Exhibit 10.1
SUPERIOR BANCORP 2008 INCENTIVE COMPENSATION PLAN
     Superior Bancorp, a Delaware corporation (the “Company”), by resolution of
its Board of Directors, hereby adopts the Superior Bancorp 2008 Incentive
Compensation Plan (the “Plan”). The Plan will become effective upon the approval
of the Company’s stockholders (the “Effective Date”).
     The purpose of the Plan is to promote the success and enhance the value of
the Company by linking the personal interests of its directors, officers and
employees to those of the Company’s stockholders and by providing such
individuals with an incentive for outstanding performance to generate superior
returns to the Company’s stockholders. The Plan is further intended to provide
flexibility to the Company in its ability to motivate, attract, and retain the
services of directors, officers and employees upon whose judgment, interest, and
special effort the successful conduct of the Company’s operation is largely
dependent.
ARTICLE I
DEFINITIONS
     Wherever the following terms are used in the Plan they shall have the
meanings specified below, unless the context clearly indicates otherwise. The
singular pronoun shall include the plural where the context so indicates.
     1.1. “Administrator” shall mean the entity that conducts the general
administration of the Plan as provided in Article X.
     1.2. “Award” shall mean an Option, a Restricted Stock Award, a Restricted
Stock Unit Award, a Performance Award, a Dividend Equivalents Award, a Stock
Appreciation Right or an Other Stock-Based Award, which may be awarded or
granted under the Plan (collectively, “Awards”).
     1.3. “Award Agreement” shall mean a written agreement executed by an
authorized officer of the Company and the Holder which shall contain such terms
and conditions with respect to an Award as the Administrator shall determine,
consistent with the Plan.
     1.4. “Award Limit” shall mean 30,000 shares of Common Stock for grants to
any individual in any calendar year as adjusted pursuant to Section 11.3.
     1.5. “Board” shall mean the Board of Directors of the Company.
     1.6. “Change in Control” shall mean the occurrence of any of the following
transactions or events occurring on or after the Effective Date:

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     (a) a merger, consolidation or other corporate reorganization of the
Company in which the Company does not survive, or, if it survives, the
shareholders of the Company before such transaction do not own more than 50% of,
respectively: (i) the common stock of the surviving entity, and (ii) the
combined voting power of any other outstanding securities entitled to vote on
the election of directors of the surviving entity;
     (b) the acquisition, other than from the Company, by any individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act
of beneficial ownership of 25% or more of either: (i) the then outstanding
shares of Common Stock of the Company, or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors; provided, however, that neither of the following
shall constitute a Change in Control:
     (A) any acquisition by the Company, any of its subsidiaries, or any
employee benefit plan (or related trust) of the Company or its subsidiaries, or
     (B) any acquisition by any corporation, entity, or group, if, following
such acquisition, more than 50% of the then outstanding voting rights of such
corporation, entity or group are owned, directly or indirectly, by all or
substantially all of the persons who were the owners of the Common Stock of the
Company immediately prior to such acquisition;
     (c) individuals who, as of the effective date of the Plan, constitute the
Board of the Company (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board, provided that any individual becoming a
director subsequent to such date, whose election, or nomination for election by
the Company’s shareholders, was approved by a vote of at least a majority of the
directors then comprising the Board, shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any individual whose initial assumption of office is in connection with
an actual or threatened election contest relating to the election of the
directors of the Company (as such terms are used in Rule 14a-l 1 of Regulation
l4A promulgated under the Exchange Act; or
     (d) approval by the shareholders of the Company of:
     (i) a complete liquidation or dissolution of the Company, or
     (ii) the sale or other disposition of all or substantially all the assets
of the Company, other than to a corporation, with respect to which immediately
following such sale or other disposition more than 50%, respectively, of 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
Common Stock of the

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Company, and the outstanding voting securities of the Company immediately prior
to such sale or other disposition, in substantially the same proportions as
their ownership, immediately prior to such sale or disposition, of the
outstanding Common Stock of the Company and outstanding securities of the
Company, as the case may be.
     1.7. “Code” shall mean the Internal Revenue Code of 1986, as amended from
time to time.
     1.8. “Committee” shall mean the Compensation Committee of the Board, or
another committee or subcommittee of the Board, appointed as provided in
Section 10.1.
     1.9. “Common Stock” shall mean the common stock of the Company, par value
$0.001 per share.
     1.10. “Company” shall mean Superior Bancorp., a Delaware corporation.
     1.11. “Covered Employee” shall mean any Employee who is, or the Committee
determines could be, a “covered employee” within the meaning of Section 162(m)
of the Code.
     1.12. “Director” shall mean a member of the Board.
     1.13. “Dividend Equivalent” shall mean a right to receive the equivalent
value (in cash or Common Stock) of dividends paid on Common Stock, awarded under
Section 8.3 of the Plan.
     1.14. “DRO” shall mean a domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended from
time to time, or the rules thereunder.
     1.15. “Effective Date” shall mean the date the Plan is approved by the
Company’s stockholders.
     1.16. “Employee” shall mean any officer or other employee (as defined in
accordance with Section 3401(c) of the Code) of the Company, or of any
Subsidiary.
     1.17. “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended from time to time.
     1.18. “Fair Market Value” means, as of any date, the value of a share of
Common Stock determined as follows:
     (a) If the Common Stock is listed on any established stock exchange (such
as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ Global
Select Market) or any national market system, including without limitation any
market

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system of The NASDAQ Stock Market, the value of a share of Common Stock shall be
the closing sales price for a share of Common Stock as quoted on such exchange
or system for such date, or if there is no closing sales price for a share of
Common Stock on the date in question, the closing sales price for a share of
Common Stock on the last preceding date for which such quotation exists, as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable;
     (b) If the Common Stock is regularly quoted by a recognized securities
dealer but closing sales prices are not reported, the value of a share of Common
Stock shall be the mean of the high bid and low asked prices for such date or,
if there are no high bid and low asked prices for a share of Common Stock on the
date in question, the high bid and low asked prices for a share of Common Stock
on the last preceding date for which such information exists, as reported in The
Wall Street Journal or such other source as the Administrator deems reliable; or
     (c) If the Common Stock is neither listed on an established stock exchange
or a national market system nor regularly quoted by a recognized securities
dealer, the value of a share of Common Stock shall be established by the
Administrator in good faith.
     1.19. “Fiscal Year” means the fiscal year of the Company.
     1.20. “Full Value Award” means any Award other than an Option or a Stock
Appreciation Right.
     1.21. “Holder” shall mean a person who has been granted an Award.
     1.22. “Incentive Stock Option” shall mean an option which conforms to the
applicable provisions of Section 422 of the Code and which is designated as an
Incentive Stock Option by the Administrator.
     1.23. “Non-Employee Director” shall mean a member of the Board who is not
an Employee.
     1.24. “Non-Qualified Stock Option” shall mean an Option which is not
designated as an Incentive Stock Option by the Administrator.
     1.25. “Option” shall mean a stock option granted under Article IV of the
Plan. An Option granted under the Plan shall, as determined by the
Administrator, be either a Non-Qualified Stock Option or an Incentive Stock
Option; provided, however, that Options granted to Non-Employee Directors shall
be Non-Qualified Stock Options.
     1.26. “Other Stock-Based Award” shall have the meaning set forth in
Section 8.5 of the Plan.

