Exhibit 10.1
HAMPSHIRE GROUP, LIMITED
2009 STOCK INCENTIVE PLAN
          1. Purpose.
          The purpose of the Plan is to assist the Company in attracting,
retaining, motivating, and rewarding certain key employees, officers, directors,
and consultants of the Company and its Affiliates, and promoting the creation of
long-term value for stockholders of the Company by closely aligning the
interests of such individuals with those of such stockholders. The Plan
authorizes the award of Stock-based incentives to Eligible Persons to encourage
such persons to expend their maximum efforts in the creation of stockholder
value.
          2. Definitions.
          For purposes of the Plan, the following terms shall be defined as set
forth below:
          (a) “Affiliate” means, with respect to any entity, any other entity
that, directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such entity.
          (b) “Award” means any Option, Restricted Stock, Restricted Stock Unit,
Stock Appreciation Right, or other Stock-based award granted under the Plan.
          (c) “Board” means the Board of Directors of the Company.
          (d) “Cause” means, in the absence of an employment or similar
agreement between a Participant and the Employer otherwise defining Cause, (i) a
Participant’s conviction of or indictment for any crime (whether or not
involving the Company or its Affiliates) (A) constituting a felony or (B) that
has, or could reasonably be expected to result in, an adverse impact on the
performance of the Participant’s duties to the Employer, or otherwise has, or
could reasonably be expected to result in, an adverse impact to the business or
reputation of the Company or its Affiliates; (ii) conduct of the Participant, in
connection with his or her employment, that has, or could reasonably be expected
to result in, material injury to the business or reputation of the Company or
its Affiliates; (iii) any material violation of the policies of the Company or
its Affiliates, including, but not limited to those relating to sexual
harassment, the disclosure or misuse of confidential information, or those set
forth in the manuals or statements of policy of the Company or its Affiliates;
(iv) act or acts of embezzlement or fraud committed by a Participant, at such
Participant’s direction, or with such Participant’s prior personal knowledge; or
(v) willful neglect in the performance of the Participant’s duties for the
Employer or willful or repeated failure or refusal to perform such duties. In
the event there is an employment or similar agreement between a Participant and
the Employer defining Cause, “Cause” shall have the meaning provided in such
agreement, and a Termination by the Employer for Cause hereunder shall not be
deemed to have occurred unless all applicable notice and cure periods in such
employment agreement are complied with.

 

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          (e) “Change in Control” means:
          (i) a change in ownership or control of the Company effected through a
transaction or series of transactions (other than an offering of Stock to the
general public through a registration statement filed with the Securities and
Exchange Commission) whereby any “person” (as defined in Section 3(a)(9) of the
Exchange Act) or any two or more persons deemed to be one “person” (as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act), other than the Company or
any of its Affiliates, or an employee benefit plan maintained by the Company or
any of its Affiliates, directly or indirectly acquire “beneficial ownership”
(within the meaning of Rule 13d-3 under the Exchange Act) of securities of the
Company possessing more than fifty percent (50%) of the total combined voting
power of the Company’s securities outstanding immediately after such
acquisition;
          (ii) the date upon which individuals who, as of the Effective Date,
constitute the Board (the “Incumbent Board”), cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company’s stockholders, was approved by a vote of at least a
majority of the directors then constituting the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than the
Board; or
          (iii) the sale or disposition, in one or a series of related
transactions, of all or substantially all of the assets of the Company to any
“person” (as defined in Section 3(a)(9) of the Exchange Act) or to any two or
more persons deemed to be one “person” (as used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act) other than the Company’s Affiliates.
          (f) “Code” means the Internal Revenue Code of 1986, as amended from
time to time, including regulations thereunder and successor provisions and
regulations thereto.
          (g) “Committee” means the Board or such other committee appointed by
the Board consisting of two or more individuals.
          (h) “Company” means Hampshire Group, Limited, a Delaware corporation.
          (i) “Disability” means, in the absence of an employment or similar
agreement between a Participant and the Employer otherwise defining Disability,
any incapacity that qualifies as a “long-term disability” pursuant to the terms
of the Company’s long-term disability policy, or if none, the Company’s
handbook. In the event there is an employment or similar agreement between a
Participant and the Employer defining Disability, “Disability” shall have the
meaning provided in such agreement.
          (j) “Effective Date” means October 21, 2009.

