EXHIBIT 10.1

ZIONS BANCORPORATION

AMENDED AND RESTATED

2005 STOCK OPTION AND INCENTIVE PLAN

ARTICLE I

GENERAL

1.1 Purpose

The purpose of the Amended and Restated Zions Bancorporation 2005 Stock Option
and Incentive Plan (the “Plan”) is to promote the long-term success of Zions
Bancorporation (the “Company”) by providing an incentive for officers, employees
and directors of, and consultants and advisors to, the Company and its Related
Entities to acquire a proprietary interest in the success of the Company, to
remain in the service of the Company and/or Related Entities, and to render
superior performance during such service.

1.2 Definitions of Certain Terms

(a) “Award” means an award under the Plan as described in Section 1.5 and
Article II.

(b) “Award Agreement” means a written agreement entered into between the Company
and a Grantee in connection with an Award.

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

(d) “Cause” Termination of Employment by the Company for “Cause” means, with
respect to a Grantee and an Award, (i) except as provided otherwise in the
applicable Award Agreement or as provided in clause (ii) below, Termination of
Employment of the Grantee by the Company (A) upon Grantee’s failure to
substantially perform Grantee’s duties with the Company or a Related Entity
(other than any such failure resulting from death or Disability), (B) upon
Grantee’s failure to substantially follow and comply with the specific and
lawful directives of the Board or any officer of the Company or a Related Entity
to whom Grantee directly or indirectly reports, (C) upon Grantee’s commission of
an act of fraud or dishonesty resulting in actual or potential economic,
financial or reputational injury to the Company or a Related Entity, (D) upon
Grantee’s engagement in illegal conduct, gross misconduct or an act of moral
turpitude, (E) upon Grantee’s violation of any written policy, guideline, code,
handbook or similar document governing the conduct of directors, officers or
employees of the Company or its Related Entities, or (F) upon Grantee’s
engagement in any other similar conduct or act determined by the Committee in
its discretion to constitute “cause”; or (ii) in the case of directors, officers
or employees who at the time of the Termination of Employment are entitled to
the benefits of a change in control, employment or similar agreement entered
into by the Company or a Related Entity that defines or addresses termination
for cause, termination for cause as defined and/or determined pursuant to such
agreement. In the event that there is more than one such agreement, the
Executive Compensation Committee shall determine which agreement shall govern.

 

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

(f) “Committee” means the Executive Compensation Committee (including any
successor thereto) of the Board and shall consist of not less than two
directors. However, if (i) a member of the Executive Compensation Committee is
not an “outside director” within the meaning of Section 162(m) of the Code, is
not a “non-employee director” within the meaning of Rule 16b-3 under the
Exchange Act, or is not an “independent director” within the meaning of Nasdaq
Market Rule 4350 (c), or (ii) the Executive Compensation Committee otherwise in
its discretion determines, then the Executive Compensation Committee may from
time to time delegate some or all of its functions under the Plan to a
subcommittee composed of members of the Executive Compensation Committee that,
if relevant, meet the necessary requirements. The term “Committee” includes the
Executive Compensation Committee or any such subcommittee, to the extent of the
Executive Compensation Committee’s delegation.

(g) “Common Stock” means the common stock of the Company.

(h) “Disability” means, with respect to a Grantee and an Award, (i) except as
provided in the applicable Award Agreement or as provided in clause (ii) below,
“disability” as defined in the Company’s long-term disability plan in which
Grantee is participating; or (ii) in the case of directors, officers or
employees who at the time of the Termination of Employment are entitled to the
benefits of a change in control, employment or similar agreement entered into by
the Company or a Related Entity that defines or addresses termination because of
disability, “disability” as defined in such agreement. In the event that there
is more than one such agreement, the Committee shall determine which agreement
shall govern. Notwithstanding the foregoing, (A) in the case of an Incentive
Stock Option, the term “Disability” for purposes of the preceding sentence shall
have the meaning given to it by Section 422 (c)(6) of the Code and (B) to the
extent an Award is subject to the provisions of Section 409A of the Code and in
order for compensation provided under any Award to avoid the imposition of taxes
under Section 409A of the Code, then a Grantee shall be determined to have
suffered a Disability only if such Grantee is “disabled” within the meaning of
Section 409A of the Code.

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

(j) The “Fair Market Value” of a share of Common Stock on any date shall be
(i) the closing sale price per share of Common Stock during normal trading hours
on the national securities exchange, association or other market on which the
Common Stock is principally traded for such date or the last preceding date on
which there was a sale of such Common Stock on such exchange, association or
market, or (ii) if the shares of Common Stock are then traded in an
over-the-counter market, the average of the closing bid and asked prices for the
shares of Common Stock during normal trading hours in such over-the-counter
market for such date or the last preceding date on which there was a sale of
such Common Stock in such market, or (iii) if the shares of Common Stock are not
then listed on a national securities exchange, association or other market or
traded in an over-the-counter market, such value as the Committee, in its
discretion shall determine.

 

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(k) “Grantee” means a person who receives an Award.

(l) “Incentive Stock Option” means, subject to Section 2.3 (f), a stock option
that is intended to qualify for special federal income tax treatment pursuant to
Sections 421 and 422 of the Code (or a successor provision thereof) and which is
so designated in the applicable Award Agreement. Under no circumstances shall
any stock option that is not specifically designated as an Incentive Stock
Option be considered an Incentive Stock Option.

(m) “Key Persons” means then acting or prospective directors, officers and
employees of the Company or of a Related Entity, and then acting or prospective
consultants and advisors to the Company or a Related Entity.

(n) “Non-Employee Director” has the meaning given to it in Section 2.13(a).

(o) “Performance Goals” means the goal(s) (or combined goal(s)) determined by
the Committee in its discretion to be applicable to a Grantee with respect to an
Award. As determined by the Committee, the Performance Goals applicable to an
Award may provide for a targeted or measured level or levels of achievement or
change using one or more of the following measures: (i) revenue, (ii) earnings
per share, (iii) net income, (iv) return on assets, (v) return on equity,
(vi) stock price, (vii) economic profit or shareholder value added, and
(viii) total shareholder return. Such measures may be defined and calculated in
such manner and detail as the Committee in its discretion may determine,
including whether such measures shall be calculated before or after income taxes
or other items, the degree or manner in which various items shall be included or
excluded from such measures, whether total assets or certain categories of
assets shall be used, whether such measures shall be applied to the Company on a
consolidated basis or to certain Related Parties of the Company or to certain
divisions, operating units or business lines of the Company or a Related Entity,
the weighting that shall be given to various measures if combined goals are
used, and the periods and dates during or on which such measures shall be
calculated. The Performance Goals may differ from Grantee to Grantee and from
Award to Award.

(p) “Person”, whether or not capitalized, means any natural person, any
corporation, partnership, limited liability company, trust or legal or
contractual entity or joint undertaking and any governmental authority.

(q) “Related Entity” means any corporation, partnership, limited liability
company or other entity that is an “affiliate” of the Company within the meaning
of Rule 12b-2 under the Exchange Act.

 

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(r) “Retirement” means, with respect to a Grantee and an Award, (i) except as
otherwise provided in the applicable Award Agreement or as provided in clause
(ii) below, the Grantee’s Termination of Employment with the Company or a
Related Entity for a reason other than for Cause and that at the time of the
Termination of Employment the Grantee has reached the following age with the
corresponding number of years of service with the Company and/or Related
Entities:

 

Age

   Years of
Service

55

   10

56

   9

57

   8

58

   7

59

   6

60 and older

   5;

or (ii) with respect to a Non-Employee Director, the Grantee’s Termination of
Employment with the Company at the end of his or her term of office for any
reason other than Cause.

(s) “Rule 16b-3” means Rule 16b-3 under the Exchange Act.

