Exhibit 10.3
ENCORE ACQUISITION COMPANY
2008 INCENTIVE STOCK PLAN
(As Established Effective May 6, 2008)
SECTION 1 Purpose; Definitions.
     The purpose of the Plan is to attract, motivate and retain selected
employees of the Company and to provide the Company with the ability to provide
incentives more directly linked to the profitability of the Company’s businesses
and increases in shareholder value.
     For purposes of the Plan, the following terms are defined as set forth
below:
     “Awards” mean grants under this Plan of any form of Stock Option, Stock
Award, Stock Appreciation Right or Cash Award, whether granted singly, in
combination or in tandem, pursuant to any applicable terms, conditions and
limitations as the Committee may establish in order to fulfill the objectives of
the Plan.
     “Board” means the Board of Directors of the Company.
     “Cash Award” means an Award denominated in cash.
     “Code” means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
     “Commission” means the Securities and Exchange Commission or any successor
agency.
     “Committee” means the Board unless, and until, a Compensation Committee of
the Board, or a subcommittee thereof, any successor thereto or such other
committee or subcommittee, shall be designated by the Board to administer the
Plan.
     “Common Stock” or “Stock” means the $0.01 par value Common Stock of the
Company.
     “Company” means Encore Acquisition Company, a corporation organized under
the laws of the State of Delaware, and its successors.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time, and any successor thereto.
     “Fair Market Value” means, as of any given date, (i) the closing sale price
of the Common Stock for such date on The New York Stock Exchange, (ii) at the
discretion of the Committee, the price prevailing on the exchange at the time of
exercise or other relevant event (as determined in accordance with procedures
established by the Committee), (iii) if the closing sale price or the price
prevailing on the exchange cannot be determined, the fair market value of the
Common Stock as determined by the Committee in good faith, (iv) if applicable,
the price per share as determined in accordance with the terms, conditions, and
limitations set forth in an Award agreement, or (v) if applicable, the price per
share as determined in accordance with the

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procedures of a third party administrator retained by the Company to administer
the Plan and as approved by the Committee. Under no circumstances shall the Fair
Market Value be less than the par value of the Common Stock.
     “Grant Date” means the date an Award is granted to a Plan participant
pursuant to the Plan. The Grant Date for a substituted award is the Grant Date
of the original award.
     “Grant Price” means the price at which a Plan participant may exercise his
or her right to receive cash or Common Stock, as applicable, under the terms of
an Award.
     “Incentive Stock Option” means any Stock Option that complies with
Section 422 of the Code.
     “Nonqualified Stock Option” means any Stock Option that is not an Incentive
Stock Option.
     “Performance Award” means an Award made pursuant to this Plan that is
subject to the attainment of one or more Performance Goals. For the avoidance of
doubt, a Performance Award may also include a time-vesting component.
     “Performance Goal” means one or more standards established by the Committee
to determine in whole or in part whether a Performance Award shall be earned.
     “Plan” means this 2008 Incentive Stock Plan, as amended from time to time.
     “Qualified Performance Award” means a Performance Award made to a
participant who is an employee that is intended to qualify as qualified
performance-based compensation under Section 162(m) of the Code, as described in
Section 5(e)(ii) of the Plan.
     “Restricted Period” means the period during which an Award may not be sold,
assigned, transferred, pledged or otherwise encumbered.
     “Restricted Stock” means an Award of shares of Common Stock that is subject
to a Restricted Period.
     “Restricted Stock Unit” means a Stock Unit that is subject to a Restricted
Period.
     “Spread Value” means, with respect to a share of Common Stock subject to an
Award, an amount equal to the excess of the Fair Market Value, on the date such
value is determined, over the Award’s exercise or Grant Price, if any.
     “Stock Appreciation Right” or “SAR” means a right to receive a payment, in
cash or Common Stock, equal to the excess of the Fair Market Value or other
specified valuation of a specified number of shares of Common Stock on the date
the right is exercised over a specified Grant Price, in each case, as determined
by the Committee.
     “Stock Award” means an Award in the form of shares of Common Stock or Stock
Units, including an award of Restricted Stock or Restricted Stock Units.