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          (k) “Eligible Person” means (i) each employee of the Company or of any
of its Affiliates, including each such person who may also be a director of the
Company and/or its Affiliates; (ii) each non-employee director of the Company
and/or its Affiliates; (iii) each other person who provides substantial services
to the Company and/or its Affiliates and who is designated as eligible by the
Committee; and (iv) any person who has been offered employment or service by the
Company or its Affiliates; provided, that such prospective service provider may
not receive any payment or exercise any right relating to an Award until such
person has commenced employment or service with the Company or its Affiliates.
An employee on an approved leave of absence may be considered as still in the
employ of the Company or its Affiliates for purposes of eligibility for
participation in the Plan.
          (l) “Employer” means either the Company or an Affiliate of the Company
by which the Participant is principally employed or to which the Participant
provides services, as applicable (in each case determined without regard to any
transfer of an Award).
          (m) “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time, including rules thereunder and successor provisions
and rules thereto.
          (n) “Expiration Date” means the date upon which the term of an Option
expires, as determined under Section 5(b) hereof.
          (o) “Fair Market Value” means, as of any date when the Stock is listed
on one or more national securities exchanges, the closing price reported on the
principal national securities exchange on which such Stock is listed and traded
on the date of determination. If the Stock is not listed on an exchange, or
representative quotes are not otherwise available, the Fair Market Value shall
mean the amount determined by the Board in good faith, and in a manner
consistent with Section 409A of the Code, to be the fair market value per share
of Stock.
          (p) “Incumbent Board” shall have the meaning set forth in
Section 2(e)(ii) hereof.
          (q) “Option” means a conditional right, granted to a Participant under
Section 5 hereof, to purchase Stock at a specified price during specified time
periods. Options granted under the Plan are not intended to qualify as incentive
stock options within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.
          (r) “Option Agreement” means a written agreement between the Company
and a Participant evidencing the terms and conditions of an individual Option
grant.
          (s) “Participant” means an Eligible Person who has been granted an
Award under the Plan, or if applicable, such other person or entity who holds an
Award.
          (t) “Plan” means this Hampshire Group, Limited 2009 Stock Incentive
Plan.
          (u) “Qualified Member” means a member of the Committee who is a
“Non-Employee Director” within the meaning of Rule 16b-3.

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          (v) “Qualifying Committee” shall have the meaning set forth in Section
3(b) hereof.
          (w) “Restricted Stock” means Stock granted to a Participant under
Section 6 hereof that is subject to certain restrictions and to a risk of
forfeiture.
          (x) “Restricted Stock Agreement” means a written agreement between the
Company and a Participant evidencing the terms and conditions of an individual
Restricted Stock grant.
          (y) “Restricted Stock Unit” means a notional unit representing the
right to receive one share of Stock (or the cash value of one share of Stock, if
so determined by the Committee) on a specified settlement date.
          (z) “Securities Act” means the Securities Act of 1933, as amended from
time to time, including rules thereunder and successor provisions and rules
thereto.
          (aa) “Stock” means the Company’s Common Stock, par value $0.10 per
share, and such other securities as may be substituted for such stock pursuant
to Section 8 hereof.
          (bb) “Stock Appreciation Right” means a conditional right to receive
an amount equal to the value of the appreciation in the Stock over a specified
period. Except in the event of extraordinary circumstances, as determined in the
sole discretion of the Committee, or pursuant to Section 9(b) below, Stock
Appreciation Rights shall be settled in Stock.
          (cc) “Termination” means the termination of a Participant’s employment
or service, as applicable, with the Employer; provided, however, that, if so
determined by the Committee at the time of any change in status in relation to
the Employer (e.g., a Participant ceases to be an employee and begins providing
services as a consultant, or vice versa), such change in status will not be
deemed to be a Termination hereunder. Unless otherwise determined by the
Committee, in the event that any Employer ceases to be an Affiliate of the
Company (by reason of sale, divesture, spin-off or other similar transaction),
unless a Participant’s employment or service is transferred to another entity
that would constitute an Employer immediately following such transaction, such
Participant shall be deemed to have suffered a Termination hereunder as of the
date of the consummation of such transaction.
          3. Administration.
          (a) Authority of the Committee. Except as otherwise provided below,
the Plan shall be administered by the Committee. The Committee shall have full
and final authority, in each case subject to and consistent with the provisions
of the Plan, to (i) select Eligible Persons to become Participants; (ii) grant
Awards; (iii) determine the type, number of shares of Stock subject to, and
other terms and conditions of, and all other matters relating to, Awards;
(iv) prescribe Award agreements (which need not be identical for each
Participant) and rules and regulations for the administration of the Plan;
(v) construe and interpret the Plan and Award agreements and correct defects,
supply omissions, or reconcile inconsistencies therein; (vi) suspend the right
to exercise Awards during any period that the Committee deems appropriate to
comply with applicable securities laws, and thereafter extend the exercise
period