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     1.27. “Performance Award” shall mean a performance or incentive award that
is denominated in stock and is paid in cash, Common Stock or a combination of
both, awarded under Section 8.2 of the Plan.
     1.28. “Performance Criteria” means the criteria (and adjustments) that the
Committee selects for an Award for purposes of establishing the Performance Goal
or Performance Goals for a Performance Period, determined as follows:
     (a) The Performance Criteria that shall be used to establish Performance
Goals are limited to the following: (i) net earnings (either before or after
(A) interest, (B) taxes, (C) depreciation and (D) amortization), (ii) gross or
net sales or revenue, (iii) net income (either before or after taxes),
(iv) operating profit, (v) cash flow (including, but not limited to, operating
cash flow and free cash flow), (vi) return on assets, (vii) return on capital,
(viii) return on stockholders’ equity, (ix) return on sales, (x) gross or net
profit or operating margin, (xi) costs, (xii) funds from operations,
(xiii) expense, (xiv) working capital, (xv) earnings per share, and (xvi) price
per share of Common Stock, (xvii) regulatory ratings, (xviii) market share,
(xix) growth in loans and/or other assets, (xx) growth in deposits and
(xxi) various measures of credit quality, any of which may be measured either in
absolute terms or as compared to any incremental increase or decrease or as
compared to results of a peer group.
     (b) The Committee may, in its discretion, at the time of grant, specify in
the Award that one or more objectively determinable adjustments shall be made to
one or more of the Performance Goals. Such adjustments may include one or more
of the following: (i) items related to a change in accounting principle;
(ii) items relating to financing activities; (iii) expenses for restructuring or
productivity initiatives; (iv) other non-operating items; (v) items related to
acquisitions; (vi) items attributable to the business operations of any entity
acquired by the Company during the Performance Period; (vii) items related to
the disposal of a business or segment of a business; or (viii) items related to
discontinued operations that do not qualify as a segment of a business under
United States generally accepted accounting principles (“GAAP”).
     1.29. “Performance Goals” means, for a Performance Period, one or more
goals established in writing by the Committee for the Performance Period based
upon one or more Performance Criteria. Depending on the Performance Criteria
used to establish such Performance Goals, the Performance Goals may be expressed
in terms of overall Company performance or the performance of a division,
business unit, or an individual. The achievement of each Performance Goal shall
be determined in accordance with GAAP to the extent applicable.
     1.30. “Performance Period” means one or more periods of time, which may be
of varying and overlapping durations, as the Committee may select, over which
the attainment of one or more Performance Goals will be measured for the purpose
of determining a Holder’s right to, and the payment of, a Performance Award.

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     1.31. “Plan” shall mean the Superior Bancorp 2008 Incentive Compensation
Plan, as amended from time to time.
     1.32. “Prior Award” shall mean a stock option, restricted stock or other
stock award granted under any Prior Plan.
     1.33. “Prior Plan” shall mean the Third Amended and Restated 1998 Stock
Incentive Plan of The Banc Corporation, as amended from time to time.
     1.34. “Restricted Stock” shall mean Common Stock awarded under Article VII
of the Plan that is subject to repurchase or forfeiture.
     1.35. “Restricted Stock Units” shall mean rights to receive Common Stock or
its cash equivalent awarded under Section 8.4.
     1.36. “Rule 16b-3” shall mean Rule 16b-3 promulgated under the Exchange
Act, as such Rule may be amended from time to time.
     1.37. “Securities Act” shall mean the Securities Act of 1933, as amended
from time to time.
     1.38. “Stock Appreciation Right” shall mean a stock appreciation right
granted under Article IX of the Plan.
     1.39. “Subsidiary” means any entity (other than the Company), whether
domestic or foreign, in an unbroken chain of entities beginning with the Company
if each of the entities other than the last entity in the unbroken chain
beneficially owns, at the time of the determination, securities or interests
representing more than fifty percent (50%) of the total combined voting power of
all classes of securities or interests in one of the other entities in such
chain.
     1.40. “Subsidiary Corporation” shall mean any corporation in an unbroken
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain then owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
     1.41. “Substitute Award” shall mean an Award granted under this Plan upon
the assumption of, or in substitution for, outstanding equity awards previously
granted by a company or other entity in connection with a corporate transaction,
such as a merger, combination, consolidation or acquisition of property or
stock; provided, however, that in no event shall the term “Substitute Award” be
construed to refer to an award made in connection with the cancellation and
repricing of an Option or Stock Appreciation Right.
     1.42. “Termination of Directorship” shall mean the time when a Holder who
is a Non-Employee Director ceases to be a Director for any reason, including,
without

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limitation, a termination by resignation, failure to be elected, death or
retirement. The Administrator, in its discretion, shall determine the effect of
all matters and questions relating to Termination of Directorship with respect
to Non-Employee Directors.
     1.43. “Termination of Employment” shall mean the time when the
employee-employer relationship between a Holder and the Company or any
Subsidiary is terminated for any reason, with or without cause, including,
without limitation, a termination by resignation, discharge, death, disability
or retirement; but excluding terminations where there is a simultaneous
reemployment or continuing employment of a Holder by the Company or any
Subsidiary. The Administrator, in its discretion, shall determine the effect of
all matters and questions relating to Termination of Employment, including,
without limitation, the question of whether a Termination of Employment resulted
from a discharge for cause; provided, however, that, with respect to Incentive
Stock Options, unless the Administrator otherwise provides in the terms of the
Award Agreement or otherwise, a leave of absence, change in status from an
employee to an independent contractor or other change in the employee-employer
relationship shall constitute a Termination of Employment if, and to the extent
that, such leave of absence, change in status or other change interrupts
employment for the purposes of Section 422(a)(2) of the Code and the then
applicable regulations and revenue rulings under said Section. For purposes of
the Plan, a Holder’s employee-employer relationship shall be deemed to be
terminated in the event that the Subsidiary employing such Holder ceases to
remain a Subsidiary following any merger, sale of stock or other corporate
transaction or event (including, without limitation, a spin-off).
ARTICLE II
SHARES SUBJECT TO PLAN
     2.1. Shares Subject to Plan.
     (a) Subject to Section 11.3 and Section 2.1(b), the aggregate number of
shares of Common Stock that may be issued or transferred pursuant to Awards
under the Plan shall be 300,000 shares (the “Initial Authorized Shares”).
Notwithstanding the preceding sentence, the aggregate number of shares of Common
Stock that may be issued or transferred pursuant to Full Value Awards under the
Plan shall not exceed 90,000 shares.
     (b) To the extent that an Award under the Plan or a Prior Award under the
Prior Plan terminates, expires, is settled in cash, lapses or is forfeited for
any reason, any shares of Common Stock then subject to such Award shall again be
available for the grant of an Award pursuant to the Plan. To the extent
permitted by applicable law or any exchange rule, shares of Common Stock issued
in assumption of, or in substitution for, any outstanding awards of any entity
acquired in any form of combination by the Company or any Subsidiary shall not
be counted against shares of Common Stock available for grant pursuant to this
Plan. The payment of Dividend Equivalents in cash in conjunction with any
outstanding Awards shall not be counted against the shares available for
issuance under the Plan. Notwithstanding the provisions of this Section 2.1(b),
no shares of