(t) Unless otherwise determined by the Committee and subject to the following
sentence, a Grantee shall be deemed to have a “Termination of Employment” upon
ceasing employment with the Company or any Related Entity (or, in the case of a
Grantee who is not an employee, upon ceasing association with the Company or any
Related Entity as a director, consultant, advisor or otherwise). Unless the
Committee in its discretion determines otherwise, it shall not be considered a
Termination of Employment of a Grantee if the Grantee ceases employment or
association with the Company or a Related Entity but continues or immediately
commences employment or association with a majority-owned Related Entity or the
Company. The Committee in its discretion may determine (i) that a given
termination of employment with the Company or any particular Related Entity does
not constitute a Termination of Employment (including circumstances in which
employment continues with another Related Entity or the Company), (ii) whether
any leave of absence constitutes a Termination of Employment for purposes of the
Plan, (iii) the impact, if any, of any such leave of absence on Awards
theretofore made under the Plan, and (iv) when a change in a Grantee’s
association with the Company or any Related Entity constitutes a Termination of
Employment for purposes of the Plan. The Committee may also determine in its
discretion whether a Grantee’s Termination of Employment is for Cause and the
date of termination in such case. The Committee may make any such determination
at anytime, whether before or after the Grantee’s Termination of Employment.

1.3 Administration

(a) The Committee. The Plan shall be administered by the Committee, which shall
consist of not less than two directors.

(b) Authority. The Committee shall have the authority (i) to exercise all of the
powers granted to it under the Plan, (ii) to construe, interpret and implement
the Plan and any Award Agreements, (iii) to prescribe, amend and rescind rules
and regulations relating to the

 

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Plan, including rules governing its own operations, (iv) to make all
determinations necessary or advisable in administering the Plan (including
defining and calculating Performance Goals and certifying that such Performance
Goals have been met), (v) to correct any defect, supply any omission and
reconcile any inconsistency in the Plan, (vi) to amend the Plan to reflect
changes in applicable law or regulations, (vii) to determine whether, to what
extent and under what circumstances Awards may be settled or exercised in cash,
shares of Common Stock, other securities, other Awards or other property, or
canceled, forfeited or suspended and the method or methods by which Awards may
be settled, canceled, forfeited or suspended (including, but not limited to,
canceling an Award in exchange for a cash payment (or securities with an
equivalent value) equal to the difference between the Fair Market Value of a
share of Common Stock on the date of grant and the Fair Market Value of a share
of Common Stock on the date of cancellation, and, if no such difference exists,
canceling an Award without a payment in cash or securities), and (viii) to
determine whether, to what extent and under what circumstances cash, shares of
Common Stock, other securities, other Awards or other property and other amounts
payable with respect to an Award shall be deferred either automatically or at
the election of the holder thereof or of the Committee.

(c) Voting. Actions of the Committee shall be taken by the vote of a majority of
its members. Any action may be taken by a written instrument signed by a
majority of the Committee members, and action so taken shall be fully as
effective as if it had been taken by a vote at a meeting.

(d) Binding determinations. The determination of the Committee on all matters
relating to the Plan or any Award Agreement shall be final, binding and
conclusive.

(e) Exculpation. No member of the Board or the Committee or any officer,
employee or agent of the Company or any of its Related Entities (each such
person a “Covered Person”) shall have any liability to any person (including,
without limitation, any Grantee) for any action taken or omitted to be taken or
any determination made in good faith with respect to the Plan or any Award. Each
Covered Person shall be indemnified and held harmless by the Company against and
from any loss, cost, liability or expense (including attorneys’ fees) that may
be imposed upon or incurred by such Covered Person in connection with or
resulting from any action, suit or proceeding to which such Covered Person may
be a party or in which such Covered Person may be involved by reason of any
action taken or omitted to be taken under the Plan and against and from any and
all amounts paid by such Covered Person, with the Company’s approval, in
settlement thereof, or paid by such Covered Person in satisfaction of any
judgment in any such action, suit or proceeding against such Covered Person;
provided that the Company shall have the right, at its own expense, to assume
and defend any such action, suit or proceeding and, once the Company gives
notice of its intent to assume the defense, the Company shall have sole control
over such defense with counsel of the Company’s choice. The foregoing right of
indemnification shall not be available to a Covered Person to the extent that a
court of competent jurisdiction in a final judgment or other final adjudication,
in either case, not subject to further appeal, determines that the acts or
omissions of such Covered Person giving rise to the indemnification claim
resulted from such Covered Person’s bad faith, fraud or willful criminal act or
omission. The foregoing right of indemnification shall not be exclusive of any
other rights

 

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of indemnification to which Covered Persons may be entitled under the Company’s
Articles of Incorporation or Bylaws, in each case as amended from time to time,
as a matter of law, or otherwise, or any other power that the Company may have
to indemnify such persons or hold them harmless.

(f) Experts. In making any determination or in taking or not taking any action
under this Plan, the Committee or the Board may obtain and may rely upon the
advice of experts, including professional and financial advisors and consultants
to the Committee or the Company. No director, officer, employee or agent of the
Company shall be liable for any such action or determination taken or made or
omitted in good faith reliance on such advice.

(g) Board. Notwithstanding anything to the contrary contained herein (i) until
the Board shall appoint the members of the Committee, the Plan shall be
administered by the Board, and (ii) the Board may, in its sole discretion, at
any time and from time to time, grant Awards or resolve to administer the Plan.
In either of the foregoing events, the Board shall have all of the authority and
responsibility granted to the Committee herein.

1.4 Persons Eligible for Awards

Awards under the Plan may be made to such Key Persons as the Committee shall
select in its discretion.

1.5 Types of Awards under the Plan

Awards may be made under the Plan in the form of stock options, including
Incentive Stock Options and non-qualified stock options, stock appreciation
rights, restricted stock, unrestricted stock, restricted stock units,
performance shares, performance units, dividend equivalent units, deferred stock
units and other stock-based Awards, as set forth in Article II.

1.6 Shares Available for or Subject to Awards

(a) Total shares available. The total number of shares of Common Stock that may
be transferred pursuant to Awards granted under the Plan shall not exceed
13,200,000 shares. All of such shares shall be authorized for issuance pursuant
to incentive stock options under Section 2.3 or for other Awards under Article
II. Such shares may be authorized but unissued Common Stock or authorized and
issued Common Stock held in the Company’s treasury or acquired by the Company
for the purposes of the Plan. The Committee may direct that any stock
certificate evidencing shares issued pursuant to the Plan shall bear a legend
setting forth such restrictions on transferability as may apply to such shares
pursuant to the Plan. If any Award is forfeited or otherwise terminates or is
canceled without the delivery of shares of Common Stock, then the shares covered
by such forfeited, terminated or canceled Award shall again become available for
transfer pursuant to Awards granted or to be granted under this Plan. However,
if any Award or shares of Common Stock issued or issuable under Awards are
tendered or withheld as payment for the exercise price of an Award, the shares
of Common Stock may not be reused or reissued or otherwise be treated as being
available for Awards or issuance pursuant to the Plan. With respect to a stock
appreciation rights, both shares of

 

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Common Stock issued pursuant to the Award and shares of Common Stock
representing the exercise price of the Award shall be treated as being
unavailable for other Awards or other issuances pursuant to the Plan unless the
stock appreciation right is forfeited, terminated or cancelled without the
delivery of shares of Common Stock. Any shares of Common Stock delivered by the
Company, any shares of Common Stock with respect to which Awards are made by the
Company and any shares of Common Stock with respect to which the Company becomes
obligated to make Awards, through the assumption of, or in substitution for,
outstanding awards previously granted by an acquired entity, shall not be
counted against the shares available for Awards under this Plan.

(b) Treatment of Certain Awards. Any shares of Common Stock subject to Awards
shall be counted against the numerical limits of this Section 1.6 as one share
for every share subject thereto, except that any shares of Common Stock subject
to Awards with a per share or unit purchase price lower than 100% of Fair Market
Value of a share of Common Stock on the date of grant shall be counted against
the numerical limits of this Section 1.6 as 1.8 shares for every one share
subject thereto.

