Value or at the sales price in accordance with authorized
procedures for cashless exercises, necessary to satisfy the minimum applicable
withholding obligation on exercise, vesting or payment. In no event shall the
shares withheld exceed the minimum whole number of shares required for tax
withholding under applicable law.

 

  7.7 Plan and Award Amendments, Termination and Suspension.

 

  7.7.1 Board Authorization. The Board may, at any time, terminate or, from time
to time, amend, modify or suspend this Plan, in whole or in part. No Awards may
be granted during any period that the Board suspends this Plan.

 

  7.7.2 Stockholder Approval. To the extent then required by applicable law or
any applicable listing agency or required under Sections 162, 422 or 424 of the
Code to preserve the intended tax consequences of this Plan, or deemed necessary
or advisable by the Board, any amendment to this Plan shall be subject to
stockholder approval.

 

  7.7.3

Amendments to Awards. Without limiting any other express authority of the
Administrator under (but subject to) the express limits of this Plan, the
Administrator by agreement or resolution may waive conditions of or

 

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limitations on Awards to Participants that the Administrator in the prior
exercise of its discretion has imposed, without the consent of a Participant,
and (subject to the requirements of Sections 2.2 and 7.7.4) may make other
changes to the terms and conditions of Awards.

 

  7.7.4 Limitations on Amendments to Plan and Awards. No amendment, suspension
or termination of this Plan or amendment of any outstanding Award Agreement
shall, without written consent of the Participant, affect in any manner
materially adverse to the Participant any rights or benefits of the Participant
or obligations of the Corporation under any Award granted under this Plan prior
to the effective date of such change. Changes, settlements and other actions
contemplated by Section 7.3 shall not be deemed to constitute changes or
amendments for purposes of this Section 7.7.

 

  7.8 Privileges of Stock Ownership. Except as otherwise expressly authorized by
the Administrator, a Participant will not be entitled to any privilege of stock
ownership as to any shares of Common Stock not actually delivered to and held of
record by the Participant. Except as expressly required by Section 7.3.1, no
adjustment will be made for dividends or other rights as a stockholder for which
a record date is prior to such date of delivery.

 

  7.9 Stock-Based Awards in Substitution for Awards Granted by Other
Corporation. Awards may be granted to Eligible Persons in substitution for or in
connection with an assumption of employee stock options, stock appreciation
rights, restricted stock or other stock-based awards granted by other entities
to persons who are or who will become Eligible Persons in respect of the
Corporation or one of its Affiliates, in connection with a distribution, merger
or other reorganization by or with the granting entity or an affiliated entity,
or the acquisition by the Corporation or one of its Affiliates, directly or
indirectly, of all or a substantial part of the stock or assets of the employing
entity. The Awards so granted need not comply with other specific terms of this
Plan, provided the Awards reflect only adjustments giving effect to the
assumption or substitution consistent with the conversion applicable to the
Common Stock in the transaction and any change in the issuer of the security.
Any shares that are delivered and any Awards that are granted by, or become
obligations of, the Corporation, as a result of the assumption by the
Corporation of, or in substitution for, outstanding awards previously granted by
an acquired company (or previously granted by a predecessor employer (or direct
or indirect parent thereof) in the case of persons that become employed by the
Corporation or one of its Affiliates in connection with a business or asset
acquisition or similar transaction) shall not be counted against the Share Limit
or other limits on the number of shares available for issuance under this Plan.

 

  7.10 Effective Date of the Plan. This Plan is effective upon the Effective
Date, subject to approval by the stockholders of the Corporation within twelve
months after the date the Board approves this Plan.

 

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7.11

Term of the Plan. Unless earlier terminated by the Board, this Plan will
terminate at the close of business on the day before the 10th anniversary of the
Effective Date. After the termination of this Plan either upon such stated
expiration date or its earlier termination by the Board, no additional Awards
may be granted under this Plan, but previously granted Awards (and the authority
of the Administrator with respect thereto, including the authority to amend such
Awards) shall remain outstanding in accordance with their applicable terms and
conditions and the terms and conditions of this Plan.

