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Exhibit 10.1
 

SIGA TECHNOLOGIES, INC.
2010 STOCK INCENTIVE PLAN
(as amended and restated, effective February 2, 2012)
 
ARTICLE I
General
 
1.1   Purpose
 
The purpose of the SIGA Technologies, Inc. 2010 Stock Incentive Plan (the
“Plan”) is to establish a flexible vehicle through which SIGA Technologies,
Inc., a Delaware corporation (the “Company”), may offer equity-based
compensation incentives to eligible personnel of the Company and its
subsidiaries in order to attract, motivate, reward and retain such personnel and
to further align the interests of such personnel with those of the stockholders
of the Company.
 
1.2   Administration
 
(a)   Administration by Committee; Constitution of Committee. The Plan shall be
administered by the Compensation Committee of the Board of Directors of the
Company (the “Board”) or such other committee or subcommittee as the Board may
designate (the “Committee”). The members of the Committee shall be appointed by,
and serve at the pleasure of, the Board. If the Committee does not exist, or for
any other reason determined by the Board, the Board may take any action under
the Plan that would otherwise be the responsibility of the Committee.
 
(b)   Committee’s Authority. The Committee shall have the authority to (i)
exercise all of the powers granted to it under the Plan, (ii) construe,
interpret and implement the Plan and any award certificates issued under the
Plan, (iii) prescribe, amend and rescind rules and regulations relating to the
Plan, including rules governing its own operations, (iv) make all determinations
necessary or advisable in administering the Plan, (v) correct any defect, supply
any omission and reconcile any inconsistency in the Plan, and (vi) amend the
Plan to reflect changes in applicable law.
 
(c)   Committee Action; Delegation. Actions of the Committee shall be taken by
the vote of a majority of its members. Except as otherwise required by
applicable law, any action may be taken by a written instrument signed by a
majority of the Committee members, and action so taken shall be fully as
effective as if it had been taken by a vote at a meeting. Notwithstanding the
foregoing or any other provision of the Plan, the Committee (or the Board acting
instead of the Committee), may delegate to one or more officers of the Company
the authority to designate the individuals (other than such officer(s)), among
those eligible to receive awards pursuant to the terms of the Plan, who will
receive rights or options under the Plan and the size of each such grant, to the
fullest extent permitted by applicable law.
 
(d)   The determination of the Committee on all matters relating to the Plan or
any award under the Plan shall be final, binding and conclusive.
 
(e)   Limit on Committee Members’ Liability. No member of the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan or any award thereunder.
 
1.3   Persons Eligible for Awards
 
The persons eligible to receive awards under the Plan are those officers,
directors (whether or not they are employed by the Company), and salaried
employees of, and consultants to, the Company and any direct or indirect
subsidiaries (collectively, “key persons”) as the Committee in its absolute
discretion shall select.
 
 
 
 
 

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1.4   Types of Awards Under Plan
 
Awards may be made under the Plan in the form of (a) incentive stock options,
(b) non-qualified stock options, (c) stock appreciation rights, (d) restricted
stock, (e) restricted stock units and (f) unrestricted stock, all as more fully
set forth in Article II. The term “award” means any of the foregoing. No
incentive stock option may be granted to a person who is not an employee of the
Company or one of its subsidiary corporations on the date of grant.
 
1.5   Shares Available for Awards; Adjustments to Awards
 
(a)   Aggregate Number Available; Certificate Legends. Subject to adjustment as
provided under Section 1.5(d)(i) below, the total number of shares of common
stock of the Company, par value $0.0001 per share (“Common Stock”) with respect
to which awards may be granted pursuant to the Plan shall not exceed the sum
of 2,000,000 shares. Shares issued pursuant to the Plan may be authorized but
unissued Common Stock, authorized and issued Common Stock held in the Company’s
treasury or Common Stock acquired by the Company for the purposes of the Plan.
The Committee may direct that any stock certificate evidencing shares issued
pursuant to the Plan shall bear a legend setting forth such restrictions on
transferability as may apply to such shares.
 
(b)   Individual Limits. Except as provided in this Section 1.5(b), no provision
of this Plan shall be deemed to limit the number or value of shares otherwise
available for awards under the Plan with respect to which the Committee may make
awards to any one eligible person. Subject to adjustment as provided in Section
1.5(d)(i) hereof, the total number of shares of Common Stock with respect to
which awards may be granted to any one employee of the Company or a subsidiary
during any one calendar year shall not exceed 1,000,000 shares. Stock options
and stock appreciation rights granted and subsequently canceled or deemed to be
canceled in a calendar year shall count against this limit even after their
cancellation.
 
(c)   Certain Shares to Become Available Again. The following shares of Common
Stock shall again become available for awards under the Plan: (i) any shares
that are subject to an award under the Plan and that remain unissued upon the
cancellation or termination of such award for any reason whatsoever, (ii) any
shares subject to awards that are settled in cash, (iii) any shares subject to
an award that are withheld or surrendered in order to pay the exercise or
purchase price under an award or to satisfy the tax withholding obligations
associated with the exercise, vesting or settlement of an award and (iv) any
shares of restricted stock forfeited pursuant to the terms of the Plan or the
award, provided that any dividends paid on such shares are also forfeited.  With
respect to stock appreciation rights, only the shares that actually are issued
in settlement of a stock appreciation right shall be counted against the limits
of Sections 1.5(a) and (b).
 