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     “Stock Option” means an option granted pursuant to Section 5(a).
     “Stock Unit” means a unit representing the right to receive one share of
Common Stock or equivalent value (as determined by the Committee).
     In addition, the terms “Business Combination,” “Change in Control,” “Change
in Control Price,” “Incumbent Board,” “Outstanding Company Stock,” “Outstanding
Company Voting Securities” and “Person” have the meanings set forth in
Section 6.
SECTION 2. Administration.
     The Plan shall be administered by the Committee, which shall have the power
to interpret the Plan and to adopt such rules and guidelines for carrying out
the Plan as it may deem appropriate. The Committee shall have the authority to
adopt such modifications, procedures and subplans as may be necessary or
desirable to comply with the laws, regulations, compensation practices and tax
and accounting principles of the countries in which the Company, a subsidiary or
an affiliate may operate to assure the viability of the benefits of Awards made
to individuals employed in such countries and to meet the objectives of the
Plan.
     Subject to the terms of the Plan, the Committee shall have the authority to
determine those employees eligible to receive Awards and the amount, type and
terms of each Award.
     Following the authorization of a pool of cash or shares of Common Stock to
be available for Awards, the Board or the Committee may authorize the Chief
Executive Officer and/or another executive officer of the Company, if and to the
extent permitted by applicable law, rule or regulation, or a subcommittee of
members of the Board, to grant individual Awards from such pool pursuant to such
conditions or limitations as the Board or the Committee may establish. The Board
or Committee may also delegate to the Chief Executive Officer and to other
employees of the Company its administrative duties under this Plan (excluding
its granting authority) pursuant to such conditions or limitations as the
Committee may establish. The Board or Committee may engage or authorize the
engagement of a third party administrator to carry out administrative functions
under the Plan.
     The Committee may, in its discretion, provide for the extension of the
exercisability of an Award, accelerate the vesting or exercisability of an
Award, eliminate or make less restrictive any restrictions applicable to an
Award, waive any restriction or other provision of this Plan or an Award or
otherwise amend or modify an Award in any manner that is either (i) not adverse
to the Participant to whom such an Award was granted or (ii) consented to by
such Participant. Notwithstanding anything herein to the contrary, without the
approval of the Company’s stockholders, Stock Options issued under the Plan will
not be repriced, replaced, or regranted through cancellation or by decreasing
the exercise price of a previously granted Stock Option, except as expressly
provided by the adjustment provisions of Section 4.
     Any determination made by the Committee or pursuant to delegated authority
in accordance with the provisions of the Plan with respect to any Award shall be
made in the sole discretion of the Committee or such delegate, and all decisions
made by the Committee or any appropriately designated officer pursuant to the
provisions of the Plan shall be final and binding on all persons, including the
Company and Plan participants.

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SECTION 3. Eligibility.
     All directors and all employees of the Company and its subsidiaries and
affiliates are eligible to be granted Awards under the Plan.
SECTION 4. Common Stock Subject to Plan.
     The total number of shares of Common Stock reserved and available for
distribution pursuant to the Plan shall be 2,400,000 shares, all of which may be
available for use in connection with Incentive Stock Options. No more than
1,600,000 shares of Common Stock shall be available under this Plan for Stock
Awards. Additionally, the number of shares of Common Stock that are the subject
of Awards under this Plan, that are cancelled, forfeited, terminated or expire
unexercised, shall again immediately become available for Awards hereunder. The
number of shares reserved for issuance under the Plan shall be reduced only to
the extent that shares of Common Stock are actually issued in connection with
the exercise or settlement of an Award; provided, however, that the number of
shares reserved for issuance shall be reduced by the total number of Options or
SARs exercised. The number of shares reserved for issuance under the Plan shall
not be increased by (i) any shares tendered or Awards surrendered in connection
with the purchase of shares upon the exercise of an Option or (ii) any shares
deducted from an Award payment in connection with the Company’s tax withholding
obligations.
     Shares of Common Stock delivered under the Plan as an Award or in
settlement of an Award issued or made (a) upon the assumption, substitution,
conversion or replacement of outstanding awards under a plan or arrangement of
an entity acquired in a merger or other acquisition or (b) as a post-transaction
grant under such a plan or arrangement of an acquired entity shall not reduce or
be counted against the maximum number of shares of Common Stock available for
delivery under the Plan, to the extent that the exemption for transactions in
connection with mergers and acquisitions from the shareholder approval
requirements of the New York Stock Exchange for equity compensation plans
applies.
     In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, split-up, distribution to holders
of Common Stock of securities or property (including cash dividends that the
Board determines are not in the ordinary course of business but excluding normal
cash dividends), or other change in corporate structure affecting the Common
Stock occurring after adoption of the Plan by the Board, the Board shall make
substitutions or adjustments in the aggregate number and kind of shares reserved
and available for issuance under the Plan, in the number, kind and Grant Price
or other price of shares subject to outstanding Awards and in the per person
Award limits set forth in Section 5, in each case as determined to be
appropriate by the Board in its discretion; provided, however, that any such
substitutions or adjustments shall be, to the extent deemed appropriate by the
Board, consistent with the treatment of shares of Common Stock not subject to
the Plan, and that the number of shares subject to any Award shall always be a
whole number.