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Common Stock may again be optioned, granted or awarded if such action would
cause an Incentive Stock Option to fail to qualify as an incentive stock option
under Section 422 of the Code. In addition, the following shares of Common Stock
shall not become available for purposes of the Plan: (1) shares of Common Stock
previously owned or acquired by the Holder that are delivered to the Company, or
withheld from an Award, to pay the exercise price, (2) shares of Common Stock
that are delivered or withheld for purposes of satisfying a tax withholding
obligation, or (3) shares of Common Stock reserved for issuance upon the grant
of a SAR that exceed the number of shares actually issued upon exercise.
     2.2. Stock Distributed. Any Common Stock distributed pursuant to an Award
shall consist, in whole or in part, of authorized and unissued Common Stock,
shares of Common Stock held in treasury or shares of Common Stock purchased on
the open market.
     2.3. Limitation on Number of Shares Subject to Awards. Notwithstanding any
provision in the Plan to the contrary, and subject to Article XI, the maximum
number of shares of Common Stock with respect to one or more Awards that may be
granted to any one Employee during any calendar year shall not exceed the Award
Limit. To the extent required by Section 162(m) of the Code, shares subject to
Awards which are canceled shall continue to be counted against the Award Limit.
ARTICLE III
GRANTING OF AWARDS
     3.1. Award Agreement. Each Award shall be evidenced by an Award Agreement.
Award Agreements evidencing Awards intended to qualify as performance-based
compensation (as described in Section 162(m)(4)(C) of the Code) shall contain
such terms and conditions as may be necessary to meet the applicable provisions
of Section 162(m) of the Code. Award Agreements evidencing Incentive Stock
Options shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 422 of the Code.
     3.2. Provisions Applicable to Section 162(m) Performance-Based
Compensation.
     (a) The Committee, in its discretion, may determine whether an Award is to
qualify as performance-based compensation (as described in Section 162(m)(4)(C)
of the Code).
     (b) Notwithstanding anything in the Plan to the contrary, the Committee may
grant any Award to a Covered Employee, including Restricted Stock the
restrictions with respect to which lapse upon the attainment of specified
Performance Goals and any performance or incentive award described in
Article VIII that vests or becomes exercisable or payable upon the attainment of
one or more specified Performance Goals.

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     (c) To the extent necessary to comply with the performance-based
compensation requirements of Section 162(m)(4)(C) of the Code, with respect to
any Award granted under Articles VII and VIII which may be granted to one or
more Covered Employees, no later than ninety (90) days following the
commencement of any Performance Period (or such earlier time as may be required
under Section 162(m) of the Code), the Committee shall, in writing,
(i) designate one or more Covered Employees, (ii) select the Performance
Criteria applicable to the Performance Period (including any applicable
adjustments), (iii) establish the various performance targets, in terms of an
objective formula or standard, and amounts of such Awards, as applicable, which
may be earned for such Performance Period, and (iv) specify the relationship
between Performance Criteria and the performance targets and the amounts of such
Awards, as applicable, to be earned by each Covered Employee for such
Performance Period. Following the completion of each Performance Period, the
Committee shall certify in writing whether the applicable performance targets
have been achieved for such Performance Period. In determining the amount earned
by a Covered Employee, the Committee shall have the right to reduce (but not to
increase) the amount payable at a given level of performance to take into
account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the Performance Period.
     (d) Furthermore, notwithstanding any other provision of the Plan, any Award
which is granted to a Covered Employee and is intended to qualify as
performance-based compensation (as described in Section 162(m)(4)(C) of the
Code) shall be subject to any additional limitations set forth in Section 162(m)
of the Code (including any amendment to Section 162(m) of the Code) or any
regulations or rulings issued thereunder that are requirements for qualification
as performance-based compensation (as described in Section 162(m)(4)(C) of the
Code), and the Plan shall be deemed amended to the extent necessary to conform
to such requirements.
     (e) The maximum aggregate amount of all Awards intended to qualify as
performance-based compensation during any calendar year shall not exceed the
Award Limit. Unless otherwise specified by the Administrator at the time of
grant, the Performance Criteria with respect to an Award payable to a Covered
Employee shall be determined on the basis of GAAP.
     3.3. Limitations Applicable to Section 16 Persons. Notwithstanding any
other provision of the Plan, the Plan, and any Award granted or awarded to any
individual who is then subject to Section 16 of the Exchange Act, shall be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of
the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan and Awards granted or
awarded hereunder shall be deemed amended to the extent necessary to conform to
such applicable exemptive rule.
     3.4. At-Will Employment. Nothing in the Plan or in any Award Agreement
hereunder shall confer upon any Holder any right to continue in the employ of
the

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Company or any Subsidiary, or as a Director of the Company, or shall interfere
with or restrict in any way the rights of the Company and any Subsidiary, which
rights are hereby expressly reserved, to discharge any Holder at any time for
any reason whatsoever, with or without cause, except to the extent expressly
provided otherwise in a written employment agreement between the Holder and the
Company and any Subsidiary.
ARTICLE IV
GRANTING OF OPTIONS TO EMPLOYEES AND NON-EMPLOYEE DIRECTORS
     4.1. Eligibility. Any Employee or Non-Employee Director selected by the
Administrator pursuant to Section 4.4(a) shall be eligible to be granted an
Option.
     4.2. Disqualification for Stock Ownership. No person may be granted an
Incentive Stock Option under the Plan if such person, at the time the Incentive
Stock Option is granted, owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any then
existing Subsidiary Corporation or parent corporation (as defined in Section
424(e) of the Code) unless such Incentive Stock Option conforms to the
applicable provisions of Section 422 of the Code.
     4.3. Qualification of Incentive Stock Options. No Incentive Stock Option
shall be granted to any person who is not an Employee of the Company or a
Subsidiary Corporation.
     4.4. Granting of Options.
     (a) Options may be awarded to any Employee or Non-Employee Director who the
Administrator determines should receive such an Award. The Administrator shall
in its discretion, and, subject to applicable limitations of the Plan:
     (i) Subject to the Award Limit, determine the number of shares to be
subject to such Options granted;
     (ii) Subject to Section 4.2 and Section 4.3, determine whether such Options
are to be Incentive Stock Options or Non-Qualified Stock Options; and
     (iii) Determine the terms and conditions of such Options, consistent with
the Plan.
     (b) Upon the selection of an Employee or Non-Employee Director to be
granted an Option, the Administrator shall instruct the Secretary of the Company
to issue the Option and may impose such conditions on the grant of the Option as
it deems appropriate.