 

  7.12 Governing Law/Severability.

 

  7.12.1 Choice of Law. This Plan, the Awards, all documents evidencing Awards
and all other related documents will be governed by, and construed in accordance
with, the laws of the state of Delaware.

 

  7.12.2 Severability. If it is determined that any provision of this Plan or an
Award Agreement is invalid and unenforceable, the remaining provisions of this
Plan and/or the Award Agreement, as applicable, will continue in effect provided
that the essential economic terms of this Plan and the Award can still be
enforced.

 

  7.13 Captions. Captions and headings are given to the sections and subsections
of this Plan solely as a convenience to facilitate reference. Such headings will
not be deemed in any way material or relevant to the construction or
interpretation of this Plan or any provision thereof.

 

  7.14 Non-Exclusivity of Plan. Nothing in this Plan will limit or be deemed to
limit the authority of the Board or the Administrator to grant awards or
authorize any other compensation, with or without reference to the Common Stock,
under any other plan or authority.

 

  7.15 No Restriction on Corporate Powers. The existence of this Plan, the Award
Agreements, and the Awards granted hereunder, shall not limit, affect or
restrict in any way the right or power of the Board or the stockholders of the
Corporation to make or authorize: (a) any adjustment, recapitalization,
reorganization or other change in the Corporation’s or any Affiliate’s capital
structure or its business; (b) any merger, amalgamation, consolidation or change
in the ownership of the Corporation or any Affiliate; (c) any issue of bonds,
debentures, capital, preferred or prior preference stocks ahead of or affecting
the Corporation’s capital stock or the rights thereof; (d) any dissolution or
liquidation of the Corporation or any Affiliate; (e) any sale or transfer of all
or any part of the Corporation or any Affiliate’s assets or business; or (f) any
other corporate act or proceeding by the Corporation or any Affiliate. No
Participant, Beneficiary or any other person shall have any claim under any
Award or Award Agreement against any member of the Board or the Administrator,
or the Corporation or any employees, officers or agents of the Corporation or
any Affiliate, as a result of any such action.

 

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  7.16 Other Company Compensation or Benefit Programs. Payments and other
benefits received by a Participant under an Award made pursuant to this Plan
shall not be deemed a part of a Participant’s compensation for purposes of the
determination of benefits under any other employee welfare or benefit plans or
arrangements, if any, provided by the Corporation or any Affiliate, except where
the Administrator or the Board expressly otherwise provides or authorizes in
writing. Awards under this Plan may be made in addition to, in combination with,
as alternatives to or in payment of grants, awards or commitments under any
other plans or arrangements of the Corporation or any Affiliate.

 

8. DEFINITIONS.

“Administrator” has the meaning given to such term in Section 2.1.

“Affiliate” means (a) any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation if, at the time of
the determination, each of the corporations other than the Corporation 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, or
(b) any corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation if, at the time of the
determination, 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.

“Award” means an award of any Option or Stock Award, or any combination thereof,
whether alternative or cumulative, authorized by and granted under this Plan.

“Award Agreement” means any writing, approved by the Administrator, setting
forth the terms of an Award that has been duly authorized and approved.

“Award Date” means the date upon which the Administrator took the action
granting an Award or such later date as the Administrator designates as the
Award Date at the time of the grant of the Award.

“Beneficiary” means the person, persons, trust or trusts designated by a
Participant, or, in the absence of a designation, entitled by will or the laws
of descent and distribution, to receive the benefits specified in the Award
Agreement and under this Plan if the Participant dies, and means the
Participant’s executor or administrator if no other Beneficiary is designated
and able to act under the circumstances.

“Board” means the Board of Directors of the Corporation.

