Exhibit 10.18
PATRIOT COAL CORPORATION
EMPLOYEE STOCK PURCHASE PLAN

 

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TABLE OF CONTENTS

                      Page     SECTION 1. INTRODUCTION     3  
1.1
  Purpose     3  
1.2
  Stock Purchase Plan     3  
1.3
  Effective Date and Term     3  
1.4
  Participating Subsidiaries     3  
1.5
  Stock Subject to Plan     3   SECTION 2. DEFINITIONS     4  
2.1
  “Beneficiary”     4  
2.2
  “Board”     4  
2.3
  “Change in Control”     4  
2.4
  “Code”     4  
2.5
  “Committee”     5  
2.6
  “Company”     5  
2.7
  “Compensation”     5  
2.8
  “Custodian”     5  
2.9
  “Effective Date”     5  
2.10
  “Employee”     5  
2.11
  “Fair Market Value”     5  
2.12
  “Offering Date”     5  
2.13
  “Offering Period”     5  
2.14
  “Option”     6  
2.15
  “Option Account”     6  
2.16
  “Participating Subsidiary”     6  
2.17
  “Plan”     6  
2.18
  “Stock”     6  
2.19
  “Subsidiary”     6  
2.20
  “Termination Date”     6   SECTION 3. ENROLLMENT AND CONTRIBUTIONS     6  
3.1
  Eligibility for Enrollment     6  
3.2
  Enrollment Procedure     7  
3.3
  Contributions     7  
3.4
  Option Accounts     8  
3.5
  Withdrawal of Contributions     8  
3.6
  No Funding of Accounts     8   SECTION 4. GRANT AND EXERCISE OF OPTION     9  
4.1
  Grant of Options; Terms     9  
4.2
  Exercise of Option; Exercise Price     9  
4.3
  Option Accounts     10  
4.4
  No Interest on Account Balances     10   SECTION 5. TERMINATION OF ENROLLMENT
    10  
5.1
  Termination of Enrollment     10  
5.2
  Distributions to Employee     11  
5.3
  Beneficiaries     12  

 

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                      Page     SECTION 6. PLAN ADMINISTRATION     12  
6.1
  Committee     12  
6.2
  Committee Powers     12  
6.3
  Committee Actions     12  
6.4
  Member Who is a Participant     13  
6.5
  Information Required from Company     13  
6.6
  Information Required from Employees     13  
6.7
  Uniform Rules and Administration     13   SECTION 7. AMENDMENT AND TERMINATION
    13  
7.1
  Amendment     13  
7.2
  Termination     14  
7.3
  Rights upon Plan Termination     14   SECTION 8. GENERAL PROVISIONS     14  
8.1
  No Transfer or Assignment     14  
8.2
  Rights as Stockholder     15  
8.3
  Rights as Employee     15  
8.4
  Costs     15  
8.5
  Application of Funds     15  
8.6
  Reports     15  
8.7
  Actions by Company     15  
8.8
  Governmental Approval     15  
8.9
  Stockholder Approval     15  
8.10
  Applicable Law     15  
8.11
  Gender and Number     15  
8.12
  Headings     15  