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of an Award by an equivalent period of time; and (vii) make all other decisions
and determinations as the Committee may deem necessary or advisable for the
administration of the Plan. Any action of the Committee shall be final,
conclusive, and binding on all persons, including, without limitation, the
Company, its Affiliates, Eligible Persons, Participants, and beneficiaries of
Participants.
          (b) Manner of Exercise of Committee Authority. At any time that a
member of the Committee is not a Qualified Member, any action relating to an
Award granted or to be granted to a Participant who is then subject to
Section 16 of the Exchange Act in respect of the Company may be taken either by
a subcommittee, designated by the Committee or the Board, composed solely of two
or more Qualified Members (a “Qualifying Committee”), or by the Committee but
with each such member who is not a Qualified Member abstaining or recusing
himself from such action; provided, that upon such abstention or recusal, the
Committee remains composed of two or more Qualified Members. Any action
authorized by such a Qualifying Committee or by the Committee upon the
abstention or recusal of such non-Qualified Member(s) shall be deemed to be the
action of the Committee for purposes of the Plan. The express grant of any
specific power to the Committee, and the taking of any action by the Committee,
shall not be construed as limiting any power or authority of the Committee.
          (c) Delegation. To the extent permitted by applicable law, the
Committee may delegate to officers or employees of the Company or any of its
Affiliates, or committees thereof, the authority, subject to such terms as the
Committee shall determine, to perform such functions, including but not limited
to administrative functions, as the Committee may determine appropriate. The
Committee may appoint agents to assist it in administering the Plan.
Notwithstanding the foregoing or any other provision of the Plan to the
contrary, any Award granted under the Plan to any person or entity who is not an
employee of the Company or any of its Affiliates (including any non-employee
director of the Company or any Affiliate) or to any person who is subject to
Section 16 of the Exchange Act shall be expressly approved by the Committee or
Qualifying Committee in accordance with subsection (b) above.
          (d) Section 409A. The Committee shall take into account compliance
with Section 409A of the Code in connection with any grant of an Award under the
Plan, to the extent applicable.
          4. Shares Available Under the Plan.
          (a) Number of Shares Available for Delivery. Subject to adjustment as
provided in Section 8 hereof, the total number of shares of Stock reserved and
available for delivery in connection with Awards under the Plan shall be
880,000. Shares of Stock delivered under the Plan shall consist of authorized
and unissued shares or previously issued shares of Stock reacquired by the
Company on the open market or by private purchase.
          (b) Share Counting Rules. The Committee may adopt reasonable counting
procedures to ensure appropriate counting, avoid double counting (as, for
example, in the case of tandem or substitute awards) and make adjustments if the
number of shares of Stock actually delivered differs from the number of shares
previously counted in connection with an Award. To the extent that an Award
expires or is canceled, forfeited, settled in cash, or otherwise terminated

