Exhibit 10.2

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KiOR, INC.
2011 LONG-TERM INCENTIVE PLAN

1. Plan. This KiOR, Inc. 2011 Long-Term Incentive Plan (this “Plan”) was adopted
by the Board of Directors of KiOR, Inc., a Delaware corporation (the “Company”),
to reward certain officers, employees and directors of the Company and its
Subsidiaries by enabling them to acquire shares of Common Stock and by providing
for certain cash benefits.

2. Objectives. This Plan is designed to attract and retain officers, employees
and directors of the Company and its Subsidiaries, to encourage the sense of
proprietorship of such officers, employees and directors, to stimulate the
active interest of such persons in the development and financial success of the
Company and its Subsidiaries, and to provide such persons with additional
incentive and reward opportunities designed to enhance the profitable growth of
the Company and its Subsidiaries. These objectives are to be accomplished by
making Awards under this Plan and thereby aligning the interests of Participants
and the Company’s stockholders, motivating Participants to act in the long-term
best interests of the Company and its Subsidiaries, and providing Participants
with a proprietary interest in the growth and performance of the Company and its
Subsidiaries.

3. Definitions. As used herein, the terms set forth below shall have the
following respective meanings:

(a) “Award” means any Option, SAR, Stock Award, Restricted Stock Unit Award,
Performance Stock Unit Award, Cash Award or Performance Award granted, whether
singly, in combination or in tandem, to a Participant pursuant to such
applicable terms, conditions and limitations (including treatment as a
Performance Award) as the Committee may establish.

(b) “Award Agreement” means a written notice or agreement setting forth the
terms, conditions and limitations applicable to an Award, to the extent the
Committee determines such agreement is necessary.

(c) “Board” means the Board of Directors of the Company.

(d) “Cash Award” means an award denominated in cash.

(e) “Change in Control” means a change in ownership or control of the Company
effected through any of the following transactions, but only if such transaction
constitutes a change in the ownership or effective control of a corporation or a
change in the ownership of a substantial portion of the assets of a corporation
under Section 409A of the Code and accompanying U.S. Treasury regulations:

i. a merger, consolidation or other reorganization approved by the Company’s
stockholders, unless securities representing more than 50% of the total combined
voting power of the voting securities of the successor company are immediately
thereafter beneficially owned, directly or indirectly and in substantially the
same proportion, by the persons who beneficially owned the Company’s outstanding
voting securities immediately prior to such transaction, or

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ii. a stockholder-approved sale, transfer or other disposition of all or
substantially all of the Company’s assets in complete liquidation or dissolution
of the Company, or

iii. the acquisition, directly or indirectly by any person or related group of
persons (other than the Company or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Company), of
beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than 50% of the total combined voting power of the
Company’s outstanding securities pursuant to a tender or exchange offer made
directly to the Company’s stockholders.

(f) In no event shall any public offering of the Company’s securities be deemed
to constitute a Change in Control.

(g) “Code” means the Internal Revenue Code of 1986, as amended.

(h) “Committee” means such committee of two or more members of the Board as is
designated by the Board to administer this Plan, or the full Board if so
designated.

(i) “Common Stock” means the Class A Common Stock, par value $.0001 per share,
of the Company.

(j) “Company” means KiOR, Inc., a Delaware corporation.

(k) “Disabled” or “Disability” means an individual (i) is unable to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months or (ii) is,
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, receiving income replacement benefits for a
period of not less than three months under a Company-sponsored accident and
health plan. Notwithstanding the foregoing, with respect to an Incentive Stock
Option, “Disability” means a permanent and total disability, within the meaning
of Section 22(e)(3) of the Code, as determined by the Plan Committee in good
faith, upon receipt of medical advice from one or more individuals, selected by
the Plan Committee, who are qualified to give professional medical advice.

(l) “Director” means a member of the Board of Directors of the Company.

(m) “Effective Date” means the date on which the Company first receives payment
for the shares of Common Stock it sells under the first registration statement
filed under the Securities Act of 1933, as amended, and respecting an
underwritten primary offering by the Company of shares of Common Stock that is
declared effective under that Act and the shares registered by that registration
statement are issued and sold by the Company (otherwise than pursuant to the
exercise of any overallotment option).

(n) “Employee” means an employee or officer of the Company or any of its
Subsidiaries.

