Exhibit 10.1

 

ALLIANT TECHSYSTEMS INC.
2005 STOCK INCENTIVE PLAN

 

Section 1.   Purpose of the Plan; Effect on Prior Plans.

 

(a)                                          Purpose of the Plan.   The purpose
of the Plan is to aid the Company in recruiting and retaining employees,
officers and non-employee Directors capable of assuring the future success of
the Company through the grant of Awards to such persons under the Plan. The
Company expects that Awards of stock-based compensation and opportunities for
stock ownership in the Company will provide incentives to Plan participants to
exert their best efforts for the success of the Company’s business and thereby
align the interests of Plan participants with those of the Company’s
stockholders.

 

(b)                                         Effect on Prior Plans.   From and
after the date of stockholder approval of the Plan, no awards shall be granted
under the Company’s Amended and Restated 1990 Equity Incentive Plan, as amended,
but all outstanding awards previously granted under that plan shall remain
outstanding in accordance with their terms. From and after the date of
stockholder approval of the Plan, the remaining shares authorized under the
Company’s Management Compensation Plan shall not be awarded or issued, but the
Management Compensation Plan shall remain in effect for cash awards. The
Company’s Amended and Restated Non-Employee Director Restricted Stock Plan shall
remain in effect, and restricted stock awards may continue to be made under that
plan.

 

Section 2.   Definitions.

 

The following capitalized terms used in the Plan have the meanings set forth in
this Section:

 

(a)                                          “Affiliate” means (i) any entity
that, directly or indirectly through one or more intermediaries, is controlled
by the Company and (ii) any entity in which the Company has a significant equity
interest, in each case as determined by the Committee.

 

(b)                                         “Award” means any Option, Stock
Appreciation Right, Restricted Stock, Restricted Stock Unit, Dividend
Equivalent, Performance Award, Stock Award or Other Stock-Based Award granted
under the Plan.

 

(c)                                          “Award Agreement” means any written
agreement, contract or other instrument or document evidencing an Award granted
under the Plan. Each Award Agreement shall be subject to the applicable terms
and conditions of the Plan and any other terms and conditions (not inconsistent
with the Plan) determined by the Committee.

 

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

 

(e)                                          “Code” means the Internal Revenue
Code of 1986, as amended from time to time, and any regulations promulgated
thereunder.

 

(f)                                            “Committee” means the Personnel
and Compensation Committee of the Board or any successor committee of the Board
designated by the Board to administer the Plan. The Committee shall be comprised
of not less than such number of Directors as shall be required to permit Awards
granted under the Plan to qualify under Rule 16b-3, and each member of the
Committee shall be a “Non-Employee Director” within the meaning of Rule 16b-3
and an “outside director” within the meaning of Section 162(m) of the Code. The
Company expects to have the Plan administered in accordance with the
requirements for the award of “qualified performance-based compensation” within
the meaning of Section 162(m) of the Code.

 

(g)                                         “Company” means Alliant Techsystems
Inc., a Delaware corporation.

 

1

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

 

(h)                                         “Director” means a member of the
Board.

 

(i)                                             “Dividend Equivalent” means any
right granted under Section 6(d) of the Plan.

 

(j)                                             “Eligible Person” means any
employee, officer or non-employee Director of the Company or any Affiliate whom
the Committee determines to be an Eligible Person.

 

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

 

(l)                                             “Fair Market Value” means, with
respect to any property (including, without limitation, any Shares or other
securities), the fair market value of such property determined by such methods
or procedures as shall be established from time to time by the Committee.
Notwithstanding the foregoing, unless otherwise determined by the Committee, the
Fair Market Value of Shares on a given date for purposes of the Plan shall be
the closing sale price of the Shares on the New York Stock Exchange as reported
in the consolidated transaction reporting system on such date or, if such
Exchange is not open for trading on such date, on the most recent preceding date
when such Exchange is open for trading.

 

(m)                                       “Incentive Stock Option” means an
option granted under Section 6(a) of the Plan that is intended to meet the
requirements of Section 422 of the Code or any successor provision.