(c) Adjustments. The number of shares of Common Stock covered by each
outstanding Award, the number or amount of shares or units available for Awards
under Section 1.6 (a) or otherwise, the number or amount of shares or units that
may be subject to Awards to any one Grantee under Section 1.7 (b) or otherwise,
the price per share of Common Stock or units covered by each such outstanding
Award and any other calculation relating to shares of Common Stock available for
Awards or under outstanding Awards (including Awards under Section 2.13) shall
be proportionately adjusted by the Committee in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, for (i) any increase or decrease in the number of issued shares
of Common Stock resulting from a stock split, reverse stock split, stock
dividend, recapitalization, combination or reclassification of the Common Stock
or similar transaction, or any other increase or decrease in the number of
issued shares of Common Stock effected without receipt of consideration by the
Company or to reflect any distributions to holders of Common Stock (including
rights offerings) other than regular cash dividends or (ii) any other unusual or
nonrecurring event affecting the Company or its financial statements or any
change in applicable law, regulation or accounting principles; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been “effected without receipt of consideration.” Except as
expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an Award. After any
adjustment made pursuant to this paragraph, the number of shares subject to each
outstanding Award shall be rounded to the nearest whole number. The Committee’s
determinations as to the manner of effecting this Section 1.6(c) shall be
conclusive and binding.

(d) Grants exceeding allotted shares. If the shares of Common Stock covered by
an Award exceeds, as of the date of grant, the number of shares of Common Stock
which may be issued under the Plan without additional shareholder approval, such
Award shall be void with respect to such excess shares of Common Stock unless
shareholder approval of an amendment sufficiently increasing the number of
shares of Common Stock subject to the Plan is timely obtained in accordance with
the Plan.

 

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1.7 Regulatory Considerations

(a) General. To the extent that the Committee determines it desirable for any
Award to be given any particular tax, accounting, legal or regulatory treatment,
the Award may be made by a Committee consisting of qualifying directors, subject
to any necessary restrictions, conditions or other terms or otherwise in such
manner as is necessary to obtain the desired treatment.

(b) Code Section 162(m) provisions. Unless and until the Committee determines
that an Award to a Grantee shall not be designed to qualify as
“performance-based compensation” under Section 162(m) of the Code, the following
rules shall apply to Awards granted to Grantees:

(i) No Grantee shall be granted, in any fiscal year, stock options or stock
appreciation rights to purchase (or obtain the benefits of the equivalent of)
more than 500,000 shares of Common Stock;

(ii) No Grantee shall be granted, in any fiscal year, more than 166,666 shares
of restricted stock, unrestricted stock, restricted stock units or performance
shares;

(iii) No Grantee shall receive performance units, in any fiscal year, having a
value greater than $5 million, provided that if any units are awarded with
respect to multiple years of service, such limit shall be multiplied by such
number of years (not to exceed five years).

(iv) No Grantee shall be granted, in any fiscal year, dividend equivalent rights
with respect to more shares than the aggregate number of shares and units
granted to such Grantee in such year; and

(v) For purposes of qualifying grants of Awards as “performance-based
compensation” under Section 162(m) of the Code, the Committee in its discretion
may set restrictions based upon the achievement of Performance Goals. The
Performance Goals shall be set by the Committee on or before the latest date
permissible to enable the Awards to qualify as “performance-based compensation”
under Section 162(m) of the Code. In granting share Awards which are intended to
qualify under Section 162(m) of the Code, the Committee shall follow any
procedures determined by it from time to time to be necessary or appropriate to
ensure qualification of the Award under Section 162(m) of the Code (e.g., in
determining the Performance Goals).

 

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1.8 No Repricing

Without consent of the Company’s shareholders, the exercise price (or
equivalent) for an Award may not be reduced. This shall include, without
limitation, a repricing of the Award as well as an Award exchange program
whereby the Grantee agrees to cancel an existing Award in exchange for a new
Award, cash or any other form of consideration.

ARTICLE II

AWARDS UNDER THE PLAN

2.1 Awards and Award Agreements

Each Award granted under the Plan shall be evidenced by an Award Agreement which
shall contain such provisions as the Committee in its discretion deems necessary
or desirable. Such provisions may include restrictions on the Grantee’s right to
transfer the shares of Common Stock issuable pursuant to the Award, a
requirement that the Grantee become a party to an agreement restricting transfer
or allowing repurchase of any shares of Common Stock acquired pursuant to the
Award, a requirement that the Grantee acknowledge that such shares are acquired
for investment purposes only, and a right of first refusal exercisable by the
Company in the event that the Grantee wishes to transfer any such shares. The
Committee may grant Awards in tandem or in connection with or independently of
or in substitution for any other Award or Awards granted under this Plan or any
award granted under any other plan of the Company. Payments or transfers to be
made by the Company upon the grant, exercise or payment of an Award may be made
in such form as the Committee shall determine, including cash, shares of Common
Stock or other securities (or proceeds from the sale thereof), other Awards (by
surrender or cancellation thereof or otherwise) or other property and may be
made in a single payment or transfer, in installments or on a deferred basis.
The Committee may determine that a Grantee shall have no rights with respect to
an Award unless such Grantee accepts the Award within such period as the
Committee shall specify by executing an Award Agreement in such form as the
Committee shall determine and, if the Committee shall so require, makes payment
to the Company in such amount as the Committee may determine. The Committee
shall determine if loans (whether or not secured by shares of Common Stock) may
be extended, guaranteed or arranged by the Company with respect to any Awards;
provided, however, that loans to executive officers of the Company may not be
extended, guaranteed or arranged by the Company in violation of Section 402 of
the Sarbanes-Oxley Act of 2002, Regulation O of the Board of Governors of the
Federal Reserve System or any other applicable law or regulation. Subject to the
terms of the Plan, the Committee at any time, whether before or after the grant,
expiration, exercise, vesting or maturity of an Award or the Termination of
Employment of a Grantee, may determine in its discretion to waive or amend any
term or condition of an Award, including transfer restrictions, vesting,
maturity and expiration dates, and conditions for vesting, maturity or exercise.

 

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2.2 No Rights as a Shareholder

No Grantee of an Award (or other person having rights pursuant to such Award)
shall have any of the rights of a shareholder of the Company with respect to
shares subject to such Award until the transfer of such shares to such person.
Except as otherwise provided in Section 1.6(c), no adjustment shall be made for
dividends, distributions or other rights (whether ordinary or extraordinary, and
whether in cash, securities or other property) for which the record date is
prior to the date such shares are issued.

2.3 Grant of Stock Options, Stock Appreciation Rights and Additional Options

(a) Grant of stock options. The Committee may grant stock options, including
Incentive Stock Options and nonqualified stock options, to purchase shares of
Common Stock from the Company, to such Key Persons, in such amounts and subject
to such terms and conditions (including the attainment of Performance Goals), as
the Committee shall determine in its discretion, subject to the provisions of
the Plan.

(b) Grant of stock appreciation rights. The Committee may grant stock
appreciation rights to such Key Persons, in such amounts and subject to such
terms and conditions (including the attainment of Performance Goals), as the
Committee shall determine in its discretion, subject to the provisions of the
Plan. Stock appreciation rights may be granted in connection with all or any
part of, or independently of, any stock option granted under the Plan. A stock
appreciation right may be granted at or after the time of grant of such option.