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PATRIOT COAL CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. INTRODUCTION
     1.1 Purpose. The purpose of the Patriot Coal Corporation Employee Stock
Purchase Plan is to provide eligible employees of Patriot Coal Corporation (the
“Company”) and its Participating Subsidiaries the opportunity to acquire a
proprietary interest in the Company and thereby provide employees with an
additional incentive to contribute to the long-term profitability and success of
the Company and its Subsidiaries. The Plan is for the exclusive benefit of
eligible employees of the Company and its Subsidiaries.
     1.2 Stock Purchase Plan. The Plan is a stock purchase plan that is intended
to satisfy all requirements of Section 423 of the Internal Revenue Code of 1986,
as amended. Any provision of the Plan inconsistent with Code Section 423 will,
without further act or amendment by the Company, be deemed reformed to comply
with Code Section 423.
     1.3 Effective Date and Term. The Plan is effective on January 1, 2008 (the
“Effective Date”). The Plan shall continue in effect until the earlier of the
date the Company terminates the Plan or the date all of the shares of Stock
subject to the Plan, as amended from time to time, are purchased.
     1.4 Participating Subsidiaries. A Subsidiary of the Company as of the
Effective Date will be deemed to have adopted the Plan for its eligible
Employees as of the Effective Date and any corporation that becomes a Subsidiary
after the Effective Date will be deemed to have adopted the Plan for its
eligible Employees immediately upon becoming a Subsidiary, unless the Company
acts to exclude the Subsidiary and its eligible Employees from participation in
the Plan.
     1.5 Stock Subject to Plan.
     (a) The Stock subject to purchase under the Plan will be shares of the
Company’s authorized but unissued shares, or previously issued shares of Stock
reacquired and held by the Company, or shares acquired in the market. The
aggregate number of shares of Stock that may be purchased under the Plan shall
not exceed one million (1,000,000) shares. All shares of Stock purchased under
the Plan will count against this limitation.
     (b) In case of a reorganization, recapitalization, stock split, reverse
stock split, stock dividend, combination of shares, merger, consolidation,
offering of rights or other change in the capital structure of the Company, the
Committee may make such adjustment as it deems appropriate in the number, kind
and purchase price of shares of Stock available for purchase under the Plan,
subject to Section 7.1.

 

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SECTION 2. DEFINITIONS
     For purposes of this Plan, the following words and phrases, whether or not
capitalized, have the meanings specified below, unless the context plainly
requires a different meaning:
     2.1 “Beneficiary” means a person to whom all or a portion of the cash
amounts due to the Employee under this Plan will be paid if the Employee dies
before receiving such cash amounts.
     2.2 “Board” means the Board of Directors of the Company.
     2.3 “Change in Control” means any one of the following:
     (a) any Person (other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, or any company
owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the Company),
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power of the Company’s
then-outstanding securities (provided, however, that if any Person is considered
to own more than 50% of the total voting power of the stock of the Company, the
acquisition of additional stock by the same Person is not considered to cause a
change in the ownership or control of the Company);
     (b) during any period of twelve consecutive months, individuals who at the
beginning of such period constitute the Board, and any new director (other than
(i) a director nominated by a Person who has entered into an agreement with the
Company to effect a transaction described in paragraph (a), (c) or (d), or
(ii) a director nominated by any Person (including the Company) who publicly
announces an intention to take or to consider taking actions (including, but not
limited to, an actual or threatened proxy contest) which if consummated would
constitute a Change in Control) whose election by the Board or nomination for
election by the Company’s shareholders was approved by a vote of the
shareholders or a vote of at least three-fourths (3/4) of the directors then
still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for
any reason to constitute at least a majority of the Board;
     (c) the consummation of any merger, consolidation, plan of arrangement,
reorganization or similar transaction or series of transactions in which the
Company is involved, other than such a transaction or series of transactions
that would result in the shareholders of the Company immediately prior thereto
continuing to own (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50% of the combined voting
power of the securities of the Company or such surviving entity (or the parent,
if any) outstanding immediately after such transaction(s) in substantially the
same proportions as their ownership immediately prior to such transaction(s); or

