Exhibit 10.1

KINDER MORGAN, INC.
 
2011 STOCK INCENTIVE PLAN
 
 
 
1. PURPOSE OF THE PLAN. The purpose of the 2011 Stock Incentive Plan (the
“Plan”) of Kinder Morgan, Inc., a Delaware corporation (the “Company”), is to
provide incentive for future endeavors and to advance the interests of the
Company and its stockholders by encouraging ownership of the shares of Class P
common stock of the Company, $0.01 par value (“Stock”), by its Employees (as
defined below) and Consultants (as defined below) and to enable the Company to
compete effectively with other enterprises for the services of such new
employees and consultants as may be needed for the continued improvement of the
Company’s business, through the grant of (a) options to purchase Stock
(“Options”), (b) shares of Stock that are subject to restrictions set forth in
the Plan or any individual award agreement (“Restricted Stock” or a “Restricted
Stock Award”), (c) Stock Appreciation Rights (as defined below), (d)
hypothetical shares of Stock (a “Restricted Stock Unit”, and collectively with a
Restricted Stock Award, a “Restricted Award”), (e) Performance Compensation
Awards (as defined below) and (f) Other Stock Based-Awards (as described in
Section 10) (such Options, Restricted Awards, Stock Appreciation Rights,
Performance Compensation Awards and Other Stock-Based Awards, collectively, the
“Awards”).
 
2. PARTICIPANTS.
 
(a) Awards may be granted under the Plan to any Employees and Consultants of the
Company and its Affiliates (as defined below, including Affiliates that become
such after adoption of the Plan) as shall be determined by the Committee (each,
a “Grantee”); provided, however, that Incentive Stock Options may be granted
only to Employees, and no Awards may be granted to any person if such grant
would cause the Plan to cease to be an “employee benefit plan” as defined in
Rule 405 of Regulation C promulgated under the Securities Act.
 
(b) A Consultant shall not be eligible for the grant of an Award if, at the time
of grant, a Form S-8 Registration Statement under the Securities Act (“Form
S-8”) is not available to register either the offer or the sale of the Company’s
securities to such Consultant because of the nature of the services that the
Consultant is providing to the Company (i.e., capital raising), or because the
Consultant is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both (i) that such
grant (A) shall be registered in another manner under the Securities Act (e.g.,
on a Form S-3 Registration Statement) or (B) does not require registration under
the Securities Act in order to comply with the requirements of the Securities
Act, if applicable, and (ii) that such grant complies with the securities laws
of all other relevant jurisdictions.
 
3. EFFECTIVE DATE; TERM OF THE PLAN. The Plan is effective (the “Effective
Date”) as of January 1, 2011, subject to the approval of the Plan by the
Company's stockholders within twelve months before or after the Effective
Date.  If the Plan is not so approved by the Company's stockholders, (a) the
Plan shall not be effective, and (b) any grants of Awards under the Plan shall
immediately expire and be of no force and effect.  No Awards may be exercised or
paid prior to the approval of the Plan by the Company's stockholders.  No Awards
may be
 

 
 
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granted under the Plan after the tenth anniversary of the Effective Date or the
tenth anniversary of the date on which the Plan is approved by the Company's
stockholders, whichever is earlier.  The Plan shall remain in effect until all
Awards granted under the Plan have been satisfied or expired.
 
4. DEFINITIONS.
 
(a) “Affiliate” means any entity in which the Company has a direct or indirect
ownership interest selected by the Committee; provided, that, for purposes of
the definitions of "Change in Control" and "Permitted Holders," "Affiliate"
means, with respect to any Person, any other Person that directly or indirectly
controls, is controlled by or is under common control with, the Person in
question.  As used in this definition of "Affiliate," referred to in the last
proviso of the preceding sentence, the term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
 
(b) “Award” means any right granted under the Plan, including an Option, a
Restricted Stock Award, a Restricted Stock Unit, a Performance Compensation
Award, a Stock Appreciation Right, and Other Stock Based-Award.
 
(c) “Award Agreement” means a written agreement between the Company and a
Grantee evidencing the terms and conditions of an individual Award grant.  Each
Award Agreement shall be subject to the terms and conditions of the Plan.
 
(d) “Board” means the Board of Directors of the Company.
 
(e) “Change in Control” means:
 
(i) the acquisition by any Person or group (within the meaning of Section
13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision),
including any group acting for the purpose of acquiring, holding or disposing of
securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act),
other than any of the Permitted Holders, in a single transaction or a series of
related transactions, by way of merger, amalgamation, consolidation or other
business combination or purchase of beneficial ownership (within the meaning of
Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50%
of the total voting power of the Company (or the surviving or resulting entity
thereof) after giving effect to such transaction;
 
(ii) a sale, merger or similar transaction or related series of transactions
involving the Company, as a result of which the Permitted Holders do not
collectively hold (either directly or indirectly) more than 50% of the voting
power of the Company (or the surviving or resulting entity thereof) after giving
effect to such transaction or related series of transactions; provided, however,
that such sale, merger or similar transaction shall not constitute a Change in
Control in the event that, following such sale, merger or similar transaction
(a) the Permitted Holders continue to collectively own at least 35% of the
voting power of the Company (or the surviving or resulting entity thereof),
(b) no other Person or group (within the meaning of Section 13(d)(3) or Section
14(d)(2) of the Exchange Act, or any successor provision), including any group
acting for
 

 
 
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the purpose of acquiring, holding or disposing of securities (within the meaning
of Rule 13d-5(b)(1) under the Exchange Act) owns more than 35% of the voting
power of the Company (or the surviving or resulting entity thereof), and
(c) either Richard D. Kinder or C. Park Shaper is a senior executive officer of
the Company (or the surviving or resulting entity thereof);
 
(iii) the sale or transfer of all or substantially all of the assets of the
Company and its subsidiaries, taken as a whole, in a single transaction or a
series of related transactions, in any case, other than to an entity of which
more than 50% of the voting power is held (either directly or indirectly) by one
or more Permitted Holders or by Persons who held (either directly or indirectly)
more than 50% of the voting power of the Company immediately prior to such
transaction (or in each case their Affiliates);
 
(iv) during any period of two consecutive years following the closing of the
IPO, individuals who at the beginning of such period constitute the Board, and
any new director whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason other than normal retirement, death or disability
to constitute at least a majority of the Board then in office; or
 
(v) the stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets (or any transaction having a similar
effect).
 
(f) “Change in Control Value” means, with respect to a Change in Control, (i)
the per share price offered to stockholders of the Company in any merger,
consolidation, reorganization, sale of assets or dissolution transaction, (ii)
the price per share offered to stockholders of the Company in any tender offer,
exchange offer or sale or other disposition of outstanding voting stock of the
Company, or (iii) if such Change in Control occurs other than as described in
clause (i) or clause (ii), the Fair Market Value per share of the shares into
which Awards are exercisable, as determined by the Committee, whichever is
applicable.  In the event that the consideration offered to stockholders of the
Company consists of anything other than cash, the Committee shall determine the
fair cash equivalent of the portion of the consideration offered which is other
than cash.
 
(g) “Code” means the Internal Revenue Code of 1986, as it may be amended from
time to time.
 
(h) “Committee” means the Board or the Compensation Committee, as administrator
of the Plan.
 
(i) “Compensation Committee” means a committee of one or more members of the
Board appointed by the Board to administer the Plan in accordance with Section
6(c).
 
(j) “Company” means Kinder Morgan, Inc., a Delaware corporation.
 

 
 
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(k) “Consultant” means any individual, including an advisor engaged by the
Company or an Affiliate to render consulting or advisory services and who is
compensated for such services or who provides bona fide services to the Company
or an Affiliate pursuant to a written agreement; provided that such individual
is a natural person and such services are not in connection with the offer or
sale of securities in a capital raising transaction and do not directly or
indirectly promote or maintain a market for the Company’s securities.
 
(l) “Covered Employee” has the same meaning as set forth in Code Section
162(m)(3).
 
(m) “Date of Grant” means the date on which the Committee adopts a resolution,
or takes other appropriate action, expressly granting an Award to a Grantee that
specifies the key terms and conditions of the Award and from which the Grantee
begins to benefit from or be adversely affected by subsequent changes in the
Fair Market Value of the Stock or, if a later date is set forth in such
resolution, then such date as is set forth in such resolution.  In no event
shall a Date of Grant be a date prior to the date of any such action by the
Committee.
 
(n) “Director” means a member of the Board.
 