(d)   Adjustments to Available Shares and Existing Awards Upon Changes in Common
Stock or Certain Other Events. Upon certain changes in Common Stock or other
corporate events, the number of shares of Common Stock available for issuance
with respect to awards that may be granted under the Plan, and that are the
subject of existing awards, shall be adjusted or shall be adjustable, as
follows:
 
(i)   Shares Available for Grants. In the event of any change in the number of
shares of Common Stock outstanding by reason of any stock dividend or split,
reverse stock split, recapitalization, merger, consolidation, combination or
exchange of shares or similar corporate change, the maximum number of shares of
Common Stock with respect to which the Committee may grant awards under Section
1.5(a) above and the annual individual limit under Section 1.5(b) above, shall
be appropriately adjusted by the Committee. In the event of any change in the
number of shares of Common Stock outstanding by reason of any other event or
transaction, the Committee may, but need not, make such adjustments in the
maximum number and class of shares of Common Stock with respect to which the
Committee may grant awards under Section 1.5(a) above and the annual individual
limit under Section 1.5(b) above, in each case as the Committee may deem
appropriate.
 
(ii)   Outstanding Restricted Stock and Restricted Stock Units. Unless the
Committee in its absolute discretion otherwise determines, any securities or
other property (including dividends paid in cash) received by a grantee with
respect to a share of restricted stock, which has not yet vested, as a result of
any dividend, stock split, reverse stock split, recapitalization, merger,
consolidation, combination, exchange of shares or otherwise, will not vest until
such share of restricted stock vests, and shall be promptly deposited with the
Company.  The Committee shall adjust outstanding grants of shares of restricted
stock units to reflect any corporate event as the Committee may deem appropriate
to prevent the enlargement or dilution of rights of grantees.
 
 
 
 
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(iii)   Outstanding Options and Stock Appreciation Rights – Increase or Decrease
in Issued Shares Without Consideration. Subject to any required action by the
stockholders of the Company, in the event of any increase or decrease in the
number of issued shares of Common Stock resulting from a subdivision or
consolidation of shares of Common Stock or the payment of a stock dividend (but
only on the shares of Common Stock), or any other increase or decrease in the
number of such shares effected without receipt of consideration by the Company,
the Committee shall proportionally adjust the number of shares of Common Stock
subject to each outstanding option and stock appreciation right and the exercise
price-per-share of Common Stock of each such option and stock appreciation
right, to the extent necessary to prevent the enlargement or dilution of rights
with respect to such options and stock appreciation rights.
 
(iv)   Outstanding Options, Stock Appreciation Rights and Restricted Stock Units
– Certain Mergers. Subject to any required action by the shareholders of the
Company, in the event that the Company shall be the surviving corporation in any
merger or consolidation (except a merger or consolidation as a result of which
the holders of shares of Common Stock receive securities of another
corporation), each option, stock appreciation right and restricted stock unit
outstanding on the date of such merger or consolidation shall pertain to and
apply to the securities which a holder of the number of shares of Common Stock
subject to such option, stock appreciation right and restricted stock unit would
have received in such merger or consolidation.
 
(v)   Outstanding Options, Stock Appreciation Rights and Restricted Stock Units
– Certain Other Transactions. In the event of (1) a dissolution or liquidation
of the Company, (2) a merger or consolidation involving the Company in which the
Company is not the surviving corporation or (3) a merger or consolidation
involving the Company in which the Company is the surviving corporation but the
holders of shares of Common Stock receive securities of another corporation
and/or other property, including cash, the Committee shall, in its absolute
discretion, either:
 
(A)   cancel, effective immediately prior to such event, each option, stock
appreciation right and restricted stock unit outstanding immediately prior to
such event (whether or not then exercisable), and, in full consideration of such
cancellation, pay to the grantee (1) to whom such option or stock appreciation
right was granted an amount in cash, for each share of Common Stock subject to
such option or stock appreciation right, equal to the excess of (x) the value,
as determined by the Committee in its absolute discretion, of the property
(including cash) received by the holder of a share of Common Stock as a result
of such event over (y) the exercise price of such option or stock appreciation
right and (2) to whom such restricted stock unit was granted, for each share of
Common Stock subject to such award, the value, as determined by the Committee in
its sole discretion, of the property (including cash) received by the holder of
a share of Common Stock as a result of such event;
 
(B) (1)   cause all options and stock appreciation rights, whether or not
otherwise exercisable, to be fully exercisable on a date at least 10 days prior
to the completion of such event, and to expire as of the completion of such
event and (2) cancel, effective immediately prior to the completion of such
event, each restricted stock unit outstanding immediately prior to such event
(whether or not then vested), and, in full consideration of such cancellation,
pay to the grantee to whom such restricted stock unit was granted, for each
share of Common Stock subject to such award, the value, as determined by the
Committee in its sole discretion, of the property (including cash) received by
the holder of a share of Common Stock as a result of such event; or
 
 
 
 
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(C)   if the acquiring or successor entity is publicly traded on a major
securities exchange, provide for the exchange of each option, stock appreciation
right and restricted stock unit outstanding immediately prior to such event
(whether or not then exercisable) for an option, stock appreciation right or
restricted stock unit with respect to, as appropriate, the number of shares of
stock in such acquiring or successor entity which a holder of the number of
shares of Common Stock subject to such award would have received and, incident
thereto, make an equitable adjustment as determined by the Committee in its
absolute discretion in the exercise price of the option or stock appreciation
right or the number of shares or amount of property subject to the option, stock
appreciation right or restricted stock unit or, if appropriate, provide for a
cash payment to the grantee to whom such option, stock appreciation right or
restricted stock unit was granted in partial consideration for the exchange of
the option, stock appreciation right or restricted stock unit.
 
