ALAMO GROUP INC.

 

2009 EQUITY INCENTIVE PLAN

 

Section 1.  Background and Purpose of the Plan.

 

            (a)        Background.    The name of this plan is the Alamo Group
Inc. 2009 Equity Incentive Plan (the “Plan”).  Alamo Group Inc., a Delaware
corporation (the “Company”), established an incentive compensation plan known as
the “First Amended and Restated 1999 Non-Qualified Stock Option Plan,” effective
August 31, 1999 (the “1999 Plan”).  The 1999 Plan expires as of July 6, 2009. 
Subject to the approval of the Company’s stockholders, the Company now desires
to adopt the Plan as of May 7, 2009, to replace the 1999 Plan, as set forth
below. 

 

            (b)        Purpose.  The purpose of the Plan is to provide
incentives to those officers, employees, and directors of the Company and its
direct and indirect subsidiaries whose contributions are essential to the growth
and success of the Company’s business, in order to strengthen the long-term
commitment of such persons to the Company and its direct and indirect
subsidiaries, and to help the Company and its direct and indirect subsidiaries
secure and retain the services of such key persons.  To accomplish such
purposes, the Plan provides that the Company may grant Nonqualified Stock
Options, Restricted Stock, and Restricted Stock Units.  The Plan is intended to
permit awards that satisfy the requirements of Section 162(m) of the Code and
shall be interpreted in a manner consistent with the requirements therefor.

 

Section 2.  Definitions.

 

            For purposes of the Plan, in addition to terms defined elsewhere in
the Plan, the following terms shall be defined as set forth below:

 

            (a)        “Award” means an award of Options, Restricted Stock, or
Restricted Stock Units under the Plan.

 

            (b)        “Award Agreement” means, with respect to any Award, the
written agreement between the Company and the Participant setting forth the
terms and conditions of the Award.

 

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

 

            (d)        “Change in Control” means, unless otherwise provided in
an Award Agreement, the first to occur of any one of the events set forth in the
following paragraphs:

 

 (i) a change in the ownership of the Company which occurs on the date that any
one person, or more than one person acting as a group (as such terms are defined
in Section 13(d)(3) of the Exchange Act), becomes the “beneficial owner” (as
defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of Shares
representing more than fifty percent (50%) of the total voting power of the
issued and outstanding stock of the Company entitled to vote in the election of
directors of the Company (“Voting Stock”) and such person or group has the power
and authority to vote such Shares; provided, however, that for purposes of this
subsection (i), the acquisition of additional Shares by any one person or group
who have then been owners of 10% or more of the Shares of the Company for a
continuous period at least ten (10) years will not be considered a Change in
Control; or

 

1

--------------------------------------------------------------------------------

 

(ii) a change in the effective control of the Company which occurs on the date
that a majority of members of the Board is replaced during any twelve (12) month
period by directors whose appointment or election is not endorsed by a majority
of the members of the Board prior to the date of the appointment or election; or

 

(iii) any sale, lease, exchange, or other disposition (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Company (together with the assets of the Company’s direct and indirect
subsidiaries) to any person or  more than one person acting as a group (as such
terms are defined in Section 13(d)(3) of the Exchange Act); provided, however,
that for purposes of this subsection (iii), a transfer of assets by the Company
to an entity that is controlled by the Company’s stockholders immediately after
the transfer will not be considered a Change in Control;  or

 

(iv) the consummation of a merger or consolidation of the Company with another
entity in which immediately following the consummation of the transaction, those
stockholders of the Company immediately before the consummation of the
transaction cease to own collectively at least fifty percent (50%) of the Voting
Stock of the Company.

 

            (e)        “Code” means the Internal Revenue Code of 1986, as
amended from time to time, or any successor thereto.

 

            (f)         “Committee” means the Compensation Committee of the
Board, as appointed from time to time by at least a majority of the whole
Board. 

           

            (g)        “Common Shares” means the shares of common stock, par
value $0.10 per share, of the Company.     

 

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

 

            (i)         “Fair Market Value” of a Share on a particular date
shall mean (1) the closing sale price reported for such Share on the national
securities exchange or national market system on which such Share is principally
traded on such date (or, if there were no trades on such date, on the most
recently preceding day on which there was a sale thereon), or (2) if the Shares
are not then listed on a national securities exchange or national market system,
or if the value of such Shares is not otherwise determinable, such value as
determined by the Committee in good faith in its sole discretion.  In making
such determination, the Committee should (but is not required to) use a
valuation method that is presumed reasonable under Treas. Reg.
§1.409A-1(b)(5)(iv)(B)(2).  If the Committee does not use a method that is
presumed reasonable, the Committee nevertheless shall use a method designed to
comply with the reasonableness requirements of Treas. Reg.
§1.409A-1(b)(5)(iv)(B).