(o) “Employee” means any individual employed by the Company or an
Affiliate.  Notwithstanding the foregoing, for purposes of granting an Incentive
Stock Option, an individual is not an Employee unless he or she is an employee
of a Parent Corporation or Subsidiary Corporation.
 
(p) “Entity” means a corporation, limited liability company, venture,
partnership (general or limited), trust, unincorporated organization,
cooperative, association or other entity.
 
(q) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
(r) “Fair Market Value” means, as of any date, the value of the Stock as
determined below.  The Fair Market Value on any date on which the Stock is
registered under Section 12 of the Exchange Act and listed on any national
securities exchange shall be the closing price of a share of Stock on any
national securities exchange on such date (if such national securities exchange
is not open for trading on such date, then the closing price per share of Stock
on such national securities exchange on the next preceding day on which the
national securities exchange was open for trading), and thereafter (i) if the
Stock is admitted to quotation on the over the counter market or any interdealer
quotation system, the Fair Market Value on any given date shall not be less than
the average of the highest bid and lowest asked prices of the Stock reported for
such date or, if no bid and asked prices were reported for such date, for the
last day preceding such date for which such prices were reported, or (ii) in the
absence of an established market for the Stock, the Fair Market Value determined
in good faith by the Committee and such determination shall be conclusive and
binding on all persons.  Notwithstanding the foregoing, the determination of
fair market value in all cases shall be in accordance with the requirements set
forth under Code Section 409A and the regulations thereunder.
 
(s) “Form S-8” has the meaning set forth in Section 2(b).
 
(t) “Free Standing Rights” has the meaning set forth in Section 9(a).
 

 
 
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(u) “Grantee” means a person to whom an Award is granted pursuant to the Plan
or, if applicable, such other person who holds an outstanding Award.
 
(v) “Incentive Stock Option” means an Option that is designated by the Committee
as an incentive stock option as described in Code Section 422 and otherwise
meets the requirements set forth in the Plan.
 
(w) “IPO” means the initial underwritten public offering of Stock for cash
pursuant to a registration statement filed under the Securities Act reasonably
promptly after approval of the Plan by the Company's stockholders.
 
(x) “Negative Discretion” means the discretion authorized by the Plan to be
applied by the Committee to eliminate or reduce the size of a Performance
Compensation Award in accordance with Section 13(d)(iv) of the Plan.
 
(y) “Non-Employee Director” means a Director who is a “non-employee director”
within the meaning of Rule 16b-3.
 
(z) “Nonqualified Stock Option” means an Option that is not designated by the
Committee as an Incentive Stock Option.
 
(aa) “Officer” means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
 
(bb) “Option” means an Incentive Stock Option or a Nonqualified Stock Option
granted pursuant to the Plan.
 
(cc) “Option Agreement” means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an individual Option
grant.  Each Option Agreement shall be subject to the terms and conditions of
the Plan and need not be identical.
 
(dd) “Optionholder” means a Grantee to whom an Option is granted pursuant to the
Plan or, if applicable, such other person who holds an outstanding Option.
 
(ee) “Outside Director” means a Director who is an “outside director” within the
meaning of Code Section 162(m) and Treasury Regulations Section 1.162-27(e)(3)
or any successor to such statute and regulation.
 
(ff) “Parent Corporation” means a "parent corporation" of the Company within the
meaning of Code Section 424(e).
 
(gg) “Performance Compensation Award” means any Award designated by the
Committee as a Performance Compensation Award pursuant to Section 13 of the
Plan.
 
(hh) “Performance Criteria” means the criterion or criteria that the Committee
shall select for purposes of establishing the Performance Goal(s) for a
Performance Period with respect to any Performance Compensation Award under the
Plan.  The Performance Criteria that will be used to establish the Performance
Goal(s) shall be based on the attainment of specific
 

 
 
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levels of performance of the Company (or Affiliate, division or operational unit
of the Company) and shall be limited to the following:
 
(i) the price of a share of Stock or of the equities of a subsidiary or business
unit designated by the Committee;
 
(ii) the earnings per share of Stock of the Company or earnings per share of a
subsidiary or business unit designated by the Committee;
 
(iii) the total stockholder or unitholder value of the Company or a subsidiary
or business unit designated by the Committee;
 
(iv) dividends or distributions of the Company or a subsidiary or business unit
designated by the Committee;
 
(v) revenues of the Company or a subsidiary or business unit designated by the
Committee;
 
(vi) debt/equity, interest coverage, or indebtedness/earnings before or after
interest, taxes, depreciation and amortization ratios of the Company or a
subsidiary or business unit designated by the Committee;
 
(vii) cash coverage ratio of the Company or a subsidiary or business unit
designated by the Committee;
 
(viii) net income (before or after taxes) of the Company or a subsidiary or
business unit designated by the Committee;
 
(ix) cash flow or cash flow return on investment of the Company or a subsidiary
or business unit designated by the Committee;
 
(x) earnings before or after interest, taxes, depreciation, and/or amortization
of the Company or a subsidiary or business unit designated by the Committee;
 
(xi) economic value added of the Company or a subsidiary or business unit
designated by the Committee; or
 
(xii) return on stockholders' or unitholders' equity achieved by the Company or
a subsidiary or business unit designated by the Committee.
 
Any one or more of the Performance Criteria may be used on an absolute or
relative basis to measure the performance of the Company and/or an Affiliate as
a whole or any business unit of the Company and/or an Affiliate or any
combination thereof, as the Committee may deem appropriate, or any of the above
Performance Criteria as compared to the performance of a group of comparable
companies, or published or special index that the Committee, in its sole
discretion, deems appropriate.  The Committee also has the authority to provide
for accelerated vesting of any Award based on the achievement of Performance
Goals pursuant to the Performance Criteria specified in this paragraph.  To the
extent required under Code Section
 

 
 
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162(m), the Committee shall, within the first 90 days of a Performance Period
(or, if longer or shorter, within the maximum period allowed under Code Section
162(m)), define in an objective fashion the manner of calculating the
Performance Criteria it selects to use for such Performance Period.  In the
event that applicable tax and/or securities laws change to permit Committee
discretion to alter the governing Performance Criteria without obtaining
stockholder approval of such changes, the Committee shall have sole discretion
to make such changes without obtaining stockholder approval.
 
(ii) “Performance Formula” means, for a Performance Period, one or more
objective formulas applied against the relevant Performance Goal to determine,
with regard to the Performance Compensation Award of a particular Grantee,
whether all, some portion but less than all, or none of the Performance
Compensation Award has been earned for the Performance Period.
 
(jj) “Performance Goals” means, for a Performance Period, one or more goals
established by the Committee for the Performance Period based upon the
Performance Criteria.  The Committee is authorized, in its sole and absolute
discretion, to adjust or modify the calculation of a Performance Goal for such
Performance Period (provided, that if an Award is intended to constitute
"performance based compensation" under Code Section 162(m), such adjustment or
modification may be made only to the extent permitted under Code Section 162(m))
in order to prevent the dilution or enlargement of the rights of Grantees based
on the following events:
 
(i) asset write-downs;
 
(ii) litigation or claim judgments or settlements;
 
(iii) the effect of changes in tax laws, accounting principles, or other laws or
regulatory rules affecting reported results;
 
(iv) any reorganization and restructuring programs;
 
(v) extraordinary nonrecurring items as described in Accounting Principles Board
Opinion No. 30 (or any successor or pronouncement thereto) and/or in
management’s discussion and analysis of financial condition and results of
operations appearing in the Company’s annual report to stockholders for the
applicable year;
 
(vi) acquisitions or divestitures;
 
(vii) any other specific unusual or nonrecurring events, or objectively
determinable category thereof;
 
(viii) foreign exchange gains and losses; and
 
(ix) a change in the Company’s fiscal year.
 
(kk) “Performance Period” means one or more periods of time as the Committee may
select, over which the attainment of one or more Performance Goals will be
measured for the
 

 
 
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purpose of determining a Grantee’s right to and the payment of a Performance
Compensation Award.
 
(ll) “Permitted Holders” means, at any time, Richard D. Kinder and investment
funds advised by, or affiliated with, Goldman, Sachs & Co., Highstar Capital LP,
The Carlyle Group and Riverstone Holdings LLC.
 
(mm) “Person” means a natural person or an entity.
 
(nn) “Plan” means this Kinder Morgan, Inc. 2011 Stock Incentive Plan.
 
(oo) “Related Stock Appreciation Rights” has the meaning set forth in Section
9(a).
 
(pp) “Restricted Award” means any Award granted pursuant to Section 8(a).
 