(vi)   Outstanding Options, Stock Appreciation Rights and Restricted Stock Units
– Other Changes. In the event of any change in the capitalization of the Company
or a corporate change other than those specifically referred to in Section
1.5(d)(iii), (iv) or (v) above, the Committee may, in its absolute discretion,
make such adjustments in the number and class of shares subject to options,
stock appreciation rights and restricted stock units outstanding on the date on
which such change occurs and in the per-share exercise price of each such option
or stock appreciation right as the Committee may consider appropriate to prevent
dilution or enlargement of rights. In addition, if and to the extent the
Committee determines it is appropriate, the Committee may elect to cancel each
option, stock appreciation right and restricted stock unit outstanding
immediately prior to such event (whether or not then exercisable), and, in full
consideration of such cancellation, pay to the grantee to whom such option,
stock appreciation right and restricted stock unit was granted an amount in
cash, (1) for each share of Common Stock subject to such option or stock
appreciation right, equal to the excess of (x) the Fair Market Value of Common
Stock on the date of such cancellation over (y) the exercise price of such award
and (2) for each share of Common Stock subject to such restricted stock unit,
equal to the Fair Market Value of a share of  Common Stock on the date of such
cancellation.
 
(vii)   No Other Rights. Except as expressly provided in the Plan, no grantee
shall have any rights by reason of any subdivision or consolidation of shares of
stock of any class, the payment of any dividend, any increase or decrease in the
number of shares of stock of any class or any dissolution, liquidation, merger
or consolidation of the Company or any other corporation. Except as expressly
provided in the Plan, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares of Common Stock subject to an award or the exercise price of
any option or stock appreciation right.
 
1.6   Definitions of Certain Terms
 
(a)   The term “Cause” shall have the meaning set forth in any employment
agreement between the Participant and the Company in effect as of the date the
event giving rise to cause occurred. In the absence of such an employment
agreement provision, “Cause” shall mean: (i) the Participant's conviction of any
crime (whether or not involving the Company) constituting a felony in the
jurisdiction involved; (ii) conduct of the Participant related to the
Participant's employment for which either criminal or civil penalties against
the Participant or the Company may be sought; (iii) material violation of the
Company's policies, including, without limitation, those relating to sexual
harassment, the disclosure or misuse of confidential information, or those set
forth in Company manuals or statements of policy; (iv) serious neglect or
misconduct in the performance of the Participant's duties for the Company or
willful or repeated failure or refusal to perform such duties; or (v) any
material violation by the Participant of the terms of any agreement between the
Participant and the Company, including, without limitation, any employment or
non-competition agreement. Any rights the Company may have hereunder in respect
of the events giving rise to Cause shall be in addition to the rights the
Company may have under any other agreement with a Participant or at law or in
equity. Any determination of whether a Participant's employment is (or is deemed
to have been) terminated for Cause shall be made by the Committee in its sole
discretion, which determination shall be final and binding on all parties. If,
subsequent to a Participant's termination of employment (whether voluntary or
involuntary) without Cause, it is discovered that the Participant's employment
could have been terminated for Cause, such Participant's employment shall be
deemed to have been terminated for Cause. A Participant's termination of
employment for Cause shall be effective as of the date of the occurrence of the
event giving rise to Cause, regardless of when the determination of Cause is
made.
 
 
 
 
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(b)   The term “employment” shall be deemed to mean an employee’s employment
with, or a consultant’s provision of services to, the Company or any Company
subsidiary and each Board member’s service as a Board member.
 
(c)   The “Fair Market Value” of a share of Common Stock on any day shall be the
last sale price on such date on the Nasdaq Stock Market, or, if no reported
sales take place on the applicable date, the average of the high bid and low
asked price of Common Stock on such date or, if no such quotation is made on
such date, on the next preceding day on which there were quotations, provided
that such quotations shall have been made within the ten (10) business days
preceding the applicable date, and if there is no such quotation, the Fair
Market Value shall be determined in good faith by the Committee in a manner
consistently applied.
 
(d)   The term “incentive stock option” means an option that is intended to
qualify for special federal income tax treatment pursuant to sections 421 and
422 of the Code as now constituted or subsequently amended, or pursuant to a
successor provision of the Code, and which is so designated in the applicable
award certificate. Any option that is not specifically designated as an
incentive stock option shall under no circumstances be considered an incentive
stock option. Any option that is not an incentive stock option is referred to
herein as a “non-qualified stock option”.
 
(e)   In relation to the Company, the term “subsidiary corporation” shall be
defined in accordance with sections 424(f) of the Code.
 
(f)   A grantee shall be deemed to have “terminated employment” on (i) the date
the grantee ceases to be employed by, or to provide consulting services for, the
Company or any Company subsidiary, or any corporation (or any of its
subsidiaries) which assumes the grantee’s award in a transaction to which
section 424(a) of the Code applies; or (ii) the date the grantee ceases to be a
Board member, provided, however, that in the case of a grantee (x) who is, at
the time of reference, both an employee or consultant and a Board member, or (y)
who ceases to be engaged as an employee, consultant or Board member and
immediately is engaged in another of such relationships with the Company or any
Company subsidiary, the grantee shall be deemed to have a “termination of
employment” upon the later of the dates determined pursuant to clauses (i) and
(ii) of this Section 1.6(f). For purposes of clause (i) of this Section 1.6(f),
a grantee who continues his or her employment or consulting relationship with a
Company subsidiary subsequent to its sale by the Company shall have a
termination of employment upon the date of such sale. The Committee may in its
absolute discretion determine whether any leave of absence constitutes a
termination of employment for purposes of the Plan and the impact, if any, of
any such leave of absence on awards theretofore made under the Plan.
 