 

2

--------------------------------------------------------------------------------

 

            (j)         “Nonqualified Stock Option” means an Option that by its
terms is a nonqualified stock option and that will not be treated as an
“incentive stock option” within the meaning of Section 422 of the Code. 

 

            (k)        “Option” means a right to purchase Shares, granted to a
Participant pursuant to the Plan.  As used herein, the term “Option” shall
include only a Nonqualified Stock Option, and the Plan shall be construed in a
manner that will effectuate the intent for all Options granted hereunder to be
treated as Nonqualified Stock Options.    

 

            (l)         “Participant” means the holder of an outstanding Award. 

           

            (m)       “Restricted Stock” means Shares issued pursuant to an
Award Agreement in accordance with Section 7 of the Plan. 

 

            (n)        “Restricted Stock Unit” means a bookkeeping entry
representing an amount equal to the Fair Market Value of one Share, granted
pursuant to Section 8 of the Plan.  Each Restricted Stock Unit represents an
unfunded and unsecured obligation of the Company.

           

            (o)        “Service Provider” means an employee, officer, or
director of the Company or any of the Company’s direct or indirect subsidiaries.
 For purposes of this paragraph, the term “direct or indirect subsidiaries”
shall refer only to those subsidiaries that qualify as eligible issuers of the
Company’s stock under Treas. Reg. §1.409A-1(b)(5)(iii)(E). 

 

            (p)        “Shares” means the Common Shares and the common equity of
any successor security.

                       

Section 3.  Shares Subject to the Plan.    

 

            (a)        There shall be reserved and available for issuance under
the Plan 400,000 Common Shares.  In determining the terms and conditions of an
Award hereunder, the Committee shall not impose any conditions on the Common
Shares (such as a mandatory repurchase obligation or a put or call right) that
would cause the Common Shares issued under the Award not to be considered
“Service Recipient Stock” under Treas. Reg. §1.409A-1(b)(5)(iii).           

 

            (b)        To the extent that (i) an Option expires or is otherwise
cancelled or terminated without being exercised as to the underlying Shares,
(ii) any Shares subject to any award of Restricted Stock or Restricted Stock
Units are forfeited, or (iii) Shares are withheld from payment of an Award in
satisfaction of any minimum federal, state, local, or foreign withholding
requirements, such Shares shall again be available for issuance in connection
with future Awards granted under the Plan.  The Shares issued under the Plan may
be authorized but unissued Common Shares, reacquired Common Shares, issued
Common Shares held in the Company’s treasury, or any combination of the
foregoing.  

 

3

--------------------------------------------------------------------------------

 

            (c)        The Company, during the term of the Plan, will at all
times reserve and keep available such number of Shares as will be sufficient to
satisfy the requirements of the Plan. 

 

Section 4.  Administration of the Plan. 

 

            (a)        The Plan shall be administered by the Committee.  The
Committee shall consist solely of two or more “Non-Employee Directors,” as
defined in Rule 16b-3(b)(3)(i) of the Exchange Act. 

 

            (b)        To the extent desirable to qualify transactions hereunder
as exempt under Rule 16b-3 of the Exchange Act, the transactions contemplated
hereunder will be structured to satisfy the requirements for exemption under
Rule 16b-3 of the Exchange Act.

 

            (c)        The Committee shall have the power and authority, in its
discretion:

 

(i)         to select the Service Providers to whom Awards may be granted
hereunder;

 

(ii)        to determine whether and to what extent Options, Restricted Stock,
or Restricted Stock Units are to be granted hereunder to Service Providers;

 

(iii)       to determine the number of Shares to be covered by each Award
granted hereunder;

 

(iv)       to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Award granted hereunder;

 

(v)        to determine the terms and conditions, not inconsistent with the
terms of the Plan, which shall govern all written instruments evidencing Awards
granted hereunder;

 

(vi)       to adopt, alter, and rescind rules and regulations relating to the
Plan as it shall from time to time deem advisable; and

 

(vii)      to construe and interpret the terms of the Plan and Awards granted
pursuant to the Plan (and any Award Agreement relating thereto), and to
otherwise supervise the administration of the Plan.