 

(n)                                         “Non-Qualified Stock Option” means
an option granted under Section 6(a) of the Plan that is not intended to be an
Incentive Stock Option.

 

(o)                                         “Option” means an Incentive Stock
Option or a Non-Qualified Stock Option.

 

(p)                                         “Other Stock-Based Award” means any
right granted under Section 6(g) of the Plan.

 

(q)                                         “Participant” means an Eligible
Person who is designated by the Committee to be granted an Award under the Plan.

 

(r)                                            “Performance Award” means any
right granted under Section 6(e) of the Plan.

 

(s)                                          “Performance Goal” means an
objective performance goal or goals based on one or more of the following
criteria: sales; gross profit; profitability of an identifiable business unit or
product; income before interest and taxes; income before interest, taxes,
depreciation and amortization; net income; earnings per share; return on
stockholders’ equity; return on investment or average capital employed; cash
flow; and stock price. The foregoing criteria may relate to the Company, one or
more of its subsidiaries or one or more of its divisions or units, or any
combination of the foregoing, and may be applied on an absolute basis and/or be
relative to one or more peer group companies or indices, or any combination
thereof, all as the Committee shall determine. On or before the 90th day of the
applicable performance period for which Performance Goals are established, the
Committee may specify that the achievement of the Performance Goals will be
calculated without regard to the negative or positive effect of certain events,
including any of the following events: asset impairments; litigation or claim
judgments or settlements; changes in the tax code; changes in accounting
principles; changes in other laws or provisions affecting reported results;
severance, restructuring, contract termination and other costs related to
rationalizing certain business activities; and gains or losses from the
disposition of businesses or assets or from the early extinguishment of debt.

 

(t)                                            “Person” means any individual,
corporation, partnership, association or trust.

 

(u)                                         “Plan” means this Alliant
Techsystems Inc. 2005 Stock Incentive Plan, as amended from time to time.

 

(v)                                         “Restricted Stock” means any Share
granted under Section 6(c) of the Plan.

 

2

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

 

(w)                                       “Restricted Stock Unit” means any unit
granted under Section 6(c) of the Plan evidencing the right to receive a Share
(or a cash payment equal to the Fair Market Value of a Share) at some future
date.

 

(x)                                           “Rule 16b-3” means Rule 16b-3
promulgated by the Securities and Exchange Commission under the Exchange Act or
any successor rule or regulation.

 

(y)                                         “Section 162(m)” means
Section 162(m) of the Code, or any successor provision, and the applicable
Treasury Regulations promulgated thereunder.

 

(z)                                           “Shares” means shares of common
stock, par value of $0.01 per share, of the Company or such other securities or
property as may become subject to Awards pursuant to an adjustment made under
Section 4(c) of the Plan.

 

(aa)                                    “Stock Appreciation Right” means any
right granted under Section 6(b) of the Plan.

 

(bb)                                  “Stock Award” means any Share granted
under Section 6(f) of the Plan.

 

Section 3.   Administration.

 

(a)                                          Power and Authority of the
Committee.   The Plan shall be administered by the Committee. Subject to the
express provisions of the Plan and to applicable law, the Committee shall have
full power and authority to: (i) designate Participants; (ii) determine the type
or types of Awards to be granted to each Participant under the Plan;
(iii) determine the number of Shares to be covered by (or the method by which
payments or other rights are to be calculated in connection with) each Award;
(iv) determine the terms and conditions of any Award or Award Agreement;
(v) amend the terms and conditions of any Award or Award Agreement, provided,
however, that, except as otherwise provided in Section 4(c) hereof, the
Committee shall not reprice, adjust or amend the exercise price of Options or
the grant price of Stock Appreciation Rights previously awarded to any
Participant, whether through amendment, cancellation and replacement grant, or
any other means; (vi) accelerate the exercisability of any Award or the lapse of
restrictions relating to any Award; (vii) determine whether, to what extent and
under what circumstances Awards may be exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited or suspended;
(viii) determine whether, to what extent and under what circumstances cash,
Shares, other securities, other Awards, other property and other amounts payable
to a Participant with respect to an Award under the Plan shall be deferred
either automatically or at the election of the holder of the Award or the
Committee; (ix) interpret and administer the Plan and any instrument or
agreement, including any Award Agreement, relating to the Plan; (x) establish,
amend, suspend or waive such rules and regulations and appoint such agents as it
shall deem appropriate for the proper administration of the Plan; and (xi) make
any other determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan. Unless otherwise
expressly provided in the Plan, all designations, determinations,
interpretations and other decisions under or with respect to the Plan or any
Award or Award Agreement shall be within the sole discretion of the Committee,
may be made at any time and shall be final, conclusive and binding upon any
Participant, any holder or beneficiary of any Award or Award Agreement, and any
employee of the Company or any Affiliate.