(o) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

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(p) “Fair Market Value” means, as of a particular date, (i) if the shares of
Common Stock are listed on a national securities exchange, the final closing
sales price per share of Common Stock as reported on the consolidated
transaction reporting system of such national securities exchange on that date,
or, if there shall have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported, (ii) if the shares of
Common Stock are not so listed but are quoted by The NASDAQ Stock Market LLC,
the mean between the highest and lowest sales price per share of Common Stock on
the consolidated transaction reporting system for The NASDAQ Stock Market LLC on
that date, or, if there shall have been no such sale so reported on that date,
on the last preceding date on which such a sale was so reported, (iii) if the
shares of Common Stock are not so listed or quoted, the mean between the closing
bid and asked price on that date, or, if there are no quotations available for
such date, on the last preceding date on which such quotations shall be
available, as reported by The NASDAQ Stock Market LLC, or, if not reported by
The NASDAQ Stock Market LLC, by OTC Markets Group Inc., or (iv) if none of the
above are applicable, the fair market value of a share of Common Stock as
determined in good faith by the Committee.

(q) “Grant Date” means the date an Award is granted to a Participant pursuant to
this Plan.

(r) “Grant Price” means the price at which a Participant may exercise his or her
right to receive cash or Common Stock, as applicable, under the terms of an
Award.

(s) “Incentive Stock Option” means an Option that is intended to comply with the
requirements set forth in Section 422 of the Code.

(t) “Non-Qualified Performance Award” means a Performance Award that is not
intended to qualify as qualified performance-based compensation under
Section 162(m) of the Code, as described in Section 8(a)(vii)(A) of this Plan.

(u) “Non-Qualified Stock Option” means an Option that is not an Incentive Stock
Option.

(v) “Option” means a right to purchase a specified number of shares of Common
Stock at a specified Grant Price, which may be an Incentive Stock Option or a
Non-Qualified Stock Option.

(w) “Participant” means an Employee or Director to whom an Award has been
granted under this Plan.

(x) “Performance Award” means an Award made pursuant to this Plan that is
subject to the attainment of one or more performance goals.

(y) “Performance Goal” means a standard established by the Committee to
determine in whole or in part whether a Qualified Performance Award shall be
earned.

(z) “Performance Stock Unit” means a unit evidencing the right to receive in
specified circumstances one share of Common Stock or equivalent value in cash.

(aa) “Performance Stock Unit Award” means an Award of Performance Stock Units
that, upon attainment of the performance goals, entitles the Participant to
shares of Common Stock.

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(bb) “Plan” has the meaning set forth in Section 1.

(cc) “Qualified Performance Award” means a Performance Award made to a
Participant who is an Employee that is intended to qualify as qualified
performance-based compensation under Section 162(m) of the Code, as described in
Section 8(a)(vii)(B) of this Plan.

(dd) “Restricted Stock” means Common Stock that is restricted or subject to
forfeiture provisions.

(ee) “Restricted Stock Unit” means a unit evidencing the right to receive in
specified circumstances one share of Common Stock or equivalent value in cash
that is restricted or subject to forfeiture provisions.

(ff) “Restricted Stock Unit Award” means an Award in the form of Restricted
Stock Units.

(gg) “Restriction Period” means a period of time beginning as of the Grant Date
of an Award of Restricted Stock or Restricted Stock Units and ending as of the
date upon which the Common Stock subject to such Award is issued (if not
previously issued), no longer restricted or no longer subject to forfeiture
provisions.

(hh) “Stock Appreciation Right” or “SAR” means a right to receive a payment, in
cash or Common Stock, equal to the excess of the Fair Market Value or other
specified valuation of a specified number of shares of Common Stock on the date
the right is exercised over a specified Grant Price.

(ii) “Stock Award” means an Award in the form of shares of Common Stock,
including an Award of Restricted Stock.

(jj) “Subsidiary” means (i) with respect to any Awards other than Incentive
Stock Options, any corporation, limited liability company or similar entity of
which the Company directly or indirectly owns shares representing more than 50%
of the voting power of all classes or series of equity securities of such
entity, which have the right to vote generally on matters submitted to a vote of
the holders of equity interests in such entity, and (ii) with respect to Awards
of Incentive Stock Options, any subsidiary within the meaning of Section 424(f)
of the Code.

4. Duration; Transition Relief.

(a) Duration. This Plan will expire on the tenth anniversary of the Effective
Date or, if later, the tenth anniversary of any subsequent approval of the Plan
by stockholders, and no Awards may be granted on or after the expiration of this
Plan; provided, however, that any Award granted prior to the expiration of this
Plan shall remain outstanding in accordance with its terms.

(b) Transition Relief. This Plan qualifies for the transition relief from the
deductibility limitation of Section 162(m) of the Code as provided under
Treasury Regulation § 162(m)-27(f).

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5. Administration.