(qq) “Restricted Period” has the meaning set forth in Section 8(a).
 
(rr) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time.
 
(ss) “SAR Amount” has the meaning set forth in Section 9(k).
 
(tt) “SAR exercise price” has the meaning set forth in Section 9(a).
 
(uu) “Securities Act” means the Securities Act of 1933, as amended.
 
(vv) “Share for Share Exchange” has the meaning set forth in Section 7(g).
 
(ww) “Stock” means shares of Class P common stock of the Company, $0.01 par
value.
 
(xx) “Stock Appreciation Right” means any Award granted pursuant to Section 9.
 
(yy) “Subsidiary Corporation” means a "subsidiary corporation" of the Company
within the meaning of Code Section 424(f).
 
5. STOCK SUBJECT TO THE PLAN.
 
(a) Subject to the provisions of Section 11, the aggregate number of shares of
Stock for which Awards may be granted under the Plan shall not exceed
15,000,000, any or all of which may be issued pursuant to Incentive Stock
Options; provided, that, if, on or prior to the termination of the Plan, any
Option granted under the Plan shall have expired or terminated for any reason
without having been exercised in full or any shares of Restricted Stock shall
have been forfeited, or any other Awards for which Stock is deliverable are so
forfeited, such unpurchased or forfeited shares of Stock covered thereby shall
again become available for the grant of Awards under the Plan.  The exercise of
a Stock Appreciation Right for cash or the payment of any Award in cash shall
not count against the aggregate plan limit described above.  Notwithstanding
anything to the contrary contained herein:  (i) shares of Stock surrendered or
withheld in payment of the exercise price of an Option shall count against the
aggregate plan limit described above; and (ii) shares of Stock withheld by the
Company to satisfy any tax
 

 
 
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withholding obligation shall count against the aggregate plan limit described
above.  No fractional shares of Stock may be issued hereunder.
 
(b) The Stock to be delivered pursuant to an Award shall be made available, at
the discretion of the Committee, either from authorized but previously unissued
shares of Stock or from Stock reacquired by the Company, including Stock
purchased in the open market, and Stock held in the treasury of the Company.
 
6. ADMINISTRATION OF THE PLAN.
 
(a) The Plan shall be administered by the Board unless and until the Board
delegates administration to a Compensation Committee, as provided in Section
6(c).
 
(b) The Board shall have the power and authority: (i) to construe and interpret
the Plan and apply its provisions; (ii) to promulgate, amend, and rescind rules
and regulations relating to the administration of the Plan; (iii) to authorize
any person to execute, on behalf of the Company, any instrument required to
carry out the purposes of the Plan; (iv) to delegate its authority to one or
more Officers of the Company with respect to awards that do not involve Covered
Employees or “insiders” within the meaning of Section 16 of the Exchange Act;
(v) to determine when Awards are to be granted under the Plan and the applicable
Date of Grant; (vi) from time to time to select, subject to the limitations set
forth in this Plan, those Grantees to whom Awards shall be granted and to make
any such grants; (vii) to determine the number of shares of Stock to be made
subject to each Award; (viii) to prescribe the terms and conditions of each
Award, including, without limitation, the exercise price and medium of payment,
vesting provisions and right of repurchase provisions, and to specify the
provisions of the Award Agreement relating to such grant or sale; (ix) to amend
any outstanding Awards, including for the purpose of modifying the time or
manner of vesting, or the term of any outstanding Award; (x) to determine the
duration and purpose of leaves of absences which may be granted to a Grantee
without constituting termination of his or her employment for purposes of the
Plan, which periods shall be no shorter than the periods generally applicable to
Employees under the Company’s employment policies; (xi) to make decisions with
respect to outstanding Awards that may become necessary upon a change in
corporate control or an event that triggers anti-dilution adjustments; and (xii)
to exercise discretion to make any and all other determinations which it
determines to be necessary or advisable for administration of the Plan.  The
Board also may modify the purchase price or the exercise price of any
outstanding Award, provided that if the modification effects a repricing,
stockholder approval shall be required before the repricing is effective.
 
(c) The Compensation Committee.
 
(i)           The Board may delegate administration of the Plan to a
Compensation Committee of one or more members of the Board.  If administration
is delegated to a Compensation Committee, the Compensation Committee shall have,
in connection with the administration of the Plan, the powers theretofore
possessed by the Board as described in Section 6(b), including the power to
delegate to a subcommittee any of the administrative powers the Compensation
Committee is authorized to exercise, subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be
 

 
 
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adopted from time to time by the Board.  The Board may abolish the Compensation
Committee at any time and revest in the Board the administration of the
Plan.  The members of the Compensation Committee shall be appointed by and serve
at the pleasure of the Board.  From time to time, the Board may increase or
decrease the size of the Compensation Committee, add additional members to,
remove members (with or without cause) from, appoint new members in substitution
therefor, and fill vacancies, however caused, in the Compensation
Committee.  The Compensation Committee shall act pursuant to a vote of the
majority of its members or, in the case of a committee comprised of only two
members, the unanimous consent of its members, whether present or not, or by the
written consent of the majority of its members and minutes shall be kept of all
of its meetings and copies thereof shall be provided to the Board.  Subject to
the limitations prescribed by the Plan and the Board, the Compensation Committee
may establish and follow such rules and regulations for the conduct of its
business as it may determine to be advisable.
 
(ii)           At such time as the Stock is required to be registered under
Section 12 of the Exchange Act, the Board shall have discretion to determine
whether or not it intends to comply with the exemption requirements of Rule
16b-3 and/or Code Section 162(m), if applicable.  If the Board intends to
satisfy such exemption requirements, with respect to Awards to any Covered
Employee and with respect to any insider subject to Section 16 of the Exchange
Act, the Compensation Committee shall be a compensation committee of the Board
that at all times consists solely of two or more Non-Employee Directors who are
also Outside Directors.  Within the scope of such authority, the Board or the
Compensation Committee may (A) delegate to a committee of one or more members of
the Board who are not Outside Directors the authority to grant Awards to
eligible persons who are either (x) not then Covered Employees and are not
expected to be Covered Employees at the time of recognition of income resulting
from such Award or (y) not persons with respect to whom the Company wishes to
comply with Code Section 162(m) or (B) delegate to a committee of one or more
members of the Board who are not Non-Employee Directors the authority to grant
Awards to eligible persons who are not then subject to Section 16 of the
Exchange Act.  Nothing herein shall create an inference that an Option is not
validly granted under the Plan in the event Awards are granted under the Plan by
a compensation committee of the Board that does not at all times consist solely
of two or more Non-Employee Directors who are also Outside Directors.
 
(d) The interpretation and construction of any provision of the Plan or of any
Award granted under it by the Committee shall be final, conclusive and binding
upon all parties, including the Company, its stockholders and Directors, and the
executives and employees of the Company and its Affiliates.  No member of the
Committee shall be liable to the Company, any stockholder, any Grantee or any
employee of the Company or its Affiliates for any action or determination made
in good faith with respect to the Plan or any Award granted under it.  No member
of the Committee may vote on any Award to be granted to him or her.
 
(e) The expenses of administering the Plan shall be borne by the Company.
 

 
 
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7. OPTIONS.
 
(a) An Option granted under the Plan may be either an Incentive Stock Option or
a Nonqualified Stock Option; provided, however, that no Incentive Stock Option
shall be granted to any individual who is not an employee of the Company, a
Parent Corporation or Subsidiary Corporation.  Each Option shall be in such form
and shall contain such terms and conditions as the Committee shall deem
appropriate.  Notwithstanding anything herein to the contrary, it is the
intention of the Company that all Options granted hereunder shall comply with
the provisions and requirements of Code Section 409A to the extent
applicable.  The provisions of separate Options need not be identical.
 
(b) The exercise price per share of each Option shall be not less than 100% of
the Fair Market Value of a share of Stock on the date the Option is
granted.  Notwithstanding the foregoing, an Option may be granted with an
exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option
in a manner satisfying the provisions of Code Section 424(a).  No Option shall
include any feature for the deferral of compensation other than the deferral of
recognition of income until the exercise of the Option.
 
(c) The exercise price of any outstanding Options shall not be reduced during
the term of such Options except by reason of an adjustment pursuant to Section
11 hereof (and any such reduction shall be in accordance with Code Section
409A), nor shall the Committee cancel outstanding Options and reissue new
Options at a lower exercise price in substitution for the canceled Options.
 
(d) The expiration date of an Option granted under the Plan shall be as
determined by the Committee at the time of grant, provided that each such Option
shall expire not more than ten years after the date the Option is granted.
 