(c) Stock appreciation rights. The Grantee of a stock appreciation right shall
have the right, subject to the terms of the Plan and the applicable Award
Agreement, to receive from the Company an amount equal to (i) the excess of the
Fair Market Value of a share of Common Stock on the date of exercise of the
stock appreciation right over (ii) the exercise price of such right as set forth
in the Award Agreement (if the stock appreciation right is granted in connection
with a stock option, then the exercise price of the option), multiplied by
(iii) the number of shares with respect to which the stock appreciation right is
exercised. Payment to the Grantee upon exercise of a stock appreciation right
shall be made in cash or in shares of Common Stock (valued at their Fair Market
Value on the date of exercise of the stock appreciation right) or both, as the
Committee shall determine in its discretion. Upon the exercise of a stock
appreciation right granted in connection with a stock option, the number of
shares subject to the option shall be correspondingly reduced by the number of
shares with respect to which the stock appreciation right is exercised. Upon the
exercise of a stock option in connection with which a stock appreciation right
has been granted, the number of shares subject to the stock appreciation right
shall be reduced correspondingly by the number of shares with respect to which
the option is exercised.

(d) Exercise price. Each Award Agreement with respect to a stock option or stock
appreciation right shall set forth the exercise price, which shall be determined
by the Committee in its discretion; provided, however, that the exercise price
shall be at least 100% of the Fair Market Value of a share of Common Stock on
the date the Award is granted (except as permitted in connection with the
assumption or issuance of options or stock appreciation rights in a transaction
to which Section 424 (a) of the Code applies).

 

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(e) Exercise periods. Each Award Agreement with respect to a stock option or
stock appreciation right shall set forth the periods during which the Award
evidenced thereby shall be exercisable, and, if applicable, the conditions which
must be satisfied (including the attainment of Performance Goals) in order for
the Award evidenced thereby to be exercisable, whether in whole or in part. Such
periods and conditions shall be determined by the Committee in its discretion;
provided, however, that no stock option or stock appreciation right shall be
exercisable more than ten (10) years after the date the Award is issued.

(f) Incentive stock options. Notwithstanding Section 2.3(d) and (e), with
respect to any Incentive Stock Option or stock appreciation right granted in
connection with an Incentive Stock Option (i) the exercise price shall be at
least 100% of the Fair Market Value of a share of Common Stock on the date the
option is granted (except as permitted in connection with the assumption or
issuance of options in a transaction to which Section 424(a) of the Code
applies) and (ii) the exercise period shall not be for longer than ten
(10) years after the date of the grant. To the extent that the aggregate Fair
Market Value (determined as of the time the option is granted) of the shares of
Common Stock with respect to which Incentive Stock Options and stock
appreciation rights granted in connection with Incentive Stock Options granted
under this Plan and all other plans of the Company are first exercisable by any
Grantee during any calendar year shall exceed the maximum limit (currently,
$100,000), if any, imposed from time to time under Section 422 of the Code, such
options and rights shall be treated as nonqualified stock options. For purposes
of this Section 2.3(f), Incentive Stock Options shall be taken into account in
the order in which they were granted.

(g) Ten percent owners. Notwithstanding the provisions of Sections 2.3(d),
(e) and (f), to the extent required under Section 422 of the Code, an Incentive
Stock Option may not be granted under the Plan to an individual who, at the time
the option is granted, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of his or her employer corporation or of
its parent or subsidiary corporations (as such ownership may be determined for
purposes of Section 422(b)(6) of the Code) unless (i) at the time such Incentive
Stock Option is granted the exercise price is at least 110% of the Fair Market
Value of the shares subject thereto, and (ii) the Incentive Stock Option by its
terms is not exercisable after the expiration of five (5) years from the date
granted.

2.4 Exercise of Stock Options and Stock Appreciation Rights

Each stock option or stock appreciation right granted under the Plan shall be
exercisable as follows:

(a) Exercise period. A stock option or stock appreciation right shall become and
cease to be exercisable at such time or times as determined by the Committee.

 

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(b) Manner of exercise. Unless the applicable Award Agreement otherwise
provides, a stock option or stock appreciation right may be exercised from time
to time as to all or part of the shares as to which such Award is then
exercisable (but, in any event, only for whole shares). A stock appreciation
right granted in connection with an option may be exercised at any time when,
and to the same extent that, the related option may be exercised. A stock option
or stock appreciation right shall be exercised by written notice to the Company,
on such form and in such manner as the Committee shall prescribe.

(c) Payment of exercise price. Any written notice of exercise of a stock option
shall be accompanied by payment of the exercise price for the shares being
purchased. Such payment shall be made (i) in cash (by certified check or as
otherwise permitted by the Committee), or (ii) to the extent specified in the
Award Agreement or otherwise permitted by the Committee in its discretion (A) by
delivery of shares of Common Stock (which, if acquired pursuant to the exercise
of a stock option or under an Award made under this Plan or any other
compensatory plan of the Company, were acquired at least six (6) months prior to
the option exercise date) having a Fair Market Value (determined as of the
exercise date) equal to all or part of the exercise price and cash for any
remaining portion of the exercise price, (B) to the extent permitted by law, by
such other method as the Committee may from time to time prescribe, including a
cashless exercise procedure through a broker-dealer.

(d) Delivery of shares. Promptly after receiving payment of the full exercise
price, or after receiving notice of the exercise of a stock appreciation right
for which payment by the Company will be made partly or entirely in shares of
Common Stock, the Company shall, subject to the provisions of Section 3.3
(relating to certain restrictions), transfer to the Grantee or to such other
person as may then have the right to exercise the Award, the shares of Common
Stock for which the Award has been exercised and to which the Grantee is
entitled. If the method of payment employed upon option exercise so requires,
and if applicable law permits, a Grantee may direct the Company to deliver the
shares to the Grantee’s broker-dealer.

2.5 Cancellation and Termination of Stock Options and Stock Appreciation Rights

The Committee may, at any time prior to the occurrence of a change of control
and in its discretion, determine that any outstanding stock options and stock
appreciation rights granted under the Plan, whether or not exercisable, will be
canceled and terminated and that in connection with such cancellation and
termination the holder of such options (and stock appreciation rights not
granted in connection with an option) may receive for each share of Common Stock
subject to such Award a cash payment (or the delivery of shares of stock, other
securities or a combination of cash, stock and securities equivalent to such
cash payment) equal to the difference, if any, between the amount determined by
the Committee to be the Fair Market Value of the shares of Common Stock and the
applicable exercise price per share multiplied by the number of shares of Common
Stock subject to such Award; provided that, if such product is zero or less or
to the extent that the Award is not then exercisable, the stock options and
stock appreciation rights will be canceled and terminated without payment
therefore.

 

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2.6 Termination of Employment

(a) Termination of Employment by Grantee for any Reason or By the Company for
Cause. Except to the extent otherwise provided in paragraphs (b), (c), (d) and
(e) below or in the applicable Award Agreement, all stock options and stock
appreciation rights whether or not vested and to the extent not theretofore
exercised shall terminate immediately upon (i) the Grantee’s Termination of
Employment at Grantee’s election for any reason or (ii) Grantee’s Termination of
Employment by the Company for Cause.

(b) At election of Company or a Related Entity. Except to the extent otherwise
provided in the applicable Award Agreement, upon the Termination of Employment
of a Grantee at the election of the Company or a Related Entity (other than in
circumstances governed by paragraph (a) above or paragraphs (c), (d) or
(e) below) the Grantee may exercise any outstanding stock option or stock
appreciation right on the following terms and conditions: (i) exercise may be
made only to the extent that the Grantee was entitled to exercise the Award on
the date of the Termination of Employment; and (ii) exercise must occur within
three (3) months after the Termination of Employment but in no event after the
expiration date of the Award as set forth in the Award Agreement.

(c) Retirement. Except to the extent otherwise provided in the applicable Award
Agreement, upon the Termination of Employment of a Grantee by reason of the
Grantee’s Retirement, the Grantee may exercise any outstanding stock option or
stock appreciation right on the following terms and conditions: (i) exercise may
be made only to the extent that the Grantee was entitled to exercise the Award
on the date of Retirement; (ii) exercise must occur within three (3) years after
Retirement but in no event after the expiration date of the Award as set forth
in the Award Agreement; and (iii) notwithstanding clause (ii) above, the option
or right shall terminate on the date Grantee begins or agrees to begin
employment with another company that is in the financial services industry
unless such employment is specifically approved by the Committee.