(a) Authority of the Committee. This Plan shall be administered by the Committee
except as otherwise provided herein. Subject to the provisions hereof, the
Committee shall have full and exclusive power and authority to administer this
Plan and to take all actions that are specifically contemplated hereby or are
necessary or appropriate in connection with the administration hereof. The
Committee shall also have full and exclusive power to interpret this Plan and to
adopt such rules, regulations and guidelines for carrying out this Plan as it
may deem necessary or proper, all of which powers shall be exercised in the best
interests of the Company and in keeping with the objectives of this Plan.
Subject to Section 5(c) hereof, the Committee may, in its discretion, provide
for the extension of the exercisability of an Award, accelerate the vesting or
exercisability of an Award, eliminate or make less restrictive any restrictions
contained in an Award, waive any restriction or other provision of this Plan
(insofar as such provision relates to Awards) or an Award or otherwise amend or
modify an Award in any manner that is (i) not adverse to the Participant to whom
such Award was granted, (ii) consented to by such Participant or
(iii) authorized by Section 15 hereof; provided, however, that no such action
shall permit the term of any Option to be greater than ten years from the
applicable Grant Date. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in this Plan or in any Award in the
manner and to the extent the Committee deems necessary or desirable to further
the purposes of this Plan. Any decision of the Committee with respect to Awards
or in the interpretation and administration of this Plan shall lie within its
sole and absolute discretion and shall be final, conclusive and binding on all
parties concerned.

(b) Indemnification. No member of the Committee or officer of the Company to
whom the Committee has delegated authority in accordance with the provisions of
Section 5(d) hereof shall be liable for anything done or omitted to be done by
him or her, by any member of the Committee or by any officer of the Company in
connection with the performance of any duties under this Plan, except for his or
her own willful misconduct or as expressly provided by statute.

(c) Prohibition on Repricing of Awards. No Option or SAR may be repriced,
replaced, regranted through cancellation or modified without stockholder
approval (except in connection with a change in the Company’s capitalization),
if the effect would be to reduce the Grant Price for the shares underlying such
Award.

(d) Delegation of Authority. The Committee may delegate to the President and to
other senior officers of the Company its duties under this Plan pursuant to such
conditions or limitations as the Committee may establish with respect to Awards,
except that the Committee may not delegate to any person the authority to grant
Awards to, or take other action with respect to, Participants who are subject to
Section 16 of the Exchange Act. The Committee may engage or authorize the
engagement of a third party administrator to carry out administrative functions
under this Plan.

6. Eligibility. All Employees and Directors are eligible for Awards under this
Plan. The Committee shall select the Participants in this Plan from time to time
for the grant of Awards under this Plan. In no event will an Incentive Stock
Option be granted to any person other than an Employee.

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7. Common Stock Available for Awards. Subject to the provisions of Section 15
hereof, no Award shall be granted if it shall result in the aggregate number of
shares of Common Stock issued under this Plan plus the number of shares of
Common Stock covered by or subject to Awards then outstanding (after giving
effect to the grant of the Award in question) to exceed 10% of number of shares
of Common Stock and Class B Common Stock, par value $.0001 per share, of the
Company outstanding on the Effective Date. All shares of Common Stock available
under this Plan may be the subject of Incentive Stock Options.

The number of shares of Common Stock that are the subject of Awards under this
Plan that are forfeited, terminated or expire unexercised shall again
immediately become available for Awards hereunder. The number of shares of
Common Stock available under this Plan shall not be increased by shares of
Common Stock tendered, surrendered or withheld in connection with the exercise
or settlement of an Award or the Company’s tax withholding obligations. The
Committee may from time to time adopt and observe such procedures concerning the
counting of shares against the maximum shares available under this Plan as it
may deem appropriate. The Board and the appropriate officers of the Company
shall from time to time take whatever actions are necessary to file any required
documents with governmental authorities, stock exchanges and transaction
reporting systems to ensure that shares of Common Stock are available for
issuance pursuant to Awards.

8. Awards.

(a) The Committee shall determine the type or types of Awards to be made under
this Plan and shall designate from time to time the individuals who are to be
the recipients of such Awards. Each Award shall be evidenced in such
communications as the Committee deems appropriate, including in an Award
Agreement, and shall contain such terms, conditions and limitations as shall be
determined by the Committee in its sole discretion. Awards may consist of those
listed in this Section 8(a) and may be granted singly, in combination or in
tandem. Awards may also be granted in combination or in tandem with, in
replacement of, or as alternatives to, grants or rights under this Plan or any
other plan of the Company or any of its Subsidiaries, including the plan of any
acquired entity; provided, however, that, except as contemplated in Section 15
hereof, no Option or SAR may be issued in exchange for the cancellation of an
Option or SAR with a higher Grant Price nor may the Grant Price of any Option or
SAR be reduced. All or part of an Award may be subject to conditions established
by the Committee. Upon the termination of employment by a Participant, any
unexercised, deferred, unvested or unpaid Awards shall be treated as set forth
in the applicable Award Agreement or in any other agreement with the
Participant.