(e) Each Option shall become exercisable in whole or in part or in installments
at such time or times as the Committee may prescribe at the time the Option is
granted and specify in the Option Agreement.
 
(f) Notwithstanding any contrary provision contained herein, unless otherwise
expressly provided in the Option Agreement, any Option granted hereunder shall
become immediately vested in full upon the occurrence of a Change in Control of
the Company.
 
(g) The exercise price of an Option shall be paid, to the extent permitted by
applicable statutes and regulations, either (i) in cash or by certified or bank
check, or (ii) in the discretion of the Committee, upon such terms as the
Committee shall approve: (A) by delivery to the Company of other shares of
Stock, duly endorsed for transfer to the Company, with a Fair Market Value on
the date of delivery equal to the exercise price (or portion thereof) due for
the number of shares of Stock being acquired, or by means of attestation whereby
the Grantee identifies for delivery specific shares of Stock that have a Fair
Market Value on the date of attestation equal to the exercise price (or portion
thereof) and receives a number of shares of Stock equal to the difference
between the number of shares of Stock thereby purchased and the number of
identified attestation shares of Stock (a “Share for Share Exchange”); (B) by a
 

 
 
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“cashless” exercise program established with a broker; (C) by reduction in the
number of shares of Stock otherwise deliverable upon exercise of such Option
with a Fair Market Value equal to the aggregate exercise price at the time of
exercise; or (D) in any other form of legal consideration that may be acceptable
to the Committee.  Notwithstanding the foregoing, during any period for which
the Stock is publicly traded (i.e., the Stock is listed on any established stock
exchange or a national market system) an exercise by an executive officer that
involves or may involve a direct or indirect extension of credit or arrangement
of an extension of credit by the Company, directly or indirectly, in violation
of Section 402(a) of the Sarbanes-Oxley Act (codified as Section 13(k) of the
Exchange Act) shall be prohibited with respect to any Award under this Plan.
 
(h) A Nonqualified Stock Option may, in the sole discretion of the Committee, be
transferable to a permitted transferee upon written approval by the Committee to
the extent provided in the Option Agreement.  A permitted transferee includes:
(i) a transfer by gift or domestic relations order to a member of the
Optionholder’s immediate family (child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships), any person sharing the
Optionholder’s household (other than a tenant or employee), a trust in which
these persons have more than 50% of the beneficial interest, a foundation in
which these persons (or the Optionholder) control the management of assets, and
any other entity in which these persons (or the Optionholder) own more than 50%
of the voting interests; (ii) third parties designated by the Committee in
connection with a program established and approved by the Committee pursuant to
which Grantees may receive a cash payment or other consideration in
consideration for the transfer of such Option; and (iii) such other transferees
as may be permitted by the Committee in its sole discretion.  If the Option does
not provide for transferability, then the Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the
Optionholder.  Notwithstanding the foregoing, the Optionholder may, by
delivering written notice to the Company, in a form satisfactory to the Company,
designate a third party who, in the event of the death of the Optionholder,
shall thereafter be entitled to exercise the Option.
 
(i) No Optionholder shall have any rights to distributions or other rights of a
common stockholder with respect to Stock subject to an Option prior to the
purchase of such Stock upon exercise of the Option.
 
(j) Each individual Option Agreement shall describe the effect of the
Optionholder's termination of employment or service with the Company or an
Affiliate on the exercisability of the Options held by the Optionholder,
provided that no Option shall remain exercisable beyond the expiration of the
original term of the Option.  Notwithstanding the foregoing, the Committee may,
at any time prior to any termination of such employment or service, determine in
its sole discretion that the exercise of any Option after termination of such
employment or other relationship with the Company shall be subject to
satisfaction of the conditions precedent that the Optionholder refrain from
engaging, directly or indirectly, in any activity which is competitive with any
activity of the Company or any of its Affiliates thereof and from otherwise
acting, either prior to or after termination of such employment or other
relationship, in any manner inimical or in any way contrary to the best
interests of the Company and that the Optionholder
 

 
 
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furnish to the Company such information with respect to the satisfaction of the
foregoing condition precedent as the Committee shall reasonably request.
 
(k) An Optionholder under the Plan may make written designation of a beneficiary
on forms prescribed by and filed with the Secretary of the Company. Such
beneficiary, or if no such designation of any beneficiary has been made, the
legal representative of such Optionholder or such other person entitled thereto
as determined by a court of competent jurisdiction, may exercise, in accordance
with and subject to the provisions of this Section 7, any unterminated and
unexpired Option granted to such Optionholder to the same extent that the
Optionholder himself or herself could have exercised such Option were he alive
or able; provided, however, that no Option granted under the Plan shall be
exercisable for more shares of Stock than the Optionholder could have purchased
thereunder on the date his or her employment by, or other relationship with, the
Company and its Affiliates was terminated.
 
(l) Notwithstanding anything to the contrary in this Section 7, Incentive Stock
Options shall be subject to the following requirements:
 
(i) If an Incentive Stock Option is granted to a Grantee who owns stock
representing more than ten percent of the voting power of all classes of stock
of the Company or of a Parent Corporation or Subsidiary Corporation, the Option
shall expire not more than five years after the date the Option is granted and
the exercise price shall be not less than 110% of the Fair Market Value of a
share of Stock on the date the Option is granted.
 
(ii) An Incentive Stock Option shall not be transferable except by will or by
the laws of descent and distribution and shall be exercisable during the
lifetime of the Optionholder only by the Optionholder.
 
(iii) To the extent the aggregate Fair Market Value (determined as of the date
the Option is granted) of Stock for which Incentive Stock Options are
exercisable for the first time by any Grantee during any calendar year (under
all plans of the Company, a Parent Corporation or a Subsidiary Corporation)
exceeds $100,000, such Incentive Stock Options shall be treated as Nonqualified
Stock Options.
 
(m) Notwithstanding anything to the contrary in this Section 7, if an Option is
granted to an Employee with respect to whom Stock does not constitute "service
recipient stock” (as defined in Treasury Regulation Section
1.409A-1(b)(5)(iii)), the Option shall comply with Code Section 409A to the
extent applicable.
 
8. RESTRICTED AWARDS.
 
(a) A Restricted Award is an Award of Stock (“Restricted Stock”) or hypothetical
shares of Stock (“Restricted Stock Units”) having a value equal to the Fair
Market Value of an identical number of shares of Stock, which may, but need not,
provide that such Restricted Award will be subject to forfeiture and may not be
sold, assigned, transferred or otherwise disposed of, pledged or hypothecated as
collateral for a loan or as security for the performance of any obligation or
for any other purpose for such period (the “Restricted Period”) as the
 

 
 
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Committee shall determine.  In the discretion of the Committee, a Restricted
Award may be granted as a Performance Compensation Award under Section 13.
 
(b) Each Grantee granted Restricted Stock shall execute and deliver to the
Company an Award Agreement with respect to the Restricted Stock setting forth
the restrictions and other terms and conditions applicable to such Restricted
Stock.  If the Committee determines that the Restricted Stock shall be held by
the Company or in escrow rather than delivered to the Grantee pending the
release of the applicable restrictions, the Committee may require the Grantee to
additionally execute and deliver to the Company (i) an escrow agreement
satisfactory to the Committee, if applicable and (ii) the appropriate blank
stock power with respect to the Restricted Stock covered by such agreement.  If
a Grantee shall fail to execute an agreement evidencing an Award of Restricted
Stock and, if applicable, an escrow agreement and stock power, the Award shall
be null and void.  Subject to the restrictions set forth in the Award Agreement,
the Grantee generally shall have the rights and privileges of a Class P common
stockholder as to such Restricted Stock, including the right to vote such
Restricted Stock.  At the discretion of the Committee, cash dividends and Stock
dividends with respect to the Restricted Stock may be either currently paid to
the Grantee or withheld by the Company for the Grantee’s account, and interest
may be credited on the amount of the cash dividends withheld at a rate and
subject to such terms as determined by the Committee.  The cash dividends or
Stock dividends so withheld by the Committee and attributable to any particular
share of Stock (and earnings thereon, if applicable) shall be distributed to the
Grantee in cash or, at the discretion of the Committee, in Stock having a Fair
Market Value equal to the amount of such dividends, if applicable, upon the
release of restrictions on such Stock and, if such Stock is forfeited, the
Grantee shall have no right to such dividends.
 