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SECTION 5. Awards.
          The types of Awards that may be granted under the Plan are set forth
below. Awards may be granted singly, in combination, or in tandem with other
Awards. To the extent prescribed by the Committee, each Award will be set forth
in a separate agreement with the person receiving the Award and will indicate
the type, terms and conditions of the Award.
(a) Stock Options.
     (i) A Stock Option represents the right to purchase a share of Stock at a
predetermined Grant Price. Stock Options granted under this Plan may be in the
form of Incentive Stock Options or Nonqualified Stock Options, as specified in
the Award agreement. The terms of each Stock Option shall be set forth in the
Award agreement. Subject to the applicable Award agreement, Stock Options may be
exercised, in whole or in part, by giving written notice of exercise to the
Company specifying the number of shares to be purchased. Such notice shall be
accompanied by payment in full of the purchase price by certified or bank check
or such other instrument as the Company may accept (including a copy of
instructions to a broker or bank acceptable to the Company to deliver promptly
to the Company an amount of sale or loan proceeds sufficient to pay the purchase
price). As determined by the Committee, payment in full or in part may also be
made in the form of Common Stock already owned by the optionee valued at the
Fair Market Value on the date the Stock Option is exercised; provided, however,
that to the extent required by the Committee such Common Stock shall not have
been acquired within the preceding six months upon the exercise of a Stock
Option Award granted under the Plan or any other plan maintained at any time by
the Company or any subsidiary.
     (ii) Incentive Stock Options will be designed to comply with the provisions
of the Code and will be subject to certain restrictions contained in the Code.
Among such restrictions, Incentive Stock Options must have an exercise price not
less than the Fair Market Value of a share of Common Stock on the Grant Date,
must expire within a specified period of time following the optionee’s
termination of employment, and must be exercised within ten years after the
Grant Date; but may be subsequently modified to disqualify them from treatment
as Incentive Stock Options. In the case of an Incentive Stock Option granted to
an individual who owns (or is deemed to own) at least 10% of the total combined
voting power of all classes of stock of the Company, the exercise price must be
at least 110% of the Fair Market Value of a share of Common Stock on the Grant
Date and the Incentive Stock Option must expire no later than the fifth
anniversary of the date of its grant. The aggregate Fair Market Value
(determined at the time the option was granted) of the Common Stock with respect
to which Incentive Stock Options are exercisable for the first time by a
participant during any calendar year shall not exceed $100,000 (or such other
limit as may be required by the Code).
     (iii) Nonqualified Stock Options will provide for the right to purchase
Common Stock at a specified price which shall be no less than Fair Market Value
on the Grant Date and usually will become exercisable (in the discretion of the
Committee) in