 

In exercising such discretion pursuant to this Section 4(c), the Committee shall
ensure that a grant of Options, Restricted Stock, or Restricted Stock Units is
structured so as not to cause a deferral of compensation under Code §409A and
the Regulations thereunder.

 

            (d)        The Committee’s decisions, determinations, and
interpretations will be final, conclusive, and binding on all persons, including
the Company and the Participants.  No member of the Committee, nor any officer
or employee of the Company acting on behalf of the Committee, shall be
personally liable for any action, determination, or interpretation taken or made
in good faith with respect to the Plan, and all members of the Committee and
each and any officer or employee of the Company acting on their behalf shall, to
the extent permitted by law, be fully indemnified and protected by the Company
in respect of any such action, determination, or interpretation. 

 

4

--------------------------------------------------------------------------------

 

Section 5.        Eligibility.

 

            The Participants under the Plan shall be selected from time to time
by the Committee, in its sole discretion, from among Service Providers.  The
Committee shall have the authority to grant to any Service Provider Options,
Restricted Stock, or Restricted Stock Units, in accordance with the terms of the
Plan.

 

Section 6.        Options.

 

            (a)        General.  Options may be granted alone or in addition to
other Awards granted under the Plan.  Any Option granted under the Plan shall be
evidenced by an Award Agreement.  The provisions of each Option need not be the
same with respect to each Participant.  The Committee shall determine the
Service Providers to whom, and the time or times at which, awards of Options
shall be made, and the terms of such Options, not inconsistent with the terms of
the Plan.  Participants who are granted Options shall enter into an Award
Agreement with the Company, in such form as the Committee shall determine, which
Award Agreement shall set forth, among other things, the exercise price of the
Option, the term of the Option, and provisions regarding exercisability of the
Option granted thereunder.  The Options granted under the Plan must be
Nonqualified Stock Options.  More than one Option may be granted to the same
Participant and be outstanding concurrently hereunder.  Options granted under
the Plan shall be subject to the terms and conditions set forth in paragraphs
(b) –(h) of this Section 6 and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall
deem desirable.

 

            (b)        Exercise Price.  The per share exercise price of Shares
purchasable under an Option shall be determined by the Committee in its sole
discretion at the time of the grant, but shall not be less than 100% of the Fair
Market Value per Share as of the date of grant.

 

            (c)        Option Term.  The term of such Option shall be fixed by
the Committee, but no Option shall be exercisable more than ten (10) years after
the date such Option is granted. 

 

            (d)        Exercisability and Vesting.  Options shall be exercisable
and vested at such time or times and subject to such terms and conditions as
shall be determined by the Committee in its sole discretion.  Unless otherwise
provided in an Award Agreement, Options shall vest and become exercisable at the
rate of 20% of the Shares subject to the Option on the first anniversary of the
date of grant, and as to an additional 20% of the Shares subject to the Option
on each of the four succeeding anniversaries on the date of grant, but only to
the extent that the Participant has continuously been a Service Provider through
each such date.  In accordance with Code §409A, if the Committee selects an
exercise and vesting schedule other than that set forth in this paragraph, such
exercise and vesting schedule shall be fixed as of the date of the Option grant
and shall not include any feature for the deferral of compensation other than
deferral of recognition of income until the later of (i) the exercise or
disposition of the Option under Treas. Reg. §1.83-7 or (ii) the time the stock
acquired pursuant to the exercise of the Option first becomes substantially
vested (as defined in Treas. Reg. §1.83-3(b).

 

5

--------------------------------------------------------------------------------

 

            (e)        Method of Exercise.  An Option may be exercised in whole
or in part prior to the expiration of such Option by giving written notice of
exercise to the Company specifying the number of Shares to be purchased,
accompanied by full payment for the Shares with respect to which the Option is
exercised (together with applicable withholding taxes).  Full payment may
consist of any consideration and method of payment authorized by the Committee
and permitted by the Award Agreement and the Plan. 

 

            (f)         Rights as a Stockholder.  Until the Shares are issued
(as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as a stockholder will exist with respect to the Shares
subject to an Option, notwithstanding the exercise of the Option.  The Company
will issue (or cause to be issued) certificate(s) evidencing such Shares
promptly after the Option is exercised.