 

(b)                                         Delegation.   The Committee may
delegate its powers and duties under the Plan to one or more Directors
(including a Director who is also an officer of the Company) or a committee of
Directors, subject to such terms, conditions and limitations as the Committee
may establish in its sole discretion; provided, however, that the Committee
shall not delegate its powers and duties under the Plan (i) with regard to
officers or directors of the Company or any Affiliate who are subject to
Section 16 of the Exchange Act or (ii) in such a manner as would cause the Plan
not to comply with the requirements of Section 162(m) of the Code.

 

3

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

 

(c)                                          Power and Authority of the Board of
Directors.   Notwithstanding anything to the contrary contained herein, the
Board may, at any time and from time to time, without any further action of the
Committee, exercise the powers and duties of the Committee under the Plan,
unless the exercise of such powers and duties by the Board would cause the Plan
not to comply with the requirements of Section 162(m) of the Code.

 

Section 4.   Shares Available for Awards.

 

(a)                                          Shares Available.   Subject to
adjustment as provided in Section 4(c) of the Plan, the aggregate number of
Shares that may be issued under all Awards under the Plan shall be 3,000,000.
Shares to be issued under the Plan will be authorized but unissued Shares or
Shares that have been reacquired by the Company and designated as treasury
shares. Shares that are subject to Awards that terminate, lapse or are cancelled
or forfeited shall be available again for grant under the Plan. Shares that are
tendered by a Participant or withheld by the Company as full or partial payment
to the Company of the purchase or exercise price relating to an Award or to
satisfy tax withholding obligations relating to an Award shall not be available
for future grants under the Plan. In addition, if Stock Appreciation rights are
settled in Shares upon exercise, the aggregate number of Shares subject to the
Award rather than the number of Shares actually issued upon exercise shall be
counted against the number of Shares authorized under the Plan.

 

(b)                                         Accounting for Awards.   For
purposes of this Section 4, if an Award entitles the holder thereof to receive
or purchase Shares, the number of Shares covered by such Award or to which such
Award relates shall be counted on the date of grant of such Award against the
aggregate number of Shares available for granting Awards under the Plan.

 

(c)                                          Adjustments.   In the event that
the Committee shall determine that any dividend or other distribution (whether
in the form of cash, Shares, other securities or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase or exchange of Shares
or other securities of the Company, issuance of warrants or other rights to
purchase Shares or other securities of the Company or other similar corporate
transaction or event affects the Shares such that an adjustment is determined by
the Committee to be appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan,
then the Committee shall, in such manner as it may deem equitable, adjust any or
all of (i) the number and type of Shares (or other securities or other property)
that thereafter may be made the subject of Awards, (ii) the number and type of
Shares (or other securities or other property) subject to outstanding Awards and
(iii) the purchase or exercise price with respect to any Award.

 

(d)                                         Award Limitations Under the Plan.

 

(i)                                     Section 162(m) Limitation for Certain
Types of Awards.   No Participant may be granted Options, Stock Appreciation
Rights or any other Award or Awards under the Plan, the value of which Award or
Awards is based solely on an increase in the value of the Shares after the date
of grant of such Award or Awards, for more than 750,000 Shares (subject to
adjustment as provided in Section 4(c) of the Plan) in the aggregate in any
calendar year. The foregoing annual limitation specifically applies to any Award
or Awards representing “qualified performance-based compensation” within the
meaning of Section 162(m) of the Code.