(d) Disability. Except to the extent otherwise provided in the applicable Award
Agreement, upon the termination of Employment of a Grantee by reason of
Disability the Grantee may exercise any outstanding stock option or stock
appreciation right on the following terms and conditions: (i) exercise may be
made only to the extent that the Grantee was entitled to exercise the Award on
the date of Termination of Employment; and (ii) exercise must occur six
(6) months after the Termination of Employment but in no event after the
expiration date of the Award as set forth in the Award Agreement.

(e) Death. Except to the extent otherwise provided in the applicable Award
Agreement, if a Grantee dies during the period in which the Grantee’s stock
options or stock appreciation rights are exercisable, whether pursuant to their
terms or pursuant to paragraph (b), (c) or (d) above, any outstanding stock
option or stock appreciation right shall be exercisable on the following terms
and conditions: (i) exercise may be made only to the extent that the Grantee was
entitled to exercise the Award on the date of death; and (ii) exercise must
occur six (6) months after the date of the Grantee’s death. Any such exercise of
an Award following a Grantee’s death shall be made only by the Grantee’s
executor or administrator, unless the

 

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Grantee’s will specifically disposes of such Award, in which case such exercise
shall be made only by the recipient of such specific disposition. If a Grantee’s
executor (or administrator) or the recipient of a specific disposition under the
Grantee’s will shall be entitled to exercise any Award pursuant to the preceding
sentence, such executor (or administrator) or recipient shall be bound by all
the terms and conditions of the Plan and the applicable Award Agreement which
would have applied to the Grantee.

2.7 Grant of Restricted Stock and Unrestricted Stock

(a) Grant of restricted stock. The Committee may grant restricted shares of
Common Stock to such Key Persons, in such amounts and subject to such terms and
conditions (including the attainment of Performance Goals), as the Committee
shall determine in its discretion, subject to the provisions of the Plan.

(b) Grant of unrestricted stock. The Committee may grant unrestricted shares of
Common Stock to such Key Persons, in such amounts and subject to such terms and
conditions as the Committee shall determine in its discretion, subject to the
provisions of the Plan.

(c) Rights as shareholder. The Company may issue in the Grantee’s name shares of
Common Stock covered by an Award of restricted stock or unrestricted stock. Upon
the issuance of such shares, the Grantee shall have the rights of a shareholder
with respect to the restricted stock or unrestricted stock, subject to the
transfer restrictions and the Company’s repurchase rights described in
paragraphs (d) and (e) below and to such other restrictions and conditions as
the Committee in its discretion may include in the applicable Award Agreement.

(d) Company to hold certificates. Unless the Committee shall otherwise
determine, any certificate issued evidencing shares of restricted stock shall
remain in the possession of the Company until such shares are free of any
restrictions specified in the Plan or the applicable Award Agreement.

(e) Nontransferable. Shares of restricted stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided in this Plan or the applicable Award Agreement. The
Committee at the time of grant shall specify the date or dates (which may depend
upon or be related to the attainment of Performance Goals) and other conditions
on which the non-transferability of the restricted stock shall lapse. Unless the
applicable Award Agreement provides otherwise, additional shares of Common Stock
or other property distributed to the Grantee in respect of shares of restricted
stock, as dividends or otherwise, shall be subject to the same restrictions
applicable to such restricted stock. The Committee at any time may waive or
amend the transfer restrictions or other condition of an Award of restricted
stock.

(f) Termination of employment. Except to the extent otherwise provided in the
applicable Award Agreement or unless otherwise determined by the Committee, in
the event of the Grantee’s Termination of Employment for any reason, shares of
restricted stock that remain subject to transfer restrictions as of the date of
such termination shall be forfeited and canceled.

 

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2.8 Grant of Restricted Stock Units

(a) Grant of restricted stock units. The Committee may grant Awards of
restricted stock units to such Key Persons, in such amounts and subject to such
terms and conditions (including the attainment of Performance Goals), as the
Committee shall determine in its discretion, subject to the provisions of the
Plan.

(b) Vesting. The Committee, at the time of grant, shall specify the date or
dates on which the restricted stock units shall become vested and other
conditions to vesting (including the attainment of Performance Goals).

(c) Maturity dates. At the time of grant, the Committee shall specify the
maturity date or dates applicable to each grant of restricted stock units, which
may be determined at the election of the Grantee if the Committee so determines.
Such date may be on or later than, but may not be earlier than, the vesting date
or dates of the Award. On the relevant maturity date(s), the Company shall
transfer to the Grantee one unrestricted, fully transferable share of Common
Stock for each vested restricted stock unit scheduled to be paid out on such
date and as to which all other conditions to the transfer have been fully
satisfied. The Committee shall specify the purchase price, if any, to be paid by
the Grantee to the Company for such shares of Common Stock.

(d) Termination of Employment. Except to the extent otherwise provided in the
applicable Award Agreement or unless otherwise determined by the Committee, in
the event of the Grantee’s Termination of Employment for any reason, restricted
stock units that have not vested or matured shall be forfeited and canceled.

2.9 Grant of Performance Shares and Performance Units

(a) Grant of performance shares and units. The Committee may grant performance
shares in the form of actual shares of Common Stock or share units over an
identical number of shares of Common Stock, to such Key Persons, in such amounts
(which may depend on the extent to which Performance Goals are attained),
subject to the attainment of such Performance Goals and satisfaction of such
other terms and conditions (which may include the occurrence of specified
dates), as the Committee shall determine in its discretion, subject to the
provisions of the Plan. The Performance Goals and the length of the performance
period applicable to any Award of performance shares or performance units shall
be determined by the Committee. The Committee shall determine in its discretion
whether performance shares granted in the form of share units shall be paid in
cash, Common Stock, or a combination of cash and Common Stock.

(b) Company to hold certificates. Unless the Committee shall otherwise
determine, any certificate issued evidencing performance shares shall remain in
the possession of the Company until such performance shares are earned and are
free of any restrictions specified in the Plan or the applicable Award
Agreement.

 

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(c) Nontransferable. Performance shares may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
in this Plan or the applicable Award Agreement. The Committee at the time of
grant shall specify the date or dates (which may depend upon or be related to
the attainment of Performance Goals) and other conditions on which the
non-transferability of the performance shares shall lapse. Unless the applicable
Award Agreement provides otherwise, additional shares of Common Stock or other
property distributed to the Grantee in respect of performance shares, as
dividends or otherwise, shall be subject to the same restrictions applicable to
such performance shares. The Committee at any time may waive or amend the
transfer restrictions or other condition of an Award of performance shares.

(d) Termination of Employment. Except to the extent otherwise provided in the
applicable Award Agreement or unless otherwise determined by the Committee, in
the event of the Grantee’s Termination of Employment for any reason, performance
shares and performance share units that remain subject to transfer restrictions
as of the date of such termination shall be forfeited and canceled.

2.10 Grant of Dividend Equivalent Rights

The Committee may in its discretion include in the Award Agreement with respect
to any Award, other than a stock option or stock appreciation right, a dividend
equivalent right entitling the Grantee to receive amounts equal to the ordinary
dividends that would be paid, during the time such Award is outstanding and
unexercised, on the shares of Common Stock covered by such Award if such shares
were then outstanding. In the event such a provision is included in an Award
Agreement, the Committee shall determine whether such payments shall be made in
cash, in shares of Common Stock or in another form, whether they shall be
conditioned upon the exercise or vesting of, or the attainment or satisfaction
of terms and conditions applicable to, the Award to which they relate, the time
or times at which they shall be made, and such other terms and conditions as the
Committee shall deem appropriate.