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without a delivery to the Participant of the full number of shares to which the
Award related, the undelivered shares will again be available for grant. Shares
withheld in payment of the exercise price or taxes relating to an Award and
shares equal to the number surrendered in payment of any exercise price or taxes
relating to an Award shall be deemed to constitute shares not delivered to the
Participant and shall be deemed to again be available for Awards under the Plan;
provided, however, that such shares shall not become available for issuance
hereunder if either (i) the applicable shares are withheld or surrendered
following the termination of the Plan, or (ii) at the time the applicable shares
are withheld or surrendered, it would constitute a material revision of the Plan
subject to stockholder approval under any then-applicable rules of the national
securities exchange on which the Stock is listed.
          5. Options.
          (a) General. Options may be granted to Eligible Persons in such form
and having such terms and conditions as the Committee shall deem appropriate.
The provisions of separate Options shall be set forth in an Option Agreement,
which agreements need not be identical.
          (b) Term. The term of each Option shall be set by the Committee at the
time of grant; provided, however, that no Option granted hereunder shall be
exercisable after the expiration of ten (10) years from the date it was granted.
          (c) Exercise Price. The exercise price per share of Stock for each
Option shall be set by the Committee at the time of grant; provided, however,
that if an Option is intended to not be considered “nonqualified deferred
compensation” within the meaning of Section 409A of the Code, the applicable
exercise price shall not be less than the Fair Market Value.
          (d) Payment for Stock. Payment for shares of Stock acquired pursuant
to Options granted hereunder shall be made in full, upon exercise of the
Options, (i) in immediately available funds in United States dollars, or by
certified or bank cashier’s check; (ii) by delivery of a notice of “net
exercise” to the Company, pursuant to which the Participant shall receive the
number of shares of Stock underlying the Options so exercised reduced by the
number of shares of Stock equal to the aggregate exercise price of the Options
divided by the Fair Market Value on the date of exercise; (iii) by delivery of
shares of Stock having a value equal to the exercise price; or (iv) by any other
means approved by the Committee. Anything herein to the contrary
notwithstanding, if the Committee determines that any form of payment available
hereunder would be in violation of Section 402 of the Sarbanes-Oxley Act of
2002, such form of payment shall not be available.
          (e) Vesting. Options shall vest and become exercisable in such manner,
on such date or dates, or upon the achievement of performance or other
conditions, in each case, as may be determined by the Committee and set forth in
the Option Agreement; provided, however, that notwithstanding any such vesting
dates, the Committee may in its sole discretion accelerate the vesting of any
Option, which acceleration shall not affect the terms and conditions of any such
Option other than with respect to vesting. Unless otherwise specifically
determined by the Committee, the vesting of an Option shall occur only while the
Participant is employed or rendering services to the Employer, and all vesting
shall cease upon a Participant’s Termination

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with the Employer for any reason. If an Option is exercisable in installments,
such installments or portions thereof which become exercisable shall remain
exercisable until the Option expires.
          (f) Transferability of Options. An Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Participant only by the Participant.
Notwithstanding the foregoing, Options shall be transferable to the extent
provided in the Option Agreement or otherwise determined by the Committee.
          (g) Termination of Employment or Service. Except as may otherwise be
provided by the Committee in the Option Agreement:
          (i) In the event of a Participant’s Termination with the Employer
prior to the Expiration Date for any reason other than (A) by the Employer for
Cause, or (B) by reason of the Participant’s death or Disability, (1) all
vesting with respect to such Participant’s Options shall cease, (2) all of such
Participant’s unvested Options shall expire as of the date of such Termination,
and (3) all of such Participant’s vested Options shall remain exercisable until
the earlier of the Expiration Date and the date that is ninety (90) days after
the date of such Termination.
          (ii) In the event of a Participant’s Termination with the Employer
prior to the Expiration Date by reason of such Participant’s death or
Disability, (A) all vesting with respect to such Participant’s Options shall
cease, (B) all of such Participant’s unvested Options shall expire as of the
date of such Termination, and (C) all of such Participant’s vested Options shall
expire on the earlier of the Expiration Date and the date that is twelve
(12) months after the date of such Termination due to death or Disability of the
Participant. In the event of a Participant’s death, such Participant’s Options
shall remain exercisable by the person or persons to whom a Participant’s rights
under the Options pass by will or the applicable laws of descent and
distribution until their expiration, but only to the extent the Options were
vested by such Participant at the time of such Termination due to death.
          (iii) In the event of a Participant’s Termination with the Employer
prior to the Expiration Date by the Employer for Cause, all of such
Participant’s Options (whether or not vested) shall immediately expire as of the
date of such Termination.
          6. Restricted Stock.
          (a) General. Restricted Stock granted hereunder shall be in such form
and shall contain such terms and conditions as the Committee shall deem
appropriate. The terms and conditions of each Restricted Stock grant shall be
evidenced by a Restricted Stock Agreement, which agreements need not be
identical. Subject to the restrictions set forth in Section 6(b), except as
otherwise set forth in the applicable Restricted Stock Agreement, the
Participant shall generally have the rights and privileges of a stockholder as
to such Restricted Stock, including the right to vote such Restricted Stock.
Unless otherwise set forth in a Participant’s Restricted Stock Agreement, cash
dividends and stock dividends, if any, with respect to the Restricted Stock
shall be paid by the Company to the Participant at the time of payment to other
stockholders of the Company; provided, however, in the case of stock dividends
only, the stock