ARTICLE II
Awards Under the Plan
 
2.1   Certificates Evidencing Awards
 
Each award granted under the Plan shall be evidenced by a written certificate
(“award certificate”) which shall contain such provisions as the Committee may
in its absolute discretion deem necessary or desirable. By accepting an award
pursuant to the Plan, a grantee thereby agrees that the award shall be subject
to all of the terms and provisions of the Plan and the applicable award
certificate.
 
2.2   Terms of Stock Options and Stock Appreciation Rights
 
(a)   Stock Option Grants. The Committee may grant incentive stock options and
non-qualified stock options (collectively, “options”) to purchase shares of
Common Stock from the Company, to such key persons, and in such amounts and
subject to such vesting and forfeiture provisions and other terms and
conditions, as the Committee shall determine in its absolute discretion, subject
to the provisions of the Plan.
 
 
 
 
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(b)   Stock Appreciation Right Grants; Types of Stock Appreciation Rights.  The
Committee may grant stock appreciation rights to such key persons, and in such
amounts and subject to such vesting and forfeiture provisions and other terms
and conditions, as the Committee shall determine in its sole discretion, subject
to the provisions of the Plan.  The terms of a stock appreciation right may
provide that it shall be automatically exercised for a cash payment upon the
happening of a specified event that is outside the control of the grantee and
that it shall not be otherwise exercisable.  Stock appreciation rights may be
granted in connection with all or any part of, or independently of, any option
granted under the Plan.  A stock appreciation right granted in connection with
an option may be granted at or after the time of grant of such option.
 
(c)   Nature of Stock Appreciation Rights.  The grantee of a stock appreciation
right shall have the right, subject to the terms of the Plan and the applicable
award certificate, to receive from the Company an amount equal to (i) the excess
of the Fair Market Value of a share of Common Stock on the date of exercise of
the stock appreciation right over the stock appreciation right exercise price,
which shall be an amount, not be less than the Fair Market Value of a share of
Common Stock on the date of grant, determined by the Committee and set forth in
the award certificate (or over the option exercise price if the stock
appreciation right is granted in connection with an option), multiplied by (ii)
the number of shares with respect to which the stock appreciation right is
exercised.  Upon the exercise of a stock appreciation right granted in
connection with an option, the number of shares subject to the option shall be
reduced by the number of shares with respect to which the stock appreciation
right is exercised. Payment upon exercise of a stock appreciation right shall be
in cash or in shares of Common Stock (valued at their Fair Market Value on the
date of exercise of the stock appreciation right) or both, all as the
Administrator shall determine in its sole discretion. Upon the exercise of an
option in connection with which a stock appreciation right has been granted, the
number of shares subject to the stock appreciation right shall be reduced by the
number of shares with respect to which the option is exercised.
 
(d)   Option Exercise Price. Each award certificate with respect to an option
shall set forth the amount (the “option exercise price”) payable by the grantee
to the Company upon exercise of the option evidenced thereby. The option
exercise price per share shall be determined by the Committee in its absolute
discretion; provided, however, that the option exercise price shall be at least
100% of the Fair Market Value of a share of Common Stock on the date the option
is granted, and provided further that in no event shall the option exercise
price be less than the par value of a share of Common Stock.
 
(e)   Exercise Period. The exercise of an option or stock appreciation right
shall be subject to the following:
 
(i)   Ten-Year Limit. No stock option or stock appreciation right shall be
exercisable more than 10 years after the date of grant.
 
(ii)   Vesting. The Committee shall determine and set forth in the applicable
award certificate the date or dates on which such option or stock appreciation
right shall become vested, which may be based on continued employment and/or the
achievement of specified performance goals.
 
(iii)   Beginning of Exercise Period. An option or stock appreciation right will
be exercisable when it vests, and may be exercised in whole or in part.
 
(iv)   End of Exercise Period. Unless the applicable award certificate otherwise
provides, once an installment becomes exercisable, it shall remain exercisable
until the earlier of (A) the tenth anniversary of the date of grant of the award
or (B) the expiration, cancellation or termination of the award.
 
 
 
 
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(v)   Termination of Employment – Generally. Except as otherwise provided below
in this Section 2.2(c), or in the applicable award certificate, upon a
Participant’s termination of employment, the following shall apply:
 
(A)   Generally. If a Participant’s employment terminates for any reason other
than death, disability or cause, then: (x) all options and stock appreciation
rights not yet exercisable as of the date of such termination shall expire on
the date of such termination and (y) all options and stock appreciation rights
that are exercisable as of the date of such termination shall remain exercisable
for the 90-day period following such termination of employment.
 
(B)   Death or Disability. If a Participant’s employment terminates due to the
Participant’s death or disability, then: (x) all options and stock appreciation
rights not yet exercisable as of the date of such termination shall expire on
the date of such termination and (y) all options and stock appreciation rights
that are exercisable as of the date of such termination shall remain exercisable
until the first anniversary of the Participant’s termination of employment.
 
(C)   Cause. If a Participant’s employment is terminated for cause, all options
and stock appreciation rights not theretofore exercised shall terminate upon the
commencement of business on the date of the Participant’s termination of
employment.
 