 

            (g)        Nontransferability of Options.  The Participant shall not
be permitted to sell, transfer, pledge, or assign any Option other than by: (i)
will or the laws of descent and distribution, or (ii) a qualified domestic
relations order within the meaning of Section 414(p) of the Code or any similar
instrument.  All Options shall be exercisable during the Participant’s lifetime
only by the Participant. 

           

(h)        Termination of Relationship as a Service Provider. 

 

(1)               Termination other than for Death.  If a Participant ceases to
be a Service Provider, other than upon the Participant’s termination as a
Service Provider as a result of the Participant’s death, the Participant may
exercise his or her Option within ninety (90) days of such termination of
service to the extent such Option is vested on the date Participant ceases to be
a Service Provider, but in no event later than the expiration of the term of
such Option as set forth in the Award Agreement.  If on the date the Participant
ceases to be a Service Provider the Participant is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option will
revert to the Plan.  If, after Participant ceases to be a Service Provider, the
Participant does not exercise his or her Option within the ninety (90) days
described above, the Option will terminate, and the Shares covered by the Option
will revert to the Plan.

 

(2)               Termination by Reason of Death.  If a Participant either (i)
dies while a Service Provider, or (ii) dies within the ninety (90) day period
following the date the Participant ceases to be a Service Provider as described
in Section 6(h)(1) above, the Option may be exercised within twelve (12) months
following the Participant’s death to the extent such Option is vested on the
date of Participant’s death, but in no event later than the expiration of the
term of such Option as set forth in the Award Agreement.  Such Option may be
exercised by the personal representative of the Participant’s estate, or by the
person(s) to whom the Option is transferred pursuant to the Participant’s will
or in accordance with the laws of descent and distribution, provided that
documentation satisfactory to the Committee establishing the right of such
personal representative or heir to receive the Option from Participant is
provided to the Committee.   If on the date the Participant dies the Participant
is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option will revert to the Plan.  If, after Participant dies, the
Participant’s Option is not exercised within the twelve (12) months described
above, the Option will terminate, and the Shares covered by the Option will
revert to the Plan.

 

6

--------------------------------------------------------------------------------

 

 

Section 7.  Restricted Stock.

 

            (a)        General.  Awards of Restricted Stock may be issued either
alone or in addition to other Awards granted under the Plan and shall be
evidenced by an Award Agreement.  The provisions of the awards of Restricted
Stock need not be the same with respect to each Participant.  The Committee
shall determine the Service Providers to whom, and the time or times at which,
awards of Restricted Stock shall be made; the number of Shares to be awarded;
the price, if any, to be paid by the Participant for the acquisition of the
Restricted Stock, and the Restricted Period (as defined in Section 7(c))
applicable to awards of Restricted Stock. 

 

            (b)        Awards and Escrow.  The prospective recipient of an Award
of Restricted Stock shall not have any rights with respect to any such Award,
unless and until such recipient has executed an Award Agreement evidencing the
Award and delivered a fully executed copy thereof to the Company, within such
period as the Committee may specify after the award date.  Each Participant who
is granted an Award of Restricted Stock shall be issued a share certificate in
respect of such Shares of Restricted Stock, which certificate shall be
registered in the name of the Participant and shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to any such
Award; provided, however, that unless the Committee determines otherwise, (i)
the Company as escrow agent will hold the share certificates for all Shares of
Restricted Stock until the Restricted Period has ended and all restrictions on
such Shares have lapsed, and (ii) as a condition of Award of Restricted Stock,
the Participant shall have delivered a stock power, endorsed in blank, relating
to the Shares covered by such Award.

 

            (c)        Nontransferability of Restricted Stock.  The Committee,
in its sole discretion, shall determine in the terms of the Award Agreement and
the period during which the Restricted Stock Award shall be subject to
restrictions on transferability (the “Restricted Period”).  During the
Restricted Period, the Participant shall not be permitted to sell, transfer,
pledge, hypothecate, or assign Shares of Restricted Stock awarded under the Plan
except by: (i) will or the laws of descent and distribution, or (ii) a qualified
domestic relations order within the meaning of Section 414(p) of the Code or any
similar instrument.  The Committee, in its sole discretion, may impose such
other restrictions and conditions on Shares of Restricted Stock as it may deem
advisable or appropriate, including the attainment of corporate or individual
performance goals.   