 

(ii)                                  Section 162(m) Limitation for Performance
Awards.   No Participant may be granted Performance Awards in excess of 500,000
Shares (subject to adjustment as provided in Section 4(c) of the Plan) in the
aggregate in any calendar year. This limitation does not apply to any Award
subject to the limitation contained in Section 4(d)(i) of the Plan.

 

(iii)                               Plan Limitation on Restricted Stock,
Restricted Stock Units, Performance Awards and Stock Awards.   No more than
1,000,000 Shares (subject to adjustment as provided in Section 4(c) 

 

4

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

 

of the Plan) shall be available under the Plan for issuance pursuant to grants
of Restricted Stock, Restricted Stock Units, Performance Awards and Stock
Awards; provided, however, that Shares subject to such Awards that terminate,
lapse or are cancelled or forfeited shall again be available for grants of
Restricted Stock, Restricted Stock Units, Performance Awards and Stock Awards
for purposes of this limitation on grants of such Awards. Of the 1,000,000
Shares authorized under this Section 4(d)(iii), only 100,000 Shares may be used
for Stock Awards in accordance with Section 6(f) of the Plan.

 

(iv)                              Limitation on Awards Granted to Non-Employee
Directors.   Directors who are not also employees of the Company or an Affiliate
may not be granted Awards in the aggregate for more than 5% of the Shares
available for Awards under the Plan, subject to adjustment as provided in
Section 4(c) of the Plan.

 

(v)                                 Limitation on Incentive Stock Options.   The
number of Shares available for granting Incentive Stock Options under the Plan
shall not exceed 1,000,000, subject to adjustment as provided in Section 4(c) of
the Plan and subject to the provisions of Section 422 or 424 of the Code or any
successor provision.

 

Section 5.   Eligibility.

 

Any Eligible Person may be designated to be a Participant. In determining which
Eligible Persons shall receive an Award and the terms of any Award, the
Committee may take into account the nature of the services provided by the
respective Eligible Persons, their present and potential contributions to the
success of the Company or such other factors as the Committee, in its
discretion, shall deem relevant. Notwithstanding the foregoing, an Incentive
Stock Option may only be granted to full-time or part-time employees (which term
as used herein includes, without limitation, officers and Directors who are also
employees), and an Incentive Stock Option shall not be granted to an employee of
an Affiliate unless such Affiliate is also a “subsidiary corporation” of the
Company within the meaning of Section 424(f) of the Code or any successor
provision.

 

Section 6.   Awards.

 

(a)                                          Options.   The Committee may grant
Options with the following terms and conditions and with such additional terms
and conditions not inconsistent with the provisions of the Plan as the Committee
shall determine:

 

(i)                                     Exercise Price.   The purchase price per
Share purchasable under an Option shall be determined by the Committee and shall
not be less than 100% of the Fair Market Value of a Share on the date of grant
of such Option; provided, however, that the Committee may designate a per share
exercise price below Fair Market Value on the date of grant if the Option is
granted in substitution for a stock option previously granted by an entity that
is acquired by or merged with the Company or an Affiliate.

 

(ii)                                  Option Term.   The term of each Option
shall be fixed by the Committee but shall not be longer than 10 years from the
date of grant.

 

(iii)                               Time and Method of Exercise.   The Committee
shall determine the time or times at which an Option may be exercised in whole
or in part and the method or methods by which, and the form or forms (including,
without limitation, cash, Shares, other securities, other Awards or other
property, or any combination thereof, having a Fair Market Value on the exercise
date equal to the applicable exercise price) in which, payment of the exercise
price with respect thereto may be made or deemed to have been made.