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     (c) Any Incentive Stock Option granted under the Plan may be modified by
the Administrator, with the consent of the Holder, to disqualify such Option
from treatment as an “incentive stock option” under Section 422 of the Code.
ARTICLE V
TERMS OF OPTIONS
     5.1. Option Price. The price per share of Common Stock subject to each
Option granted to Employees and Non-Employee Directors shall be set by the
Administrator; provided, however, that:
     (a) Except in the case of an Option that is a Substitute Award, such price
shall not be less than 100% of the Fair Market Value of a share of Common Stock
on the date the Option is granted (or, in the case of Incentive Stock Options,
the date the Option is modified, extended or renewed for purposes of Section
424(h) of the Code); and
     (b) In the case of Incentive Stock Options granted to an individual then
owning (within the meaning of Section 424(d) of the Code) more than 10% of the
total combined voting power of all classes of stock of the Company or any
Subsidiary Corporation or parent corporation thereof (as defined in Section
424(e) of the Code), such price shall not be less than 110% of the Fair Market
Value of a share of Common Stock on the date the Option is granted (or the date
the Option is modified, extended or renewed for purposes of Section 424(h) of
the Code); and
     5.2. Option Term. The term of an Option granted to an Employee or
Non-Employee Director shall be set by the Administrator in its discretion;
provided, however, that the term shall not be more than ten (10) years from the
date the Option is granted, or five (5) years from the date the Option is
granted if the Option is an Incentive Stock Option granted to an individual then
owning (within the meaning of Section 424(d) of the Code) more than 10% of the
total combined voting power of all classes of stock of the Company or any
Subsidiary Corporation or parent corporation thereof (as defined in Section
424(e) of the Code). Except as limited by requirements of Section 409A or
Section 422 of the Code and regulations and rulings thereunder, the
Administrator may extend the term of any outstanding Option in connection with
any Termination of Employment or Termination of Directorship of the Holder, or
amend any other term or condition of such Option relating to such a Termination
of Employment or Termination of Directorship.
     5.3. Option Vesting.
     (a) The period during which the right to exercise, in whole or in part, an
Option vests in the Holder shall be set by the Administrator and the
Administrator may determine that an Option may not be exercised in whole or in
part for a specified period after it is granted. At any time after grant of an
Option, the Administrator may, in its

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discretion and subject to whatever terms and conditions it selects, accelerate
the period during which an Option vests.
     (b) A Option is exercisable only while the Holder is an Employee or
Non-Employee Director, as applicable; provided, however, that the Administrator
in its discretion may provide that the Option may be exercised subsequent to a
Termination of Employment or Termination of Directorship, as applicable,
following a Change in Control or because of the Holder’s retirement, death or
disability or termination without cause, or otherwise.
     (c) To the extent that the aggregate fair market value of stock with
respect to which “incentive stock options” (within the meaning of Section 422 of
the Code, but without regard to Section 422(d) of the Code) are exercisable for
the first time by a Holder during any calendar year under the Plan, and all
other plans of the Company and any Subsidiary Corporation or parent corporation
thereof (as defined in Section 424(e) of the Code), exceeds $100,000, the
Options shall be treated as Non-Qualified Stock Options to the extent required
by Section 422 of the Code. The rule set forth in the preceding sentence shall
be applied by taking Options and other “incentive stock options” into account in
the order in which they were granted. For purposes of this Section 5.3(c), the
fair market value of stock shall be determined as of the time the Option or
other “incentive stock options” with respect to such stock is granted.
ARTICLE VI
EXERCISE OF OPTIONS
     6.1. Partial Exercise. An exercisable Option may be exercised in whole or
in part. However, an Option shall not be exercisable with respect to fractional
shares and the Administrator may require that, by the terms of the Option, a
partial exercise be with respect to a minimum number of shares.
     6.2. Manner of Exercise. All or a portion of an exercisable Option shall be
deemed exercised upon delivery of all of the following to the Secretary of the
Company, or such other person or entity designated by the Administrator, or his,
her or its office, as applicable:
     (a) A written notice complying with the applicable rules established by the
Administrator stating that the Option, or a portion thereof, is exercised. Such
rules may provide that for administrative convenience an Option may not be
exercised during such period (not exceeding 10 days) as is specified in advance
by the Administrator. The notice shall be signed by the Holder or other person
then entitled to exercise the Option or such portion of the Option;
     (b) Such representations and documents as the Administrator, in its
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any other federal, state or
foreign securities laws or regulations. The

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Administrator may, in its discretion, also take whatever additional actions it
deems appropriate to effect such compliance including, without limitation,
placing legends on share certificates and issuing stop-transfer notices to
agents and registrars;
     (c) In the event that the Option shall be exercised pursuant to
Section 11.1 by any person or persons other than the Holder, appropriate proof
of the right of such person or persons to exercise the Option; and
     (d) Full cash payment to the Secretary of the Company for the shares with
respect to which the Option, or portion thereof, is exercised. However, the
Administrator may, in its discretion, (i) allow payment, in whole or in part,
through the delivery of shares of Common Stock which have been owned by the
Holder for at least six months, duly endorsed for transfer to the Company with a
Fair Market Value on the date of delivery equal to the aggregate exercise price
of the Option or exercised portion thereof; (ii) allow payment, in whole or in
part, through the surrender of shares of Common Stock then issuable upon
exercise of the Option having a Fair Market Value on the date of Option exercise
equal to the aggregate exercise price of the Option or exercised portion
thereof; (iii) allow payment, in whole or in part, through the delivery of
property of any kind which constitutes good and valuable consideration;
(iv) allow payment, in whole or in part, through the delivery of a notice that
the Holder has placed a market sell order with a broker with respect to shares
of Common Stock then issuable upon exercise of the Option, and the broker timely
pays a sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price; or (v) allow payment through any
combination of the consideration provided in the foregoing subparagraphs (i),
(ii), (iii) and (iv); provided, however, that the payment in the manner
prescribed in the preceding paragraphs shall not be permitted to the extent that
the Administrator determines that payment in such manner shall result in an
extension or maintenance of credit, an arrangement for the extension of credit,
or a renewal or an extension of credit in the form of a personal loan to or for
any Director or executive officer of the Company that is prohibited by Section
13(k) of the Exchange Act or other applicable law.
     6.3. Conditions to Issuance of Stock Certificates. The Company shall not be
required to issue or deliver any certificate or certificates for shares of stock
purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:
     (a) The admission of such shares to listing on all stock exchanges on which
such class of stock is then listed;
     (b) The completion of any registration or other qualification of such
shares under any federal, state or foreign law, or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental
regulatory body which the Administrator shall, in its discretion, deem necessary
or advisable;

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     (c) The obtaining of any approval or other clearance from any federal,
state or foreign governmental agency which the Administrator shall, in its
discretion, determine to be necessary or advisable;
     (d) The lapse of such reasonable period of time following the exercise of
the Option as the Administrator may establish from time to time for reasons of
administrative convenience; and
     (e) The receipt by the Company of full payment for such shares, including
payment of any applicable withholding tax, which in the discretion of the
Administrator may be in the form of consideration used by the Holder to pay for
such shares under Section 6.2(d).
     6.4. Rights as Stockholders. Holders shall not be, nor have any of the
rights or privileges of, stockholders of the Company in respect of any shares
purchasable upon the exercise of any part of an Option unless and until
certificates representing such shares have been issued by the Company to such
Holders.
     6.5. Ownership and Transfer Restrictions. The Administrator, in its
discretion, may impose such restrictions on the ownership and transferability of
the shares purchasable upon the exercise of an Option as it deems appropriate.
Any such restriction shall be set forth in the respective Award Agreement and
may be referred to on the certificates evidencing such shares. The Holder shall
give the Company prompt notice of any disposition of shares of Common Stock
acquired by exercise of an Incentive Stock Option within (a) two years from the
date of granting (including the date the Option is modified, extended or renewed
for purposes of Section 424(h) of the Code) such Option to such Holder, or
(b) one year after the transfer of such shares to such Holder.
     6.6. Additional Limitations on Exercise of Options. Holders may be required
to comply with any timing or other restrictions with respect to the settlement
or exercise of an Option, including a window-period limitation, as may be
imposed in the discretion of the Administrator.
ARTICLE VII
AWARD OF RESTRICTED STOCK
     7.1. Eligibility. Subject to the Award Limit, Restricted Stock may be
awarded to any Employee or Non-Employee Director who the Administrator
determines should receive such an Award.
     7.2. Award of Restricted Stock.
     (a) The Administrator may from time to time, in its discretion:

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     (i) Select from among the Employees or Non-Employee Directors (including
Employees or Non-Employee Directors who have previously received Awards under
the Plan) such of them as in its opinion should be awarded Restricted Stock; and
     (ii) Determine the purchase price, if any, and other terms and conditions
applicable to such Restricted Stock, consistent with the Plan.
     (b) The Administrator shall establish the purchase price, if any, and form
of payment for Restricted Stock; provided, however, that such purchase price
shall be no less than the minimum amount required by applicable state law.
     (c) Upon the selection of an Employee or Non-Employee Director to be
awarded Restricted Stock, the Administrator shall instruct the Secretary of the
Company to issue such Restricted Stock and may impose such conditions on the
issuance of such Restricted Stock as it deems appropriate.
     7.3. Rights as Stockholders. Subject to Section 7.4, upon delivery of the
shares of Restricted Stock to the escrow holder pursuant to Section 7.5, the
Holder shall have, unless otherwise provided by the Administrator, all the
rights of a stockholder with respect to said shares, subject to the restrictions
in his or her Award Agreement, including the right to receive all dividends and
other distributions paid or made with respect to the shares; provided, however,
that, in the discretion of the Administrator, any extraordinary distributions
with respect to the Common Stock shall be subject to the restrictions set forth
in Section 7.4.
     7.4. Restriction. All shares of Restricted Stock issued under the Plan
(including any shares received by Holders thereof with respect to shares of
Restricted Stock as a result of stock dividends, stock splits or any other form
of recapitalization) shall, in the terms of each individual Award Agreement, be
subject to such restrictions as the Administrator shall provide, which
restrictions may include, without limitation, restrictions concerning voting
rights and transferability and restrictions based on duration of employment or
directorship with the Company, Company performance and individual performance;
provided, however, by action taken after the Restricted Stock is issued, the
Administrator may, on such terms and conditions as it may determine to be
appropriate, remove any or all of the restrictions imposed by the terms of the
Award Agreement. Restricted Stock may not be sold or encumbered until all
restrictions are terminated or expire. A Holder’s rights in unvested Restricted
Stock shall lapse, and such Restricted Stock shall be surrendered to the Company
without consideration, upon Termination of Employment or Termination of
Directorship, as applicable; provided, however, that the Administrator in its
discretion may provide that such rights shall not lapse in the event of a
Termination of Employment or Termination of Directorship, as applicable,
following a Change in Control or because of the Holder’s retirement, death or
disability or termination without cause, or otherwise.

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     7.5. Escrow. The Secretary of the Company or such other escrow holder as
the Administrator may appoint shall retain physical custody of each certificate
representing Restricted Stock until all of the restrictions imposed under the
Award Agreement with respect to the shares evidenced by such certificate expire
or shall have been removed.
     7.6. Legend. In order to enforce the restrictions imposed upon shares of
Restricted Stock hereunder, the Administrator shall cause a legend or legends to
be placed on certificates representing all shares of Restricted Stock that are
still subject to restrictions under Award Agreements, which legend or legends
shall make appropriate reference to the conditions imposed thereby.
     7.7. Section 83(b) Election. If a Holder makes an election under Section
83(b) of the Code, or any successor section thereto, to be taxed with respect to
the Restricted Stock as of the date of transfer of the Restricted Stock rather
than as of the date or dates upon which the Holder would otherwise be taxable
under Section 83(a) of the Code, the Holder shall deliver a copy of such
election to the Company immediately after filing such election with the Internal
Revenue Service.
ARTICLE VIII
PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, , RESTRICTED STOCK
UNITS, OTHER STOCK-BASED AWARDS
     8.1. Eligibility. Subject to the Award Limit, one or more Performance
Awards, Dividend Equivalent Awards, Restricted Stock Unit Awards and/or Other
Stock-Based Awards may be granted to any Employee or Non-Employee Director whom
the Administrator determines should receive such an Award.
     8.2. Performance Awards. Any Employee or Non-Employee Director selected by
the Administrator may be granted one or more Performance Awards. The value of
such Performance Awards may be linked to any one or more of the Performance
Criteria or other specific performance criteria determined appropriate by the
Administrator, in each case on a specified date or dates or over any period or
periods determined by the Administrator. In making such determinations, the
Administrator shall consider (among such other factors as it deems relevant in
light of the specific type of award) the contributions, responsibilities and
other compensation of the particular Employee or Non-Employee Director.
     8.3. Dividend Equivalents. Any Employee or Non-Employee Director selected
by the Administrator may be granted Dividend Equivalents based on the dividends
declared on Common Stock, to be credited as of dividend payment dates, during
the period between the date a Full Value Award is granted and the date such Full
Value Award vests, is exercised, is distributed or expires, as determined by the
Administrator. Such Dividend Equivalents shall be converted to cash or
additional shares of Common Stock by such formula and at such time and subject
to such limitations as may be determined by the Administrator.

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     8.4. Restricted Stock Units. Any Employee or Non-Employee Director selected
by the Administrator may be granted an award of Restricted Stock Units in the
manner determined from time to time by the Administrator. The Administrator is
authorized to make awards of Restricted Stock Units in such amounts and subject
to such terms and conditions as determined by the Administrator. The
Administrator shall specify the date or dates on which the Restricted Stock
Units shall become fully vested and nonforfeitable, and may specify such
conditions to vesting as it deems appropriate, and may specify that such
Restricted Stock Units become fully vested and nonforfeitable pursuant to the
satisfaction of one or more Performance Goals or other specific performance
goals as the Administrator determines to be appropriate at the time of the
grant, in each case on a specified date or dates or over any period or periods
determined by the Administrator. The Administrator shall specify the
distribution dates applicable to each award of Restricted Stock Units which
shall be no earlier than the vesting dates or events of the award and may be
determined at the election of the Employee or Non-Employee Director, subject to
compliance with Section 409A of the Code. Payment of Restricted Stock Units
shall be in cash, in Common Stock or a combination of both, as determined by the
Administrator.
     8.5. Other Stock-Based Awards. Any Employee or Non-Employee Director
selected by the Administrator may be granted an Other Stock-Based Award (as
hereinafter defined) in the manner determined from time to time by the
Administrator. An Other Stock-Based Award means any other type of equity-based
or equity-related Award not otherwise described by the terms of this Plan
(including the grant or offer for sale of unrestricted Shares) in such amount
and subject to such terms and conditions as the Administrator shall determine.
Such Awards may involve the transfer of actual shares of Common Stock, or
payment in cash or otherwise of amounts based on the value of shares of Common
Stock.
     8.6. Termination of Employment or Termination of Directorship. A
Performance Award, Dividend Equivalent Award, Restricted Stock Unit Award and/or
Other Stock-Based Award is exercisable or distributable only while the Holder is
an Employee or Non-Employee Director, as applicable; provided, however, that the
Administrator in its discretion may provide that the Award may be exercised or
distributed subsequent to a Termination of Employment or Termination of
Directorship, as applicable, following a Change in Control or because of the
Holder’s retirement, death or disability or termination without cause, or
otherwise.
ARTICLE IX
STOCK APPRECIATION RIGHTS
     9.1. Grant of Stock Appreciation Rights. A Stock Appreciation Right may be
granted to any Employee or Non-Employee Director selected by the Administrator.
A Stock Appreciation Right may be granted: (a) in connection and simultaneously
with the grant of an Option, or (b) independent of an Option. A Stock
Appreciation Right shall be