 

7

--------------------------------------------------------------------------------

 

 

            (d)        Removal of Restrictions.  Unless otherwise provided in an
Award Agreement, the Restricted Period shall end as to 25% of the total Shares
of Restricted Stock granted in an Award on the first anniversary of the date of
grant, and as to an additional 25% of the total Shares of Restricted Stock
granted in an Award on each of the three succeeding anniversaries of the date of
grant, but only to the extent that the Participant has continuously been a
Service Provider through each such date.  Shares of Restricted Stock covered by
Restricted Stock grants made under the Plan will be released from escrow on a
rolling basis as Restricted Periods end, such Shares to be released as soon as
practicable after the last day of the particular Restricted Period applicable to
the Shares, or at such other time as the Committee may determine. 

 

            (e)        Rights as a Stockholder.  Except as provided in Sections
7(b) and (c) above or as otherwise provided in an Award Agreement, the
Participant shall possess all incidents of ownership with respect to Shares of
Restricted Stock during the Restricted Period, including the right to receive
all dividends and distributions paid with respect to such Shares and to vote
such Shares.  If any such dividends or distributions are paid in Shares, the
Shares will be subject to the same restrictions on transferability and
forfeitability as the Shares of Restricted Stock with respect to which they were
paid. 

 

            (f)         Termination of Relationship as a Service Provider. 
Except as otherwise provided in an Award Agreement, if a Participant ceases to
be a Service Provider for any reason during the Restricted Period, the
Participant’s rights to Shares of Restricted Stock for which restrictions have
not lapsed will be forfeited back to the Company and the Participant shall have
no further rights thereto.

 

Section 8.        Restricted Stock Units. 

 

            (a)        General.  Awards of Restricted Stock Units may be issued
either alone or in addition to other Awards granted under the Plan and shall be
evidenced by an Award Agreement.  The provisions of the awards of Restricted
Stock Units need not be the same with respect to each Participant.  The
Committee shall determine the Service Providers to whom, and the time or times
at which, awards of Restricted Stock Units shall be made; the number of
Restricted Stock Units to be awarded, and the vesting period (as described in
Section 8(c)) applicable to awards of Restricted Stock Units.    

 

            (b)        Awards.  A Restricted Stock Unit Award shall be similar
in nature to a Restricted Stock Award except that no Shares are actually issued
to a Participant (or held in escrow for the benefit of Participant) until a
later date specified in the applicable Award Agreement.  Each Restricted Stock
Unit shall have a value equal to the Fair Market Value of a Share.

 

            (c)        Vesting.  The Committee, in its sole discretion, shall
determine in the terms of the Award Agreement the vesting schedule and other
restrictions and conditions to which the Restricted Stock Unit Award will be
subject.  The Committee may set vesting criteria based upon the achievement of
Company-wide, business unit, or individual goals (including, but not limited to,
continued employment), or any other basis determined by the Committee in its
discretion.  Provided that the conditions to the vesting of a Restricted Stock
Unit are satisfied, and except as provided in Section 8(e) hereof, upon
satisfaction of all vesting conditions with respect to a Restricted Stock Unit,
such Restricted Stock Unit shall vest. 

 

8

--------------------------------------------------------------------------------

 

 

            (d)        Benefit Upon Vesting.  Upon the vesting of the Restricted
Stock Units, the Participant shall be entitled to receive, as soon as
practicable after the date on which such Restricted Stock Unit vests, an amount
in cash, Shares, or a combination of the foregoing (as determined by the
Committee in its sole discretion) equal, per unit, to the Fair Market Value of a
Share on the date on which such Restricted Stock Unit vests.

 

            (e)        Termination of Relationship as a Service Provider. 
Except as otherwise provided in an Award Agreement, if a Participant ceases to
be a Service Provider for any reason before the Restricted Stock Units have
vested, the Participant’s rights to unvested Restricted Stock Units shall be
cancelled and the Participant shall have no further rights thereto.

 

Section 9.        Adjustments; Dissolution or Liquidation; Change in Control. 

 

            (a)        Adjustments.  In the event that any dividend or other
distribution (whether in the form of cash, Shares, other securities, or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, or exchange
of Shares or other securities of the Company, or other change in the corporate
structure of the Company affecting the Shares occurs, the  Committee, in order
to prevent diminution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, will adjust the number and class
of shares of stock that may be delivered under the Plan and/or the number,
class, and price of shares of stock covered by each outstanding Award.

(b)        Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, the Committee will use its reasonable efforts to
notify each Participant as soon as practicable prior to the effective date of
such proposed transaction. To the extent it has not been previously exercised,
an Award will terminate immediately prior to the consummation of such proposed
action.