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     (d) the consummation of a sale or disposition by the Company of all or
substantially all of the Company’s assets, other than a liquidation of the
Company into a wholly owned subsidiary (provided, however, that a transfer of
assets by the Company is not treated as a change in the ownership of such assets
if the assets are transferred to: (i) a shareholder of the Company (immediately
before the asset transfer) in exchange for or with respect to its stock; (ii) an
entity of which the Company owns, directly or indirectly, 50% or more of the
total value or voting power; (iii) a Person, or more than one Person acting as a
group, that owns, directly or indirectly, 50% or more of the total value or
voting power of all the outstanding stock of the Company; or (iv) an entity of
which a Person or group described in clause (iii) above owns, directly or
indirectly, at least 50% of the total value or voting power).
     As used herein, the term “Person” (including a “group”), has the meaning
assigned to such term for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (or any successor section thereto).
     2.4 “Code” means the Internal Revenue Code of 1986, as amended, and any
successor thereto.
     2.5 “Committee” means the group of individuals appointed by the Board to
administer the Plan.
     2.6 “Company” means Patriot Coal Corporation and any successor thereto.
     2.7 “Compensation” means straight-time wages or base salary
(inclusively) paid for services rendered by an Employee to the Company or any
Participating Subsidiary during the applicable period specified in the Plan,
including any such amounts contributed by the Employee to any plan or plans
established by the Company or Participating Subsidiary in accordance with Code
Section 125 or 401(k). Bonuses, incentive compensation, overtime, commissions
and shift premiums paid to an Employee shall not be included in Compensation.
     2.8 “Custodian” means the custodian for the Plan appointed by the Company.
     2.9 “Effective Date” shall have the meaning set forth in Section 1.3.
     2.10 “Employee” means any employee (as defined for purposes of Code
Section 423) of the Company or a Participating Subsidiary.
     2.11 “Fair Market Value” means the fair market value of one share of Stock
as of a particular day, which shall be the closing price per share of Stock on
the New York Stock Exchange on that day, or, if such day is not a trading day,
the last preceding trading day.
     2.12 “Offering Date” means the first day of the Offering Period.
     2.13 “Offering Period” means any of the following time periods: the
Effective Date through June 30, 2008; July 1, 2008 through December 31, 2008;
and each consecutive six-month period thereafter; or such other period
designated by the Committee in its sole discretion.

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     2.14 “Option” means an option to purchase shares of Stock under the Plan,
based on the contributions credited to each Employee’s Option Account.
     2.15 “Option Account” means the Account maintained on behalf of the
Employee under Section 3.4 to which contributions to the Plan are credited and
from which amounts are withdrawn to exercise options on a Termination Date.
     2.16 “Participating Subsidiary” means a Subsidiary that is participating in
the Plan in accordance with Section 1.4.
     2.17 “Plan” means this Patriot Coal Corporation Employee Stock Purchase
Plan, as described in this document and as amended from time to time.
     2.18 “Stock” means the common stock, $0.01 par value, of the Company.
     2.19 “Subsidiary” means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations, or group of commonly controlled corporations, other than the last
corporation in the unbroken chain owns 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the chain.
     2.20 “Termination Date” means the last day of an Offering Period or, if
earlier, the date of a Change in Control that occurs during such Offering
Period.
SECTION 3. ENROLLMENT AND CONTRIBUTIONS
     3.1 Eligibility for Enrollment.
     (a) An Employee may enroll in the Plan for an Offering Period unless one of
the following applies:
     (i) The customary employment of the Employee on the Offering Date is twenty
(20) hours or fewer per week; or
     (ii) The customary employment of the Employee on the Offering Date is for
not more than five (5) months in any calendar year; or
     (iii) The Employee is not employed by the Company or a Participating
Subsidiary on the Offering Date; or
     (iv) The Employee would, immediately upon enrollment, own directly or
indirectly, or hold options or rights to acquire, an aggregate of five percent
(5%) or more of the total combined voting power or value of all outstanding
shares of all classes of stock of the Company or any Subsidiary, with ownership
determined in accordance with the rules of Code Section 424(d) and treating
stock that the Employee may purchase under outstanding options as owned by the
Employee.