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one or more installments after the Grant Date. The term of a Nonqualified Stock
Option will not exceed ten years from the Grant Date.
     (b) Stock Awards. An Award may be in the form of a Stock Award. The terms,
conditions and limitations applicable to any Stock Awards granted pursuant to
this Plan shall be determined by the Committee; provided that the Restricted
Period for any Stock Award which is not a Performance Award shall lapse no
sooner than ratably over a period of three years from the Grant Date, provided
further that (i) the Committee may provide for earlier vesting upon a
termination of employment by reason of death, disability, layoff, retirement, or
change in control, and (ii) such three-year minimum vesting period shall not
apply to a Stock Award that is granted in lieu of salary or bonus. Shares of
Restricted Stock are shares of Common Stock that are awarded to a participant
and that during the Restricted Period may be forfeitable to the Company upon
such conditions as may be set forth in the applicable Award agreement
(including, without limitation, a specified period of employment or the
satisfaction of pre-established Performance Goals). Stock Awards granted to
executive officers may only be in the form of Performance Awards. Except as
provided in this subsection (b) and in the applicable Award agreement, a
participant who has received an Award of Restricted Stock shall have all the
rights of a holder of Common Stock, including the rights to receive dividends or
dividend equivalents and to vote during the Restricted Period. Dividends with
respect to Restricted Stock that are payable in Common Stock shall be paid in
the form of Restricted Stock.
     (c) Stock Appreciation Rights. An Award may be in the form of an SAR. On
the Grant Date, the Grant Price of an SAR shall be not less than the Fair Market
Value of the Common Stock subject to such SAR. The exercise period for an SAR
shall extend no more than 10 years after the Grant Date. Subject to the
foregoing provisions, the terms, conditions, and limitations applicable to any
SARs awarded pursuant to this Plan, including the Grant Price, the term of any
SARs, and the date or dates upon which they become exercisable, shall be
determined by the Committee.
     (d) Cash Awards. An Award may be in the form of a Cash Award. The terms,
conditions, and limitations applicable to any Cash Awards granted pursuant to
this Plan shall be determined by the Committee.
     (e) Performance Awards. Without limiting the type or number of Awards that
may be made under the other provisions of this Plan, an Award may be in the form
of a Performance Award. The terms, conditions and limitations applicable to any
Performance Awards granted pursuant to this Plan shall be determined by the
Committee; provided that any Stock Award granted as a Performance Award shall
have a minimum Restricted Period of one year from the Grant Date, provided
further that the Committee may provide for earlier vesting upon a termination of
employment by reason of death, disability, layoff, retirement, or change in
control. The Committee shall set Performance Goals in its discretion which,
depending on the extent to which they are met, will determine the value and/or
amount of Performance Awards that will be paid out to the Plan participant
and/or the portion of an Award that may be exercised.
     (i) Nonqualified Performance Awards. Performance Awards that are not
intended to qualify as qualified performance-based compensation under
Section 162(m), or that are Stock Options or SARs, of the Code shall be based on
achievement of such

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goals and be subject to such terms, conditions, and restrictions as the
Committee or its delegate shall determine.
     (ii) Qualified Performance Awards. Performance Awards under the Plan that
are intended to qualify as qualified performance-based compensation under
Section 162(m) of the Code shall be paid, vested, or otherwise deliverable
solely on account of the attainment of one or more pre-established, objective
Performance Goals established by the Committee prior to the earlier to occur of
(x) 90 days after the commencement of the period of service to which the
Performance Goal relates and (y) the lapse of 25% of the period of service (as
scheduled in good faith at the time the goal is established), and in any event
while the outcome is substantially uncertain. A Performance Goal is objective if
a third party having knowledge of the relevant facts could determine whether the
goal is met. Such a Performance Goal may be based on one or more business
criteria that apply to the Employee, one or more business units or divisions of
the Company or the applicable sector, or the Company as a whole, and if so
desired by the Committee, by comparison with a peer group of companies. A
Performance Goal may include one or more of the following: Increased revenue;
Net income measures (including but not limited to income after capital costs and
income before or after taxes); Stock price measures (including but not limited
to growth measures and total shareholder return); Market share; Earnings per
share (actual or targeted growth); Earnings before interest, taxes,
depreciation, and amortization (“EBITDA”); Cash flow measures (including but not
limited to net cash flow and net cash flow before financing activities); Return
measures (including but not limited to return on equity, return on average
assets, return on capital, risk-adjusted return on capital, return on investors’
capital and return on average equity); Operating measures (including operating
income, funds from operations, cash from operations, after-tax operating income,
sales volumes, production volumes, and production efficiency); Expense measures
(including but not limited to finding and development costs, overhead cost and
general and administrative expense); Margins; Shareholder value; Total
shareholder return; Reserve levels; Reserve additions; Proceeds from
dispositions; Reserve replacement ratio; Total market value; and Corporate
values measures (including ethics compliance, environmental, and safety).
     Unless otherwise stated, such a Performance Goal need not be based upon an
increase or positive result under a particular business criterion and could
include, for example, maintaining the status quo or limiting economic losses
(measured, in each case, by reference to specific business criteria). In
interpreting Plan provisions applicable to Qualified Performance Awards, it is
the intent of the Plan to conform with the standards of Section 162(m) of the
Code and Treasury Regulation §1.162-27(e)(2)(i), as to grants to those
participants whose compensation is, or is likely to be, subject to Section
162(m) of the Code, and the Committee in establishing such goals and
interpreting the Plan shall be guided by such provisions. Prior to the payment
of any compensation based on the achievement of Performance Goals for Qualified
Performance Awards, the Committee must certify in writing that applicable
Performance Goals and any of the material terms thereof were, in fact,
satisfied. Subject to the foregoing provisions, the terms, conditions, and
limitations applicable to any Qualified Performance Awards made pursuant to this
Plan shall be determined by the Committee.