(i) Option. An Award may be in the form of an Option. An Option awarded to an
Employee pursuant to this Plan may consist of either an Incentive Stock Option
or a Non-Qualified Stock Option. An Option awarded to a Director may only
consist of a Non-Qualified Stock Option. On the Grant Date, the Grant Price of
an Option shall not be less than the Fair Market Value of the Common Stock
subject to such Option. The term of the Option shall extend no more than ten
years after the Grant Date. Options may not include provisions that “reload” the
Option upon exercise. Subject to the foregoing provisions, the terms, conditions
and limitations applicable to any Options awarded pursuant to this Plan,
including the Grant Price, the term of the Options, the number of shares subject
to the Option and the date or dates upon which they become exercisable, shall be
determined by the Committee.

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The aggregate Fair Market Value of shares of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by a Participant
during any calendar year under this Plan and any other stock option plan of the
Company or any of its Subsidiaries shall not exceed $100,000. Such Fair Market
Value shall be determined as of the date on which each such Incentive Stock
Option is granted. In the event that the aggregate Fair Market Value of shares
of Common Stock with respect to such Incentive Stock Options exceeds $100,000,
then Incentive Stock Options granted hereunder to such Participant shall, to the
extent and in the order required by regulations promulgated under the Code (or
any other authority having the force of regulations), automatically be deemed to
be Non-Qualified Stock Options, but all other terms and provisions of such
Incentive Stock Options shall remain unchanged. In the absence of such
regulations (and authority), or in the event such regulations (or authority)
require or permit a designation of the Options which shall cease to constitute
Incentive Stock Options, Incentive Stock Options granted hereunder shall, to the
extent of such excess and in the order in which they were granted, automatically
be deemed to be Non-Qualified Stock Options, but all other terms and provisions
of such Incentive Stock Options shall remain unchanged.

No Incentive Stock Option may be granted to an individual if, at the time of the
proposed grant, such individual owns stock possessing more than ten percent of
the total combined voting power of all classes of stock of the Company or any of
its Subsidiaries, unless (i) the exercise price of such Incentive Stock Option
is at least one hundred and ten percent of the Fair Market Value of a share of
Common Stock at the time such Incentive Stock Option is granted and (ii) such
Incentive Stock Option is not exercisable after the expiration of five years
from the date such Incentive Stock Option is granted.

(ii) Stock Appreciation Rights. An Award may be in the form of an SAR. On the
Grant Date, the Grant Price of an SAR shall be not less than the Fair Market
Value of the Common Stock subject to such SAR. The holder of a tandem SAR may
elect to exercise either the Option or the SAR, but not both. The exercise
period for an SAR shall extend no more than ten years after the Grant Date. SARs
may not include provisions that “reload” the SAR upon exercise. Subject to the
foregoing provisions, the terms, conditions and limitations applicable to any
SARs awarded pursuant to this Plan, including the Grant Price, the term of any
SARs and the date or dates upon which they become exercisable, shall be
determined by the Committee.

(iii) Stock Award. An Award may be in the form of a Stock Award. The terms,
conditions and limitations applicable to any Stock Award, including, but not
limited to, vesting or other restrictions, shall be determined by the Committee.

(iv) Restricted Stock Unit Awards. An Award may be in the form of a Restricted
Stock Unit Award. The terms, conditions and limitations applicable to a
Restricted Stock Unit Award, including, but not limited to, the Restriction
Period and the right to dividend equivalents, shall be determined by the
Committee.

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(v) Performance Stock Unit Awards. An Award may be in the form of a Performance
Stock Unit Award. The terms, conditions and limitations applicable to any
Performance Stock Unit Award, including, but not limited to, vesting or other
restrictions, shall be determined by the Committee. Performance Stock Unit
Awards shall be in the form of a Non-Qualified Performance Award or a Qualified
Performance Award and shall have a minimum performance period of one year from
the date of grant.

(vi) Cash Award. An Award may be in the form of a Cash Award. The terms,
conditions and limitations applicable to any Cash Awards pursuant to this Plan,
including, but not limited to, vesting or other restrictions, shall be
determined by the Committee.