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received in connection with such shall be subject to the same vesting and
forfeiture conditions as the shares of Restricted Stock to which such dividends
relate.
          (b) Restrictions on Transfer. In addition to any other restrictions
set forth in a Participant’s Restricted Stock Agreement, until such time that
the Restricted Stock has vested pursuant to the terms of the Restricted Stock
Agreement, which vesting the Committee may in its sole discretion accelerate at
any time, the Participant shall not be permitted to sell, transfer, pledge, or
otherwise encumber the Restricted Stock. Notwithstanding anything contained
herein to the contrary, the Committee shall have the authority to remove any or
all of the restrictions on the Restricted Stock whenever it may determine that,
by reason of changes in applicable laws or other changes in circumstances
arising after the date of the Restricted Stock Award, such action is
appropriate.
          (c) Termination of Employment or Service. Except as may otherwise be
provided by the Committee in the Restricted Stock Agreement, in the event of a
Participant’s Termination with the Employer for any reason prior to the time
that such Participant’s Restricted Stock has vested, (i) all vesting with
respect to such Participant’s Restricted Stock shall cease, and (ii) as soon as
practicable following such Termination, the Company shall repurchase from the
Participant, and the Participant shall sell, all of such Participant’s unvested
shares of Restricted Stock at a purchase price equal to the original purchase
price paid for the Restricted Stock, or if the original purchase price is equal
to $0, such unvested shares of Restricted Stock shall be forfeited by the
Participant to the Company for no consideration as of the date of such
Termination.
          7. Other Stock-Based Awards.
          The Committee is authorized, subject to limitations under applicable
law, to grant to Participants such other Awards that may be denominated or
payable in, valued in whole or in part by reference to, or otherwise based on,
or related to, Stock, as deemed by the Committee to be consistent with the
purposes of the Plan, including, without limitation, Restricted Stock Units and
Stock Appreciation Rights. The Committee may also grant Stock as a bonus, or may
grant other awards in lieu of obligations of the Company or an Affiliate to pay
cash or deliver other property under this Plan or under other plans or
compensatory arrangements, subject to such terms as shall be determined by the
Committee. The terms and conditions applicable to such Awards shall be
determined by the Committee and evidenced by Award agreements, which agreements
need not be identical.
          8. Adjustment for Recapitalization, Merger, etc.
          (a) Capitalization Adjustments. The aggregate number of shares of
Stock that may be granted or purchased pursuant to Awards (as set forth in
Section 4 hereof), the number of shares of Stock covered by each outstanding
Award, and the price per share thereof in each such Award shall be equitably and
proportionally adjusted or substituted, as determined by the Committee, as to
the number, price, or kind of a share of Stock or other consideration subject to
such Awards (i) in the event of changes in the outstanding Stock or in the
capital structure of the Company by reason of stock dividends, stock splits,
reverse stock splits, recapitalizations, reorganizations, mergers,
consolidations, combinations, exchanges, or other relevant changes in