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subject to such terms and conditions not inconsistent with the Plan as the
Administrator shall impose and shall be evidenced by an Award Agreement.
     9.2. Coupled Stock Appreciation Rights.
     (a) A Coupled Stock Appreciation Right (“CSAR”) shall be related to a
particular Option and shall be exercisable only when and to the extent the
related Option is exercisable.
     (b) A CSAR may be granted to the Holder for no more than the number of
shares subject to the simultaneously granted Option to which it is coupled.
     (c) A CSAR shall entitle the Holder (or other person entitled to exercise
the Option pursuant to the Plan) to surrender to the Company unexercised a
portion of the Option to which the CSAR relates (to the extent then exercisable
pursuant to its terms) and to receive from the Company in exchange therefor an
amount determined by multiplying (i) the difference obtained by subtracting the
exercise price per share of the CSAR from (ii) the Fair Market Value of a share
of Common Stock on the date of exercise of the CSAR by the number of shares of
Common Stock with respect to which the CSAR shall have been exercised, subject
to any limitations the Administrator may impose.
     9.3. Independent Stock Appreciation Rights.
     (a) An Independent Stock Appreciation Right (“ISAR”) shall be unrelated to
any Option and shall have a term set by the Administrator in its discretion;
provided, however, that the term shall not be more than ten (10) years from the
date the ISAR is granted. An ISAR shall be exercisable in such installments as
the Administrator may determine. An ISAR shall cover such number of shares of
Common Stock as the Administrator may determine The exercise price per share of
Common Stock subject to each ISAR shall be set by the Administrator; provided,
that such exercise price per share shall not be less than 100% of the Fair
Market Value of a share of Common Stock on the date the ISAR is granted. An ISAR
is exercisable only while the Holder is an Employee or Non-Employee Director;
provided, that the Administrator may provide that ISARs may be exercised
following a Termination of Employment, or Termination of Directorship, as
applicable, or following a Change in Control, or because of the Holder’s
retirement, death or disability or termination without cause, or otherwise.
     (b) An ISAR shall entitle the Holder (or other person entitled to exercise
the ISAR pursuant to the Plan) to exercise all or a specified portion of the
ISAR (to the extent then exercisable pursuant to its terms) and to receive from
the Company an amount determined by multiplying (i) the difference obtained by
subtracting the exercise price per share of the ISAR from the Fair Market Value
of a share of Common Stock on the date of exercise of the ISAR by (ii) the
number of shares of Common Stock with respect to which the ISAR shall have been
exercised, subject to any limitations the Administrator may impose.

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     9.4. Payment and Limitations on Exercise.
     (a) Payment of the amounts determined under Section 9.2(c) and 9.3(b) above
shall be in cash, shares of Common Stock (based on its Fair Market Value as of
the date the Stock Appreciation Right is exercised), or a combination of both,
as determined by the Administrator. The Company shall not be required to issue
or deliver any certificate or certificates for shares of stock issuable upon the
exercise of any Stock Appreciation Right prior to fulfillment of the conditions
set forth in Section 6.3 above.
     (b) Holders of Stock Appreciation Rights may be required to comply with any
timing or other restrictions with respect to the settlement or exercise of a
Stock Appreciation Right, including a window-period limitation, as may be
imposed in the discretion of the Administrator.
ARTICLE X.
ADMINISTRATION
     10.1. Committee. The Committee shall consist solely of two or more
Non-Employee Directors appointed by and holding office at the pleasure of the
Board, each of whom is intended to (a) be independent under rules promulgated by
a securities exchange on which the Company’s Common Stock is listed and
(b) qualify as both a “non-employee director” as defined by Rule 16b-3 and an
“outside director” for purposes of Section 162(m) of the Code. Appointment of
Committee members shall be effective upon acceptance of appointment. Committee
members may resign at any time by delivering written notice to the Board.
Vacancies in the Committee may be filled by the Board.
     10.2. Duties and Powers of Committee. It shall be the duty of the Committee
to conduct the general administration of the Plan in accordance with its
provisions. The Committee shall have the power to interpret the Plan and the
Award Agreements, and to adopt such rules for the administration, interpretation
and application of the Plan as are consistent therewith, to interpret, amend or
revoke any such rules, and to amend any Award Agreement provided that the rights
or obligations of the Holder of the Award that is the subject of any such Award
Agreement are not affected adversely. Any such grant or award under the Plan
need not be the same with respect to each Holder. Any such interpretations and
rules with respect to Incentive Stock Options shall be consistent with the
provisions of Section 422 of the Code. In its discretion, the Board may at any
time and from time to time exercise any and all rights and duties of the
Committee under the Plan except with respect to matters which under Rule 16b-3
or Section 162(m) of the Code, or any regulations or rules issued thereunder,
are required to be determined in the discretion of the Committee. The Board or
the Committee may in its discretion, and consistent with applicable law,
delegate to one or more officers of the Company all or part of the Committee’s
authority and duties with respect to Awards to be granted to individuals who are
(i) not subject to the reporting requirements of Section 16 of the Exchange Act,
and (ii) not Covered Employees.

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     10.3. Majority Rule; Unanimous Written Consent. The Committee shall act by
a majority of its members in attendance at a meeting at which a quorum is
present or by a memorandum or other written instrument signed by all members of
the Committee.
     10.4. Compensation; Professional Assistance; Good Faith Actions. Members of
the Committee shall receive such compensation, if any, for their services as
members as may be determined by the Board. All expenses and liabilities which
members of the Committee incur in connection with the administration of the Plan
shall be borne by the Company. The Committee may, with the approval of the
Board, employ attorneys, consultants, accountants, appraisers, brokers or other
persons. The Committee, the Company and the Company’s officers and Directors
shall be entitled to rely upon the advice, opinions or valuations of any such
persons. All actions taken and all interpretations and determinations made by
the Committee or the Board in good faith shall be final and binding upon all
Holders, the Company and all other interested persons. No members of the
Committee or Board shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or Awards, and all
members of the Committee and the Board shall be fully protected by the Company
in respect of any such action, determination or interpretation.
ARTICLE XI
MISCELLANEOUS PROVISIONS
     11.1. Transferability of Awards.
     (a) Except as otherwise provided in Section 11.1(b):
     (i) No Award under the Plan may be sold, pledged, assigned or transferred
in any manner other than by will or the laws of descent and distribution or,
subject to the consent of the Administrator, pursuant to a DRO, unless and until
such Award has been exercised, or the shares underlying such Award have been
issued, and all restrictions applicable to such shares have lapsed;
     (ii) No Award or interest or right therein shall be liable for the debts,
contracts or engagements of the Holder or his successors in interest or shall be
subject to disposition by transfer, alienation, anticipation, pledge,
hypothecation, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect, except to the extent that such disposition is permitted
by the preceding sentence; and
     (iii) During the lifetime of the Holder, only the Holder may exercise an
Option or other Award (or any portion thereof) granted to him under the Plan,
unless it has been disposed of pursuant to a DRO; after the death of the Holder,
any