(c)        Change in Control. In the event of a Change in Control, each
outstanding Award will be treated as the Committee determines, including,
without limitation, that each Award be assumed or an equivalent option or right
substituted by the successor entity or a parent or affiliate of the successor
entity. The Committee will not be required to treat all Awards similarly in the
transaction. Unless otherwise provided in an Award Agreement, upon the
occurrence of a Change in Control, all outstanding Shares of Restricted Stock
and Restricted Stock Units granted to a Participant that have not theretofore
vested shall immediately vest, and each Option granted to a Participant and
outstanding at such time shall become fully and immediately vested and
exercisable, unless such Awards are either assumed or an equitable substitution
is made therefor. 

 

Section 10.      Tax Withholding.

 

(a)        Withholding Requirements. Prior to the delivery of any Shares or cash
pursuant to an Award (or exercise thereof), the Company will have the power and
the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state, local, foreign or other
taxes (including the Participant’s FICA obligation) required to be withheld with
respect to such Award (or exercise thereof).

 

9

--------------------------------------------------------------------------------

 

 

 

(b)        Withholding Arrangements. The Committee, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit a
Participant to satisfy such tax withholding obligation, in whole or in part by
(without limitation): (i) paying cash, (ii) electing to have the Company
withhold otherwise deliverable cash or Shares having a Fair Market Value equal
to the minimum statutory amount required to be withheld, (iii) delivering to the
Company already-owned Shares having a Fair Market Value equal to the minimum
statutory amount required to be withheld, or (iv) any combination thereof.  The
Fair Market Value of the Shares to be withheld or delivered will be determined
as of the date that the taxes are required to be withheld.

 

Section 11.      No Effect on Employment or Service.

 

            Neither the Plan nor any Award will confer upon a Participant any
right with respect to continuing the Participant’s relationship as a Service
Provider with the Company or a Company’s direct or indirect subsidiary, nor will
they interfere in any way with the Participant’s right or the Company’s right
(or the right of a Company’s direct or indirect subsidiary) to terminate such
relationship at any time, with or without cause, to the extent permitted by
applicable laws.

 

Section 12.      Term of Plan; Amendment; Termination.

 

            The Plan will become effective upon its adoption by the Board,
subject to the approval of the Company’s stockholders.  Unless terminated
earlier pursuant to the terms of the Plan, the Plan will continue in effect for
a period of ten (10) years from the effective date (the “Plan Term”).  No Award
shall be granted pursuant to the Plan after the end of the Plan Term, but Awards
theretofore granted may extend beyond the Plan Term.  The Board may at any time
amend, alter, suspend or terminate the Plan.  The Company shall obtain
stockholder approval of any Plan amendment, alteration, suspension, or
termination to the extent necessary and desirable to comply with applicable
laws.  No amendment, alteration, suspension, or termination of the Plan will
impair the rights of any Participant, unless mutually agreed otherwise by the
Participant and the Committee, which agreement must be in writing and signed by
the Participant and the Committee.

 

Section 13.      General Provisions.

 

            (a)        Shares shall not be issued pursuant to the exercise of
any Award granted hereunder unless the exercise of such Award and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, and the requirements of any stock exchange upon which
the Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance. The Company shall be
under no obligation to effect the registration pursuant to the Securities Act of
1933, as amended, of any interests in the Plan or any Shares to be issued
hereunder or to effect similar compliance under any state laws.

        

 

10

--------------------------------------------------------------------------------

 

 

            (b)        All certificates for Shares delivered under the Plan
shall be subject to such stock-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 stock exchange upon
which the Shares may then be listed, and any applicable federal or state
securities law, and the Committee may cause a legend or legends to be placed on
any such certificates to make appropriate reference to such restrictions. The
Committee may require, as a condition of the issuance and delivery of
certificates evidencing Shares pursuant to the terms hereof, that the recipient
of such Shares make such agreements and representations as the Committee, in its
sole discretion, deems necessary or desirable.

                

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

           

            (d)        If any provision of the Plan is held to be invalid or
unenforceable, the other provisions of the Plan shall not be affected but shall
be applied as if the invalid or unenforceable provision had not been included in
the Plan.

           

            (e)        The Plan and all Awards shall be governed by the laws of
the State of Delaware without regard to its principles of conflict of laws.

           

           

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11