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capitalization occurring after the date of grant of any such Award (including
any Corporate Event, as defined below); (ii) in connection with any
extraordinary dividend declared and paid in respect of shares of Stock, whether
payable in the form of cash, stock, or any other form of consideration; or
(iii) in the event of any change in applicable laws that results in or could
result in, in either case, as determined by the Committee in its sole
discretion, any substantial dilution or enlargement of the rights granted to, or
available for, Participants in the Plan.
          (b) Corporate Events. Notwithstanding the foregoing, except as may
otherwise be provided in an Award agreement, in connection with (i) a merger or
consolidation involving the Company in which the Company is not the surviving
corporation; (ii) a merger or consolidation involving the Company in which the
Company is the surviving corporation but the holders of shares of Stock receive
securities of another corporation and/or other property, including cash; (iii) a
Change in Control; or (iv) the reorganization or liquidation of the Company
(each, a “Corporate Event”), the Committee may, in its discretion, provide for
any one or more of the following:
          (1) that such Awards be assumed or substituted in connection with such
Corporate Event, in which case, the Awards shall be subject to the adjustment
set forth in subsection (a) above, and to the extent such Awards are Awards that
vest subject to the achievement of performance criteria, such performance
criteria shall be appropriately adjusted to reflect the Corporate Event;
          (2) that the vesting of any Awards shall be accelerated, subject to
the consummation of such Corporate Event;
          (3) that any or all vested and/or unvested Awards be cancelled as of
the consummation of such Corporate Event, and that Participants holding vested
Awards (including any Awards that would vest upon the Corporate Event but for
such cancellation) so cancelled will receive a payment in respect of
cancellation of their Awards based on the amount of the per-share consideration
being paid for the Stock in connection with such Corporate Event, less, in the
case of Options, Stock Appreciation Rights, and other Awards subject to
exercise, the applicable exercise price; provided, however, that holders of
Options, Stock Appreciation Rights, and other Awards subject to exercise shall
only be entitled to consideration in respect of cancellation of such Awards if
the per-share consideration less the applicable exercise price is greater than
zero (and to the extent the per-share consideration is less than or equal to the
applicable exercise price, such Awards shall be cancelled for no consideration);
and
          (4) that Awards (other than Awards that are “stock rights” within the
meaning of Section 409A of the Code) be replaced with a cash incentive program
that preserves the value of the Awards so replaced (determined as of the
consummation of the Corporate Event), with subsequent payment of cash incentives
subject to the same vesting conditions as applicable to the Awards so replaced,
and payment to be made within thirty (30) days of the applicable vesting date.

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Payments to holders pursuant to clause (3) above shall be made in cash or, in
the sole discretion of the Committee, in the form of such other consideration
necessary for a Participant to receive property, cash, or securities (or
combination thereof) as such Participant would have been entitled to receive
upon the occurrence of the transaction if the Participant had been, immediately
prior to such transaction, the holder of the number of shares of Stock covered
by the Award at such time (less any applicable exercise price). In addition, in
connection with any Corporate Event, prior to any payment or adjustment
contemplated under this subsection (b), the Committee may require a Participant
to (i) represent and warrant as to the unencumbered title to his Awards,
(ii) bear such Participant’s pro rata share of any post-closing indemnity
obligations, and be subject to the same post-closing purchase price adjustments,
escrow terms, offset rights, holdback terms, and similar conditions as the other
holders of Stock; and (iii) deliver customary transfer documentation as
reasonably determined by the Committee.
          (c) Fractional Shares. Any adjustment provided under this Section 8
may provide for the elimination of any fractional share that might otherwise
become subject to an Award.
          9. Use of Proceeds.
          The proceeds received from the sale of Stock pursuant to the Plan
shall be used for general corporate purposes.
          10. Rights and Privileges as a Stockholder.
          Except as otherwise specifically provided in the Plan, no person shall
be entitled to the rights and privileges of stock ownership in respect of shares
of Stock that are subject to Awards hereunder until such shares have been issued
to that person.
          11. Employment or Service Rights.
          No individual shall have any claim or right to be granted an Award
under the Plan or, having been selected for the grant of an Award, to be
selected for a grant of any other Award. Neither the Plan nor any action taken
hereunder shall be construed as giving any individual any right to be retained
in the employ or service of the Company or an Affiliate of the Company.
          12. Compliance With Laws.
          The obligation of the Company to deliver Stock upon vesting and/or
exercise of any Award shall be subject to all applicable laws, rules, and
regulations, and to such approvals by governmental agencies as may be required.
Notwithstanding any terms or conditions of any Award to the contrary, the
Company shall be under no obligation to offer to sell or to sell, and shall be
prohibited from offering to sell or selling any shares of Stock pursuant to an
Award unless such shares have been properly registered for sale with the
Securities and Exchange Commission pursuant to the Securities Act or unless the
Company has received an opinion of counsel, satisfactory to the Company, that
such shares may be offered or sold without such registration pursuant to an
available exemption therefrom and the terms and conditions of such exemption
have been fully complied with. The Company shall be under no obligation to
register for sale or resale under the Securities Act any of the shares of Stock
to be offered or sold under