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exercisable portion of an Option or other Award may, prior to the time when such
portion becomes unexercisable under the Plan or the applicable Award Agreement,
be exercised by his personal representative or by any person empowered to do so
under the deceased Holder’s will or under the then applicable laws of descent
and distribution.
     (b) Notwithstanding Section 11.1(a), the Administrator, in its discretion,
may determine to permit a Holder to transfer a Non-Qualified Stock Option to any
one or more Permitted Transferees (as defined below), subject to the following
terms and conditions: (i) a Non-Qualified Stock Option transferred to a
Permitted Transferee shall not be assignable or transferable by the Permitted
Transferee other than by will or the laws of descent and distribution; (ii) any
Non-Qualified Stock Option which is transferred to a Permitted Transferee shall
continue to be subject to all the terms and conditions of the Non-Qualified
Stock Option as applicable to the original Holder (other than the ability to
further transfer the Non-Qualified Stock Option); and (iii) the Holder and the
Permitted Transferee shall execute any and all documents requested by the
Administrator, including, without limitation documents to (A) confirm the status
of the transferee as a Permitted Transferee, (B) satisfy any requirements for an
exemption for the transfer under applicable federal, state and foreign
securities laws and (C) evidence the transfer. For purposes of this
Section 11.1(b), “Permitted Transferee” shall mean, with respect to a Holder,
any child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the Holder’s household (other than a tenant or
employee), a trust in which these persons (or the Holder) control the management
of assets, and any other entity in which these persons (or the Holder) own more
than fifty percent of the voting interests, or any other transferee specifically
approved by the Administrator after taking into account any federal, state,
local and foreign tax and securities laws applicable to transferable
Non-Qualified Stock Options.
     11.2. Amendment, Suspension or Termination of the Plan. Except as otherwise
provided in this Section 11.2, the Plan may be wholly or partially amended or
otherwise modified, suspended or terminated at any time or from time to time by
the Board, or the Compensation Committee of the Board. However, without approval
of the Company’s stockholders given within twelve (12) months before or after
the action by the Administrator, no action of the Administrator may, except as
provided in Section 11.3, (i) increase the limits imposed in Section 2.1 on the
maximum number of shares which may be issued under the Plan, (ii) decrease the
exercise price of any outstanding Option or Stock Appreciation Right granted
under the Plan, or (iii) result in a material change in eligibility
requirements. Except as provided in Section 11.12, no amendment, suspension or
termination of the Plan shall, without the consent of the Holder, alter or
impair any rights or obligations under any Award theretofore granted or awarded,
unless the Award itself otherwise expressly so provides. No Awards may be
granted or awarded during any period of suspension or after termination of the
Plan, and in no event may any Award be granted under the Plan after the first to
occur of the following events:

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     (a) The expiration of ten (10) years from the date the Plan is adopted by
the Board; or
     (b) The expiration of ten (10) years from the date the Plan is first
approved by the Company’s stockholders.
     11.3. Changes in Common Stock or Assets of the Company, Acquisition or
Liquidation of the Company and Other Corporate Events.
     (a) Subject to Section 11.3(d), in the event of any dividend or other
distribution (whether in the form of cash, Common Stock, other securities or
other property), recapitalization, reclassification, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company, or
exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event that affects the Common
Stock, then the Administrator shall equitably adjust any or all of the following
in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan or with respect to an
Award:
     (i) The number and kind of shares of Common Stock (or other securities or
property) with respect to which Awards may be granted or awarded (including,
without limitation, adjustments of the limitations in Section 2.1 on the maximum
number and kind of shares which may be issued under the Plan, adjustments of the
Award Limit, and adjustments of the manner in which shares subject to Full Value
Awards will be counted);
     (ii) The number and kind of shares of Common Stock (or other securities or
property) subject to outstanding Awards; and
     (iii) The grant or exercise price with respect to any Award.
     (b) Subject to Section 11.3(d), in the event of any transaction or event
described in Section 11.3(a) or any unusual or nonrecurring transactions or
events affecting the Company, any affiliate of the Company, or the financial
statements of the Company or any affiliate, or of changes in applicable laws,
regulations or accounting principles, the Administrator, in its discretion, and
on such terms and conditions as it deems appropriate, either by the terms of the
Award or by action taken prior to the occurrence of such transaction or event
and either automatically or upon the Holder’s request, is hereby authorized to
take any one or more of the following actions whenever the Administrator
determines that such action is appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to any Award under the Plan, to facilitate such
transactions or events or to give effect to such changes in laws, regulations or
principles:

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     (i) To provide for the purchase of any such Award for an amount of cash
equal to the amount that could have been attained upon the exercise of such
Award or realization of the Holder’s rights had such Award been currently
exercisable or payable or fully vested, to authorize a cash payment to the
Holder of an Option or SAR in an amount equal to the amount that could have been
attained upon the exercise of the Option or SAR, or to cancel for no
consideration an Option that upon exercise would not yield a positive benefit
for the Holder;
     (ii) To provide for the replacement of such Award with other rights or
property selected by the Administrator in its discretion having an aggregate
value not exceeding the amount that could have been attained upon the exercise
of such Award or realization of the Holder’s rights had such Award been
currently exercisable or payable or fully vested;
     (iii) To provide that the Award cannot vest, be exercised or become payable
after such event;
     (iv) To provide that such Award shall be exercisable as to all shares
covered thereby, notwithstanding anything to the contrary in Section 5.3 or the
provisions of such Award;
     (v) To provide that such Award be assumed by the successor or survivor
corporation, or a parent or subsidiary thereof, or shall be substituted for by
similar options, rights or awards covering the stock of the successor or
survivor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices;
     (vi) To make adjustments in the number and type of shares of Common Stock
(or other securities or property) subject to outstanding Awards, and/or in the
terms and conditions of (including the grant, exercise or purchase price), and
the criteria included in, outstanding options, rights and awards and options,
rights and awards which may be granted in the future; and
     (vii) To provide that, for a specified period of time prior to such event,
the restrictions imposed under an Award Agreement upon some or all shares of
Restricted Stock, Restricted Stock Units or Other Stock-Based Awards may be
terminated, and, in the case of Restricted Stock, some or all shares of such
Restricted Stock may cease to be subject to forfeiture under Section 7.4 after
such event.
     (c) Subject to Sections 11.3(d) and 3.2, the Administrator may, in its
discretion, include such further provisions and limitations in any Award,
agreement or certificate, as it may deem equitable and in the best interests of
the Company.
     (d) With respect to Awards which are granted to Covered Employees and are
intended to qualify as performance-based compensation under
Section 162(m)(4)(C), no