(c) The terms and conditions of a grant of Restricted Stock Units shall be
reflected in a written Award Agreement.  No Stock shall be issued at the time a
Restricted Stock Unit is granted, and the Company will not be required to set
aside a fund for the payment of any such Award.  At the discretion of the
Committee, each Restricted Stock Unit (representing one share of Stock) may be
credited with cash distributions and Stock dividends paid by the Company in
respect of one share of Stock (“Dividend Equivalents”).  At the discretion of
the Committee, Dividend Equivalents may be either currently paid to the Grantee
or withheld by the Company for the Grantee’s account, and interest may be
credited on the amount of cash Dividend Equivalents withheld at a rate and
subject to such terms as determined by the Committee.  Dividend Equivalents
credited to a Grantee’s account and attributable to any particular Restricted
Stock Unit (and earnings thereon, if applicable) shall be distributed in cash
or, at the discretion of the Committee, in Stock having a Fair Market Value
equal to the amount of such Dividend Equivalents and earnings, if applicable, to
the Grantee upon settlement of such Restricted Stock Unit and, if such
Restricted Stock Unit is forfeited, the Grantee shall have no right to such
Dividend Equivalents.
 
(d) Restricted Stock awarded to a Grantee shall be subject to the following
restrictions until the expiration of the Restricted Period, and to such other
terms and conditions as may be set forth in the applicable Award Agreement:  (A)
if an escrow arrangement is used, the Grantee shall not be entitled to delivery
of the Stock certificate; (B) the Stock shall be subject to the restrictions on
transferability set forth in the Award Agreement; (C) the Stock shall be subject
to forfeiture to the extent provided in the applicable Award Agreement; and (D)
to the
 

 
 
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extent such shares of Stock are forfeited, the Stock certificates shall be
returned to the Company, and all rights of the Grantee to such shares of Stock
and as a stockholder with respect to such shares of Stock shall terminate
without further obligation on the part of the Company.
 
(e) Restricted Stock Units awarded to any Grantee shall be subject to
(A) forfeiture until the expiration of the Restricted Period, and satisfaction
of any applicable Performance Goals during such period, to the extent provided
in the applicable Award Agreement, and to the extent such Restricted Stock Units
are forfeited, all rights of the Grantee to such Restricted Stock Units shall
terminate without further obligation on the part of the Company and (B) such
other terms and conditions as may be set forth in the applicable Award
Agreement.
 
(f) Upon termination of employment with or service to the Company or any of its
Affiliates (including by reason of such Affiliate ceasing to be an Affiliate of
the Company), during the applicable Restricted Period, Restricted Stock and
Restricted Stock Units shall be forfeited; provided, that the Committee may
provide, by rule or regulation or in any Award Agreement, or may determine in
any individual case, that restrictions or forfeiture conditions relating to
Restricted Stock or Restricted Stock Units will be waived in whole or in part in
the event of terminations resulting from specified causes, and the Committee may
in other cases waive in whole or in part the forfeiture restrictions of
Restricted Stock or Restricted Stock Units.
 
(g) Unless otherwise determined by the Committee or set forth in the applicable
Award Agreement, upon a Change in Control of the Company, all Restricted Stock
and Restricted Stock Units shall become immediately vested and all restrictions
with respect thereto shall lapse, other than restrictions on transfer imposed
under the federal securities laws.
 
(h) With respect to Restricted Stock and Restricted Stock Units, the Restricted
Period shall commence on the Date of Grant and end at the time or times set
forth on a schedule established by the Committee in the applicable Award
Agreement.
 
(i) Upon the expiration of the Restricted Period with respect to any Restricted
Stock, the restrictions set forth in this Section 8 and the applicable Award
Agreement shall be of no further force or effect with respect to such Stock,
except as set forth in the applicable Award Agreement.  If an escrow arrangement
is used, upon such expiration, the Company shall deliver to the Grantee, or his
beneficiary, without charge, the Stock certificate evidencing the Restricted
Stock which has not then been forfeited and with respect to which the Restricted
Period has expired (to the nearest full share of Stock) and any cash
distributions or Stock dividends credited to the Grantee’s account with respect
to such Restricted Stock and the interest thereon, if any.  Upon the expiration
of the Restricted Period with respect to any outstanding Restricted Stock Units,
the Company shall deliver to the Grantee, or his beneficiary, without charge,
one share of Stock for each such outstanding Restricted Stock Unit (“Vested
Unit”) and cash equal to any Dividend Equivalents credited with respect to each
such Vested Unit in accordance with Section 8(c) hereof and the interest thereon
or, at the discretion of the Committee, in Stock having a Fair Market Value
equal to such Dividend Equivalents’ interest thereon, if any; provided, however,
that, if explicitly provided in the applicable Award Agreement, the Committee
may, in its sole discretion, elect to pay cash or part cash and part Stock in
lieu of delivering only Stock for Vested Units.  If a cash payment is made in
lieu of delivering Stock, the amount of such payment
 

 
 
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shall be equal to the Fair Market Value of the Stock as of the date on which the
Restricted Period lapsed with respect to such Vested Unit.
 
(j) Each certificate representing Restricted Stock awarded under the Plan shall
bear a legend in the form the Company deems appropriate.
 
9. STOCK APPRECIATION RIGHTS.
 
(a) A Stock Appreciation Right means the right pursuant to an Award granted
under this Section 9 to receive an amount set forth in paragraph (e) below upon
the exercise of the Award.  Stock Appreciation Rights may be granted either
alone (“Free Standing Rights”) or in conjunction with all or part of any Option
granted under the Plan (“Related Stock Appreciation Rights”).  The Committee
shall determine the Grantee to whom, and the time or times at which, grants of
Stock Appreciation Rights shall be made; the number of shares of Stock to be
subject to the Stock Appreciation Right; the exercise price per share of Stock
(“SAR exercise price”); and all other conditions of Stock Appreciation Rights.
No Related Stock Appreciation Right may be granted for more shares of Stock than
are subject to the Option to which it relates.  A Stock Appreciation Right must
be granted with an SAR exercise price not less than the Fair Market Value of a
share of Stock on the Date of Grant.  The number of shares of Stock subject to
the Stock Appreciation Right must be fixed on the Date of Grant of the Stock
Appreciation Right, and the right must not include any feature for the deferral
of compensation other than the deferral of recognition of income until the
exercise of the right.  The provisions of Stock Appreciation Rights need not be
the same with respect to each Grantee. Stock Appreciation Rights granted under
the Plan shall be subject to the following terms and conditions set forth in
this Section 9 and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable,
as set forth in the applicable Award Agreement.
 
(b) The Grantee of a Stock Appreciation Right shall not have any rights with
respect to such Award, unless and until such recipient has executed an Award
Agreement and delivered a fully executed copy thereof to the Company. Grantees
who are granted Stock Appreciation Rights shall have no rights as common
stockholders of the Company with respect to the grant or exercise of such
rights.
 
(c) Free Standing Rights shall be exercisable at such time or times and subject
to such terms and conditions as shall be determined by the Committee at or after
grant.
 
(d) Related Stock Appreciation Rights shall be exercisable only at such time or
times and to the extent that the Options to which they relate shall be
exercisable in accordance with the provisions of Section 7 above and this
Section 9 of the Plan.
 
(e) Upon exercise of a Stock Appreciation Right, the Grantee shall be entitled
to receive from the Company an amount equal to the product of (i) the excess of
the Fair Market Value, on the date of exercise, of one share of Stock over the
SAR exercise price per share of Stock specified in such Stock Appreciation Right
or its related Option, multiplied by (ii) the number of shares of Stock for
which such Stock Appreciation Right is exercised.  Payment with respect to the
exercise of a Stock Appreciation Right that is not subject to Code Section 409A
shall be paid on the date of exercise.  Payment with respect to the exercise of
a Stock
 

 
 
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Appreciation Right that is subject to Code Section 409A shall be paid at the
time specified in the Award in accordance with the provisions of Section
9(k).  Payment may be made in the form of Stock (with or without restrictions as
to substantial risk of forfeiture and transferability, as determined by the
Committee in its sole discretion), cash or a combination thereof, as determined
by the Committee.  Fractional shares of Stock resulting from the exercise of a
Stock Appreciation Right pursuant to this Section 9 shall be settled in cash.
 
(f) The exercise price of a Free Standing Right shall be determined by the
Committee, but shall not be less than 100% of the Fair Market Value of one share
of Stock on the Date of Grant of such Stock Appreciation Right.  A Related Stock
Appreciation Right granted simultaneously with or subsequent to the grant of an
Option and in conjunction therewith or in the alternative thereto shall have the
same exercise price as the related Option, shall be transferable only upon the
same terms and conditions as the related Option, and shall be exercisable only
to the same extent as the related Option; provided, however, that a Stock
Appreciation Right, by its terms, shall be exercisable only when the Fair Market
Value per share of Stock subject to the Stock Appreciation Right and related
Option exceeds the exercise price per share of Stock thereof and no Stock
Appreciation Rights may be granted in tandem with an Option unless the Committee
determines that the requirements of Section 9(a) are satisfied.
 