 

5

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

 

(b)                                         Stock Appreciation Rights.   The
Committee may grant Stock Appreciation Rights subject to the terms of the Plan
and such additional terms and conditions not inconsistent with the provision of
the Plan as the Committee shall determine. A Stock Appreciation Right granted
under the Plan shall confer on the holder thereof a right to receive upon
exercise thereof the excess of (i) the Fair Market Value of one Share on the
date of exercise over (ii) the grant price of the Stock Appreciation Right as
specified by the Committee, which price shall not be less than 100% of the Fair
Market Value of one Share on the date of grant of the Stock Appreciation Right;
provided, however, that the Committee may designate a per share grant price
below Fair Market Value on the date of grant if the Stock Appreciation Right is
granted in substitution for a stock appreciation right previously granted by an
entity that is acquired by or merged with the Company or an Affiliate.

 

(c)                                          Restricted Stock and Restricted
Stock Units.   The Committee may grant Awards of Restricted Stock and Restricted
Stock Units with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the
Committee shall determine:

 

(i)                                     Restrictions.   Shares of Restricted
Stock and Restricted Stock Units shall be subject to such restrictions as the
Committee may impose (including, without limitation, any limitation on the right
to vote a Share of Restricted Stock or the right to receive any dividend or
other right or property with respect thereto), which restrictions may lapse
separately or in combination at such time or times, in such installments or
otherwise, as the Committee may deem appropriate. The minimum vesting period of
such Awards shall be one year from the date of grant. Notwithstanding the
foregoing, the Committee may permit acceleration of vesting of such Awards in
the event of the Participant’s death, disability or retirement or a change in
control of the Company.

 

(ii)                                  Issuance and Delivery of Shares.   Any
Restricted Stock granted under the Plan shall be issued at the time such Awards
are granted and may be evidenced in such manner as the Committee may deem
appropriate, including book-entry registration or issuance of a stock
certificate or certificates, which certificate or certificates shall be held by
the Company. Such certificate or certificates shall be registered in the name of
the Participant and shall bear an appropriate legend referring to the
restrictions applicable to such Restricted Stock. Shares representing Restricted
Stock that is no longer subject to restrictions shall be delivered to the
Participant promptly after the applicable restrictions lapse or are waived. In
the case of Restricted Stock Units, no Shares shall be issued at the time such
Awards are granted. Upon the lapse or waiver of restrictions and the restricted
period relating to Restricted Stock Units evidencing the right to receive
Shares, such Shares shall be issued and delivered to the holder of the
Restricted Stock Units.

 

(iii)                               Forfeiture.   Except as otherwise determined
by the Committee, upon a Participant’s termination of employment or resignation
or removal as a Director (in either case, as determined under criteria
established by the Committee) during the applicable restriction period, all
Shares of Restricted Stock and all Restricted Stock Units held by the
Participant at such time shall be forfeited and reacquired by the Company;
provided, however, that the Committee may, when it finds that a waiver would be
in the best interest of the Company, waive in whole or in part any or all
remaining restrictions with respect to Shares of Restricted Stock or Restricted
Stock Units.

 

(d)                                         Dividend Equivalents.   The
Committee may grant Dividend Equivalents under which the Participant shall be
entitled to receive payments (in cash, Shares, other securities, other Awards or
other property as determined in the discretion of the Committee) equivalent to
the amount of any cash dividends paid by the Company to holders of Shares with
respect to a number of Shares determined by the Committee. Subject to the terms
of the Plan, such Dividend Equivalents may have such terms and conditions as the
Committee shall determine.

 

6

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

 

(e)                                          Performance Awards.   The Committee
may grant Performance Awards denominated in Shares that may be settled or
payable in Shares (including, without limitation, Restricted Stock or Restricted
Stock Units) or cash. Performance Awards granted to Participants who may be
“covered employees” under Section 162(m) of the Code are intended to be
“qualified performance-based compensation” within the meaning of Section 162(m).
Performance Awards shall, to the extent required by Section 162(m), be
conditioned solely on the achievement of one or more objective Performance
Goals, and such Performance Goals shall be established by the Committee within
the time period prescribed by, and shall otherwise comply with the requirements
of, Section 162(m). Subject to the terms of the Plan and any applicable Award
Agreement, the Performance Goals to be achieved during any performance period,
the length of any performance period, the amount of any Performance Award
granted, the amount of any payment or transfer to be made pursuant to any
Performance Award, and any other terms and conditions of any Performance Award
shall be determined by the Committee. The Committee shall also certify in
writing that such Performance Goals have been met prior to payment of the
Performance Awards to the extent required by Section 162(m).