2.11 Deferred Stock Units.

(a) Description. Deferred stock units shall consist of a restricted stock,
restricted stock unit, performance share or performance unit Award that the
Committee in its discretion permits to be paid out in installments or on a
deferred basis, in accordance with rules and procedures established by the
Committee. Deferred stock units shall remain subject to the claims of the
Company’s general creditors until distributed to the Grantee.

(b) 162(m) limits. Deferred stock units shall be subject to the annual
Section 162(m) limits applicable to the underlying restricted stock, restricted
stock unit, performance share or performance unit Award as forth in
Section 1.7(b).

 

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2.12 Other Stock-Based Awards

The Committee may grant other types of stock-based Awards to such Key Persons,
in such amounts and subject to such terms and conditions, as the Committee shall
in its discretion determine, subject to the provisions of the Plan. Such Awards
may entail the transfer of actual shares of Common Stock, or payment in cash or
otherwise of amounts based on the value of shares of Common Stock.

2.13 Director Stock Options

(a) Eligibility. Until and unless the Committee in its discretion determines
otherwise (i) all voting directors of the Company who are not employees of the
Company (“Non-Employee Directors”) shall automatically receive stock options
pursuant to this Section 2.13.

(b) Grant of director stock options. Until and unless the Committee in its
discretion determines otherwise, pursuant to this section 2.13 (i) on the first
business day after the date the Plan is approved by the Company’s shareholders,
each Non-Employee Director shall automatically be granted stock options to
purchase four thousand (4,000) shares of Common Stock, (ii) on the first
business day following the annual meeting of the shareholders of the Company in
2006 and 2007, each Non-Employee Director shall automatically be granted stock
options to purchase four thousand (4,000) shares of Common Stock, and (iii) on
the first business day following the annual meeting of the shareholders of the
Company in each year thereafter, each Non-Employee Director shall automatically
be granted stock options to purchase a number of shares of Common Stock equal to
$70,000 divided by the per option expense expected by the Company on such date
to be recorded by it for the grant of such options in its financial reports
filed with the Securities and Exchange Commission, rounded to the nearest 100
(the “Determined Amount”). If the number of shares then remaining available for
the grant of stock options under the Plan is not sufficient for each
Non-Employee Director to be granted a stock option for four thousand
(4,000) shares of the Determined Amount of shares, as the case may be, then each
Non-Employee Director shall be granted a stock option for a whole number of
shares equal to the number of shares then remaining available divided by the
number of Non-Employee Directors, disregarding any fractional shares.

(c) Exercise Price. Notwithstanding Section 2.3(d), until and unless the
Committee in its discretion determines otherwise, the per share exercise price
for each stock option granted under this Section 2.13 shall be 100% of the Fair
Market Value of a share of Common Stock on the date the stock option is granted.

(d) Exercise Period. Notwithstanding Section 2.3(e), until and unless the
Committee in its discretion determines otherwise, each stock option granted
under this Section 2.13 shall vest and become exercisable in four equal
installments of one thousand (1,000) shares beginning on the date six months
from the date of the grant and on each anniversary of the first vesting date.
Notwithstanding Section 2.3(e), and subject to Sections 2.6 and 3.7 and other
applicable provisions of the Plan, until and unless the Committee in its
discretion determines otherwise, each stock option granted under this
Section 2.13 shall be exercisable for ten (10) years from the date of grant and
shall expire thereafter.

 

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(e) Non-statutory options. Stock options granted under this Section 2.13 will
constitute nonqualified stock options.

(f) Other stock option terms applicable. Except as set forth in this
Section 2.13, all stock options granted under this Section 2.13 will be subject
to and benefited by the terms and conditions (including Section 3.7) of the Plan
applicable to other stock options granted under the Plan.

ARTICLE III

MISCELLANEOUS

3.1 Amendment of the Plan; Modification of Awards

(a) Board authority to amend Plan. The Board in its discretion may at any time
suspend, discontinue, revise or amend the Plan in any respect whatsoever, except
that any such amendment (other than an amendment pursuant to paragraphs (d),
(e) or (f) of this Section 3.1 or an amendment to effect an assumption or other
action consistent with Section 3.7) that materially impairs the rights or
materially increases the obligations of a Grantee under an outstanding Award
shall be effective with respect to such Grantee and Award only with the consent
of the Grantee (or, upon the Grantee’s death, the Grantee’s executor (or
administrator) or the recipient of a specific disposition under the Grantee’s
will). For purposes of the Plan, any action of the Board that alters or affects
the tax treatment of any Award shall not be considered to materially impair any
rights of any Grantee.

(b) Shareholder approval. Shareholder approval of any amendment shall be
obtained to the extent necessary to comply with Section 422 of the Code
(relating to Incentive Stock Options) or any other applicable law, regulation or
rule (including the rules of self-regulatory organizations).

(c) Committee authority to amend Awards. The Committee in its discretion may at
any time, whether before or after the grant, expiration, exercise, vesting or
maturity of or lapse of restriction on an Award or the Termination of Employment
of a Grantee, amend any outstanding Award or Award Agreement, including an
amendment which would accelerate or extend the time or times at which the Award
becomes unrestricted or may be exercised, or waive or amend any goals,
restrictions or conditions set forth in the Award Agreement. However, any such
amendment (other than an amendment pursuant to paragraphs (d), (e) or (f) of
this Section 3.1 or an amendment to effect an action consistent with
Section 3.7) that materially impairs the rights or materially increases the
obligations of a Grantee under an outstanding Award shall be made only with the
consent of the Grantee (or, upon the Grantee’s death, the Grantee’s executor (or
administrator) or the recipient of a specific disposition under the Grantee’s
will). For purposes of the Plan, any action of the Committee that alters or
affects the tax treatment of any Award shall not be considered to materially
impair any rights of any Grantee.

 

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(d) Regulatory changes generally. Notwithstanding anything to the contrary in
this Section 3.1 or the Plan, the Board or the Committee shall have full
discretion to amend the Plan or an outstanding Award or Award Agreement to the
extent necessary to preserve any tax, accounting, legal or regulatory treatment
with respect to any Award and any outstanding Award Agreement shall be deemed to
be so amended to the same extent, without obtaining the consent of any Grantee
(or, after the Grantee’s death, the Grantee’s executor (or administrator) or the
recipient of a specific disposition under the Grantee’s will), without regard to
whether such amendment adversely affects a Grantee’s rights under the Plan or
such Award and Award Agreement.

(e) Section 409A changes. Notwithstanding anything to the contrary in this
Section 3.1 or the Plan, the Board or the Committee shall have full discretion
to amend the Plan or any outstanding Award or Award Agreement to the extent
necessary to avoid the imposition of any tax under Section 409A of the Code. Any
such amendments to the Plan, an Award or an Award Agreement may be adopted
without obtaining the consent of any Grantee (or, after the Grantee’s death, the
Grantee’s executor (or administrator) or the recipient of a specific disposition
under the Grantee’s will), regardless of whether such amendment adversely
affects a Grantee’s rights under the Plan or such Award or Award Agreement.

(f) Other tax changes. In the event that changes are made to Section 83(b),
162(m), 422 or other applicable provision of the Code the Board or the Committee
may, subject to Sections 3.1 (a), (b) and (c), make any adjustments it
determines in its discretion to be appropriate with respect to the Plan or any
Award or Award Agreement.

3.2 Tax Withholding

(a) Tax withholdings. As a condition to the receipt of any shares of Common
Stock pursuant to any Award or the lifting of restrictions on any Award, or in
connection with any other event that gives rise to a federal or other
governmental tax withholding obligation on the part of the Company relating to
an Award (including, without limitation, FICA tax), the Company shall be
entitled to require that the Grantee remit to the Company an amount sufficient
in the opinion of the Company to satisfy such withholding obligation.