(g) Upon any exercise of a Related Stock Appreciation Right, the number of
shares of Stock for which the related Option shall be exercisable shall be
reduced by the number of shares of Stock for which the Stock Appreciation Right
shall have been exercised.  The number of shares of Stock for which a Related
Stock Appreciation Right shall be exercisable shall be reduced upon any exercise
of the related Option by the number of shares of Stock for which such Option
shall have been exercised.
 
(h) Unless otherwise determined by the Committee or set forth in an applicable
Award Agreement, upon a Change in Control of the Company, all Stock Appreciation
Rights shall become immediately vested and exercisable.
 
(i) Stock Appreciation Rights shall be transferable only when and to the extent
that an Option would be transferable under Section 7 of the Plan.
 
(j) Each individual Award Agreement shall describe the effect of the Grantee's
termination of employment or service with the Company or an Affiliate on the
exercisability of the Stock Appreciation Rights held by the Grantee, provided
that no Stock Appreciation Right shall remain exercisable beyond the expiration
of the original term of the Stock Appreciation Right.  Notwithstanding the
foregoing, the Committee may, at any time prior to any termination of such
employment or service, determine in its sole discretion that the exercise of any
Stock Appreciation Right after termination of such employment or other
relationship with the Company shall be subject to satisfaction of the conditions
precedent that the Grantee refrain from engaging, directly or indirectly, in any
activity which is competitive with any activity of the Company or any of its
Affiliates thereof and from otherwise acting, either prior to or after
termination of such employment or other relationship, in any manner inimical or
in any way contrary to the best interests of the Company and that the Grantee
furnish to the Company such information with respect to the satisfaction of the
foregoing condition precedent as the Committee shall reasonably request.
 

 
 
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(k) A Stock Appreciation Right that is subject to Code Section 409A shall
satisfy the requirements of this Section 9(k) and the additional conditions
applicable to nonqualified deferred compensation under Code Section 409A.  The
requirements herein shall apply in the event any Stock Appreciation Right under
this Plan is granted with an SAR exercise price less than the Fair Market Value
of the Stock underlying the Award on the date the Stock Appreciation Right is
granted (regardless of whether or not such SAR exercise price is intentionally
or unintentionally priced at less than Fair Market Value, or is materially
modified at a time when the Fair Market Value exceeds the SAR exercise price),
is granted to an Employee with respect to whom Stock does not constitute
"service recipient stock” (as defined in Treasury Regulation Section
1.409A-1(b)(5)(iii)), or is otherwise determined to constitute “nonqualified
deferred compensation” within the meaning of Code Section 409A.  Any such Stock
Appreciation Right may provide that it is exercisable at any time permitted
under the governing written instrument, but such exercise shall be limited to
fixing the measurement of the amount, if any, by which the Fair Market Value of
a share of Stock on the date of exercise exceeds the SAR exercise price (the
“SAR Amount”).  However, once the Stock Appreciation Right is exercised, the SAR
Amount may be paid only on the fixed time, payment schedule or other event
specified in the governing written instrument.
 
10. OTHER STOCK-BASED AWARDS.
 
(a) The Committee is authorized to grant Awards to Grantee in the form of Other
Stock-Based Awards, as deemed by the Committee to be consistent with the
purposes of the Plan and as evidenced by an Award Agreement. Other Stock-Based
Awards shall include a right or other interest granted to a Grantee under the
Plan that may be denominated or payable in, valued in whole or in part by
reference to, or otherwise based on or related to, Stock, including but not
limited to dividend equivalents or performance units, each of which may be
subject to the attainment of Performance Goals or a period of continued
employment or other terms or conditions as determined by the Committee. The
Committee shall determine the terms and conditions of such Other Stock-Based
Awards, consistent with the terms of the Plan, at the Date of Grant or
thereafter, including any Performance Goals and Performance Periods. Stock or
other securities or property delivered pursuant to an Award in the nature of a
purchase right granted under this Section 10 shall be purchased for such
consideration, paid for at such times, by such methods, and in such forms,
including, without limitation, Stock, other Awards, notes or other property, as
the Committee shall determine, subject to any required corporate action.
 
(b) Unless otherwise determined by the Committee, any Other Stock-Based Award
shall become immediately vested upon a Change in Control.
 
11. ADJUSTMENT OF AND CHANGES IN CAPITALIZATION.
 
(a) In the event that the outstanding shares of Stock shall be changed in number
or class by reason of split-ups, spin-offs, combinations, mergers,
consolidations or recapitalizations, or by reason of Stock dividends, the number
or class of shares of Stock which thereafter may be issued pursuant to Awards
granted under the Plan, both in the aggregate and as to any individual, and the
number and class of shares of Stock then subject to Awards theretofore granted
and the price per share of Stock payable upon exercise of such Award shall be
adjusted so as to reflect such change, all as determined by the Committee. In
the event there shall be any other change in
 

 
 
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the number or kind of the outstanding shares of Stock, or of any stock or other
securities or property into which such shares of Stock shall have been changed,
or for which it shall have been exchanged, then if the Committee shall determine
that such change equitably requires an adjustment in any outstanding Award
theretofore granted or which may be granted under the Plan, such adjustment
shall be made in accordance with such determination.  Any adjustments under this
Section 11 shall be made in a manner which does not adversely affect the
exemption provided pursuant to Rule 16b-3 or otherwise result in a violation of
Code Section 409A or the disqualification of any Incentive Stock
Option.  Further, with respect to Awards intended to qualify as
“performance-based compensation” under Code Section 162(m), such adjustments or
substitutions shall be made only to the extent that the Committee determines
that such adjustments or substitutions shall be made.
 
(b) Notice of any adjustment shall be given by the Company to each Grantee with
an Award which shall have been so adjusted and such adjustment (whether or not
such notice is given) shall be effective and binding for all purposes of the
Plan.
 
(c) Fractional shares of Stock resulting from any adjustment of Awards pursuant
to this Section 11 may be settled in cash or otherwise as the Committee may
determine.
 
(d) Notwithstanding the above, in the event of any of the following:  (i) the
Company is merged or consolidated with another corporation or entity and, in
connection therewith, consideration is received by stockholders of the Company
in a form other than stock or other equity interests of the surviving entity or
outstanding Awards are not to be assumed upon consummation of the proposed
transaction; (ii) all or substantially all of the assets of the Company are
acquired by another person; (iii) the reorganization or liquidation of the
Company; or (iv) the Company shall enter into a written agreement to undergo an
event described in clause (i), (ii) or (iii) above, then the Committee may, in
its discretion and upon at least 10 days’ advance notice to the affected
persons, cancel any outstanding Awards and cause the holders thereof to be paid,
in cash, stock or other property, or any combination thereof, the value of such
Awards based upon the price per share of Stock received or to be received by
other common stockholders of the Company in the event.  The terms of this
Section 11 may be varied by the Committee in any particular Award Agreement.
 
(e) In the event of a Change in Control, the Committee, in its discretion, may
take any action with respect to outstanding Awards that it deems appropriate,
which action may vary among Awards granted to individual Grantees; provided,
however, that such action shall not reduce the value of an Award.  In
particular, with respect to Options, the actions the Committee may take upon a
Change in Control include, but are not limited to, the following:  (i)
accelerating the time at which Options then outstanding may be exercised so that
such Options may be exercised in full for a limited period of time on or before
a specified date (before or after such Change in Control) fixed by the
Committee, after which specified date all unexercised Options and all rights of
Optionholders thereunder shall terminate, (ii) requiring the mandatory surrender
to the Company by selected Optionholders of some or all of the outstanding
Options held by such Optionholders (irrespective of whether such Options are
then exercisable) as of a date, before or after such Change in Control,
specified by the Committee, in which event the Committee shall thereupon cancel
such Options and the Company shall pay to each such Optionholder an amount of
cash per share equal to the excess, if any, of the Change in Control
 

 
 
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Value of the shares subject to such Option over the exercise price(s) under such
Options for such shares, (iii) make such adjustments to Options then outstanding
as the Committee deems appropriate to reflect such Change in Control (provided,
however, that the Committee may determine in its sole discretion that no
adjustment is necessary to Options then outstanding), or (iv) provide that the
number and class of shares of Stock covered by an Option theretofore granted
shall be adjusted so that such Option shall thereafter cover the number and
class of shares of Stock or other securities or property (including, without
limitation, cash) to which the Optionholder would have been entitled pursuant to
the terms of the agreement of merger, consolidation or sale of assets and
dissolution if, immediately prior to such merger, consolidation or sale of
assets and dissolution, the Optionholder had been the holder of record of the
number of shares of Stock then covered by such Option.  The provisions contained
in this paragraph shall not terminate any rights of a Grantee to further
payments pursuant to any other agreement with the Company with respect to a
Change in Control.
 