(D)   Restrictions on Exercise Following Death. Any exercise of an option or
stock appreciation right following a grantee’s death shall be made only by the
grantee’s executor or administrator or other duly appointed representative
reasonably acceptable to the Committee, unless the grantee’s will specifically
disposes of such option or stock appreciation right, in which case such exercise
shall be made only by the recipient of such specific disposition. If a grantee’s
personal representative or the recipient of a specific disposition under the
grantee’s will shall be entitled to exercise any option or stock appreciation
right pursuant to the preceding sentence, such representative or recipient shall
be bound by all the terms and conditions of the Plan and the applicable award
certificate which would have applied to the grantee.
 
(vi)   Special Rules for Incentive Stock Options. No option that remains
exercisable for more than three months following a grantee’s termination of
employment for any reason other than death (including death within three months
after the termination of employment or within one year after a termination due
to disability) or disability, or for more than one year following a grantee’s
termination of employment as the result of disability, may be treated as an
incentive stock option.
 
(f)   Incentive Stock Options: $100,000 Limitation. To the extent that the
aggregate Fair Market Value (determined as of the time the option is granted) of
the stock with respect to which incentive stock options are first exercisable by
any employee during any calendar year shall exceed $100,000, or such higher
amount as may be permitted from time to time under section 422 of the Code, such
options shall be treated as non-qualified stock options.
 
(g)   Incentive Stock Options: 10% Owners. Notwithstanding the foregoing
provisions of this Section 2.2, an incentive stock option may not be granted
under the Plan to an individual who, at the time the option is granted, owns
stock possessing more than 10% of the total combined voting power of all classes
of stock of his or her employer or of its parent or subsidiary (as such
ownership may be determined for purposes of section 422(b)(6) of the Code)
unless (i) at the time such incentive stock option is granted the option
exercise price is at least 110% of the Fair Market Value of the shares subject
thereto and (ii) the incentive stock option by its terms is not exercisable
after the expiration of 5 years from the date it is granted.
 
2.3   Exercise of Options and Stock Appreciation Rights
 
 
 
 
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Subject to the other provisions of this Article II, each option and stock
appreciation right granted under the Plan shall be exercisable as follows:
 
(a)   Notice of Exercise. An option shall be exercised by the filing of a
written notice with the Company or the Company’s designated exchange agent (the
“exchange agent”), on such form and in such manner as the Committee shall in its
absolute discretion prescribe.
 
(b)   Payment of Option Exercise Price. Any written notice of exercise of an
option shall be accompanied by payment for the shares being purchased. Such
payment shall be made: (i) by certified or official bank check (or the
equivalent thereof acceptable to the Company or its exchange agent) for the full
option exercise price; or (ii) with the consent of the Committee, by delivery of
shares of Common Stock owned by the grantee (whether acquired by option exercise
or otherwise, provided that if such shares were acquired pursuant to the
exercise of a stock option, they were acquired at least six months prior to the
option exercise date or such other period as the Committee may from time to time
determine) having a Fair Market Value (determined as of the exercise date) equal
to all or part of the option exercise price and a certified or official bank
check (or the equivalent thereof acceptable to the Company or its exchange
agent) for any remaining portion of the full option exercise price; (iii) by
means of a brokered cashless exercise; or (iv) at the discretion of the
Committee and to the extent permitted by law, by such other provision,
consistent with the terms of the Plan, as the Committee may from time to time
prescribe.
 
(c)   Delivery of Certificates Upon Exercise. Promptly after receiving payment
of the full option exercise price, or after receiving notice of the exercise of
a stock appreciation right, the Company or its exchange agent shall deliver to
the grantee or to such other person as may then have the right to exercise the
award, certificate or certificates for the shares of Common Stock for which the
award has been exercised or shall establish an account evidencing ownership of
such shares in uncertificated form. If the method of payment employed upon
option exercise so requires, and if applicable law permits, a grantee may direct
the Company, or its exchange agent, as the case may be, to deliver the stock
certificate(s) to the grantee’s stockbroker.
 
(d)   No Shareholder Rights. No grantee of an option or stock appreciation right
(or other person having the right to exercise such award) shall have any of the
rights of a shareholder of the Company with respect to shares subject to such
award until the issuance of a stock certificate to such person for such shares
or the establishment of such account. Except as otherwise provided in Section
1.5(d) above, no adjustment shall be made for dividends, distributions or other
rights (whether ordinary or extraordinary, and whether in cash, securities or
other property) for which the record date is prior to the date such stock
certificate is issued or such account is established.
 
2.4   Compensation in Lieu of Exercise of an Option
 
Upon written application of the grantee of an option, the Committee in its
absolute discretion may determine to substitute, for the exercise of such
option, compensation to the grantee not in excess of the difference between the
option exercise price and the Fair Market Value of the shares covered by such
written application on the date of such application. Such compensation shall be
in shares of Common Stock, and the payment thereof may be subject to conditions,
all as the Committee shall determine in its absolute discretion. In the event
compensation is substituted pursuant to this Section 2.4 for the exercise, in
whole or in part, of an option, the number of shares subject to the option shall
be reduced by the number of shares for which such compensation is substituted.
 