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     (b) The Committee or its designee will notify an Employee that the Employee
is first eligible to enroll in the Plan and, except as otherwise provided herein
with respect to the Offering Period beginning on the Effective Date, make
available to each eligible Employee the necessary enrollment forms before the
Offering Date.
     3.2 Enrollment Procedure.
     (a) To enroll in the Plan for an Offering Period, an Employee must file an
enrollment form with the Company and elect to make contributions under the Plan
in accordance with Section 3.3. The enrollment form must be received by the
Company at least fifteen (15) calendar days prior to the Offering Date and must
state the contribution rate elected by the Employee for the Offering Period. An
Employee who does not enroll in the Plan for an Offering Period will receive no
shares of Stock under the Plan for such Offering Period. Notwithstanding the
foregoing, with respect to the Offering Period beginning on the Effective Date,
any Employee eligible to enroll in the Plan as of the Effective Date pursuant to
Section 3.1 shall be automatically enrolled in the Plan at the maximum
contribution rate permitted under Section 3.3(b), subject to such Employee’s
right to increase, decrease or discontinue contributions under Section 3.3(d).
     (b) An Employee whose enrollment in, and contributions under, the Plan
continue throughout an Offering Period will automatically be enrolled in the
Plan for the next Offering Period unless (i) the Employee files with the Company
a written notice of discontinuance of contributions before the Offering Date for
the next Offering Period in accordance with Section 5.1(a)(i), or (ii) on the
Offering Date for such Offering Period the Employee is described in
Section 3.1(a). The contribution rate for an Employee who is automatically
enrolled for an Offering Period (other than the Offering Period beginning on the
Effective Date) pursuant to this Section will be the contribution rate in effect
for the immediately preceding Offering Period, unless the Employee files with
the Company an amended enrollment form designating a different contribution rate
at least fifteen (15) calendar days prior to the next Offering Period.
     3.3 Contributions.
     (a) To enroll for the first time in the Plan for an Offering Period (other
than the Offering Period beginning on the Effective Date), an Employee must
elect to make a contribution under the Plan, subject to the terms and conditions
described below, by means of payroll deduction for each payroll period within
the Offering Period. Notwithstanding the foregoing, with respect to the Offering
Period beginning on the Effective Date, contributions to the Plan by any
Employee who is automatically enrolled in the Plan pursuant to Section 3.2(a)
shall be made by means of payroll deductions only for payroll periods within
such Offering Period that begin after the date of the effective registration
statement filed on Form S-8 under the Securities Act of 1933, as amended, with
respect to the shares of Stock available under the Plan (the “S-8 Registration
Date”). An Employee may make contributions to the Plan in the form of a check or
payroll deductions (including deductions at a rate higher than the maximum rate
permitted under Section 3.3(b)) to make up for the period from the Effective
Date to the end of the pay period in which the S-8 Registration occurs. Such
additional contributions may be made

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at any time during the portion of such Offering Period beginning on the S-8
Registration Date and ending on the first Termination Date.
     (b) Except as otherwise provided in Section 3.3(a), an Employee may elect
to make payroll deduction contributions in amounts not less than one percent
(1%) of Compensation per payroll period and not more than the lesser of
(i) fifteen percent (15%) of Compensation per Offering Period (or such other
amount as the Committee may establish from time to time and communicate to
Employees before the Offering Date) or (ii) a percentage of Compensation for
each payroll period that ensures that the limit on the purchase of shares of
Stock specified in Section 4.1 is not exceeded for the Offering Period.
     (c) Except as otherwise provided in Section 3.3(a), payroll deductions will
commence with the first payroll period that begins during the Offering Period
and will be made in conformity with the Company’s payroll deduction schedule and
practices.
     (d) Except as provided in Section 5.1, an Employee may elect to increase,
decrease or discontinue contributions once each Offering Period as of the first
day of the first payroll period beginning in the Offering Period by giving
written notice to the Committee at least fifteen (15) calendar days before such
date. Notwithstanding the foregoing, with respect to the Offering Period
beginning on the Effective Date, any Employee who is automatically enrolled in
the Plan pursuant to Section 3.2(a) shall have one opportunity to increase,
decrease or discontinue contributions at any time during the portion of such
Offering Period beginning on the S-8 Registration Date and ending fifteen
(15) calendar days before the end of such Offering Period.
     (e) Notwithstanding anything in the Plan to the contrary, contributions
otherwise made by an Employee to the Plan pursuant to the enrollment procedure
described in Section 3.2 shall be automatically suspended to the extent, and for
the period of time, required under Code Section 401(k) and the regulations
promulgated thereunder.
     3.4 Option Accounts. All contributions made by an Employee under the Plan
will be credited to an Option Account maintained by the Company or the Custodian
on behalf of the Employee. The Company will make the credit as soon as
practicable after the contributions are withheld from the Employee’s
Compensation.
     3.5 Withdrawal of Contributions. An Employee may elect to withdraw
contributions made during an Offering Period by giving written notice to the
Committee at least fifteen (15) calendar days before the end of such Offering
Period, in which case the cash credited to the Employee’s Option Account will be
refunded to the Employee without interest as soon as administratively feasible
after the Committee receives such notice, and the Employee may not re-enroll in
the Plan until the next Offering Period.
     3.6 No Funding of Accounts. No cash shall be set aside with respect to an
Option Account until it is credited thereto. Nothing contained in this Plan and
no action taken pursuant to the provisions hereof shall create or be construed
to create a trust of any kind, or a fiduciary relationship between the Company
and any Employee or any other person with respect to an Option Account. Amounts
credited to an Option Account at any time and from time to time shall