12. SECURITIES ACTS REQUIREMENTS.
 
(a) No Option granted pursuant to the Plan shall be exercisable in whole or in
part, and the Company shall not be obligated to sell any Stock subject to any
such Option, if such exercise and sale or issuance would, in the opinion of
counsel for the Company, violate the Securities Act or other Federal or state
statutes having similar requirements, as they may be in effect at that time; and
each Option shall be subject to the further requirement that, at any time that
the Committee shall determine, in their respective discretion, that the listing,
registration or qualification of the Stock subject to such Option under any
securities exchange requirements or under any applicable law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such Option or the issuance
of Stock thereunder, such Option may not be exercised or issued, as the case may
be, in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Committee.
 
(b) As a condition to the issuance of any Award that may be settled in Stock
under the Plan, the Committee may require the Grantee to furnish a written
representation that he or she is acquiring such Award for investment and not
with a view to distribution of the Stock to the public and a written agreement
restricting the transferability of the Stock of such Award, and may affix a
restrictive legend or legends on the face of the certificate representing such
Stock. Such representation, agreement and/or legend shall be required only in
cases where in the opinion of the Committee and counsel for the Company, it is
necessary to enable the Company to comply with the provisions of the Securities
Act or other Federal or state statutes having similar requirements, and any
stockholder who gives such representation and agreement shall be released from
it and the legend removed at such time as the shares of Stock to which they
applied are registered or qualified pursuant to the Securities Act or other
Federal or state statutes having similar requirements, or at such other time as,
in the opinion of the Committee and counsel for the Company, the representation
and agreement and legend cease to be necessary to enable the Company to comply
with the provisions of the Securities Act or other Federal or state statutes
having similar requirements.
 

 
 
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13. PERFORMANCE-BASED COMPENSATION.
 
(a) The Committee shall have the authority, at the time of grant of any Award
described in this Plan (other than Options and Stock Appreciation Rights granted
with an exercise price equal to or greater than the Fair Market Value per share
of Stock on the Date of Grant), to designate such Award or a portion of such
Award as a “Performance Compensation Award.”
 
(b) The Committee will, in its sole discretion, designate within the first 90
days of a Performance Period (or, if sooner, before twenty five percent (25%) of
the Performance Period has elapsed) which Grantees will be eligible to receive
Performance Compensation Awards in respect of such Performance Period.  However,
designation of a Grantee eligible to receive an Award hereunder for a
Performance Period shall not in any manner entitle the Grantee to receive
payment in respect of any Performance Compensation Award for such Performance
Period.  The determination as to whether or not such Grantee becomes entitled to
payment in respect of any Performance Compensation Award shall be decided solely
in accordance with the provisions of this Section 13.  Moreover, designation of
a Grantee eligible to receive an Award hereunder for a particular Performance
Period shall not require designation of such Grantee eligible to receive an
Award hereunder in any subsequent Performance Period and designation of one
person as a Grantee eligible to receive an Award hereunder shall not require
designation of any other person as a Grantee eligible to receive an Award
hereunder in such period or in any other period.
 
(c) With regard to a particular Performance Period, the Committee shall have
full discretion to select the length of such Performance Period, the type(s) of
Performance Compensation Awards to be issued, the Performance Criteria that will
be used to establish the Performance Goal(s), the kind(s) and/or level(s) of the
Performance Goals(s) that is (are) to apply and the Performance Formula.  Within
the first 90 days of a Performance Period (or, if sooner, before twenty five
percent (25%) of the Performance Period has elapsed), the Committee shall, with
regard to the Performance Compensation Awards to be issued for such Performance
Period, exercise its discretion with respect to each of the matters enumerated
in the immediately preceding sentence of this Section 13(c) and record the same
in writing.
 
(d) Payment of Performance Compensation Awards.
 
(i) Unless otherwise provided in the applicable Award Agreement, a Grantee must
be employed by the Company or an Affiliate on the last day of a Performance
Period to be eligible for payment in respect of a Performance Compensation Award
for such Performance Period.
 
(ii) A Grantee shall be eligible to receive payment in respect of a Performance
Compensation Award only to the extent that:  (A) the applicable Performance
Goals are achieved; and (B) the Performance Formula as applied against such
Performance Goals determines that all or some portion of such Grantee’s
Performance Compensation Award has been earned.
 
(iii) Prior to the payment of any Performance Compensation Award, the Committee
shall review and certify in writing whether, and to what extent, the
 

 
 
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Performance Goals have been achieved and, if so, calculate and certify in
writing that amount of the Performance Compensation Awards earned based upon the
Performance Formula.  The Committee shall then determine the actual size of each
Grantee’s Performance Compensation Award for the Performance Period and, in so
doing, may apply Negative Discretion in accordance with Section 13(d)(iv)
hereof, if and when it deems appropriate.
 
(iv) In determining the actual size of an individual Performance Compensation
Award, the Committee may reduce or eliminate the amount of the Performance
Compensation Award earned through the use of Negative Discretion if, in its sole
judgment, such reduction or elimination is appropriate.  With respect to any
Performance Compensation Award intended to constitute "performance-based
compensation" under Code Section 162(m), the Committee shall not have the
discretion to (A) grant or provide payment in respect of Performance
Compensation Awards if the Performance Goals have not been attained;
(B) increase a Performance Compensation Award above the maximum amount payable
under Section 13(d)(vi) or (vii) of the Plan; or (C) cause an increase in a
Grantee's Performance Compensation Award as a result of the use of Negative
Discretion with respect to another Grantee's Performance Compensation Award.  In
addition, if a Performance Compensation Award is based, in whole or in part, on
a percentage of a Grantee's salary, base pay or other compensation, the maximum
amount of the Performance Compensation Award must be fixed at the time the
Performance Goals are established.  Notwithstanding the foregoing, an Award
Agreement may provide that a Performance Compensation Award may be payable upon
death, disability or change of ownership or control prior to the attainment of
the Performance Goals, provided that any such Award will not constitute
"performance-based compensation" under Code Section 162(m) to the extent the
Award is actually paid prior to the attainment of the Performance Goals.
 
(v) Performance Compensation Awards shall be paid to Grantees as soon as
administratively practicable following completion of the certifications required
by this Section 13.
 
(vi) With respect to Performance Compensation Awards, Options and Stock
Appreciation Rights intended to constitute "performance-based compensation"
under Code Section 162(m), subject to the adjustment provisions of Section 11,
notwithstanding any provision contained in this Plan to the contrary, (A) no
more than 2,000,000 shares of Stock may be subject to Options granted under the
Plan to any one individual during any five (5) consecutive year period, (B) no
more than 2,000,000 shares of Stock may be subject to Stock Appreciation Rights
granted under the Plan to any one individual during any five (5) consecutive
year period, (C) no more than 1,000,000 shares of Restricted Stock may be
granted under the Plan to any one individual during any five (5) consecutive
year period, (D) no more than 1,000,000 shares of Stock may be subject to
Restricted Stock Units granted under the Plan to any one individual during any
five (5) consecutive year period, and (E) no more than 1,000,000 shares of Stock
may be subject to Other Stock-Based Awards granted under the Plan to any one
individual during any five (5) consecutive year period.
 

 
 
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(vii) With respect to Restricted Stock and Restricted Stock Units that are
intended to constitute "performance-based compensation" under Code Section
162(m),  the Committee has the discretion to determine whether dividends on such
Restricted Stock and Dividend Equivalents on such Restricted Stock Units are
intended to constitute "performance-based compensation."  If any dividends or
Dividend Equivalents are so intended, such dividends or Dividend Equivalents
must satisfy the requirements of Code Section 162(m) separately from the
underlying Restricted Awards.  With respect to any such dividends or Dividend
Equivalents, no Grantee may receive dividends on Restricted Stock or Dividend
Equivalents on Restricted Stock Units in an amount greater than $600,000 per
calendar year.
 