2.5   Transferability of Options and Stock Appreciation Rights
 
Except as otherwise provided in an applicable award certificate evidencing an
option or stock appreciation right, during the lifetime of a grantee, each
option or stock appreciation right granted to a grantee shall be exercisable
only by the grantee and no option or stock appreciation right shall be
assignable or transferable otherwise than by will or by the laws of descent and
distribution. Any attempt to transfer any option or stock appreciation right
other than as permitted herein shall be void and immediately cancelled, and no
such option or stock appreciation right shall in any manner be liable for or
subject to the debts, contracts, liabilities or torts of any person who shall be
entitled to such option or stock appreciation right, nor shall any option or
stock appreciation right be subject to attachment or legal process for or
against such person. The Committee may, in any applicable
 
 
 
 
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award certificate evidencing an option (other than an incentive stock option to
the extent inconsistent with the requirements of section 422 of the Code
applicable to incentive stock options) or stock appreciation right, permit a
grantee to transfer all or some of the options or stock appreciation rights to
(A) the grantee’s spouse, children or grandchildren (“immediate family
members”), (B) a trust or trusts for the exclusive benefit of such immediate
family members, or (C) other parties approved by the Committee in its absolute
discretion. Following any such transfer, any transferred options and stock
appreciation rights shall continue to be subject to the same terms and
conditions as were applicable immediately prior to the transfer, and the
transferee shall be subject to all obligations under the Plan as if such person
were the grantee.
 
2.6   Grant of Restricted Stock
 
(a)   Restricted Stock Grants. The Committee may grant restricted shares of
Common Stock to such key persons, in such amounts and subject to such vesting
and forfeiture provisions and other terms and conditions as the Committee shall
determine in its absolute discretion, subject to the provisions of the Plan.
Restricted stock awards may be made independently of or in connection with any
other award under the Plan. A grantee of a restricted stock award shall have no
rights with respect to such award unless such grantee accepts the award within
such period as the Committee shall specify by accepting delivery of an award
certificate in such form as the Committee shall determine and, in the event the
restricted shares are newly issued by the Company, makes payment to the Company
or its exchange agent in an amount at least equal to the par value of the shares
as required by the Committee and in accordance with the applicable Delaware law.
 
(b)   Issuance of Stock Certificate(s). Promptly after a grantee accepts a
restricted stock award, the Company or its exchange agent shall issue to the
grantee a stock certificate or stock certificates for the shares of Common Stock
covered by the award or shall establish an account evidencing ownership of the
stock in uncertificated form. Upon the issuance of such stock certificate(s) or
establishment of such account, the grantee shall have the rights of a
shareholder with respect to the restricted stock, subject to: (i) the
nontransferability restrictions and forfeiture provision described in Sections
2.6(d) and 2.6(e) below; (ii) in the Committee’s absolute discretion, a
requirement that any dividends paid on such shares shall be held in escrow until
all restrictions on such shares have lapsed; and (iii) any other restrictions
and conditions contained in the applicable award certificate.
 
(c)   Custody of Stock Certificate(s). Unless the Committee shall otherwise
determine, any stock certificates issued evidencing shares of restricted stock
shall remain in the possession of the Company until such shares are free of any
restrictions specified in the applicable award certificate. The Committee may
direct that such stock certificate(s) bear a legend setting forth the applicable
restrictions on transferability and that any such account include electronic
coding indicating such restrictions.
 
(d)   Nontransferability. Shares of restricted stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as otherwise
specifically provided in the Plan or the applicable award certificate. The
Committee at the time of grant shall specify the date or dates (which may depend
upon or be related to a period of continued employment with the Company, the
attainment of performance goals or other conditions or a combination of such
conditions) on which the nontransferability of the restricted stock shall lapse.
 
(e)   Forfeiture Upon Termination of Employment. Except as may otherwise be
provided by the Committee at any time prior to a grantee’s termination of
employment, a grantee’s termination of employment for any reason (including
death) shall cause the immediate forfeiture of all shares of restricted stock
that have not yet vested as of the date of such termination of employment.
Unless the Committee determines otherwise, all dividends paid on such shares
also shall be forfeited, whether by termination of any escrow arrangement under
which such dividends are held, by the grantee’s repayment of dividends received
directly, or otherwise.
 
2.7   Grant of Unrestricted Stock
 
The Committee may grant (or sell at a purchase price at least equal to par
value) shares of Common Stock free of restrictions under the Plan, to such key
persons and in such amounts as the Committee shall determine in its absolute
discretion. Shares may be thus granted or sold in respect of past services or
other valid consideration.
 
 
 
 
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2.8   Right of Recapture
 
If at any time after the date on which a grantee has been granted or become
vested in an award pursuant to the achievement of performance goals, the
Committee determines that the earlier determination as to the achievement of the
performance goals was based on incorrect data and that in fact the performance
goals had not been achieved or had been achieved to a lesser extent than
originally determined, then (i) any award or portion of an award granted based
on such incorrect determination shall be forfeited, (ii) any award or portion of
an award that became vested based on such incorrect determination shall be
deemed to be not vested, and (iii) any amounts paid to the grantee based on such
incorrect determination shall be paid by the grantee to the Company upon notice
from the Company.
 
2.9   Grant of Restricted Stock Units
 
(a)   Restricted Stock Unit Grants. The Committee may grant restricted stock
units to such key persons, in such amounts, and subject to such terms and
conditions as the Committee shall determine in its sole discretion, subject to
the provisions of the Plan. Restricted stock units may be awarded independently
of or in connection with any other award under the Plan. A grantee of a
restricted stock unit shall have no rights with respect to such award unless
such grantee accepts the award within such period as the Committee shall specify
by accepting delivery of a Grant Certificate in such form as the Committee shall
determine. A grant of a restricted stock unit entitles the grantee to receive a
share of Common Stock or, in the sole discretion of the Committee, the value of
a share, on a date specified in the award certificate.  If no date is specified,
the grantee shall receive such share or value on the date that the restricted
stock unit vests.
 