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be general assets of the Company. To the extent that any person acquires a right
to receive the benefit of amounts credited to an Option Account, such right
shall be that of an unsecured general creditor of the Company.
SECTION 4. GRANT AND EXERCISE OF OPTION
     4.1 Grant of Options; Terms. Enrollment in the Plan with respect to any
Offering Period will constitute the grant by the Company of an Option to
purchase shares of Stock under the Plan during such Offering Period. All
Employees granted Options shall have the same rights and privileges as required
by Code Section 423(b)(5). Each Option will be subject to the following terms:
     (a) The exercise price will be as specified in Section 4.2
     (b) Except as limited in subsection (e) below, the number of shares of
Stock subject to the Option will equal the number of shares of Stock that can be
purchased at the exercise price specified in Section 4.2 with the aggregate
amount credited to the Employee’s Option Account as of the Termination Date.
     (c) The Option with respect to an Offering Period will be exercised on the
Termination Date of such Offering Period.
     (d) The payment by an Employee for the shares of Stock purchased upon
exercise of an Option will be made only through payroll deduction, unless
otherwise provided herein with respect to the Offering Period beginning on the
Effective Date, all in accordance with Section 3.3.
     (e) No Employee shall be granted an Option to the extent the number of
shares of Stock that may be purchased for such Employee (when taken together
with all other options exercisable by such Employee under any other stock
purchase plan of the Company or a Subsidiary that is qualified under Code
Section 423) in the aggregate during a calendar year exceeds twenty-five
thousand dollars ($25,000) in Fair Market Value of such shares of Stock
determined on the Offering Date for the Offering Period with respect to which
the purchase is to be made.
     4.2 Exercise of Option; Exercise Price.
     (a) As soon as practicable after the Termination Date of each Offering
Period, the Company or the Custodian will apply to the purchase of the number of
shares of Stock the exercise price of which is covered by the amounts credited
to each Employee’s Option Account as of such Termination Date. In the event that
the aggregate amount credited to the Employees’ Option Accounts as of such
Termination Date exceeds the exercise price of the shares available for purchase
as of such date under this Plan, the Company or Custodian shall purchase for
each Employee his or her proportional share of the shares available for
purchase, based on the percentage that the cash allocated to his or her Option
Account represents of the total cash allocated to the Option Accounts of all
Employees for the Offering Period ending on such date, and the excess of the
amount so credited shall be returned to the Employee without interest. The Stock
so purchased shall