(viii) If, after the attainment of the applicable Performance Goals, payment of
a Performance Compensation Award in cash is accelerated to an earlier date, the
amount paid will be discounted to reasonably reflect the time value of
money.  Any Performance Compensation Award that has been deferred shall not
(between the date as of which the Award is deferred and the payment date)
increase (A) with respect to a Performance Compensation Award that is payable in
cash, by a measuring factor for each fiscal year greater than a reasonable rate
of interest set by the Committee or (B) with respect to a Performance
Compensation Award that is payable in Stock, by an amount greater than the
appreciation of a share of Stock from the date such Award is deferred to the
payment date.
 
(ix) With respect to any Performance Compensation Award intended to constitute
"performance-based compensation" under Code Section 162(m), no amount shall be
paid unless the shareholder approval requirements under Code Section 162(m) and
Treasury Regulations Section 1.162-27(e)(4) or any successor to such statute and
regulation have been satisfied.
 
14. WITHHOLDING OBLIGATIONS. To the extent provided by the terms of an Award
Agreement and subject to the discretion of the Committee, the Grantee may
satisfy any federal, state, provincial or local tax withholding obligation
relating to the exercise or acquisition of Stock under an Award by any of the
following means (in addition to the Company’s right to withhold from any
compensation paid to the Grantee by the Company) or by a combination of such
means:  (a) tendering a cash payment; (b) authorizing the Company to withhold
shares of Stock from the shares of Stock otherwise issuable to the Grantee as a
result of the exercise or acquisition of Stock under the Award, provided,
however, that no shares of Stock are withheld with a value exceeding the minimum
amount of tax required to be withheld by law; or (c) delivering to the Company
previously owned and unencumbered shares of Stock.
 
15. AMENDMENT OF THE PLAN AND AWARDS.
 
(a) The Board may at any time and from time to time alter, amend, suspend, or
terminate the Plan in whole or in part.  However, the Board may not make any
alteration or amendment which would decrease any authority granted to the
Committee hereunder in contravention of Rule 16b-3 and, except as provided in
Section 11 relating to adjustments upon changes in Stock and Section 15(c), no
amendment shall be effective unless approved by the stockholders of the Company
to the extent stockholder approval is necessary to satisfy any
 

 
 
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applicable laws, rules, regulations or securities exchange listing
requirements.  At the time of such amendment, the Board shall determine, upon
advice from counsel, whether such amendment will be contingent on stockholder
approval.  The Board may, in its sole discretion, submit any other amendment to
the Plan for stockholder approval.  No Awards may be granted under the Plan
while the Plan is suspended or after it is terminated, but Awards theretofore
granted may extend beyond the date of Plan suspension or termination.
 
(b) It is expressly contemplated that the Board may amend the Plan in any
respect the Board deems necessary or advisable to provide eligible Employees
with the maximum benefits provided or to be provided under the provisions of the
Code and the regulations promulgated thereunder relating to the nonqualified
deferred compensation provisions of Code Section 409A and/or to bring the Plan
and/or Awards granted under it into compliance therewith.
 
(c) Notwithstanding the foregoing, no amendment to or termination of the Plan
shall affect adversely any of the rights of any Grantee, without such Grantee’s
consent in writing. All changes described in this paragraph are at the sole
discretion of the Board, may be made at any time, and may have a retroactive
effective date.
 
(d) The Board at any time, and from time to time, may amend the terms of any one
or more Awards; provided, however, that the Board may not effect any amendment
which would otherwise constitute an impairment of the rights under any Award
unless (a) the Company requests the consent of the Grantee and (b) the Grantee
consents in writing.
 
16. GENERAL PROVISIONS.
 
(a) No Employment or Other Service Rights.  Nothing in the Plan or any
instrument executed or Award granted pursuant thereto shall confer upon any
Grantee any right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Award was granted or shall affect the right
of the Company or an Affiliate to terminate (i) the employment of an Employee
with or without notice and with or without cause, or (ii) the service of a
Consultant pursuant to the terms of such Consultant’s agreement with the Company
or an Affiliate, and any applicable provisions of the corporate law of the state
in which the Company or the Affiliate is incorporated, as the case may be.
 
(b) Code Section 409A.  If the Board (or its delegate) determines in its
discretion that an Award is determined to be “nonqualified deferred
compensation” subject to Code Section 409A, and that Grantee is a “specified
employee” as defined in Code Section 409A(a)(2)(B)(i) and the regulations and
other guidance issued thereunder, then the exercise or distribution of such
Award upon a separation from service may not be made before the date which is
six months after the date the Grantee separates from service with the Company or
any of its Affiliates.  Notwithstanding any other provision contained herein,
terms such as “termination of service,” “termination of employment” and
“termination of engagement” shall mean a “separation from service” within the
meaning of Code Section 409A, to the extent any exercise or distribution
hereunder could be deemed “nonqualified deferred compensation” for purposes
thereof.
 
(c) Section 16.  It is the intent of the Company that the Plan satisfy, and be
interpreted in a manner that satisfies, the applicable requirements of Rule
16b-3 so that Grantees
 

 
 
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will be entitled to the benefit of Rule 16b-3, or any other rule promulgated
under Section 16 of the Exchange Act, and will not be subject to short-swing
liability under Section 16 of the Exchange Act.  Accordingly, if the operation
of any provision of the Plan would conflict with the intent expressed in this
Section 16(c), such provision to the extent possible shall be interpreted and/or
deemed amended so as to avoid such conflict.
 
(d) Code Section 162(m).  To the extent the Committee issues any Award that is
intended to be exempt from the application of Code Section 162(m), the Committee
may, without stockholder or Grantee approval, amend the Plan or the relevant
Award Agreement retroactively or prospectively to the extent it determines
necessary in order to comply with any subsequent clarification of Code Section
162(m) required to preserve the Company’s federal income tax deduction for
compensation paid pursuant to any such Award.
 
17. CHANGES IN LAW.  The Board may amend the Plan and any outstanding Awards
granted thereunder in such respects as the Board shall, in its sole discretion,
deem advisable in order to incorporate in the Plan or any such Awards any new
provision or change designed to comply with or take advantage of requirements or
provisions of the Code or any other statute, or Rules or Regulations of the
Internal Revenue Service or any other federal or state governmental agency
enacted or promulgated after the adoption of the Plan.
 
18. CLAWBACKS.  To the extent required by applicable laws, rules, regulations or
securities exchange listing requirements, the Company shall have the right, and
shall take all actions necessary, to recover any amounts paid to any individual
under this Plan.
 
19. LEGAL MATTERS.
 
(a) Every right of action by or on behalf of the Company or by any stockholder
against any past, present or future member of the Board, officer or employee of
the Company arising out of or in connection with this Plan shall, irrespective
of the place where such action may be brought and irrespective of the place of
residence of any such Grantee, cease and be barred by the expiration of three
years from whichever is the later of (i) the date of the act or omission in
respect of which such right of action arises, or (ii) the first date upon which
there has been made generally available to stockholders an annual report of the
Company and a proxy statement for the annual meeting of stockholders following
the issuance of such annual report, which annual report and proxy statement
alone or together set forth, for the related period, the aggregate number of
shares of Stock for which Awards were granted; and any and all rights of action
by any employee or executive of the Company (past, present or future) against
the Company arising out of or in connection with this Plan shall, irrespective
of the place where such action may be brought, cease and be barred by the
expiration of three years from the date of the act or omission in respect of
which such right of action arises.
 
(b) This Plan and all determinations made and actions taken pursuant hereto
shall be governed by the law of Texas, applied without giving effect to any
conflicts-of-law principles, and construed accordingly.
 
20. ELECTRONIC DELIVERY AND ACCEPTANCE.  The Company may, in its sole
discretion, deliver any documents related to the Award by electronic means.  To
participate in
 

 
 
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the Plan, a Grantee consents to receive all applicable documentation by
electronic delivery and through an on-line (and/or voice activated) system
established and maintained by the Company or a third party vendor designated by
the Company.
 
21. FOREIGN EMPLOYEES.  Without the amendment of this Plan, the Board may
provide for the participation in the Plan by employees who are subject to the
laws of foreign countries or jurisdictions, and such participation may be on
such terms and conditions different from those specified in this Plan as may be
administratively necessary or necessary or desirable to foster and promote
achievement of the purposes of this Plan and, in furtherance of such purposes
the Board or its designee may make such modifications, amendments, procedures,
subprograms and the like as may be necessary or advisable to comply with the
provisions of laws of other countries or jurisdictions in which Affiliates
operate or have employees.
 
 
 
 

 
 
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