(b) Withholding shares. If the event giving rise to the withholding obligation
is a transfer of shares of Common Stock, then, unless otherwise provided in the
applicable Award Agreement, the Grantee may satisfy only the minimum statutory
withholding obligation imposed under paragraph (a) by electing to have the
Company withhold shares of Common Stock having a Fair Market Value equal to the
amount of tax to be withheld. For this purpose, Fair Market Value shall be
determined as of the date on which the amount of tax to be withheld is
determined (and any fractional share amount shall be settled in cash).

3.3 Restrictions

(a) Required consents. If the Committee shall at any time determine that any
consent (as hereinafter defined) is necessary or desirable as a condition of, or
in connection with, the granting of any Award, the issuance or purchase of
shares of Common Stock or other rights

 

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thereunder, or the taking of any other action thereunder (a “Plan Action”), then
no such Plan Action shall be taken, in whole or in part, unless and until such
consent shall have been effected or obtained to the full satisfaction of the
Committee.

(b) Definition. The term “consent” as used herein with respect to any action
referred to in paragraph (a) means (i) any and all listings, registrations or
qualifications in respect thereof upon any securities exchange or under any
federal, state or local law, rule or regulation, (ii) any and all written
agreements and representations by the Grantee with respect to the disposition of
shares, or with respect to any other matter, which the Committee shall deem
necessary or desirable to comply with the terms of any such listing,
registration or qualification or to obtain an exemption from the requirement
that any such listing, qualification or registration be made, (iii) any and all
consents, clearances and approvals in respect of a Plan Action by any
governmental or other regulatory bodies, and (iv) any and all consents or
authorizations required to comply with, or required to be obtained under,
applicable local law or otherwise required by the Committee. Nothing herein
shall require the Company to list, register or qualify the shares of Common
Stock on any securities exchange.

3.4 Nonassignability

(a) Nonassignability. No Award or right granted to any person under the Plan
shall be assignable or transferable other than by will or by the laws of descent
and distribution, and all such Awards and rights shall be exercisable during the
life of the Grantee only by the Grantee or the Grantee’s legal representative
and any such attempted assignment, transfer or exercise in contravention of this
Section 3.4 shall be void. Notwithstanding the foregoing, the Committee may in
its discretion permit the donative transfer of any Award under the Plan (other
than an Incentive Stock Option) by the Grantee (including to a trust or similar
instrument), subject to such terms and conditions as may be established by the
Committee.

(b) Cashless exercises permitted. The restrictions on exercise and transfer in
paragraph (a) above shall not be deemed to prohibit the authorization by the
Committee of “cashless exercise” procedures with parties who provide financing
for the purpose of (or who otherwise facilitate) the exercise of Awards
consistent with applicable legal restrictions and Rule 16b-3.

3.5 Requirement of Notification of Election Under Section 83(b) of the Code

If a Grantee, in connection with the acquisition of shares of Common Stock under
the Plan, is permitted under the terms of the Award Agreement to make the
election permitted under Section 83(b) of the Code (i.e., an election to include
in gross income in the year of transfer the amounts specified in Section 83(b)
of the Code notwithstanding the continuing transfer restrictions) and the
Grantee makes such an election, the Grantee shall notify the Company of such
election within ten (10) days of filing notice of the election with the Internal
Revenue Service, in addition to any filing and notification required pursuant to
regulations issued under Section 83(b) of the Code.

 

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3.6 Requirement of Notification Upon Disqualifying Disposition Under
Section 421(b) of the Code

If any Grantee shall make any disposition of shares of Common Stock issued
pursuant to the exercise of an Incentive Stock Option under the circumstances
described in Section 421(b) of the Code (relating to certain disqualifying
dispositions), such Grantee shall notify the Company of such disposition within
ten (10) days thereof.

3.7 Change in Control

(a) Definition. A “Change in Control” means the occurrence of any one of the
following events:

(i) any Person (as defined in Sections 13(d) and 14(d) of the Exchange Act) is
or becomes the Beneficial Owner (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 20%
or more of the combined voting power of the Company’s then outstanding
securities (“Company Voting Securities”); provided, however, that the event
described in this clause (i) shall not be deemed a Change in Control by virtue
of any of the following acquisitions: (A) by the Company or any corporation
controlled by the Company, (B) by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company, (C) by any underwriter temporarily holding securities pursuant to an
offering of such securities, (D) pursuant to a Non-Qualifying Transaction (as
defined in clause (iii) below), (E) pursuant to any acquisition by Grantee or
any group of persons including Grantee (or any entity controlled by Grantee or
any group of persons including Grantee), (F) a transaction (other than one
described in clause (iii) below) in which outstanding Company Voting Securities
are acquired from the Company, if a majority of the Continuing Directors (as
defined in clause (ii) below) approve a resolution providing expressly that the
acquisition pursuant to this subclause (F) does not constitute a Change in
Control under this clause (F), or (G) any acquisition by a person of 20% of the
outstanding Company Voting Securities as a result of an acquisition of common
stock of the Company by the Company which, by reducing the number of shares of
common stock of the Company outstanding, increases the proportionate number of
shares beneficially owned by such person to 20% or more of the outstanding
Company Voting Securities, provided, however, that if a person shall become the
beneficial owner of 20% or more of the outstanding Company Voting Securities by
reason of a share acquisition by the Company as described above and shall, after
such share acquisition by the Company, become the beneficial owner of any
additional shares of common stock of the Company, then such acquisition shall
constitute a Change in Control;

 

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(ii) individuals who, on March 1, 2005, constitute the Board (“Continuing
Directors”), cease for any reason to constitute at least a majority thereof,
provided that any person becoming a director subsequent to such date whose
election or nomination for election was approved by a vote of at least a
majority of the Continuing Directors then on the Board (either by a specific
vote or by approval of the proxy statement of the Company in which such person
is named as a nominee for director, without written objection to such
nomination) shall be a Continuing Director; provided, however, that no
individual initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest with respect to directors or
as a result of any other actual or threatened solicitation of proxies or
consents by or on behalf of any person other than the Board shall be deemed to
be a Continuing Director;

(iii) the consummation of a merger, consolidation, statutory share exchange or
similar form of corporate transaction involving the Company or any of its
subsidiaries that requires the approval of the Company’s shareholders, whether
for such transaction or the issuance of securities in the transaction (a
“Business Combination”), unless immediately following such Business Combination:
(A) more than 50% of the total voting power of (x) the corporation resulting
from such Business Combination (the “Surviving Corporation”), or (y) if
applicable, the ultimate parent corporation that directly or indirectly has
beneficial ownership of at least 95% of the voting securities eligible to elect
directors of the Surviving Corporation (the “Parent Corporation”), is
represented by Company Voting Securities that were outstanding immediately prior
to such Business Combination (or, if applicable, is represented by shares into
which such Company Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting
Securities among the holders thereof immediately prior to the Business
Combination, (B) no person (other than any employee benefit plan (or related
trust) sponsored or maintained by the Surviving Corporation or the Parent
Corporation), is or becomes the beneficial owner, directly or indirectly, of 20%
or more of the total voting power of the outstanding voting securities eligible
to elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) and (C) at least a majority of the
members of the board of directors of the Parent Corporation (or, if there is no
Parent Corporation, the Surviving Corporation) following the consummation of the
Business Combination are Continuing Directors (any Business Combination which
satisfies all of the criteria specified in subclauses (A), (B) and (C) above
shall be deemed to be a “Non-Qualifying Transaction”); provided, however, that
if Continuing Directors constitute a majority of the Board immediately

 

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following the occurrence of a Business Combination, then a majority of
Continuing Directors in office prior to the Consummation of the Business
Combination may approve a resolution providing expressly that such Business
Combination does not constitute a Change in Control under this clause (iii) for
any and all purposes of the Plan.

(iv) the shareholders of the Company approve a plan of complete liquidation or
dissolution of the Company; or

(v) the consummation of an agreement (or agreements) providing for the sale or
disposition by the Company of all or substantially all of the Company’s assets
other than a sale or disposition which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent 50% or
more of the combined voting power of the Company or such surviving entity
outstanding immediately after such sale or disposition.