(vii) Performance Award. Without limiting the type or number of Awards that may
be made under the other provisions of this Plan, an Award described above that
is granted to an Employee may also be in the form of a Performance Award. The
terms, conditions and limitations applicable to an Award that is a Performance
Award shall be determined by the Committee. The Committee shall set performance
goals in its discretion which, depending on the extent to which they are met,
will determine the value and/or amount of Performance Awards that will be paid
and/or the portion that may be exercised.

(A) Non-Qualified Performance Awards. Performance Awards granted to Employees
that are not intended to qualify as qualified performance-based compensation
under Section 162(m) of the Code shall be based on achievement of such goals and
be subject to such terms, conditions and restrictions as the Committee shall
determine.

(B) Qualified Performance Awards. Performance Awards granted to Employees under
this Plan that are intended to qualify as qualified performance-based
compensation under Section 162(m) of the Code shall be paid, vest or otherwise
deliverable solely on account of the attainment of one or more pre-established,
objective Performance Goals established by the Committee prior to the earlier to
occur of (x) 90 days after the commencement of the period of service to which
the Performance Goal relates or (y) the lapse of 25% of the period of service
(as scheduled in good faith at the time the goal is established), and in any
event while the outcome is substantially uncertain. A Performance Goal is
objective if a third party having knowledge of the relevant facts could
determine whether the goal is met. Such a Performance Goal may be based on one
or more business criteria that apply to the Employee, one or more business
segments, units, or divisions of the Company, or the Company as a whole, and if
so desired by the Committee, by comparison with a peer group of companies. A
Performance Goal may include one or more of the following:

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  •  
Cash flow measures (including but not limited to before or after tax cash flow,
cash flow per share, cash flow return on capital, net cash flow or attainment of
working capital levels);

  •  
Expense measures (including but not limited to overhead cost, research and
development expense, general and administrative expense and improvement in or
attainment of expense levels);

  •  
Income measures (including but not limited to net income and income before or
after taxes);

  •  
Operating measures (including operating income, funds from operations, cash from
operations, after-tax operating income, net operating profit after tax,
operating efficiency, production volumes and production efficiency);

  •  
Return measures (including but not limited to return on capital employed, return
on equity, return on investment and return on assets);

  •  
Stock price measures (including but not limited to price per share, growth
measures and total stockholder return);

  •  
Earnings per share (actual or targeted growth);

  •  
Earnings before interest, taxes, depreciation, and amortization (“EBITDA”);

  •  
Net earnings;

  •  
Market share;

  •  
Debt to equity ratio;

  •  
Debt reduction;

  •  
Acquisition of financings;

  •  
Economic value added (or an equivalent metric);

  •  
Cash available for distribution;

  •  
Cash available for distribution per share;

  •  
Operating income;

  •  
Margins;

  •  
Implementing or completion of critical projects, including a commercial
production facility;

  •  
Obtaining regulatory approvals;

  •  
Satisfaction of offtake agreement requirements;

  •  
Revenue or sales;

  •  
Total market value;

  •  
Reliability;

  •  
Productivity;

  •  
Acquisition of feedstock; and

  •  
Corporate values measures (including but not limited to diversity commitment,
ethics compliance, environmental and safety, product liability claims).

Unless otherwise stated, such a Performance Goal need not be based upon an
increase or positive result under a particular business criterion and could
include, for example, maintaining the status quo or limiting economic losses
(measured, in each case, by reference to specific business criteria). In
interpreting Plan provisions applicable to Performance Goals and Qualified
Performance Awards, it is the intent of this Plan to conform with the standards
of Section 162(m) of the Code and Treasury Regulation §1.162-27(e)(2)(i), as to
grants to those Employees whose compensation is, or is likely to be, subject to
Section 162(m) of the Code, and the Committee in establishing such goals and
interpreting this Plan shall be guided by such provisions. Prior to the payment
of any compensation based on the achievement of Performance Goals, the Committee
must certify in writing that applicable Performance Goals and any of the
material terms thereof were, in fact, satisfied. Subject to the foregoing
provisions, the terms, conditions and limitations applicable to any Qualified
Performance Awards made pursuant to this Plan shall be determined by the
Committee.

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(b) Notwithstanding anything to the contrary contained in this Plan, no Employee
may be granted, during the term of this Plan, Awards consisting of, relating to,
or exercisable for more than 500,000 shares of Common Stock (this limitation
being hereinafter referred to as “Stock Based Awards Limitation”).

9. Change in Control. The Committee may provide in an Award Agreement for
accelerated vesting and exercisability of any Award in connection with a Change
in Control; this provision does not limit the authority of the Board to provide
for adjustments as described under Section 15.