“Cause” with respect to a Participant means (unless otherwise expressly provided
in the applicable Award Agreement, or another applicable contract with the
Participant that defines such term for purposes of determining the effect that a
“for cause” termination has on the Participant’s stock options and/or stock
awards) a termination of employment or service based upon a finding by the
Corporation or any of its Affiliates, acting in good faith and based on its
reasonable belief at the time, that the Participant:

 

  (a) has been negligent in the discharge of his or her duties to the
Corporation or any Affiliate, has refused to perform stated or assigned duties
or is incompetent in or (other than by reason of a disability or analogous
condition) incapable of performing those duties;

 

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  (b) has been dishonest or committed or engaged in an act of theft,
embezzlement or fraud, a breach of confidentiality, an unauthorized disclosure
or use of inside information, customer lists, trade secrets or other
confidential information;

 

  (c) has breached a fiduciary duty, or willfully and materially violated any
other duty, law, rule, regulation or policy of the Corporation or any of its
Affiliates; or has been convicted of, or pled guilty or nolo contendere to, a
felony or misdemeanor (other than minor traffic violations or similar offenses);

 

  (d) has materially breached any of the provisions of any agreement with the
Corporation or any of its Affiliates;

 

  (e) has engaged in unfair competition with, or otherwise acted intentionally
in a manner injurious to the reputation, business or assets of, the Corporation
or any of its Affiliates; or

 

  (f) has improperly induced a vendor or customer to break or terminate any
contract with the Corporation or any of its Affiliates or induced a principal
for whom the Corporation or any Affiliate acts as agent to terminate such agency
relationship.

A termination for Cause shall be deemed to occur (subject to reinstatement upon
a contrary final determination by the Administrator) on the date on which the
Corporation or any Affiliate first delivers written notice to the Participant of
a finding of termination for Cause.

“Change in Control Event” means any of the following:

 

  (a) Approval by stockholders of the Corporation (or, if no stockholder
approval is required, by the Board alone) of the complete dissolution or
liquidation of the Corporation, other than in the context of a Business
Combination that does not constitute a Change in Control Event under paragraph
(c) below;

 

  (b)

The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”)) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 50% or more of either (1) the then-outstanding shares of common stock of the
Corporation (the “Outstanding Company Common Stock”) or (2) the combined voting
power of the then-outstanding voting securities of the Corporation entitled to
vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that, for purposes of this paragraph (b), the
following acquisitions shall not constitute a Change in Control Event; (A) any
acquisition directly from the Corporation, (B) any acquisition by the
Corporation, (C) any acquisition by any employee benefit plan (or related trust)
sponsored or

 

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maintained by the Corporation or any Affiliate or a successor, (D) any
acquisition by any entity pursuant to a Business Combination, (E) any
acquisition by a Person described in and satisfying the conditions of Rule
13d-1(b) promulgated under the Exchange Act, or (F) any acquisition by a Person
who is the beneficial owner (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 50% or more of the Outstanding Company Common Stock and/or
the Outstanding Company Voting Securities on the Effective Date (or an
affiliate, heir, descendant, or related party of or to such Person);

 

  (c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Corporation or any
corporation or other entity a majority of whose outstanding voting stock or
voting power is beneficially owned directly or indirectly by the Corporation (a
“Subsidiary”), a sale or other disposition of all or substantially all of the
assets of the Corporation, or the acquisition of assets or stock of another
entity by the Corporation or any of its Subsidiaries (each, a “Business
Combination”), in each case unless, following such Business Combination, (1) all
or substantially all of the individuals and entities that were the beneficial
owners of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of
common stock and the combined voting power of the then-outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the entity resulting from such Business Combination (including,
without limitation, an entity that, as a result of such transaction, owns the
Corporation or all or substantially all of the Corporation’s assets directly or
through one or more subsidiaries (a “Parent”)), and (2) no Person (excluding any
individual or entity described in clauses (C), (E) or (F) of paragraph
(b) above) beneficially owns (within the meaning of Rule 13d-3 promulgated under
the Exchange Act), directly or indirectly, more than 50% of, respectively, the
then-outstanding shares of common stock of the entity resulting from such
Business Combination or the combined voting power of the then-outstanding voting
securities of such entity, except to the extent that the ownership in excess of
50% existed prior to the Business Combination;

provided, however, that a transaction shall not constitute a Change in Control
Event if it is in connection with the underwritten public offering of the
Corporation’s securities.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Common Stock” means the shares of the Corporation’s Class A common stock, par
value $0.001 per share, and such other securities (other than Class B common
stock of the Corporation) or property as may become the subject of Awards, or
become subject to Awards, pursuant to an adjustment made under Section 7.3.1 of
this Plan.