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     (f) Employee Award Limits.
     (i) No Plan participant who is an employee may be granted, during any
calendar year, Awards covering or relating to more than 300,000 shares of Common
Stock.
     (ii) No Plan participant who is an employee may be granted Awards
consisting of cash (including Cash Awards that are granted as Performance
Awards) in respect of any calendar year having a value determined on the Grant
Date in excess of $5,000,000.
     (g) Nonemployee Director Award Limits. No Plan participant who is a
nonemployee director may be granted, during any calendar year, Awards covering
or relating to more than 20,000 shares of Common Stock.
SECTION 6. Change in Control Provisions.
     (a) Impact of Event. Notwithstanding any other provision of the Plan to the
contrary, in the event of a Change in Control, unless the Committee otherwise
determines at the time an Award is granted:
     (i) All Stock Options and SARs outstanding as of the date such Change in
Control occurs shall become fully vested and exercisable.
     (ii) The restrictions and other conditions applicable to any Stock Award,
including vesting requirements, shall lapse, and such Awards shall become free
of all restrictions and fully vested.
     (b) Definition of Change in Control. A “Change in Control” means the
happening of any of the following events:
     (i) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”)) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 40% or more of either (A) the then outstanding shares of Common Stock (the
“Outstanding Company Common Stock”) or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided,
however, that the following acquisitions shall not constitute a Change in
Control: (1) any acquisition directly from the Company, (2) any acquisition by
the Company, (3) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company or (4) any acquisition by any corporation pursuant to a transaction
described in clauses (A), (B) and (C) of paragraph (iii) of this Section 6(b) or
(5) any acquisition by a Person that owns on the date this Plan is adopted by
the Board of Directors more than 20% of the outstanding capital stock of the
Company at such date; or

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     (ii) Individuals who, as of the effective date of the Plan, 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 such effective date whose election, or nomination for
election by the stockholders of the Company, was approved by a vote of at least
a majority of the directors then comprising 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) Consummation of a reorganization, merger, share exchange or
consolidation (a “Business Combination”), unless, in each case following such
Business Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or indirectly, more than
60% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation that as a result of such transaction owns the Company through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (B) no
Person (excluding any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 40% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such Person owned 40%
or more of the Outstanding Company Common Stock or Outstanding Company Voting
Securities prior to the Business Combination and (C) at least a majority of the
members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Business Combination; or
     (iv) Approval by the stockholders of the Company of (A) a complete
liquidation or dissolution of the Company or (B) the sale or other disposition
of all or substantially all of the assets of the Company, other than to a
corporation with respect to which, following such sale or other disposition,
(1) more than 60% of, respectively, the then outstanding shares of common stock
of such corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to such
sale or other disposition,

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of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (2) less than 40% of, respectively, the then
outstanding shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned, directly
or indirectly, by any Person (excluding any employee benefit plan (or related
trust) of the Company or such corporation), except to the extent that such
Person owned 40% or more of the Outstanding Company Common Stock or Outstanding
Company Voting Securities prior to the sale or disposition and (3) at least a
majority of the members of the board of directors of such corporation were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such sale or other
disposition of assets of the Company or were elected, appointed or nominated by
the Board.
     (c) Notwithstanding the foregoing, if any right granted pursuant to this
Section 6 would make a Change in Control transaction ineligible for pooling of
interests accounting under generally accepted accounting principles that but for
this Section 6 would otherwise be eligible for such accounting treatment, the
Committee shall have the ability to substitute the cash payable pursuant to this
Section 6 with Common Stock with a Fair Market Value equal to the cash that
would otherwise be payable hereunder.
SECTION 7. Plan Amendment and Termination
     The Board may amend or terminate the Plan at any time, provided that no
such amendment shall be made without stockholder approval if such approval is
required by applicable legal requirements or the requirements of the securities
exchange on which the Company’s stock is listed, or if such amendment would:
(i) decrease the Grant Price of any Stock Option to less than the minimum price
set forth herein on the Grant Date; or (ii) increase the total number of shares
of Common Stock that may be distributed under the Plan.
     Except as set forth in any Award agreement, no amendment or termination of
the Plan may materially and adversely affect any outstanding Award under the
Plan without the Award recipient’s consent.
SECTION 8. Transferability.
     No Award shall be transferable or assignable, or payable to or exercisable
by, anyone other than the participant to whom it was granted, except (i) by law,
will or the laws of descent and distribution, (ii) as a result of the disability
of a participant or (iii) that the Committee may permit transfers of Awards by
gift or otherwise to a member of a participant’s immediate family and/or trusts
whose beneficiaries are members of the participant’s immediate family, or to
such other persons or entities as may be approved by the Committee.
Notwithstanding the foregoing, in no event shall Incentive Stock Options be
transferable or assignable other than by will or by the laws of descent and
distribution, except as may be expressly allowed by applicable laws or
regulations.