10. Payment of Awards.

(a) General. Payment of Awards may be made in the form of cash or Common Stock,
or a combination thereof, and may include such restrictions as the Committee
shall determine, including, but not limited to, in the case of Common Stock,
restrictions on transfer and forfeiture provisions. For an Award of Restricted
Stock, the certificates evidencing the shares of such Restricted Stock (to the
extent that such shares are so evidenced) shall contain appropriate legends and
restrictions that describe the terms and conditions of the restrictions
applicable thereto. For an Award of Restricted Stock Units or Performance Stock
Units, the  shares of Common Stock that may be issued at the end of the
Restriction Period shall be evidenced by book entry registration or in such
other manner as the Committee may determine.

(b) Deferral. With the approval of the Committee, amounts payable in respect of
Awards may be deferred and paid either in the form of installments or as a
lump-sum payment; provided, however, that if deferral is permitted, such
deferral shall be in compliance with the requirements of Section 409A of the
Code. The Committee may permit selected Participants to elect to defer payments
of some or all types of Awards in accordance with procedures established by the
Committee. Any deferred payment pursuant to an Award, whether elected by the
Participant or specified by the Award Agreement or the terms of the Award or by
the Committee, may be forfeited if and to the extent that the Award Agreement or
the terms of the Award so provide.

(c) Dividends; Dividend Equivalents and Interest. Rights to dividends and
dividend equivalents shall not be extended to and made part of any Award. The
Committee may establish rules and procedures for the crediting of interest on
deferred cash payments for Awards.

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11. Option Exercise. The Grant Price shall be paid in full at the time of
exercise in cash or, if elected by the Participant, the Participant may purchase
such shares by means of tendering Common Stock or surrendering another Award,
including Restricted Stock, valued at Fair Market Value on the date of exercise,
or any combination thereof. The Committee shall determine acceptable methods for
Participants to tender Common Stock or other Awards. The Committee may provide
for procedures to permit the exercise or purchase of such Awards by use of the
proceeds to be received from the sale of Common Stock issuable pursuant to an
Award (including “cashless exercise”). Unless otherwise provided in the
applicable Award Agreement, in the event shares of Restricted Stock are tendered
as consideration for the exercise of an Option, a number of the shares issued
upon the exercise of the Option, equal to the number of shares of Restricted
Stock used as consideration thereof, shall be subject to the same restrictions
as the Restricted Stock so submitted as well as any additional restrictions that
may be imposed by the Committee. The Committee may adopt additional rules and
procedures regarding the exercise of Options from time to time, provided that
such rules and procedures are not inconsistent with the provisions of this
Section.

12. Taxes. The Company or its designated third party administrator shall have
the right to deduct applicable taxes from any Award payment and withhold, at the
time of delivery or vesting of cash or shares of Common Stock under this Plan,
an appropriate amount of cash or number of shares of Common Stock or a
combination thereof for payment of taxes or other amounts required by law or to
take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for withholding of such taxes or other amounts. The
Committee may also permit withholding to be satisfied by the transfer to the
Company of shares of Common Stock theretofore owned by the holder of the Award
with respect to which withholding is required. If shares of Common Stock are
used to satisfy tax withholding, such shares shall be valued based on the Fair
Market Value on the date the tax withholding is required to be made.

13. Amendment, Modification, Suspension or Termination of this Plan. The Board
may amend, modify, suspend or terminate this Plan for the purpose of meeting or
addressing any changes in legal requirements or for any other purpose permitted
by law, except that (i) no amendment or alteration that would adversely affect
the rights of any Participant under any Award previously granted to such
Participant shall be made without the consent of such Participant and (ii) no
amendment or alteration shall be effective prior to its approval by the
stockholders of the Company to the extent such approval is required by
applicable legal requirements or the requirements of the securities exchange on
which the Common Stock is listed.

14. Assignability. Except as otherwise provided herein, no Award granted under
this Plan shall be sold, transferred, pledged, assigned or otherwise alienated
or hypothecated by a Participant other than by will or the laws of descent and
distribution, and during the lifetime of a Participant, any Award shall be
exercisable only by the Participant, or, in the case of a Participant who is
mentally incapacitated, the Award shall be exercisable by the Participant’s
guardian or legal representative. The Committee may prescribe and include in
applicable Award Agreements other restrictions on transfer. Any attempted
assignment or transfer in violation of this Section 14 shall be null and void.
Upon the Participant’s death, the personal representative or other person
entitled to succeed to the rights of the Participant (the “Successor
Participant”) may exercise such rights. A Successor Participant must furnish
proof satisfactory to the Company of his or her right to exercise the Award
under the Participant’s will or under the applicable laws of descent and
distribution.