“Corporation” means Liberman Broadcasting, Inc., a Delaware corporation, and its
successors.

 

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“Effective Date” means the date the Board approved this Plan.

“Eligible Person” has the meaning given to such term in Section 3 of this Plan.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time.

“Fair Market Value,” for purposes of this Plan and unless otherwise determined
or provided by the Administrator in the circumstances, means as follows:

 

  (a) If the Common Stock is listed or admitted to trade on the New York Stock
Exchange or other national securities exchange (the “Exchange”), the Fair Market
Value shall equal the closing price of a share of Common Stock as reported on
the composite tape for securities on the Exchange for the date in question, or,
if no sales of Common Stock were made on the Exchange on that date, the closing
price of a share of Common Stock as reported on said composite tape for the next
preceding day on which sales of Common Stock were made on the Exchange. The
Administrator may, however, provide with respect to one or more Awards that the
Fair Market Value shall equal the closing price of a share of Common Stock as
reported on the composite tape for securities listed on the Exchange on the last
trading day preceding the date in question or the average of the high and low
trading prices of a share of Common Stock as reported on the composite tape for
securities listed on the Exchange for the date in question or the most recent
trading day.

 

  (b) If the Common Stock is not listed or admitted to trade on a national
securities exchange, the Fair Market Value shall be the value as reasonably
determined by the Administrator for purposes of the Award in the circumstances.

The Administrator also may adopt a different methodology for determining Fair
Market Value with respect to one or more Awards if a different methodology is
necessary or advisable to secure any intended favorable tax, legal or other
treatment for the particular Award(s) (for example, and without limitation, the
Administrator may provide that Fair Market Value for purposes of one or more
Awards will be based on an average of closing prices (or the average of high and
low daily trading prices) for a specified period preceding the relevant date).

Any determination as to Fair Market Value made pursuant to this Plan shall be
made without regard to any restriction other than a restriction which, by its
terms, will never lapse, and shall be conclusive and binding on all persons with
respect to Awards granted under this Plan.

“Incentive Stock Option” means an Option that is designated and intended as an
“incentive stock option” within the meaning of Section 422 of the Code, the
award of which contains such provisions (including but not limited to the
receipt of stockholder approval of this Plan, if the award is made prior to such
approval) and is made under such circumstances and to such persons as may be
necessary to comply with that section.

 

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“Investor Rights Agreement” means the Investor Rights Agreement entered into as
of March 30, 2007, as amended from time to time, by and among (i) the
Corporation, (ii) OCM Principal Opportunities Fund III, L.P., a Delaware limited
partnership, OCM Principal Opportunities Fund IIIA, L.P., a Delaware limited
partnership, OCM Opps Broadcasting, LLC, a Delaware limited liability company,
and OCM Principal Opportunities Fund IV AIF (Delaware), L.P., a Delaware limited
partnership, (iii) Tinicum Capital Partners II, L.P., a Delaware limited
partnership, and Tinicum Capital Partners II Parallel Fund, L.P., a Delaware
limited partnership, (iv) Jose Liberman, (v) each person listed on the signature
pages thereto under the heading of “Existing Stockholders,” and (vi) each of the
other parties listed thereto from time to time.

“Nonqualified Stock Option” means an Option that is not an “incentive stock
option” within the meaning of Section 422 of the Code and includes any Option
designated or intended as a Nonqualified Stock Option and any Option designated
or intended as an Incentive Stock Option that fails to meet the applicable legal
requirements thereof.