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be allocated to the Option Account for each Employee. The Stock shall be held by
the Custodian on behalf of the Employee and registered in the name of a nominee.
     (b) The exercise price of each share of Stock purchased with respect to any
Offering Period shall be the lower of:
     (i) Eighty-five percent (85%) of the Fair Market Value of the Stock on the
Offering Date for such Offering Period, or
     (ii) Eighty-five percent (85%) of the fair market value of the Stock on the
Termination Date for such Offering Period.
     4.3 Option Accounts.
     (a) All shares of Stock purchased on behalf of an Employee as of a
Termination Date shall be credited to such Employee’s Option Account as of such
date. Dividends payable with respect to shares of Stock credited to the
Employee’s Option Account will be credited to the Employee’s Option Account and,
to the extent such dividends are paid in cash, will be used by the Custodian to
purchase additional shares of Stock on the open market as soon as
administratively feasible following receipt of the dividend payment by the
Custodian.
     (b) The Committee may determine whether cash in an amount representing the
price of a fractional share shall be carried over to the next Offering Period or
applied to the purchase of a fractional share at the end of an Offering Period;
provided that such determination shall apply uniformly to all Employees for each
Offering Period.
     4.4 No Interest on Account Balances. No interest or other earnings will be
credited to any Option Account with respect to (a) amounts credited thereto
during an Offering Period or (b) amounts to be returned to the Employee. Neither
the Committee nor the Company shall have any obligation to invest or otherwise
manage amounts credited to an Option Account, other than to apply such amounts
to the purchase of Stock in accordance with the terms of this Plan.
SECTION 5. TERMINATION OF ENROLLMENT
     5.1 Termination of Enrollment.
     (a) An Employee’s enrollment in the Plan will terminate under the following
circumstances:
     (i) as of the beginning of the Offering Period that is at least fifteen
(15) calendar days after the Employee files with the Company a written notice of
discontinuance of contributions (except as provided in Section 5.1(a)(ii));
     (ii) immediately upon the Employee filing with the Company a written notice
of discontinuance of contributions with respect to the Offering Period beginning
on the Effective Date as provided in Section 3.3(d);

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     (iii) upon the Employee’s termination of employment with the Company and
all Participating Subsidiaries;
     (iv) as of the date on which the Employee would own, directly or
indirectly, or hold options or rights to acquire, an aggregate of five percent
(5%) or more of the total combined voting power or value of all outstanding
shares of all classes of the Company or any Subsidiary, determined in accordance
with Code Section 424(d); and
     (v) upon termination of the Plan or as of the date the relevant
Participating Subsidiary ceases to be a Subsidiary.
     (b) An Employee whose enrollment in the Plan terminates under this Section,
other than by reason of termination of the Plan, may again enroll in the Plan as
of any subsequent Offering Date if the Employee satisfies the eligibility
conditions of Section 3.1 as of such date.
     5.2 Distributions to Employee.
     (a) Subject to the eighteen (18) month holding period prescribed in
subsection 5.2(c), as soon as administratively feasible after an Employee’s
enrollment in the Plan terminates under Section 5.1:
     (i) The Company will pay to the Employee all cash credited to the
Employee’s Option Account as of the date of termination, without interest; and
     (ii) The Committee will direct the Custodian to distribute to the Employee
shares of Stock then credited to the Employee’s Option Account that have been
credited to the Employee’s Option Account for at least eighteen (18) months in
the form of certificates representing whole shares of Stock (and cash equal to
the Fair Market Value of any fractional share), or a nominee account, as
requested by the Employee or former Employee.
     (b) If an Employee’s enrollment terminates as a result of death, or if the
Employee’s death occurs before the Employee receives a distribution under this
Section, all cash amounts payable under this Section to the Employee will be
paid to the Employee’s Beneficiary; and shares of Stock credited to the Option
Account of a deceased Employee may be distributed to the personal representative
of the deceased employee without regard to the eighteen (18) month holding
period described in Section 5.2(c).
     (c) An Employee or former Employee may, from time to time, request
distribution of shares of Stock then credited to the Employee’s Option Account
that have been credited to the Employee’s Option Account for at least eighteen
(18) months. Notwithstanding the above, in the event of a Change in Control an
Employee or former Employee may request distribution of shares of Stock then
credited to the Employee’s Option Account. Distribution may be made as soon as
administratively practicable in the form of stock certificates representing
whole shares of Stock (and cash equal to the Fair