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the Plan or any shares of Stock issued upon exercise or settlement of Awards. If
the shares of Stock offered for sale or sold under the Plan are offered or sold
pursuant to an exemption from registration under the Securities Act, the Company
may restrict the transfer of such shares and may legend the Stock certificates
representing such shares in such manner as it deems advisable to ensure the
availability of any such exemption.
          13. Withholding Obligations.
          As a condition to the vesting and/or exercise of any Award, the
Committee may require that a Participant satisfy, through deduction or
withholding from any payment of any kind otherwise due to the Participant, or
through such other arrangements as are satisfactory to the Committee, the
minimum amount of all federal, state, and local income and other taxes of any
kind required or permitted to be withheld in connection with such vesting and/or
exercise. The Committee, in its discretion, may permit shares of Stock to be
used to satisfy tax withholding requirements, and such shares shall be valued at
their Fair Market Value as of the settlement date of the Award; provided,
however, that the aggregate Fair Market Value of the number of shares of Stock
that may be used to satisfy tax withholding requirements may not exceed the
minimum statutorily required withholding amount with respect to such Award.
          14. Amendment of the Plan or Awards.
          (a) Amendment of Plan. The Board at any time, and from time to time,
may amend the Plan; provided, however, that the Board shall not, without
stockholder approval, make any amendment to the Plan that requires stockholder
approval pursuant to applicable law or the applicable rules of the national
securities exchange on which the Stock is principally listed.
          (b) Amendment of Awards. The Board or the Committee, at any time, and
from time to time, may amend the terms of any one or more Awards; provided,
however, that the rights under any Award shall not be impaired by any such
amendment unless the Participant consents in writing (it being understood that
no action taken by the Board or the Committee that is expressly permitted under
the Plan, including, without limitation, any actions described in Section 8
hereof, shall constitute an amendment of an Award for such purpose).
Notwithstanding the foregoing, subject to the limitations of applicable law, if
any, and without an affected Participant’s consent, the Board or the Committee
may amend the terms of any one or more Awards if necessary to bring the Award
into compliance with Section 409A of the Code and Department of Treasury
regulations and other interpretive guidance issued thereunder, including without
limitation any such regulations or other guidance that may be issued or amended
after the Effective Date.
          (c) Repricing of Awards without Stockholder Approval. The repricing of
Awards upon the approval of the Board or Committee shall expressly be permitted
under the Plan without additional stockholder approval. For this purpose, a
“repricing” means any of the following (or any other action that has the same
effect as any of the following): (i) changing the terms of an Award to lower its
exercise price (other than on account of capital adjustments resulting from
share splits, etc., as described in Section 8(a)), (ii) any other action that is
treated as “repricing” under generally accepted accounting principals, and
(iii) repurchasing for cash or canceling an Award in exchange for another Award
at a time when its exercise price is greater