 

(f)                                            Stock Awards.   The Committee may
grant Shares without restrictions thereon, but only for the purpose of paying
annual incentive compensation earned by an Eligible Person that otherwise would
have been paid in cash by the Company. Subject to the terms of the Plan, Stock
Awards may have such terms and conditions as the Committee shall determine.

 

(g)                                         Other Stock-Based Awards.   The
Committee may grant such other Awards that are denominated or payable in, valued
in whole or in part by reference to, or otherwise based on or related to, Shares
(including, without limitation, securities convertible into Shares), as are
deemed by the Committee to be consistent with the purpose of the Plan. The
Committee shall determine the terms and conditions of such Awards, subject to
the terms of the Plan and the Award Agreement. Shares, or other securities
delivered pursuant to a purchase right granted under this Section 6(g), shall be
purchased for consideration having a value equal to at least 100% of the Fair
Market Value of such Shares or other securities on the date the purchase right
is granted.

 

(h)                                         General.

 

(i)                                     Consideration for Awards.   Awards may
be granted for no cash consideration or for any cash or other consideration as
may be determined by the Committee or required by applicable law.

 

(ii)                                  Awards May Be Granted Separately or
Together.   Awards may, in the discretion of the Committee, be granted either
alone or in addition to, in tandem with or in substitution for any other Award
or any award granted under any other plan of the Company or any Affiliate.
Awards granted in addition to or in tandem with other Awards or in addition to
or in tandem with awards granted under any other plan of the Company or any
Affiliate may be granted either at the same time as or at a different time from
the grant of such other Awards or awards.

 

(iii)                               Forms of Payment under Awards.   Subject to
the terms of the Plan and of any applicable Award Agreement, payments or
transfers to be made by the Company or an Affiliate upon the grant, exercise or
payment of an Award may be made in such form or forms as the Committee shall
determine (including, without limitation, cash, Shares, other securities, other
Awards or other property, or any combination thereof), and may be made in a
single payment or transfer, in installments or on a deferred basis, in each case
in accordance with rules and procedures established by the Committee. Such
rules and procedures may include, without limitation, provisions for the payment
or crediting of reasonable interest on installment or deferred payments or the
grant or crediting of Dividend Equivalents with respect to installment or
deferred payments.

 

7

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

 

(iv)                              Term of Awards.   The term of each Award shall
be for a period not longer than 10 years from the date of grant.

 

(v)                                 Limits on Transfer of Awards.   Except as
otherwise provided by the Committee or the terms of this Plan, no Award and no
right under any such Award shall be transferable by a Participant other than by
will or by the laws of descent and distribution. The Committee may establish
procedures as it deems appropriate for a Participant to designate a Person or
Persons, as beneficiary or beneficiaries, to exercise the rights of the
Participant and receive any property distributable with respect to any Award in
the event of the Participant’s death. The Committee, in its discretion and
subject to such additional terms and conditions as it determines, may permit a
Participant to transfer a Non-Qualified Stock Option to any “family member” (as
such term is defined in the General Instructions to Form S-8 (or any successor
to such Instructions or such Form) under the Securities Act of 1933, as amended)
at any time that such Participant holds such Option, provided that such
transfers may not be for value (i.e., the transferor may not receive any
consideration therefor) and the family member may not make any subsequent
transfers other than by will or by the laws of descent and distribution. Each
Award under the Plan or right under any such Award shall be exercisable during
the Participant’s lifetime only by the Participant (except as provided herein or
in an Award Agreement or amendment thereto relating to a Non-Qualified Stock
Option) or, if permissible under applicable law, by the Participant’s guardian
or legal representative. No Award or right under any such Award may be pledged,
alienated, attached or otherwise encumbered, and any purported pledge,
alienation, attachment or encumbrance thereof shall be void and unenforceable
against the Company or any Affiliate.