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adjustment or action described in this Section 11.3 or in any other provision of
the Plan shall be authorized to the extent that such adjustment or action would
cause such Award to fail to so qualify under Section 162(m)(4)(C), or any
successor provisions thereto. No adjustment or action described in this
Section 11.3 or in any other provision of the Plan shall be authorized to the
extent that such adjustment or action would cause the Plan to violate
Section 422(b)(1) of the Code. Furthermore, no such adjustment or action shall
be authorized to the extent such adjustment or action would result in
short-swing profits liability under Section 16 or violate the exemptive
conditions of Rule 16b-3 unless the Administrator determines that the Award is
not to comply with such exemptive conditions. The number of shares of Common
Stock subject to any Award shall always be rounded down to the next whole
number.
     (e) The existence of the Plan, the Award Agreement and the Awards granted
hereunder shall not affect or restrict in any way the right or power of the
Company or the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any issue
of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.
     (f) No action shall be taken under this Section 11.3 which shall cause an
Award to fail to comply with Section 409A of the Code or the Treasury
Regulations thereunder, to the extent applicable to such Award.
     11.4. Approval of Plan by Stockholders. The Plan will be submitted for the
approval of the Company’s stockholders within twelve (12) months after the date
of the Board’s initial adoption of the Plan. No Awards may be granted or awarded
prior to such stockholder approval. In addition, if the Board determines that
Awards other than Options or Stock Appreciation Rights which may be granted to
Covered Employees should continue to be eligible to qualify as performance-based
compensation under Section 162(m)(4)(C) of the Code, the Performance Criteria
must be disclosed to and approved by the Company’s stockholders no later than
the first stockholder meeting that occurs in the fifth year following the year
in which the Company’s stockholders previously approved the Plan.
     11.5. Tax Withholding. The Company or any Subsidiary shall have the
authority and the right to deduct or withhold, or require a Holder to remit to
the Company, an amount sufficient to satisfy federal, state, local and foreign
taxes (including the Holder’s FICA obligation) required by law to be withheld
with respect to any taxable event concerning a Holder arising as a result of
this Plan. The Administrator may in its discretion and in satisfaction of the
foregoing requirement allow a Holder to elect to have the Company withhold
shares of Common Stock otherwise issuable under an Award (or allow the return of
shares of Common Stock) having a Fair Market Value equal to the

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sums required to be withheld. Notwithstanding any other provision of the Plan,
the number of shares of Common Stock which may be withheld with respect to the
issuance, vesting, exercise or payment of any Award (or which may be repurchased
from the Holder of such Award within six months (or such other period as may be
determined by the Administrator) after such shares of Common Stock were acquired
by the Holder from the Company) in order to satisfy the Holder’s federal, state,
local and foreign income and payroll tax liabilities with respect to the
issuance, vesting, exercise or payment of the Award shall be limited to the
number of shares which have a Fair Market Value on the date of withholding or
repurchase equal to the aggregate amount of such liabilities based on the
minimum statutory withholding rates for federal, state, local and foreign income
tax and payroll tax purposes that are applicable to such supplemental taxable
income.
     11.6. Prohibition on Repricing. Subject to Section 11.3, the Administrator
shall not, without the approval of the stockholders of the Company, authorize
the amendment of any outstanding Award to reduce its price per share.
Furthermore, no Award shall be canceled and replaced with the grant of an Award
having a lesser price per share without the further approval of stockholders of
the Company. Subject to Section 11.2, the Administrator shall have the
authority, without the approval of the stockholders of the Company, to amend any
outstanding award to increase the price per share or to cancel and replace an
Award with the grant of an Award having a price per share that is greater than
or equal to the price per share of the original Award.
     11.7. Forfeiture Provisions. Pursuant to its general authority to determine
the terms and conditions applicable to Awards under the Plan, the Administrator
shall have the right to provide, in the terms of Awards made under the Plan, or
to require a Holder to agree by separate written instrument, that: (a)(i) any
proceeds, gains or other economic benefit actually or constructively received by
the Holder upon any receipt or exercise of the Award, or upon the receipt or
resale of any Common Stock underlying the Award, must be paid to the Company,
and (ii) the Award shall terminate and any unexercised portion of the Award
(whether or not vested) shall be forfeited, if (b)(i) a Termination of
Employment or Termination of Directorship occurs prior to a specified date, or
within a specified time period following receipt or exercise of the Award, or
(ii) the Holder at any time, or during a specified time period, engages in any
activity in competition with the Company, or which is inimical, contrary or
harmful to the interests of the Company, as further defined by the Administrator
or (iii) the Holder incurs a Termination of Employment or Termination of
Directorship for “cause” (as such term is defined in the discretion of the
Administrator, or as set forth in a written agreement relating to such Award
between the Company and the Holder).
     11.8. Effect of Plan upon Other Compensation Plans. The adoption of the
Plan shall not affect any other compensation or incentive plans in effect for
the Company or any Subsidiary. Nothing in the Plan shall be construed to limit
the right of the Company or any Subsidiary: (a) to establish any other forms of
incentives or compensation for Employees, Directors or Consultants of the
Company or any Subsidiary, or (b) to grant or assume options or other rights or
awards otherwise than under the Plan in connection with any proper corporate
purpose including without limitation, the grant or assumption

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of options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation,
partnership, limited liability company, firm or association.
     11.9. Compliance with Laws. The Plan, the granting and vesting of Awards
under the Plan and the issuance and delivery of shares of Common Stock and the
payment of money under the Plan or under Awards granted or awarded hereunder are
subject to compliance with all applicable federal, state, local and foreign
laws, rules and regulations (including but not limited to federal, state and
foreign securities law and margin requirements) and to such approvals by any
listing, regulatory or governmental authority as may, in the opinion of counsel
for the Company, be necessary or advisable in connection therewith. Any
securities delivered under the Plan shall be subject to such restrictions, and
the person acquiring such securities shall, if requested by the Company, provide
such assurances and representations to the Company as the Company may deem
necessary or desirable to assure compliance with all applicable legal
requirements. To the extent permitted by applicable law, the Plan and Awards
granted or awarded hereunder shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.
     11.10. Titles. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of the Plan.
     11.11. Governing Law. The Plan and any agreements hereunder shall be
administered, interpreted and enforced under the internal laws of the State of
Delaware without regard to conflicts of laws thereof.
     11.12. Section 409A. To the extent that the Administrator determines that
any Award granted under the Plan is subject to Section 409A of the Code, the
Award Agreement evidencing such Award shall incorporate the terms and conditions
required by Section 409A of the Code. To the extent applicable, the Plan and
Award Agreements shall be interpreted in accordance 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 after the Effective Date. Notwithstanding any
provision of the Plan to the contrary, in the event that following the Effective
Date the Administrator determines that any Award may be subject to Section 409A
of the Code and related Department of Treasury guidance (including such
Department of Treasury guidance as may be issued after the Effective Date), the
Administrator may adopt such amendments to the Plan and the applicable Award
Agreement or adopt other policies and procedures (including amendments, policies
and procedures with retroactive effect), or take any other actions, that the
Administrator determines are necessary or appropriate to (a) exempt the Award
from Section 409A of the Code and/or preserve the intended tax treatment of the
benefits provided with respect to the Award, or (b) comply with the requirements
of Section 409A of the Code and related Department of Treasury guidance.

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