“Option” means an option to purchase Common Stock granted under Section 5 of
this Plan. The Administrator will designate any Option granted to an employee of
the Corporation or an Affiliate as a Nonqualified Stock Option or an Incentive
Stock Option.

“Participant” means an Eligible Person who has been granted and holds an Award
under this Plan.

“Personal Representative” means the person or persons who, upon the disability
or incompetence of a Participant, has acquired on behalf of the Participant, by
legal proceeding or otherwise, the power to exercise the rights or receive
benefits under this Plan by virtue of having become the legal representative of
the Participant.

“Plan” means this Liberman Broadcasting, Inc. Stock Incentive Plan, as it may
hereafter be amended from time to time.

“Public Offering Date” means the date the Common Stock is first registered under
the Exchange Act and listed or quoted on a recognized national securities
exchange.

“Restricted Shares” or “Restricted Stock” means shares of Common Stock awarded
to a Participant under this Plan, subject to payment of such consideration and
such conditions on vesting (which may include, among others, the passage of
time, specified performance objectives or other factors) and such transfer and
other restrictions as are established in or pursuant to this Plan and the
related Award Agreement, to the extent such remain unvested and restricted under
the terms of the applicable Award Agreement.

“Restricted Stock Award” means an award of Restricted Stock.

“Securities Act” means the Securities Act of 1933, as amended from time to time.

 

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“Severance Date” with respect to a particular Participant means, unless
otherwise provided in the applicable Award Agreement:

 

  (a) if the Participant is an Eligible Person under clause (a) of Section 3 and
the Participant’s employment by the Corporation or any of its Affiliates
terminates (regardless of the reason), the last day that the Participant is
actually employed by the Corporation or such Affiliate (unless, immediately
following such termination of employment, the Participant is a member of the
Board or, by express written agreement with the Corporation or any of its
Affiliates, continues to provide other services to the Corporation or any
Affiliate as an Eligible Person under clause (c) of Section 3, in which case the
Participant’s Severance Date shall not be the date of such termination of
employment but shall be determined in accordance with clause (b) or (c) below,
as applicable, in connection with the termination of the Participant’s other
services);

 

  (b) if the Participant is not an Eligible Person under clause (a) of Section 3
but is an Eligible Person under clause (b) thereof, and the Participant ceases
to be a member of the Board (regardless of the reason), the last day that the
Participant is actually a member of the Board (unless, immediately following
such termination, the Participant is an employee of the Corporation or any of
its Affiliates or, by express written agreement with the Corporation or any of
its Affiliates, continues to provide other services to the Corporation or any
Affiliate as an Eligible Person under clause (c) of Section 3, in which case the
Participant’s Severance Date shall not be the date of such termination but shall
be determined in accordance with clause (a) above or (c) below, as applicable,
in connection with the termination of the Participant’s employment or other
services);

 

  (c) if the Participant is not an Eligible Person under clause (a) or clause
(b) of Section 3 but is an Eligible Person under clause (c) thereof, and the
Participant ceases to provide services to the Corporation or any of its
Affiliates as determined in accordance with Section 7.4.4 (regardless of the
reason), the last day that the Participant actually provides services to the
Corporation or such Affiliate as an Eligible Person under clause (c) of
Section 3 (unless, immediately following such termination, the Participant is an
employee of the Corporation or any of its Affiliates or is a member of the
Board, in which case the Participant’s Severance Date shall not be the date of
such termination of services but shall be determined in accordance with clause
(a) or (b) above, as applicable, in connection with the termination of the
Participant’s employment or membership on the Board).

“Stock Award” means an award of shares of Common Stock under Section 6 of this
Plan. A Stock Award may be a Restricted Stock Award or an award of unrestricted
shares of Common Stock.

“Total Disability” means a “total and permanent disability” within the meaning
of Section 22(e)(3) of the Code and, with respect to Awards other than Incentive
Stock Options, such other disabilities, infirmities, afflictions, or conditions
as the Administrator may include.

 

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