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Market Value of any fractional share), or a nominee account, as requested by the
Employee or former Employee.
     5.3 Beneficiaries.
     (a) An Employee may designate a Beneficiary to receive his or her benefits
under the Plan following the Employee’s death. Any such designation must be made
on a form provided by the Company for this purpose, will be effective on the
date received by the Company and may be revoked by the Employee at any time.
     (b) If the Employee fails to designate a Beneficiary or if no designated
Beneficiary survives the Employee, then any amounts due to the Employee under
the Plan shall be paid to the Employee’s estate.
SECTION 6. PLAN ADMINISTRATION
     6.1 Committee. The Plan will be administered by the Committee.
     6.2 Committee Powers.
     (a) The Committee will have all powers appropriate to administer the Plan,
including, but not limited to, the following:
     (i) To resolve all questions that may arise under the Plan, including the
power to determine the rights or eligibility of Employees or their
Beneficiaries;
     (ii) To construe the terms of the Plan and to remedy ambiguities,
inconsistencies or omissions;
     (iii) To adopt such rules of procedure and prescribe such forms that it
considers appropriate for the proper administration of the Plan and that are
consistent with the Plan;
     (iv) To enforce the Plan provisions and the rules of procedure that the
Committee adopts;
     (v) To employ agents, attorneys, accountants, actuaries or other persons,
and to allocate or delegate to them such powers, rights and duties as the
Committee considers appropriate for the proper administration of the Plan.
     (b) The Committee will have such further powers and duties as may be
specified elsewhere in the Plan.
     6.3 Committee Actions. The actions of the Committee may be taken at a
meeting by a majority of its members, in writing without a meeting if a majority
of its members sign such writing or by the use of a conference telephone or
other communications equipment by means of which all persons participating in
the meeting can hear each other and participation in such a

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meeting in this manner shall constitute attendance and presence in person at the
meeting of the person or persons so participating for all purposes. In taking
action:
     (a) The Committee may allocate authority to a specific member or specific
members of the Committee to carry out such duties as the Committee may assign;
     (b) A member of the Committee may delegate, in writing, any or all of such
member’s rights, powers, duties and discretion to any other member of the
Committee, with the consent of such other member;
     (c) The Committee may delegate to any agents such duties and powers as it
deems appropriate, by an instrument in writing that specifies which duties are
so delegated and to whom each such duty is so delegated; and
     (d) When there is an even division of opinion among the members of the
Committee as to a matter, the Board of Directors of the Company will resolve the
matter, provided, however, that no member of the Board of Directors may vote on
such a matter if it concerns such member’s individual rights, privileges or
obligations under the Plan.
     6.4 Member Who is a Participant. If a member of the Committee is an
Employee, such member may not decide any matter relating to the member’s
participation or Option Account or how the Option Account is to be paid to the
member that the member would not have the right to decide in the absence of
membership on the Committee. No Employee will receive any compensation for
services as a member of the Committee.
     6.5 Information Required from Company. The Company will furnish the
Committee with such data and information as the Committee deems appropriate to
administer the Plan. The records of the Company as to an Employee’s Compensation
will be conclusive and binding on all persons unless determined by the Committee
to be clearly incorrect.
     6.6 Information Required from Employees. Each person entitled to benefits
under the Plan must furnish the Company from time to time in writing such
person’s mailing address, each change of mailing address and such other data and
information as the Committee deems appropriate to administer the Plan. Any
communication, statement or notice mailed with postage prepaid to any person at
the last mailing address filed with the Company will be binding upon such person
for all purposes of the Plan.
     6.7 Uniform Rules and Administration. The Committee will administer the
Plan on a nondiscriminatory basis and will apply uniform rules to all persons
similarly situated.
SECTION 7. AMENDMENT AND TERMINATION
     7.1 Amendment.
     (a) The Company reserves the right to amend the Plan from time to time
subject to the following limitations:
     (i) To the extent necessary to comply with or obtain an exemption from any
provision of the Code, including regulations thereunder, or of the