(b)   Vesting/Nontransferability.  The Committee shall specify at the time of
grant the date or dates (which may depend upon or be related to a period of
continued employment with the Company, the achievement of performance goals or
other conditions or a combination of such conditions) on which the restricted
stock units shall vest.  Restricted stock units may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as otherwise
specifically provided in the applicable award certificate.
 
(c)   Consequence of Termination of Employment. Except as may otherwise be
provided by the Committee in a award certificate or otherwise, a grantee’s
termination of employment for any reason (including death) shall cause the
immediate forfeiture of all restricted stock units that have not yet vested
prior to, and do not vest on account of, such termination of employment.
 
(d)   Shareholder Rights.  The grantee of a restricted stock unit will have the
rights of a shareholder only as to shares for which a stock certificate has been
issued pursuant to the award and not with respect to any other shares subject to
the award.
 
ARTICLE III
Miscellaneous
 
3.1   Amendment of the Plan; Modification of Awards
 
(a)   Amendment of the Plan. The Board may from time to time suspend,
discontinue, revise or amend the Plan in any respect whatsoever, except that no
such amendment shall materially impair any rights or materially increase any
obligations under any award theretofore made under the Plan without the consent
of the grantee (or, upon the grantee’s death, the person having the right to
exercise the award). For purposes of this Section 3.1, any action of the Board
or the Committee that in any way alters or affects the tax treatment of any
award or that in the absolute discretion of the Board is necessary to prevent an
award from being subject to tax under Section 409A of the Code shall not be
considered to materially impair any rights of any grantee. The Board shall
determine, in its absolute discretion, whether to submit any amendment of the
Plan to stockholders for approval; in making such determination it is expected
that the Board will take into account the prerequisites for favorable tax
treatment to the Company and grantees of awards made under the Plan, and such
other considerations as the Board deems relevant.
 
 
 
 
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(b)   Modification of Awards. The Committee may cancel any award under the Plan.
The Committee also may amend any outstanding award certificate, including,
without limitation, by amendment which would: (i) accelerate the time or times
at which the award becomes unrestricted or vested or may be exercised; (ii)
waive or amend any goals, restrictions or conditions set forth in the award
certificate; or (iii) waive or amend any applicable provision of the Plan or
award certificate with respect to the termination of the award upon termination
of employment, provided however, that no such amendment may lower the exercise
price of an outstanding option or stock appreciation right. However, any such
cancellation or amendment (other than an amendment pursuant to Section 1.5(d))
above that materially impairs the rights or materially increases the obligations
of a grantee under an outstanding award shall be made only with the consent of
the grantee (or, upon the grantee’s death, the person having the right to
exercise the award).
 
3.2   Consent Requirement
 
(a)   No Plan Action without Required Consent. If the Committee shall at any
time determine that any Consent (as defined in Section 3.2(b) below) is
necessary or desirable as a condition of, or in connection with, the granting of
any award under the Plan, the issuance or purchase of shares or exercise of
other rights thereunder, or the taking of any other action thereunder (each such
action being hereinafter referred to as a “Plan action”), then such Plan action
shall not be taken or permitted, in whole or in part, unless and until such
Consent shall have been effected or obtained to the full satisfaction of the
Committee.
 
(b)   Consent Defined. The term “Consent” as used herein with respect to any
Plan action means (i) any and all listings, registrations or qualifications in
respect thereof upon any securities exchange or under any federal, state or
local law, rule or regulation, (ii) any and all written agreements and
representations by the grantee with respect to the disposition of shares, or
with respect to any other matter, which the Committee shall deem necessary or
desirable to comply with the terms of any such listing, registration or
qualification or to obtain an exemption from the requirement that any such
listing, qualification or registration be made and (iii) any and all consents,
clearances and approvals in respect of a Plan action by any governmental or
other regulatory bodies.
 
(c)   Representations, Legend. The Committee may require as a condition to the
receipt of shares of Common Stock pursuant to an award under the Plan that the
grantee or any other person receiving shares pursuant to the award represent
that such person is not acquiring the shares with a view to distribution thereof
and to make such other securities law related representations as the Committee
shall request. In addition to any legend required by the Plan, any certificate
representing Common Stock acquired in respect of an award may bear such legends
as the Company deems advisable to assure compliance with all applicable laws and
regulations.
 
3.3   Nonassignability
 
(a)   General. Except as expressly provided herein or by the terms of an award
certificate: (a) no award or right granted to any person under the Plan or under
any award certificate shall be assignable or transferable other than by will or
by the laws of descent and distribution; and (b) all rights granted under the
Plan or any award certificate shall be exercisable during the life of the
grantee only by the grantee or the grantee’s legal representative.
 
(b)   Payment to Minors, Etc. Any benefit payable to or for the benefit of a
minor, an incompetent person or other person incapable of receipt thereof shall
be deemed paid when paid to such person's guardian or to the party providing or
reasonably appearing to provide for the care of such person, and such payment
shall fully discharge the Committee, the Board, the Company, its affiliates and
their employees, agents and representatives with respect thereto.
 