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SECTION 9. Award Agreements.
     Each Award under the Plan shall be evidenced by a written agreement that
sets forth the terms, conditions, and limitations for each Award. Such terms may
include, but are not limited to, the term of the Award, vesting and forfeiture
provisions, and the provisions applicable in the event the recipient’s
employment terminates. The Committee may amend an Award Agreement, provided that
no such amendment may materially and adversely affect an Award without the Award
recipient’s consent.
SECTION 10. Effective Date; Term.
     The Plan was initially adopted by the Board on February 12, 2008, subject
to the approval by the holders of a majority of the shares of common stock then
outstanding. The term of the Plan is ten years from the date the Plan is
approved by the holders of a majority of the shares of Common Stock. No Awards
shall be granted after the term of the Plan has expired. Any Awards granted
during the term of the Plan may extend beyond the term of the Plan.
SECTION 11. General Provisions.
     (a) The Committee may require each person acquiring shares of Common Stock
pursuant to an Award to represent to and agree with the Company in writing that
such person is acquiring the shares without a view to the distribution thereof.
The certificates for such shares may include any legend that the Committee deems
appropriate to reflect any restrictions on transfer.
     All certificates for shares of Common Stock delivered under the Plan shall
be subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of the
Commission, any stock exchange upon which the Common Stock is then listed, and
any applicable Federal, state or foreign securities law, and the Committee may
cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
     (b) It is presently intended that the Plan constitute an “unfunded” plan
for incentive and deferred compensation. The Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Common Stock or make payments; provided, however, that,
unless the Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the “unfunded” status of the Plan.
     (c) Nothing contained in this Plan shall prevent the Company, a subsidiary,
or an affiliate from adopting other or additional compensation arrangements for
its employees.
     (d) The adoption of the Plan shall not confer upon any employee any right
to continued employment nor shall it interfere in any way with the right of the
Company, a subsidiary, or an affiliate to terminate the employment of any
employee at any time.
     (e) No later than the date as of which an amount first becomes includible
in the gross income of the participant for Federal income tax purposes with
respect to any Award under the Plan, the participant shall pay to the Company,
or make arrangements satisfactory to the

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Company regarding the payment of, any Federal, state, local, or foreign taxes of
any kind required by law to be withheld with respect to such amount. Unless
otherwise determined by the Committee, withholding obligations arising from an
Award may be settled with Common Stock, including Common Stock that is part of,
or is received upon exercise or conversion of, the Award that gives rise to the
withholding requirement. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company and its
subsidiaries and affiliates shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment otherwise due to the
participant. Common Stock used to settle withholding obligations shall be valued
at Fair Market Value on the date such withholding obligations are due. The
Committee may establish such procedures as it deems appropriate, including the
making of irrevocable elections, for the settling of withholding obligations
with Common Stock.
     (f) On receipt of written notice of exercise, the Committee may elect to
cash out all or a portion of the shares of Common Stock for which a Stock Option
is being exercised by paying the optionee an amount, in cash or Common Stock,
equal to the Spread Value of such shares on the date such notice of exercise is
received.
     (g) The Plan and all Awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Delaware.
     (h) If any provision of the Plan is held invalid or unenforceable, the
invalidity or unenforceability shall not affect the remaining parts of the Plan,
and the Plan shall be enforced and construed as if such provision had not been
included.
     (i) Notwithstanding anything in this Plan to the contrary, if any Plan
provision or Award under the Plan would result in the imposition of an
applicable tax under Section 409A of the Code and related regulations and
Treasury pronouncements, that Plan provision or Award will be reformed to avoid
imposition of the applicable tax and no such action shall be deemed to adversely
affect the Participant’s rights to an Award.

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