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Notwithstanding any provision of this Plan to the contrary, the Committee may
permit transfers of Non-Qualified Stock Options, SARs, Stock Awards, Restricted
Stock Unit Awards or Cash Awards to Family Members (including, without
limitation, transfers as a result of a domestic relations order which has been
approved as to form by the Committee) subject to such terms and conditions as
the Committee shall determine. “Family Members” means as to a Participant, any
(i) child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
mother-in-law, father-in-law, son-in-law or daughter-in-law (including adoptive
relationships), (ii) trusts for the exclusive benefit of one or more such
persons and/or the Participant and (iii) other entity owned solely by one or
more such persons and/or the Participant.

15. Adjustments.

(a) The existence of outstanding Awards shall not affect in any manner the right
or power of the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the capital
stock of the Company or its business or any merger or consolidation of the
Company, or any issue of bonds, debentures, preferred or prior preference stock
(whether or not such issue is prior to, on a parity with or junior to the
existing Common Stock) or the dissolution or liquidation of the Company, or any
sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding of any kind, whether or not of a character similar
to that of the acts or proceedings enumerated above.

(b) In the event of any subdivision or consolidation of outstanding shares of
Common Stock, declaration of a dividend payable in shares of Common Stock or
other stock split, then (i) the number of shares of Common Stock reserved under
this Plan, (ii) the number of shares of Common Stock covered by outstanding
Awards in the form of Common Stock or units denominated in Common Stock,
(iii) the Grant Price or other price in respect of such Awards, (iv) the
appropriate Fair Market Value and other price determinations for such Awards,
and (v) the Stock Based Awards Limitation shall each be proportionately adjusted
by the Board as appropriate to reflect such transaction. In the event of any
other recapitalization or capital reorganization of the Company, any
consolidation or merger of the Company with another corporation or entity, the
adoption by the Company of any plan of exchange affecting Common Stock or any
distribution to holders of Common Stock of securities or property (other than
normal cash dividends or dividends payable in Common Stock), the Board shall
make appropriate adjustments to (i) the number of shares of Common Stock covered
by Awards in the form of Common Stock or units denominated in Common Stock,
(ii) the Grant Price or other price in respect of such Awards, (iii) the
appropriate Fair Market Value and other price determinations for such Awards,
and (iv) the Stock Based Awards Limitation to reflect such transaction; provided
that such adjustments shall only be such as are necessary to maintain the
proportionate interest of the holders of the Awards and preserve, without
increasing, the value of such Awards.

(c) In the event of a corporate merger, consolidation, acquisition of property
or stock, separation, reorganization or liquidation, the Board may make such
adjustments to Awards or other provisions for the disposition of Awards as it
deems equitable, and shall be authorized, in its discretion, (i) to provide for
the substitution of a new Award or other arrangement (which, if applicable, may
be exercisable for such property or stock as the Board determines) for an Award
or the assumption of the Award, regardless of whether in a transaction to which
Section 424(a) of the Code applies, (ii) to provide, prior to the transaction,
for the acceleration of the vesting and exercisability of, or lapse of
restrictions with respect to, the Award and, if the transaction is a cash
merger, provide for the termination of any portion of the Award that remains
unexercised at the time of such transaction, or (iii) to cancel any such Awards
and to deliver to the Participants cash in an amount that the Board shall
determine in its sole discretion is equal to the fair market value of such
Awards on the date of such event, which in the case of Options or SARs shall be
the excess of the Fair Market Value of Common Stock on such date over the Grant
Price of such Award.

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(d) No adjustment or substitution pursuant to this Section 15 shall be made in a
manner that results in noncompliance with the requirements of Section 409A of
the Code, to the extent applicable.

16. Restrictions. No Common Stock or other form of payment shall be issued with
respect to any Award unless the Company shall be satisfied based on the advice
of its counsel that such issuance will be in compliance with applicable federal
and state securities laws. Certificates evidencing shares of Common Stock
delivered under this Plan (to the extent that such shares are so evidenced) may
be subject to such stop transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any securities exchange or transaction
reporting system upon which the Common Stock is then listed or to which it is
admitted for quotation and any applicable federal or state securities law. The
Committee may cause a legend or legends to be placed upon such certificates (if
any) to make appropriate reference to such restrictions.