 

(vi)                              Restrictions; Securities Exchange Listing.  
All Shares or other securities delivered under the Plan pursuant to any Award or
the exercise thereof shall be subject to such restrictions as the Committee may
deem advisable under the Plan, applicable federal or state securities laws and
regulatory requirements, and the Committee may cause appropriate entries to be
made or legends to be placed on the certificates for such Shares or other
securities to reflect such restrictions. If the Shares or other securities are
traded on a securities exchange, the Company shall not be required to deliver
any Shares or other securities covered by an Award unless and until such Shares
or other securities have been admitted for trading on such securities exchange.

 

Section 7.   Amendment and Termination; Corrections.

 

(a)                                          Amendments to the Plan.   The Board
of Directors of the Company may amend, alter, suspend, discontinue or terminate
the Plan; provided, however, that, notwithstanding any other provision of the
Plan or any Award Agreement, prior approval of the stockholders of the Company
shall be required for any amendment to the Plan that:

 

(i)                                     requires stockholder approval under the
rules or regulations of the Securities and Exchange Commission, the New York
Stock Exchange, any other securities exchange or the National Association of
Securities Dealers, Inc. that are applicable to the Company;

 

(ii)                                  increases the number of shares authorized
under the Plan as specified in Section 4(a) of the Plan;

 

(iii)                               increases the number of shares subject to
the limitations contained in Section 4(d) of the Plan;

 

(iv)          permits repricing of Options or Stock Appreciation Rights which is
prohibited by Section 3(a)(v) of the Plan;

 

8

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

 

(v)                                 permits the award of Options or Stock
Appreciation Rights at a price less than 100% of the Fair Market Value of a
Share on the date of grant of such Option or Stock Appreciation Right, contrary
to the provisions of Sections 6(a)(i) and 6(b)(ii) of the Plan; or

 

(vi)                              would cause Section 162(m) of the Code to
become unavailable with respect to the Plan.

 

(b)                                         Amendments to Awards.   Subject to
the provisions of the Plan, the Committee may waive any conditions of or rights
of the Company under any outstanding Award, prospectively or retroactively.
Except as otherwise provided in the Plan, the Committee may amend, alter,
suspend, discontinue or terminate any outstanding Award, prospectively or
retroactively, but no such action may adversely affect the rights of the holder
of such Award without the consent of the Participant or holder or beneficiary
thereof.

 

(c)                                          Correction of Defects, Omissions
and Inconsistencies.   The Committee may correct any defect, supply any omission
or reconcile any inconsistency in the Plan or in any Award or Award Agreement in
the manner and to the extent it shall deem desirable to implement or maintain
the effectiveness of the Plan.

 

Section 8.   Tax Withholding.

 

The Company may take such action as it deems appropriate to withhold or collect
from a Participant the applicable federal, state, local or foreign payroll,
withholding, income or other taxes that are required to be withheld or collected
by the Company upon the grant, exercise, vesting or payment of an Award. The
Committee may require the Company to withhold Shares having a Fair Market Value
equal to the amount necessary to satisfy the Company’s minimum statutory
withholding requirements upon the grant, exercise, vesting or payment of an
Award from Shares that otherwise would have been delivered to a Participant. The
Committee may, subject to any terms and conditions that the Committee may adopt,
permit a Participant to elect to pay all or a portion of the minimum statutory
withholding taxes by (a) having the Company withhold Shares otherwise to be
delivered upon the grant, exercise, vesting or payment of an Award with a Fair
Market Value equal to the amount of such taxes, (b) delivering to the Company
Shares other than Shares issuable upon the grant, exercise, vesting or payment
of an Award with a Fair Market Value equal to the amount of such taxes or
(c) paying cash. Any such election must be made on or before the date that the
amount of tax to be withheld is determined.

 

Section 9.   General Provisions.