(b) Effect of Change in Control. Upon the occurrence of a Change in Control
specified in paragraph (a)(i) or (a)(ii) above and immediately prior to the
occurrence of a Change in Control specified in paragraph (a)(iii), (a)(iv) or
(a)(v) above, Awards shall Fully Vest (as defined in paragraph (c) below). If,
within two (2) years after the occurrence of a Change in Control a Termination
of Employment occurs with respect to any Grantee for any reason other than
Cause, Disability, death or Retirement, Grantee shall be entitled to exercise
Awards at any time thereafter until the earlier of (i) the date forty-two
(42) months after the date of Termination of Employment and (ii) the expiration
date in the applicable Award Agreement.

(c) Fully Vest. The following shall occur if Awards “Fully Vest”: (i) any stock
options and stock appreciation rights granted under the Plan shall become fully
vested and immediately exercisable, (ii) any restricted stock, restricted stock
units, performance shares, performance units and other stock-based Awards
granted under the Plan will become fully vested and matured, any restrictions
applicable to such Awards shall lapse and such Awards denominated in stock will
be immediately paid out, and (iii) any Performance Goals applicable to Awards
will be deemed to be fully satisfied; provided that (A) any Performance Goals
whose performance period has not yet lapsed shall be calculated based on the
higher of (x) the target value of the Awards as established by the Committee and
(y) the value of the Awards calculated under the terms of the Awards based on
the average performance through the end of the fiscal quarter immediately prior
to the effective date of the Change of Control (continued pro forma through the
end of the performance period if necessary for purposes of determining whether
the Performance Goal would have been met), and (B) if the Award has a
performance period greater than one (1) year, the amount of the Award payable to
the Grantee will be pro rated, based on a fraction, the numerator of which is
the number of fiscal quarters completed from the beginning of the performance
period until the effective date of the Change of Control and the denominator is
the total number of fiscal quarters in the performance period.

(d) Section 409A. To the extent it is necessary for the term “change of control”
to be defined as provided in Section 409A of the Code in order for compensation

 

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provided under any Award to avoid the imposition of taxes under Section 409A of
the Code, then the term “change in control”, only insofar as it applies to any
such Award, shall be defined as provided in Section 409A of the Code, rather
than as provided in Section 3.7 (a), and the terms of Sections 3.7(b) through
(c) shall be applied and interpreted with respect to such Section 409A
definition in such manner as the Committee in its discretion determines to be
equitable and reflect the intention of Sections 3.7(a) through (c).

3.8 No Right to Employment

Nothing in the Plan or in any Award Agreement shall confer upon any Grantee the
right to continue in the employ of or association with the Company or any
Related Entity or affect any right which the Company or Related Entity may have
to terminate such employment or association at any time (with or without cause).

3.9 Nature of Payments

Unless the Committee determines at any time in its discretion, any and all
grants of Awards and issuances of shares of Common Stock under the Plan shall
constitute a special incentive payment to the Grantee and shall not be taken
into account in computing the amount of salary or compensation of the Grantee
for the purpose of determining any benefits under any pension, retirement,
profit-sharing, bonus, life insurance or other benefit plan of the Company or
under any agreement with the Grantee, unless such plan or agreement specifically
provides otherwise.

3.10 Non-Uniform Determinations

The Committee’s determinations under the Plan need not be uniform and may be
made by it selectively among persons who receive, or are eligible to receive,
Awards (whether or not such persons are similarly situated). Without limiting
the generality of the foregoing, the Committee shall be entitled, among other
things, to make non-uniform and selective determinations, and to enter into
non-uniform and selective Award Agreements, as to the persons to receive Awards
under the Plan, and the terms and provisions of Awards under the Plan.

3.11 Other Payments or Awards

Nothing contained in the Plan shall be deemed in any way to limit or restrict
the Company from making any award or payment to any person under any other plan,
arrangement or understanding, whether now existing or hereafter in effect.

3.12 Interpretation

The section headings contained herein are for the purpose of convenience only
and are not intended to define or limit the contents of the sections. As used in
the Plan, “include,” “includes,” and “including” are deemed to be followed by
“without limitation” whether or not they are followed by such words or words of
like import; except as the context requires, the singular includes the plural
and visa versa; and references to any agreement or other document are references
to such agreement or document as amended or supplemented from time

 

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to time. Any determination, interpretation or similar act to be made by the
Committee shall be made in the discretion of the Committee, whether or not the
applicable provisions of the Plan specifically refer to the Committee’s
discretion.

3.13 Effective Date and Term of Plan

Unless sooner terminated by the Board, the Plan, including the provisions
respecting the grant of Incentive Stock Options, shall terminate on the tenth
anniversary of the adoption of the Plan by the Board; provided that the Plan
shall continue to govern outstanding Awards until such Awards have been
satisfied or terminated. All Awards made under the Plan prior to its termination
shall remain in effect until such Awards have been satisfied or terminated in
accordance with the terms and provisions of the Plan and the applicable Award
Agreements.

3.14 Governing Law

All rights and obligations under the Plan shall be construed and interpreted in
accordance with the laws of the State of Utah, without giving effect to
principles of conflict of laws.

3.15 Severability; Entire Agreement

If any of the provisions of this Plan or any Award Agreement is finally held to
be invalid, illegal or unenforceable (whether in whole or in part), such
provision shall be deemed modified to the extent, but only to the extent, of
such invalidity, illegality or unenforceability and the remaining provisions
shall not be affected thereby; provided, that if any of such provisions is
finally held to be invalid, illegal, or unenforceable because it exceeds the
maximum scope determined to be acceptable to permit such provision to be
enforceable, such provision shall be deemed to be modified to the minimum extent
necessary to modify such scope in order to make such provision enforceable
hereunder. The Plan and any Award Agreements contain the entire agreement of the
parties with respect to the subject matter thereof and supersede all prior
agreements, promises, covenants, arrangements, communications, representations
and warranties between them, whether written or oral, with respect to the
subject matter thereof.

3.16 No Third Party Beneficiaries

Except as expressly provided therein, neither the Plan nor any Award Agreement
shall confer on any person other than the Company and the grantee of any Award
any rights or remedies thereunder.

3.17 Successors and Assigns

The terms of this Plan shall be binding upon and inure to the benefit of the
Company and its successors and assigns.

 

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3.18 Waiver of Claims

Each Grantee of an Award recognizes and agrees that prior to being selected by
the Committee to receive an Award he or she has no right to any benefits
hereunder. Accordingly, in consideration of the Grantee’s receipt of any Award
hereunder, he or she expressly waives any right to contest the amount of any
Award, the terms of any Award Agreement, any determination, action or omission
hereunder or under any Award Agreement by the Committee, the Company or the
Board, or any amendment to the Plan or any Award Agreement (other than an
amendment to this Plan or an Award Agreement to which his or her consent is
expressly required by the express terms of the Plan or an Award Agreement).

3.19 Relation to Key Employee Plan, You’re the Owner Plan and Directors Plan

Notwithstanding any other provisions to the contrary in the Company’s Key
Employee Incentive Stock Option Plan, Amended and Restated 1998 Non-Qualified
Stock Option and Incentive Plan or Amended and Restated 1996 Non-Employee
Directors Stock Option Plan (“Directors Plan”), upon shareholder approval of
this Plan and filing and effectiveness of a Form S-8 registration statement with
the Securities and Exchange Commission for this Plan, no new awards of shares of
Common Stock will be granted under the Company’s Key Employee Incentive Stock
Option Plan, Amended and Restated 1998 Non-Qualified Stock Option and Incentive
Plan or Directors Plan. Notwithstanding anything to the contrary in the
Directors Plan or Section 2.13, only one grant of stock options shall be made to
Non-Employee Directors in 2005 pursuant to the Directors Plan and/or
Section 2.13.

 

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