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Securities Exchange Act of 1934, as amended, no amendment will be made without
the prior approval of the stockholders of the Company if the amendment will (A)
increase the number of shares of Stock reserved for purchase under the Plan, or
(B) materially modify the eligibility conditions or materially increase the
benefits available under the Plan.
     (ii) No amendment will make any change in a previously granted and
outstanding Option that adversely affects the rights of an Employee with respect
to such Option.
     (iii) No amendment will reduce the amount of an Employee’s Option Account
balance.
     (b) The Company may delegate to the Committee or its officers the power to
amend the Plan as the Company deems appropriate, subject to the limitations of
this Section.
     7.2 Termination. The Plan is entirely voluntary on the part of the Company
and the continuance of the Plan should not be construed as a contractual
obligation of the Company. Accordingly, the Company reserves the right to
terminate the Plan at any time. Unless sooner terminated by the Company, the
Plan shall terminate on the date all of the shares of Stock specified in
Section 1.5(a) are purchased, unless additional shares of Stock are authorized
for the Plan by the stockholders of the Company. No Option may be granted under
the Plan after the Plan is terminated.
     7.3 Rights upon Plan Termination.
     (a) If the Plan terminates, the Committee may elect to terminate all
outstanding Options either immediately or upon completion of the purchase of
shares of Stock on the next following Termination Date.
     (b) If the Committee terminates an Option prior to the expiration of the
Option, all amounts contributed to the Plan that remain in an Employee’s Option
Account will be returned to the Employee as soon as reasonably practicable.
SECTION 8. GENERAL PROVISIONS
     8.1 No Transfer or Assignment. The rights of an Employee under the Plan may
not be sold, pledged, assigned or transferred, voluntarily or involuntarily, in
any manner other than by will or the laws of descent and distribution. Any such
attempted sale, pledge, assignment or transfer shall be without effect. An
Employee’s rights and all Options granted under the Plan shall be exercisable
only by such Employee during his or her lifetime.
     Furthermore, except as provided in Section 5.2(b), shares purchased for an
Employee as of a Termination Date may not be sold, exchanged, assigned,
transferred, pledged, or otherwise disposed of in any way by the Employee, other
than by will or the laws of descent and distribution, until after eighteen
(18) months after such Termination Date. The Company may place controls on the
Account of the Employee to which such shares are credited as necessary or

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appropriate to enforce such restrictions. Any such attempted assignment,
transfer, pledge or other disposition shall be without effect.
     8.2 Rights as Stockholder. The grant of an Option to purchase shares of
Stock under the Plan will not confer upon an Employee any rights as a
stockholder of the Company with respect to shares of Stock subject to the
Option. An Employee will become a stockholder with respect to shares of Stock
subject to an Option under the Plan only when the purchase of such shares of
Stock is completed as of a Termination Date.
     8.3 Rights as Employee. The Plan is not a contract of employment, and the
grant of an Option to purchase shares of Stock under the Plan will not confer
upon any Employee the right to be retained in the employ of the Company or any
Subsidiary.
     8.4 Costs. All costs and expenses incurred in the administration of the
Plan will be paid by the Company and its Subsidiaries. Any brokerage fees for
the sale of shares of Stock by an Employee will be borne by the Employee.
     8.5 Application of Funds. All proceeds received by the Company from the
sale of Stock under the Plan will be used for general corporate purposes.
     8.6 Reports. The Company will provide or cause to be provided to each
Employee an annual report of the Employee’s contributions under the Plan for
each Plan Year and the shares of Stock purchased with such contributions.
     8.7 Actions by Company. Any action taken by the Company with respect to the
Plan will be by resolution of its Board of Directors or by a person or persons
authorized by resolution of its Board of Directors.
     8.8 Governmental Approval. The Plan and any offering or sale made to
Employees under the Plan is subject to any governmental approvals or consents
that are or may become applicable in connection herewith.
     8.9 Stockholder Approval. The Plan is subject to approval by the holders of
a majority of the shares present in person or by proxy and voting at the meeting
at which the Plan is considered and shall not be effective without such approval
within twelve (12) months before or after the adoption of the Plan by the Board
of Directors.
     8.10 Applicable Law. The Plan will be governed by the laws of the State of
Delaware, without regard to the law of conflicts of such state, to the extent
that federal law does not preempt such laws.
     8.11 Gender and Number. When the context permits, words in the Plan used in
the masculine gender include the feminine gender, words in the singular include
the plural and words in the plural include the singular.
     8.12 Headings. All headings in the Plan are included solely for ease of
reference and do not bear on the interpretation of the text.
[ADOPTION CERTIFICATION PAGE FOLLOWS]

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     The undersigned hereby certifies that this Plan was duly adopted by the
shareholders of the Company on October 12, 2007.

                  By:   /s/ Richard M. Whiting         Title:  President & Chief
Executive Officer      Date:  October 22, 2007   

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