 

(a)                                          No Rights to Awards.   No Eligible
Person, Participant or other Person shall have any claim to be granted any Award
under the Plan, and there is no obligation for uniformity of treatment of
Eligible Persons, Participants or holders or beneficiaries of Awards under the
Plan. The terms and conditions of Awards need not be the same with respect to
any Participant or with respect to different Participants.

 

(b)                                         Award Agreements.   No Participant
shall have rights under an Award granted to such Participant unless and until an
Award Agreement shall have been duly executed on behalf of the Company and, if
requested by the Company, signed by the Participant.

 

(c)                                          No Rights of Stockholders.   Except
with respect to Restricted Stock and Stock Awards, neither a Participant nor the
Participant’s legal representative shall be, or have any of the rights and
privileges of, a stockholder of the Company with respect to any Shares issuable
upon the exercise or payment of any Award, in whole or in part, unless and until
the Shares have been issued.

 

(d)                                         No Limit on Other Compensation Plans
or Arrangements.   Nothing contained in the Plan shall prevent the Company or
any Affiliate from adopting or continuing in effect other or additional
compensation plans or arrangements.

 

9

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

 

(e)                                          No Right to Employment or
Directorship.   The grant of an Award shall not be construed as giving a
Participant the right to be retained as an employee of the Company or any
Affiliate, or a Director to be retained as a Director, nor will it affect in any
way the right of the Company or an Affiliate to terminate a Participant’s
employment at any time, with or without cause. In addition, the Company or an
Affiliate may at any time dismiss a Participant from employment free from any
liability or any claim under the Plan or any Award, unless otherwise expressly
provided in the Plan or in any Award Agreement.

 

(f)                                            Governing Law.   The internal
law, and not the law of conflicts, of the State of Delaware, shall govern all
questions concerning the validity, construction and effect of the Plan or any
Award, and any rules and regulations relating to the Plan or any Award.

 

(g)                                         Severability.   If any provision of
the Plan or any Award is or becomes or is deemed to be invalid, illegal or
unenforceable in any jurisdiction or would disqualify the Plan or any Award
under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to applicable laws, or if it cannot be so
construed or deemed amended without, in the determination of the Committee,
materially altering the purpose or intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction or Award, and the remainder
of the Plan or any such Award shall remain in full force and effect.

 

(h)                                         No Trust or Fund Created.   Neither
the Plan nor any Award shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Company or any
Affiliate and a Participant or any other Person. To the extent that any Person
acquires a right to receive payments from the Company or any Affiliate pursuant
to an Award, such right shall be no greater than the right of any unsecured
general creditor of the Company or any Affiliate.

 

(i)                                             Securities Matters.   The
Company shall not be required to deliver any Shares until the requirements of
any federal or state securities or other laws, rules or regulations (including
the rules of any securities exchange) as may be determined by the Company to be
applicable are satisfied.

 

(j)                                             No Fractional Shares.   No
fractional Shares shall be issued or delivered pursuant to the Plan or any
Award, and the Committee shall determine whether cash shall be paid in lieu of
any fractional Share or whether such fractional Share or any rights thereto
shall be canceled, terminated or otherwise eliminated.

 

(k)                                          Headings.   Headings are given to
the Sections and subsections of the Plan solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material or relevant to
the construction or interpretation of the Plan or any provision thereof.

 

Section 10.   Effective Date of the Plan.

 

The Plan shall be subject to approval by the stockholders of the Company at the
annual meeting of stockholders of the Company to be held on August 2, 2005 and
the Plan shall be effective as of the date of such stockholder approval.

 

Section 11.   Term of the Plan.

 

The Plan shall terminate at midnight on August 1, 2015, unless terminated before
then by the Board. Awards may be granted under the Plan until the Plan
terminates or until all Shares available for Awards under the Plan have been
purchased or acquired; provided, however, that Incentive Stock Options may not
be granted following the 10-year anniversary of the Board’s adoption of the
Plan. The Plan shall remain in effect as long as any Awards are outstanding.

 

10

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