17. Unfunded Plan. This Plan shall be unfunded. Although bookkeeping accounts
may be established with respect to Participants who are entitled to cash, Common
Stock or rights thereto under this Plan, any such accounts shall be used merely
as a bookkeeping convenience. The Company shall not be required to segregate any
assets that may at any time be represented by cash, Common Stock or rights
thereto, nor shall this Plan be construed as providing for such segregation, nor
shall the Company, the Board or the Committee be deemed to be a trustee of any
cash, Common Stock or rights thereto to be granted under this Plan. Any
liability or obligation of the Company to any Participant with respect to an
Award of cash, Common Stock or rights thereto under this Plan shall be based
solely upon any contractual obligations that may be created by this Plan and any
Award Agreement, and no such liability or obligation of the Company shall be
deemed to be secured by any pledge or other encumbrance on any property of the
Company. None of the Company, the Board and the Committee shall be required to
give any security or bond for the performance of any obligation that may be
created by this Plan.

18. Section 409A of the Code. The Awards are intended to comply with or be
exempt from Section 409A of the Code and the provisions of the Award Agreement
will be construed accordingly. If a provision of an Award would result in the
imposition of an applicable tax under Section 409A of the Code, such provision
shall be reformed to avoid imposition of the applicable tax if permissible and
no such action taken to comply with Section 409A of the Code shall be deemed to
adversely affect the rights or benefits under such Award.

If an Award is intended to comply with Section 409A of the Code, all payments to
be made upon a termination of employment under such Award may only be made upon
a “separation from service” (as defined in Section 409A of the Code). For
purposes of Section 409A of the Code, each payment under an Award is treated as
a separate payment for purposes of applying Section 409A of the Code. In no
event may the Participant, directly or indirectly, designate the calendar year
of payment.

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If the Participant is deemed to be a “specified employee” as of the date of his
or her “separation from service” (each as defined in Section 409A of the Code)
as determined by the Company, the payment of any amount under an Award on
account of separation from service that is deferred compensation subject to
Section 409A of the Code and not otherwise exempt from Section 409A of the Code,
shall not be paid before the earliest of (i) the first business day that is at
least six months after the date of the Participant’s separation from service,
(ii) the date of the Participant’s death, or (iii) the date that otherwise
complies with the requirements of Section 409A of the Code. This provision shall
be applied by accumulating all payments that otherwise would have been paid
within six months of the Participant’s separation from service and paying such
accumulated amounts, without interest, at the earliest date as described in the
preceding sentence and any remaining payments due under such Award shall be paid
or provided in accordance with the normal payment dates specified therein.

19. Parachute Payment Limitation. Notwithstanding any contrary provision of this
Plan, the Committee may provide in an Award Agreement or in any other agreement
with the Participant for a limitation on the acceleration of vesting and
exercisability of unmatured Awards to the extent necessary to avoid or mitigate
the impact of the golden parachute excise tax under Section 4999 of the Code on
the Participant or may provide for a supplemental payment to be made to the
Participant as necessary to offset or mitigate the impact of the golden
parachute excise tax on the Participant. In the event the Award Agreement or
other agreement with the Participant does not contain any contrary provision
regarding the method of avoiding or mitigating the impact of the golden
parachute excise tax under Section 4999 of the Code on the Participant, then
notwithstanding any contrary provision of this Plan, the aggregate present value
of all parachute payments payable to or for the benefit of a Participant,
whether payable pursuant to this Plan or otherwise, shall be limited to three
times the Participant’s base amount less one dollar and, to the extent
necessary, the exercisability of an unmatured Award shall be reduced in order
that this limitation not be exceeded, with the order of reduction applied first
against the Award with the latest vesting date and continuing, as necessary, to
those Awards with earlier vesting dates. For purposes of this Section 19, the
terms “parachute payment,” “base amount” and “present value” shall have the
meanings assigned thereto under Section 280G of the Code. It is the intention of
this Section 19 to avoid excise taxes on the Participant under Section 4999 of
the Code or the disallowance of a deduction to the Company pursuant to
Section 280G of the Code.

20. Right to Employment. Nothing in this Plan or an Award Agreement shall
interfere with or limit in any way the right of the Company or a Subsidiary to
terminate any Participant’s employment or other service relationship at any
time, nor confer upon any Participant any right to continue in the capacity in
which he or she is employed or otherwise serves the Company or a Subsidiary.

21. Successors. All obligations of the Company under this Plan with respect to
Awards granted hereunder shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business and/or assets of the Company.

22. Governing Law. This Plan and all determinations made and actions taken
pursuant hereto, to the extent not otherwise governed by mandatory provisions of
the Code or the securities laws of the United States, shall be governed by and
construed in accordance with the laws of the State of Texas.

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