3.4   Requirement of Notification of Election Under Section 83(b) of the Code
 
If any grantee shall, in connection with the acquisition of shares of Common
Stock under the Plan, make the election permitted under section 83(b) of the
Code (i.e., an election to include in gross income in the year of transfer the
amounts specified in section 83(b)), such grantee shall notify the Company of
such election within 10 days of filing notice of the election with the Internal
Revenue Service, in addition to any filing and notification required pursuant to
regulations issued under the authority of Code section 83(b).
 
 
 
 
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3.5   Requirement of Notification Upon Disqualifying Disposition Under Section
421(b) of the Code
 
Each grantee of an incentive stock option shall notify the Company of any
disposition of shares of Common Stock issued pursuant to the exercise of such
option under the circumstances described in section 421(b) of the Code (relating
to certain disqualifying dispositions), within 10 days of such disposition.
 
3.6   Withholding Taxes
 
(a)   With Respect to Cash Payments. Whenever cash is to be paid pursuant to an
award under the Plan, the Company shall be entitled to deduct therefrom an
amount sufficient in its opinion to satisfy all federal, state and other
governmental tax withholding requirements related to such payment.
 
(b)   With Respect to Delivery of Common Stock. Whenever shares of Common Stock
are to be delivered pursuant to an award under the Plan, the Company shall be
entitled to require as a condition of delivery that the grantee remit to the
Company an amount sufficient in the opinion of the Company to satisfy all
federal, state and other governmental tax withholding requirements related
thereto. In lieu of such a cash remittance by the Participant, the Committee may
elect to withhold from delivery shares having a value equal to the amount of tax
to be withheld. Such shares shall be valued at their Fair Market Value as of the
date on which the amount of tax to be withheld is determined. Fractional share
amounts shall be settled in cash. Such a withholding election may be made with
respect to all or any portion of the shares to be delivered pursuant to an
award.
 
3.7   Employment Provisions
 
(a)   Right of Discharge Reserved. Nothing in the Plan or in any award
certificate shall confer upon any grantee the right to continue employment with
the Company or any affiliated entity or affect any right which the Company or
any affiliated entity may have to terminate such employment.
 
(b)   Confidentiality. The acceptance of an award by a grantee shall be deemed
to be a covenant by the grantee that he or she will not disclose to anyone
outside the Company or its affiliates, or use in any manner other than in the
furtherance of the Company's or its affiliate's business, without written
authorization from the Company, any confidential information or proprietary
information relating to the business of the Company or its affiliates that is
acquired by a grantee prior to the grantee's termination of employment.
 
3.8   Nature of Payments
 
(a)   Consideration for Services Performed. Any and all grants of awards and
issuances of shares of Common Stock under the Plan shall be in consideration of
services performed for the Company by the grantee.
 
(b)   Not Taken into Account for Benefits. All such grants and issuances shall
constitute a special incentive payment to the grantee and shall not be taken
into account in computing the amount of salary or compensation of the grantee
for the purpose of determining any benefits under any pension, retirement,
profit-sharing, bonus, life insurance or other benefit plan of the Company or
under any agreement between the Company and the grantee, unless such plan or
agreement specifically otherwise provides.
 
3.9   Non-Uniform Determinations
 
The Committee’s determinations under the Plan need not be uniform and may be
made by it selectively among persons who receive, or who are eligible to
receive, awards under the Plan (whether or not such persons are similarly
situated). Without limiting the generality of the foregoing, the Committee shall
be entitled, among other things, to make non-uniform and selective
determinations, and to enter into non-uniform and selective award certificates,
as to (a) the persons to receive awards under the Plan, (b) the terms and
provisions of awards under the Plan, and (c) the treatment of leaves of absence
pursuant to Section 1.6(f) above.
 
 
 
 
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3.10   Severability of Provisions
 
If any provision of the Plan shall be held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provisions hereof, and
this Plan shall be construed and enforced as if such provisions had not been
included.
 
3.11   Other Payments or Awards
 
Nothing contained in the Plan shall be deemed in any way to limit or restrict
the Company from making any award or payment to any person under any other plan,
arrangement or understanding, whether now existing or hereafter in effect.
 
3.12   Headings
 
Any Article, Section or other subdivision headings contained herein are for the
purpose of convenience only and are not intended to expand, limit or otherwise
define the contents of such subdivisions.
 
3.13   Effective Date and Term of Plan
 
(a)   Adoption; Shareholder Approval. The Plan was adopted by the Board on May
13, 2010, subject to approval by the Company’s shareholders. All awards under
the Plan prior to such shareholder approval are subject in their entirety to
such approval. If such approval is not obtained prior to the first anniversary
of the date of adoption of the Plan, the Plan and all awards thereunder shall
terminate on that date.
 
(b)   Termination of Plan. Unless sooner terminated by the Board or pursuant to
paragraph (a) above, the provisions of the Plan respecting the grant of any
award pursuant to which shares of Common Stock will be granted shall terminate
on the tenth anniversary of the date of the Plan’s adoption by the Board. All
awards made under the Plan prior to the termination of the Plan shall remain in
effect until such awards have been satisfied or terminated in accordance with
the terms and provisions of the Plan and the applicable award certificates.
 
3.14   Restriction on Issuance of Stock Pursuant to Awards
 
The Company shall not permit any shares of Common Stock to be issued pursuant to
awards granted under the Plan unless such shares of Common Stock are fully paid
and non-assessable, within the meaning of applicable law.
 
3.15   Governing Law
 
Except to the extent preempted by any applicable federal law, the Plan will be
construed and administered in accordance with the laws of the State of Delaware,
without giving effect to principles of conflict of laws.
 
 
 
 
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