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than the Fair Market Value of the underlying Stock, unless the cancellation and
exchange occurs in connection with an event set forth in Section 8(b).
          15. Termination or Suspension of the Plan.
          The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on the tenth (10th) anniversary of the
Effective Date. No Awards may be granted under the Plan while the Plan is
suspended or after it is terminated.
          16. Effective Date of the Plan.
          The Plan is effective as of the Effective Date.
          17. Miscellaneous.
          (a) Certificates. Stock acquired pursuant to Awards granted under the
Plan may be evidenced in such a manner as the Committee shall determine. If
certificates representing Stock are registered in the name of the Participant,
the Committee may require that such certificates bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such Stock,
that the Company retain physical possession of the certificates, and that the
Participant deliver a stock power to the Company, endorsed in blank, relating to
the Stock. Notwithstanding the foregoing, the Committee may determine, in its
sole discretion, that the Stock shall be held in book entry form rather than
delivered to the Participant pending the release of any applicable restrictions.
          (b) Clawback/Recoupment Policy. Notwithstanding anything contained
herein to the contrary, all Awards granted under the Plan shall be and remain
subject to any incentive compensation clawback or recoupment policy currently in
effect or as may be adopted by the Board, and in each case, as may be amended
from time to time. Any such policy adoption or amendment shall in no event
require the prior consent of any Participant.
          (c) Participants Outside of the United States. The Committee may
modify the terms of any Award under the Plan made to or held by a Participant
who is then a resident or primarily employed outside of the United States in any
manner deemed by the Committee to be necessary or appropriate in order that such
Award shall conform to laws, regulations, and customs of the country in which
the Participant is then a resident or primarily employed, or so that the value
and other benefits of the Award to the Participant, as affected by foreign tax
laws and other restrictions applicable as a result of the Participant’s
residence or employment abroad, shall be comparable to the value of such Award
to a Participant who is a resident or primarily employed in the United States.
An Award may be modified under this Section 17(a) in a manner that is
inconsistent with the express terms of the Plan, so long as such modifications
will not contravene any applicable law or regulation or result in actual
liability under Section 16(b) of the Exchange Act for the Participant whose
Award is modified. Additionally, the Committee may adopt such procedures and
sub-plans as are necessary or appropriate to permit participation in the Plan by
Eligible Persons who are foreign nationals or employed outside the United
States.
          (d) No Liability of Committee Members. No member of the Committee
shall be personally liable by reason of any contract or other instrument
executed by such member or

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on his behalf in his capacity as a member of the Committee or for any mistake of
judgment made in good faith, and the Company shall indemnify and hold harmless
each member of the Committee and each other employee, officer, or director of
the Company to whom any duty or power relating to the administration or
interpretation of the Plan may be allocated or delegated, against all costs and
expenses (including counsel fees) and liabilities (including sums paid in
settlement of a claim) arising out of any act or omission to act in connection
with the Plan unless arising out of such person’s own fraud or willful
misconduct; provided, however, that approval of the Board shall be required for
the payment of any amount in settlement of a claim against any such person. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company’s
certificate or articles of incorporation or by-laws, each as may be amended from
time to time, as a matter of law, or otherwise, or any power that the Company
may have to indemnify them or hold them harmless.
          (e) Payments Following Accidents or Illness. If the Committee shall
find that any person to whom any amount is payable under the Plan is unable to
care for his affairs because of illness or accident, or is a minor, or has died,
then any payment due to such person or his estate (unless a prior claim therefor
has been made by a duly appointed legal representative) may, if the Committee so
directs the Company, be paid to his spouse, child, relative, an institution
maintaining or having custody of such person, or any other person deemed by the
Committee to be a proper recipient on behalf of such person otherwise entitled
to payment. Any such payment shall be a complete discharge of the liability of
the Committee and the Company therefor.
          (f) Governing Law. The Plan shall be governed by and construed in
accordance with the internal laws of the State of Delaware without reference to
the principles of conflicts of laws thereof.
          (g) Funding. No provision of the Plan shall require the Company, for
the purpose of satisfying any obligations under the Plan, to purchase assets or
place any assets in a trust or other entity to which contributions are made or
otherwise to segregate any assets, nor shall the Company maintain separate bank
accounts, books, records, or other evidence of the existence of a segregated or
separately maintained or administered fund for such purposes. Participants shall
have no rights under the Plan other than as unsecured general creditors of the
Company, except that insofar as they may have become entitled to payment of
additional compensation by performance of services, they shall have the same
rights as other employees under general law.
          (h) Reliance on Reports. Each member of the Committee and each member
of the Board shall be fully justified in relying, acting or failing to act, and
shall not be liable for having so relied, acted, or failed to act in good faith,
upon any report made by the independent public accountant of the Company and its
Affiliates and upon any other information furnished in connection with the Plan
by any person or persons other than such member.

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          (i) Titles and Headings. The titles and headings of the sections in
the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.
* * *

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